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INDEX TO CONSOLIDATED FINANCIAL STATEMENTS Luxoft Holding, Inc Consolidated financial statements Years ended March 31, 2011, 2012 and 2013

As filed with the Securities and Exchange Commission on June 12, 2013.

Registration No. 333-188765

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549



Amendment No. 2
to

Form F-l
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933



Luxoft Holding, Inc
(Exact Name of Registrant as Specified in its Charter)



British Virgin Islands
(State or Other Jurisdiction of
Incorporation or Organization)
  7371
(Primary Standard Industrial
Classification Code Number)
  Not Applicable
(I.R.S. Employer
Identification Number)

Luxoft Holding, Inc
Akara Building
24 De Castro Street
Wickhams Cay 1, Road Town
Tortola, British Virgin Islands

(Address, including zip code, and telephone number, including area code, of Registrant's principal executive offices)



Luxoft USA Inc.
225 W. 34th St.
Suite 1707
New York, NY 10122
+ 1 (212) 964-9900
(Name, address, including zip code, and telephone number, including area code, of agent for service)



Copies to:

Joshua G. Kiernan
White & Case LLP
5 Old Broad Street
London EC2N 1DW
United Kingdom
Tel: +44 (20) 7532-1408
Fax: +44 (20) 7532-1001

 

Darina Lozovsky
White & Case LLC
4 Romanov Pereulok
125009 Moscow
Russia
Tel: +7 (495) 787-3000
Fax: +7 (495) 787-3001

 

Dmitry Loshchinin
Luxoft Global Operations GmbH
Bundensstrasse 5 CH 6300
Zug
Switzerland
Tel: +41 (445) 568-446

 

Pranav L. Trivedi
Michael Zeidel
Skadden, Arps, Slate, Meagher & Flom LLP
40 Bank Street
Canary Wharf
London E14 5DS
United Kingdom
Tel: +44 (20) 7519-7000
Fax: + 44 (20) 7519-7070



Approximate date of commencement of proposed sale to the public:
As soon as practicable after effectiveness of this registration statement.

          If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box. o

          If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. o

          If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. o

          If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. o



CALCULATION OF REGISTRATION FEE

       
 
Title of Each Class of Securities to be Registered
  Proposed Maximum
Aggregate Offering Price(l)(2)

  Amount of Registration Fee(3)
 

Class A ordinary shares, no par value

  U.S.$84,705,840   U.S.$11,553.88

 

(1)
Estimated solely for the purpose of calculating the registration fee pursuant to Rule 457(o) under the Securities Act of 1933.

(2)
Includes shares to be sold upon exercise of the underwriters' option. See "Underwriting."

(3)
Previously paid.



          The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the Registration Statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine.

   


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The information in this preliminary prospectus is not complete and may be changed. We and the selling shareholder may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This preliminary prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any jurisdiction where the offer or sale is not permitted.

Subject to completion, dated June 12, 2013

Preliminary Prospectus

GRAPHIC

4,092,070
Luxoft Holding, Inc.
Class A Ordinary Shares

         This is an initial public offering of Class A ordinary shares of Luxoft Holding, Inc. We are offering 2,046,035 of the shares to be sold in the offering. The selling shareholder identified in this prospectus is offering an additional 2,046,035 shares.

         Following this offering, we will be authorized to issue two classes of ordinary shares: Class A ordinary shares and Class B ordinary shares. The rights of the holders of Class A ordinary shares and Class B ordinary shares will be identical, including dividend and liquidation rights, except with respect to voting and conversion. Each Class A ordinary share will be entitled to one vote per share. Each Class B ordinary share will be entitled to 10 votes per share and will be convertible at any time into one Class A ordinary share. Outstanding Class B ordinary shares will represent approximately 98.2% of the voting power of our outstanding shares immediately following this offering.

         We will not receive any of the proceeds from the sale of the shares being offered by the selling shareholder. Prior to this offering, there has been no public market for our Class A ordinary shares. The estimated initial public offering price is between $16.00 and $18.00 per share.

         We have applied to list our Class A ordinary shares on the New York Stock Exchange ("NYSE") under the symbol "LXFT".

 
  Per share   Total  

Initial public offering price

  $                   $                   

Underwriting discounts and commissions(1)

  $                   $                   

Proceeds to us, before expenses

  $                   $                   

Proceeds to selling shareholder, before expenses

  $                   $                   

(1)
See "Underwriting" for a description of the compensation payable to the underwriters.

         We and the selling shareholder have granted the underwriters an over-allotment option for a period of 30 days to purchase up to 306,905 and 306,905 additional Class A ordinary shares, respectively, at the initial public offering price, less underwriting discounts and commissions.

         We are a "controlled company" under the corporate governance rules for NYSE-listed companies.

         We are an "emerging growth company" as defined under Section 2(a) of the Securities Act of 1933.

         Investing in our Class A ordinary shares involves a high degree of risk. See "Risk Factors" beginning on page 13 of this prospectus.

         Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

         This prospectus does not constitute, and there will not be, an offering of securities to the public in the British Virgin Islands.

         The underwriters expect to deliver the Class A ordinary shares to purchasers on or about            , 2013.

UBS Investment Bank   Credit Suisse   J.P. Morgan

VTB Capital   Cowen and Company

The date of this prospectus is            , 2013.


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Table of Contents


TABLE OF CONTENTS

 
  Page

Prospectus Summary

  1

The Offering

  8

Risk Factors

  13

Special Note Regarding Forward-Looking Statements

  46

Industry Data and Other Information

  47

Use of Proceeds

  48

Dividend Policy

  49

Capitalization

  50

Dilution

  51

Selected Consolidated Financial Data

  53

Management's Discussion and Analysis of Financial Condition and Results of Operations

  56

Business

  83

Management

  109

Principal and Selling Shareholders

  120

Certain Relationships and Related Party Transactions

  122

Description of Authorized Shares

  127

Shares Eligible for Future Sale

  137

Taxation

  139

Underwriting

  144

Legal Matters

  151

Experts

  152

Enforceability of Civil Liabilities

  153

Where You Can Find Additional Information

  154

Index to Consolidated Financial Statements

  F-1

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PROSPECTUS SUMMARY

        This summary highlights selected information contained elsewhere in this prospectus. This summary does not contain all the information that you should consider before deciding to invest in our Class A ordinary shares. You should read the entire prospectus carefully, including "Risk Factors" and our consolidated financial statements and notes to those consolidated financial statements, before making an investment decision. The terms "Luxoft," "we," "our" or "us," as used herein, refer to Luxoft Holding, Inc and its direct and consolidated subsidiaries unless otherwise stated or indicated by context. We define Central and Eastern Europe ("CEE") to include Albania, Belarus, Bosnia-Herzegovina, Bulgaria, Croatia, Czech Republic, Estonia, Hungary, Latvia, Lithuania, Macedonia, Moldova, Montenegro, Kosovo, Poland, Romania, Russia, Serbia, Slovakia, Slovenia and Ukraine.

Overview

        We are a leading provider of software development services and innovative IT solutions to a global client base consisting primarily of large multinational corporations. Our software development services consist of core and mission critical custom software development and support, product engineering and testing, and technology consulting. Our solutions are based on our proprietary products and platforms that directly impact our clients' business outcomes and efficiently deliver continuous innovation. Through our services and solutions, we enable our clients to improve their competitive position by increasing efficiency, shortening time-to-market, and enhancing their end user experience. We have developed a reputation and track record of delivering consistently high quality service that has enabled us to establish long-term strategic relationships with many of our clients, translating into significant revenue growth and recurring business.

        We utilize our deep industry- and domain-specific expertise to develop innovative high quality software for our clients' core products, processes and applications. We focus on six industry verticals that have significant and growing demand for IT services and consider innovative technology to be a top priority in achieving their business goals: financial services; travel and aviation; technology; telecom; automotive and transport; and energy. Across these industry verticals, we utilize a wide variety of modern technologies and have developed expertise in a number of domain practices, the most important of which are supported by our Centers of Expertise ("COEs"): big data; open source; mobile; Agile; and user interface, user experience and human machine interface ("UI/UX/HMI"). Each COE focuses on the research and development of its respective domain practice and has a dedicated pool of resources, including its own budget, time and IT professionals. We believe the combination of our broad range of services and solutions, and our deep industry and domain expertise, allows us to work concurrently on multiple mission critical engagements for a single client, leaving us well positioned to increase our share of our clients' core technology budgets.

        We serve large multinational corporations primarily in Western Europe and North America that rely on our IT solutions and software development capabilities for many of their mission critical systems. The scope of our services ranges from handling standard outsourcing client-directed engagements to engaging in managed delivery and transformational engagements, in which we assume full control of the project team and manage all facets of the execution. For the year ended March 31, 2013, a significant portion of our sales was to Fortune Global 500 companies, including Deutsche Bank, UBS, Boeing, Harman, Avaya and AMD. During the same period, we derived 45.6% of our sales from clients located in Europe, 42.0% from clients in North America, and 12.4% from clients in other geographies. Seven out of our top ten clients have been with us for five or more years and, in the three fiscal years ended March 31, 2013, the majority of our new clients were referred to us.

        We operate through a global dedicated delivery model. We provide our services and deliver our solutions from fourteen delivery centers located primarily in CEE, including in Russia, Ukraine, Romania and Poland, where we have access to a significant pool of highly educated IT professionals

 

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who possess technical expertise and business domain knowledge. We also have delivery centers in the UK, U.S. and Vietnam.

        We believe that our strong brand, corporate culture, and our focus on efficient innovation and our client's business goals and outcomes, allow us to successfully recruit and retain highly qualified IT engineers and developers ("IT professionals"). As of March 31, 2013, we had 5,846 personnel of whom 4,927 were IT professionals. Approximately 80% of our IT professionals hold Master's degrees (or Master's degree equivalents in certain jurisdictions) or higher, and approximately 85% of our personnel have more than five years of industry experience.

        Our work has earned us important client recognitions, including from our large multinational clients like Deutsche Bank, which formally recognized us this year as their strategic vendor partner in Global Technology and awarded us its Relationship Excellence Award for our "sustained and structured approach in nurturing and building a new basis for doing business to deliver superior outcomes." Several leading technology industry research firms have recognized our work. In particular, in its January 2013 report "Mobile Feast Or Beggar's Banquet," Forrester Research, Inc. listed us with IBM, Infosys and uTest as a mobile testing tool outsourcing vendor. In its December 2012 report "Innovation Insight: The Connected Vehicle Will Dominate Automotive and Mobility Innovations," Gartner, Inc. named us one of the four key operating system, software and application developers, with such developers as Google and Microsoft. We were also awarded the "IT Outsourcing Project of the Year" in 2012 by the European Outsourcing Association ("EOA") for our work with Hotwire Inc. For additional information about the awards described in this summary, please see "Business—Sales and marketing".

        We have experienced significant growth over the last three years. Our sales have grown from $198.4 million in the year ended March 31, 2011 to $314.6 million in the year ended March 31, 2013, representing a compound annual growth rate ("CAGR") of 25.9%. Our net income has grown from $25.9 million in the year ended March 31, 2011 to $37.5 million in the year ended March 31, 2013, representing a CAGR of 20.4%. During the year ended March 31, 2012 we added 45 new clients, and during the year ended March 31, 2013 we added 52 new clients including Delphi, PepsiCo and Brookfield.

Competitive strengths

        We believe the following strengths differentiate us from our competitors:

        Deep vertical expertise with focus on innovative service offerings and solutions.    We currently focus on six industry verticals that are technology- and data-intensive, that, we believe, present a large and growing market opportunity. To enhance our expertise, we recruit highly skilled IT professionals with significant technical expertise and understanding of industry-specific business operations and issues. We have also built substantive practice areas within our verticals to address our clients' most pressing problems, such as risk management, reference data, and fixed income, currencies and commodities ("FICC"). We invest in research and development to create cross-functional and vertical-specific proprietary products and platforms that help us deliver our services rapidly and cost-effectively. Examples of our solutions include an open-source car connectivity technology, called SmartPhoneLink, which we have developed with Ford; mobile financial information dashboards for risk management; smart-grid demand management systems; and open source-based test automation frameworks for network equipment.

        Strong domain practices anchored by COEs.    Over the past several years, we have developed expertise in several domain practices, including five key domain practices that we believe to be critical to the ongoing success of our clients: big data, open source, mobile, Agile, and UI/UX/HMI. We have established COEs specifically dedicated to the research and development of each of these key domain

 

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practices. We believe that our domain practice knowledge, applied within the industry vertical context of our clients' business needs, provides us with a strong competitive advantage.

        Long-term relationships with multinational clients.    We experience very low client turnover. Our largest clients consist primarily of Fortune Global 500 companies such as Deutsche Bank, UBS, Boeing, Harman, Avaya and AMD. Seven out of our top ten clients have been with us for five or more years. The dedicated teams of IT professionals we assign to each client, combined with a personnel attrition rate that we believe to be lower than many other industry players, results in the continuity of personnel and, importantly, the retention of know-how and strengthening of client relationships.

        Highly educated, experienced and loyal workforce.    We are committed to recruiting, developing and maintaining a work force of high quality IT professionals. We have invested significant resources to grow from 1,669 IT professionals as of March 31, 2008 to 4,927 technically sophisticated IT professionals as of March 31, 2013. Approximately 80% of our IT professionals hold Master's degrees or higher (or Master's degree equivalents in certain jurisdictions) with a focus on science and engineering, and approximately 85% of our personnel have more than five years of IT industry experience. Furthermore, we utilize the strong ties we have built with the leading local colleges and universities in CEE and Vietnam, as well as our existing reputation as an employer of choice, to continue attracting and retaining highly educated IT professionals.

        Global delivery platform.    Our secure delivery centers in Russia, Ukraine, Romania, Poland, the UK, U.S. and Vietnam allow us to provide managed delivery and value added services for software development and innovative IT solutions. We distribute our high complexity work to client-facing industry specialists in tier-one locations, such as Kiev, Ukraine; Moscow, Russia; and Bucharest, Romania, and our lower complexity work to lower-cost, industry generalists in tier-two locations, such as Omsk, Russia; Dnipropetrovsk, Ukraine; and Ho Chi Minh City, Vietnam. This allows us to effectively allocate work based on resource and talent requirements, which leads to increased utilization, achieves scalability, and mitigates certain economic risks that might affect any single geography. We believe that our global delivery model allows us to better serve our clients, providing us with agility, logistical and time zone convenience and the cost advantage of having fewer dedicated on-site personnel. In our opinion, serving our clients by means of this model, combined with the mission critical nature of our engagements and the similarities in engineering cultures between CEE and our primary revenue-generating geographies, reduces the risk that our clients will switch vendors and drives recurring revenue.

        Strong and experienced management team.    We benefit from the effective leadership of an international management team with diverse backgrounds and extensive experience in IT services. Each member of our senior management team has on average more than 15 years of industry experience, and has extensive experience in working both inside and outside of CEE for large and multinational corporations. During the recessionary period between March 31, 2009 and March 31, 2010, we increased our sales by 16.4%, which we believe substantially exceeded the revenue growth of most of our publicly listed peers during the same period.

Strategies

        Our goal is to become the provider of choice for core systems and mission critical software that enhance business outcomes and help enterprises within our industry verticals remain competitive. We intend to expand our offerings to existing clients and to win business from new clients by pursuing the following:

        Develop new capabilities and service offerings within our verticals.    We intend to use our global dedicated delivery model, vertically aligned client-facing teams and innovative industry-specific products and platforms to increase our share of high value engagements and diversify across our existing clients' divisions and departments. For example, in financial services, we seek to expand beyond services for

 

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investment banking and sales and trading, and increasingly target new sources of revenues. We also seek to expand our service offerings by taking over our clients' captive IT operations, which also benefits clients by reducing the total cost of ownership. We will continue to proactively invest in and develop our innovative proprietary solutions around emerging technologies, supporting trends and critical client needs in our industry verticals.

        Leverage domain practice expertise to win new business.    We intend to win new business by leveraging the domain practice expertise we have developed in each of our five COEs, and to developing new technical expertise. We plan to use the products and platforms we have developed within our domain practices to benefit existing clients, and as pre-sale tools to demonstrate our capabilities to new clients.

        Continue to expand our managed delivery model.    In an effort to better serve our clients' needs, we are transitioning a significant portion of our engagements to managed delivery. We believe managed delivery provides meaningful advantages for both our clients and our operations. Our aim is to increase our ownership of client projects to the point of providing transformational engagements and those within which we substantially or fully replace a portion of our clients' IT departments.

        Continue to develop our proprietary products and platforms.    We will continue to develop our existing proprietary products and platforms to further enhance their capabilities and to create new products and platforms. For example, our platform iviLink can be amplified to accommodate a rich application environment for branded software developed by or for specific original equipment manufacturers ("OEMs"), and our product Horizon can be further developed by adding calculation, reference data and analytics tools. These proprietary assets also will help us target aspects of our clients' software budgets that were not previously accessible to us, and will position us well for growth.

        Attract and retain top quality talent.    To support our growth and maintain our competitive position as a leading high-end IT service provider, we plan to grow our highly skilled employee base by continuing to execute our rigorous sourcing and hiring practices and enhancing our brand as an employer of choice in the industry. We will scale our human resources infrastructure as our business grows. In addition, we will seek to maintain our low attrition rates through our internal training programs and employee initiatives, including rewards and incentives for high-performing employees. We also intend to build on our successful track record of establishing delivery centers in CEE, where we have access to highly educated IT professionals at attractive wages.

        Selectively pursue strategic acquisitions.    While we focus primarily on organic growth, we intend to pursue complementary acquisitions of primarily small, specialized software engineering services firms or relevant assets that will accelerate our growth, enhance and/or complement our expertise and existing client base, add highly talented and qualified IT professionals to our team, and/or expand our presence in key geographies. We are continuously reviewing and identifying potential acquisitions that would enhance our technological or domain knowledge and client relationships.

Recent Developments

Joint Venture

        We have recently commenced preliminary discussions with one of our major clients, who is a tier-one supplier for the automotive industry, to explore increased cooperation in the field of application development and technology services in the automotive and transport vertical. While these discussions are in the early stages and the parties have not entered into any agreement, letter of intent or similar understanding, one of the possible structures being considered involves the formation of a joint venture ("JV") into which each party will contribute all of its applicable aftermarket, application and technology services-related contracts with OEMs and all applicable technology solutions. In addition, our client would contribute its globally recognized brand and we would contribute our

 

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engineering services, including personnel. The proposed JV would serve automotive OEMs, dealers, and direct consumers. It would combine the service expertise and innovative technologies of both companies in such areas as head unit servicing, navigation systems and services, cloud solutions, big data and engineering services that would be executed through the resources contributed to the JV by us. Our sales generated by this client account for a substantial majority of the total sales generated by our automotive and transport vertical, with the remainder represented by one OEM and several tier-one suppliers, which together comprised less than 1.0% of our total sales in the year ending March 31, 2013. While increased cooperation between the client and us may hamper our ability to pursue contracts with other competing tier-one suppliers, our ultimate goal is to capitalize on and monetize the synergies between our company and the client and generate greater revenues and profitability than each party generates separately. At present, the client and we are assessing the commercial viability of this JV and considering other possible forms of joint cooperation; however, we can provide no assurance that the JV will be established or that the client and we will enter into any other form of joint cooperation.

Dividend Declaration

        On April 30, 2013, we declared a $30.5 million dividend representing $1.00 per share to our shareholders. We have paid $2.5 million of this dividend to our shareholders as of the date of this prospectus. We intend to pay an additional $12.5 million of the dividend by July 1, 2013, and the remainder in $3.0 million monthly installments out of our operating cash flows. We will consider accelerating the payment schedule of the dividend from our operating cash flows. See "Dividend Policy."

Risk factors

        Investing in our Class A ordinary shares involves risks. You should carefully consider the risks described in "Risk Factors" before making a decision to invest in our Class A ordinary shares. If any of these risks actually occurs, our business, financial condition or results of operations will likely be materially adversely affected. In such case, the trading price of our Class A ordinary shares would likely decline, and you may lose all or part of your investment. The following is a summary of some of the principal risks we face:

    We generate a significant portion of our sales of services, and anticipate deriving a large portion of our sales of products, from clients primarily located in the U.S. and Europe. Worsening economic conditions or factors that negatively affect the economic health of the U.S. or Europe could reduce our sales of services and thus adversely affect our results of operations.

    Rapid growth may strain our limited resources, and a failure to manage this growth could have a material adverse effect on the quality of our services and client support.

    We generate a significant portion of our sales of services, and anticipate deriving a large portion of our sales of products, from a limited number of clients and any significant loss of business from these clients or failure by such clients to pay for our services could materially adversely affect our results of operations.

    We derive a large portion of our sales of services, and expect that we will derive a large portion of our sales of products, from clients who operate in a limited number of industries.

    We operate in a highly competitive environment and may not be able to compete successfully.

    The significant share ownership position of IBS Group will limit your ability to influence corporate matters.

 

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Our principal shareholder

        Our principal shareholder is IBS Group Holding Ltd. ("IBS Group"), a leading software development and information technology services provider in Eastern Europe founded in 1992. IBS Group's global depositary receipts are listed on the Frankfurt Stock Exchange. Following the completion of this offering, IBS Group will beneficially own 84.3% of our outstanding Class B ordinary shares and will have control over 82.9% of our voting power.

Potential separation from IBS Group

        IBS Group has advised us that it may consider divesting all or a portion of its ownership interest in us through an exchange offer or other form of distribution. IBS Group has advised us that it has not made an affirmative decision to pursue any such transactions and the timing of any such transactions is undetermined, however, no such transaction will be consummated during the 365-day period following the date of this prospectus. There are many factors that could affect IBS Group's decision to pursue such a transaction, and it may never pursue such a transaction at all.

Our status as a controlled company

        We are a "controlled company" within the meaning of the corporate governance rules of the NYSE. Under these rules, a company of which more than 50% of the voting power is held by an individual, group or another company is a "controlled company" and may elect not to comply with certain corporate governance requirements. See "Risk Factors—The significant share ownership position of IBS Group will limit your ability to influence corporate matters."

Implications of being an emerging growth company

        As a company with less than $1.0 billion in annual gross revenues during our last fiscal year, we qualify as an "emerging growth company" pursuant to the Jumpstart Our Business Startups Act of 2012 (the "JOBS Act"). An emerging growth company may take advantage of specified reduced reporting and other burdens that are otherwise applicable generally to public companies. These provisions include an exemption from the auditor attestation requirement in the assessment of the emerging growth company's internal control over financial reporting. The JOBS Act also provides that an emerging growth company need not comply with any new or revised financial accounting standard until such date that a non-reporting company is required to comply with such new or revised accounting standard. Furthermore, we are not required to present selected financial information or any management's discussion herein for any period prior to the earliest audited period presented in connection with this prospectus. We have irrevocably elected to opt out of the extended transition period for complying with new or revised accounting standards pursuant to Section 107(b) of the JOBS Act. As a result, we will comply with new or revised accounting standards on the relevant dates on which adoption of such standards is required for non-"emerging growth companies." See "Management's Discussion and Analysis of Financial Condition and Results of Operations—Critical accounting policies."

        We will remain an emerging growth company until the earliest of (1) the last day of our fiscal year during which we have total annual gross revenues of at least $1.0 billion; (2) the last day of our fiscal year following the fifth anniversary of the completion of this offering; (3) the date on which we have, during the previous three-year period, issued more than $1.0 billion in non-convertible debt; or (4) the date on which we are deemed to be a "large accelerated filer" under the Securities Exchange Act of 1934, or the Exchange Act. When we are no longer deemed to be an emerging growth company, we will not be entitled to the exemptions provided in the JOBS Act discussed above. If we choose to take advantage of any of these reduced reporting burdens, the information that we provide shareholders may be different than you might get from other public companies.

 

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Corporate information

        Including our predecessors, we have been in business since March 2000. Luxoft Holding, Inc was incorporated as a company limited by shares under the laws of the British Virgin Islands on March 7, 2006.

        We have principal business offices located at 41-43 Klimentos Str., Klimentos Tower 2nd Floor Office 24, 1061 Ay. Nicolaos Nicosia, Cyprus; Bundesstrasse 5 CH-6300 Zug, Switzerland; 10-3, 1-Volokolamsky proezd, 123060 Moscow, Russia; 14 Vasylkivska Str., 03040 Kiev, Ukraine; 167 Calea Floreasca, 3rd floor, district 1 Bucharest, Romania; Ul. Krakowska 280, 32-080 Zabierzow, Poland; and Wentworth Lodge Suite 3, Great North Road, Welwyn Garden City, Hertfordshire, AL8 7SR United Kingdom. Our registered office is Akara Bldg., 24 De Castro Street, Wickhams Cay 1, PO Box 3136, Road Town, Tortola, BVI. Our telephone numbers are +357 22 766624/25, +41 445 568 446, +7 495 967 8030; +38 044 238 8108; +40 21 203 6600; +48 12 445 8000; and +44 1707 242100, respectively. Our website addresses are www.luxoft.com and www.luxoft.ru. The information contained therein or connected thereto shall not be deemed to be incorporated into this prospectus or the registration statement of which it forms a part.

        The chart below represents our corporate structure at the closing of this offering.

GRAPHIC


*
0.56% of the shares of Software ITC (Romania) are held by a former employee.

 

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THE OFFERING

Class A ordinary shares offered by us   2,046,035 shares (or 2,352,940 shares if the underwriters exercise their over-allotment option in full).

Class A ordinary shares offered by the selling shareholder

 

2,046,035 shares (or 2,352,940 shares if the underwriters exercise their over-allotment option in full).

Class A ordinary shares outstanding after this offering

 

5,166,710 shares (or 5,780,520 shares if the underwriters exercise their over-allotment option in full).

Class B ordinary shares outstanding after this offering

 

27,472,405 shares (or 27,165,500 shares if the underwriters exercise their over-allotment option in full).

Total Class A and B ordinary shares to be outstanding after this offering

 

32,639,115 shares.

Voting and conversion rights

 

Following this offering, we will be authorized to issue two classes of ordinary shares: Class A ordinary shares and Class B ordinary shares. The rights of the holders of Class A and Class B ordinary shares are identical including dividend and liquidation rights, except with respect to voting and conversion. The holders of Class A ordinary shares are entitled to one vote per share, and the holders of Class B ordinary shares are entitled to 10 votes per share, on all matters that are subject to a shareholder vote. Each Class B ordinary share may be converted into one Class A ordinary share at any time at the election of the holder thereof, and will be automatically converted into one Class A ordinary share upon the earlier of (i) the date specified by a vote of the holders of two thirds (2/3) or more of the outstanding Class B ordinary shares, (ii) the death or disability of a holder of Class B ordinary shares, (iii) a change of control transaction (as described in our Amended and Restated Memorandum of Association and Articles of Association ("Amended Memorandum and Articles of Association") with respect to a holder of Class B ordinary shares, (iv) transfer thereof except for certain transfers described in our Amended Memorandum and Articles of Association, including, without limitation, transfers to certain affiliates and for tax and estate planning purposes, (v) the trading day immediately after the earliest date on which the number of outstanding Class B ordinary shares represents less than 10% of the aggregate combined number of outstanding Class A ordinary shares and Class B ordinary shares, or (vi) on the seventh anniversary of the adoption of our Amended Memorandum and Articles of Association. See "Description of Authorized Shares" for additional information.

 

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Use of proceeds   We estimate that the net proceeds to us from this offering, after deducting the underwriting discount and estimated offering expenses, will be approximately $31.1 million (or approximately $35.9 million if the underwriters exercise their over-allotment option in full), assuming the shares are offered at $17.00 per Class A ordinary share, the mid-point of the estimated offering price range set forth on the cover page of this prospectus.

 

 

We intend to use the net proceeds for working capital and other general corporate purposes.

 

 

We will not receive any of the proceeds from the sale of shares offered by the selling shareholder.

Dividend policy

 

We do not currently intend to pay dividends on our ordinary shares for the foreseeable future following this offering. See "Dividend Policy."

Risk Factors

 

See "Risk Factors" and other information included in this prospectus for a discussion of factors you should carefully consider before deciding to invest in our Class A ordinary shares.

Proposed symbol

 

"LXFT"

        The number of Class A and Class B ordinary shares to be outstanding after this offering is based on 3,120,675 Class A ordinary shares and 27,472,405 Class B ordinary shares outstanding as of June 1, 2013, and excludes 437,192 Class A ordinary shares reserved for issuance in connection with the vesting of options granted pursuant to our stock option plan and 110,348 Class A ordinary shares reserved for issuance under our stock option plan, in each case giving effect to the reclassification of our ordinary shares as described below. See "Management—Stock option plan."

        Unless otherwise indicated, all information in this prospectus:

    assumes an initial public offering price of $17.00 per share, the mid-point of the estimated initial public offering price range set forth on the cover page of this prospectus;

    assumes the reclassification in connection with this offering of our ordinary shares into 27,472,405 Class B ordinary shares and 3,120,675 Class A ordinary shares;

    assumes no exercise of the underwriters' option to purchase up to an additional 306,905 Class A ordinary shares from us and 306,905 Class A ordinary shares from the selling shareholder to cover over-allotments, if any; and

    gives effect to a 28-for-1 share split effected on June 7, 2013.

 

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Summary Consolidated Financial Data

        The following tables set forth our summary consolidated financial data. You should read the following summary consolidated financial data in conjunction with "Management's Discussion and Analysis of Financial Condition and Results of Operations" and our consolidated financial statements and related notes included elsewhere in this prospectus. Historical results are not indicative of the results to be expected in the future. Our consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America ("US GAAP").

        We have derived the summary consolidated statements of comprehensive income data for each of the years ended March 31, 2011, 2012 and 2013 from our audited consolidated financial statements included elsewhere in this prospectus.

 

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  Year ended March 31,  
 
  2011   2012   2013  
 
  (in thousands, except per share data)
 

Consolidated statements of comprehensive income:

                   

Sales of services

  $ 198,368   $ 271,142   $ 314,596  

Operating expenses:

                   

Cost of services (exclusive of depreciation and amortization)

    109,996     157,004     185,557  

Selling, general and administrative expenses

    51,039     64,720     76,911  

Depreciation and amortization

    6,344     7,742     8,981  
               

Operating income

    30,989     41,676     43,147  

Other income and expenses:

                   

Interest expense, net

    (3,522 )   (2,151 )   (1,277 )

Gain/(loss) from foreign currency exchange contracts          

    (320 )   886     (621 )

Other gain/(loss), net

    529     170     (1 )

Net foreign exchange gain/(loss)

    914     (1,263 )   (66 )
               

Income from continuing operations before income taxes

    28,590     39,318     41,182  

Income tax expense

    (2,043 )   (3,210 )   (3,645 )
               

Income from continuing operations

    26,547     36,108     37,537  

Income/(loss) from discontinued operations

    (664 )   80      

Net income

    25,883     36,188     37,537  

Less: Net loss attributable to the non-controlling interest

    1     62      
               

Net income attributable to the Group

  $ 25,884   $ 36,250   $ 37,537  
               

Other comprehensive income, net of tax:

                   

Foreign currency transaction adjustment

    15     (879 )   (1,514 )
               

Comprehensive income attributable to the Group

  $ 25,899   $ 35,371   $ 36,023  
               

Actual net income per ordinary share and pro forma per Class A and Class B ordinary shares:

                   

Basic

  $ 0.89   $ 1.23   $ 1.27  

Diluted

  $ 0.88   $ 1.22   $ 1.24  

Actual weighted average number of ordinary shares and pro forma number of Class A and Class B ordinary shares outstanding(1):

                   

Basic

    28,621,824     29,286,348     29,662,696  

Diluted

    29,506,708     29,734,292     30,235,884  

Dividends declared per share

  $   $ 0.14   $ 0.91  

 

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  As of March 31, 2013  
 
  Actual   Pro forma(2)  
 
   
  (unaudited)
 
 
  (in thousands)
 

Consolidated balance sheet data:

             

Cash and cash equivalents

  $ 4,499   $ 35,597  

Work-in-progress

    3,478     3,478  

Working capital(3)

    46,662     47,280  

Total assets

    155,222     186,320  

Total borrowings(4)

    16,765     16,765  

Total liabilities

    59,927     90,407  

Total equity

  $ 95,295   $ 95,913  

 

 
  Year ended March 31,  
 
  2011   2012   2013  
 
  (in thousands)
 

Supplemental financial metrics:

                   

Adjusted net income(5)

  $ 27,860   $ 38,354   $ 42,997  

(1)
See Note 17 to our annual consolidated financial statements included elsewhere in this prospectus for an explanation of the number of shares used in calculating basic and diluted earnings per share.

(2)
Pro forma to give effect to the completion of this offering and the reclassification of all of our ordinary shares into Class A and Class B ordinary shares, and to further give effect to the $30.5 million dividend declared on April 30, 2013.

(3)
Working capital is defined as total current assets minus total current liabilities.

(4)
Includes short term and long term borrowings, loans from related parties and capital lease obligations.

(5)
Adjusted net income is a non-GAAP measure and is net income from continuing operations before share-based compensation. We present adjusted net income as a supplemental performance measure because we believe that it facilitates operating performance comparisons from period to period and company to company. Adjusted net income should not be considered in isolation or as a substitute for operating income or other statement of comprehensive income items prepared in accordance with US GAAP as a measure of our performance. We use adjusted net income as a measure of operating performance because it assists us in comparing performance on a consistent basis, as it removes from our operating results the impact of share-based compensation expense, which is a non-cash item. In addition, adjusted net income, as presented in this prospectus, may not be comparable to similarly titled measures reported by other companies due to differences in the way that these measures are calculated. A reconciliation of adjusted net income to net income from continuing operations is set forth in the table below.

   
  Year ended March 31,  
   
  2011   2012   2013  
   
  (in thousands)
 
 

Reconciliation of adjusted net income:

                   
 

Income from continuing operations

  $ 26,547   $ 36,108   $ 37,537  
 

Share-based compensation

    1,313     2,246     5,460  
                 
 

Adjusted net income

  $ 27,860   $ 38,354   $ 42,997  
                 

 

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RISK FACTORS

        This offering and an investment in our Class A ordinary shares involve a high degree of risk. You should consider carefully the risks described below and all other information contained in this prospectus, before you decide to buy our Class A ordinary shares. If any of the following risks actually occurs, our business, financial condition and results of operations could be materially and adversely affected. In that event, the trading price of our Class A ordinary shares would likely decline and you might lose all or part of your investment.

Risks related to our business and our industry

We generate a significant portion of our sales of services, and anticipate deriving a material portion of our sales of products, from clients primarily located in the U.S. and Europe. Worsening economic conditions or factors that negatively affect the economic health of the U.S. or Europe could reduce our sales of services and thus adversely affect our results of operations.

        The recent crisis in the financial and credit markets in the U.S. and Europe led to a global economic slowdown, with the economies of those regions showing significant signs of weakness. The IT industry is particularly sensitive to the economic environment, and tends to decline during general economic downturns. We derive a significant portion of our sales of services from clients in the U.S. and Europe. If the U.S. or European economies further weaken or slow, pricing for our services may be depressed and our clients may reduce or postpone their technology spending significantly which may in turn lower the demand for our services. Furthermore, clients in affected regions could terminate their contracts with us, generally by giving between 30 days and six months' notice, or choose not to renew their contracts with us. Such actions by our clients would negatively affect our sales of services and profitability. The current financial crisis in Europe has given rise to concerns that certain European countries may default on their sovereign debt. The resulting economic uncertainty could adversely impact our operating results unless and until economic conditions in Europe improve and the prospects of sovereign debt defaults in Europe decline. The financial crisis in Europe may also have ripple effects in the U.S.

        If we are unable to successfully anticipate changing economic and other conditions affecting the markets in which we operate, we may be unable to effectively plan for or respond to those changes, and our results of operations could be materially adversely affected.

Rapid growth may strain our limited resources, and a failure to manage this growth could have a material adverse effect on the quality of our services and client support.

        We have recently experienced rapid growth and significantly expanded our business. Our sales of services grew from $198.4 million in the year ended March 31, 2011 to $314.6 million in the year ended March 31, 2013. As of March 31, 2013, we had 5,846 personnel, as compared to 4,273 personnel as of March 31, 2011. Our rapid growth has placed, and we expect it to continue to place, significant demands on our management and our administrative, operational and financial infrastructure. Continued expansion increases the challenges we face in offering our services in the following areas:

    recruiting and retaining sufficiently skilled IT professionals, as well as marketing and management personnel;

    training and supervision of our personnel to maintain our high quality standards;

    borrowing adequate short-term funds to finance rapid growth;

    developing financial and management controls; and

    preserving our culture and values and our entrepreneurial environment.

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        If we are unable to manage our rapid growth efficiently, it could have a material adverse effect on the quality of our services and client support, and therefore on our productivity and results of operations.

We generate a significant portion of our sales of services, and anticipate deriving a large portion of our sales of products, from a limited number of clients and any significant loss of business from these clients or failure by such clients to pay for our services could materially adversely affect our results of operations.

        We are dependent on our key clients for a significant portion of our sales of services. Our largest clients, Deutsche Bank and UBS, accounted, in the aggregate, for 47.3% and 47.0% of our sales of services in the year ended March 31, 2012 and the year ended March 31, 2013, respectively. In the aggregate, our ten largest clients accounted for 82.6% and 81.2% of our sales of services in the year ended March 31, 2012 and the year ended March 31, 2013, respectively.

        Our ability to maintain close relationships with these and other major clients is essential to the growth and profitability of our business. We have entered into framework agreements with each of our key clients, including Deutsche Bank, UBS and Boeing, which govern substantially all of our arrangements for the provision of services to such clients. These agreements, however, do not grant us any exclusivity and do not contain any minimum service conditions. Further, though our framework agreements with Deutsche Bank, UBS and Boeing provide for compensation for any services already rendered by us in the case of early termination, they may be terminated by Deutsche Bank, UBS and Boeing, respectively, generally upon prior written notice of between one and six months without any penalty. In addition, Deutsche Bank may terminate any or all of the individual service contracts governed by the master framework agreement if the master framework agreement is terminated for cause or for any other reason. Accordingly, we cannot provide any assurance that we will succeed in maintaining or growing our business with sales of services from our largest clients.

        Our reliance on any individual client may give that client a certain degree of pricing leverage against us as we negotiate contracts and terms of service. In addition, a number of other factors outside of our control could cause the loss of or reduction in business or sales of services from any client, and these factors are not predictable. These factors may include, among others, a client's corporate restructuring or insolvency, pricing pressure or changes to its outsourcing strategy. A client may decide to reduce spending on technology services or sourcing from us, or shift such spending to one of our competitors, due to a challenging economic environment or other internal or external factors relating to its business. For example, in 2008, one of our ten largest clients at the time, Nortel, filed for bankruptcy. As a result of this action, not only were we unable to continue our relationship with Nortel, but we were unable to collect unpaid receivables for a portion of the work we had done for this client.

        Furthermore, as we increase the amount of services we offer to our biggest clients and as our services account for a larger portion of our clients' budgets on IT services, we run the risk of approaching our clients' maximum budget allowance for spending on IT services. If our clients are unable or unwilling to devote more of their IT budget to paying for our services, or if our clients are unable or unwilling to devote more of their overall budget to IT services, we risk being unable to increase our sales of services from each of these clients. Likewise, as we expand our product offerings to clients, we may run the risk of approaching our clients' maximum budget allowance for software spending.

        The loss of any of our major clients, or a significant decrease in the volume of work they outsource to us or the price at which we sell our services to them, could materially adversely affect our sales of services and thus our results of operations.

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We derive a large portion of our sales of services, and expect that we will derive a large portion of our sales of products, from clients who operate in a limited number of industries.

        We derive a large portion of our sales of services from clients who operate in a limited number of industries including financial services, travel and aviation, and technology. In the year ended March 31, 2013, we derived 54.7%, 12.4% and 11.5% of our sales of services, respectively, from clients operating in these three industries. Furthermore, we anticipate our product sales will be largely to clients in the same industries. Our business and growth depend to a large extent on continued demand for our services from clients and potential clients in these industries. Demand for our services and products in general, as well as in any industry specifically, could be affected by multiple factors outside of our control, including a decrease in growth or growth prospects of the industry, a slowdown or reversal of the trend to outsource technological applications and software development services generally, or consolidation within the industry. Furthermore, clients in affected regions could terminate their contracts with us, generally by giving between 30 days and six months' notice, or choose not to renew their contracts with us. In addition, serving a major client within a particular industry may limit our ability to enter into engagements with competitors of that client, and certain of our client contracts prohibit certain of our employees from working on engagements with our clients' competitors. Many of these industries are also experiencing vendor consolidation, which may limit our ability to gain new clients or keep existing clients as the procurement department of potential and existing clients limit the number of vendors from which they are willing to buy services. Any significant decrease in demand for our services by clients in these industries, or other industries from which we derive significant sales of services in the future, may have a material adverse effect on our results of operations.

        In particular, an economic slowdown or financial crisis could result in decreased IT spending by institutions in the financial services industry. Many such institutions may reduce their IT spending, delay planned projects or both. As a result, it may make it more difficult to obtain new clients, sell our services and products or maintain the current level of demand from our existing clients in this industry. Because the financial services industry is our largest vertical, such a slowdown could materially affect our revenues and thus our results of operations.

        In addition, the large sovereign debts and/or fiscal deficits of a number of European countries and the U.S. have raised concerns regarding the financial condition of financial institutions, insurers and other corporations:

    located in these countries;

    that have direct or indirect exposure to these countries; and/or

    whose banks, counterparties, custodians, clients, service providers, sources of funding and/or suppliers have direct or indirect exposure to these countries.

        The default, or a significant decline in the credit rating, of one or more sovereigns or financial institutions could cause severe stress in the financial system generally and could adversely affect the businesses and economic condition and prospects of our clients (some of the largest of which are European banks), counterparties, suppliers or creditors, directly or indirectly, in ways difficult to predict. The impact of these conditions could be detrimental to us and could materially adversely affect our business, operations and profitability.

We operate in a highly competitive environment and may not be able to compete successfully.

        The IT industry in general, and the software development market in particular, is highly competitive, and we expect competition not only to persist but also to intensify. We believe that the principal competitive factors in our markets are the quality of the services offered, breadth and depth of service offerings, reputation and track record, industry expertise, effective personnel recruiting,

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training and retention, marketing and sales skills, scalability of infrastructure, and ability to address clients' timing requirements and price.

        We face competition from offshore technology service providers in outsourcing destinations with low wage costs such as India, as well as competition from large global consulting and outsourcing firms and in-house IT departments of large corporations. Once we begin introducing new products for commercial resale and licensing, we will face competition from software product companies, such as QlikView and Red Hat. There is no assurance that we will not face additional competition from new market entrants. We do not enter into exclusive services arrangements with any of our clients, and as a result, our sales of services could suffer to the extent that clients could obtain services from other competing application and software engineering outsourcing services. Clients may prefer application and software engineering outsourcing services that have more locations or that are based in countries that are more cost-competitive or more politically and economically stable than the countries in which we operate.

        Some of our current and potential competitors may benefit from substantially greater financial, marketing, or technical resources. Our current and potential competitors may also be able to respond more quickly to new technologies or processes and changes in client demands; may be able to devote greater resources towards the development, promotion and sale of their services than we can; and may also make strategic acquisitions or establish cooperative relationships among themselves or with third parties that increase their ability to address client needs. We cannot give any assurance that we will be able to retain our clients while competing against such competitors. Increased competition, our inability to compete successfully, pricing pressures and resulting loss of clients could materially adversely affect our business.

Our future revenue growth depends in part on our ability to successfully introduce new products.

        The software industry is characterized by rapidly changing technology, evolving industry standards and frequent new product introductions. As we continue to grow our business, we plan to introduce new products for resale and licensing. In order for our products to be commercially viable, either through direct sales or through licensing agreements, they must meet changing client needs and offer our clients unique benefits. We have limited experience to date in developing products for resale and licensing, and have not generated significant revenues from the sale of products. We may not be able to successfully introduce our products to the market. If we are not able to develop and clearly demonstrate the value of our products to our clients, the growth of our revenues may be harmed. Even if we are able to attract clients for our product offerings, the amount of revenue that we derive from our product sales may be smaller than what we forecast. As new products are continually being released, it is difficult to predict the amount of usage each of our products will receive before it becomes obsolete. Therefore, we may need to devote significant resources to the creation, support, upgrade and maintenance of such product offerings. If we are slow to develop products, of if our competitors are able to achieve those results more quickly than we, we will fail to capture a significant share of the software product market. If we misjudge client needs in the future, our new product offerings may not succeed and our revenues may be harmed. Because these new initiatives are inherently risky, they may not be successful and may harm our financial condition and operating results.

Our computer networks may be vulnerable to security risks that could disrupt our services and cause us to incur losses or liabilities that could adversely affect our business.

        Our computer networks may be vulnerable to unauthorized access, computer hackers, computer viruses, worms, malicious applications and other security problems caused by unauthorized access to, or improper use of, systems by third parties or employees. A hacker who circumvents security measures could misappropriate proprietary information, including personally identifiable information, or cause interruptions or malfunctions in our operations. Although we intend to continue to implement security

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measures, computer attacks or disruptions may jeopardize the security of information stored in and transmitted through our computer systems. Actual or perceived concerns that our systems may be vulnerable to such attacks or disruptions may deter our clients from using our solutions or services. As a result, we may be required to expend significant resources to protect against the threat of these security breaches or to alleviate problems caused by these breaches.

        Data networks are also vulnerable to attacks, unauthorized access and disruptions. For example, in a number of public networks, hackers have bypassed firewalls and misappropriated confidential information, including personally identifiable information. It is possible that, despite existing safeguards, an employee could misappropriate our clients' proprietary information or data, exposing us to a risk of loss or litigation and possible liability. Losses or liabilities that are incurred as a result of any of the foregoing could adversely affect our business.

If we cause disruptions to our clients' businesses or provide inadequate service, our clients may have claims for substantial damages against us, which could cause us to lose clients, have a negative effect on our reputation and adversely affect our results of operations.

        Many of our engagements involve projects that are critical to the operations of our clients' businesses and provide benefits to our clients that may be difficult to quantify. Our software development services involve a high degree of technological complexity and have unique specifications, and could contain design defects or software errors that our quality assurance procedure may fail to detect and correct.

        Errors or defects may result in the loss of current clients, failure to attract new clients, diversion of development resources and an increase in support or service costs. Furthermore, any failure in a client's system or any breach of security could disrupt the client's business and could result in a claim for substantial damages against us, regardless of our responsibility for such failure, if such failure is caused by a breach of our contract obligations upon agreements with clients. In addition, any such failures or errors could seriously damage our reputation and materially affect our ability to attract new business.

        Most of our contracts contain limitations on liability capped at between six months and one year of payments under the contract, or at the full service contract price; and many of our contracts disclaim any warranties of merchantability and sell our services "as-is." However, not all client contracts contain liability caps, and these limitations on liability may not apply in all circumstances, may be unenforceable in some cases, or may be insufficient to protect us from liability for damages, direct or consequential. Any substantial liability that we incur as a result of any of the above could have a material adverse effect on our business and results of operations.

Our insurance may be inadequate to protect us against our losses.

        Although we believe our insurance coverage is customary for the jurisdictions in which we operate, insurance for our operations in CEE does not cover all the risks that a company of a similar size and nature operating in a more economically developed country would insure. For example, we do not have coverage for business interruption or loss of key management personnel. In addition, we only have limited product liability insurance. We do not maintain separate funds or otherwise set aside reserves to cover such losses or third-party claims. Thus, if any such uninsured event were to occur, we might incur substantial costs and diversion of resources, which, in turn, could have a material adverse effect on our results of operations.

Our success depends on our ability to continue to attract new personnel, and retain and motivate our existing personnel.

        Our ability to maintain and renew existing engagements and obtain new business is critical to our success and will largely depend on our ability to attract, train and retain skilled professionals, including

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experienced IT professionals and other professionals, which enables us to keep pace with growing demands for outsourcing, evolving industry standards and changing client preferences.

        We believe that one of the key factors that distinguishes us from many of our competitors is the quality and educational level of our work force. For example, as of March 31, 2013, approximately 80% of our software and IT professionals held Master's degrees (or Master's degree equivalents in certain jurisdictions) or higher. Because our business model does not provide for the hiring and training of a large number of junior personnel, we must depend on lateral hires to provide us with skilled professionals. Competition for skilled professionals in the markets in which we operate can be intense and, accordingly, we may not be able to retain or hire all of the professionals necessary to meet our ongoing and future business needs. If our competitors are able to increase the educational level of their work force, or if clients and prospective clients become more price sensitive and choose lower-cost suppliers that have a cheaper labor force, we may lose our competitive advantage notwithstanding the relatively high educational level of our work force. In addition, any reductions in headcount for economic or business reasons, however temporary, could negatively affect our reputation as an employer and our ability to hire qualified professionals to meet our business requirements.

        Our attrition rates were 9.9%, 12.7% and 12.9% for the years ended March 31, 2011, 2012 and 2013, respectively. Our attrition rate increased during the year ended March 31, 2012 and 2013 due to an overall increase in demand for IT professionals, which contributed to higher turnover throughout the industry. We define attrition as the total number of personnel with more than six months of work experience in the company, who have left the company during the reporting period, divided by the total number of personnel at the end of the reporting period, net of employees who have left on the last day of the period. We believe that our competitors calculate attrition based on the same principles, although their methodology may differ slightly from ours. While we have adopted a number of programs aimed at managing our attrition rate, we may encounter higher attrition rates in the future. A significant increase in the attrition rate among professionals with specialized skills could decrease our operating efficiency and productivity and could lead to a decline in demand for our services. The competition for highly-skilled professionals may require us to increase salaries, and we may be unable to pass on these increased costs to our clients. These factors may, as a result, have a material adverse effect on our profitability and results of operations. Our failure to attract, train and retain professionals with the qualifications necessary to fulfill the needs of our existing and future clients could materially adversely affect our ability to provide high quality services to our clients.

Wage inflation in countries where our delivery centers are located may adversely affect our financial condition and results of operations.

        We operate delivery centers in Russia, Ukraine, Romania, Poland and Vietnam where wage costs have historically been significantly lower than wage costs in the U.S. and Western Europe for comparably skilled professionals. Wages are our most significant operating expense and wage increases in these countries may prevent us from sustaining this competitive advantage internationally and may negatively affect our profitability. According to Rosstat, the State Statistics Service of Ukraine, and the Romanian National Institute of Statistics, wage inflation (or deflation) in Russia, Ukraine and Romania, where we have the majority of our employees, for the year ended December 31, 2012 was approximately 6.6%, (0.2)% and 5.8%, respectively. Russia and Ukraine use inflation as measured by the consumer price index, as a proxy for wage inflation in official statistics. However, we believe that wage inflation for the IT industry can be significantly higher than overall wage inflation within each of these countries. We may need to increase the levels of employee compensation more rapidly than in the past to remain competitive, and we may not be able to pass on these increased costs to our clients. Unless we are able to continue to increase the efficiency and productivity of our employees as well as the prices we can charge for our services, wage inflation may materially adversely affect our financial condition and results of operations.

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Fluctuations in currency exchange rates and increased inflation could materially adversely affect our financial condition and results of operations.

        We conduct business in multiple countries, which expose us to risks associated with fluctuations in currency exchange rates. In the year ended March 31, 2013, 55.2% of our sales were denominated in U.S. dollars and 31.1% were denominated in Euros. Conversely, during the same time period, 36.7% of our expenses (excluding currency losses and changes in deferred tax) were denominated in Rubles. As a result, strengthening of the Ruble relative to the U.S. dollar presents the most significant risk to us. The Ruble to U.S. dollar and Euro exchange rates has been volatile in the past few years as a result of instability of the global financial markets. Any further significant fluctuations in currency exchange rates may impact our business significantly.

        In addition, economies in CEE countries such as Russia, Ukraine and Romania have periodically experienced high rates of inflation. According to the Russian Federal State Statistics Service, the State Statistics Service of Ukraine, and the Romanian National Institute of Statistics, the inflation rate, as measured by the consumer price index, was as follows:

    the annual inflation rate in Russia was 8.8% in 2009, 8.8% in 2010, 6.1% in 2011 and 6.6% in 2012;

    the annual inflation rate in Ukraine was 12.3% in 2009, 9.1% in 2010 and 4.6% in 2011, and in 2012 the annual rate of deflation was 0.2%; and

    the annual inflation rate in Romania was 5.6% in 2009, 6.1% in 2010, 5.8% in 2011 and 3.3% in 2012.

        Periods of higher inflation may slow economic growth in those countries. As a substantial portion of our expenses (excluding currency losses and changes in deferred tax) are denominated in Rubles, the relative movement of inflation significantly affects our results of operations. Inflation also is likely to increase some of our costs and expenses, including wages, rents, leases and employee benefit payments, which we may not be able to pass on to our clients and, as a result, may reduce our profitability. To the extent inflation causes these costs to increase, such inflation may materially adversely affect our business. Inflationary pressures could also affect our ability to access financial markets and lead to counter-inflationary measures that may harm our financial condition, results of operations or materially adversely affect the market price of our securities.

Our competitive position and future prospects depend on our senior management's expertise, and our business may be severely disrupted if we lose their services.

        Our business is dependent on retaining the services of certain key members of the management team who have extensive experience in the IT industry. If a key member of the management team is unable or unwilling to continue in his or her present position, it could disrupt our business operations, and we may not be able to replace such a person easily, or at all. In addition, the number of qualified managerial personnel in the primary jurisdictions in which we operate is limited and competition for the services of such persons in our industry is intense. While we have entered into employment contracts with our senior managers and have provided incentives for them to remain with us, including monetary bonuses and share-based compensation, we cannot guarantee the retention of their services. We currently do not maintain insurance against any damage that may be incurred in case of the loss or dismissal of our key specialists or managers. The loss of any key management may have an adverse effect on our business.

        If any of our senior management or key personnel joins a competitor or forms a competing company, we may lose clients, suppliers, know-how and key technology professionals and staff members to them. Also, if any of our business development managers, who generally keep a close relationship with our clients, joins a competitor or forms a competing company, we may lose clients, and our sales of services may be materially adversely affected. Additionally, such movement by senior management could result in unauthorized disclosure or use of our technical knowledge, practices or procedures, which may materially adversely affect our competitive position and, consequently, our business.

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Our ability to generate and retain business depends on our reputation in the marketplace.

        Because many of our specific client engagements involve unique services, our corporate reputation is a significant factor in our clients' evaluation of whether to engage our services. We believe the Luxoft brand name and our reputation are important corporate assets that help distinguish our services from those of our competitors and also contribute to our efforts to recruit and retain talented employees. However, our corporate reputation is susceptible to damage by actions or statements made by current or former clients, competitors, vendors, employees and adversaries, as well as government regulators, in legal proceedings or otherwise and members of the investment community and the media, irrespective of the accuracy of the information on which such actions or statements are based. There is a risk that negative information about us, even if based on false rumor or misunderstanding, could adversely affect our business. In particular, damage to our reputation could be difficult and time-consuming to repair, could make potential or existing clients reluctant to select us for new engagements and could materially adversely affect our recruitment and retention efforts. Damage to our reputation could also reduce the value and effectiveness of the Luxoft brand name and could reduce investor confidence in us. Our inability to generate or retain business as a result of damage to our reputation could materially adversely affect our business.

If we do not succeed in quickly assimilating new technologies and rapidly changing technologies, methodologies and evolving industry standards, our business may be materially and adversely affected.

        The IT industry is subject to rapid and significant changes in technology, methodologies and evolving industry standards. Our clients rely on us to continue to anticipate and provide them with the most innovative technologies on the market. Our future success will to a large extent depend on our ability to quickly acquire and assimilate cutting edge technologies, which we can then use to develop our clients' systems. Development and introduction of new services and products involves a significant commitment of time and resources and is subject to a number of risks and challenges, including:

    it may be difficult or costly to update our services, applications, tools and software and to develop new services and products quickly enough to meet our clients' needs;

    it may be difficult or costly to make some features of our software work effectively and securely over the Internet or with new or changed operating systems;

    it may be difficult or costly to update our software and services to keep pace with business, evolving industry standards, methodologies, regulatory and other developments in the industries where our clients operate; and

    it may be difficult to maintain a high level of quality in implementing new technologies and methodologies.

        We may not be successful in anticipating or responding to these developments in a timely manner, or if we do respond, the services, technologies or methodologies we develop or implement may not be successful in the marketplace. Further, products, services, technologies or methodologies that are developed by our competitors may render our services and products non-competitive or obsolete. Our failure to enhance our existing services and to develop and introduce new services and products in line with the developments in technology, methodologies and standards in the IT industry that will promptly address the needs of our clients could cause us to lose clients, and materially adversely affect our business.

Our profitability could suffer if we are not able to manage large and complex projects and complete fixed price, fixed-timeframe contracts on budget and on time.

        Our profitability and operating results are dependent on the scale of our projects and the prices we are able to charge for our services. We are performing an increasing percentage of our work

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through fixed price contracts, in which we assume full control of the project team, including the project manager, lead analyst and lead architect, and manage all facets of execution. As we take on more sophisticated projects, while simultaneously shifting more engagements to a fixed price model, we may be unable to accurately estimate the appropriate project price and successfully manage large and complex projects. Although we use specified technical processes and our past project experience to reduce the risks associated with estimating, planning and performing fixed price and fixed-timeframe projects, we face the risk of cost overruns, completion delays and wage inflation in connection with these projects. Pricing projects on a fixed price basis is a relatively new model for our business, so we have less experience in pricing projects on this basis. If we fail to accurately estimate the resources and time required for a project or future rates of wage inflation, or if we fail to perform contractual obligations within the contractual timeframe, our profitability could suffer.

        The challenges of managing larger and more complex projects include:

    maintaining high-quality control and process execution standards;

    maintaining planned resource utilization rates on a consistent basis;

    maintaining productivity levels and implementing necessary process improvements;

    controlling project costs;

    maintaining close client contact and high levels of client satisfaction;

    recruiting and retaining sufficient numbers of skilled IT professionals; and

    maintaining effective client relationships.

        In addition, large and complex projects may involve multiple engagements or stages, and there is a risk that a client may choose not to retain us for additional stages or may cancel or delay additional planned engagements. Such cancellations or delays may make it difficult to plan our project resource requirements, and may result in lower profitability levels than we anticipated upon commencing engagements.

Our profitability could suffer if we fail to maintain favorable pricing for our projects.

        The pricing of our services is affected by a number of factors, including:

    our clients' perception of our ability to add value through our services;

    our competitors' pricing policies;

    bid practices of clients and their use of third-party advisors;

    our ability to charge premium prices when justified by market demand or the type of service;

    our large clients' pricing leverage; and

    general economic conditions.

        If we are not able to maintain favorable pricing for our services, our profitability could suffer.

If we are unable to collect our receivables from, or bill our unbilled services to our clients, our results of operations and cash flows could be materially adversely affected.

        Our business depends on our ability to successfully obtain payment from our clients of the amounts they owe us for work performed. We usually bill and collect such amounts on relatively short cycles. We maintain allowances for doubtful accounts. Actual losses on client balances could differ from those that we currently anticipate and, as a result, we might need to adjust our allowances. There is no guarantee that we will accurately assess the creditworthiness of our clients. Weak macroeconomic

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conditions and related turmoil in the global financial system could also result in financial difficulties, including limited access to the credit markets, insolvency, or bankruptcy for our clients, and, as a result, could cause clients to delay payments, request modifications to their payment arrangements that could increase our receivables balance, or default on their payment obligations. In addition, some of our clients may delay payments due to changes in internal payment procedures driven by rules and regulations these clients are subject to. Timely collection of client balances also depends on our ability to complete our contractual commitments and bill and collect our contracted sales of services. If we are unable to meet our contractual requirements and if we experience an increase in the time to bill and collect for our services, we might be unable to collect our client balances or experience delays in collection. If this occurs, our results of operations and cash flows could be materially adversely affected.

Our sales of services, operating results or profitability may experience significant variability and our past results may not be indicative of our future performance.

        Our operating results may fluctuate due to a variety of factors, many of which are outside of our control. As a result, comparing our operating results on a period-to-period basis may not be meaningful. You should not rely on our past results as an indication of our future performance.

        Factors that are likely to cause these variations include:

    the number, timing, scope and contractual terms of projects in which we are engaged;

    delays in project commencement or staffing delays due to difficulty in assigning appropriately skilled or experienced professionals;

    the accuracy of estimates on the resources, time and fees required to complete fixed price projects and costs incurred in the performance of each project;

    inability to maintain high employee utilization levels;

    changes in pricing in response to client demand and competitive pressures;

    changes in the allocation of on-site and offshore staffing;

    the business decisions of our clients regarding the use of our services;

    the ability to further grow sales of services from existing clients;

    the available leadership and senior technical resources compared to junior engineering resources staffed on each project;

    seasonal trends and the budget and work cycles of our clients;

    delays or difficulties in expanding our operational facilities or infrastructure;

    our ability to estimate costs under fixed price contracts;

    employee wage levels and increases in compensation costs, including timing of promotions and annual pay increases;

    unanticipated contract or project terminations;

    the timing of collection of accounts receivable;

    our ability to manage risk through our contracts;

    the continuing financial stability of our clients; and

    general economic conditions.

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        Based upon all of the factors described above, our operating results may from time to time fall below our estimates or the expectations of public market analysts and investors.

We have incurred, and may continue to incur, significant share-based compensation expenses which could adversely impact our net income.

        We have granted certain options under our stock option plan, as a result of which we have recorded $1.3 million, $2.2 million and $5.5 million as share-based compensation expenses for the years ended March 31, 2011, 2012 and 2013 respectively.

        US GAAP prescribes how we account for share-based compensation. US GAAP requires us to recognize share-based compensation as a compensation expense in the statement of comprehensive income generally based on the fair value of equity awards on the date of the grant, with the compensation expense recognized over the period in which the recipient is required to provide service in exchange for the equity award. Such expenses could adversely impact our results of operations or the price of our Class A ordinary shares. While in the past we recorded significant share-based compensation expenses, if we do not grant equity awards, or if we reduce the number of equity awards we grant, we may not be able to attract and retain key personnel. If we adopt additional equity incentive plans in the future in order to attract and retain key personnel, the expenses associated with such additional equity awards could materially adversely affect our results of operations.

We may be subject to third-party claims of intellectual property infringement that could be time-consuming and costly to defend.

        Our success largely depends on our ability to use and develop our technology, tools, code, methodologies and services, which might also require us to utilize the intellectual property rights of third parties, including patents, copyrights, trade secrets and trademarks. All intellectual property ("IP") rights created by our employees and contractors are transferred to us subject to local laws and regulations. Typically, we transfer to our clients all of the intellectual property rights to the software we develop for them within the scope of our custom software development and software engineering arrangement, without retaining any rights for ourselves. In developing software for our clients we use third-party environment software under separate license agreements, or, if requested by clients, we may incorporate third-party software into our software development for them. In these cases, we acquire all necessary licenses for such software once we reach a preliminary agreement with our clients.

        Although there are no material pending or threatened intellectual property claims against us as of the date of this prospectus, and we believe that our intellectual property rights do not infringe on the intellectual property rights of others, infringement claims may be asserted against us in the future. For example, we may be unaware of intellectual property registrations or applications relating to our services that may give rise to potential infringement claims against us. Our contracts may be deemed to result in the assignment to our clients of the rights to any developments or improvements in our proprietary delivery platform, software development tools, or residual know-how developed by us during the course of our engagements. Such an interpretation may give rise to a potential claim that our product improvements or residual know-how were previously assigned to our client and can no longer be used by us on behalf of ourselves or other clients, or subject us to liability for infringement of our client's intellectual property rights. There may also be technologies licensed to and relied on by us that are subject to infringement or other corresponding allegations or claims by third parties which may damage our ability to rely on such technologies.

        Further, our current and former employees and/or contractors could challenge our exclusive rights in the software they have developed in the course of their employment or engagement. In Russia and certain other countries in which we operate, (a) where intellectual property was created by an employee of a company as part of their employment relationship, the respective employee retains authorship of

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such intellectual property, while the employer, unless otherwise provided in the employment agreement, is deemed to own the exclusive rights to such intellectual property, and (b) where an engaged specialized contractor creates the intellectual property by contract with the client, the latter is by default the holder of exclusive rights to such intellectual property, unless the contract provides otherwise. However, in either case, the authors, regardless of whether they were employees of the company or of any of its contractors (as the case may be), may retain authorship and should be paid consideration for the intellectual property work performed. In the case of intellectual property work created by an employee during his/her employment, the employer may be required to satisfy additional legal requirements in order to make further use or dispose of such intellectual property. While we believe that we have complied with all such requirements, and have fulfilled all requirements necessary to acquire all rights, to the extent permitted by law, to software developed by our employees and contractors, courts have been inconsistent in their approach to enforcing such applicable legal requirements. As a result, there can be no guarantee that we would be successful in defending against any claim by our current or former employees or contractors challenging our exclusive rights over the use and transfer of works that the respective employees and contractors created or requesting additional compensation for such works.

        Parties making infringement claims may be able to obtain an injunction to prevent us from delivering our services or using technology containing the allegedly infringing intellectual property.

        We may also be subject to litigation involving claims of patent infringement or violation of other intellectual property rights of third parties. Furthermore, most of our client contracts require us to indemnify the client in these circumstances for any damages and expenses the client incurs in defending any such claims by third parties, and we may be required to indemnify the client even if the claim by the third party against our client is without merit or is dismissed.

        If we fail to defend ourselves and our clients against such claims, our reputation as well as our financial condition may be adversely affected.

We may not be successful in protecting our intellectual property rights, including our unpatented proprietary know-how and trade secrets, or in avoiding claims that we infringed on the intellectual property rights of others.

        We rely on unpatented proprietary know-how and trade secrets and employ commercially reasonable methods, including confidentiality agreements with employees and consultants, to protect our know-how and trade secrets. However, these methods and our patents and trademarks may not afford complete protection and there can be no assurance that others will not independently develop the know-how and trade secrets or develop better production methods than us. Further, we may not be able to deter current and former employees, contractors and other parties from breaching confidentiality agreements and misappropriating proprietary information and it is possible that third parties may copy or otherwise obtain and use our information and proprietary technology without authorization or otherwise infringe on our intellectual property rights. Additionally, in the future we may develop and license trade secrets and similar proprietary rights to third parties. While we attempt to ensure that our intellectual property and similar proprietary rights are protected when entering into business relationships, third parties may take actions that could materially and adversely affect our rights or the value of our intellectual property, similar proprietary rights or reputation. In the future, we may also rely on litigation to enforce our intellectual property rights and contractual rights and, if not successful, we may not be able to protect the value of our intellectual property. Furthermore, no assurance can be given that we will not be subject to claims asserting the infringement of the intellectual property rights of third parties seeking damages, the payment of royalties or licensing fees and/or injunctions against the sale of our products. Any litigation could be protracted and costly and could have a material adverse effect on our business and results of operations regardless of its outcome.

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We may be liable to our clients for damages caused by violations of intellectual property rights and the disclosure of other confidential information, system failures, errors or unsatisfactory performance of services, and our insurance policies may not be sufficient to cover these damages.

        We often have access to sensitive or confidential client information, including personally identifiable information. The protection of our clients' intellectual property rights and other confidential information, including personally identifiable information of our clients, is particularly important for us since our operations are mainly based in CEE countries. CEE countries have not traditionally enforced intellectual property protection to the same extent as countries such as the U.S. To protect proprietary information and other intellectual property, we require our employees, independent contractors, vendors and clients to enter into written confidentiality agreements with us.

        Despite measures we take to protect the intellectual property and other confidential information or personally identifiable information of our clients, unauthorized parties, including our employees and subcontractors, may attempt to misappropriate certain intellectual property rights that are proprietary to our clients or otherwise breach our clients' confidences. The agreements we enter into with employees, independent contractors, vendors and clients may not provide meaningful protection for trade secrets, know-how or other proprietary information in the event of any unauthorized use, misappropriation or disclosure of such trade secrets, know-how or other proprietary information. Policing unauthorized use of proprietary technology is difficult and expensive. The steps we have taken may be inadequate to prevent the misappropriation of our and our clients' proprietary technology. Reverse engineering, unauthorized copying or other misappropriation of our and our clients' proprietary technologies, tools and applications could enable third parties to benefit from our or our clients' technologies, tools and applications without paying us for doing so. Unauthorized disclosure of sensitive or confidential client information, including personally identifiable information, or a violation of intellectual property rights, whether through employee misconduct, breach of our computer systems, systems failure or otherwise, may subject us to liabilities, damage our reputation and cause us to lose clients.

        Our client contracts generally provide for indemnity for intellectual property infringements of third party rights that arise from our breach under such contracts. Although we attempt to limit our contractual liability for consequential damages in rendering our services, and provide limitation of liabilities for amount of such liabilities, typically to one year's payment under the relevant agreement, these limitations on liability may not apply in all circumstances, and may be unenforceable in some cases, or may be insufficient to protect us from liability for damages. There may be instances when liabilities for damages are greater than the insurance coverage we hold and we will have to internalize those losses, damages and liabilities not covered by our insurance. Furthermore, if any third party brings any claims against our clients, claiming that our work product or intellectual property transferred to our clients violates, or infringes upon such third party's IP rights, any such claims could result in claims by our clients against us, which could result in the loss of such client, could seriously damage our reputation, could result in other clients terminating their engagements with us and could make it more difficult to obtain new clients.

If we fail to integrate or manage acquired businesses efficiently, or if the acquired companies are difficult to integrate, divert management resources or do not perform to our expectations, we may not be able to realize the benefits envisioned for such acquisitions, and our overall profitability and growth plans could be materially adversely affected.

        On occasion we have expanded our service capabilities and gained new clients through selective acquisitions, including our recent purchase of certain IT assets of Freedom Professional Services & Technologies LLC ("FOSS"). We plan to continue making selective acquisitions in the future. Our ability to successfully integrate an acquired business and realize the benefits of an acquisition requires,

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among other things, successful integration of technologies, operations and personnel. Challenges we face in the acquisition and integration process include:

    integrating operations, services and personnel in a timely and efficient manner;

    diverting significant management attention and financial resources from our other operations and disrupting our ongoing business;

    unforeseen or undisclosed liabilities and integration costs;

    incurring liabilities from the acquired businesses for infringement of intellectual property rights or other claims for which we may not be successful in seeking indemnification;

    incurring debt, amortization expenses related to intangible assets, large and immediate write-offs, or issuing ordinary shares as consideration for the acquired assets that would dilute our existing shareholders' ownership;

    generating sufficient revenues and net income to offset acquisition costs;

    potential loss of, or harm to, employee or client relationships;

    properly structuring our acquisition consideration and any related post-acquisition earn-outs and successfully monitoring any earn-out calculations and payments;

    failing to realize the potential cost savings or other financial benefits and/or the strategic benefits of the acquisition;

    retaining key senior management and key sales and marketing and research and development personnel, particularly those of the acquired operations;

    consolidating and rationalizing corporate, information technology and administrative infrastructures;

    entry into unfamiliar markets; and

    increased complexity from potentially operating additional geographically dispersed sites, particularly if we acquire a company or business with facilities or operations outside of the countries in which we currently have operations.

        In addition, the primary value of many potential acquisition targets in the IT services industry lies in their skilled IT professionals and established client relationships. Transitioning these types of assets to our business can be particularly difficult due to different corporate cultures and values, geographic distance and other intangible factors. For example, some newly acquired employees may decide not to work with us or to leave shortly after their move to our company and some acquired clients may decide to discontinue their commercial relationships with us. These challenges could disrupt our ongoing business, distract our management and employees and increase our expenses, including causing us to incur one-time expenses and write-offs, and make it more difficult and complex for our management to effectively manage our operations. If we are not able to successfully integrate an acquired business and its operations and to realize the benefits envisioned for such acquisition, our overall growth and profitability plans may be adversely affected.

Our international operations involve risks that could increase our expenses, adversely affect our results of operations and require increased time and attention from our management.

        We have operations in a number of jurisdictions, including Russia, Ukraine, Romania, the UK, Poland and Vietnam, and we serve clients across North America, Europe and Asia. As a result, we may be subject to risks inherently associated with international operations. Our global operations expose us

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to numerous and sometimes conflicting legal, tax and regulatory requirements, and violations or unfavorable interpretation by the respective authorities of these regulations could harm our business.

        Additional risks associated with international operations include difficulties in enforcing contractual rights, the burdens of complying with a wide variety of foreign laws and potentially adverse tax consequences, including permanent establishment and transfer pricing issues, tariffs, quotas and other barriers and potential difficulties in collecting accounts receivable. In addition, we may face competition in other countries from companies that may have more experience with operations in such countries or with international operations. Additionally, such companies may have long-standing or well-established relationships with desired clients, which may put us at a competitive disadvantage. We may also face difficulties integrating new facilities in different countries into our existing operations, as well as integrating employees that we hire in different countries into our existing corporate culture. Our international expansion plans may not be successful and we may not be able to compete effectively in other countries. We cannot ensure that these and other factors will not impede the success of our international expansion plans or limit our ability to compete effectively in other countries.

Our business operations and financial condition could be adversely affected by negative publicity about offshore outsourcing or anti-outsourcing legislation in the U.S. or other countries in which our clients operate.

        Concerns that offshore outsourcing has resulted in a loss of jobs and sensitive technologies and information to foreign countries have led to negative publicity concerning outsourcing in some countries, including the U.S. Current or prospective clients may elect to perform services that we offer themselves, or may be discouraged from transferring these services to offshore providers such as ourselves to avoid any negative perceptions that may be associated with using an offshore provider. As a result, our ability to compete effectively with competitors that operate primarily out of facilities located in these countries could be harmed. In addition, anti-outsourcing legislation, if adopted, could materially adversely affect our business, financial condition and results of operations, and impair our ability to service our clients.

We depend on a limited number of key accounting personnel for the preparation of US GAAP financial statements. Given the competition for such personnel some of the key accounting personnel may leave, which could disrupt our ability to timely and accurately report US GAAP financial statements.

        We maintain our books and records and prepare stand-alone accounting reports for management reporting purposes, which are then consolidated on a monthly basis, and adjusted to conform to US GAAP financial reporting on a quarterly basis. Timely and accurate US GAAP financial reporting is a challenging task, requiring us to retain a sufficient number of US GAAP-experienced accounting personnel. While we have accounting personnel with the required US GAAP expertise, this still may not be sufficient to support our rapid growth. There is strong demand for US GAAP-experienced accounting personnel in the regions in which we operate, and as such, we may not be able to effectively compete for such personnel.

        In case we are not able to retain such personnel or replace them in a timely manner, this may disrupt our ability to timely and accurately report US GAAP financial statements.

We may need additional capital, and a failure by us to raise additional capital on terms favorable to us, or at all, could limit our ability to grow our business and develop or enhance our service offerings to respond to market demand or competitive challenges.

        We believe that our current cash balances, cash flow from operations, credit facilities and the proceeds from this offering should be sufficient to meet our anticipated cash needs for at least the next 12 months. We may, however, require additional cash resources due to changed business conditions or other future developments, including any investments or acquisitions we may decide to pursue. If these

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resources are insufficient to satisfy our cash requirements, we may seek to sell additional equity or debt securities or obtain another credit facility. The sale of additional equity securities could result in dilution to our shareholders. The incurrence of indebtedness would result in increased debt service obligations and could require us to agree to operating and financing covenants that would restrict our operations. Our ability to obtain additional capital on acceptable terms is subject to a variety of uncertainties, including:

    investors' perception of, and demand for, securities of IT services companies;

    conditions of the U.S. and other capital markets in which we may seek to raise funds;

    our future results of operations and financial condition; and

    economic, political and other conditions in CEE and globally.

        Financing may not be available in amounts or on terms acceptable to us, or at all, and could limit our ability to grow our business and develop or enhance our service offerings to respond to market demand or competitive challenges.

We face risks associated with having significant resource commitments to provide services prior to realizing sales for those services.

        We have a long selling cycle for our IT services (generally up to 18 months for new clients), which requires significant investment of human resources and time by both our clients and us. Before committing to use our services, potential clients require us to expend substantial time and resources educating them on the value of our services and our ability to meet their requirements. Therefore, our selling cycle is subject to many risks and delays over which we have little or no control, including our clients' decisions to choose alternatives to our services (such as other IT services providers or in-house resources) and the timing of our clients' budget cycles and approval processes. Our selling cycle for new clients can be especially unpredictable. In the past, we have received sales from new clients up to six months later than expected. If our selling cycle unexpectedly lengthens for one or more large projects, it would negatively affect the timing of our sales and hinder our sales growth.

        Implementing our services also involves a significant commitment of resources over an extended period of time from both our clients and us. Our clients may experience delays in obtaining internal approvals or delays associated with technology, thereby further delaying the implementation process. Our current and future clients may not be willing or able to invest the time and resources necessary to implement our services, and we may fail to close sales with potential clients to which we have devoted significant time and resources. Any significant failure to generate sales, or delays in recognizing sales after incurring costs related to our sales or services process, could materially adversely affect our business.

Our effective tax rate could be materially adversely affected by a number of factors.

        We conduct business globally and file income tax returns in multiple jurisdictions, including the U.S., Russia, Cyprus, Ukraine and Romania. Our effective tax rate could be materially adversely affected by a number of factors, including changes in the amount of income taxed by or allocated to the various jurisdictions in which we operate that have different statutory tax rates; changing tax laws, regulations and interpretations of such tax laws in multiple jurisdictions; and the resolution of issues arising from tax audits or examinations and any related interest or penalties.

        We report our results of operations based on our determination of the amount of taxes owed in the various jurisdictions in which we operate. We have certain intercompany arrangements among our subsidiaries in relation to various aspects of our business, including operations, marketing, sales and delivery functions that are subject to transfer pricing regulations of the respective jurisdiction.

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U.S. transfer pricing regulations, as well as regulations applicable in CEE 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 to be on arm's-length terms; however, the determination of our consolidated provision for income taxes and other tax liabilities requires estimates, judgment and calculations, and the ultimate tax determination may not be certain. Our determination of tax liability is always subject to review or examination by authorities in various jurisdictions.

        If a tax authority in any jurisdiction reviews any of our tax returns and proposes an adjustment and/or imposes fines and/or penalties, including, as a result of a determination, that the transfer prices and terms we have applied are not appropriate, this could have a negative impact on our financial results.

We may become a passive foreign investment company, or PFIC, which could result in adverse U.S. tax consequences to U.S. holders.

        Based on our financial statements, relevant market data, and the projected composition of our income and valuation of our assets, including goodwill, we do not expect to be a passive foreign investment company, or PFIC, for the year ended March 31, 2014, and we do not expect to become one in the future, although there can be no assurance in this regard. If we become a PFIC, holders of our Class A ordinary shares in the U.S. may become subject to increased tax liabilities under U.S. federal income tax laws and regulations and may become subject to burdensome reporting requirements. The determination of whether or not we are a PFIC is made on an annual basis and will depend on the composition of our income and assets from time to time. Specifically, for any taxable year we will be classified as a PFIC for U.S. federal income tax purposes if either (i) 75% or more of our gross income in that taxable year is passive income or (ii) the average percentage of our assets (which includes cash) by value in that taxable year which produce or are held for the production of passive income is at least 50%. The calculation of the value of our assets will be based, in part, on the quarterly market value of our Class A ordinary shares, which is subject to change. See "Taxation—United States federal income taxation."

If we fail to maintain an effective system of disclosure controls and procedures and internal controls over financial reporting, we may not be able to accurately report our financial results or prevent fraud.

        Ensuring that we have adequate disclosure controls and procedures, including internal controls over financial reporting, in place so that we can produce accurate financial statements on a timely basis is costly, time-consuming and needs to be re-evaluated frequently. We are in the process of documenting, reviewing and, if appropriate, improving our internal controls and procedures in anticipation of being a public company and eventually being subject to the requirements of Section 404 of the Sarbanes-Oxley Act, which will require annual management assessments of the effectiveness of our internal controls over financial reporting and, when we cease to be an emerging growth company under the JOBS Act, a report by our independent auditors addressing these assessments. We will be required to comply with the internal controls evaluation and certification requirements of Section 404 of the Sarbanes-Oxley Act. Our management may conclude that our internal controls over financial reporting are not effective due to our failure to cure any identified material weakness or otherwise. Moreover, even if our management concludes that our internal controls over financial reporting are effective, our independent registered public accounting firm may not conclude that our internal controls over financial reporting are effective. Although no such material weaknesses were identified as a result of the audit of our financial statements for the year ended March 31, 2012 or the year ended March 31, 2013, our independent registered accounting firm did identify a material weakness in relation to certain aspects of our internal controls in connection with the audit of our financial statements for the year ended March 31, 2011. Going forward, our independent registered public accounting firm may

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not be satisfied with our internal controls over financial reporting or the level at which our controls are documented, designed, operated or reviewed, or it may interpret the relevant requirements differently from us. As a result, such firm may decline to attest to the effectiveness of our internal controls over financial reporting or may issue a qualified report. In addition, during the course of the evaluation, documentation and testing of our internal controls over financial reporting, we may identify deficiencies that we may not be able to remediate in time to meet the deadline imposed by the Securities and Exchange Commission for compliance with the requirements of Section 404. If we fail to achieve and maintain the adequacy of our internal controls over financial reporting, as these standards are modified, supplemented or amended from time to time, we may be unable to report our financial information on a timely basis, we may not be able to conclude on an ongoing basis that we have effective internal controls over financial reporting in accordance with the Sarbanes-Oxley Act and we may suffer adverse regulatory consequences or violations of listing standards. There could also be a negative reaction in the financial markets due to a loss of investor confidence in the reliability of our financial statements.

International hostilities, terrorist activities, other violence or war, natural disasters, pandemics and infrastructure disruptions, could delay or reduce the number of new service orders we receive and impair our ability to service our clients.

        Hostilities involving the U.S. and acts of terrorism, violence or war, such as the attacks of September 11, 2001 in the U.S., the attacks of July 7, 2005 in the United Kingdom, the Domodedevo Airport bombing on January 24, 2011 in Moscow, Russia, the continuing conflict in Afghanistan, the recent conflicts in North Africa, natural disasters, global health risks or pandemics or the threat or perceived potential for these events could materially adversely affect our operations and our ability to provide services to our clients. We may be unable to protect our people, facilities and systems against any such occurrences. Such events may cause clients to delay their decisions on spending for IT services and give rise to sudden significant changes in regional and global economic conditions and cycles. These events also pose significant risks to our people and to physical facilities and operations around the world, whether the facilities are ours or those of our clients, which could materially adversely affect our financial results. By disrupting communications and travel, giving rise to travel restrictions, and increasing the difficulty of obtaining and retaining highly-skilled and qualified IT professionals, these events could make it difficult or impossible for us to deliver services to some or all of our clients. Travel restrictions could cause us to incur additional unexpected labor costs and expenses or could restrain our ability to retain the skilled IT professionals we need for our operations. In addition, any extended disruptions of electricity, other public utilities or network services at our facilities, as well as system failures at, or security breaches in, our facilities or systems, could also adversely affect our ability to serve our clients.

Risks related to conducting business in CEE countries

Emerging markets, such as CEE countries, are subject to greater risks than more developed markets, and financial turmoil in any emerging market could disrupt our business.

        CEE countries are generally considered to be emerging markets. Investors in emerging markets should be aware that these markets are subject to greater risk than more developed markets, including in some cases significant legal, economic and political risks. Investors should note that emerging markets are subject to rapid change and that the information set out in this prospectus may become outdated relatively quickly. Moreover, financial turmoil in any emerging market country tends to adversely affect prices in the equity markets of all emerging market countries, as investors move their money to more stable, developed markets. As has happened in the past, financial problems or an increase in the perceived risks associated with investing in emerging economies could dampen foreign investment in the CEE region and adversely affect the economy of the region. In addition, during such

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times, companies that operate in emerging markets can face severe liquidity constraints as foreign funding sources are withdrawn. Thus, even if the economy of the CEE region remains relatively stable, financial turmoil in any emerging market country could adversely affect our business, as well as result in a decrease in the price of our Class A ordinary shares.

        Accordingly, investors should exercise particular care in evaluating the risks involved and must decide for themselves whether, in light of those risks, their investment is appropriate. Generally, investment in emerging markets is only suitable for sophisticated investors who fully appreciate the significance of the risks involved, and investors are urged to consult with their own legal and financial advisors before making an investment decision.

Political and governmental instability in CEE countries could materially adversely affect our business and operations in these countries.

        Since the early 1990s, Russia, Ukraine, Romania and other CEE countries have sought to transform from one-party states with a centrally planned economy to democracies with a market economy of various degrees. As a result of the sweeping nature of various reforms, and the failure of some of them, the political systems of many CEE countries remain vulnerable to popular dissatisfaction, including demands for autonomy from particular regional and ethnic groups.

        We have significant operations in Russia, Ukraine and Romania. Over the last decade, the political and economic situation in Russia, Ukraine and Romania has generally become more stable and conducive to investment. Such stability, however, has been negatively affected by the global financial and economic crisis and the on-going economic recession. Any significant struggle over the direction of future reforms, or a reversal of the reform process, could lead to deterioration in the investment climate in these countries that could have a material adverse effect on our business, financial condition, results of operations and prospects. Future political instability could result in a worsening overall economic situation, including capital flight and slowdown of investment and business activity.

        Following the Russian parliamentary elections in December 2011, controversy concerning alleged voting in favor of the current ruling party, United Russia, led to organized protests in several Russian cities, including Moscow, in which tens of thousands of individuals participated. Allegations of voting irregularities also appeared following the election of Vladimir Putin to the Russian presidency in March 2012, with a number of protests occurring throughout the country both before and after his May inauguration.

        The 2012 parliamentary elections in Ukraine were highly controversial and heavily criticized by the international community. A number of factors could adversely affect political stability in Ukraine, including lack of agreement within the factions and between individual deputies or controversial positions of the president and the government on various domestic and foreign policy issues, and court actions taken by opposition politicians against decrees and other actions of the president and the government. Recent political developments have also highlighted potential inconsistencies between Ukraine's constitution and various laws and presidential decrees.

        The current political environment in Romania is somewhat unstable. Since the beginning of 2012, there have been three changes of government in Romania. Most recently, on December 21, 2012, the Romanian Parliament approved a new government, led by Prime Minister Victor Ponta. Despite the fact that the current President, Traian Basescu, and Prime Minister Victor Ponta, as representatives of opposed political powers concluded a cooperation agreement, governmental changes may trigger significant amendments in the policies pursued by the Romanian government and the political instability may have a material negative impact on our operations in Romania.

        Current and future changes in the Russian, Ukrainian, Romanian and other CEE governments, major policy shifts or lack of consensus between various branches of the government and powerful

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economic groups could lead to political instability and disrupt or reverse political, economic and regulatory reforms. Any disruption or reversal of reform policies could lead to political or governmental instability or the occurrence of conflicts among powerful economic groups, which could materially adversely affect our business and operations in CEE.

A deterioration in political and economic relations among CEE countries in which we operate and/or between CEE countries and the U.S. and the European Union could materially adversely affect our business and operations in CEE.

        Political and economic relations between Russia, Romania, Ukraine and the other countries in which we operate are complex, and recent conflicts have arisen between their governments. Likewise, CEE countries continue to have a complicated relationship with the U.S. and the European Union. Political, ethnic, religious, historical and other differences have, on occasion, given rise to tensions and, in certain cases, military conflicts between countries of CEE which can halt normal economic activity and disrupt the economies of neighboring regions.

        The relationship between Russia and Ukraine has been historically strained due to, among other things, disagreements over the prices and methods of payment for gas delivered by Russia to, or for transportation through, Ukraine, issues relating to the temporary stationing of the Russian Black Sea Fleet in the territory of Ukraine, a Russian ban on imports of meat and milk products from Ukraine and anti-dumping investigations conducted by Russian authorities in relation to certain Ukrainian goods. Imprisonment of the ex-Prime Minister Yulia Timoshenko added to political instability and tension in relationships with the European Union, the U.S., and Russia. Despite the fact that the possible accession by Ukraine to NATO was delayed by Ukraine declaring its neutral status to military blocks, its willingness to stay in close cooperation with NATO has also been a significant source of tension between Russia and Ukraine. Following the presidential election in February 2010, Ukraine's relations with Russia generally improved, but have recently begun to deteriorate. Any further adverse changes in Ukraine's relations with Russia, in particular any such changes adversely affecting supplies of energy resources from Russia to Ukraine or Ukraine's revenues derived from transit charges for Russian oil and gas, may have negative effects on the Ukrainian economy as a whole. The conflicts among CEE countries and conflicts within CEE countries have, in some instances, also strained their relationship with the U.S. and the European Union which, at times, has negatively impacted their financial markets. Similarly, economic deterioration in CEE countries may strain political relationships with neighboring regions, and vice versa. For example, Romania joined the European Union in January 2007, and is subject to certain post-accession benchmarks mandated by the EU under the Cooperation and Verification Mechanism to help Romania address outstanding shortcomings in various social fields such as judicial reform and fight against corruption. On January 30, 2013 the European Commission presented a report welcoming recent steps taken by Romania, but explained that much remained to be done to fully implement its recommendations. If Romania does not adequately address these benchmarks the European Commission is entitled to apply certain sanctions against Romania, including the suspension of Member States' obligation to recognize and enforce, under the conditions laid down in the Community laws, the decisions of Romanian courts. The application of any of the sanctions referenced above may have a negative effect on the Romanian economy and investor confidence in the Romanian economic environment, which could lead to material adverse consequences on our operations in Romania.

        The emergence of new or escalated tensions among CEE countries could further exacerbate tensions between CEE countries and the U.S. and the European Union, which may have a negative effect on their economy, our ability to obtain financing on commercially reasonable terms, and the level and volatility of the trading price of our Class A ordinary shares. Any of the foregoing circumstances could materially adversely affect our business and operations in the CEE.

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The legal and tax systems in CEE countries can create an uncertain environment for business activity, which could materially adversely affect our business and operations in the CEE.

        The legal and tax framework to support a market economy remains new and in flux in Russia, Ukraine, Romania and other CEE countries and, as a result, these systems can be characterized by:

    inconsistencies between and among laws and governmental, ministerial and local regulations, orders, decisions, resolutions and other acts;

    gaps in the regulatory structure resulting from the delay in adoption or absence of implementing regulations;

    selective enforcement of laws or regulations, sometimes in ways that have been perceived as being motivated by political or financial considerations;

    limited judicial and administrative guidance on interpreting legislation;

    relatively limited experience of judges and courts in interpreting recent commercial legislation;

    a perceived lack of judicial and prosecutorial independence from political, social and commercial forces;

    inadequate court system resources;

    a high degree of discretion on the part of the judiciary and governmental authorities; and

    underdeveloped bankruptcy procedures that are subject to abuse.

        The relatively recent enactment of many laws, the lack of consensus about the scope, content and pace of political and economic reform and the rapid evolution of legal systems in ways that may not always coincide with market developments have resulted in legal ambiguities, inconsistencies and anomalies and, in certain cases, the enactment of laws without a clear constitutional or legislative basis. Furthermore, legal and bureaucratic obstacles and corruption exist to varying degrees in each of the regions in which we operate, and these factors are likely to hinder our further development. These characteristics give rise to investment risks that do not exist in countries with more developed legal systems.

        In addition, as is true of civil law systems generally, judicial precedents generally have no binding effect on subsequent decisions. Not all legislation and court decisions in CEE countries are readily available to the public or organized in a manner that facilitates understanding. Enforcement of court orders can be very difficult in practice. All of these factors make judicial decisions difficult to predict and effective redress uncertain. Additionally, court claims and governmental prosecutions may be used in furtherance of what some perceive to be political aims.

        The untested nature of much of recent legislation in the countries in which we operate and the rapid evolution of their legal systems may result in ambiguities, inconsistencies and anomalies in the application and interpretation of laws and regulations. Any of these factors may affect our ability to enforce our rights under our contracts or to defend ourselves against claims by others, or result in our being subject to unpredictable requirements. These uncertainties also extend to property rights; and the expropriation or nationalization of any of our entities, their assets or portions thereof, potentially without adequate compensation, could materially adversely affect our business, financial condition and results of operations.

Loss of certain tax benefits that we enjoy in Russia and Ukraine could have a negative impact on our operating results and profitability.

        The Russian government provides qualified Russian IT companies with substantial tax benefits through a reduced social contribution charge rate program, as well as through VAT exemptions. These

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programs resulted in savings for us of $23.9 million in the year ended March, 31, 2013. However, the reduced tax rates for social contributions (14% in total) are only available until December 31, 2017, after which the Russian government plans to gradually increase the tax rates (21% in 2018 and 28% in 2019) until they are equal to the rates for non-qualified companies (34%) in 2020. If the Russian government were to change its favorable treatment of Russian IT companies by modifying or repealing its current favorable tax measures, or if we become ineligible for such favorable treatment, it would significantly impact our financial condition and results of operations.

        Substantially all of the persons who work for us in the Ukraine are independent contractors. Although we believe that we have properly classified these workers as independent contractors and are, therefore, not required to pay social duties and personal income tax applicable to employees, there is, nevertheless, a risk that the Ukrainian tax authority may take a different view. Laws and regulations that govern the status and classification of independent contractors are subject to change or interpretation by various authorities. In addition, if a national or local authority or court enacts legislation or adopts regulations that change the manner in which employees and independent contractors are classified, or makes any adverse determination with respect to some or all of our independent contractors, we could incur significant costs arising from fines or judgments as a result of tax withholding. We may also elect to hire these independent contractors as our employees, and, we may, as a result, incur significant personnel expenses.

        Amendments to the Ukrainian tax code granting substantial benefits to software development companies entered into force on January 1, 2013. For software companies, the effective preferential tax system is in place for a period of 10 years, and includes payment of income tax at the rate of 5%, and the exemption from VAT of the supply of software products. However, the new preferential system contains a large number of risks due to ambiguities in the law. Therefore, these preferential tax policies may not fully offset the increased costs we may be subject to in the event we are forced to hire our independent contractors as our employees.

        Any or all of these factors may have a material adverse effect on our business, financial condition and results of operations.

Selective or arbitrary government action could materially adversely affect our business and operations in CEE.

        Many commercial laws and regulations in CEE are relatively new and have been subject to limited interpretation. As a result, their application can be unpredictable. Government authorities have a high degree of discretion in Russia, Ukraine and other CEE countries and have at times exercised their discretion in ways that may be perceived as selective or arbitrary, and sometimes in a manner that is seen as being influenced by political or commercial considerations. These governments also have the power, in certain circumstances, to interfere with the performance of, nullify or terminate contracts. Selective or arbitrary actions have included withdrawal of licenses, sudden and unexpected tax audits, criminal prosecutions and civil actions. Federal and local government entities have also used common defects in documentation as pretexts for court claims and other demands to invalidate and/or to void transactions, apparently for political purposes. In this environment, our competitors could receive preferential treatment from the government, potentially giving them a competitive advantage. Government officials may apply contradictory or ambiguous laws or regulations in ways that could materially adversely affect our business and operations in CEE. We cannot assure you that regulators, judicial authorities or third parties in Russia, Ukraine and other CEE countries will not challenge our compliance (including that of our subsidiaries) with applicable laws, decrees and regulations. Selective or arbitrary government action could materially adversely affect our business, financial condition and results of operations.

        We must comply with laws and regulations relating to the formation, administration and performance of government contracts in CEE countries where we provide services to the local

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governments. Any failure to comply with applicable local laws, regulations and procedures could result in contract termination, damage to our reputation, price or fee reductions or suspension or debarment from contracting with the government, each of which could materially adversely affect our business, financial condition and results of operations. In addition, governments may revise existing contract rules and regulations or adopt new contract rules and regulations at any time and for any reason. Any of these changes could impair our ability to obtain new contracts or renew or enforce contracts under which we currently provide services. Any new contracting methods could be costly or administratively difficult for us to implement, which could materially adversely affect our business and operations in the CEE.

Changes in the tax system in CEE countries or arbitrary or unforeseen application of existing rules could materially adversely affect our financial condition and results of operations.

        There have been significant changes to the taxation systems in CEE countries in recent years as the authorities have gradually replaced legislation regulating the application of major taxes such as corporate income tax, VAT, corporate property tax and other taxes with new legislation. Tax authorities in CEE countries, including Russia and Ukraine, have also been aggressive in their interpretation of tax laws and their many ambiguities, as well as in their enforcement and collection activities. Technical violations of contradictory laws and regulations, many of which are relatively new and have not been subject to extensive application or interpretation, can lead to penalties. High-profile companies can be particularly vulnerable to aggressive application of unclear requirements. Many companies must negotiate their tax bills with tax inspectors who may demand higher taxes than applicable law appears to provide. Our tax liability may become greater than the estimated amount that we have expensed to date and paid or accrued on our balance sheets, particularly if the tax benefits we receive in Russia are changed or removed. Any additional tax liability, as well as any unforeseen changes in tax laws, could materially adversely affect our future results of operations, financial condition or cash flows in a particular period.

        In its decision dated July 26, 2001, the Constitutional Court of the Russian Federation introduced a concept of "a taxpayer acting in a bad faith" without clearly stipulating the criteria for it. Furthermore, on October 12, 2006, the Plenum of the Higher Arbitrage Court of the Russian Federation issued Ruling No. 53, formulating a concept of an "unjustified tax benefit". These concepts have not been defined in Russian tax law. Nonetheless, these concepts have been widely used by the tax authorities to deny, for instance, the taxpayer's right to use certain tax benefits prescribed in the tax law, or to rely on certain provisions of the tax law. The tax authorities and courts often exercise significant discretion in interpreting these concepts in a manner that is unfavorable to taxpayers. In practice, when challenging the tax benefits applied by a taxpayer (e.g., deduction of expenses for corporate income tax purposes and/or VAT offset) the tax authorities often mix the above concepts and argue that the taxpayer may receive an "unjustified tax benefit" by executing contractual relationships with the counterparties acting "in a bad faith" (so-called "mala-fide" taxpayers). Although we use our best efforts to ensure that our counterparties are bona fide taxpayers, there may be a risk that the tax authorities may take a different view and/or interpret the relationship with our counterparties in a different manner and impose us with the extra taxes, fines and late payment penalties, which could materially affect our business.

        In January 2011, Ukraine enacted a new tax code. The new code aims to create a comprehensive legal framework for tax reform and provide for a wide range of changes to the existing tax system in the areas of tax collection and administration. There can be no assurance however that the adoption of the tax code will have a positive effect on the Ukrainian tax system, in which differing opinions between, and within, government ministries regarding legal interpretations of tax regulations often create uncertainties and areas of conflict. Tax declarations or returns, together with other matters of legal compliance, such as customs and currency control matters, are subject to review and investigation

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by a number of authorities, which may impose fines, penalties and interest charges for noncompliance. These circumstances generally create tax risks in Ukraine that are more significant than those typically found in countries with more developed tax systems.

        The tax systems in the CEE countries in which we operate impose additional burdens and costs on our operations in such countries, and complicate our tax planning and related business decisions. Furthermore, these tax systems have historically been complicated by contradictions in the respective tax legislation. These uncertainties could result in a greater than expected tax burden and potentially exposes us to significant fines and penalties and enforcement measures, despite our best efforts at compliance. These factors raise the risk of a sudden imposition of arbitrary or onerous taxes on our operations in these countries. This could materially adversely affect our financial condition and results of operations.

Our subsidiaries established outside of Russia may be exposed to taxation in Russia.

        The Russian Tax Code contains the concept of a permanent establishment in Russia as a means for taxing foreign legal entities which carry on regular entrepreneurial activities in Russia beyond preparatory and auxiliary activities. The Russian double tax treaties with other countries also contain a similar concept. If a foreign company is treated as having a permanent establishment in Russia, it would be subject to Russian taxation in a manner broadly similar to the taxation of a Russian legal entity, but only to the extent of the amount of the foreign company's income that is attributable to the company's permanent establishment in Russia. However, the practical application of the concept of a permanent establishment under Russian domestic law is not well developed and foreign companies having even limited operations in Russia, which would not normally satisfy the conditions for creating a permanent establishment under international norms, may be at risk of being treated as having a permanent establishment in Russia and hence being liable to Russian taxation. Having a permanent establishment in Russia may also lead to other adverse tax implications, including having to challenge a reduced withholding tax rate on dividends under an applicable double tax treaty, a potential effect on VAT and property tax obligations.

        There is also a risk that penalties could be imposed by the tax authorities for failure to register a permanent establishment with the Russian tax authorities. Recent events in Russia suggest that the tax authorities may be more actively seeking to investigate and assert whether foreign entities operate through a permanent establishment in Russia. Any such taxes or penalties could have a material adverse effect on our business, financial conditions and the results of operations.

We may be exposed to liability for actions taken by our subsidiaries.

        In certain cases we may be jointly and severally liable for obligations of our subsidiaries. We may also incur secondary liability and, in certain cases, liability to creditors for obligations of our subsidiaries in certain instances involving bankruptcy or insolvency.

        In particular, Russian law generally provides that shareholders in a Russian joint stock company or participants in a limited liability company are not liable for the obligations of such a company and bear only the risk of loss of their investment. This may not be the case, however, when an effective parent company is capable of determining decisions made by its effective subsidiary. The effective parent bears joint and several liabilities for transactions concluded by the effective subsidiary, in carrying out business decisions if the effective parent gives binding instructions to the effective subsidiary and the right of the effective parent to give binding instructions is set out in the charter of the effective subsidiary or in a contract between those entities.

        Further, an effective parent is secondarily liable for an effective subsidiary's debts if the effective subsidiary becomes insolvent or bankrupt as a result of the action or inaction of the effective parent. In these instances, the other shareholders of the effective subsidiary may claim compensation for the

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effective subsidiary's losses from the effective parent that caused the effective subsidiary to take action or fail to take action, knowing that such action or failure to take action would result in losses. We could be found to be the effective parent of the subsidiaries, in which case we could become liable for their debts, which could have a material adverse effect on our business, financial condition and results of operations or prospects.

Our CEE subsidiaries can be forced into liquidation on the basis of formal noncompliance with certain legal requirements.

        We operate in CEE countries primarily through locally organized subsidiaries. Certain provisions of the laws of CEE countries may allow a court to order liquidation of a locally organized legal entity on the basis of its formal noncompliance with certain requirements during formation, reorganization or during its operations.

        Russian corporate law, Ukrainian corporate law and Romanian corporate law require liquidation of a company if its net assets fall below a certain threshold and, in case of Romania, it does not take remedial steps. For example, under Russian corporate law, negative net assets calculated on the basis of the Russian accounting standards as of the end of the year following the second or any subsequent year of a company's existence can serve as a basis for creditors to accelerate their claims and to demand payment of damages, as well as for a court to order the liquidation of the company upon a claim by governmental authorities. Many Russian companies have negative net assets due to a very low historical value of property, plant and equipment reflected on their Russian accounting standards balance sheets. However, their solvency (defined as their ability to pay debts as they come due) has not been otherwise adversely affected by such negative net assets. There are cases when courts have ordered mandatory liquidation of a company based on its negative net assets, though such company had continued to fulfil its obligations and had net assets in excess of the required minimum at the time of liquidation.

        As of March 31, 2013, the net amount of the assets of our subsidiary Luxoft Professional Romania SRL was $6.0 million, or approximately 32.7% of the value of its subscribed share capital. Under Romanian Companies Law no. 31/1990, the board of directors of a company whose assets fall below half of its subscribed share capital must convene a general meeting of the company's shareholders to vote on whether to wind up the business of such company. If the shareholders do not vote to wind up the company, such company must instead decrease its share capital. Luxoft Professional Romania SRL has not convened the required meeting of shareholders. While Luxoft Professional Romania SRL is planning to remediate the situation, if it fails to take the necessary actions, shareholders, creditors and other interested parties could seek the dissolution of Luxoft Professional Romania SRL in Romanian courts. Nonetheless, according to Romanian law, even if dissolution is requested in court, the judge may grant to Luxoft Professional Romania SRL a moratorium of up to six months to remedy the undercapitalization situation. The company would not be dissolved if the undercapitalization situation is solved prior to the date on which the court's decision regarding the dissolution becomes final.

        Similarly, there have also been cases in CEE countries in which formal deficiencies in the establishment process of a legal entity or noncompliance with provisions of law have been used by courts as a basis for liquidation of a legal entity. Weaknesses in the legal systems of CEE countries create an uncertain legal environment, which makes the decisions of a court or a governmental authority difficult to predict. If involuntary liquidation of any of our subsidiaries were to occur, such liquidation could materially adversely affect our financial condition and results of operations.

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Risks related to our Class A ordinary shares and this offering

The price of our Class A ordinary shares may fluctuate significantly, and you could lose all or part of your investment.

        The initial public offering price for our Class A ordinary shares will be determined through negotiations with the underwriters. This initial public offering price may vary from the market price of our Class A ordinary shares after the offering. Some of the factors that may cause the market price of our Class A ordinary shares to fluctuate include:

    fluctuations in our quarterly financial results or the quarterly financial results of companies perceived to be similar to us;

    changes in estimates of our financial results or recommendations by securities analysts;

    failure to develop or deliver our services as expected;

    changes in market valuations of similar companies;

    successes by our competitors;

    changes in our capital structure, such as future issuances of securities or the incurrence of debt;

    sales of large blocks of our Class A ordinary shares;

    announcements by us or our competitors of significant services, contracts, acquisitions or strategic alliances;

    regulatory developments in Russia, Ukraine, Romania or elsewhere;

    litigation involving our company, our general industry or both;

    additions or departures of key personnel;

    investors' general perception of us, including any perception of misuse of sensitive information;

    changes in general economic, industry and market conditions;

    our ability to forecast revenue and control our costs; and

    changes in regulatory and other dynamics.

        In addition, if the market for shares in our industry, or the stock market in general, experiences price and volume fluctuation or a loss of investor confidence, the trading price of our Class A ordinary shares could decline for reasons unrelated to our business, financial condition or results of operations. If any of the foregoing occurs, it could cause our share price to fall and may expose us to lawsuits that, even if unsuccessful, could be costly to defend and a distraction to management.

The dual class structure of our ordinary shares has the effect of concentrating voting control with certain shareholders who held our shares prior to this offering, including one of our directors and our chief executive officer, and limiting your ability to influence corporate matters.

        Each of our Class B ordinary shares has 10 votes per share, and each of our Class A ordinary shares, which is the class of shares we are offering, has one vote per share. Shareholders who hold Class B ordinary shares will together beneficially own shares representing approximately 98.2% of the voting power of our outstanding shares following this offering. Consequently, the holders of Class B ordinary shares collectively will continue to be able to control all matters submitted to our shareholders for approval even if their share ownership were to decrease to less than 50% of the outstanding ordinary shares. This concentrated control will limit your ability to influence corporate matters for the

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foreseeable future, and, as a result, the market price of our Class A ordinary shares could be adversely affected.

        Future transfers by holders of Class B ordinary shares will generally result in those shares converting to Class A ordinary shares, which will have the effect, over time, of increasing the relative voting power of those holders of Class B ordinary shares who retain their shares in the long term.

The significant share ownership position of IBS Group will limit your ability to influence corporate matters.

        Following the completion of this offering, IBS Group will beneficially own 72.4% of our ordinary shares and control 82.9% of our voting power. If the underwriters exercise their over-allotment option in full, these percentages will decrease to 70.8% and 82.5%, respectively. As a result of this concentration of share ownership, IBS Group will have sufficient voting power to effectively control all matters submitted to our shareholders for approval. These matters include:

    the composition of our board of directors;

    approving or rejecting a legal merger, demerger or other business combination; and

    amending our Amended Memorandum and Articles of Association, which govern the rights attached to our ordinary shares.

        This concentration of ownership of our ordinary shares could delay or prevent proxy contests, mergers, tender offers, open-market purchase programs or other purchases of our ordinary shares that might otherwise give you the opportunity to realize a premium over the then-prevailing market price of our ordinary shares. The interests of IBS Group may not always coincide with the interests of our other shareholders. This concentration of ownership may also adversely affect our share price.

An active trading market for our Class A ordinary shares may not develop, and you may not be able to sell your ordinary shares at or above the initial public offering price.

        Prior to this offering, there has been no public market for our Class A ordinary shares. An active trading market for our ordinary shares may never develop or be sustained following this offering. As a result, you may not be able to sell your Class A ordinary shares at or above the initial public offering price or at any other price or at the time that you would like to sell.

If equity research analysts do not publish research or reports about our business or if they issue unfavorable commentary or downgrade our Class A ordinary shares, the price of our Class A ordinary shares could decline.

        The trading market for our Class A ordinary shares will rely in part on the research and reports that equity research analysts publish about us and our business. The price of our Class A ordinary shares could decline if one or more securities analysts downgrade our Class A ordinary shares or if those analysts issue other unfavorable commentary or cease publishing reports about us or our business.

We currently intend to take advantage of NYSE's "controlled company" exemption from certain corporate governance requirements to a limited extent, and therefore, our shareholders will not have the same protections afforded to shareholders of companies that are subject to such requirements.

        As a result of the number of shares beneficially owned by IBS Group, after the completion of this offering, we will be eligible to take advantage of the "controlled company" exemption under NYSE's corporate governance rules. A "controlled company" is a company of which more than 50% of the voting power is held by an individual or group of shareholders. Pursuant to the "controlled company" exemption, a company is not required to comply with the requirements of having a nominating and corporate governance committee and a compensation committee, each of which is composed entirely of

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independent directors, has a written charter addressing the committee's purpose and responsibilities, and is subject to an annual performance evaluation. See "Management—Board committees." We currently intend to rely on this exemption only to the extent necessary to permit Anatoly Karachinskiy and Glen Granovsky to serve on our compensation committee, even though they do not satisfy NYSE's definition of an "independent director", and do not intend to have a nominating and governance committee. In addition, upon the closing of this offering, the majority of our board of directors will not be independent. If available to us, we may elect to use the controlled company exemption more broadly in the future. If we do so, you will not have the same protections afforded to shareholders of companies that are subject to all of the corporate governance requirements of the NYSE.

We are not subject to the supervision of the British Virgin Islands Financial Services Commission and so our shareholders are not protected by any regulatory inspections in the British Virgin Islands.

        We are not an entity subject to any regulatory supervision in the British Virgin Islands by the Financial Services Commission. As a result, shareholders are not protected by any regulatory supervision or inspections by any regulatory agency in the British Virgin Islands and we are not required to observe any restrictions in respect of its conduct save as disclosed in this prospectus or our Amended Memorandum and Articles of Association.

As a foreign private issuer whose shares are listed on the NYSE we may in the future elect to follow certain home country corporate governance practices instead of certain NYSE requirements.

        We have elected to apply the corporate governance rules of the NYSE applicable to controlled companies, with the exception of maintaining an internal audit function, even though, as a foreign private issuer, we are permitted to follow the corporate governance practices of our home country, the British Virgin Islands, instead of these requirements. Nevertheless, we may in the future follow home country corporate governance practices instead of some or all of the NYSE's requirements, including in the event we are no longer eligible for the "controlled company" exemption. A foreign private issuer that elects to follow a home country practice instead of NYSE requirements must submit to the NYSE in advance a written statement from an independent counsel in such issuer's home country certifying that the issuer's practices are not prohibited by the home country's laws. In addition, a foreign private issuer must disclose in its annual reports filed with the Securities and Exchange Commission each such requirement that it does not follow and describe the home country practice followed instead of any such requirement. Certain corporate governance requirements are not reflected in the BVI Business Companies Act, 2004 (as amended from time to time) (the "BVI Act") or other British Virgin Islands law, such as the requirements to obtain shareholder approval for certain dilutive issuances of shares, including the sale of our Class A ordinary shares in below market private placement transactions if greater than 20% of our pre-transaction issued and outstanding shares are sold, or are subject to different approval requirements, such as in connection with the establishment or amendment of equity compensation plans. Moreover, the BVI Act does not require the implementation of a nominating committee or establishment of a formal director nomination process, the formation of an audit committee or if such a committee is formed that it have any specific composition, that a board of directors consist of a majority of independent directors or that independent directors be involved in the determination of executive compensation. See "Management—Corporate governance practices." Accordingly, our shareholders may not be afforded the same protection as provided under the NYSE's corporate governance rules.

        Furthermore, as a foreign private issuer, we will be exempt from the rules and regulations under the Exchange Act, related to the furnishing and content of proxy statements, and our officers, directors and principal shareholders will be exempt from the reporting and short swing profit recovery provisions contained in Section 16 of the Exchange Act. In addition, we will not be required under the Exchange Act to file annual, quarterly and current reports and financial statements with the Securities and Exchange Commission as frequently or as promptly as domestic companies whose securities are registered under the Exchange Act.

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We are an "emerging growth company" with reduced reporting requirements that may make our Class A ordinary shares less attractive to investors.

        We are an "emerging growth company", as defined in the JOBS Act, and will take advantage of certain exemptions from various reporting requirements that are generally applicable to public companies. For so long as we remain an "emerging growth company", we will not be subject to the provision of Section 404(b) of the Sarbanes-Oxley Act that requires that our independent registered public accounting firm provide an attestation report on the effectiveness of our internal control over financial reporting. This may increase the risk that we will fail to detect and remedy any weaknesses or deficiencies in our internal control over financial reporting. It is also possible that investors may generally find our Class A ordinary shares less attractive due to our status as an "emerging growth company" and our more limited disclosure. Any of the foregoing could adversely affect the price and liquidity of our Class A ordinary shares.

        We may take advantage of these disclosure exemptions until we are no longer an "emerging growth company". We will cease to be an "emerging growth company" upon the earliest of:

    the last day of the fiscal year in which the fifth anniversary of this offering occurs;

    the last day of the fiscal year in which our annual gross revenues are $1 billion or more;

    the date on which we have, during the previous three-year period, issued more than $1 billion in non-convertible debt securities; or

    the last day of any fiscal year in which the market value of our Class A ordinary shares held by non-affiliates exceeds $700 million as of the end of the second quarter of that fiscal year.

It may be difficult to enforce a U.S. or foreign judgment against us, our directors and officers named in this prospectus outside the U.S., or to assert U.S. securities laws claims outside of the U.S.

        Almost all of our assets are located outside of the U.S. A majority of our directors and officers are nationals or residents of jurisdictions other than the U.S. and a substantial portion of their assets are located in Russia, Ukraine and other CEE countries. As a result, it may be difficult for a shareholder to effect service of process within the U.S. upon these persons, or to enforce against us, or them, judgments obtained in U.S. courts, including judgments predicated upon the civil liability provisions of the securities laws of the U.S. or any state of the U.S. Additionally, it may be difficult to assert U.S. securities law claims in actions originally instituted outside of the U.S. Foreign courts may refuse to hear a U.S. securities law claim because foreign courts may not be the most appropriate forums in which to bring such a claim. Even if a foreign court agrees to hear a claim, it may determine that the law of the jurisdiction in which the foreign court resides, and not U.S. law, is applicable to the claim. Further, if U.S. law is found to be applicable, the content of applicable U.S. law must be proved as a fact, which can be a time-consuming and costly process, and certain matters of procedure would still be governed by the law of the jurisdiction in which the foreign court resides. Additionally, although arbitration awards are generally enforceable in CIS countries, judgments obtained in the U.S. or in other foreign courts, including those with respect to U.S. federal securities law claims, may not be enforceable in many CIS countries including Russia. A foreign court judgment may be recognized and enforced in Ukraine only on the basis of an international treaty to which Ukraine is a party providing for enforcement of such judgments, and then only in accordance with the terms of such treaty. Ukraine is a party to more than 20 mutual legal assistance treaties in civil matters (mostly with CIS and former socialist countries) and, by way of legal succession, a party to nine mutual legal assistance treaties of the former USSR. However, while Ukraine does have such treaties in place with several EU countries, it is not a party to mutual legal assistance treaties in civil matters with the U.S., Canada, the UK, Germany and France. As a result, there are no international treaties that could be relied upon to enforce in Ukraine a civil judgment rendered in those countries. In the absence of an international

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treaty providing for enforcement of judgments, the courts of Ukraine may only recognize or enforce a foreign court judgment on the basis of the principle of reciprocity, which, unless proven otherwise, is deemed to exist in relations between Ukraine and the country where the judgment was rendered. At the same time, the principle of reciprocity is a relatively new and undeveloped concept in Ukrainian legislation, and there is no official interpretation or established court practice on the application of the principle of reciprocity. Therefore, it is possible that a U.S. or other foreign court judgment issued in a country, which has no mutual legal assistance treaty with Ukraine, could be refused recognition and/or enforcement in Ukraine, and the parties would have to re-litigate the dispute in Ukrainian courts. In addition, the lack of practice and varying approaches towards recognition and enforcement in Ukraine of foreign court judgments potentially make such recognition and enforcement problematic, if at all possible. In Romania, foreign civil and commercial judgments issued by courts of a non-EU member state may be recognized and enforced only if certain conditions are met, including, for example, the existence of a bilateral instrument or agreement providing for the mutual recognition of the legal effects of civil judgments. No such agreement or instrument is currently in place between Romania and the U.S. As a result of the difficulty associated with enforcing a judgment against us, you may not be able to collect any damages awarded by either a U.S. or foreign court. See "Enforceability of Civil Liabilities."

The market price of our Class A ordinary shares could be negatively affected by future sales of our Class A ordinary shares.

        After this offering, there will be 5,166,710 of our Class A ordinary shares outstanding. Sales by our shareholders or us of a substantial number of our Class A ordinary shares in the public market following this offering, or the perception that these sales might occur, could cause the market price of our Class A ordinary shares to decline or could impair our ability to raise capital through a future sale of, or pay for acquisitions using, our equity securities. All of the Class A ordinary shares sold in this offering will be freely transferable, except for any shares acquired by our "affiliates," as that term is defined in Rule 144 under the U.S. Securities Act of 1933. Following completion of this offering, approximately 87.5% of our outstanding Class A and Class B ordinary shares (or 85.7% if the underwriters exercise their over-allotment option in full) will be considered restricted shares and will be held by our affiliates. Such securities can be resold into the public markets in the future in accordance with the requirements of Rule 144, including volume limitations, manner of sale requirements and notice requirements. See "Shares Eligible for Future Sale."

        We, our executive officers, directors, the selling shareholder and certain other shareholders and optionholders have agreed with the underwriters that, subject to limited exceptions, for a period of 180 days after the date of this prospectus, we and they will not directly or indirectly offer, pledge, sell, contract to sell, grant any option to purchase or otherwise dispose of any Class A ordinary shares or any securities convertible into or exercisable or exchangeable for Class A ordinary shares, or in any manner transfer all or a portion of the economic consequences associated with the ownership of Class A ordinary shares, or cause a registration statement covering any Class A ordinary shares to be filed except for the Class A ordinary shares offered in this offering, without the prior written consent of the designated representatives of the underwriters, who may, in their sole discretion and at any time without notice, release all or any portion of the shares subject to these lock-up agreements.

We do not intend to pay any dividends for the foreseeable future. Investors in this offering may never obtain a return on their investment.

        You should not rely on an investment in our Class A ordinary shares to provide dividend income. Although we have declared and paid dividends in prior years, and have declared a dividend for the year ended March 31, 2013, we do not intend to declare or pay any further dividends to holders of our Class A ordinary shares for the foreseeable future following this offering, and any future credit facility

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may contain terms prohibiting or limiting the amount of dividends that may be declared or paid on our Class A ordinary shares. Accordingly, investors must rely on sales of their Class A ordinary shares after price appreciation, which may never occur, as the only way to realize any return on their investment. As a result, investors seeking cash dividends should not purchase our Class A ordinary shares.

        In addition, our ability to pay dividends is dependent upon the earnings of our subsidiaries and their distribution of funds to us, primarily in the form of dividends. The ability of our subsidiaries to make distributions may be subject to statutory restrictions and retained earnings criteria, and is contingent upon the cash flow and earnings of those subsidiaries. For example, Russian law prohibits declaration and payment of dividends by a Russian company if such company's net assets' value is lower than its charter capital or will become lower than its charter capital as a result of declaration or distribution of dividends. These restrictions could reduce the amount of distributions that we receive from our subsidiaries which, in turn, would restrict our ability to pay dividends. According to Romanian law, if the company's net assets are less than its subscribed shares, the shares should be adjusted accordingly before any distribution of dividends can be declared.

Because the initial public offering price of our Class A ordinary shares will be substantially higher than the pro forma net tangible book value per share of our outstanding Class A and Class B ordinary shares following this offering, you will incur immediate and substantial dilution as a result of this offering.

        If you purchase Class A ordinary shares in this offering, you will pay more for your shares than the amounts paid by an existing shareholder for its Class B ordinary shares. As a result, you will incur an immediate and substantial dilution of net tangible book value of $15.09 per Class A ordinary share, representing the difference between the assumed initial public offering price of $17.00 per Class A ordinary share (the mid-point of the range set forth on the cover page of this prospectus), and our pro forma net tangible book value per share after giving effect to this offering. See "Dilution."

Provisions in our organizational documents may delay or prevent our acquisition by a third party.

        Our Amended Memorandum and Articles of Association contains a number of provisions that may make it more difficult or expensive for a third party to acquire control of us without the approval of our board of directors. These provisions also may delay, prevent or deter a merger, acquisition, tender offer, proxy contest or other transaction that might otherwise result in our shareholders receiving a premium over the market price for their ordinary shares. These provisions include, among others:

    a dual class ordinary share structure for seven years following the completion of this offering;

    our board of directors' ability to issue, from time to time, one or more classes of preferred shares and, with respect to each such class, to fix the terms thereof by resolution;

    restrictions on the ability of shareholders to call meetings and bring proposals before meetings;

    elimination of the ability of shareholders to act by written consent;

    the requirement of the affirmative vote of two-thirds or more of the shares entitled to vote to amend certain provisions of our Amended Memorandum and Articles of Association;

    a requirement of the affirmative vote of two-thirds or more of the shares entitled to vote on special matters such as mergers or acquisitions; and

    the ability of directors in their absolute discretion to decline to register or delay the registration of any transfer of shares without assigning any reason.

        These provisions of our Amended Memorandum and Articles of Association could discourage potential takeover attempts and reduce the price that investors might be willing to pay for our Class A

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ordinary shares in the future, which could reduce the market price of our Class A ordinary shares. For more information, see "Description of Authorized Shares."

Our management will have broad discretion over the use of proceeds from this offering and may not obtain a favorable return on the use of these proceeds.

        Our management will have broad discretion in determining how to spend the net proceeds from this offering and may use the proceeds in a manner that our shareholders may not deem desirable. We intend to use the net proceeds of this offering for working capital and other general corporate purposes. General corporate purposes may include, among other things, acquisitions or investments in complementary companies, products or technologies (although we currently do not have any acquisitions or investments planned), additions to working capital, capital expenditures and other investments. We will have broad discretion in the way that we use net proceeds of this offering. We cannot assure you that these uses or any other use of the net proceeds of this offering will yield favorable returns or results.

As the rights of shareholders under British Virgin Islands law differ from those under U.S. law, you may have fewer protections as a shareholder.

        Our corporate affairs will be governed by our Amended Memorandum and Articles of Association, the BVI Act and the common law of the British Virgin Islands. The rights of shareholders to take legal action against our directors, actions by minority shareholders and the fiduciary responsibilities of our directors under British Virgin Islands law are to a large extent governed by the BVI Act and the common law of the British Virgin Islands. The common law of the British Virgin Islands is derived in part from comparatively limited judicial precedent in the British Virgin Islands as well as from English common law, which has persuasive, but not binding, authority on a court in the British Virgin Islands. The rights of shareholders and the fiduciary responsibilities of our directors under British Virgin Islands law are not as clearly established as they would be under statutes or judicial precedents in some jurisdictions in the U.S. In particular, the British Virgin Islands has a less developed body of securities laws as compared to the U.S., and some states (such as Delaware) have more fully developed and judicially interpreted bodies of corporate law. In addition, British Virgin Islands law does not make a distinction between public and private companies and some of the protections and safeguards (such as statutory pre-emption rights, save to the extent that they are expressly provided for in the Amended Memorandum and Articles of Association) that investors may expect to find in relation to a public company are not provided for under British Virgin Islands law.

        As a result of all of the above, holders of our Class A ordinary shares may have more difficulty in protecting their interests in the face of actions taken by our management, directors or major shareholders than they would as shareholders of a U.S. company. For a discussion of significant differences between the provisions of the BVI Act and the laws applicable to companies incorporated in the U.S. and their shareholders, see "Description of Authorized Shares—Differences in corporate law."

Shareholders in British Virgin Islands companies may not be able to initiate shareholder derivative actions, thereby depriving a shareholder of the ability to protect their interests.

        While statutory provisions do exist in British Virgin Islands law for derivative actions to be brought in certain circumstances, shareholders in British Virgin Islands companies may not have standing to initiate a shareholder derivative action in a federal court of the U.S. The circumstances in which any such action may be brought, and the procedures and defenses that may be available in respect to any such action, may result in the rights of shareholders of a British Virgin Islands company being more limited than those of shareholders of a company organized in the U.S. Accordingly, shareholders may have fewer alternatives available to them if they believe that corporate wrongdoing has occurred. The British Virgin Islands courts are also unlikely to: (i) recognize or enforce against us judgments of courts

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in the U.S. based on certain civil liability provisions of U.S. securities law; or (ii) to impose liabilities against us, in original actions brought in the British Virgin Islands, based on certain civil liability provisions of U.S. securities laws that are penal in nature. There is no statutory recognition in the British Virgin Islands of judgments obtained in the U.S., although the courts of the British Virgin Islands will in certain circumstances recognize and enforce the non-penal judgment of a foreign court of competent jurisdiction without retrial on the merits.

The laws of the British Virgin Islands provide little protection for minority shareholders, so minority shareholders will have little or no recourse if the shareholders are dissatisfied with the conduct of our affairs.

        Under the laws of the British Virgin Islands, there is little statutory protection of minority shareholders other than the provisions of the BVI Act dealing with shareholder remedies. The principal protection under statutory law is that shareholders may bring an action to enforce the BVI Act or the constituent documents of the corporation, the Amended Memorandum and Articles of Association. Shareholders are entitled to have the affairs of the company conducted in accordance with the BVI Act and the Amended Memorandum and Articles of Association.

        There are common law rights for the protection of shareholders that may be invoked, largely dependent on English company law, since the common law of the British Virgin Islands is limited. Under the general rule pursuant to English company law known as the rule in Foss v. Harbottle, a court will generally refuse to interfere with the management of a company at the insistence of a minority of its shareholders who express dissatisfaction with the conduct of the company's affairs by the majority or the board of directors. However, every shareholder is entitled to have the affairs of the company conducted properly according to British Virgin Islands law and the company's constituent documents.

        As such, if those who control the company have persistently disregarded the requirements of company law or the provisions of the company's Amended Memorandum and Articles of Association, then the courts may grant relief. Generally, the areas in which the courts will intervene are the following: (1) an act complained of which is outside the scope of the authorized business or is illegal or not capable of ratification by the majority; (2) acts that constitute a "fraud on the minority" where the wrongdoers control the company; (3) acts that infringe or are about to infringe on the personal rights of the shareholders, such as the right to vote; and (4) where the company has not complied with provisions requiring the approval of a majority of shareholders, which are more limited than the rights afforded to minority shareholders under the laws of many states in the U.S.

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SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

        We make forward-looking statements in this prospectus that are subject to risks and uncertainties. These forward-looking statements include information about possible or assumed future results of our business and financial condition, as well as the results of operations, liquidity, plans and objectives. In some cases, you can identify forward-looking statements by terminology such as "believe," "may," "estimate," "continue," "anticipate," "intend," "should," "plan," "expect," "predict," "potential," or the negative of these terms or other similar expressions. These statements include, but are not limited to, statements regarding:

    the persistence and intensification of competition in the IT industry;

    the future growth of spending in IT services outsourcing generally and in each of our industry verticals, application outsourcing and custom application development and offshore R&D services;

    the level of growth of demand for our services from our clients;

    the level of increase in revenues from our new clients;

    seasonal trends and the budget and work cycles of our clients;

    the levels of our concentration of revenues by vertical, geography, by client and by type of contract in the future;

    the expected timing of the increase in our corporate tax rate;

    our expectations with respect to the proportion of our fixed price contracts;

    our expectation that our FOSS acquisition will help us develop new practice expertise;

    the demands we expect our rapid growth to place on our management and infrastructure;

    the sufficiency of our current cash, cash flow from operations, and lines of credit to meet our anticipated cash needs;

    the high proportion of our cost of services comprised of personnel salaries;

    our plans to introduce new products for commercial resale and licensing in addition to providing services;

    our anticipated joint venture with one of our clients;

    IBS Group's consideration of further divesting all or a portion of its ownership interest in us; and

    our continued financial relationship with IBS Group including expectations for the provision and purchase of services and purchase and lease of equipment.

        The preceding list is not intended to be an exhaustive list of all of our forward-looking statements. The forward-looking statements are based on our beliefs, assumptions and expectations of future performance, taking into account the information currently available to us. These statements are only predictions based upon our current expectations and projections about future events. There are important factors that could cause our actual results, level of activity, performance or achievements to differ materially from the results, level of activity, performance or achievements expressed or implied by the forward-looking statements. In particular, you should consider the numerous risks provided under "Risk Factors" in this prospectus.

        You should not rely upon forward-looking statements as predictions of future events. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee that future results, levels of activity, performance and events and circumstances reflected in the forward-looking statements will be achieved or will occur. Except as required by law, we undertake no obligation to publicly update any forward-looking statements for any reason after the date of this prospectus to conform these statements to actual results or to changes in our expectations.

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INDUSTRY DATA AND OTHER INFORMATION

        This prospectus includes data, forecasts and information obtained from industry publications and surveys and other information available to us. Forecasts and other metrics included in this prospectus to describe our industry are inherently uncertain and speculative in nature and actual results for any period may materially differ. Estimates and forecasts involve uncertainties and risks and are subject to change based on various factors, including those discussed above and under the heading "Risk Factors" in this prospectus.

        The Gartner Report(s) described herein, (the "Gartner Report(s)") represent(s) data, research opinion or viewpoints published, as part of a syndicated subscription service, by Gartner, Inc. ("Gartner"), and are not representations of fact. Each Gartner Report speaks as of its original publication date (and not as of the date of this Prospectus) and the opinions expressed in the Gartner Report(s) are subject to change without notice.

        Unless stated otherwise, third party data in this prospectus consists of:

    1.
    Gartner, Analysis of Poland as an Offshore Services Location, Ian Marriott, Gianluca Tramacere, November 5, 2012;

    2.
    Gartner, Analysis of Romania as an Offshore Services Location, Ian Marriott, Khalda De Souza, November 5, 2012;

    3.
    Gartner, Analysis of Ukraine as an Offshore Services Location, Gianluca Tramacere, Ian Marriott, October 24, 2012;

    4.
    Gartner, Innovation Insight: The Connected Vehicle Will Dominate Automotive and Mobility Innovations, Thilo Koslowski, December 28, 2012;

    5.
    IDC Worldwide Offshore IT Services 2012-2016 Forecast, #234403, April 2012;

    6.
    IDC Worldwide Services 2012-2016 Forecast Update #237692, November 2012;

    7.
    Forrester Research Inc, Thrive With Sustained Innovation in the Empowered BT Era, August 23, 2012;

    8.
    Forrester Research Inc, Rightsource Your Agile-Lean Ecosystem, November 7, 2012; and

    9.
    Forrester Research Inc, Mobile Feast or Beggar's Banquet?, January 24, 2013.

        None of the underwriters, the selling shareholder or we have authorized anyone to provide you with additional information or information different from that contained in this prospectus or in any free writing prospectus prepared by us or on our behalf. When you make a decision about whether to invest in our Class A ordinary shares, you should not rely upon any information other than the information in this prospectus and any free writing prospectus prepared by us or on our behalf. Neither the delivery of this prospectus nor the sale of our Class A ordinary shares means that information contained in this prospectus is correct after the date of this prospectus. This prospectus is not an offer to sell or solicitation of an offer to buy these shares in any circumstances under which the offer or solicitation is unlawful.

        For investors outside the United States: neither we, the selling shareholder, nor any of the underwriters have done anything that would permit the offering or possession or distribution of this prospectus in any jurisdiction where action for that purpose is required, other than in the United States. You are required to inform yourselves about and to observe any restrictions relating to this offering and the distribution of this prospectus outside of the United States.

        Throughout this prospectus, we refer to various trademarks, service marks and trade names that we use in our business. "Luxoft" is our registered trademark. We also have several other registered trademarks, service marks and pending applications relating to our services. Other trademarks and service marks appearing in this prospectus are the property of their respective holders.

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USE OF PROCEEDS

        We estimate that the net proceeds to us from this offering, after deducting the underwriting discounts and commissions and estimated offering expenses, will be approximately $31.1 million (or approximately $35.9 million if the underwriters exercise their over-allotment option in full), assuming the shares are offered at $17.00 per share, the mid-point of the estimated offering price range set forth on the cover page of this prospectus.

        We will not receive any proceeds from the sale of shares by the selling shareholder, including if the underwriters exercise their overallotment option.

        We intend to use the net proceeds for working capital and other general corporate purposes. We will not receive any of the proceeds from the sale of shares by the selling shareholder. The primary purposes of this offering are to create a U.S. public market for our Class A ordinary shares, increase the profile and prestige of our company with existing and possible future customers, vendors and strategic partners, make our ordinary shares more valuable and attractive to our employees and potential employees for compensation purposes, raise additional capital and allow potential future access to the U.S. public markets should we need more capital in the future. We do not intend to declare or pay any additional dividends on our ordinary shares for the foreseeable future following this offering.

        A $1.00 increase (decrease) in the assumed initial public offering price of $17.00 per share would increase (decrease) the net proceeds to us from this offering by approximately $1.9 million, assuming the number of Class A ordinary shares offered by us as set forth on the cover page of this prospectus remains the same and after deducting the underwriting discounts and commissions and estimated offering expenses. Similarly, each increase (decrease) of 500,000 shares in the number of Class A ordinary shares offered by us would increase (decrease) the net proceeds to us from this offering by approximately $7.9 million, assuming that the assumed initial public offering price remains the same, and after deducting the underwriting discounts and commissions and estimated offering expenses.

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DIVIDEND POLICY

        In December 2011, we paid a $4.0 million dividend, representing $0.14 per share, to our shareholders for the year ended March 31, 2011. On July 21, 2012, we declared a $27.0 million dividend, representing $0.91 per share, for the year ended March 31, 2012, $21.9 million of which was paid to our shareholders, $0.1 million remains to be paid, and the balance of which was offset against a loan receivable from IBS Group. On April 30, 2013, we declared a $30.5 million dividend, representing $1.00 per share, to our shareholders, for the year ended March 31, 2013. We expect that this dividend will be paid on or before January 31, 2014. We have paid $2.5 million of this dividend to our shareholders as of the date of this prospectus. We intend to pay an additional $12.5 million of the dividend by July 1, 2013, and the remainder in $3.0 million monthly installments out of our operating cash flows. We will consider accelerating the payment schedule of the dividend from our operating cash flows.

        We do not intend to declare or pay any further dividends on our ordinary shares for the foreseeable future following this offering. Any future determination relating to our dividend policy will be made at the discretion of our board of directors, subject to the BVI Act, and will depend on a number of factors, including future earnings, capital requirements, contractual restrictions, financial condition and future prospects, and other factors our board of directors may deem relevant. Any future dividend that our board of directors declares will be shared equally on a per share basis.

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CAPITALIZATION

        The following table sets forth our cash and cash equivalents and total capitalization as of March 31, 2013, as follows:

    on an actual basis;

    on a pro forma basis to give effect to the completion of this offering and the reclassification of all of our ordinary shares into Class A and Class B ordinary shares, and to give further effect to the $30.5 million dividend declared on April 30, 2013.

        You should read this information in conjunction with our consolidated financial statements and the related notes appearing elsewhere in this prospectus, the "Management's Discussion and Analysis of Financial Condition and Results of Operations" section, and other financial information contained in this prospectus. See "Use of Proceeds."

 
  As of March 31, 2013  
 
  Actual   Pro forma  
 
   
  (unaudited)
 
 
  (in thousands)
 

Cash and cash equivalents

  $ 4,499   $ 35,597  
           

Indebtedness:

             

Short-term debt including current portion of long-term debt

    16,759     16,759  

Long-term debt

    6     6  

Total indebtedness

    16,765     16,765  
           

Shareholder's Equity:

             

Ordinary shares no par value, 36,400,000 shares authorized, 30,593,080 shares issued and outstanding, actual; 80,000,000 shares authorized, 30,593,080 shares issued and outstanding, pro forma

         

Class A ordinary shares no par value, no shares authorized, no shares issued and outstanding, actual; 50,000,000 shares authorized, 3,120,675 shares issued and outstanding, pro forma

         

Class B ordinary shares no par value, no shares authorized, shares issued and outstanding, actual; 30,000,000 shares authorized, 27,472,405 shares issued and outstanding, pro forma

         

Additional paid-in capital

    50,936     82,034  

Retained earnings

    46,720     16,240  
           

Accumulated other comprehensive loss

    (2,393 )   (2,393 )
           

Total shareholders' equity attributable to the Group

    95,263     95,881  
           

Non-controlling interest

    32     32  

Total equity

    95,295     95,913  
           

Total capitalization

  $ 112,060   $ 112,678  
           

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DILUTION

        If you invest in our Class A ordinary shares in this offering, your ownership interest will be immediately diluted to the extent of the difference between the initial public offering price per share and the net tangible book value per ordinary share after this offering. Our net tangible book value as of March 31, 2013 was $61.6 million. Net tangible book value per share represents our total assets excluding intangible assets and goodwill reduced by the amount of our total liabilities, divided by the total number of ordinary shares outstanding as of March 31, 2013.

        After giving effect to the sale of ordinary shares that we are offering at an assumed initial public offering price of $17.00 per ordinary share (the mid-point of the initial public offering price range set forth on the cover page of this prospectus) and after deducting the estimated underwriting discounts and commissions and estimated offering expenses payable by us, our pro forma net tangible book value as of March 31, 2013 would have been approximately $1.91 per ordinary share. This amount represents an immediate decrease in net tangible book value of $0.11 per ordinary share to our existing shareholders and an immediate dilution in net tangible book value of approximately $15.09 per ordinary share to new investors purchasing ordinary shares in this offering. We determine dilution by subtracting the pro forma net tangible book value per share after this offering from the amount of cash that a new investor paid for an ordinary share.

        The following table illustrates this dilution:

Assumed initial public offering price per share

        $ 17.00  
             

Net tangible book value per share as of March 31, 2013

  $ 2.01        

Increase per share attributable to this offering

    (0.11 )      
             

Pro forma net tangible book value per share after this offering

          1.91  

Dilution per share to new investors

        $ 15.09  
             

             

        A $1.00 increase (decrease) in the assumed initial public offering price of $17.00 per ordinary share, would increase (decrease) our pro forma consolidated net tangible book value after this offering by $0.06 and the dilution per share to new investors by $14.15, in each case assuming the number of shares offered, as set forth on the cover page of this prospectus, remains the same and after deducting the underwriting discounts and commissions and estimated offering expenses payable by us.

        If the underwriters exercise their over-allotment option in full in this offering, the pro forma net tangible book value after the offering would be $2.04 per share, the increase in net tangible book value per share or our ordinary shares to existing shareholders would be $0.03 and the dilution per ordinary share to new investors would be $14.96 per share.

        The following table summarizes, as of March 31, 2013, the differences between the number of shares purchased from us, the total consideration paid to us in cash and the average price per share that existing shareholders and new investors paid. The calculation below is based on an assumed initial public offering price of $17.00 per ordinary share before deducting the estimated underwriting discounts and commissions and estimated offering expenses payable by us.

 
  Shares purchased   Total consideration    
 
 
  Average price per share  
 
  Number   Percent   Amount   Percent  

Existing shareholders

  $     0.0 % $     0.0 % $  

New investors

    2,046,035     100     34,782,595     100     17.00  
                         

Total

  $ 2,046,035     100 % $ 34,782,595     100 %      
                         

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        The foregoing tables and calculations exclude 437,192 Class A ordinary shares reserved for issuance in connection with the vesting of options granted pursuant to our stock option plan and 110,348 Class A ordinary shares reserved for issuance under our equity incentive plans. To the extent that additional shares are issued under our equity incentive plans, there will be further dilution to new investors. To the extent that all of such shares had been issued as of March 31, 2013, the pro forma net tangible book value per share after this offering would be $1.87, and total dilution per share to new investors would be $15.13.

        If the underwriters exercise their over-allotment option in full:

    the number of Class B ordinary shares held by existing shareholders will decrease to 27,165,500, or approximately 82.5% of the total number of our Class A and Class B ordinary shares outstanding after this offering; and

    the number of Class A ordinary shares held by new investors will increase to 4,705,880, or approximately 14.3% of the total number of our Class A and Class B ordinary shares outstanding after this offering.

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SELECTED CONSOLIDATED FINANCIAL DATA

        You should read the following selected consolidated financial data in conjunction with "Management's Discussion and Analysis of Financial Condition and Results of Operations" and our consolidated financial statements and the related notes included elsewhere in this prospectus. The consolidated statements of comprehensive income data for the years ended March 31, 2011, 2012 and 2013, and the consolidated balance sheet data as of March 31, 2011, 2012 and 2013, are derived from our audited consolidated financial statements included elsewhere in this prospectus, which have been prepared in accordance with US GAAP. Historical results are not indicative of the results to be expected in the future.

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  Year ended March 31,  
 
  2011   2012   2013  
 
  (in thousands, except per share data)
 

Consolidated statements of comprehensive income:

                   

Sales of services

  $ 198,368   $ 271,142   $ 314,596  

Operating expenses:

                   

Cost of services (exclusive of depreciation and amortization)

    109,996     157,004     185,557  

Selling, general and administrative expenses

    51,039     64,720     76,911  

Depreciation and amortization

    6,344     7,742     8,981  
               

Operating income

    30,989     41,676     43,147  

Other income and expenses:

                   

Interest expense, net

    (3,522 )   (2,151 )   (1,277 )

Gain/(loss) from foreign currency exchange contracts

    (320 )   886     (621 )

Other gain/(loss), net

   
529
   
170
   
(1

)

Net foreign exchange gain/(loss)

    914     (1,263 )   (66 )
               

Income from continuing operations before income taxes

    28,590     39,318     41,182  

Income tax expense

    (2,043 )   (3,210 )   (3,645 )
               

Income from continuing operations

    26,547     36,108     37,537  

Income/(loss) from discontinued operations

    (664 )   80      

Net income

    25,883     36,188     37,537  

Less: Net loss attributable to the non-controlling interest

    1     62      
               

Net income attributable to the Group

  $ 25,884   $ 36,250   $ 37,537  
               

Other comprehensive income, net of tax:

                   

Foreign currency transaction adjustment

    15     (879 )   (1,514 )
               

Comprehensive income attributable to the Group

  $ 25,899   $ 35,371   $ 36,023  
               

Actual net income per ordinary share and pro forma per Class A and Class B ordinary shares:

                   

Basic

  $ 0.89   $ 1.23   $ 1.27  

Diluted

  $ 0.88   $ 1.22   $ 1.24  

Actual weighted average number of ordinary shares and pro forma number of Class A and Class B ordinary shares outstanding(1):

                   

Basic

    28,621,824     29,286,348     29,662,696  

Diluted

    29,506,708     29,734,292     30,235,884  

Dividends declared per share

  $   $ 0.14   $ 0.91  

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  As of March 31, 2013  
 
  Actual   Pro forma(2)  
 
   
  (unaudited)
 
 
  (in thousands)
 

Consolidated balance sheet data:

             

Cash and cash equivalents

  $ 4,499   $ 35,597  

Work-in-progress

    3,478     3,478  

Working capital(3)

    46,662     47,280  

Total assets

    155,222     186,320  

Total borrowings(4)

    16,765     16,765  

Total liabilities

    59,927     90,407  

Total equity

  $ 95,295   $ 95,913  

 

 
  Year ended March 31,  
 
  2011   2012   2013  
 
  (in thousands)
 

Supplemental financial metrics:

                   

Adjusted net income(5)

  $ 27,860   $ 38,354   $ 42,997  

(1)
See Note 17 to our annual consolidated financial statements included elsewhere in this prospectus for an explanation of the number of shares used in calculating basic and diluted earnings per share.

(2)
Pro forma to give effect to the completion of this offering and the reclassification of all of our ordinary shares into Class A and Class B ordinary shares, and to further give effect to the $30.5 million dividend declared on April 30, 2013.

(3)
Working capital is defined as total current assets minus total current liabilities.

(4)
Includes short term and long term borrowings, loans from related parties and capital lease obligations.

(5)
Adjusted net income is a non-GAAP measure and is net income from continuing operations before share-based compensation. We present adjusted net income as a supplemental performance measure because we believe that it facilitates operating performance comparisons from period to period and company to company. Adjusted net income should not be considered in isolation or as a substitute for operating income or other statement of comprehensive income items prepared in accordance with US GAAP as a measure of our performance. We use adjusted net income as a measure of operating performance because it assists us in comparing performance on a consistent basis, as it removes from our operating results the impact of share-based compensation expense, which is a non-cash item. In addition, adjusted net income, as presented in this prospectus, may not be comparable to similarly titled measures reported by other companies due to differences in the way that these measures are calculated. A reconciliation of adjusted net income to net income from continuing operations is set forth in the table below.

 
  Year ended March 31,  
 
  2011   2012   2013  
 
  (in thousands)
 

Reconciliation of adjusted net income:

                   

Income from continuing operations

  $ 26,547   $ 36,108   $ 37,537  

Share-based compensation

    1,313     2,246     5,460  
               

Adjusted net income

  $ 27,860   $ 38,354   $ 42,997  
               

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MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS

        The following discussion should be read in conjunction with our consolidated financial statements and the related notes included elsewhere in this prospectus. This discussion contains forward-looking statements that are subject to known and unknown risks and uncertainties. Actual results and the timing of events may differ significantly from those expressed or implied in such forward-looking statements due to a number of factors, including those set forth in the section entitled "Risk Factors" and elsewhere in this prospectus. You should read the following discussion in conjunction with "Special Note Regarding Forward-Looking Statements" and "Risk Factors."

Overview

        We are a leading provider of software development services and innovative IT solutions to a global client base consisting primarily of large, multinational corporations. Our software development services consist of core and mission critical custom software development and support, product engineering and testing, and technology consulting. Our solutions are based on our proprietary products and platforms that directly impact our clients' business outcomes and efficiently deliver continuous innovation. Through our services and solutions, we enable our clients to improve their competitive position by increasing efficiency, shortening time-to-market, and enhancing their end user experience. We have a reputation and track record of delivering consistently high quality service that has enabled us to establish long-term strategic relationships with many of our clients, translating into significant revenue growth and recurring business.

Factors affecting our results of operations

        We believe the following factors have a significant effect on our results of operations:

    Wage inflation:  Wage inflation has been growing rapidly in the countries in which we maintain a significant number of personnel. Wage inflation contributes to increasing our cost of services, and selling, general and administrative expenses. The impact of wage inflation is heightened by increased attrition, which is caused by the increasing demand for qualified IT personnel. The impact of wage inflation is mitigated to a limited extent by several factors, including our ability to shift work away from delivery centers that may be disproportionately affected by wage inflation, as well as our ability to pass some of the cost to our clients through provisions in a number of our contracts that permit us to increase prices based on inflation and related indicators.

    Demand for IT services outsourcing in the United States and Western Europe:  The demand for IT services outsourcing is growing steadily in the United States and Western Europe, the regions in which most of our clients operate. The growth in demand for IT services outsourcing in key regions in which we operate gives us the ability to increase our sales of services and, therefore, may positively impact our results of operations. Conversely, if the growth in demand for IT services outsourcing slows or declines, our revenues may be negatively impacted. We focus on providing services primarily to mission critical aspects of our clients' businesses, which we believe reduces the risk of our clients decreasing their IT spending on our engagements during economic downturns relative to those IT services providers who focus on discretionary projects and business process outsourcing.

    Client concentration:  In the year ended March 31, 2013, 54.7% of our sales were derived from clients in the financial services industry. We believe we will continue to have similar levels of revenue concentration in the financial services industry in the near term. The developments in this industry that impact the demand for software development services and solutions are likely to have a greater impact on us than on competitors, who do not have a similarly high level of

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      revenue concentration in this vertical. Furthermore, we have a high degree of client concentration and our top five clients represented an aggregate of 69.7% of our sales in the year ended March 31, 2013. We believe that the financial services industry will remain one of the most significant sources of demand for IT services in the near term, driven by ongoing pressure to restore growth and improve profitability, industry-wide regulatory reforms, requirements to increase transparency and manage risk exposure, as well as the adoption of new technologies such as cloud computing, mobile and data analytics. We believe that the financial industry's strong reliance on IT outsourcing services and the mission critical nature of the services we provide for key clients within the financial industry, such as Deutsche Bank and UBS, reduce the risks we face from client concentration.

    Foreign currency fluctuation:  We operate in a multi-currency environment, and exchange rate fluctuations, especially between the Ruble and the U.S. dollar, impact our cost of services and therefore our results of operations. Our sales are largely denominated in U.S. dollars and Euros, and to a lesser extent in Rubles and British pounds, whereas our expenses are largely denominated in Rubles, U.S. dollars, Euros and Romanian leu. As a result, currency fluctuations, and especially the appreciation of the Ruble relative to the U.S. dollar and the depreciation of the Euro relative to U.S. dollar, could negatively impact our results of operations.

    Migration from time-and-materials contracts to fixed price contracts:  We have increased the proportion of services that we perform on a fixed price basis versus on a time-and-materials basis. Fixed price contracts often allow us more freedom in allocating our internal resources and we are better able to control our costs compared to time-and-materials contracts. We expect a slight increase in the proportion of fixed price services over the mid-term, which should have a positive impact on our gross margins. However, we bear the risk of unexpected cost overruns under fixed price contracts, which could negatively affect our margins and our gross results of operations.

    Inflation in CEE:  Our results of operations are affected by inflation rates in CEE because our expenses are largely denominated in Rubles and, to a lesser extent, other CEE currencies, such as Romanian leu and Polish zloty. If we are unable to increase our revenues in line with our costs in CEE, it could have a material effect upon our results of operations and financial condition. See "Risk Factors—Risks Related to Conducting Business in CEE Countries—Fluctuations in currency exchange rates and increased inflation could materially adversely affect our financial condition and results of operations."

    Tax reduction programs:  In Russia we benefit from a reduced social contributions tax rate program available to qualified IT service providers. Russia's social contributions tax is a mandatory tax consisting of contributions paid by employers to the Russian Pension Fund, the Russian Social Security Fund and the Federal Medical Insurance Fund. The social contributions tax rate varies depending on employee's annual compensation between 8.0% and 22.0% for the Pension Fund; up to 2.9% to the Social Security Fund; up to 5.1% to the Federal Medical Insurance Fund; and between 0.2% and 8.5% for mandatory accident insurance. Mandatory social contributions are payable by employers and are levied on (i) payments made to Russian and foreign citizens who reside in Russia permanently or temporarily (i.e., those who have residence permits or permission to temporarily reside in Russia) at general rates, and on (ii) payments made to foreign citizens who temporarily stay in Russia (e.g., based on a work visa, if required), except for payments to foreign citizens employed by Russian companies or Russian branches of foreign companies who obtained work permit as "highly qualified specialists." In addition, mandatory accident insurance contributions are assessed on a gross payroll of all Russia-based employees. However, the reduced tax rates for social contributions (currently 14.0% in the aggregate) are only available until December 31, 2017, after which the Russian

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      government plans to gradually increase the tax rates (21.0% in 2018 and 28.0% in 2019) until they are equal to the rates for non-qualified companies (34.0%) in 2020.

    Corporate income tax increase as a result of restructuring:  We are currently undergoing an internal legal restructuring in order to reduce our transfer pricing and permanent establishment risks. As a result of this restructuring, we expect our effective corporate tax rate to increase during the next several years up to 14.0%.

        As we continue to grow our business, we plan to introduce new products for resale and licensing. We have limited experience to date in developing products for resale and licensing, and have not generated significant revenues from the sale of products. We expect the development of new products to increase our R&D costs in the near and medium term. However, we intend to grow our revenues in the medium and long term from the sale of our products. See "Risk Factors—Our future revenue growth depends in part on our ability to successfully introduce new products."

Acquisitions and joint ventures

        On February 20, 2013, Luxoft USA entered into an agreement to purchase the customer base and to hire several employees of Freedom Professional Services & Technologies LLC ("FOSS"), an IT software development and integration company. According to the agreement, Luxoft USA paid the sellers $0.9 million upon signing, and will pay contingent cash consideration with a fair value of $5.3 million, and 28,588 of our ordinary shares, subject to the acquired FOSS assets meeting certain revenue and gross margin targets. Pursuant to the agreement, FOSS assigned to Luxoft USA several of its major contracts, including with UBS and Standard & Poor's, and also transferred five of its key employees to Luxoft USA. We believe this transaction will allow us to develop a new practice in Service Oriented Architecture/Open Source, and to access new technologies. The acquisition was completed on March 20, 2013.

        On December 31, 2012, Luxoft International Company Limited ("Luxoft International") entered into an assignment and license back agreement with Deutsche Bank AG (London Branch) and DB Services New Jersey, Inc. (together "DB") relating to Horizon, a software product for comprehensive across-enterprise risk management and visualization, which Luxoft International helped develop for DB. Pursuant to this agreement, Luxoft International acquired the intellectual property rights to Horizon for 2.5 million Euros, and simultaneously granted DB an irrevocable, non-exclusive, license to continue to use Horizon. Under the agreement, Luxoft International will pay DB a royalty of 20% of the net sales revenue of Horizon to third parties during the five year period starting December 31, 2012. As of the date of this prospectus we have not yet begun selling this product to third parties.

        We have recently commenced preliminary discussions with one of our major clients, who is a tier-one supplier in the automotive industry, to explore increased cooperation in the field of application development and technology services in the automotive and transport vertical. While these discussions are in the early stages and the parties have not entered into any agreement, letter of intent or similar understanding, one of the possible structures being considered involves the formation of a JV into which each party will contribute all of its applicable aftermarket, application and technology services-related contracts with OEMs and all applicable technology solutions. In addition, our client would contribute its globally recognized brand and we would contribute our engineering services, including personnel. The proposed JV would serve automotive OEMs, dealers, and direct consumers. It would combine the service expertise and innovative technologies of both companies in such areas as head unit servicing, navigation systems and services, cloud solutions, big data and engineering services that would be executed through the resources contributed to the JV by us. Our sales generated by this client account for a substantial majority of the total sales generated by our automotive and transport vertical, with the remainder represented by one OEM and several tier-one suppliers, which together comprised less than 1.0% of our total sales in the year ending March 31, 2013. While increased cooperation

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between the client and us may hamper our ability to pursue contracts with other competing tier-one suppliers, our ultimate goal is to capitalize on and monetize the synergies between our company and the client and generate greater revenues and profitability than each party generates separately. At present, the client and we are assessing the commercial viability of this JV and considering other possible forms of joint cooperation; however, we can provide no assurance that the JV will be established or that the client and we will enter into any other form of joint cooperation.

Certain comprehensive income statement line items

Sales of services

        Sales of services consist primarily of the provision of software development, which includes core custom software development and support, product engineering and testing and technology consulting services to our clients. Sales of services also includes sales generated from non-core activities, including external project consulting, quality management consulting, recruitment services provided to our clients and training services provided to third parties, as well as reimbursements of expenses of our IT professionals by clients. Historically, non-core sales have accounted for a small portion of total sales. The growth rate of non-core sales is somewhat slower than our average revenue growth rate. In the past two fiscal years, we derived a substantial majority of the growth in our sales of services to existing clients. Below is a discussion of our revenue organized by client location, industry vertical, client concentration and contract type.

    Client locations

        We present client location based on the location of the client's key decision-maker. We seek to maintain the current geographical balance of sales. Our revenue by client location has generally experienced balanced growth during the periods under review.

        The following table sets forth sales by client location, by amount and as a percentage of our total sales for the periods indicated:

 
  Year ended March 31,  
 
  2011   2012   2013  
 
  Amount   % of
Sales
  Amount   % of
Sales
  Amount   % of
Sales
 
 
  (in thousands, except percentages)
 

Client location

                                     

U.S. 

  $ 76,295     38.5 % $ 98,509     36.3 % $ 114,132     36.3 %

UK

    56,748     28.6     86,928     32.0     88,729     28.2  

Germany

    25,383     12.8     34,477     12.7     40,306     12.8  

Russia

    12,994     6.5     24,627     9.1     35,199     11.2  

Canada

    11,335     5.7     8,300     3.1     17,947     5.7  

Rest of Europe

    11,342     5.7     14,341     5.3     14,526     4.6  

Other

    4,271     2.2     3,960     1.5     3,757     1.2  
                           

Total

  $ 198,368     100 % $ 271,142     100 % $ 314,596     100 %
                           

    Industry Verticals

        While financial services have historically been our largest industry vertical, we have deep expertise in each of the industry verticals we serve. We target six industry verticals within which we have maintained a relatively stable revenue mix during the periods under review.

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        The following table sets forth sales by industry vertical, by amount and as a percentage of our sales for the periods indicated:

 
  Year ended March 31,  
 
  2011   2012   2013  
 
  Amount   % of
Sales
  Amount   % of
Sales
  Amount   % of
Sales
 
 
  (in thousands, except percentages)
 

Industry Vertical

                                     

Financial services

  $ 97,682     49.2 % $ 141,836     52.3 % $ 172,086     54.7 %

Travel and aviation

    29,139     14.7     38,892     14.3     38,976     12.4  

Technology

    24,040     12.1     29,258     10.8     36,123     11.5  

Telecom

    24,905     12.6     31,230     11.5     31,587     10.0  

Automotive and transport

    14,830     7.5     21,414     7.9     25,945     8.3  

Energy

    6,443     3.2     7,190     2.7     8,236     2.6  

Other

    1,329     0.7     1,322     0.5     1,643     0.5  
                           

Total

  $ 198,368     100 % $ 271,142     100 % $ 314,596     100 %
                           

    Client concentration

        We have deep and long-standing relationships with our top clients. We expect client concentration from our top ten clients to decrease and a simultaneous increase in demand from other clients, as well as business from new clients. New clients for any period are defined as clients who were not on our client list as of the end of the applicable prior fiscal year. The following table sets forth sales by our top five and top ten clients, by amount and as a percentage of our total sales for the periods indicated:

 
  Year ended March 31,  
 
  2011   2012   2013  
 
  Amount   % of
Sales
  Amount   % of
Sales
  Amount   % of
Sales
 
 
  (in thousands, except percentages)
 

Client concentration

                                     

Top five clients

  $ 142,219     71.7 % $ 192,087     70.8 % $ 219,329     69.7 %

Top ten clients

  $ 165,494     83.4 % $ 223,901     82.6 % $ 255,393     81.2 %

        In the year ended March 31, 2013, Deutsche Bank and UBS accounted for 29.0% and 18.0% of our total sales, respectively; no other single client represented more than 10.0% of our total sales.

    Contract types

        Historically, the majority of our sales have been generated under time-and-materials contracts. Under time-and-materials contracts, we are compensated for actual time incurred by our IT professionals at negotiated hourly, daily or monthly rates. Recently, more of our services have moved to the fixed price model, which requires us to perform an agreed scope of services, for which we are paid a pre-determined fixed price in installments at pre-agreed intervals. The move toward fixed price contracts is consistent with a broader move toward this model within the industry, as clients seek more efficient and predictable pricing arrangements as well as increased project ownership by the project provider.

        Starting in 2012, we experienced an increased demand from clients, including our two largest clients, for fixed price contracts, and responded by providing a transitional framework for our major, long-term clients to convert time-and-materials contracts into fixed price contracts. The transition of

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these two clients to a fixed price contract basis resulted in a significant shift in the proportion of our revenues derived from fixed price contracts.

        The transitional framework allowed the majority of converted contracts remain in a monthly revenue recognition pattern, with a portion of those contracts transitioning to quarterly revenue recognition. This was achieved by setting milestones on a monthly and quarterly basis, with clear customer acceptance criteria that could be assessed in the end of respective periods.

        Fixed price contracts do not vary in length from time-and-materials contracts, and we do not believe the transition from time-and-materials contracts to fixed price contracts will significantly change our obligations under these contracts, or result in significantly different timing or patterns of service delivery for the purposes of revenue recognition. We believe the use of proportional performance with monthly or quarterly contractual milestones for customer acceptance continues to be an appropriate revenue recognition method for fixed price contracts.

        Our migration to fixed price contracts opens up an opportunity for increased margins in the future if we are able to efficiently deliver under this framework, despite our increased responsibility for the entire project outcome.

        The following table sets forth sales by contract type, by amount and as a percentage of our total sales for the periods indicated:

 
  Year ended March 31,  
 
  2011   2012   2013  
 
  Amount   % of
Sales
  Amount   % of
Sales
  Amount   % of
Sales
 
 
  (in thousands, except percentages)
 

Contract type

                                     

Time-and-materials

  $ 180,467     91.0 % $ 206,335     76.1 % $ 181,085     57.6 %

Fixed price

    17,901     9.0     64,807     23.9     133,511     42.4  
                           

Total

  $ 198,368     100.0 % $ 271,142     100.0 % $ 314,596     100.0 %
                           

Operating expenses

        Our operating expenses consist of:

    Cost of services

        Cost of services includes salaries and related benefits for our delivery center employees, compensation for our contractors and other project-related costs, including travel, materials and other direct costs. All of our IT professionals are salaried employees except for personnel in Ukraine, the substantial majority of whom are contractors. The majority of our costs of services comprise compensation to our employees and contractors, and we expect substantially the same composition of costs of services in the future. Where services are performed by contractors, the entire cost of contractors is included in cost of services. With respect to employees, the compensation for the time that our employees log for specific projects in their time sheets is included in our cost of sales, and the remainder of the total compensation for logged time is recorded in selling, general and administrative expenses. The travel expenses of our employees and contractors directly related to specific projects are recorded in our cost of services. Cost of services also includes social contribution charges payable on the salaries for our employees. Our operating results are typically lower in the first calendar quarter than in any other quarter due to the fact that we pay the highest social contribution charges and the large number of holidays during this period.

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    Selling, general and administrative expenses

        Selling expenses include primarily advertising and marketing expenses. General and administrative expenses include compensation and other expenses of our senior management, administrative personnel, and R&D personnel, as well as the unutilized portion of the compensation expenses of our IT professionals. General and administrative expenses also include office rent and maintenance and professional services, including legal, audit and insurance services, travel and entertainment expenses other than those directly related to projects for clients, and other expenses.

    Depreciation and amortization

        Depreciation and amortization includes depreciation of property and equipment and amortization of capitalized software costs, acquired contract-based client relationships and other intangible assets. We use the straight line method to determine depreciation and amortization.

Other income and expenses

        Our other income and expenses consist of:

        Interest expense, net:    Interest income and interest expense are accrued by reference to the principal amount outstanding at the applicable interest rate. We earn interest income on our cash deposits and loans provided to related parties.

        Other gains/(loss), net:    Other gains, net consists of subleasing office space, disposal of old computer equipment and reimbursement from clients for the purchases of IT equipment.

        Gain/(loss) from foreign currency exchange contracts:    Gain (loss) from foreign currency exchange contracts is represented by unrealized gains and losses from settlement and revaluation of derivatives related to forward and option foreign currency exchange contracts that are normally fully settled within our fiscal year, but may be outstanding in interim periods. The changes in unrealized gains and losses are driven by expected exchange rate volatilities and the dynamics factored into the valuations of these derivatives.

        Net foreign exchange income/(loss):    We enter into foreign exchange transactions as we have contracts denominated in both U.S. dollars, Euros, Rubles, and, to a lesser extent, British pounds and other currencies. Re-measurement of monetary assets, such as receivables, denominated in foreign currencies that are different from functional currencies of the respective subsidiaries, result in and are recorded as net foreign exchange income/(loss).

Income tax expense

        Our income tax includes both current and deferred income taxes. Because we operate in a number of countries, our income is subject to taxation in differing jurisdictions with a range of tax rates. Therefore, we need to apply significant judgment to determine our consolidated income tax position. As a result of our multi-jurisdictional operations, we are exposed to a number of different tax risks including, but not limited to, changes in tax laws or interpretations of these tax laws. We are currently undergoing an internal legal restructuring to reduce our transfer pricing and permanent establishment risks. We expect this restructuring to result in an increase in our effective tax rate.

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Results of operations

        The following tables set forth our results of operations for the periods presented and as a percentage of sales of services for those periods.

 
  Year ended March 31,  
 
  2011   2012   2013  
 
  Amount   % of
Sales
  Amount   % of
Sales
  Amount   % of
Sales
 
 
  (in thousands, except percentages)
 

Consolidated statements of comprehensive income:

                                     

Sales of services

  $ 198,368     100 % $ 271,142     100 % $ 314,596     100 %

Operating expenses:

                                     

Cost of services (exclusive of depreciation and amortization)

    109,996     55.5     157,004     57.9     185,557     59.0  

Selling, general and administrative expenses

    51,039     25.7     64,720     23.9     76,911     24.4  

Depreciation and amortization

    6,344     3.2     7,742     2.8     8,981     2.9  
                           

Operating income

    30,989     15.6     41,676     15.4     43,147     13.7  

Other income and expenses:

                                     

Interest expense, net

    (3,522 )   (1.8 )   (2,151 )   (0.8 )   (1,277 )   (0.4 )

Gain/(loss) from foreign currency exchange contracts

   
(320

)
 
(0.2

)
 
886
   
0.3
   
(621

)
 
(0.2

)

Other gain/(loss), net

    529     0.3     170     0.1     (1 )   (0.0 )

Net foreign exchange gain/(loss)

    914     0.5     (1,263 )   (0.5 )   (66 )   (0.0 )
                           

Income from continuing operations before income taxes

    28,590     14.4     39,318     14.5     41,182     13.1  

Income tax expense

    (2,043 )   (1.0 )   (3,210 )   (1.2 )   (3,645 )   (1.2 )
                           

Income from continuing operations

    26,547     13.4     36,108     13.3     37,537     11.9  

Income/(loss) from discontinued operations

    (664 )   (0.4 )   80     0.0          

Net income

    25,883     13.0     36,188     13.3     37,537     11.9  

Less: Net loss attributable to the non-controlling interest

    1     0.0     62     0.0          
                           

Net income attributable to the Group

  $ 25,884     13.0 % $ 36,250     13.4 % $ 37,537     11.9 %
                           

Other comprehensive income, net of tax:

                                     

Foreign currency transaction adjustment

    15     0.0     (879 )   (0.4 )   (1,514 )   (0.4 )
                           

Comprehensive income

  $ 25,899     13.1 % $ 35,371     13.0 % $ 36,023     11.5 %
                           

Year ended March 31, 2013 compared to year ended March 31, 2012

Sales of services

        Sales of services increased by $43.5 million, or 16.0%, to $314.6 million in the year ended March 31, 2013 from $271.1 million in the year ended March 31, 2012. The growth in sales of services resulted primarily from increased sales to existing clients. The growth in sales of services was supported by the expansion of services performed for clients across our largest verticals, including financial services, technology and automotive and transport, despite the uncertainty of projects with several large clients in the middle of the fiscal year, including the cancellation or postponement of a number of projects. Sales to existing clients accounted for 79.9% of the increase in sales of services for the year ended March 31, 2013, while sales to new clients accounted for 20.1% of the increase. Sales of services

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to new clients represented 2.8% of total sales in the year ended March 31, 2013, as compared to 2.7% of total sales in the year ended March 31, 2012. Non-core sales accounted for 0.5% of total sales in the years ended March 31, 2012 and 2013. To support our growing sales, we increased the number of our IT professionals to 4,927 as of March 31, 2013, from 4,556 IT professionals as of March 31, 2012.

Operating expenses

    Cost of services

        Cost of services increased by $28.6 million, or 18.2%, to $185.6 million in the year ended March 31, 2013 from $157.0 million in the year ended March 31, 2012. The increase was attributable primarily to the growth of personnel expenses directly attributable to client projects.

        Cost of services also increased as a result of an increased number of IT professionals as well as wage inflation for project delivery personnel. As a percentage of sales, cost of services increased to 59.0% for the year ended March 31, 2013, from 57.9% in the year ended March 31, 2012.

    Selling, general and administrative expenses

        Selling, general and administrative expenses increased by $12.2 million, or 18.8%, to $76.9 million in the year ended March 31, 2013 from $64.7 million in the year ended March 31, 2012. As a percentage of sales, selling, general and administrative expenses increased from 23.9% of sales for the year ended March 31, 2012 to 24.4% of sales for the year ended March 31, 2013. This increase was attributable to a number of factors, including an increased number of IT professionals who were temporarily not utilized due to the uncertainty of projects with several large clients in the middle of the year. This uncertainty has now started to dissipate. We have also increased spending on R&D activities, reflecting our growing focus on developing proprietary solutions. All major types of general and administrative expenses experienced growth in the year ended March 31, 2013. Payroll and bonuses expenses with payroll taxes (excluding share-based compensation) increased by $3.8 million, from $35.6 million for the year ended March 31, 2012 to $39.4 million for the year ended March 31, 2013. Share based compensation increased by $3.3 million from $2.2 million in the year ended March 31, 2012, to $5.5 million in the year ended March 31, 2013. General and administrative expenses also increased because of an increase in office rent and maintenance expenses by $0.7 million to $20.7 million for the year ended March 31, 2013 from $20.0 million for the year ended March 31, 2012, due to the rental of new facilities to accommodate increasing headcount. Expenses for professional services, including the outsourcing of administrative functions, auditing, legal and consulting services, increased by $2.0 million to $7.1 million for the year ended March 31, 2013 from $5.1 million for the year ended March 31, 2012. Additionally, we recorded a $2.0 million gain in the year ended March 31, 2012 to account for a collection from the sale of a doubtful account to a third party. No similar gains were recorded in the year ended March 31, 2013.

    Depreciation and amortization

        Depreciation and amortization expenses increased by $1.3 million, or 16.0%, to $9.0 million in the year ended March 31, 2013, from $7.7 million in the year ended March 31, 2012. The increase was attributable primarily to a greater number of fixed assets resulting from purchases of new IT equipment, leasehold improvements and software licenses. As a percentage of sales, depreciation and amortization increased from 2.8% for the year ended March 31, 2012 to 2.9% for the year ended March 31, 2013.

Operating income

        Operating income increased by $1.4 million, or 3.5%, to $43.1 million in the year ended March 31, 2013, from $41.7 million in the year ended March 31, 2012. As a percentage of sales, operating income

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declined from 15.4% of sales for the year ended March 31, 2012 to 13.7% of sales for the year ended March, 31, 2013.

        Operating income increased in absolute terms because of revenue growth, however operating income decreased as a percentage of sales from our previous fiscal year due to wage inflation, share-based compensation and the fact that we had a reversal of a bad debt expense in the year ended March 31, 2012, but did not have such a reversal in the year ended March 31, 2013.

Other income and expenses

    Interest expense, net

        Interest expense decreased by $0.9 million, or 40.6%, to $1.3 million in the year ended March 31, 2013, from $2.2 million in the year ended March 31, 2012. The decrease was due to the repayment of loans from related parties, as well as the renegotiation of some of our loans to more favorable interest rates.

    Gain/(loss) from foreign currency exchange contracts

        Gain/(loss) from foreign currency exchange contracts changed by $1.5 million, from a gain of $0.9 million in the year ended March 31, 2012 to a loss of $0.6 million in the year ended March 31, 2013. The change was due to a loss realized on several Euro/U.S. dollar forward contracts.

    Other gain/(loss), net

        Other gains, net decreased by $0.2 million to a loss of $1,000 in the year ended March 31, 2013 from $0.2 million in the year ended March 31, 2012.

    Net foreign exchange loss

        Net foreign exchange loss decreased by $1.2 million, to a loss of $0.1 million in the year ended March 31, 2013 from a loss of $1.3 million in the year ended March 31, 2012. The loss in the year ended March 31, 2012 was driven primarily by the depreciation of the Euro against the U.S. dollar, which resulted in losses from our Euro-denominated receivables. In the year ended March 31, 2013, the deprecation of the Ruble against the U.S. dollar continued, while the Euro strengthened against the U.S. dollar. The overall result of these currency movements resulted in a small loss.

Income from continuing operations before income taxes

        Income from continuing operations before income taxes increased by $1.9 million, or 4.7%, to $41.2 million in the year ended March 31, 2013 from $39.3 million in the year ended March 31, 2012. Income from continuing operations before income taxes represented 13.1% of sales in the year ended March 31, 2013 compared to 14.5% of sales in the year ended March 31, 2012.

Income tax expense

        Income tax expense increased by $0.4 million, or 13.5%, to $3.6 million in the year ended March 31, 2013, from $3.2 million in the year ended March 31, 2012. The increase was attributable primarily to an increase in taxable profits in Russia, Cyprus and the U.S. Our effective income tax rate increased to 8.9% of income from continuing operations before income taxes in the year ended March 31, 2013, from 8.2% of income from continuing operations before income taxes in the year ended March 31, 2012. The increase in taxable profits in Cyprus was a result of our corporate restructuring and the redomicile of one of our subsidiaries from the British Virgin Islands to Cyprus.

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Year ended March 31, 2012 compared to year ended March 31, 2011

Sales of services

        Sales of services increased by $72.7 million, or 36.7%, to $271.1 million in the year ended March 31, 2012 from $198.4 million in the year ended March 31, 2011. The growth in sales of services resulted primarily from increased sales to existing clients. The growth in sales of services was supported by a rapid expansion of services performed for existing clients across our largest verticals, including financial services, travel and aviation and telecom. We were also able to secure new client contracts as we experienced increased demand for high-end software development outsourcing. Sales to existing clients accounted for 89.9% of the increase in sales of services for the year ended March 31, 2012, while sales to new clients accounted for 10.1% of the increase. Sales of services to new clients represented 2.7% of total sales in the year ended March 31, 2012, as compared to 3.3% of total sales in the year ended March 31, 2011. Non-core sales stayed almost flat, and accounted for 0.5% of total sales in the year ended March 31, 2012 and 0.7% of total sales in the year ended March 31, 2011. To support our growing sales, we increased the number of our IT professionals to 4,556 as of March 31, 2012, from 3,718 IT professionals as of March 31, 2011.

Operating expenses

    Cost of services

        Cost of services increased by $47.0 million, or 42.7%, to $157.0 million in the year ended March 31, 2012 from $110.0 million in the year ended March 31, 2011. The increase was attributable primarily to the growth of personnel expenses directly attributable to client projects.

        Cost of services also increased as a result of wage inflation for project delivery personnel, as well as higher payroll expenses for personnel. To a lesser extent, cost of services increased due to increased travel expenses and telecommunication expenses in the year ended March 31, 2012. As a percentage of sales of services, cost of services increased to 57.9% for the year ended March 31, 2012, from 55.5% in the year ended March 31, 2011.

    Selling, general and administrative expenses

        Selling, general and administrative expenses increased by $13.7 million, or 26.8%, to $64.7 million in the year ended March 31, 2012 from $51.0 million in the year ended March 31, 2011. As a percentage of sales, selling, general and administrative expenses declined from 25.7% of sales for the year ended March 31, 2011 to 23.9% of sales for the year ended March 31, 2012. The increase in selling, general and administrative expenses was attributable primarily to the hiring of additional IT professionals for future projects, who were at a relatively low utilization rate upon initial engagement, as well as an increase in headcount, particularly the hiring of additional recruiters to help manage our growth and the payment of higher bonuses to recruiters, and to wage inflation. Payroll and bonuses expenses with payroll taxes (excluding share-based compensation) increased by $9.0 million, from $26.6 million for the year ended March 31, 2011 to $35.6 million for the year ended March 31, 2012. Stock option expenses increased by $0.9 million from $1.3 million in the year ended March 31, 2011, to $2.2 million in the year ended March 31, 2012. General and administrative expenses also increased because of an increase in office rent and maintenance expenses by $3.4 million to $20.0 million for the year ended March 31, 2012 from $16.6 million for the year ended March 31, 2011, due to the rental of new facilities to accommodate increasing headcount. Expenses for professional services, including the outsourcing of administrative functions, auditing, legal and consulting services, increased by $1.8 million, partially offsetting the $2.0 million reversal of a bad debt expense.

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    Depreciation and amortization

        Depreciation and amortization expenses increased by $1.4 million, or 22.0%, to $7.7 million in the year ended March 31, 2012, from $6.3 million in the year ended March 31, 2011. The increase was attributable primarily to a greater number of fixed assets due to purchases of new furniture and office equipment and software licenses. As a percentage of sales, depreciation and amortization declined from 3.2% for the year ended March 31, 2011 to 2.8% for the year ended March 31, 2012.

Operating income

        Operating income increased by $10.7 million, or 34.5%, to $41.7 million in the year ended March 31, 2012, from $31.0 million in the year ended March 31, 2011. As a percentage of sales, operating income declined insignificantly from 15.6% of sales for the year ended March 31, 2011 to 15.4% of sales for the year ended March, 31, 2012.

Other income and expenses

    Interest expense, net

        Interest expense decreased, by $1.3 million, or 38.9%, to $2.2 million in the year ended March 31, 2012, from $3.5 million in the year ended March 31, 2011. The decrease was due to the repayment of loans from related parties, as well as the renegotiation of some of our loans to more favorable interest rates.

    Gain/(loss) from foreign currency exchange contracts

        Gain/(loss) from foreign currency exchange contracts increased by $1.2 million, to a gain of $0.9 million in the year ended March 31, 2012, from a loss of $0.3 million in the year ended March 31, 2011. The increase was due to a gain realized on several Euro/U.S. dollar and U.S. dollar/Ruble forward contracts.

    Other gains/(loss), net

        Other gains, net decreased by $0.3 million or 67.9%, to $0.2 million in the year ended March 31, 2012 from $0.5 million in the year ended March 31, 2011. The change in other gains, net was attributable to a decrease of income from subleasing agreements.

    Net foreign exchange income/(loss)

        Net foreign exchange income/(loss) decreased by $2.2 million, to an loss of $1.3 million in the year ended March 31, 2012 from a gain of $0.9 million in the year ended March 31, 2011. The loss was attributable primarily to the depreciation of the Euro relative to the U.S. dollar, which negatively impacted the balance sheet value of Euro-denominated our receivables.

Income from continuing operations before income taxes

        Income from continuing operations before income taxes increased by $10.7 million, or 37.5%, to $39.3 million in the year ended March 31, 2012 from $28.6 million in the year ended March 31, 2011. Income from continuing operations before income taxes represented 14.5% of sales in the year ended March 31, 2012 compared to 14.4% of sales in the year ended March 31, 2011.

Income tax expense

        Income tax expense increased by $1.2 million, or 57.1%, to $3.2 million in the year ended March 31, 2012, from $2.0 million in the year ended March 31, 2011. The increase was attributable

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primarily to an increase in taxable profits in Romania, Ukraine and the U.S. Our effective income tax rate increased to 8.2% of income from continuing operations before income taxes in the year ended March 31, 2012 from 7.1% of income from continuing operations before income taxes in the year ended March 31, 2011.

Quarterly results

        Our business is moderately seasonal and our results of operations vary from quarter to quarter based in part upon the budget and work cycles of our clients. For example, our operating results are typically lower in the first fiscal quarter of each year due to increases in wages and other costs that typically occur in the beginning of each fiscal year, and also in the fourth fiscal quarter due to the fact that we pay the highest social contribution charges and the large number of holidays during this period.

 
  Three Months Ended  
 
  Jun 30,
2011
  Sept. 30,
2011
  Dec, 31,
2011
  March 31,
2012
  Jun 30,
2012
  Sept. 30,
2012
  Dec, 31,
2012
  March 31,
2013
 
 
  (in thousands)
 

Consolidated statements of comprehensive income:

                                                 

Sales of services

  $ 61,782   $ 66,081   $ 70,666   $ 72,613   $ 71,013   $ 74,115   $ 83,524   $ 85,944  

Operating expenses:

                                                 

Cost of services (exclusive of depreciation and amortization)

    36,383     38,936     40,533     41,152     44,503     43,741     47,618     49,695  

Selling, general and administrative expenses

    15,189     16,377     13,943     19,211     17,950     17,753     19,364     21,844  

Depreciation and amortization

    1,904     1,871     1,985     1,982     2,031     2,162     2,307     2,481  
                                   

Operating income

    8,306     8,897     14,205     10,268     6,529     10,459     14,235     11,924  

Other income and expenses:

                                                 

Interest expense, net

    (687 )   (635 )   (477 )   (352 )   (383 )   (280 )   (278 )   (336 )

Gain/(loss) from foreign currency exchange contracts

   
(244

)
 
(2,627

)
 
1,947
   
1,810
   
   
(297

)
 
(406

)
 
82
 

Other gain/(loss), net

    41     26     105     (2 )   11     (20 )   63     (55 )

Net foreign exchange gain/(loss)

    (241 )   (571 )   (570 )   119     (491 )   270     243     (88 )
                                   

Income from continuing operations before income taxes

    7,175     5,090     15,210     11,843     5,666     10,132     13,857     11,527  

Income tax expense

    (562 )   (407 )   (1,249 )   (992 )   (608 )   (996 )   (1,322 )   (719 )
                                   

Income from continuing operations

    6,613     4,683     13,961     10,851     5,058     9,136     12,535     10,808  

Income/(loss) from discontinued operations

    40     40                          

Net income

    6,653     4,723     13,961     10,851     5,058     9,136     12,535     10,808  

Less: Net loss attributable to the non-controlling interest

        7         55                  
                                   

Net income attributable to the Group

  $ 6,653   $ 4,730   $ 13,961   $ 10,906   $ 5,058   $ 9,136   $ 12,535   $ 10,808  
                                   

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Liquidity and capital resources

        Our cash requirements have principally been driven by working capital requirements and capital expenditures. Our working capital requirements are, in turn, generally driven by the growth in our business and the impact on our cash flows arising out of the difference in timing between when our payment obligations arise and when we receive payment from clients. We fund working capital primarily from cash flows provided by our operating activities, our short term credit facilities, cash and cash equivalents on hand. Our average time for collecting receivables increased to 80 days for the year ended March 31, 2013, from 67 days for the year ended March 31, 2012, due to increased accounts receivable from Deutsche Bank, Harman, UBS and other large clients. The increase in accounts receivable during the year ended March 31, 2013 is attributable to our revenue growth, as well as in increase in our average time for collecting receivables. In the past, we have utilized short term borrowings from IBS Group and its affiliates to help meet our working capital needs, with the exception of one long-term loan from IBS Group which we used in connection with an acquisition. All of our borrowings from IBS Group have been repaid as of the date of this prospectus.

        We have in the past relied on IBS Group to act as guarantor for several of our credit agreements and overdraft facilities. We do not anticipate this offering to impact IBS Group's continued ability to guarantee the various credit and overdraft facilities entered into by us and our subsidiaries. While there can be no assurance that IBS Group will continue to guarantee various credit and overdraft facilities entered into by us and our subsidiaries, IBS Group has informed us that it intends to continue to do so after the consummation of the offering. To date, IBS Group has provided guarantees under the various credit and overdraft facilities entered into by us and our subsidiaries without charge. IBS Group has informed us that in the future it may charge us or our subsidiaries a fee for such guarantees, however the terms of payment for these guarantees would be no less favorable than if we were to obtain guarantees from a third party entity, such as a bank, on the open market. In the event that IBS Group does not guarantee our obligations on such basis, we believe that we will be able to obtain credit under the same terms, irrespective of IBS Group's guarantee.

        We believe that, based on our current business plan, the proceeds of this offering, our cash and cash equivalents on hand, cash from operations and borrowings available to us will be adequate to meet our working capital, capital expenditure requirements and liquidity needs for the foreseeable future. We may require additional capital to meet our longer term liquidity and future growth requirements.

Credit facilities

        On July 16, 2010, Luxoft USA, Inc. entered into a credit facility agreement with Amsterdam Trade Bank, N.V., originally for up to $10.0 million, $12.4 million of which was outstanding as of March 31, 2013. The loan originally bore interest at 10% per annum, but was subsequently amended to increase the maximum borrowing amount to $18.0 million and lower the interest rate to 8.5% per annum. The maturity date of the loan is July 16, 2013. The loan is secured by a conditional assignment of rights to receivables under certain sales contracts with the clients of Luxoft USA, Inc. and Luxoft Eastern Europe Ltd. by a pledge of rights to certain accounts of Luxoft Eastern Europe Ltd. and Luxoft USA, Inc. The loan is guaranteed by Luxoft International and IBS Group. We intend to extend this facility for an additional year.

        On November 28, 2012, Luxoft International and its subsidiaries, entered into full recourse receivables purchase facility agreement with Deutsche Bank AG, London Branch for up to $15.0 million, of which $3.1 million was drawn and outstanding as of March 31, 2013. The loan bears interest at LIBOR/EURIBOR/PLN WIBOR plus 4.0% per annum for the relevant purchase term, plus handling fees. The loan is guaranteed by IBS Group, Luxoft USA, Inc., Luxoft UK, Luxoft GmbH, Luxoft Poland and Luxoft International.

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        On January 15, 2013, Luxoft Holding, Inc, Luxoft International, Luxoft USA, Inc. and Luxoft Eastern Europe Ltd. entered into an uncommitted receivables purchase agreement for a total amount of up to $10.0 million with BNP Paribas Dublin Branch, of which $0.8 million was drawn and outstanding as of March 31, 2013. The receivables purchase agreement bears interest at a rate of LIBOR (30/60 days) plus 3% per annum for the relevant purchase term.

Overdraft facilities

        On December 16, 2009, Luxoft International entered into an overdraft facility agreement with Amsterdam Trade Bank, N.V. for up to $1.6 million, which was later amended to increase the overdraft facility to up to $2.0 million. On July 20, 2012, Luxoft International renewed the overdraft facility agreement with Amsterdam Trade Bank, N.V for $2.0 million. As of March 31, 2013 this facility had not been drawn down. The overdraft facility bears interest at a rate of 8.5% per annum, paid monthly. The maturity date of the overdraft facility is July 20, 2013. The overdraft facility is guaranteed by IBS Group.

        On December 20, 2010, Luxoft Professional LLC ("Luxoft Professional") entered into an overdraft facility agreement with Deutsche Bank Ltd for 1.2 million Euros, which was subsequently increased to 3.0 million Euros. As of March 31, 2013 this facility had not been drawn down. The overdraft facility bears interest at a rate of EONIA overnight interest rate +5.5% per annum, paid monthly. The maturity date on the overdraft facility is December 20, 2013. The overdraft facility is secured by IBS Group for up to 4.0 million Euros.

        On October 25, 2012, Luxoft Professional entered into an overdraft facility agreement with ZAO CITIBANK for $3.0 million. As of March 31, 2013 this facility had not been drawn down. The overdraft facility bears interest at a rate of LIBOR (1M) plus 2.25% per annum overnight interest rate paid monthly. The overdraft facility is guaranteed by IBS Group.

Cash flows

        The following table presents the major components of net cash flows for the years ended March 31, 2011, 2012 and 2013.

 
  Year ended March 31,  
 
  2011   2012   2013  
 
  (in thousands)
 

Net cash flow provided by operating activities

  $ 24,843   $ 26,517   $ 35,248  

Net cash used in investing activities

    (17,163 )   (9,714 )   (16,118 )

Net cash used in financing activities

  $ (3,157 ) $ (18,194 ) $ (21,098 )

    Net cash provided by operating activities

        Net cash provided by operating activities increased by $8.7 million to $35.2 million in the year ended March 31, 2013 from $26.5 million in the year ended March 31, 2012. The increase in cash flows from operating activities was attributable to higher net income from continuing operations, which increased by $1.4 million to $37.5 million in the year ended March 31, 2013 from $36.1 million in the year in the year ended March 31, 2012. Changes in working capital positively affected cash flow from operations, and the main drivers for the increase were changes in trade accounts receivable, which decreased by $5.9 million in the year ended March 31, 2013, from the year ended March 31, 2012.

        Net cash provided by operating activities increased by $1.7 million to $26.5 million in the year ended March 31, 2012 from $24.8 million in the year ended March 31, 2011. The increase in cash flows from operating activities was primarily due to higher net income from continuing operations, which increased by $9.6 million from $26.5 million to $36.1 million in the same period. The changes in

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operating cash flows were also impacted by the timing of settlements with related parties in the ordinary course of business, resulting in an increase of expenses by $4.4 million in the year ended March 31, 2012 compared to the year ended March 31, 2011. Changes in trade accounts receivable increased by $19.9 million in the same period, primarily due to the growth in sales revenue, and an increase in accounts receivable from Deutsche Bank. The accounts payable increased in the year ended March 31, 2012 as a result of business growth, resulting in an additional $4.6 million increase affecting the operating cash flows in this year.

    Net cash used in investing activities

        Net cash used in investing activities increased by $6.4 million to $16.1 million in the year ended March 31, 2013 from $9.7 million in the year ended March 31, 2012. The increase in cash used for investing activities was due primarily to a $3.8 million loan provided to IBS Group, which was offset against a dividend. Investing activities in the year ended March 31, 2013 consisted mainly of capital expenditures on IT equipment, including purchases of computers and software, as well as investments in office equipment and leasehold improvements. Capital expenditures were $11.1 million for the year ended March 31, 2013, which represented a $1.9 million increase from the year ended March 31, 2012. This increase in capital expenditures was due to an increase in capitalized software development expenses as well as increased purchases of IT and office equipment.

        Net cash used in investing activities decreased by $7.5 million to $9.7 million in the year ended March 31, 2012 from $17.2 million in the year ended March 31, 2011. The decrease in cash used in investing activities was due primarily to smaller payments for the acquisition which decreased by $9.3 million from $10.8 million in the year ended March 31, 2011 to $1.5 million in the year ended March 31, 2012. Capital expenditures totaled $9.2 million, representing an increase of $2.3 million from the year ended March 31, 2011. This increase in capital expenditures supported the increased number of personnel who were hired to support expanded operating activities and revenue growth.

    Net cash used in financing activities

        Net cash used in financing activities increased by $2.9 million to $21.1 million used in the year ended March 31, 2013 from $18.2 million cash used by financing activities in the year ended March 31, 2012. The primary driver for the increase in cash used in financing activities was an increase of $17.9 million in dividend payments, from $4.0 million in the year ended March 31, 2012 to a dividend payment of $21.9 million in the year ended March 31, 2013, which was partially offset by a decrease in loan repayments to IBS Group of $5.5 million and an increase in net proceeds from borrowings by $8.7 million in the year ended March 31, 2013 as compared with the year ended March 31, 2012. The dividend payment of $21.9 million in the year ended March 31, 2013 was made in respect of a declared dividend of $27.0 million, the cash payment of which was offset against a loan receivable from IBS Group.

        Net cash used in financing activities increased by $15.0 million to $18.2 million used in the year ended March 31, 2012 from $3.2 million cash used by financing activities in the year ended March 31, 2011. The difference in cash for financing activities in the year ended March 31, 2012 was attributable primarily to the repayment of principal on outstanding facilities that exceeded new borrowings of funds. We repaid $11.8 million in loans to related parties in the year ended March 31, 2012. Our repayment of bank loans and promissory notes exceeded proceeds by $1.8 million in the year ended March 31, 2012. In addition, we paid a $4.0 million dividend during the period.

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Contractual commitments and contingencies

        The following table represents a summary of our estimated future payments under material contractual cash obligations as of March 31, 2013. Changes in our business needs, cancellation provisions, changing interest rates and other factors may result in actual payments differing from these estimates. We cannot provide certainty regarding the timing and amounts of payments.

 
  Payments due by Period  
 
  Total   Less than
1 year
  1–2 years   2–3 years   More than
3 years
 
 
  (in thousands)
 

Capital lease obligations

  $ 189   $ 183   $ 6   $   $  

Operating leases

    39,067     11,607     10,430     6,398     10,632  

Short-term debt obligations

    16,576     16,576              
                       

Total

  $ 55,832   $ 28,366   $ 10,436   $ 6,398   $ 10,632  
                       

Off-balance sheet commitments and arrangements

        We do not currently engage in off-balance sheet financing arrangements. In addition, we do not have any interest in entities referred to as variable interest entities, which includes special purposes entities and other structured finance entities.

Quantitative and qualitative disclosure about market risk

Foreign currency risk

        We conduct business in multiple countries, which exposes us to risks associated with fluctuations in currency exchange rates. In the year ended March 31, 2013, 55.2% of our sales were denominated in U.S. dollars and 31.1% were denominated in Euros. On the cost side, however, in the year ended March 31, 2013, 36.7% of our expenses (excluding currency losses and changes in deferred tax) were denominated in Rubles and 8.5% in Romanian leu. As a result, strengthening of the Ruble relative to the U.S. dollar presents the most significant risk to us. Fluctuations in currency exchange rates may impact our business significantly.

        Based on our results in the year ended March 31, 2013, a 1.0% increase (decrease) in the value of Euro against the U.S. dollar would have increased (decreased) our sales by $1.0 million. Based on our results in the year ended March 31, 2013, a 1.0% increase (decrease) in the value of Ruble against the U.S. dollar would have decreased (increased) our cost of services and operating expenses by $1.0 million.

        We manage our foreign currency risk primarily through short-term forward contracts in order to reduce our exposure to volatility in the currency markets. During the year ended March 31, 2013, we engaged in forward sales contracts to hedge the Euro against the U.S. dollar. Typically our outstanding instruments have maturities from one to six months, with the longest maturity not exceeding 12 months. We have obtained credit limits from our counter-party banks and are therefore not required to maintain deposits on margin accounts in case of adverse market movements. Currency options are not designated as hedging accounting instruments under ASC 815, Derivatives and Hedging (originally issued as SFAS 133). Therefore, we have been incurring financial loss or income as a result of these derivatives. As of March 31, 2013 all our derivative positions were closed.

Inflation risk

        Inflationary factors such as increases in the cost of our services and overhead costs may adversely affect our operating results. Wage inflation in Russia, Ukraine, Romania, Poland and Vietnam, where

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we operate our delivery centers, could also lead to payroll increases, which may adversely affect our operating results. Although we do not believe that inflation has had a material impact on our financial position or results of operations to date, a high rate of inflation in the future may have an adverse effect on our ability to maintain current levels of gross margin and operating expenses as a percentage of sales if the selling prices of our services do not increase in line with increases in costs.

Interest rate risk

        Our exposure to market risk for changes in interest rates relates primarily to our variable rate borrowings. See "—Liquidity and Capital Resources."

        We have not been exposed to material risks due to changes in market interest rates. However, our future interest expense may increase and interest income may fall due to changes in market interest rates.

Critical accounting policies

        We prepare our consolidated financial statements in accordance with US GAAP, which requires us to make judgments, estimates and assumptions that affect: (i) the reported amounts of assets and liabilities; (ii) disclosure of contingent assets and liabilities at the end of each reporting period; and (iii) the reported amounts of sales and expenses during each reporting period. The most significant estimates relate to the recognition of revenue, allowance for doubtful accounts, income taxes, goodwill and other long-lived assets, assumptions used in valuing share-based compensation awards and contingencies. We evaluate these estimates and assumptions based on historical experience, knowledge and assessment of current business and other conditions, and expectations regarding the future based on available information and reasonable assumptions, which together form a basis for making judgments about matters not readily apparent from other sources. Since the use of estimates is an integral component of the financial reporting process, actual results could differ from those estimates. Some of our accounting policies require higher degrees of judgment than others in their application. When reviewing our consolidated financial statements, you should consider (i) our selection of critical accounting policies, (ii) the judgment and other uncertainties affecting the application of such policies and (iii) the sensitivity of reported results to changes in conditions and assumptions. We consider the policies discussed below to be critical to an understanding of our consolidated financial statements as their application places significant demands on the judgment of our management.

        An accounting policy is considered to be critical if it requires an accounting estimate to be made based on assumptions about matters that are highly uncertain at the time the estimate is made, and if different estimates that reasonably could have been used, or changes in the accounting estimates that are reasonably likely to occur periodically, could materially impact the consolidated financial statements. We believe that the following critical accounting policies are the most sensitive and require more significant estimates and assumptions used in the preparation of our consolidated financial statements. You should read the following descriptions of critical accounting policies, judgments and estimates in conjunction with our consolidated financial statements and other disclosures included in this prospectus.

        We are an emerging growth company under the JOBS Act, and we will utilize certain exemptions from various reporting requirements that are applicable to public companies that are not emerging growth companies. For example, we will not have to provide an auditor's attestation report on our internal controls in future annual reports on Form 20-F as otherwise required by Section 404(b) of the Sarbanes-Oxley Act. However, we have irrevocably elected to opt out of the extended transition period for complying with new or revised accounting standards pursuant to Section 107(b) of the JOBS Act. As a result, we will comply with new or revised accounting standards on the relevant dates on which adoption of such standards is required for non-"emerging growth companies."

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Revenue recognition

        The Company derives its revenues from software development services, including in such areas of competence as (a) custom software development and support, (b) product engineering and testing and (c) technology consulting.

        The majority of our contracts are time-and-materials based; however, we also have a significant number of fixed price contracts. Revenues under time and materials and fixed price contracts are recognized in the period in which these services are performed and contract stages are accepted by clients by using a proportional performance method. We consider amounts to be earned once evidence of an arrangement has been obtained, services are delivered, fees are fixed or determinable, and collectability is reasonably assured. In such contracts, our services, measured by time incurred, typically are provided in less than a year and represent the contractual stages or output measures which define the pattern of contractual earnings. Costs related to completed stages are expensed as incurred, while those related to uncompleted stages are recorded as work-in-progress on our balance sheets.

        We recognize sales from time-and-material contracts as services are performed, based on actual hours and applicable billing rates, using the proportional performance method, with the corresponding cost of providing those services reflected as cost of sales. The majority of such sales are billed on a monthly basis whereby actual time is charged directly to the client at negotiated hourly billing rates.

        We recognize sales from fixed price contracts based on the proportional performance method, during the period in which amounts become billable in accordance with the terms of the contracts. Services under fixed price contracts are delivered in stages. Revenues recognized for completed stages are generally representative of the percentage of completion of the entire contract, as they are based on actual hours incurred compared with the total hours estimated to complete the entire contract. Costs related to completed stages are expensed as incurred, while those related to uncompleted stages are recorded in work-in-progress on the balance sheet. In instances where final acceptance is specified by the client, sales are deferred until all acceptance criteria have been met. In the absence of a sufficient basis to measure progress towards completion, sales are recognized upon receipt of final acceptance from the client.

        The complexity of the estimation process and factors relating to the assumptions, risks and uncertainties inherent with the application of the proportional performance method of accounting affects the amounts of sales reported in our consolidated financial statements. A number of internal and external factors can affect our estimates, including labor hours and changes in specification and testing requirements.

        We evaluate our contracts for multiple deliverables, and, when appropriate, separate the contracts into separate units of accounting for revenue recognition. Apart from software development services, which generally include any software element that may exist in the arrangement as our services are inseparable from a software deliverable, the only separate deliverable is support services. Support services, if they are required by clients, are generally contracted for and commence upon completion of the software development services. We allocate revenue to these deliverables in a multiple-element arrangement based upon their relative selling prices. The relative selling price is based on the price charged for the deliverable when it is sold separately. For multiple element arrangements under time-and-material contracts, revenue is recognized as services are performed for each deliverable based on hours incurred and applicable hourly rates. For arrangements under fixed price contracts, software development revenue is recognized upon delivery of development services under the proportional performance method, as described above and for support services—on a straight-line basis over the support period, which is generally from 6 months to a year.

        We currently do not follow Software Revenue Recognition guidance in ASC 985-605 because the focus of our service offering in the past was the customized solutions and services we provide to our

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clients, and not the software licensing element. We have not yet generated any significant revenues from solutions focused on our software platforms. This may change in the future as we are starting to focus more on licensing the software products we have accumulated in our portfolio to our clients as part of our service offerings. This shift will require the application of contract accounting to our service offerings, which prescribes the percentage-of-completion and the completed-contract method. Under the percentage-of-completion method, costs are recognized in proportion to the amount of revenue recognized, such that a constant gross margin percentage is recognized during the life of the contract (albeit updated for changes in the estimates of total contract revenues and costs as the vendor progresses toward completion of the contract). Under the completed-contract method of accounting, costs are accumulated on the balance sheet and recognized when the contact is complete and the associated revenue recognized. We do not expect the transition to software revenue recognition accounting to affect our revenue recognition policies significantly in future because: (1) we expect that our services will continue to be essential to the software licensing element in future, thus representing a single deliverable, which is the same way we treat it now; and (2) accounting for this deliverable using the percentage-of completion method is in line with our currently used proportional performance method, because, under our current method of accounting, the amounts of recognized revenues and expenses related to completed contract stages are generally representative of progress towards completion, as they are measured based on hours incurred to total project hours, taking into account applicable hourly rates. In addition, we consider the use of the completed contract method unlikely as we have not yet had any significant contracts for which estimates of completion could not be developed or final project completion and client acceptance was so uncertain as to require deferral of revenue until the completion of the project. Finally, we have not had any significant contracts where we incurred a loss on the entire contract.

        We report gross reimbursable travel and "out-of-pocket" expenses incurred as both sales and cost of sales in the consolidated statements of comprehensive income.

Accounts receivable

        Accounts receivable are shown at their net realizable value, which approximates their fair value. Since we generally do not require collateral or other security from our clients, we establish an allowance for doubtful accounts based upon estimates, historical experience and other factors surrounding the credit risk of specific clients. Allowances for doubtful accounts are made for specific accounts in which collectability is doubtful. If the financial condition of our clients were to deteriorate, resulting in an impairment of their ability to make payments, additional allowances may be required. Recoveries of losses from accounts receivable written off in prior years are presented within income from operations on our consolidated statements of comprehensive income.

        Our client base primarily consists of large multinational companies. The timing of invoicing and collection of our accounts receivable under our contracts is impacted by the life cycle of each project and related payment milestones.

        Our management periodically monitors outstanding receivables and collection status and assesses the adequacy of allowances for accounts where collection may be in doubt as frequency and amount of client defaults change due to our clients' financial condition or general economic conditions.

Goodwill

        Goodwill represents an excess of the cost of business acquired over the fair value of the amounts assigned to tangible and intangible assets acquired less liabilities assumed. The determination of the fair value of intangible assets acquired involves certain judgments and estimates. These judgments can include, but are not limited to, the cash flows that an asset is expected to generate in the future and the appropriate weighted average cost of capital.

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        We perform a test for impairment annually, or when indications of potential impairment exist, utilizing a fair value approach at the reporting unit level. We determine fair value using the income approach, which estimates the fair value of our operating units based on the future discounted cash flows.

        The basis for the cash flow assumptions includes forecasted revenue, operational costs and other relevant factors, including estimated capital expenditures. Assumptions under this method have been adjusted to reflect increased risk due to current economic volatility. In testing for a potential impairment of goodwill, we estimate the fair value of our operating units to which goodwill relates and determine the carrying value (book value) of the assets and liabilities related to those operating units. If an impairment of goodwill has occurred, we recognize a loss for the difference between the carrying amount and the implied fair value of goodwill.

Long-lived assets

        We amortize intangible assets, principally software and acquired contract-based client relationships, on a straight-line basis over their estimated useful lives. We review long-lived assets, including intangible assets that are subject to amortization, for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. We base our evaluation on such impairment indicators as the nature of the assets, the future economic benefit of the assets, any historical or future profitability measurements, as well as other external market conditions or factors that may be present. The carrying value is not recoverable if it exceeds the undiscounted future cash flows resulting from the use of the asset and its eventual disposition. If impairment has occurred, we measure any impairment of intangible assets based on a projected discounted cash flow method using a discount rate determined by our management to be commensurate with the risk inherent in our business. If such assets were determined to be impaired, we recognize a loss for the difference between the carrying amount and the fair value of the asset.

Income taxes

        Determining the consolidated provision for income tax expense, deferred income tax assets and liabilities and related valuation allowance, if any, involves judgment. We are required to calculate and provide for income taxes in each of the jurisdictions where we operate. Changes in the geographic mix or estimated level of annual pre-tax income can also affect the overall effective income tax rate.

        Because we operate in a number of countries, our income is subject to taxation in differing jurisdictions with a range of tax rates. Therefore, we need to apply significant judgment in order to determine our consolidated income tax position. As a result of our multi-jurisdictional operations, we are exposed to a number of different tax risks including, but not limited to, changes in tax laws or interpretations of these tax laws. The tax authorities in the jurisdictions where we operate may audit our tax returns and may disagree with the position taken in those returns. An adverse outcome resulting from any settlement or future examination of our tax returns may result in additional tax liabilities and may adversely affect our effective tax rate, which could have a material adverse effect on our financial position, results of operations and liquidity.

        Deferred tax assets and liabilities are recognized for the estimated future tax consequences of temporary differences between the consolidated financial statement carrying amounts and their respective tax bases at each reporting date. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the year in which the temporary differences are expected to be reversed. Changes to enacted tax rates would result in either increases or decreases in the provision for income taxes in the period of changes. We evaluate the realization of deferred tax assets and recognize a valuation allowance when it is more likely than not that all or a portion of deferred tax assets will not be realized.

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        The realization of deferred tax assets is primarily dependent on future taxable income. Any reduction in estimated forecasted results may require that we record valuation allowances against deferred tax assets. Once a valuation allowance has been established, it will be maintained until there is sufficient positive evidence to conclude that it is more likely than not that the deferred tax assets will be realized. If the allowance is reversed in a future period, the income tax provision will be correspondingly reduced. Accordingly, the increase and decrease of valuation allowances could have a significant negative or positive impact on future earnings.

        Our provision for income taxes also includes the impact of provisions established for uncertain income tax positions, as well as the related interest and penalties. Tax exposures can involve complex issues and may require an extended period to resolve. Although we believe we have adequately reserved for our uncertain tax positions, no assurance can be given that the final tax outcome of these matters will not be different. We adjust these reserves in light of changing facts and circumstances, such as the closing of a tax audit or the refinement of an estimate. To the extent that the final tax outcome of these matters differs from the amounts recorded, such differences will impact the provision for income taxes in the period in which such determination is made.

Accounting for share-based employee compensation plans

        To estimate the fair value of share or option awards, we have to exercise judgment to come up with appropriate valuation techniques, as well as to determine the fair value of our shares, which are not yet listed. To accomplish this, our management estimates future cash flows and makes other assumptions by using the discounted cash flow method, and checks its results through the valuations of comparable public peer companies. Our management also consults third party valuation experts as necessary.

        We calculate and record the cost of equity instruments, such as share options granted to employees for services received, in our statements of comprehensive income. Share-based compensation expense for awards is determined based on the grant-date fair value of the awards ultimately expected to vest. We recognize these compensation costs on a straight-line basis over the requisite service period of the entire award, provided it is no less than the amount that would have been recognized for the vested portion of the award.

        Since our option or restricted share grants to date have an exercise price of nil, we simply use the fair value of our shares, reduced by the present value for any expected dividend yields discounted using risk-free interest rates, over the expected term of the option. Therefore, the fair value of our share-based grants is most sensitive to the following inputs:

    fair value of our ordinary shares. See "—Fair value of ordinary shares".

    risk-free interest rate;

    expected dividend yield; and

    expected term of the options.

        We base the risk-free interest rate that we use in our option-pricing model on the implied yield currently available on the 20-year US treasury bills.

        In the past, we have declared and paid dividends, including with respect to the years ended March 31, 2011, 2012 and 2013. Subsequent to the completion of this offering, we do not plan to pay cash dividends on any of our shares in the foreseeable future other than the balance of the dividend declared for the year ended March 31, 2013 that has not been paid prior to the date of this offering. Any future determination regarding the reservation of part of the profits and distributions to shareholders will depend on a range of factors, including the availability of distributable profits, our liquidity and financial position, restrictions imposed by our financing arrangements, tax considerations,

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planned acquisitions, and other relevant factors. Since our practice of paying dividends was different in the past, we used an expected dividend yield of 3.4% and 1.9% applicable to our grants on March 25, 2010 and December 15, 2011, respectively, which we believe was a reasonable expectation at the time of grant.

        The expected life of an option usually represents the weighted-average period during which our option awards are expected to be outstanding. We have no experience or history to be able to determine the expected life over which our option awards will be held before exercise. However, we believe it is reasonable to assume exercise or issuance upon vesting, since the exercise price is nil.

        If any of the assumptions used in the valuation model changes significantly, share-based compensation for future awards may differ materially compared to awards previously granted.

        We estimate forfeitures at the time of a grant and revise our estimates, if necessary, in subsequent periods if actual forfeitures or vesting differ from those estimates. The assumptions used in the valuation model are based on subjective future expectations combined with management judgment. We have no past history of option forfeitures, but the retention rate amongst our key employees and management has historically been high. Therefore, our forfeiture rate is expected to be insignificant. As a result, we have applied an estimated forfeiture rate of nil. If the actual forfeiture rate is materially different from the estimate, share-based compensation expense could be materially lower than what has been recorded.

Fair value of ordinary shares

        Being a private company with no quoted market prices for our ordinary shares, we needed to make estimates of the fair value of our ordinary shares at various dates for the purpose of determining the fair value of our ordinary shares at the date of the grant of a share-based compensation award to our employees as one of the inputs into determining the grant date fair value of the award.

        The following table sets forth the fair value of our ordinary shares estimated at different times:

Date
  Class of Stock   Fair Value
(per share)
  Purpose of Valuation   Discount
for Lack of
Marketability
 

March 25, 2010

  Ordinary shares   $ 4.57   Stock option grant     44.0 %

December 15, 2011

  Ordinary shares   $ 15.25   Stock option grant     27.5 %

March 20, 2013

  Ordinary shares   $ 18.82   Business combination     15.0 %

June 7, 2013

  Ordinary shares   $ 17.00   Midpoint of estimated range     N/A  

        When estimating the fair value of our ordinary shares, our management has considered a number of factors, including the result of an appraisal of an independent third-party valuation firm and equity transactions of our company, while taking into account standard valuation methods. We used contemporaneous valuations for our option awards, and also hired a third party appraiser in order to appraise our December 15, 2011 grant.

        The valuations used a combination of (i) the income approach/discounted cash flow ("DCF") method and (ii) the market approach by reference to the valuations of comparable public companies or transactions with peer companies. The determination of the fair value of our ordinary shares requires us to make complex and subjective judgments regarding our projected financial and operating results, our unique business risks, liquidity of our ordinary shares and our operating history, and prospects at the time of each grant. We considered a variety of empirical studies as well as, restrictions on the marketability of our ordinary shares to determine an appropriate discount for lack of marketability.

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        The major assumptions used in calculating the fair value of our ordinary shares using DCF include:

    Forecasting our free cash flows, which include forecasts of software development markets, our revenue growth rates, profit margins, capital expenditures and changes in working capital. We used independent sources and our business plans as approved by the board of directors.

    Weighted average cost of capital ("WACC").  The WACC was determined based on a consideration of factors including the risk-free rate, market premium, comparative industry risk, country risk and company size.

    Terminal growth rates, which are the expected rates of growth in a period subsequent to the forecasted period.

        Our sales and earnings growth rates, as well as major milestones that we have achieved, contributed significantly to the increase in the fair value of our ordinary shares. However, these fair values are inherently uncertain and highly subjective. The assumptions used in deriving the fair values include: no material changes in the existing political, legal and economic conditions; our ability to retain competent management, key personnel to support our ongoing operations; and no material deviation in market conditions from economic forecasts. The risks associated with achieving our forecasts were assessed in selecting the appropriate WACC.

        The major assumptions used in calculating the fair value of our ordinary shares using market approach include:

        Capital market valuation multiples.    We obtained and assessed publicly available capital markets data of the selected comparable companies and used, for our valuations multiples of enterprise value to sales, and enterprise value to EBITDA (EBITDA is defined as earnings before interest, taxes, depreciation and amortization).

        Set forth below is a detailed description of the approaches used to determine the fair market value of our shares for option awards:

        March 2010 option awards.    In March 2010, we granted options to purchase an aggregate of 2,368,800 ordinary shares, or approximately 7.8% of then-outstanding ordinary shares. Our board of directors determined the fair value of the shares underlying those option awards using the combination of the discounted cash flow method and the market approach in the amount of $4.57 per share.

        In the discounted cash flow model, we applied a discount rate (WACC) of 15.4%. Because our company's shares are not publicly traded and the underlying shares represent a minority interest, the valuation analysis performed for the March 2010 option awards employed a discount for lack of marketability and minority discount, together totaling 44.0%.

        The above valuation was supported by the sale in May 2009 of 10% of our issued shares to an unrelated party at a price of approximately $3.57 per share, for a total deal size of $10.0 million. The difference between the valuation of the May 2009 transaction and valuation of the March 2010 options awards can be attributed to our positive financial results for the year ended March 31, 2010, as factored into the discounted cash flow model used for the March 2010 option grant valuation.

        December 2011 option awards.    In December 2011, we granted options to purchase an aggregate of 585,032 ordinary shares, or approximately 1.9%, of our then-outstanding ordinary shares. For the December 2011 grants we used a combination of the income approach/discounted cash flow method and the market approach. In the DCF model, we used a discount rate (WACC) of 15%. Because our company's shares are not publicly traded and the underlying shares represent a minority interest, the valuation analysis performed for the December 2011 option awards employed a discount for lack of marketability and minority discount, together totaling 27.5%.

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        March 20, 2013 business combination.    On March 20, 2013, we acquired customer contracts and certain employees of FOSS. This transaction was considered a business combination for accounting purposes. As part of this business combination, we recorded a $0.5 million contingent consideration payable in 28,588 our ordinary shares. This contingent consideration was estimated assuming a price per share of $18.82 per share. Considering the relative insignificance of the above amount to our consolidated financial statements, we used only the income approach/discounted cash flow method for this valuation. In the DCF model, we used a discount rate (WACC) of 14%. Because our shares are not publicly traded and the underlying shares represent a minority interest, the valuation analysis performed for this contingent consideration employed a discount for lack of marketability and minority discount, together totaling 15%.

Anticipated Offering Price Range

        In June 2013, we determined, after consultation with the underwriters, that our anticipated initial offering price range $16.00 to $18.00 per share. We based this determination on a multiple based on the forward adjusted net revenue of comparable companies.

        The midpoint of our offering range is $17.00 per share. The March 2013 valuation of $18.82 per share, which was used for the purpose of determining the contingent consideration payable for the acquisition of FOSS, was calculated based on a DCF method, which our management determined was most appropriate under the circumstances and consistent with the Company's historical practice. By contrast, the price range for the offering was determined primarily on the basis of a comparison of a multiple based on the forward adjusted net revenue of comparable companies, which is more consistent with public company valuation and valuations in the our sector.

        The discounted cash flow model used to estimate the fair value of our shares is highly sensitive to growth rates, with the principal drivers being the dynamics of the offshore IT services market, our market share and our ability to attract and retain qualified IT personnel. Additionally, the guideline public company method is highly sensitive to the choice of guideline companies and changes in market multiples of those guideline companies, as well as our company's relative performance in comparison with selected peers. Changes in these assumptions and drivers resulted in the estimated fair value of our shares increasing from $4.57 per share as of March 25, 2010 to $18.82 per share as of March 20, 2013, as detailed below:

    The March 2010 valuation was significantly affected by the downturn of the global and Russian IT markets;

    Multiples for public transactions with comparable companies increased in December 2011 compared to March 2010;

    Forecasts for 2012 and future years materially changed between the March 2010 and December 2011 valuations. In particular, the recovery of the market resulting from increased expectations of IT spending and the growth rate in our revenues, earnings before income tax and free cash flow continued to outperform our internal forecasts as well as the market expectations for growth of revenues; and

    Indirectly, our December 2011 valuation was confirmed by a transaction in June 2012, which involved the sale of 2,800,000 shares between unrelated shareholders and was valued at $55.0 million, or $19.64 per share. We understand that the increase in valuation in this transaction was driven by the recent IPO of our competitor, EPAM Systems Inc., indicating higher multiples for comparable companies, and by our own IPO plans.

    The March 2013 valuation of $18.82 per share used for the purpose of determining the $0.5 million contingent consideration payable for the acquisition of FOSS was insignificantly (4.2%) lower than the above transaction, which is within the range of acceptable values and is

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      likely explained by slightly different valuation assumptions factored into our DCF valuation, which were largely consistent with our prior similar valuations, and the investment decision taken by the party that acquired our shares in June 2012.

    Gradual decrease in the marketability discount between these three dates was the result of favorable market conditions for IPOs of technology companies, as well as our IPO preparation process.

Recent accounting pronouncements

        Fair Value Measurements.    In May 2011, the FASB issued Accounting Standards Update (ASU) 2011-04, "Fair Value Measurement (Topic 820): Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in US GAAP and IFRSs", which clarifies Topic 820, "Fair Value Measurements and Disclosures", but also includes some instances in which a particular principle or requirement for measuring fair value or disclosing information about fair value measurements has changed. This ASU results in common principles and requirements for measuring fair value and for disclosing information about fair value measurements in accordance with US GAAP and International Financial Reporting Standards issued by the International Accounting Standards Board ("IFRS"). The amendment is effective for public entities for interim and annual periods beginning after December 15, 2011. The adoption of the guidance did not have a material impact on our financial statements.

        Intangibles—Goodwill and Other (Topic 350): Testing Indefinite-Lived Intangible Assets for Impairment.    In July 2012, the FASB issued ASU 2012-02, "Intangibles—Goodwill and Other (Topic 350): Testing Indefinite-Lived Intangible Assets for Impairment", which states that an entity has the option first to assess qualitative factors to determine whether the existence of events and circumstances indicates that it is more likely than not that the indefinite-lived intangible asset is impaired. If, after assessing the totality of events and circumstances, an entity concludes that it is not more likely than not that the indefinite-lived intangible asset is impaired, then the entity is not required to take further action. However, if an entity concludes otherwise, then it is required to determine the fair value of the indefinite-lived intangible asset and perform the quantitative impairment test by comparing the fair value with the carrying amount in accordance with ASC 350-30, Intangibles—Goodwill and Other, General Intangibles Other than Goodwill. Under the guidance in this ASU, an entity also has the option to bypass the qualitative assessment for any indefinite-lived intangible asset in any period and proceed directly to performing the quantitative impairment test. An entity will be able to resume performing the qualitative assessment in any subsequent period. The amendments in this ASU are effective for annual and interim impairment tests performed for fiscal years beginning after September 15, 2012 and early adoption is permitted. We do not expect ASU 2012-02 to have a material impact on our financial statements.

        Technical Corrections and Improvements.    In October 2012, the FASB issued ASU 2012-04, "Technical Corrections and Improvements", which includes substantive, limited-scope improvements. These are items that represent narrow and incremental improvements to US GAAP and are not purely technical corrections. This ASU includes amendments that identify when the use of fair value should be linked to the definition of fair value in Topic 820, Fair Value Measurement, and contains conforming amendments to the Codification to reflect the measurement and disclosure requirements of Topic 820. These amendments are referred to as Conforming Amendments. The Conforming Amendments to US GAAP included in this ASU are generally nonsubstantive in nature. Many of the amendments conform wording to be consistent with the terminology in Topic 820. The amendments in this ASU that will not have transition guidance will be effective upon issuance for both public entities and nonpublic entities. For public entities, the amendments that are subject to the transition guidance will be effective for fiscal periods beginning after December 15, 2012. We do not expect ASU 2012-04 to have a material impact on our financial statements.

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        Offsetting Assets and Liabilities.    In January 2013, the FASB issued ASU 2013-01, "Clarifying the Scope of Disclosures about Offsetting Assets and Liabilities", which clarifies the scope of ASU No. 2011-11, "Balance Sheet (Topic 210): Disclosures about Offsetting Assets and Liabilities". The amendment is effective for fiscal years beginning on or after January 1, 2013 and interim periods within those years. We do not expect ASU 2013-01 to have a material impact on our financial statements.

        Comprehensive Income.    In June 2011, the FASB issued ASU 2011-05, Comprehensive Income, which gives an entity the option to present total comprehensive income, the components of net income, and the components of other comprehensive income either in a single continuous statement of comprehensive income or in two separate but consecutive statements. In both choices, an entity is required to present each component of net income along with total net income, each component of other comprehensive income along with a total other comprehensive income, and a total comprehensive income. This ASU eliminates the option to present the components of other comprehensive income as part of the statement of changes in shareholders' equity. The Group adopted this new guidance on April 1, 2012 with retrospective application for the years ended March 31, 2011 and 2012.

        In December 2011, the FASB issued ASU 2011-12, Deferral of the Effective Date for Amendments to the Presentation of Reclassifications of Items Out of Accumulated Other Comprehensive Income in Accounting Standards Update No. 2011-05, which deferred the requirement to present on the face of the financial statements reclassification adjustments for items that are reclassified from other comprehensive income to net income while the FASB further deliberates this aspect of the proposal. ASU 2011-05, as amended by ASU 2011-12, is effective for public entities for fiscal years and interim periods within those years, beginning after December 15, 2011. The Group adopted this new guidance on April 1, 2012.

        In February 2013, the FASB issued ASU 2013-02, "Comprehensive Income (Topic 220): Reporting of Amounts Reclassified out of Accumulated Other Comprehensive Income", which requires an entity to provide information about the amounts reclassified out of accumulated other comprehensive income by component. In addition, an entity is required to present, either on the face of the statement where net income is presented or in the notes, significant amounts reclassified out of accumulated other comprehensive income by the respective line items of net income but only if the amount reclassified is required under US GAAP to be reclassified to net income in its entirety in the same reporting period. For other amounts that are not required under US GAAP to be reclassified in their entirety to net income, an entity is required to cross-reference to other disclosures required under US GAAP that provide additional detail about those amounts. For public entities, the amendment is effective for reporting periods beginning after December 15, 2012 and early adoption is permitted. We do not expect ASU 2013-01 to have a material impact on our financial statements.

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BUSINESS

Overview

        We are a leading provider of software development services and innovative IT solutions to a global client base consisting primarily of large, multinational corporations. Our software development services consist of core and mission critical custom software development and support, product engineering and testing, and technology consulting. Our solutions are based on our proprietary products and platforms that directly impact our clients' business outcomes and efficiently deliver continuous innovation. Through our services and solutions, we enable our clients to improve their competitive position by increasing efficiency, shortening time-to-market, and enhancing their end user experience. We have developed a reputation and track record of delivering consistently high quality service that has enabled us to establish long-term strategic relationships with many of our clients, translating into significant revenue growth and recurring business.

        We utilize our deep industry- and domain-specific expertise to develop innovative high quality software for our clients' core products, processes and applications. We focus on six industry verticals that have significant and growing demand for IT services and consider innovative technology to be a top priority in achieving their business goals: financial services; travel and aviation; technology; telecom; automotive and transport; and energy. Across these industry verticals, we utilize a wide variety of modern technologies and have developed expertise in a number of domain practices, the most important of which are supported by our Centers of Expertise ("COEs"): big data; open source; mobile; Agile; and user interface, user experience and human machine interface ("UI/UX/HMI"). Each COE focuses on the research and development of its respective domain practice and has a dedicated pool of resources, including its own budget, time and IT professionals. We believe the combination of our broad range of services and solutions, and our deep industry and domain expertise, allows us to work concurrently on multiple mission critical engagements for a single client, leaving us well positioned to increase our share of our clients' core technology budgets.

        We serve large multinational corporations primarily in Western Europe and North America that rely on our IT solutions and software development capabilities for many of their mission critical systems. For the year ended March 31, 2013, a significant portion of our sales was to Fortune Global 500 companies, including Deutsche Bank, UBS, Boeing, Harman, Avaya and AMD. During the same period, we derived 45.6% of our sales from clients located in Europe, 42.0% from clients in North America, and 12.4% from clients in other geographies. Seven out of our top ten clients have been with us for five or more years and, in the three fiscal years ended March 31, 2013, the majority of our new clients were referred to us.

        The scope of our services ranges from handling standard outsourcing client-directed engagements to managed delivery and transformational engagements. Recently, we have experienced an increased demand for managed delivery engagements, in which we assume full control of the project team, including the project manager, lead analyst and lead architect, and manage all facets of execution. In managed delivery engagements, we have a higher degree of control over the staffing mix and the deployment of resources across our global dedicated delivery platform. These engagements allow us to embed ourselves in our client's business, thereby increasing client loyalty and barriers to entry for competition. In some cases, our long-standing relationships with large multinational clients have led to transformational engagements and engagements in which we replace a portion of the client's entire IT team and interface directly with the internal end user instead of merely augmenting our client's IT department. We seek to continually improve our delivery by using optimized development methodologies, such as Agile. Agile methodology entails the delivery of software at frequent iterations by cross functional geographically distributed teams, often working remotely across various time zones. This and other delivery methodologies reduce time-to-market and lower development costs for our clients.

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        We operate through a global dedicated delivery model. We provide our services and deliver our solutions from fourteen delivery centers located primarily in CEE, including in Russia, Ukraine, Romania and Poland, where we have access to a significant pool of highly educated IT professionals who possess technical expertise and business domain knowledge. We also have delivery centers in the UK, U.S. and Vietnam. Our CEE delivery centers are strategically located near current and potential client sites in Eastern and Western Europe and are designed to meet our clients' security and infrastructure requirements. We believe that our global delivery model allows us to better serve our clients, providing us with agility, logistical and time zone convenience and the cost advantage of having fewer dedicated on-site personnel. We also believe the similarities in engineering culture between CEE and our primary revenue-generating geographies—Europe and the U.S.—afford us a competitive advantage over non-CEE based competitors in pursuing engagements in those geographies.

        We believe that our strong brand, corporate culture, and our focus on efficient innovation and our client's business goals and outcomes, allow us to successfully recruit and retain highly qualified IT engineers and developers ("IT professionals"). As of March 31, 2013, we had 5,846 personnel of whom 4,927 were IT professionals. Approximately 80% of our IT professionals hold Master's degrees (or Master's degree equivalents in certain jurisdictions) or higher, and approximately 85% of our personnel have more than five years of industry experience, which we believe is more than most publicly traded Indian offshoring companies. We support our growth through our human resources infrastructure that allows us to scale the workforce as our business grows. During the twelve months ended March 31, 2013, we hired, on average, more than 235 IT professionals per month.

        Our work has earned us important client recognitions, including from our large multinational clients like Deutsche Bank, which formally recognized us this year as their strategic vendor partner in Global Technology and awarded us its Relationship Excellence Award for our "sustained and structured approach in nurturing and building a new basis for doing business to deliver superior outcomes." Several leading technology industry research firms have recognized our work. In particular, in its January 2013 report "Mobile Feast Or Beggar's Banquet," Forrester Research, Inc. listed us with IBM, Infosys and uTest as a mobile testing tool outsourcing vendor. In its December 2012 report "Innovation Insight: The Connected Vehicle Will Dominate Automotive and Mobility Innovations," Gartner, Inc. named us one of the four key operating system, software and application developers, with such developers as Google and Microsoft. We were also awarded the "IT Outsourcing Project of the Year" in 2012 by the European Outsourcing Association ("EOA") for our work with Hotwire Inc. The quality of our operational processes has been recognized by our Capability Maturity Model Integration, or CMMI, Level 5 certification, which is the highest level of the Software Engineering Institute's CMMI categorization for measuring the maturity of software development processes.

        We have experienced significant growth over the last three years. Our sales have grown from $198.4 million in the year ended March 31, 2011 to $314.6 million in the year ended March 31, 2013, representing a compound annual growth rate ("CAGR") of 25.9%. Our net income has grown from $25.9 million in the year ended March 31, 2011 to $37.5 million in the year ended March 31, 2013, representing a CAGR of 20.4%. During the year ended March 31, 2012 we added 45 new clients, and during the year ended March 31, 2013 we added 52 new clients including Delphi, PepsiCo and Brookfield.

Industry background

IT services outsourcing and offshoring

        For a multinational corporation to remain competitive and meet the increasingly diverse needs of its worldwide client base, it must have sufficiently high-quality underlying IT architecture, stay current with constant technological evolution and have access to high-quality IT talent at a competitive cost. Furthermore, the combination of shrinking product lifecycles and the scarcity and associated cost of

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local IT engineering talent are driving companies to increasingly rely on the capabilities of IT outsourcing firms, instead of, or in addition to, their own offshore IT operations.

        Multinational corporations seek IT services providers that have industry-specific knowledge, the ability to manage dynamic, short development cycles, scale and recruit talent with relevant expertise, agility, cost effectiveness and global delivery capabilities. Furthermore, IT spending is becoming more aligned with companies' broader business strategies towards innovation. According to Forrester in its August 2013 report "Thrive With Sustained Innovation in the Empowered BT Era", "innovation has become a primary source of growth and competitive advantage, and the need for innovation underpins senior business leaders' top three issues... Neither IT organizations nor firms sustain innovation by themselves, just as few firms are vertically integrated today for any other business activity." The increased importance of IT-related decisions requires companies to look for providers with specific domain practice and vertical expertise, as opposed to generalists with commoditized skill sets. Reflecting these pervasive trends, International Data Corporation ("IDC"), in its report, Worldwide Services 2012-2016 Forecast Update, doc #237692, November 2012, estimates that the worldwide IT services outsourcing market (excluding Business Process Outsourcing services) is expected to grow from $258.0 billion in 2011 to an estimated $318.0 billion in 2016.

        The offshore outsourcing business model has matured and evolved since its beginning in the early 1990s to provide proven advantages and fewer risks. In its report, Worldwide Offshore IT Services 2012-2016 Forecast, doc #234403, April 2012, IDC estimates the worldwide offshore IT services market will grow at a 15.2% CAGR from $41.0 billion in 2011 to $83.2 billion in 2016. The outsourcing industry is also moving away from a singular focus on cost, towards a broader focus on efficiency and innovation. Multinational corporations no longer utilize IT outsourcing only in an effort to achieve cost efficiencies and labor arbitrage, but also seek to increase agility and reduce complexity by replacing, or complementing in-house IT resources with outsourced IT.

        The financial crisis of 2008 and 2009 accelerated several trends in multinational corporations' sourcing strategies that have led to growth of the overall technology expertise outsourcing market and changed the provider landscape. The first trend is the need to innovate while reducing costs. This is driving multinational corporations to seek talent with tailored skills, and to expand the use of multiple providers in order to gain access to scalable and cost-effective resources. The second trend is increasingly thoughtful management of global vendor sourcing. Multinational corporations vary the number of vendors they use based on their budgets, mission critical and discretionary needs, and prevailing business conditions. Therefore, many multinational corporations may look to consolidate their outsourcing firms by using fewer vendors and focusing on those that provide high quality, expert services. In other cases, corporations may seek to selectively add new vendors for additional or specialized expertise and/or geographic diversity in order to manage concentration risk. The third trend is the increasing importance of vendor possession of such specialized expertise and solutions that address defined challenges specific to the client or to a given industry vertical. According to IDC, in its report, Worldwide Offshore IT Services 2012-2016 Forecast, doc #234403, April 2012, the markets for offshore application outsourcing and custom application development are expected to grow at a 17.2% and 13.9% CAGR, from $7.4 billion and $9.4 billion in 2011 to $16.3 billion and $18.0 billion in 2016, respectively.

Trends of IT spend in key industry verticals

        Financial services:    Financial services has traditionally been one of the most IT-intensive industries. We believe that three broad trends will drive financial services IT spending in the short term: ongoing cost optimization, especially in light of contracting margins in this industry, predominantly via outsourcing; modernization of mostly in-house developed, vertical-specific legacy systems; and the introduction of new technologies and processes (e.g. mobile and cloud) to support new

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emerging business lines within investment banking and other areas, as well as new financial products. Other trends in various segments of the financial services industry include:

    Update of systems and processes that quickly produce more accurate data used to address new regulatory (e.g. Basel III) reporting and compliance requirements;

    Focus on improving risk management practices and compliance, including data centralization and its conformity with the regulatory and industry standards by means of creating reference data libraries, ensuring uniformity and accuracy of records across the enterprise; and

    Investments in mobile technologies and big data for improved customer targeting, implementing new transaction types (e.g. Near Field Communication or NFC, mobile wallets) and enhancing experiences of the end users.

        Our clients in this vertical include Deutsche Bank, UBS and Citi.

        Travel and aviation:    Rebounding passenger traffic and evolving safety and security standards will require travel and aviation companies to increasingly depend on advancing technological systems. Moreover, the increasing penetration of mobile technologies is forcing travel providers to invest in internal and user-facing applications, such as mobile systems and apps for engineers and booking systems for smart phones and in-flight entertainment platforms for end-customers. With increasing cost and competitive pressures, travel and aviation companies will continue to be attracted to high quality, low cost IT services and solutions providers. Our clients in this vertical include Boeing, Hotwire and Sabre.

        Technology:    With the continued migration to new operating systems and open standards, the escalating adoption of cloud technologies and increasing mobile, high performance, cross platform and smart electronics development, technology companies are required to keep pace with rapid technological evolution. They seek vendors who can help them with these innovation-related tasks in a cost-efficient manner. Our clients in this vertical include AMD.

        Telecom:    The growth of tablets and smart phones, combined with the accelerating growth of video and multimedia traffic, will continue to increase the demands on network providers' IT systems. Furthermore, the growth in adoption of virtualization technologies and cloud computing will require telecom companies to invest in their IT infrastructure. Our clients in this vertical include Avaya and Hirschmann.

        Automotive and transport:    IT spend in the automotive and transport industry is increasingly driven by improving safety and regulatory requirements, focus on fuel economy and the emergence of electrical vehicles and rapidly evolving infotainment, human machine interface ("HMI") and advanced driver assist systems. Ensuring safety and limiting driver distraction while improving the in-car experience is becoming one of the key priorities of OEMs and their immediate suppliers. Our clients in this vertical include Harman and Ford.

        Energy:    With an aging energy distribution infrastructure and increased regulatory pressures to implement smart grid and demand response services, the IT needs of energy companies will continue to grow. Furthermore, the popularity and progress of green and renewable technologies combined with the ever-increasing need to cut costs is expected to drive demand for innovative, high quality and low cost IT services providers. Our clients in this vertical include Alstom and Accent.

Growth of CEE as a services delivery location

Availability of high quality talent

        CEE's large pool of highly educated and experienced IT professionals with strong technical skills makes the region an appealing outsourcing destination. Countries in CEE have historically

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demonstrated a strong focus on technical education, exemplified by the high proportion of students in this region completing higher education in the areas of applied math, physics, and engineering. Students from universities in CEE have also historically dominated world computer programming competitions. Four out of the top five finalists in the 2012 ACM ICPC programming competition World Finals were from universities in CEE. Based upon data provided by The Economist Intelligence Unit, we believe that wages in Eastern Europe are 75% and 82% lower than wages in Western Europe and the U.S., thus offering significant cost savings to those utilizing a CEE-based labor force. The availability of human resources throughout the region allows providers to be as agile and scalable as necessary.

Increasing popularity of near-shoring

        As the model for offshoring has evolved, the industry has seen the emergence of near-shoring, which involves outsourcing to countries with lower labor costs that are in geographical and/or time zone proximity to client locations. Near-shoring improves communication between clients and delivery teams, increases efficiency, reduces complexity and risks and increases the ultimate value delivered to clients. Given the physical proximity, cultural affinity, ease of travel, minimal time zone difference and high quality talent offered by CEE, this region is becoming an increasingly popular destination for near-shoring and a diversification alternative for Western European companies, as well as European divisions of large global companies.

Government support for IT industry in CEE

        The CEE region's IT industry is supported by favorable governmental policies. Russia has announced a number of initiatives to promote IT growth as part of a broader focus on modernization and innovation. For example, qualified IT companies under the Russian Tax Code benefit from a substantially reduced rate on contributions payable to social and pension funds and an exemption on value added tax in certain circumstances. In 2007 the Ukrainian Parliament introduced the law "On the Foundations of the Development of Ukrainian Information Society in 2007-15" which was followed by an action plan to promote and strengthen Ukraine's IT sector. In July 2012, the Ukrainian government introduced significant incentives by adopting a new Law No. 5091-VI, which reduced corporate tax rates for IT companies, gave tax incentives to IT professionals and exempted sales of certain software products from value added taxes ("VAT"). The applicable tax period under this law is from January 1, 2013 to January 1, 2023. The Romanian government has also recognized the IT sector as a priority for the national economy. A number of government policies, such as the exemption from income taxes of programmers who are employed by software companies and who satisfy certain criteria, including graduation from certain universities have been put in place to foster further growth of the sector in the country. Further, starting February 1, 2013 the allowed R&D deduction that was introduced into the Romanian Fiscal Code effective on January 1, 2009 was increased to 50% of the eligible expenses from R&D activities from the taxable profit base, instead of the previous 20%.

        As a result of these factors, the Central and Eastern European Outsourcing Association now estimates that the volume of IT exported outsourcing and custom software product development services grew in 2010 between 10% and 30%, depending on the country.

        For all third party data, see "Special Note Regarding Forward-Looking Statements and Industry Data."

Competitive strengths

        We believe the following strengths differentiate us from our competitors:

        Deep vertical expertise with focus on innovative service offerings and solutions.    We currently focus on six industry verticals that are technology- and data-intensive, that, we believe, present a large and

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growing market opportunity. To enhance our expertise, we recruit highly skilled IT professionals with significant technical expertise and understanding of industry-specific business operations and issues. We have also built substantive practice areas within our verticals to address our clients' most pressing problems, such as risk management, reference data, and fixed income currencies and commodities ("FICC"). We invest in research and development to create cross-functional and vertical-specific proprietary products and platforms that help us deliver our services rapidly and cost-effectively. Most recently we have cooperated with Ford to develop an open-source car connectivity technology, called SmartPhoneLink. This new open standard will combine the features of Ford's AppLink software with our open source platform, IviLink, among others. Other examples of our solutions include a mobile financial information dashboard, a comprehensive risk visualization tool and an award-winning open source system integration framework for the financial services vertical; smart-grid demand management systems based on big data processing for the energy and utilities vertical; and open source-based test automation frameworks for network equipment for telecom vertical.

        Strong domain practices anchored by COEs.    Over the past several years, we have developed expertise in domain practices, including our five key domain practices: big data, open source, mobile, Agile, and UI/UX/HMI. We believe these domain practices are critical to the ongoing success of our clients. To support the development of our domain practices, we have established COEs specifically dedicated to the research and development of each of our key domain practices. Each COE has a dedicated pool of resources, including its own budget, time and IT professionals. We believe that our domain practice knowledge, applied within the industry vertical context of our clients' business needs, provides us with a strong competitive advantage. We rely on the strength of our programmers to integrate a wide variety of programming languages, hardware platforms, operating systems and third-party software to meet emerging trends. Our focused investment in people, platforms and technology allows us to compete effectively with other vendors for additional business from our clients. It also helps our clients optimize their own technology and processes, achieve crucial business goals and become more competitive.

        Long-term relationships with multinational clients.    Our largest clients consist primarily of Fortune Global 500 companies such as Deutsche Bank, UBS, Boeing, Harman, Avaya and AMD. Seven out of our top ten clients have been with us for five or more years and we experience very low client turnover. Many of our large client relationships began as stand-alone pilot projects, the success of which enabled us to win additional mission critical, multi-year development engagements. Because of our delivery of consistently high quality and innovative results, our relationship with many of these clients evolved into large scale collaborative relationships and managed delivery engagements whereby we entered into outcome-based arrangements with our clients. We generally enter into multi-year master services agreements with our clients that encompass multiple stages of their IT development cycle. The dedicated teams of IT professionals we assign to each client combined with a personnel attrition rate that we believe to be lower than many other industry players, results in the continuity of personnel and, importantly, the retention of know-how and strengthening of client relationships. We leverage these deep relationships to develop a sophisticated understanding and extensive knowledge of our clients' businesses, both of which result in higher quality services, better business outcomes and further strengthen our client relationships.

        Highly educated, experienced and loyal workforce.    We are committed to recruiting, developing and maintaining a work force of high quality IT professionals. We have invested significant resources to grow from 1,669 IT professionals as of March 31, 2008 to 4,927 technically sophisticated IT professionals as of March 31, 2013. Some of our delivery locations, such as Russia, Ukraine, Romania, Poland and Vietnam are strategically established in regions with large pools of highly skilled engineers and a strong focus on technical education. We have a human resources staff of 283 people, which includes over 130 people dedicated to direct recruiting efforts. Approximately 80% of our IT professionals hold Master's degrees or higher (or Master's degree equivalents in certain jurisdictions)

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with a focus on science and engineering, and approximately 85% of our personnel have more than five years of IT industry experience. Furthermore, we utilize the strong ties we have built with the leading local colleges and universities in CEE and Vietnam, as well as our existing reputation as an employer of choice, to continue attracting and retaining highly educated IT professionals. We have six training centers throughout Russia and Ukraine, one training center in Romania and one in Poland. We have also implemented professional career development programs that help us identify, recognize, and promote our most talented and innovative employees. These highly-skilled and experienced IT professionals help us strengthen our brand and enhance our corporate culture, which, in turn, allows us to continue attracting and retaining such professionals.

        Global delivery platform.    Our secure delivery centers in Russia, Ukraine, Romania, Poland, the UK, U.S. and Vietnam allow us to provide managed delivery and value added services for software development and innovative IT solutions. We distribute our high complexity work to client-facing industry specialists in tier-one locations, such as Kiev, Ukraine; Moscow, Russia; and Bucharest, Romania, and our lower complexity work to lower-cost, industry generalists in tier-two locations, such as Omsk, Russia; Dnipropetrovsk, Ukraine; and Ho Chi Minh City, Vietnam. This enables us to increase the utilization of our IT professionals by effectively allocating work based on resource and talent requirements to balance cost and achieve scalability, and mitigates certain economic risks, such as wage inflation, that might affect any single geography. Our dedicated delivery centers are distributed across time zones among our delivery locations and consist of teams of IT professionals dedicated to a single client. This set-up allows us to work seamlessly for clients in different time zones and maintain a cultural and geographic cohesiveness with our clients' on-site teams. We believe that serving our clients by means of this model, combined with the mission critical nature of engagements, reduces the risk that our clients will switch vendors and drives recurring revenue. Our strategy of keeping, on average, 89% of our work-force off-site reduces our costs by limiting the use of expensive on-site personnel.

        Strong and experienced management team.    We benefit from the effective leadership of an international management team with diverse backgrounds and extensive experience in IT services. Each member of our senior management team has on average more than 15 years of industry experience, and has extensive experience in working both inside and outside of CEE for large and multinational corporations. Our CEO has been with us since our inception in 2000, and many of our managers have been with us for seven or more years. Moreover, our management team has successfully guided our rapid expansion primarily through organic growth. During the recessionary period between March 31, 2009 and March 31, 2010, we increased our sales by 16.4%, which we believe substantially exceeded the revenue growth of most of our publicly listed peers during the same period.

Strategies

        Our goal is to become the provider of choice for core systems and mission critical software that enhance business outcomes and help enterprises within our industry verticals remain competitive. Typically, within our six verticals we target large multinational companies that require sophisticated IT services and solutions with an intention to become an embedded, strategic provider for their high-end technology needs. We intend to expand our offerings to current clients and to win business from new clients by pursuing the following:

        Develop new capabilities and service offerings within our verticals.    We plan to expand our offerings to large multinational clients with whom we already have a strong relationship, and to win new clients within our six industry verticals. We intend to use our multi-site global dedicated delivery model, vertically aligned client-facing teams and innovative industry-specific products and platforms to increase our share of high value engagements and diversify across our existing clients' divisions and departments. For example, in financial services, we seek to expand beyond services for investment banking and sales and trading, and increasingly target new sources of revenues, such as risk

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management, regulatory reporting, FICC, wealth and other asset management. We also seek to expand our service offerings by taking over our clients' captive IT operations, which also benefits clients by reducing the total cost of ownership. We will continue to proactively invest in and develop our innovative proprietary solutions around emerging technologies, supporting trends and critical client needs in our industry verticals.

        Leverage domain practice expertise to win new business.    We intend to leverage the domain practice expertise we have developed in each of our five COEs, and to develop new technical expertise. We believe that our continued dedication to several key domain practices will result in substantial business outcomes for clients who use our services and solutions, and will translate into more business for us. For example, we apply our open source-related expertise to integrate license and royalty-free software into our clients' legacy systems, generating significant cost savings and improving operational efficiency of their core systems. In addition to being helpful to existing clients, we plan to use the products and platforms we have developed within our domain practices as pre-sale tools to demonstrate our capabilities to new clients.

        Continue to expand our managed delivery model.    In an effort to better serve our clients' needs, we are transitioning a significant portion of our engagements to managed delivery. We believe managed delivery provides meaningful advantages for both our clients and our operations. For clients, managed delivery greatly enhances visibility, transparency and cost predictability of the outsourcing process, thereby reducing their risks. For us, managed delivery is a means of expanding our role in our clients' projects, thereby embedding us in our clients' core IT operations and ensuring stability of our on-going relationships with these clients. Managed delivery, especially when used in conjunction with Agile methodologies, improves utilization of our IT professionals and resources, streamlines the engineering of complex distributed systems, and increases the visibility of our potential revenue stream and the scalability of our operations. It also allows us to gain real-time knowledge of our clients' business, thus further growing our expertise in given business domain practices, ensuring our quality service and increasing client loyalty. Our aim is to increase our ownership of client projects to the point of providing transformational engagements and those within which we substantially or fully replace a portion of our clients' IT departments.

        Continue to develop our proprietary products and platforms.    We will continue to develop our existing proprietary products and platforms to further enhance their capabilities and to create new products and platforms. For example, our platform iviLink can be amplified to accommodate a rich application environment for branded software developed by or for specific OEMs, and our product Horizon, which, as of the date of this prospectus, we have not yet begun selling to third parties, can be further developed by adding calculation, reference data and analytics tools. We also intend to selectively acquire industry leading solutions developed by our clients with our active involvement. We believe that expanding our portfolio of products and platforms differentiates us from other software services providers. These proprietary assets also will help us target aspects of our clients' software budgets that were not previously accessible to us, and will position us well for growth.

        Attract and retain top quality talent.    To support our growth and maintain our competitive position as a leading high-end IT service provider, we plan to grow our highly skilled employee base by continuing to execute our rigorous sourcing and hiring practices and enhancing our brand as an employer of choice in the industry. We will scale our human resources infrastructure as our business grows. In addition, we will seek to maintain our low attrition rates through our internal training programs and employee initiatives, including rewards and incentives for high-performing employees. We also intend to build on our successful track record of establishing delivery centers in CEE, where we have access to highly educated IT professionals at attractive wages. We have successfully opened delivery centers in Kiev, Odessa and Dnipropetrovsk, Ukraine; Omsk, St. Petersburg and Dubna,

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Russia; Bucharest, Romania; Krakow, Poland; Bellevue, WA; and New York, NY, and plan to continue opening delivery centers in CEE.

        Selectively pursue strategic acquisitions.    While we focus primarily on organic growth, we intend to pursue complementary acquisitions of primarily small, specialized software engineering services firms or relevant assets that will accelerate our growth, enhance and/or complement our expertise and existing client base, add highly talented and qualified IT professionals to our team, and/or expand our presence in key geographies. We are continuously reviewing and identifying potential acquisitions that would enhance our technological or domain knowledge and client relationships.

Our services and solutions

        Our software development service offering consists of three categories: core and mission critical custom software development and support services; product engineering and testing; and technology consulting.

        We offer these services to clients within six key industry verticals, and across several domain practices, the key five of which we developed through dedicated COEs. These industry verticals and key domain practices are:

Industry Verticals   Key Domain Practices

Financial Services

 

Big Data

Travel and Aviation

 

Agile

Technology

 

Open Source

Telecom

 

Mobile

Automotive and Transport

 

UI/UX/HMI

Energy

 

 

        We augment our domain practices by offering a suite of solutions that addresses specific but critical needs within our key industry verticals. Our solutions consist of products and platforms. Our platforms provide the building blocks for creating customized software for our clients. Often we use platforms as a sales tools to demonstrate our innovation capabilities and potential impact on clients' business outcomes. Our products are standalone solutions that we have developed for our clients. To date, we have not sold or otherwise licensed any of our products.

        Our products include:

    Horizon—a product for comprehensive enterprise-wide risk management and visualization;

    Twister—an open source test automation product for the enterprise communications market; and

    iLUX—a product that helps build mobile applications within the financial sector for iOS-based devices.

        Our platforms include:

    iviLink—an in-car connectivity tool that enables two-way integration between in-vehicle infotainment systems; and

    DMFusion—a demand response and management software platform for smart grids;

    DMMessenger—a smart grid platform that allows effective collaboration on efficient energy consumption; and

    SWIFT—an advanced flexible framework for rapid development of automotive HMI.

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Our services

        Our software development service offerings consist of three primary categories:

Custom software development and support services

        We provide a comprehensive set of core and mission critical software development services—including application software development, software architecture design, performance engineering, optimization and testing, process consulting and software quality assurance—to enterprise clients in our financial services, travel and aviation, automotive and transport and energy verticals. Our services span the entire development lifecycle, and combine sophisticated processes for solving complex problems with domain and business knowledge, project management tools and global delivery capabilities. In certain cases we also provide maintenance and support services for the software and applications that we have developed for our clients. In addition, we provide re-engineering and migration services for transferring legacy applications to our clients' new operating systems and enhancing their functionality.

Product engineering and testing

        We provide a wide range of product engineering services for the full product lifecycle—including functional specification and mock-ups, product design, engineering, automated testing, maintenance, support and performance engineering—to our clients in the technology, telecom, automotive and transport and energy verticals. We deliver product engineering services by assembling specialized teams of IT professionals who use Agile development methodologies to deliver our work product incrementally.

Technology consulting

        Our technology consulting services are designed to address clients' needs in each of our six verticals, while leveraging our in-depth expertise in technology and our best practices to optimize their software processes and data security procedures. Our technology consulting services generate a small portion of our sales and include IT strategy consulting, software engineering process consulting and data security consulting. We use our best practices, methodologies and frameworks to assist clients in establishing and improving their software development processes, including metrics analysis, quality control and appraisal procedures.

Our solutions

        Our solutions, consisting of products and platforms, are a small but growing portion of our business model. Our products are part of our current portfolio of proprietary solutions that we have not commercialized in the past. However, we intend to grow our future sales using these products as stand-alone software and as a part of our software development services offering. Our platforms are also a part of our proprietary solutions portfolio that we utilize within the scope of our software development services to clients. Most of our platform components are available under non-commercial open source license to allow any potential user quickly evaluate the characteristics of the technology, but these components are not sufficient for a commercial use.

        The list of our products and platforms is as follows:

    Products

        Horizon:    Horizon is a comprehensive risk management and visualization tool for global enterprises in various business segments. It increases portfolio transparency and allows effective monitoring of key risk metrics on every level of the business, from general overview to detailed transactions. This product consists of a series of user-friendly dashboards and provides concise, critical

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information to support decision-making and risk organization. For example, the Market Risk dashboard tracks several key market risk scenarios identified by the company against established allowed limits, and then alerts authorized parties when those limits are breached. Audit dashboard provides concise summaries of internal or other audit issues that can be visualized, tracked and analyzed by numerous metrics of the management's choice, including date, geography, and business line. This product helps our clients significantly reduce requests for documentation and time for creation of manual reports. It also increases the awareness of the clients' management, board and other committee members with respect to potential risks, and helps these critical governance bodies to focus on the company's decision-making matters. As of the date of this prospectus, we have not yet begun selling this product to third parties.

        Twister:    Twister is a new open source test automation solution developed for the enterprises communications market. Twister provides telecom equipment vendors, data system integrators and enterprise data services providers with a comprehensive open platform for testing telecommunication equipment, devices and related applications in the distributed environment. Twister delivers an innovative approach to building resilient and adoptable test automation frameworks in the Cloud, thereby increasing operational productivity for the clients within the telecom equipment sector due to its ability to run numerous testing processes simultaneously. This product makes testing, which is a critical part of the entire development process, cost efficient, scalable and repeatable. The product allows our clients to increase the efficiency of their product development by reducing complexity and the length of the testing process, and allowing them to view results faster.

        iLUX:    iLux is a scalable product that helps build mobile applications for iOS-based devices (iPads and iPhones) for clients in the financial services sector. This product allows for quick and effective creation of a dashboard that can be further customized based on user specifications and grant access to news streams, market data and other financial matters of the user's choice. This product consists of two parts: the user part that is uploaded onto an Apple device, and a back-end part, developed on a Java Enterprise application basis. The user part is a set of components that visualize user-selected information, such as stock price, volume and volatility graphs, companies' financial statements, and various financial analytics, in the easy-to-use intuitive format. One of the most important advantages of this product is the ease and effectiveness of interaction with the user, speed with which the user can get to the desired information, quality of graphical and user interface, and the ability to quickly integrate information sources of choice, including the user's internal (i.e. from the company's Ethernet) and external sources in the public domain.

Platforms

        iviLink:    iviLink is an in-car connectivity solution that enables seamless two-way integration between in-vehicle infotainment systems—such as head units of a car, car radios and rear seat entertainment—with a wide variety of consumer devices built on operating systems like Android, Linux and Apple iOS. IviLink provides OEMs and application developers with the ability to create and then adapt mobile applications for in-car use. This reduces time-to-market for these applications and significantly reduces development costs. IviLink's application programming interface ("API")-centric architecture is designed to preserve the unique user experience that usually is a branded feature of each OEM, while ensuring safety of these developed applications for further sharing and integration. IviLink operates over any standard serial linked connection, such as Wi-Fi or Bluetooth. Consistent with common industry practice, we promote iviLink to potential customers by targeting their engineers and other technical staff, who regularly use websites such as gtihub.com to discover software technologies and systems that are free to use and download. We make certain components of iviLink publicly available under a software license that places certain restrictions on its usage in a commercial setting, allowing potential users to quickly evaluate the iviLink software for their needs and thereby allowing us to better market our services and software.

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        DMFusion:    DMFusion is a software platform that enables utility companies, transmission system operators and energy retailers to develop efficient demand management solutions that can monitor and modify power generation and consumption, thus preventing outages, balancing demand distribution and reducing costs. DMFusion also enables small- and medium-sized utility companies and smart grid solution vendors to address the challenges of non-technical distribution losses and unbilled revenue and to significantly improve grid management. This platform combines sophisticated data processing and real-time analytics with easy to use visualization features for key components of a grid, including generation and other assets and transmission infrastructure.

        DMMessenger:    DMMessenger is a comprehensive software platform designed specifically for the energy and utilities market to enhance existing smart grid solutions, including our DMFusion, with an effective, collaborative tool for energy consumption regulation. DMMessenger allows utilities companies to classify consumers by their load (consumption) profiles and then identify a subset of consumers to receive targeted messages or requests for action in order to better regulate existing energy consumption. Consumers can respond to the messages, including via social networks such as Facebook, and notify utility companies of whether they have accepted or declined their requests. The company can then reward those consumers who take the requested action, thereby aiding green initiatives and optimizing energy consumption. While DMMessenger is designed for the energy and utilities segment, its architecture allows for efficient processing of big data using cloud storage and can be applied in other vertical areas.

        SWIFT:    SWIFT is a framework for rapid development of automotive HMI. It includes a development environment consisting of applications for rapid prototyping, code generation and design of screens layout, displayed messages, and other features, combined with a set of tools for various components and platforms, such as Linux and QNX. The main differentiators of this platform are its flexibility in accommodating new technologies, such as HTML5, and its ability to combine different technologies, such as HTML5 and Flash. Through a combination of SWIFT and iviLink, we are able to offer a full spectrum of in-vehicle infotainment and connectivity solutions for OEMs and their first tier suppliers.

Our verticals

        We have developed specific expertise and grown our business in six industry verticals:

    Financial services

    Travel and aviation

    Technology

    Telecom

    Automotive and transport

    Energy

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        While financial services represents our largest vertical, we have deep industry expertise in each of the six verticals we serve. The following table sets forth our sales by vertical, by amount and as a percentage of our sales for the periods indicated:

 
  Year ended March 31,  
 
  2011   2012   2013  
 
  Amount   % of
Sales
  Amount   % of
Sales
  Amount   % of
Sales
 
 
  (in thousands, except percentages)
 

Industry Vertical

                                     

Financial services

  $ 97,682     49.2 % $ 141,836     52.3 % $ 172,086     54.7 %

Travel and aviation

    29,139     14.7     38,892     14.3     38,976     12.4  

Technology

    24,040     12.1     29,258     10.8     36,123     11.5  

Telecom

    24,905     12.6     31,230     11.5     31,587     10.0  

Automotive and transport

    14,830     7.5     21,414     7.9     25,945     8.3  

Energy

    6,443     3.2     7,190     2.7     8,236     2.6  

Other

    1,329     0.7     1,322     0.5     1,643     0.5  
                           

Total

  $ 198,368     100 % $ 271,142     100 % $ 314,596     100 %
                           

Financial services

        Financial services is our largest vertical. Since we began working with financial services companies as clients in 2005, we have been engaged by global institutions to develop, deploy, and maintain a broad range of systems. We provide our clients with complex end-to-end engineering services and solutions, such as the development of trading platforms, risk management systems, clearing and settlement solutions, low latency exchange connectivity adapters. We have also developed comprehensive risk visualization and mobile products and platforms that are specifically focused on clients in the financial services sector. We possess not only expertise within technical domain practices that are crucial to financial services, such as big data, mobile and open source, but also within business domain practices such as reference data management, risk management, trading and transacting and FICC.

Travel and aviation

        The travel and aviation industry faces many challenges, including changing regulatory and security requirements, fluctuating fuel prices, intense competition and industry consolidation. Therefore, OEMs, suppliers, airlines, aircraft manufacturers, e-commerce travel providers and other participants in the travel and aviation industry are looking to optimize their operating expenses, reduce environmental impact and improve passenger comfort, convenience and safety. Each of our senior managers in this vertical has more than nine years of experience developing customized and integrated solutions for design, manufacturing and post-production support services in the travel and aviation industry. Our capabilities include design of engineering data management and flight control systems, aircraft assembly and maintenance, airport ecosystem management and e-commerce and reservations system solutions for clients such as airlines, hotels, car rentals companies, travel agencies and cruise lines.

Technology

        Our technology vertical focuses on independent software vendors, chipset and computer electronics vendors and computer hardware providers who rely on us to help them create innovative software-intensive products, solve software integration challenges and create and implement complex algorithms, while helping manage their costs. Partnering with us allows these vendors to increase their efficiency, for example by reducing time-to-market for their products and enhancing R&D productivity. We deliver

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embedded development and system verification of software components and tools for hardware produced by our technology clients, as well as high-performance transactional systems, real-time embedded applications and application security.

Telecom

        Today's telecommunications companies are faced with intense competition, declining profit margins, challenges relating to network capacity, speed and quality, and new generation technologies requiring significant infrastructure investment. Our engineers are currently working on networking and data communication product development projects for several leading global players in this industry. We assist clients in the areas of voice, wireless and wide area network infrastructures, ethernet switching and routers. We also perform operational support system services, security services, testing automation, hardware virtualization and services for our clients' hybrid customer-premises equipment and cloud technologies. We are a participating member of the Open Networking Foundation, which we believe is at the forefront of engineering development services in Software Defined Networking ("SDN"), an exciting new area of advanced networking and network applications that accelerates time-to-market, offers scale and lowers engineering costs when using frameworks such as ours for development and test automation. For example, we have independently developed an innovative product called Twister, an open source, distributed test automation framework designed for enterprise communications market, which we intend to further enhance with additional innovative SDN and OpenFlow-related solutions.

Automotive and transport

        In our automotive and transport vertical we provide product development and system engineering services to various categories of automotive and transport industry players including car manufacturers (OEMs), tier-one and tier-two suppliers and diversified service companies. Our main focus is in-vehicle infotainment ("IVI") systems that cover a broad range of modern car functionality from multimedia, to navigation, HMI, telematics and driver assistance. Our services cover the entire product development cycle from design to prototyping, development, testing and verification. We have been investing in internal R&D programs aimed at creating platforms and frameworks that may significantly reduce time and efforts required for development of new IVI solutions by our clients. Currently, our portfolio includes such platforms as SWIFT and iviLink. We are an active member of different industry associations focused on developing unified standards for IVI systems, such as GENIVI. We have been working together with Ford on developing a new code for open-source car connectivity technology, called SmartPhoneLink. The code will combine the features of Ford's AppLink™ software with our open-source IviLink and the codes of other developers, and will become a GINIVI standard. We will continue working with Ford and the entire developer community on adding the vital and unique features of iviLink, such as symmetrical two-way app integration, to the new standard.

Energy

        We provide software and hardware development services for leading energy companies, utilities, smart grid vendors, energy service companies, energy solutions vendors and energy equipment manufacturers across the globe. We primarily provide demand response, smart grid and net metering solutions in the following areas: distribution and outage management; energy management components; market management modules; substation automation; supervisory control and data acquisition integration; standards integration; demand management; network edge control framework; and mobile workplace applications. We have also independently developed innovative smart grid metering and demand management solutions such as DMFusion, which helps automate and integrate electrical networks, and DMMessenger, an energy consumer analysis and engagement tool that processes and segments high-volume meter data.

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Our domain practices

        We also have five domains practices that stretch across our service offerings:

Mobile

        Our mobile practice offers our clients full product lifecycle development of mobile applications. Our engineers have expertise in mainstream mobile platforms, including iOS, Android and others, as well as specific frameworks for cross-platform development. These frameworks allow rapid building and deployment and cost effective maintenance of products for a range of consumer devices, while providing a unique user experience. Our services span through every functional area, from user interface design to development of server-side solutions to integration with enterprise back-end applications and payment systems. Our broad project portfolio includes a number of innovative applications—such as enterprise dashboards, media monitoring systems, animated user guides, electronic document management, booking and reservation and home automation solutions—for the travel, financial services, retail, energy, automotive and other industries.

Agile

        Our Agile practice helps clients develop new applications using Agile methodology and transition their existing enterprise development processes such as Waterfall (end-to-end development with delivery upon the completion of defined tasks), into Agile. The principal differentiator of Agile methodology is its ability to deliver code frequently and consistently, usually every two to four weeks. The Agile approach usually involves small cross-functional teams of engineers (SCRUM teams) that work on the same project, often in a distributed environment. The main advantage of utilizing Agile methodology, and a reason why we built a COE within the Agile practice, is its flexibility and quick response to change, which is critical to our clients because of shrinking product lifecycles. Agile's client -driven iterative development lets the client steer projects, iteration by iteration, and determine execution priority. This approach helps foster stronger client relationships, identifies mistakes and allows us to implement last minute changes without losing critical time and generating additional expenses. It also enhances shared learning and communications processes and solidifies teamwork. We employ more than 100 Certified SCRUM Masters and more than 700 Agile Practitioners who consistently evolve our Agile practice and its applicable methodologies.

Big Data

        Our big data practice delivers services and creates critical enterprise-wide solutions based on big data technologies and know-how. We develop innovative approaches to comprehensive information storage, processing, and analysis in order to deliver business and operational benefits to our clients. Within this domain practice we perform services focused on adapting an open-source software framework, Hadoop, that supports data-intensive distributed applications to the enterprise environment. This is the key differentiator of our big data offering. We believe that our approach is vital for many strategic enterprise initiatives in various verticals, such as risk management and reporting in financial services, metering information processing in energy and utilities, and data channel processing though SDN/OpenFlow architecture in telecoms. Our architects, consultants and developers utilizing their significant engineering experience with large business-critical applications, combined with expertise in Hadoop-based systems development, engineered a solution accelerator and data transformation engines for low-risk adoption of Hadoop to specific corporate requirements and rules. We partner with one of the market leaders in big data platforms for enterprises, Cloudera, and implement its innovative technologies to maximize value of Hadoop adoption for enterprises. We have successfully delivered several critical projects for our largest clients in our financial services vertical during our last fiscal year.

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User Experience/HMI

        Our UI/UX/HMI practice consists of concept development, prototyping and design development for car connectivity systems based on various user studies. Its main focus is to create products and solutions that can manage and then present information in the car without distracting the driver, while making the in-car experience seamless, effortless and interactive. Our engineers have years of experience in developing efficient, intelligent, reliable and user-friendly HMIs for the world's leading automakers. We believe that these car features can become a distinct part of the brand strategy and value, and thus represent a competitive advantage for the OEMs.

Open Source

        Our open source practice focuses on delivering services and creating platforms that maximize benefits of open source-based software adoption for our clients. The goal of our open source services and solutions is to reduce our clients' costs by replacing expensive proprietary software with open source software. Also, due to the crowdsourcing nature of software development in the open source environment, the applications that we select for our clients are often of better quality than the proprietary software we replace, thereby increasing efficiency and related cost savings and business benefits. We utilize Event Driven Architecture and our knowledge of Complex Event Processing technology to analyze our clients' systems and processes and then propose and build the necessary infrastructure based on open source alternatives. Our team of engineers and architects utilizes extensive experience in open source and Service Oriented Architecture to build and implement scalable, stable and responsive systems for our clients.

Selected case studies

UI/UX/HMI

        Our client, a leading automotive supplier that provides advanced in-vehicle infotainment systems to leading OEMs, needed to design an improved driving experience for a concept car that includes a personalized interface between the driver, the car, and the cloud. Our expertise in each of the required aspects of HMI and UI development, including the development of specifications and engineering design, allowed us to execute this task. The project encompassed the development of personal and situational HMI, delivered to the driver by means of surround view and augmented navigation, as well as the integration of near field communication ("NFC") technology. We built a system that combines advanced smartphone integration technologies, a cloud-based radio platform, and flexible HMI design that includes gesture recognition. The new system delivers media-rich digital content into the car in an intuitive, easy-to-use format intended to minimize driver distraction and comply with applicable laws and regulations. As the driver approaches the vehicle, the system connects with the driver's smartphone using NFC to retrieve users' saved preferences, such as seat positions, favorite music, preferred HMI visualizations, emails, contacts, calendar entries and social media accounts. The entire development was successfully completed in time for a major international auto show. As of March 31, 2013, more than 570 engineers were working on 60 ongoing projects servicing this client from dedicated delivery centers in Kiev and Odessa, Ukraine and Bucharest, Romania.

Agile

        Our client, an award-winning travel aggregator with thousands of reservations daily in 2012, was looking to improve its services. We have been a preferred service provider for this client since the beginning of our relationship in 2006, and have consistently demonstrated that the application of Agile methodology to this client's software development practices results in significant cost savings and efficiency gains. Based on this advice, the client approached us with a request to shift its internal software development and delivery platform from a Waterfall approach to an Agile approach. Because

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the human factor is exceedingly important in the execution of Agile methodology, we expended particular efforts in training and consulting with the client's IT professionals through workshops and frequent on-site visits. Our dedicated delivery team's smooth transition of the client's software development processes to Agile development resulted in a substantial positive impact on the client's business. According to our client, the business outcome of using the Agile methodology resulted in additional revenue, improved client conversion rates, reduced the time-to-market, reduced the total cost of ownership, and strengthened the client's recognition within the travel business community.

Managed Delivery

        Our client, a leading global bank, has decided to reallocate resources away from a part of their business over a multiyear period due to a shift in their business model. This part of their business is important to our client's organisation and must keep current with technological developments and compliant with changing regulatory requirements, while balancing the need to manage costs efficiently. They have approached us to manage most aspects of the IT operations of this business segment, over a multiyear period. We believe we have won this engagement because we are a trusted partner for our client with deep knowledge of financial products, regulatory needs and effective managed delivery.

        We have been working with this client since 2006, starting with one engagement that deployed 30 engineers within IT support for Equities department. Historically, we have provided a variety of application engineering and support across this enterprise, including trading, risk management systems and regulatory reporting, as well as helping them implement emerging technologies. The majority of our engagements are transformational, supporting the client's technology strategy. We currently have over 30 significant projects and over 700 engineers working on them. A large number of the projects are in investment banking, however we are growing with other areas of the global bank. We believe this particular project is mutually beneficial: our client has a trusted partner to efficiently manage support of critical IT function at a predictable price; and we have the opportunity to learn more about the business and create opportunities for engagement of similar scope in the future.

Risk Management

        Our client, a leading global investment bank, needed to develop a bank-wide management information system to timely and effectively monitor and analyze risks, control compliance, track regulatory updates and manage operational risks. The bank's business leaders wanted to substitute complex excel spreadsheets and PowerPoint presentations with one stable source of visualized information that could also be provided in clear and concise format to the members of the bank's board of directors. None of the off-the-shelf visualization solutions available on the market perfectly fit with what the business leaders had envisioned. Our client approached us with the need to provide a graphically rich and intuitive application that gathers data into a user-friendly application for risk management officers and senior managers. As part of a team of IT developers, we created an intuitively operated product—also available in a mobile platform-agnostic format—consisting of a series of nine dashboards (credit, market, compliance, treasury, etc.) that provide users with unique design and graphical data representations. Particularly valuable features of this product are its ability to create a centralized "single version of truth" across an entire enterprise, and to view particular risks not only on a macro level, but also by drilling down to basic details. This product now has more than 900 unique users, was nominated for an IT Industry Award, and has become a core system for the Regulatory & Compliance, Credit Risk, Global Credit Trading, COO, Treasury, and Risk operations within the bank. Recently, we reached a mutually beneficial agreement with our client whereby we were able to add this product to our suite of proprietary products and platforms. We believe that this product, which has become a flagship of our risk management practice, will help financial institutions achieve the desired responsiveness and transparency for their risk visualization and analysis processes.

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Our delivery centers

        With delivery centers and on-site operations in CEE, Western Europe, North America and Southeast Asia, we service multinational organizations through our global dedicated delivery model comprised of an optimized mix of near-shore, offshore and on-site delivery capabilities.

        We employ a small number of on-site IT professionals in the U.S., UK, Germany, Switzerland and Singapore. The sophistication of our off-shore delivery centers allowed us to keep 89% of our personnel off-site as of March 31, 2013, deploying personnel to client sites on an as-needed basis. Our on-site and offshore delivery teams are linked through common processes, collaboration applications and tools, and a secure communications infrastructure that enables global collaboration. This connectivity grants our clients a choice between managing their work through offshore, near-shore and on-site delivery or any combination thereof.

        As of March 31, 2013, we employed 1,644 IT professionals in Russia, which represents approximately 33% of our IT professionals. Our Russian delivery centers leverage the country's advanced technological climate and engineering legacy to build a talented, motivated team of IT professionals. The United Nations Educational, Scientific and Cultural Organization ("UNESCO") estimates that 28% of all graduates in Russia receive degrees in the field of science and technology.

        As of March 31, 2013, we had 2,207 IT professionals in Ukraine, which represents approximately 45% of our IT professionals. Our operations in Ukraine leverage a strong talent pool and relatively low average wages to provide effective software development services to both national and global clients. According to the European IT Outsourcing Intelligence Report, 2010, Ukraine is the most attractive nearshore software development location, combining a strong R&D heritage with high-technology education and an available pool of IT resources. According to Gartner, Ukraine has the fourth largest number of IT professionals of any country. Furthermore, labor costs in Ukraine are lower than in most other countries in CEE, and IT salaries in Ukraine are highly competitive with most European countries and the U.S.

        As of March 31, 2013, we employed 663 IT professionals in Romania, which represents approximately 13% of our IT professionals. Our operations in Romania leverage a substantial talent pool that primarily services clients within the telecom vertical. Romania, a member of the European Union, provides geographic and cultural proximity to our clients throughout Europe and plays an important role in our global dedicated delivery model, providing geographic diversification and cost effectiveness. According to Gartner, English is the most widely spoken second language in Romania. The majority of the population in large towns and cities like Bucharest, speak fluent English and many work in English and other language call centers. These language capabilities position Romania as a good IT offshore destination although competition for skilled resources may be intense.

        As of March 31, 2013, we employed 208 IT professionals in Poland, which represents approximately 4% of our IT professionals. According to the Global Education Digest, 57.1% of Poland's population over the age of 25, or approximately 15.6 million people, has attained upper secondary education, which represents a substantial pool of potential IT professionals. Furthermore, according to Gartner, Poland is continuing to focus on developing student IT skills, launching the digital School national program in April 2012 which aims to increase student and teacher access to new digital equipment and teaching methods.

        For all third party data, see "Special Note Regarding Forward-Looking Statements and Industry data."

Quality and process management

        We have built a suite of comprehensive, customized applications and tools to manage the quality, security and transparency of our delivery process.

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        Our quality management system is ISO 9001:2008, ISO 27001:2005 and CMMI level 5-certified to ensure timely and high-quality delivery to our clients. This system enables clients to objectively evaluate our performance against their standards and procedures by identifying, documenting and resolving non-compliance issues and providing feedback to the client's project staff. It also includes systematic problem prevention activities like internal audits and causal analysis and resolution programs that detect root causes of problems and prevent them from occurring in the future.

        We assure the quality of our execution via Delivery Transparency and Maturity controls that cover all of our delivery centers, provide comprehensive reporting on project execution and assessment of management quality, and enable proactive preventive and corrective actions concerning delivery milestones, quality and customer satisfaction.

        We have developed the LUXProject system, a web-based collaborative project environment for software development that we consider critical to meeting the service levels required by our clients. LUXProject is designed to reduce risks and provide control and visibility across all project lifecycles. Key features include:

    multi-site, multi-project capabilities;

    support of several types of software development processes, including waterfall, iterative and Agile;

    tracking of all software development activities;

    role-based access control;

    fully configurable workflow engine with built-in notification and messaging;

    key performance tracking indicators and broad reporting capabilities;

    integration with Microsoft Project and Outlook; and

    24x7 secured web-based and remote access for users.

        LuxProject provides full transparency for work done by distributed teams aligned with best practices in the software development industry.

Clients

        Our clients include large multinational corporations in the financial services, travel and aviation, technology, telecom, automotive and transport, and energy industries. We have longstanding relationships with many of our clients, and seven of our top ten clients have been with us for five years or more. For the year ended March 31, 2013, financial services revenues comprised 54.7% of our sales, followed by travel and aviation and technology, which comprised 12.4% and 11.5% of our sales, respectively. We have derived, and believe that in the foreseeable future we will continue to derive, a significant portion of our sales from a small number of major clients. Our largest client is Deutsche Bank, with whom we have worked since 2003. Our outsourcing master service agreement with Deutsche Bank (the "DB Agreement") terminates on January 6, 2016. Prior to this date, the DB Agreement can be terminated by Deutsche Bank if, among other things: we commit a material breach of the DB Agreement and do not remedy it within 30 days; we breach the confidentiality provisions of the DB Agreement; we become insolvent; we experience a change of control; we experience more than a set amount of service level defaults or service disruptions; or in the case of certain disputes about the credits owed to Deutsche Bank in the case of service defaults. We may terminate the DB Agreement if Deutsche Bank does not pay us, and does not remedy the non-payment within 30 days. Deutsche Bank can terminate the DB Agreement without cause by giving six months written notice. In addition, Deutsche Bank may terminate individual work orders of Framework Service Descriptions (year-long interim agreements) entered into under the DB Agreement with prior written notice. In the year ended

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March 31, 2013, our ten largest clients contributed 81.2% to our sales, and our largest client contributed 29.0% to our sales. See "Risk Factors—Risks related to our business and our industry—We generate a significant portion of our sales from a limited number of clients and any significant loss of business from these clients or failure by such clients to pay for our services could materially adversely affect our results of operations."

        We define geography, in which our clients' revenues originate, based on the location of the clients' key decision-makers. For the year ended March 31, 2013, 36.3% of our sales were generated from clients in the U.S., 28.2% from clients in the UK, 12.8% from clients in Germany, 11.2% from clients in Russia, and 4.6% from clients in the rest of Europe.

        The following table sets forth sales by client location as a percentage of our sales for the periods indicated:

 
  Year ended March 31,  
 
  2011   2012   2013  
 
  Amount   % of Sales   Amount   % of Sales   Amount   % of Sales  
 
  (in thousands, except percentages)
 

Client location

                                     

U.S. 

  $ 76,295     38.5 % $ 98,509     36.3 % $ 114,132     36.3 %

UK

    56,748     28.6     86,928     32.0     88,729     28.2  

Germany

    25,383     12.8     34,477     12.7     40,306     12.8  

Russia

    12,994     6.5     24,627     9.1     35,199     11.2  

Canada

    11,335     5.7     8,300     3.1     17,947     5.7  

Rest of Europe

    11,342     5.7     14,341     5.3     14,526     4.6  

Other

    4,271     2.2     3,960     1.5     3,757     1.2  
                           

Total

  $ 198,368     100 % $ 271,142     100 % $ 314,596     100 %
                           

        The following table sets forth the percentage of our sales by age of accounts for the periods presented:

 
  Year ended
March 31,
 
 
  2012
  2013
 

Age of Account

             

New

    2.7 %   2.8 %

More than 1 year

    9.1     12.1  

More than 3 years

    14.3     12.8  

More than 5 years

    73.4     71.8  

Non-core sales

    0.5 %   0.5 %

Sales and marketing

        Our sales and marketing efforts are organized by verticals, each of which is headed by a managing director who is responsible for sales and service delivery quality. Our senior executives directly oversee each of our top 15 clients, which helps ensure consistent communication and responsiveness to client needs. In addition to a top-level organizational focus on winning new business, we have a dedicated sales and marketing team working from offices in New York, NY, Krakow, Poland, Menlo Park, CA and London, UK. Our sales and marketing team focuses on expanding our services offering into the new business lines of existing clients and targeting new clients through subject matter technical experts responsible for business development in corresponding industry segments.

        Our sales structure undergoes regular review and process improvements. We have been increasing our number of client-facing practice- and vertical domain-focused senior personnel members who are

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located in key geographies (UK and U.S.) These client facing representatives effectively manage relationships with new and emerging clients. Further, we are continuing to increase the presence of senior technology specialists available on-site to work with the internal IT teams of potential clients, providing process transformation consulting, aiding internal IT process optimization, which is intended to generate cost savings to these clients. We believe that this will help us win more clients aiming to switch to vendors proficient in handling managed delivery engagements. We are also in the process of establishing a lead generation and nurturing structure that will allow us to thoroughly follow up on and process the leads we gather through industry events.

        Our strategy for winning new business includes:

    Organic growth and expansion.  We have been successful in expanding our services into new areas of existing clients' businesses, and engaging in higher complexity work for clients who originally engaged us for more basic projects. Approximately 80% of our sales growth in the year ended March 31, 2013 was generated from existing clients.

    Referrals.  Our strong reputation, along with excellent references from existing clients, provides a healthy pipeline of engagements and contacts from new and prospective clients. Many of the new companies that have become our clients in recent years have done so as a result of referrals from client decision makers who have worked with us and subsequently changed employment.

    Brand management, marketing and external relations activities.  We actively participate in select industry trade shows, conferences and promotional events. These enable us to demonstrate our technological solutions and platforms and interact with industry representatives, analysts and potential clients. We also have a targeted external relations strategy that includes cultivating relations with industry analysts and research firms such as Gartner, Forrester and IDC and the media. We are increasing our investments into brand equity and develop programs that increase our brand recognition in the key geographies for our brand recognition, such as Western Europe and the U.S.

        Our successful track record of delivering innovative services has resulted in a number of industry accolades and recognitions, some of which include:

    Deutsche Bank's Relationship Excellence award for 2012, by which we were formally recognized as a strategic vendor partner in Global Technology for our contribution to Deutsche Bank's new structured approach to enhance business outcomes. Each of Deutsche Bank's strategic vendors applied for this award, and we were the only winner chosen. We did not pay to apply for this award. The award was given to the vendor who demonstrated an ongoing commitment, at all organizational levels, to the development of a relationship with Deutsche Bank, as evidenced by the vendor's commitment and communication, organization, shared strategy, aligned relationship goals;

    The recognition of our products, services and platforms by prominent independent global research firms. We were identified, along with two other vendors, by Forrester Research, Inc. in its September 2012 report, "Rightsource Your Agile-Lean Ecosystem," for our committed and aggressive Agile approach in our application outsourcing business services, and in its January 2013 report, "Mobile Feast Or Beggar's Banquet," we were listed with IBM, Infosys and uTest as a mobile testing tool outsourcing vendor. Gartner, Inc. named us one of four key operating system, software and application developers, with such developers as Google and Microsoft, in their December 2012 report, "Innovation Insight: The Connected Vehicle Will Dominate Automotive and Mobility Innovations.";

    The "IT Outsourcing Project of the Year" award from the European Outsourcing Association (EOA) for our work with Hotwire Inc. We were invited to participate in the EOA Awards 2012, and applied for consideration in the "IT Outsourcing Project of the Year". We believe

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      approximately fifteen other companies applied for this category, and we were the only one to win the award. We did not pay to participate in this award. The criteria used to evaluate candidates included the key project objectives, the success of implementation, how the candidate was able to evaluate the success of the project, best practices and innovation;

    We were short-listed for the 2013 European Smart Metering Awards in two categories: Smart Meter Data Management & Solutions and Innovation of the Year Award. We were invited to participate in this award and applied for consideration in the "Smart Meter Data Management & Solutions Award 2013" and "Innovation of the Year Award 2013" categories. According to our estimates more than 100 companies applied for 11 categories (approximately 15 companies per category).We did not pay to participate in this award. The criteria used to evaluate candidates for these awards included rationale behind entry, goals in the last 12 months, specific achievements by individuals on our team, differentiating factors that set us apart from other companies in the industry, and the extent to which our achievements will help lead the industry;

    We were ranked as #47 in the International Association of Outsourcing Professionals ("IAOP") among the 100 Leading Global Outsourcing Service Providers of 2012. We were invited to participate in the International Association of Outsourcing Professionals Top Global Services 100 rankings, and applied for consideration out of hundreds of service providers. We paid $345 to participate, on top of our $350 yearly membership fee. The criteria used to evaluate candidates for this award included our size and growth, customer satisfaction, depth of competence, relevant public recognitions, management capabilities, certifications, employee management, our differentiating capabilities, accomplishments and corporate social responsibility; and

    We were featured as a 2012 Global Services 100 provider and named in such categories as Leading Mid-tier OPD Vendors and Mid-Tier Leaders-for Testing Services. We were invited to participate in the 2012 Global Services 100 ranking, and applied for consideration out of hundreds of service providers. We did not pay to participate in this award. The criteria used to evaluate candidates for this award included our size and growth, customer satisfaction, employee management, our risk mitigation systems and depth of competence. As a result, we were featured as a 2012 Global Services 100 provider and included in the following GS100 categories: "Leading Mid-tier OPD Vendors" and "Mid-Tier Leaders—Testing Services".

Human capital

        Our human capital is a critical component of our business. Attracting and retaining skilled personnel is a key factor in our ability to grow our sales and meet client expectations. As of March 31, 2013, we had 5,846 personnel.

        We compensate our personnel through a combination of salaries, short-term bonuses and long-term incentives through our stock option plan that are based on the seniority of the personnel. We allocate bonuses based on a set of relevant key performance indicators (KPIs) within each department and role. Our stock option plan was adopted in March 2010 and nine of our senior managers were granted options pursuant to the plan. We amended the plan in December 2011 to increase the number of shares reserved and granted options to 40 additional senior personnel.

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        The breakdown of our personnel by country is as follows:

 
  Year ended March 31,  
 
  2011   2012   2013  

Location

                   

Russia

    1,860     2,145     2,076  

Ukraine

    1,633     2.129     2,582  

Romania

    562     655     732  

Poland

    47     149     238  

U.S. 

    61     53     83  

UK

    61     60     69  

Other locations

    49     63     66  
               

Total

    4,273     5,254     5,846  
               

        The breakdown of our personnel by department is as follows:

 
  Year ended March 31,  
 
  2011   2012   2013  

Department

                   

Engineering and development(1)

    3,718     4,556     4,927  

Human resources, sales and marketing(2)

    163     203     300  

Administration

    374     472     596  

Executive management

    18     23     23  
               

Total

    4,273     5,254     5,846  
               

(1)
This department consists of all of our IT professionals.

(2)
Human Resources includes recruitment and training departments.

        All of our personnel are salaried except for our personnel in Ukraine, the substantial majority of whom are defined as contractors but otherwise work on substantially equal basis and terms with our salaried employees in Russia. Members of our personnel do not belong to unions. We believe we have retained a good working relationship with our employees and contractors and have not experienced any labor disputes.

Training and development

        We grow and develop talent through a combination of professional training and mentorship programs involving senior technology specialists and industry experts. Each new hire is exposed to a training curriculum that covers methodology and industry standards, technologies and tools, management and communication skills, software engineering processes, and domain knowledge.

        Additionally, our six training centers throughout Russia and Ukraine, one training center in Romania and one training center in Poland conduct more than 196 training courses per year and host over 6,000 specialists (including our personnel and external students) for general training courses and client-specific education programs. We typically conduct between 64 and 117 resident training sessions per month with an average of twelve students per group, and fulfill an additional 760 training requests per month via our e-learning system. Additionally, during the year ending March 31, 2013 we completed 1,424 four-month foreign language training requests for English and Polish, as well as 404 month-long foreign language training requests using our e-learning tool. Our training program delivers different professional competencies, including disciplines rarely covered by university curriculums, such as system analysis, system architecture and project management.

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        Each new hire is placed on a probation period for up to six months. During this time, new hires become part of a mentoring, monitoring, coaching and motivational program. Each IT professional is assigned to a People Manager, who is responsible for project evaluation, performance appraisal and planning of professional development of the newcomer.

        Each IT professional undergoes a performance appraisal session at least once a year to measure technical performance, teamwork skills and possession of the core competencies required for his or her respective role within the company.

Recruitment and retention

        We believe our company's culture and reputation, along with the abundance of talent in the regions in which we operate, enhances our ability to recruit and retain sought-after IT professionals. As of March 31, 2013, we had a dedicated human resources staff of over 280 people that includes 100 recruiters and researchers. We have compiled a database of over 170,000 IT specialists who have experience and specific skills which are relevant to our business. Our database, along with our referral program, have accounted for 32% of all new hires in the year ended March 31, 2013. During the twelve months ended March 31, 2013, we hired on average more than 235 IT professionals each month.

        Our candidates come from a variety of sources, including external referrals, our regional network, our internal database and public sources (for example, HH, LinkedIn, Moy Krug, SuperJob and HR Sys (Jira)). As of March 31, 2013, approximately 85% of our personnel had over five years of industry experience and approximately 80% of our personnel hold Master's degrees (or Master's degree equivalents) or higher.

        In order to keep our attrition rate low, we focus on retaining our personnel through mandatory monthly evaluation reports, an employee rotation program and a targeted approach to enable different career opportunities within the company. We motivate and promote key personnel through our High Performers Club, which identifies personnel with strong management potential and offers them additional training as well as direct interaction with top management. We also offer Executive Training Programs and Corporate MBA Programs and Executive Leadership Programs at top schools including the University of Pennsylvania, Stanford University and MIT, in which several of our top managers have already participated.

Competition

        The markets in which we compete are changing rapidly and we face competition from global and Asia-based IT services providers as well as local providers based in CEE. We believe that the principal competitive factors in our business include breadth and depth of service offerings, technical expertise and industry knowledge, reputation and track record for high-quality and on-time delivery of work, effective personnel recruiting, training and retention, responsiveness to clients' business needs, ability to scale and financial stability and price. Our industry is split between low-cost vendors that provide inexpensive, commoditized services, and high-cost vendors that provide specialized and complex services at a premium cost. Our ability to provide complex, customized services at competitive cost has positioned us between these two classes of vendors.

        We face competition primarily from:

    IT outsourcing service providers in India, such as Cognizant Technology and Infosys;

    Global multinational consulting and outsourcing firms such as Accenture, Capgemini and CSC;

    Local CEE technology outsourcing IT service providers such as EPAM; and

    In-house IT departments of our clients and potential clients.

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        Although we do not often compete for engagements with providers in Brazil, China, Israel or Mexico, we may experience competition from vendors in these countries in the future. We believe that we have a strong competitive position in the market for complex software outsourcing and custom application development based on third-party industry rankings and client feedback. We believe our focus on complex software product development services, our skilled technical personnel base and continuous improvement of process methodologies, applications and platforms positions us to compete effectively in the future. Furthermore, we believe that the barriers to entry into our niche segment are relatively high, as new entrants must secure substantial amounts of financial and high-quality human resources to provide adequate services, flexibility and scale to compete for a comparable client base. See "Risk Factors—Risks related to our business and our industry—We operate in a highly competitive environment and may not be able to compete successfully."

Intellectual property rights

        We rely on a combination of intellectual property laws, trade secrets, confidentiality procedures and contractual provisions to protect our intellectual property. In addition, our intellectual property is protected under a number of international conventions. Russia, Ukraine, Romania, Poland and the U.S. are participants to the Berne Convention for the Protection of Literary Artistic Works and the Stockholm Convention establishing the World Intellectual Property Organization. Russia, Ukraine and the U.S. participate in the Universal Copyright Convention adopted under the Geneva Convention; and the U.S., Ukraine and Romania participate in WTO agreements including TRIPS and ITA. We also rely on local civil legislation to protect our intellectual property rights.

        We customarily enter into master services agreements or general framework agreements with our clients that include terms for the transfer and use by our clients of intellectual property created by us. All intellectual property rights created by our employees and contractors are transferred to us subject to local laws and regulations and terms of agreements entered into with such employees and contractors. Most of our software development services are specifically ordered and custom-built for the client, and therefore all intellectual property rights created by our employees and contractors are transferred to the client at the time of delivery. Furthermore, our agreements with clients typically contain provisions that allow us to grant a perpetual, worldwide, royalty-free, non-exclusive, transferable and non-revocable license to our clients to use our own intellectual property, but only to the extent necessary in order to use the software or systems we developed for them. Historically, we have rarely relied on and granted licenses under these provisions, but may do so in the future as we seek to commercialize our solutions. Sometimes the intellectual property rights for some of our software are not registered, which may expose us to intellectual property risks if we rely on these provisions to grant rights to our unregistered software in the future. If requested by clients we may incorporate third-party software into our software development for clients. In these cases, we acquire all necessary licenses for such software once we reach a preliminary agreement with clients. Intellectual property rights for such third-party software are always subject to separate license agreements with third parties. We are in the process of developing our own intellectual property rights for products which we are planning to sell to end users based on license agreements with end users. Recently we have acquired intellectual property rights for the Horizon software from one of our financial services clients, that we are planning to sell to other end users. See "Risk Factors—Risks related to our business and our industry—We may be subject to third-party claims of intellectual property infringement that could be time-consuming and costly to defend."

Facilities

        As of March 31, 2013, we occupied 17 facilities across eight countries, totaling 52,602 square meters of office space. As of March 31, 2013 we had the capacity for 6,213 workplaces, which leaves us with a 17.7% reserve for growth. We lease all of our facilities except for one building in Romania,

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which we acquired as part of our acquisition of Luxoft Professional Romania S.R.L. (formerly ITC Networks) in 2008.

        The table below sets forth our office locations and the number of personnel at each office as of March 31, 2013, excluding all on-site personnel and any personnel on long-term leave.

Location
  Total
square
meters
  Personnel   Principal Use(1)

Kiev, Ukraine

    18,063     1,813   Delivery center

Moscow, Russia

    9,602     977   Delivery center; sales & marketing

Bucharest, Romania

    6,678     599   Delivery center; sales & marketing

Omsk, Russia

    4,315     415   Delivery center

Odessa, Ukraine

    5,347     513   Delivery center

St. Petersburg, Russia

    3,475     403   Delivery center

Dnipropetrovsk, Ukraine

    1,602     198   Delivery center

Krakow, Poland

    1,199     35   Delivery center; sales & marketing

Welwyn Garden City, UK

    537     37   Delivery center

Ho Chi Minh City, Vietnam

    574     38   Delivery center

Dubna, Russia

    504     43   Delivery center

New York, NY

    251     7   Delivery center; sales & marketing

Bellevue, WA

    172     8   Delivery center; sales & marketing

Menlo Park, CA

    99     2   Sales & marketing

Nicosia, Cyprus

    88     1   Sales & marketing

Wroclaw, Poland

    80     21   Delivery center

London, UK

    16     1   Sales & marketing
             

Total

    52,602     5,111    
             

        The table above does not include our office in Zug, Switzerland, which was opened after March 31, 2013.

Legal proceedings

        Although we may, from time to time, be involved in litigation and claims arising out of our operations in the normal course of business, we are not currently a party to any material legal proceeding, nor are we aware of any material legal or governmental proceeding against us, or contemplated to be brought against us.

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MANAGEMENT

Directors, director nominees, executive officers and key employees

        The following table sets forth the name, age, and position as of the date of this prospectus regarding each of our directors, executive officers and director nominees.

Name
  Age   Position

Executive officers

         

Dmitry Loshchinin

    46   Chief Executive Officer and President

Mikhail Friedland

    46   Executive Vice President

Roman Yakushkin

    41   Chief Financial Officer

Przemyslaw Berendt

    32   Vice President Global Marketing

Roman Trachtenberg

    37   Managing Director, Luxoft North America

Vadim Iasenik

    42   Managing Director, Western Europe

Directors

         

Glen Granovsky

    50   Director

Stephen Eppleston*

    46   Director*

Yevgeny Senderov

    35   Director

Brian Monk

    60   Director

Anatoly Karachinskiy

    52   Director

Thomas Pickering*

    82   Director Nominee*

*
Mr. Eppleston's term as director will end upon the effectiveness of the registration statement of which this prospectus forms a part, at which time he will be replaced by Mr. Pickering.

Executive officers

Dmitry Loshchinin—Chief Executive Officer and President

        Dmitry Loshchinin has served as our Chief Executive Officer since our inception in 2000. Mr. Loshchinin started his professional career as a software engineer in the early 1990's in Germany. Before joining us, Mr. Loshchinin served in management roles within leading software companies including Kerntechnik, Entwicklung, Dinamyk GmbH (KED), Siemens Nixdorf Informationssysteme, AG (SNI), and IBM Corp. In 1998, Mr. Loshchinin joined IBS Group, where he successfully implemented the "SAP R/3" enterprise resource planning software practice before taking charge of IBS Group's initiative to offer offshore software services. This initiative eventually became Luxoft. Mr. Loshchinin holds a Master of Science degree in Applied Math from Moscow State University and completed an executive education program at the University of Pennsylvania's Wharton School of Business.

Mikhail Friedland—Executive Vice President

        Mikhail Friedland has served as our Executive Vice President since 2006. Mr. Friedland oversees our services and industry verticals, as well as our corporate sales and overall strategy for winning business. Mr. Friedland has more than 20 years of experience in the IT and software services industry. Prior to joining us, Mr. Friedland worked as a software engineer for Merrill Lynch, Lehman Brothers, and Medco (now Merck). In 1993, Mr. Friedland co-founded IT Consulting International (ITCI), which provided consulting and later outsourcing services for various U.S. clients including AIG, Citibank, Lehman Brothers, Markit, Morgan Stanley and Bunge. In 2006, we acquired ITCI. Mr. Friedland completed an executive education program at the University of Pennsylvania's Wharton School of Business.

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Roman Yakushkin—Chief Financial Officer

        Roman Yakushkin has served as our Chief Financial Officer since 2006. Mr. Yakushkin has over 15 years of financial experience. Prior to joining us, Mr. Yakushkin held several senior financial positions with a number of leading companies including MTS (Mobile Telesystems), FESCO and Louis Dreyfus. Mr. Yakushkin holds a Master of Business Administration degree from INSEAD and a University degree in Oriental Studies from Far Eastern State University. He is also a Chartered Financial Analyst.

Przemyslaw Berendt—Vice President Global Marketing

        Przemyslaw Berendt joined us as Managing Director for Poland in 2010, and has served as our Vice President of Global Marketing since April 2011. Mr. Berendt is responsible for our overall marketing strategy. Prior to joining us, Mr. Berendt served in the Global Business Services division of Procter & Gamble, and as a branch manager of Betware, a mid-size, international software development company. Mr. Berendt holds a Master of Science degree in Computer Science from DePaul University, a Bachelor of Arts degree in Computer Science from the National-Louis University, and an Associate's Degree in Programming from Blackhawk Technical College.

Roman Trachtenberg—Managing Director, Luxoft North America

        Roman Trachtenberg joined us in 2009 as Financial Services Accounts Director, and has served as CEO of Luxoft North America since 2011. Mr. Trachtenberg has more than 15 years of technology experience, and has managed global organizations with more than 500 employees in the financial services, consumer and real estate sectors. Prior to joining us, Mr. Trachtenberg served as Chief Operating Officer at SMINEX LLC and as Vice President of Operations at Rosbuilding Investment Company, both Russian private equity firms. Mr. Trachtenberg has also held management positions at companies including Republic National Bank of New York, Gateway Inc., Deutsche Bank and AIG. Mr. Trachtenberg holds a Bachelor's degree in Business Administration from Southern State University.

Vadim Iasenik—Managing Director, Western Europe

        Vadim Iasenik joined us in 2010 as Managing