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Ienergizer Limited LSE:IBPO London Ordinary Share GG00B54NMG96 ORD 1P
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iEnergizer Limited ANNUAL RESULTS FOR THE YEAR ENDED 31 MARCH 2021

24/06/2021 7:00am

UK Regulatory (RNS & others)


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RNS Number : 9194C

iEnergizer Limited

24 June 2021

iEnergizer Ltd.

("iEnergizer" or the "Company" or the "Group")

ANNUAL RESULTS FOR THE YEARED 31 MARCH 2021

iEnergizer, the technology services and media solutions leader for the digital age, reports annual results for the year ended March 31, 2021 with continued revenue and margin growth generating a substantial return and exceeding management expectations during the worst pandemic in living memory. Improved results in a full 12 months of pandemic are testament to staff and management in the most testing of years. This strong performance, together with the recurring nature and longevity of contracts, gives the Board confidence to continue the progressive dividend policy and propose a 8.4p final dividend payment to shareholders, representing a total dividend payment of 14.12p, a 4% increase compared to 2020.

Financial Highlights:

Enhanced profitability with revenue growth and margin improvements achieved through continued focus on higher margin work, deepening of existing customer relationships and accrual of several new customers, alongside active cost management and productivity gains from the Group's transition to remote working .

 
 --              Total Revenue up 2.8% at $200.3m (2020: $194.9m) 
 --              Service Revenue up 2.6% at $196.0m (2020: $191.0m) 
 --              EBITDA up 7.6% at $64.3m (2020: $59.7m) representing an EBITDA 
                  margin of 32.1% (2020: 30.7%) 
 --              Operating Profit up 2.6% at $57.6m (2020: $56.1m) 
 --              Profit Before Tax (PBT) up 1.8% at $53.5m (2020: $52.5m) 
 --              Profit After Tax (PAT) up 8.7% at $48.9m (2020: $45.0m) 
 --              Earnings per share $0.26 (2020: $0.24) 
 --              Net debt of $115.9m (2020: Net Cash $1.6m) following a special 
                  dividend of 49.4p per ordinary share ($127.3m), representing 
                  1.8x EBITDA for the period 
 --              Entered into new $165m five-year senior secured term loan facility 
                  on more favourable terms compared with previous facility 
 --              Total dividend of 14.12p per ordinary share ($36.60m) (2020: 
                  13.6p) including interim dividend of 5.72p, an increase of 4% 
 

Operational Highlights:

Continued focus on higher margin work and success in securing further work with existing and new customers, supported by new product launches and growth in digital learning and entertainment space.

-- Despite the COVID-19 pandemic, iEnergizer increased share of revenue from some of its key international clients operating in growth verticals of Media & Entertainment and Online Training & Education ; and added several new customers in E-Learning and Healthcare & Pharmaceuticals industry segments

-- Business Process Outsource revenue grew 2.6% year on year, maintaining 63.3% of revenue share (63.2% in 2020) as some of its key customers continued to increase workload volumes, and the segment also added several new customers contributing $5.8m to Group revenue, which compensated for a temporary reduction in revenue from the travel segment, which was impacted by COVID-19 restrictions . The focus remained on adding new customers in growth verticals like Healthcare and Entertainment, and on generating recurring revenue streams from long-term customer relationships across all verticals

-- Business Process Outsource services grew EBITDA margins to 34.9% (2020: 33.1%) on account of increased volumes from BPO's largest and high margin international media and entertainment vertical, offsetting the negative impact on smaller verticals (low-margin India based travel segment)

-- Content Services segment grew its revenue 2.6% over fiscal 2021 on account of increased volumes from key clients and added several new clients primarily in its E-Learning and Digital training divisions contributing $1.8m to Group revenue, which also compensated for some temporary revenue reduction impact due to delays in launching of some publishing related projects owing to global lockdowns

-- Content Services EBITDA margins exceeded 27% owing to higher efficiencies achieved due to work from home operations resulting in productivity gains and overheads related cost savings

-- Maintained growth in EBTIDA through fiscal 2021 due to revenue growth and the impact of our continued focus on cost saving initiatives:

 
            o              Growth in higher margin International BPO business 
                            and E-Learning business have contributed to the overall 
                            Group revenue and profitability 
            o              Invested in technology reducing throughput time of 
                            different processes leading to productivity gains resulting 
                            in higher margins 
            o              Invested in IT infrastructure to facilitate smooth 
                            transition to an efficient remote working operation 
            o              Promoted effective utilization of resources through 
                            increasing shift utilization at the work place operating 
                            on a 24/7 delivery model out of Group's India based 
                            delivery centers in line with the requirements of different 
                            customers 
 

-- US based sales team pursuing strategies to: enhance and grow key accounts; identify and win new business through existing and new customers, with special focus on Healthcare, Digital Education and Digital Training sectors ; cross-sell and generate leads for new service lines

-- Refinancing - As previously announced to the market, iEnergizer group entered into a 5-year senior secured term loan facility for an aggregate amount of $165,000,000, including a $15,000,000 revolving credit facility. The senior secured term loan facility bears floating interest rate per annum equal to LIBOR plus 3.5% per annum (with a 0.75% LIBOR floor), which was used to refinance its existing term loan in full and utilize the balance amounts to return cash to the shareholders subsequently paid as a Special Dividend (49.4 p per share)

-- COVID-19 impact - The Group has taken important steps to ensure that it is well positioned to fully support the requirements, health and wellbeing of its clients and employees in this unprecedented period. The business is operating at above 95% efficiency across all of its service lines as most employees have now been successfully transitioned to remote working. The Group's balance sheet, net cash position and its long-term customer relationships remain strong

Dividends:

 
 --              In line with the progressive dividend policy, the Company 
                  is pleased to announce a final dividend of 8.4p with the Dividend 
                  record date of 2 July, 2021 in addition to the interim dividend 
                  of 5.72p which was paid in November 2020. 
 --   The Company's Ordinary Shares are expected to go ex-dividend 
       on 1 July, 2021 and the dividend is expected to be paid on 
       31 July, 2021 
 --              These dividend payments reflect the Company's continued strong 
                  performance through the period and the Board's confidence 
                  in the Group's business strategy and growth prospects 
 

Marc Vassanelli, Chairman of iEnergizer, commented:

"We are delighted to report another strong performance by iEnergizer, achieving growth in revenue despite challenges faced due to the COVID-19 pandemic and as guided on 13th January 2021 exceeding market expectations for EBITDA, due to the significant progress made by colleagues across all divisions, focusing on high margin revenue.

"Reflecting the Group's strong balance sheet and the cash generative nature of the business, coupled with the Board's confidence in the business strategy and growth prospects, we are pleased to announce a final dividend of 8.4p for fiscal 2021, in line with the dividend policy adopted in 2019.

"Importantly, we have secured several new customers across all of our divisions, as well as maintaining and deepening relationships with our existing key customers. The business has maintained a successful focus on recurring revenue streams, by capitalizing on iEnergizer's advantageous position to service existing and new customers' needs in the evolving digital technology landscape.

"The first three months of fiscal 2022 have started well continuing the recent positive trend with extensions of existing contracts and new contract win especially in the Healthcare area and we look forward to another strong performance in 2022.

"During what has been an unprecedented year, we remained in close discussions with our clients to ensure that we meet their needs and requirements throughout, while supporting our staff to work safely and remotely as per government guidelines. I am proud of the way the team has delivered an uninterrupted service to clients with maximum efficiency across all our services.

"With iEnergizer's solid foundation, proven strength in operational execution, new sales initiatives, differentiated offerings, healthy balance sheet, and with substantial opportunities for further growth identified, the Board is confident in the Company's continued growth path as a unique, end-to-end digital solution enabler."

-Ends-

 
 Enquiries: 
 iEnergizer Ltd.                                      +44 (0)1481 242233 
 Chris de Putron 
 Mark De La Rue 
 
 FTI Consulting - Communications adviser              +44 (0)20 3727 1000 
 James Styles / Eleanor Purdon 
 
 Arden Partners-Nominated adviser and broker          +44 (0)20 7614 5900 
 Steve Douglas / Antonio Bossi (Corporate Finance) 
  James Reed-Daunter (Equity Sales) 
 

Company Overview

iEnergizer is an AIM listed, independent, integrated software and service pioneer. The Company is a publishing and technology leader, which is set to benefit from the dual disruptive waves of big data and the cloud in the digital age. With its expertise and cutting-edge technology, iEnergizer is uniquely positioned to facilitate the transformation to a digital world and support clients in this transition.

iEnergizer provides services across the entire customer lifecycle and offers a comprehensive suite of Content & Publishing Process Outsourcing Solutions (Content Services) and Customer Management Services (Business Process Outsource) that include Transaction Processing, customer acquisition, customer care, technical support, billing & collections, dispute handling, off the shelf courseware, and market research & analytics using various platforms including voice - inbound and outbound, back-office support, online chat, mail room and other business support services.

Our award-winning content and publishing services provide complete, end-to-end solutions for information providers and all businesses involved in content production. Our differentiation is in focusing on solutions and services that enable customers to find new ways to monetize their content assets, measurably improve performance, and increase revenues across their entire operation. From digital product conception, content creation and multichannel distribution, to post-delivery customer and IT support, we align ourselves with our customers as they streamline their operations to maximize cost-efficiencies and improve their ROI while connecting them with new, digitally savvy audiences.

Chairman's Statement

The financial performance of iEnergizer in fiscal 2021 reflects the outcome of continued volume growth from existing key customer relationships, acquiring new customers across all verticals, which together with the adoption of new technology, resulted in 1.8% growth in the Group's Profit Before Taxation (PBT) despite the challenges faced due to the ongoing COVID-19 pandemic impacting several industries across the globe. Our strategy, focused on offering differentiated end-to-end services, supports long-term value creation for our shareholders.

The underlying businesses of each division have performed well. The BPO division posted revenue growth of 2.6%, as the division added several new customers in the promising healthcare space in addition to growing wallet shares from its existing International BPO customers and also increased its EBITDA margins from 33.1% to 34.9%. The Content Services division also grew revenue by 2.6% and has increased its EBITDA margins to 27.2% owing to growth in demand for online education and training

The overall outsourcing global market continues to expand, but the functions of outsourcing are changing dramatically. The number of preferred vendors in any given contract is consolidating and the functions outsourced have become increasingly sophisticated. iEnergizer is well positioned to benefit from this trend as an essential long-term-partner that delivers high quality, complex processes. The Company has developed end-to-end Lifecycle Management (LCM) solutions, so that as companies streamline and consolidate their operations, iEnergizer can act as a preferred vendor and single partner to meet all of these needs while providing maximum cost-efficiencies.

Investments in technology and IT infrastructure facilitating a smooth transition to work from home for operations, development and marketing of off the shelf courseware, a diversified client base and robust service offering with recurring revenues, provides us with good visibility and a positive outlook towards future performance.

The Management

Our management team, through their strength of leadership, has helped iEnergizer grow continuously over the last decade supported by a fantastic team of dedicated colleagues across the business. The entrepreneurial approach has been a true asset to the Company and it has enabled us to identify new markets, customers and product lines in addition to providing a consistently high-quality service to our clients.

I would like to thank each and every one of our colleagues for their commitment to iEnergizer.

Marc Vassanelli

Chairman of the Board

Executive Director's Statement

Fiscal 2021 has been a year of strong growth marked by considerable profitability improvements through sustained maintenance of key customer contracts focussing on the existing business, generating revenue from new service lines and customers together with disciplined cost management.

Financial Overview

Revenues grew to $196.0m (2020: $191.0m) and PBT grew to $53.5m (2020: $52.5m). Growth in profit is primarily on account of growing profitable vendor contracts with key customers supported by effective management of costs across all verticals of the Company.

By service line, the BPO (Business Process Outsource) division posted revenue growth of 2.6%, as key clients, specifically from the Media & Entertainment segments, continued to increase volumes throughout the year, which also compensated for the reduction in revenue from COVID-19 impacted business lines. The top five customers across the BPO division together grew revenues 8.7% over fiscal 2020, reflective of both retaining key clients and growing 'wallet share' within key accounts along with addition of several new clients.

The Content Delivery division posted revenue growth of 2.6% due to increased volumes from key clients and addition of several new clients. The division also grew its EBITDA margins to 27.2%, with management team being able to control operational costs by utilizing resources effectively to achieve productivity gains and cost savings. The Content delivery segment is focusing on: promotion of E-Learning and Digitization services in line with the industry growth expectations; growing by renewing key contracts with existing customers; and entering into profitable contracts with new clients. The Content division has continued to focus on expanding its customer base for new service lines such as SciPris and off-the-shelf courseware services and has also continued to bid for the US Government's digital conversion projects.

Business Review

We have aligned the Company with emerging market opportunities to provide digital technology and solutions, including an increased demand within the Healthcare and Pharmaceutical sector.

Volumes processed for key customers continued to increase, without notable additional work-force resource, reflective of the capability to port expertise from one discipline to another and to utilize technology solutions.

We are proud of our service quality, which is evident in a client retention rate of over 90% and it has also benefitted the Company by an increase in the volume of new work generated from existing clients. We continue to up-sell additional services that are, often more complex and at a higher margin. Our direct customers include a number of the world's largest publishers, Fortune 500 corporations and professional service providers.

We have invested in technology across both our segments - allowing generation of increased margins through automation. On the content side, the Company added new customers on its SaaS platform "SciPris" which allows faster and upfront collections for our clients and has focussed on marketing of Off-The-Shelf (OTS) courseware through direct platform, tradeshows and online retail partners; while we continue to develop and add new content; we offer high margin custom content development services as per specific customer requirements. For BPO, we have developed the use of automation tools such as chatbots to allow basic information capture before human intervention is required. This allows a focus of man hours on technical issue resolution, driving client dependence on services.

Our focus is to continue to provide enterprises with an integrated suite of solutions. Our expertise helps companies in any industry to apply digital technology to monetize content, produce valuable new product offerings, and increase revenues across their entire operation.

From digital product conception, content creation and multichannel distribution, to post-delivery customer and IT support, we are positioned to work alongside our customers as they streamline their operations to maximise their cost-efficiencies and improve their ROI while connecting them with the growing number of digitally savvy audiences.

We have continuously worked hard to develop our differentiated offering and advantageous market positioning to keep ahead of our competitors. Healthcare, Online Education and E-Learning related Market opportunities created in recent times are being serviced with a higher degree of focus and these areas are all expected to contribute favourably towards the Company's success.

The Group's outsourcing services remain structured around industry-focused services, across its market segments. The verticals served include: Banking Financial Services and Insurance (BFSI); Publishing; Non-Publishing; Media & Entertainment; Information Technology; Healthcare and Pharmaceuticals.

Dividend

The Board is pleased to announce that on the back of its strong growth and cash generation this year, it is proposing to pay a final dividend of 8.4p per share with dividend record date of 2 July, 2021. The Company Ordinary Shares are expected to go ex-dividend on 1 July, 2021 and the dividend is expected to be paid on 31 July, 2021.

Outlook

As we look into fiscal 2022 and beyond, we see a sizeable project pipeline, in both enterprise solutions across the Group. These relate to continued development of the course material and Learning Management Systems (LMS) for the Off-The-Shelf (OTS) content service, combined with continued solid momentum in our Business Process Outsource segment. We expect the business to continue to deliver on its strategy, and we continue to keep a close eye on our costs, as the revised structure and new initiatives continue to take effect in the content delivery segment. The operational leverage in the business model enables us to capitalise substantially on revenue growth opportunities presented in the pipeline.

With a solid foundation, strong operational execution, new sales initiatives, focused differentiated offerings, a healthy balance sheet, and the substantial opportunities identified, the Board has confidence that the Company is well-set on its growth path as a unique, end-to-end digital solution enabler.

Anil Aggarwal

Chief Executive Officer and Executive Director

BOARD AND EXECUTIVE MANAGEMENT

Marc Vassanelli (50) - Chairman

Mr. Vassanelli brings extensive industry knowledge and experience of successfully growing businesses, from established business services (while CFO of ConvergeOne) to media start-ups (during his time as CEO and President of MV3 Ltd). He brings comprehensive expertise in change management, having successfully managed the integration of Equiniti and Xafinity to form Equiniti Group (a $510m+ revenue UK BPO firm). He also led the turnaround of the $1.5bn EMEA region of Marsh (a portfolio company of Marsh & McLennan) ahead of becoming the Marsh EMEA CFO. Mr. Vassanelli's previous strategic, operational and financial roles spanning private equity, consulting and banking across multiple industries, will bring invaluable insight and knowledge to the iEnergizer Board. Mr. Vassanelli sits on the audit, remuneration and nomination committees of the Company.

Anil Aggarwal (60) - Chief Executive Officer & Executive Director

Mr. Aggarwal is a first-generation entrepreneur and is the founder and promoter of iEnergizer. He has promoted and managed several successful businesses in various territories including Barker Shoes Limited in the UK. Mr. Aggarwal is primarily responsible for business development, strategy and overall growth for the company.

Ashish Madan (59) - Chief Financial Officer & Executive Director

Mr. Madan is a business development and marketing professional with over 33 years of experience in retail and customer services industry. As a CFO of iEnergizer Ltd, Mr. Madan contributes to all aspects of strategic business development and decision-making. Previously he has held senior positons in the media, publishing, and retail sectors, overseeing public and press relations as well as internal communications and has a long track record operational, marketing and, relationship success.

Christopher de Putron (47) - Non-Executive Director

Mr. de Putron is a financial services professional with over 25 years' experience in the fiduciary and funds industry in both Guernsey and Bermuda. He is the Managing Director of Jupiter Trustees Limited, a Guernsey based independent fiduciary firm and Jupiter Fund Services Limited a Guernsey based independent fund administration company, and a director of Link Market Services (Guernsey) Limited. Previously he has worked at fiduciary companies in both Guernsey and Bermuda including Rothschild, Bank of Bermuda and HSBC. Mr. de Putron has a business economics degree from the University of Wales and is a member of the Society of Trust and Estate Practitioners. Mr. de Putron sits on the audit, remuneration and nomination committees of the Company.

Mark De La Rue (52) - Non-Executive Director

Mr. De La Rue is a Fellow of the Association of Chartered Certified Accounts (ACCA) and a financial services professional with over 28 years' experience in the accounting and fiduciary industries in Guernsey. He is a director of Jupiter Trustees Limited, a Guernsey based independent fiduciary firm and Jupiter Fund Services Limited a Guernsey based independent fund administration company, and a director of Link Market Services (Guernsey) Limited.

DIRECTORS' REPORT

The Directors present their report and the financial statements of iEnergizer Limited ("the Company") and its Subsidiaries (collectively the "Group"), which covers the year from 1 April 2020 to 31 March 2021.

Principal activity and review of the business

The principal activity of the Company is that of providing Content Transformation Services and Business Process Outsourcing Services.

Results and dividends

The trading results for the year and the Group's financial position at the end of the year are shown in the attached financial statements. The Directors have recommended payment of a dividend of 8.4p per share for a total dividend of 14.12p for the year (FY2020 13.6p).

Review of business and future developments

A review of the business and expected future developments of the Company are contained in the Chairman's statement attached to this report.

Directors and Directors' interests

The Directors of the Company during the year are attached to this report.

Director's remuneration

The Director's remuneration for the year ended 31 March 2021 was:

 
 Particulars                            31 March 2021                     31 March 
                                                                              2020 
--------------------------------  -------------------------  --------------------- 
 Transactions during the year 
 Remuneration paid to directors                           $                      $ 
 Chris de Putron                                     13,086                 12,639 
 Mark De La Rue                                      13,086                 12,639 
 Marc Vassanelli                                     39,636                 37,917 
 Anil Aggarwal                                           --                     -- 
 Ashish Madan                                            --                     -- 
 

Directors share option

During the year ended 31 March 2021, no key management personnel have exercised options granted to them.

Related party contract of significance

The related party transactions are noted in note 28 of the financial statement.

Internal control

The Directors acknowledge their responsibility for the Company's system of internal control and for reviewing its effectiveness. The system of internal control is designed to manage the risk of failure to achieve the Company's strategic objectives. It cannot totally eliminate the risk of failure but will provide reasonable, although not absolute, assurance against material misstatement or loss.

Going concern

After making enquiries, the Directors have a reasonable expectation that the Company will have adequate resources to continue in operational existence for the foreseeable future. For this reason, they continue to adopt the going concern basis in preparing the financial statements.

Directors' responsibilities

The Directors are responsible for preparing the Directors' reports and consolidated financial statements for each financial year, which give a true and fair view of the state of affairs of the Group and of the profit or loss of the Group for that year. In preparing those financial statements the Directors are required to:

 
 --   Select suitable accounting policies and apply them consistently; 
 --   Make judgments and estimates that are reasonable and prudent; 
 --   State whether International Financial Reporting Standards have 
       been followed subject to any material departures disclosed and 
       explained in the financial statements; and 
 --   Prepare consolidated financial statements on a going concern 
       basis unless it is inappropriate to presume that the Group will 
       continue in business. 
 

The Directors confirm that the financial statements comply with the above requirements.

The Directors are responsible for keeping proper accounting records, which disclose with reasonable accuracy at any time, the financial position of the Company and of the Group to enable them to ensure that the financial statements comply with the requirements of the Companies (Guernsey) Law, 2008. They are also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

The Directors are responsible for the maintenance and integrity of the corporate and financial information included on the Group's website.

Legislation in Guernsey governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.

To the best of our knowledge and belief:

 
 --   The financial statements have been prepared in accordance with 
       International Financial Reporting Standards; 
 --   The financial statements give a true and fair view of the financial 
       position and results of the Group; 
 

Auditors

All of the current Directors have taken all the steps that they ought to have taken to make themselves, aware of any information needed by the Company's Auditors for the purposes of their audit and to establish that the Auditors are aware of that information. The Directors are not aware of any relevant audit information of which the Auditors are unaware.

On behalf of the board

_______________________________

Director

CORPORATE GOVERNANCE

The Directors recognise the importance of good corporate governance and have chosen to apply the Quoted Companies Alliance Corporate Governance Code (the 'QCA Code'). The QCA Code was developed by the QCA in consultation with a number of significant institutional small company investors, as an alternative corporate governance code applicable to AIM companies. The underlying principle of the QCA Code is that "the purpose of good corporate governance is to ensure that the company is managed in an efficient, effective and entrepreneurial manner for the benefit of all shareholders over the longer term". Statement of Compliance with the QCA Corporate Governance Code is provided as a separate section under AIM Rule 26 on company website www.ienergizer.com .

Board of Directors

The Board is responsible for formulating, reviewing and approving the Company strategy, budgets and corporate actions. Following Admission, the Directors intend to hold Board meetings at least bi-annually and at such other times as they deem necessary. The Board comprises of two Executive Directors, Anil Aggarwal and Ashish Madan, and three Non-Executive Directors, Chris de Putron, Mark De La Rue and Marc Vassanelli (Chairman). The resume of the board members is as outlined in the statement attached to this report.

The Executive Directors brings knowledge of the Business Process Outsourcing industry, the investment industry and a range of general business skills. The Non-Executive Directors form a number of committees to assist in the governance of the Company. Details are below.

All Directors have access to independent professional advice, at the Company's expense, if and when required.

Sub-Committees

The Board has appointed the three sub-committees outlined below. The sub-committees will meet at least once each year.

Audit Committee

The Audit committee comprises of Marc Vassanelli as chairman and Chris de Putron. The committee is responsible for ensuring that the financial performance of the Company is properly monitored and reported on. The committee is also responsible for meeting with the auditors and reviewing findings of the audit with the external auditor. It is authorised to seek any information it properly requires from any employee and may ask questions of any employee. It will meet the auditors once per year, without any member of management being present and is also responsible for considering and making recommendations regarding the identity and remuneration of such auditors.

Remuneration Committee

The Remuneration committee comprises of Marc Vassanelli as chairman and Chris de Putron. The committee will consider and recommend to the Board the framework for the remuneration of the executive directors of the Company and any other senior management. It will further consider and recommend to the Board the total individual package of each executive director including bonuses, incentive payments and share options or other share awards. In addition, subject to existing contractual obligations, it will review the design of all share incentive plans for approval by the Board and the Company's shareholders and, for each such plan, will recommend whether awards are made and, if so, the overall amount of such awards, the individual awards to executive directors and performance targets to be used. No director will be involved in decisions concerning his own remuneration.

Nomination Committee

The Nomination committee comprises Chris de Putron as chairman and Marc Vassanelli. The committee will consider the selection and re-appointment of Directors. It will identify and nominate candidates to all board vacancies and will regularly review the structure, size and composition of the board (including the skills, knowledge and experience) and will make recommendations to the Board with regard to any changes.

Share Dealing

The Company has adopted a share dealing code (based on the Model Code), and the Company will take all proper and reasonable steps to ensure compliance by Directors and relevant employees.

The City Code on Takeovers and Mergers

The Code applies to offers for all listed and unlisted public companies considered by the Panel resident in the UK, the Channel Islands or the Isle of Man. The Panel will normally consider a company to be resident only if it is incorporated in the United Kingdom, the Channel Islands or the Isle of Man and has its place of central management in one of those jurisdictions. Although the Company is incorporated in Guernsey and its place of management is in Guernsey, the Panel considers that the code does not apply to the Company. It is emphasised that although the Ordinary Shares will trade on AIM, the company will not be subject to takeover regulations in the UK; however, certain provisions analogous to parts of the Code in particular the making of mandatory offers have been incorporated into the Articles, which are available on the Company website, www.ienergizer.com .

Disclosure and Transparency Rules

Majority Shareholdings:

The following persons are directly or indirectly interested (within the mean of Part VI of FSMA and DTR5) in three percent or more of the issued share capital of iEnergizer:

 
 Name                           # of Ordinary Shares   % of Issued Share Capital 
 EICR (Cyprus) Limited                   157,196,152                       82.68 
                               ---------------------  -------------------------- 
 AXA Investment Managers U.K              12,253,034                        6.44 
                               ---------------------  -------------------------- 
 Miton Asset Mgt                           6,232,750                        3.28 
                               ---------------------  -------------------------- 
 

Control by Significant Shareholder

Mr. Anil Aggarwal, through private companies-mainly Geophysical Substrata Ltd. (GSL) and EICR (Cyprus) Limited (EICR), owns a significant percentage of the Company. Mr. Aggarwal could exercise significant influence over certain corporate governance matters requiring shareholder approval, including the election of directors and the approval of significant corporate transactions and other transactions requiring a majority vote. Also, Mr Aggarwal holds ultimate Control over the company.

The Company, Arden Partners (Broker & Nomad), GSL, EICR and Mr. Anil Aggarwal have entered into a relationship agreement to regulate the arrangements between them. The relationship agreement applies for as long as GSL/EICR directly or indirectly holds in excess of thirty per cent of the issued share capital of the Company and the Company's shares remain admitted to trading on AIM. The relationship agreement includes provisions to ensure that:

i. the Board and its committees are able to carry on their business independently of the individual interests of EICR;

ii. the constitutional documents of the Company are not changed in such a way which would be inconsistent with the Relationship Agreement;

iii. all transactions between the Group and EICR (or its affiliates) are on a normal commercial basis and concluded at arm's length;

   iv.   EICR shall not: 

(i) exercise the voting rights attaching to its Ordinary Shares; or

(ii) procure that the voting rights attaching to its Ordinary Shares be exercised,

so as (a) to appoint any person who is connected to EICR to the Board if, as a direct consequence of such appointment, the number of persons connected to EICR appointed to the Board would exceed the number of independent Directors appointed to the Board, unless such appointment(s) has been previously approved by the nomination committee of the Board constituted by a majority of independent Directors; or (b) to remove any independent Director from the Board, unless such removal has previously been recommended by a majority of the independent Directors, excluding the independent Director in question; or (c) to cancel the Admission, unless the cancellation has previously been recommended by a majority of the independent Directors; and

v. certain restrictions are put in place to prevent interference by the Shareholder with the business of the Company.

Independent auditor's report to the members of iEnergizer Limited

Opinion

Our opinion on the financial statements is unmodified

We have audited the Group financial statements of iEnergizer Limited for the year ended 31 March 2021 which comprise the Consolidated Statement of Financial Position, the Consolidated Income Statement, the Consolidated Statement of Comprehensive Income, the Consolidated Statement of Changes in Equity and the Consolidated Statement of Cash Flows and notes to the financial statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and International Financial Reporting Standards (IFRSs) as adopted by the European Union.

In our opinion, the financial statements:

-- give a true and fair view of the state of the Group's affairs as at 31 March 2021 and of the Group's profit for the year then ended;

   --    are in accordance with IFRSs as adopted by the European Union; and 
   --    comply with The Companies (Guernsey) Law, 2008. 

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs UK)) and applicable law. Our responsibilities under those standards are further described in the 'Auditor's responsibilities for the audit of the financial statements' section of our report. We are independent of the Group in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC's Ethical Standard as applied to listed entities, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Conclusions relating to going concern

We are responsible for concluding on the appropriateness of the directors' use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify the auditor's opinion. Our conclusions are based on the audit evidence obtained up to the date of our report. However, future events or conditions may cause the group to cease to continue as a going concern.

In our evaluation of the directors' conclusions, we considered the inherent risks associated with the Group's business model including effects arising from Covid-19, we assessed and challenged the reasonableness of estimates made by the directors and the related disclosures and analysed how those risks might affect the Group's financial resources or ability to continue operations over the going concern period.

Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the Group's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.

In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.

The responsibilities of the directors with respect to going concern are described in the 'Responsibilities of directors for the financial statements' section of this report.

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     Overview of our audit approach 
       *    Overall materiality: $2,676,260 , which represents 5% 
            of the Group's profit before taxation; 
 
 
 
       *    Key audit matters were identified as 
 
 
      a. Revenue recognition 
      b. Employee benefits obligation liabilities are understated 
      c. Payment to fictitious employees 
      d. Impairment of goodwill and intangible assets with indefinite useful lives 
      --    We directed our audit procedures on the basis of 
            materiality of each component in the Group structure, 
            performing a comprehensive audit for material 
            components and analytical procedures for other 
            components. 
 

Key audit matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the Group financial statements of the current period and include the most significant assessed risks of material misstatement (whether or not due to fraud) that we identified. These matters included those that had the greatest effect on: the overall audit strategy; the allocation of resources in the audit; and directing the efforts of the engagement team. These matters were addressed in the context of our audit of the Group financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

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In the graph below, we have presented the key audit matters, significant risks and other risks relevant to the audit.

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 Key Audit Matter - Group               How the matter was addressed in 
                                         the audit - Group 
-------------------------------------  ------------------------------------------------------------------ 
 Revenue recognition                         Our audit work included, but was 
                                              not restricted to: 
  Revenue is recognised when                   *    Obtaining an understanding by performing walkthroughs 
  the Group satisfies performance                   of each significant class of revenue transactions and 
  obligations by transferring                       assessing the design and implementation of key 
  the promised goods or services                    controls; 
  to its customers. 
 
  Revenue is the key driver                    *    Assessing the timing of revenue recognition on a 
  of the business and judgement                     sample basis across revenue streams in accordance 
  is involved in determining                        with IFRS 15. 
  when contractual obligations 
  have been performed and to 
  the extent that the right                    *    Performing an analytical review on revenue recognised 
  to consideration has been                         to identify any material new revenue streams and 
  earned.                                           customers and to assess whether recognized revenue is 
                                                    in line with the expected level; and 
  There is a risk that revenue 
  may be deliberately overstated 
  as a result of management                   Assessing the amount of revenue 
  override resulting from the                 to customers on a sample basis by 
  pressure management may feel                agreeing the extent, timing and 
  to achieve targeted results.                customer acceptance of goods and 
  The management of the Group                 services, where relevant 
  focuses on revenue as a key 
  performance measure which                   Our Results 
  could create an incentive                   Based on our audit procedures we 
  for revenue to be recognized                did not identify any evidence of 
  before satisfying the performance           material misstatement in the revenue 
  obligations. We therefore                   recognised for the year ended 31 
  identified revenue recognition              March 2021 in the Group financial 
  as one of the most significant              statements. 
  assessed risks of material 
  misstatement and key audit 
  matter. 
 
 
  Relevant Disclosures in the 
  Annual Report and Accounts 
  2021 
  The Group accounting policy 
  on revenue recognition is 
  shown in note 3.3 and related 
  disclosures are included in 
  note 29 
-------------------------------------  ------------------------------------------------------------------ 
 Employee benefits obligation           Our audit work included, but was 
  liabilities are understated            not restricted to: 
  The Group has the following             *    Performing walkthrough of management's process for 
  defined benefits plans for                   assessing the valuation of defined benefit plans and 
  different geographical entities              other long-term benefits and assessing the design and 
  i.e                                          implementation of key controls; 
  1. Gratuity; and 
  2. Pension Cost 
                                          *    Testing the accuracy of the underlying data used by 
                                               the Group actuaries for the purpose of calculating 
  The value of the above employee              the scheme liabilities by selecting a sample of 
  benefit obligations (net of                  employees and agreeing pertinent data such as date of 
  plan assets) amounts to                      birth, gender, date of joining etc. to underlying 
  $3,503,562.                                  records; 
 
  The valuation of the above 
  plans in accordance with IAS            *    Testing the reasonableness of assumptions used by the 
  19 Employee Benefits involves                Group actuary for calculation of the scheme 
  significant judgement and                    liabilities. 
  is subject to complex actuarial 
  assumptions. 
 
  Small variations in those              The Group accounting policy on valuation 
  actuarial assumptions can              of defined benefit plan is shown 
  lead to materially different           in note 3.9 to the financial statements 
  values of the above plans              and related disclosures are included 
  recognised in the Group financial      in note 18. 
  statements.                            Our Results 
                                         Based on our audit work, we found 
  We therefore identified employee       the valuation methodologies including 
  benefit obligation as one              inherent actuarial assumptions, 
  of the most significant assessed       estimates and potential impact on 
  risk of material misstatement,         the future period of revision of 
  and key audit matters.                 these estimates to be reasonable. 
 
  Relevant Disclosures in the 
  Annual Report and Accounts 
  2021 
  Financial Statements: Note 
  3.9, Post Employment Benefits, 
  Short Term and Long Term Employee 
  Benefits and Employee Costs; 
  Note 18, Employee Benefit 
  Obligations. 
-------------------------------------  ------------------------------------------------------------------ 
 Payment to fictitious employees             Our audit work included, but was 
                                              not restricted to: 
  The Group functions in a sector              *    Performing walkthrough of management's process for 
  having high turnover of employees                 payment of employee remuneration and assessing the 
  and has significant expenditure                   design, effectiveness and implementation of key 
  in relation to the employee                       controls; 
  cost. 
 
  We identified it as one of                   *    Performing an analytical review of employee 
  the most significant assessed                     remuneration to assess whether employee remuneration 
  risk of material misstatement                     recorded and payment made are in line with the 
  in relation to payment to                         expected level; and 
  fictitious employees and this 
  area was considered to be 
  a key audit matter.                          *    Assessing the accuracy of employee data by selecting 
                                                    a sample and interviewing them to agree pertinent 
                                                    data including the identification number issued by 
                                                    the government, date of joining and other personal 
                                                    details 
 
 
 
                                              Our Results 
                                              Based on our audit work, we did 
                                              not identify and instances of payment 
                                              to fictitious employees. 
-------------------------------------  ------------------------------------------------------------------ 
 Impairment of goodwill and             Our audit work included, but was 
  Intangible Assets with indefinite      not restricted to: 
  useful lives                            *    Performing walkthrough of management's process for 
                                               assessing the impairment of goodwill and intangible 
  The process of assessing                     assets and assessing the design and implementation of 
  whether an impairment exists                 key controls; 
  under International Accounting 
  Standard (IAS) 36 Impairment 
  of Assets is complex.                   *    Testing the methodology applied in calculating value 
                                               in use, using a valuation specialist to ensure 
  The Group has certain intangible             compliance with the requirements of IAS 36, 
  assets having indefinite lives               Impairment of Assets; 
  in the form of goodwill arising 
  from business combinations 
  in earlier years, trademarks            *    Testing the mathematical accuracy of management's 
  and patents. Management's                    model and wherein the management sought assistance 
  evaluation of the carrying                   from external valuer, using a valuation specialist; 
  value of these assets involves 
  analysis of the Group cash 
  generating units (CGU) which            *    Testing the key underlying assumptions for the 
  requires judgement about future              financial years ending 31 March 2021 and beyond; 
  performance of CGU's and the 
  discount rates applied to 
  future cash flow projections.           *    Challenging management on its cash flow forecast and 
                                               the implied growth rates for the FY 2021 and beyond, 
  Therefore, we identified impairment          considering evidence to support these assumptions; 
  of goodwill and intangible 
  assets with indefinite useful 
  lives as a significant and              *    Testing the accuracy of the "discount rates" using 
  key audit matter.                            comparative Company information, risk free/risk 
                                               premium market available rate and "long-term growth 
  Relevant Disclosures in the                  rates" by corroborating the responses received from 
  Annual Report and Accounts                   management in respect of revenue growth projections; 
  2021                                         and 
  Financial Statements: Note 
  3.5, 3.6, Goodwill and Other 
  Intangible Assets; Note 7,              *    Testing the sensitivity analysis performed by 
  8, Goodwill and Other Intangible             management in respect of the key assumptions of 
  Assets                                       discount and growth rates to check sufficient 
                                               headroom in their calculation. 
 
 
 
                                         The Group accounting policy on Impairment 
                                         of goodwill and intangible assets 
                                         is disclosed in Note 3.5 and 3.6 
                                         to the financial statements and 
                                         related disclosures are included 
                                         in Note 7. 
 
                                         Our Results 
                                         Based on our work, we found that 
                                         the assumptions made and estimates 
                                         used in management's assessment 
                                         of impairment of goodwill and intangible 
                                         assets with indefinite useful lives 
                                         are reasonable. From our audit procedures 
                                         we found that Note 7 to the financial 
                                         statements appropriately discloses 
                                         the assumptions used in arriving 
                                         at the recoverable amount of CGU. 
-------------------------------------  ------------------------------------------------------------------ 
 

Our application of materiality

We apply the concept of materiality both in planning and performing the audit, and in evaluating the effect of identified misstatements on the audit and of uncorrected misstatements, if any, on the financial statements and in forming the opinion in the auditor's report.

Materiality was determined as follows:

 
     Materiality measure                    Group                          Parent company 
============================  =================================  ================================= 
 Materiality for               We define materiality as the magnitude of misstatement 
  financial statements          in the financial statements that, individually 
  as a whole                    or in the aggregate, could reasonably be expected 
                                to influence the economic decisions of the users 
                                of these financial statements. We use materiality 
                                in determining the nature, timing and extent 
                                of our audit work. 
============================  ==================================================================== 
 Materiality threshold         USD 2,676,260 which is             USD 1,646,389 which is 
                                5% of Group Profit before          5% of Parent Company's 
                                taxes                              Profit before taxes 
============================  =================================  ================================= 
 Significant judgements        Profit before tax was              Profit before tax was 
  made by auditor               considered the most appropriate    considered the most appropriate 
  in determining                benchmark because the              benchmark because the 
  the materiality               group operates within              group operates within 
                                the service industry and           the service industry 
                                also uses profit before            and also uses profit 
                                taxes to measure it's              before taxes to measure 
                                financial performance.             it's financial performance, 
                                Further, the group is              Further, the parent is 
                                having profitable trends           having profitable trends 
                                over the past years.               over the past years. 
                                Materiality for the current        Materiality for the current 
                                year is higher than the            year is higher than the 
                                level that we determined           level that we determined 
                                for the year ended 31              for the year ended 31 
                                March 2020 to reflect              March 2020 to reflect 
                                the increase in Revenue.           the increase in Revenue. 
 Performance materiality       We set performance materiality at an amount less 
  used to drive the             than materiality for the financial statements 
  extent of our testing         as a whole to reduce to an appropriately low 
                                level the probability that the aggregate of uncorrected 
                                and undetected misstatements exceeds materiality 
                                for the financial statements as a whole. 
============================  ==================================================================== 
 Performance materiality       USD 1,605,756 which is             USD 987,833 which is 
  threshold                     60% of Group financial             60% of Parent financial 
                                statement materiality.             statement materiality. 
 Specific materiality          We determine specific materiality for one or 
                                more particular classes of transactions, account 
                                balances or disclosures for which misstatements 
                                of lesser amounts than materiality for the financial 
                                statements as a whole could reasonably be expected 
                                to influence the economic decisions of users 
                                taken on the basis of the financial statements. 
============================  ==================================================================== 
 Specific materiality          We determined a lower              We determined a lower 
  threshold                     level of specific materiality      level of specific materiality 
                                for all account balances           for all account balances 
                                and transactions                   and transactions 
============================  =================================  ================================= 
 Communication of              We determine a threshold for reporting unadjusted 
  misstatements to              differences to the audit committee. 
  the audit committee 
============================  ==================================================================== 
 Threshold for communication   USD 1,605,756 and misstatements    USD 987,833 and misstatements 
                                below that threshold that,         below that threshold 
                                in our view, warrant reporting     that, in our view, warrant 
                                on qualitative grounds.            reporting on qualitative 
                                                                   grounds. 
============================  =================================  ================================= 
 

The graph below illustrates how performance materiality interacts with our overall materiality and the tolerance for potential uncorrected misstatements.

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An overview of the scope of our audit

We performed a risk-based audit that requires an understanding of the group's and the parent company's business and in particular included the following areas:

The Engagement Team obtained an understanding of the group and its environment, including group controls, and assessed the risks of material misstatement at the group level. Further, the Engagement Team included the effect of group organisational structure on the scope of the audit.

The identified components of the Group were evaluated by the Group audit team based on a measure of materiality considered as a percentage of total profit before tax to assess the significance of the component and to determine the planned audit response. This benchmark was considered the most appropriate because the group operates within the service industry and also uses profit before taxes to measure it's financial performance. For those components that we determined to be significant, either a full scope approach or specified procedures in relation to specific balances and transactions were carried out. This approach was determined based on their relative materiality to the Group and our assessment of audit risk.

In establishing the overall approach to the Group audit, we determined the type of work that needed to be performed at the reporting units by us, as the Group engagement team, or component auditors within Grant Thornton Limited, Channel Islands, and other network firms operating under our instruction. Where the work was performed by component auditors, we determined the relevant risks for the component, the level of involvement we needed to have in the audit work, issued Group instructions to the component auditor including details of component materiality, and reviewed the workpapers through planning, fieldwork and completion of the identified risk areas to be able to conclude whether sufficient appropriate audit evidence had been obtained as a basis for our opinion on the Group Financial Statements as a whole. Due to the impact of COVID-19, the Group engagement team were unable to travel to the component auditor location in order to carry out the reviews of the work of the component auditor; however, alternative methods were identified in order to obtain sufficient, appropriate audit evidence to support the Group opinion.

The Group's components range in size and activity. To provide sufficient coverage over the Group's key audit matters, we performed full scope audit procedures on the financial information of 5 components, iEnergizer Limited, the parent company located in Guernsey, Aptara Inc. located in United States of America including it's six subsidiaries in India, iEnergizer Aptara Limited and iEnergizer Holdings Limited located in Mauritius, and iEnergizer IT Services Private Limited located in India, which included 100% of total assets, 100% of total profit before tax, 100% of total revenues of the Group respectively. For the significant components requiring full scope audit procedures of their financial information, we carried out an interim audit procedure combined with substantive procedures prior to the year end and to evaluate the components' internal control environment. Our audit testing included substantive procedures of transactions and balances for the year ended 31 March 2021.

Other information

The directors are responsible for the other information. The other information comprises the information included in the annual report set out on pages 1 to 14 , other than the financial statements and our auditor's report thereon. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.

In connection with our audit of the Group financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement of the financial statements or a material misstatement of the other information. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.

We have nothing to report in this regard.

Matters on which we are required to report by exception

We have nothing to report in respect of the following matters in relation to which The Companies (Guernsey) Law, 2008 requires us to report to you if, in our opinion:

 
 --   proper accounting records have not been kept by the Group; or 
 --   the Group financial statements are not in agreement with the accounting 
       records and returns; or 
 --   we have not obtained all the information and explanations which, 
       to the best of our knowledge and belief, are necessary for the 
       purposes of our audit. 
 

Responsibilities of directors for the financial statements

As explained more fully in the directors' responsibilities statement set out on page 11, the directors are responsible for the preparation of the Group financial statements which give a true and fair view in accordance with IFRSs, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, the directors are responsible for assessing the Group ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the Group or to cease operations, or have no realistic alternative but to do so.

Auditor's responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion.

Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at: www.frc.org.uk/auditorsresponsibilities . This description forms part of our auditor's report.

Explanation as to what extent the audit was considered capable of detecting irregularities, including fraud

Identifying and assessing potential risks related to irregularities

In identifying and assessing the risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, we considered the following:

a) The nature of the industry and sector, control environment and business performance including the design of the Group's remuneration policies, key drivers for directors' remuneration, bonus levels and performance targets;

b) Enquiring of management, internal audit and the Audit & Risk Committee, including obtaining and reviewing supporting documentation, concerning the Group's policies and procedures relating to: Identifying, evaluating and complying with laws and regulations and whether they were aware of any instances of non-compliance;

c) Detecting and responding to the risks of fraud and whether they have knowledge of any actual, suspected or alleged fraud;

d) The internal controls established to mitigate risks related to fraud or non-compliance with laws and regulations.

e) Discussing with component auditors to request identification of any instances of non-compliance with laws and regulations that could give rise to a material misstatement of the group financial statements.

f) Discussing among the engagement team including significant component audit teams and involving relevant internal specialists, including tax, valuations, and Information Technology specialists regarding how and where fraud might occur in the financial statements and any potential indicators of fraud; and;

g) Obtaining an understanding of the legal and regulatory frameworks that the Group operates in, focusing on those laws and regulations that had a direct effect on the financial statements, such as Guernsey Law.

Audit response to risks identified

As a result of performing the above, we identified the Revenue Recognition and Payment to Ficticious Employees as a key audit matter related to the potential risk of fraud. The key audit matters section of our report explains the matter in more detail and also describes the specific procedures in response to that key audit matter. In common with all audits under ISAs (UK), we are also required to perform specific procedures to respond to the risk of management override of controls

In addition to the above, our procedures to respond to risks identified included the following:

a) Reviewing the financial statement disclosures and testing to supporting documentation to assess compliance with provisions of relevant laws and regulations described as having a direct effect on the financial statements;

b) Enquiring of management, the Audit & Risk Committee and in-house and external legal counsel concerning actual and potential litigation and claims;

c) Performing analytical procedures to identify any unusual or unexpected relationships that may indicate risks of material misstatement due to fraud; and

d) Reading minutes of meetings of those charged with governance, reviewing internal audit reports and correspondence with regulators.

e) In addressing the risk of fraud through management override of controls, testing the appropriateness of journal entries and other adjustments; assessing whether the judgements made in making accounting estimates are indicative of a potential bias; and evaluating the business rationale of any significant transactions that are unusual or outside the normal course of business.

We also communicated relevant identified laws and regulations and potential fraud risks to all engagement team members and significant component audit teams, and remained alert to any indications of fraud or non-compliance with laws and regulations throughout the audit.

Use of our report

This report is made solely to the Parent Company's members, as a body, in accordance with Section 262 of The Companies (Guernsey) Law, 2008. Our audit work has been undertaken so that we might state to the Parent Company's members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Parent Company and the Parent Company's members as a body, for our audit work, for this report, or for the opinions we have formed.

Michael Carpenter

For and on behalf of Grant Thornton Limited

Chartered Accountants

St Peter Port, Guernsey, Channels Islands

Date: 23 June 2021

Consolidated Statement of Financial Position

(All amounts in United States Dollars, unless otherwise stated)

 
 
                                        Notes                   As at                   As at 
                                                        31 March 2021           31 March 2020 
-------------------------------------  ------  ----------------------  ---------------------- 
 ASSETS 
 Non-current 
 Goodwill                                 7               102,250,365             102,248,030 
 Other intangible assets                  8                12,573,227              12,557,319 
 Right to use asset                      25                 4,719,671               5,303,271 
 Property, plant and equipment            9                 6,608,441               7,142,700 
 Long- term financial asset              10                 3,311,739               3,351,981 
 Non-current tax assets                                       262,166               1,238,883 
 Deferred tax asset                      11                 3,469,843               3,623,361 
 Other non current assets                                      23,909                  21,047 
 Non-current assets                                       133,219,361             135,486,592 
                                               ----------------------  ---------------------- 
 
 Current 
 Trade and other receivables             12                33,893,763              32,044,127 
 Cash and cash equivalents               13                51,378,899              45,147,783 
 Short- term financial assets            14                16,281,924               7,642,641 
 Current tax assets                                                 -                 211,055 
 Other current assets                    15                 3,562,881               2,589,023 
 Current assets                                           105,117,467              87,634,629 
                                               ----------------------  ---------------------- 
 
 Total assets                                             238,336,828             223,121,221 
                                               ======================  ====================== 
 
 EQUITY AND LIABILITIES 
 Equity 
 Share capital                           27                 3,776,175               3,776,175 
 Share compensation reserve             3.15                   63,986                  63,986 
 Additional paid in capital             3.15               15,451,809              15,451,809 
 Merger reserve                         3.15              (1,049,386)             (1,049,386) 
 Retained earnings                      3.15               26,482,815             139,677,678 
 Other components of equity             3.15             (15,136,936)            (17,320,281) 
                                               ----------------------  ---------------------- 
 Total equity attributable to equity 
  holders of the parent                                    29,588,463             140,599,981 
                                               ----------------------  ---------------------- 
 
 
 
                                                                   As at                       As at 
                                            Notes          31 March 2021               31 March 2020 
-----------------------------------------  ------  ---------------------  -------------------------- 
 Liabilities 
 Non-current 
 Long term borrowings                        16              142,905,717                  32,992,983 
 Employee benefit obligations                18                4,708,447                   4,667,061 
 Deferred tax liability                      11                8,929,659                   9,717,709 
 Non-current liabilities                                     156,543,823                  47,377,753 
                                                   ---------------------  -------------------------- 
 
 Current 
 Trade and other payables                    17               12,929,316                  11,481,885 
 Employee benefit obligations                18                  959,887                     810,614 
 Current tax liabilities                                         393,028                           - 
 Current portion of long term borrowings     16               24,403,033                  10,527,775 
 Other current liabilities                   19               13,519,278                  12,323,213 
 Current liabilities                                          52,204,542                  35,143,487 
                                                   ---------------------  -------------------------- 
 
 Total equity and liabilities                                238,336,828                 223,121,221 
                                                   =====================  ========================== 
 
 
 
 

(The accompanying notes are an integral part of the Consolidated Financial Statements)

The Consolidated Financial Statements have been approved and authorized for issue by the Board of Directors on 23 June 2021.

Director

Consolidated Income Statement

(All amounts in United States Dollars, unless otherwise stated)

 
                                  Notes             For the year ended               For the year 
                                                         31 March 2021             ended 31 March 
                                                                                             2020 
                                         -----------------------------  ------------------------- 
 
 
 
 Income from operations 
 Revenue from services                                     195,964,336                191,000,491 
 Other operating income            20                        4,364,491                  3,881,528 
                                                           200,328,827                194,882,019 
                                         -----------------------------  ------------------------- 
 
 Cost and expenses 
 Outsourced service cost          3.18                      38,108,886                 40,309,556 
 Employee benefits expense                                  76,951,595                 79,247,043 
 Depreciation and amortisation                               5,158,089                  4,476,820 
 Other expenses                                             22,513,371                 14,711,086 
                                                           142,731,941                138,744,505 
                                         -----------------------------  ------------------------- 
 
 Operating profit                                           57,596,886                 56,137,514 
 Finance income                    21                        1,175,923                    861,314 
 Finance cost                      22                      (5,247,613)                (4,444,444) 
 Profit before tax                                          53,525,196                 52,554,384 
                                         -----------------------------  ------------------------- 
 
 Income tax expense                23                        4,588,913                  7,532,216 
 Profit for the year attributable to 
  equity 
  holders of the parent                                     48,936,283                 45,022,168 
                                         =============================  ========================= 
 
 Earnings per share                24 
 Basic                                                            0.26                       0.24 
 Diluted                                                          0.26                       0.24 
 Par value of each share in 
  GBP                                                             0.01                       0.01 
 

(The accompanying notes are an integral part of the Consolidated Financial Statements)

Consolidated Statement of Comprehensive Income

(All amounts in United States Dollars, unless otherwise stated)

 
 
                                                                       For the year               For the year 
                                                                     ended 31 March             ended 31 March 
                                                                               2021                       2020 
----------------------------------------------------  -----------------------------  ------------------------- 
 
 Profit after tax for the year                                           48,936,283                 45,022,168 
 Other comprehensive income 
 Items that will be reclassified subsequently 
  to the consolidated income statement 
 Exchange differences on translating foreign 
  operations                                                              2,141,313                (5,559,767) 
 Net other comprehensive income/(loss) that 
  will be reclassified subsequently to consolidated 
  income statement                                                        2,141,313                (5,559,767) 
                                                      -----------------------------  ------------------------- 
 Items that will not be reclassified subsequently 
  to income statement 
 Remeasurement of the net defined benefit 
  liability                                                                  56,169                  (128,440) 
 Income tax relating to items that will 
  not be reclassified                                                      (14,137)                     37,738 
 Net other comprehensive income/(loss) that 
  will be not be reclassified subsequently 
  to consolidated income statement                                           42,032                   (90,702) 
                                                      -----------------------------  ------------------------- 
 Other comprehensive income/(loss) for the 
  year                                                                    2,183,345                (5,650,469) 
                                                      -----------------------------  ------------------------- 
 Total comprehensive income attributable 
  to equity holders                                                      51,119,628                 39,371,699 
                                                      -----------------------------  ------------------------- 
 
 

(The accompanying notes are an integral part of the Consolidated Financial Statements) Consolidated Statement of Changes in Equity

(All amounts in United States Dollars, unless otherwise stated)

 
                    Share     Additional      Share         Merger           Other components of          Retained      Total equity 
                   capital      Paid in    compensation     reserve                 equity                 earnings 
                                Capital      reserve 
---------------  ----------  -----------  -------------  ------------  ------------------------------  --------------  -------------- 
 
                                                                               Foreign         Net 
                                                                              currency       defined 
                                                                             translation     benefit 
                                                                               reserve      Liability 
                                                                       -----------------  ----------- 
 
 Balance as at 
  1 April 
  2020            3,776,175   15,451,809         63,986   (1,049,386)       (18,007,911)      687,630     139,677,678     140,599,981 
---------------  ----------  -----------  -------------  ------------  -----------------  -----------  --------------  -------------- 
 Dividends                -            -              -             -                  -            -   (162,131,146)   (162,131,146) 
 Transaction 
  with 
  owners                  -            -              -             -                  -            -   (162,131,146)   (162,131,146) 
 Profit for the 
  year                    -            -              -             -                  -            -      48,936,283      48,936,283 
 Other 
  comprehensive 
  loss                    -            -              -             -          2,141,313       42,032               -       2,183,345 
 Total 
  comprehensive 
  income for 
  the period              -            -              -             -          2,141,313       42,032      48,936,283      51,119,628 
---------------  ----------  -----------  -------------  ------------  -----------------  -----------  --------------  -------------- 
 Balance as at 
  31 
  March 2021      3,776,175   15,451,809         63,986   (1,049,386)       (15,866,598)      729,662      26,482,815      29,588,463 
---------------  ----------  -----------  -------------  ------------  -----------------  -----------  --------------  -------------- 
 

(The accompanying notes are an integral part of the Consolidated Financial Statements)

Consolidated Statement of Changes in Equity

(All amounts in United States Dollars, unless otherwise stated)

 
                    Share        Additional          Share          Merger          Other components          Retained         Total 
                   capital     paid-in-capital    compensation      reserve             of equity              earnings       equity 
                                                    reserve 
                                                                              --------------------------- 
                                                                                 Foreign      Net defined 
                                                                                 currency       benefit 
                                                                                translation    liability 
                                                                                  reserve 
---------------  ----------  -----------------  --------------  ------------  -------------  ------------  -------------  --------------- 
 Balance as at 
  1 
  April 2019      3,776,175         15,451,809          63,986   (1,049,386)   (12,448,144)       778,332    131,950,337      138,523,109 
---------------  ----------  -----------------  --------------  ------------  -------------  ------------  -------------  --------------- 
 Dividends                -                  -               -             -              -             -   (37,294,827)     (37,294,827) 
 Transaction 
  with 
  owners                  -                  -               -             -              -             -   (37,294,827)     (37,294,827) 
 Profit for the 
  year                    -                  -               -             -              -             -     45,022,168       45,022,168 
 Other 
  comprehensive 
  loss                    -                  -               -             -    (5,559,767)      (90,702)              -      (5,650,469) 
 Total 
  comprehensive 
  income for 
  the period              -                  -               -             -    (5,559,767)      (90,702)     45,022,168       39,371,699 
---------------  ----------  -----------------  --------------  ------------  -------------  ------------  -------------  --------------- 
 Balance as at 
  31 
  March 2020      3,776,175         15,451,809          63,986   (1,049,386)   (18,007,911)       687,630    139,677,678      140,599,981 
---------------  ----------  -----------------  --------------  ------------  -------------  ------------  -------------  --------------- 
 

(The accompanying notes are an integral part of the Consolidated Financial Statements)

Consolidated Statement of Cash Flows

(All amounts in United States Dollars, unless otherwise stated)

 
                                                           For the year          For the year 
                                                         ended 31 March        ended 31 March 
                                                                   2021                  2020 
----------------------------------------------  -----------------------  -------------------- 
 (A) Cash flow from operating activities 
 Profit before tax                                           53,525,196            52,554,384 
 Adjustments 
 Depreciation and amortisation                                5,158,089             4,476,820 
 Loss/(Profit) on disposal of property, 
  plant and equipment                                             1,040              (10,494) 
 Trade receivables written-off/provision 
  for doubtful debts                                          3,919,116             1,585,399 
 Provision for doubtful debts written 
  back                                                      (1,227,481)             (809,227) 
 Sundry balances written back                                   (3,587)               (2,090) 
 Unrealised foreign exchange gain                             (143,426)           (1,619,967) 
 Finance income                                             (1,175,923)             (861,314) 
 Finance cost                                                 4,577,051             3,876,410 
 Interest cost on lease liability                               529,756               568,034 
 Other borrowing cost at Amortised Cost                         140,806                     - 
                                                -----------------------  -------------------- 
                                                             65,300,637            59,757,955 
 Changes in operating assets and liabilities 
 (Increase)/ Decrease in trade and other 
  receivables                                               (1,185,494)             3,171,187 
 (Increase)/ Decrease in other assets 
  (current and non-current)                                   (131,833)               582,094 
 Increase in non-current liabilities, 
  trade payables & other current liabilities                    275,462             1,426,389 
 Increase in employee benefit obligations                       132,739                87,848 
                                                -----------------------  -------------------- 
 Cash generated from operations                              64,391,511            65,025,473 
 Income taxes paid                                          (3,656,783)           (5,097,865) 
                                                -----------------------  -------------------- 
 Net cash generated from operating activities                60,734,728            59,927,608 
                                                -----------------------  -------------------- 
 
 (B) Cash flow for investing activities 
 Payments for purchase of property plant 
  and equipment                                             (2,343,683)           (3,602,218) 
 Redemption of fixed deposit                                  4,788,393             2,658,771 
 Investment in fixed deposit                               (12,900,755)           (5,595,675) 
 Proceeds from disposal of property, plant 
  & equipment                                                    55,401                 9,572 
 Payments for purchase of other intangible 
  assets                                                      (512,302)             (740,711) 
 Interest received                                            1,126,809               892,949 
                                                -----------------------  -------------------- 
 Net cash used in investing activities                      (9,786,137)           (6,377,312) 
                                                -----------------------  -------------------- 
 
 (C ) Cash flow from financing activities 
 Interest paid                                              (4,577,051)           (4,390,603) 
 Dividends paid to equity holders of the 
  parent                                                  (162,131,146)          (37,294,827) 
 Repayment of borrowings and lease liability               (43,067,804)          (11,371,909) 
 Proceeds from borrowings and lease liability               165,175,315             1,672,657 
                                                -----------------------  -------------------- 
 Net cash used in financing activities                     (44,600,686)          (51,384,682) 
                                                -----------------------  -------------------- 
 
 Net increase in cash and cash equivalents                    6,347,906             2,165,614 
 Cash and cash equivalents at the beginning 
  of the year                                                45,147,783            42,404,281 
 Effect of exchange rate changes on cash                      (116,790)               577,888 
                                                -----------------------  -------------------- 
 Cash and cash equivalents at the end 
  of the year                                                51,378,899            45,147,783 
                                                -----------------------  -------------------- 
 Cash and cash equivalents comprise 
 Cash in hand                                                     9,637                20,190 
 Balances with banks in current account                      51,369,262            43,525,802 
 Remittance in transit                                                -             1,601,791 
                                                -----------------------  -------------------- 
                                                             51,378,899            45,147,783 
                                                -----------------------  -------------------- 
 

*RECONCILIATION OF LIABILITIES ARISING FROM FINANCING ACTIVITIES

The changes in the Group's liabilities arising from financing activities can be classified as follows:

 
                                  Long-term borrowings            Short-term   Lease Liabilities               Total 
                                    (including current            borrowings 
                                  portion of long-term 
                                            borrowing) 
--------------------  --------------------------------  --------------------  ------------------  ------------------ 
 1 April 2020                               37,837,207                     -           5,683,551          43,520,758 
 Adoption of IFRS                                    -                     -                   -                   - 
  16 
 Cash-flows: 
 Repayment                                (41,036,277)                     -         (2,031,527)        (43,067,804) 
 Proceeds                                  165,175,315                     -                   -         165,175,315 
 Non-cash: 
 Additional lease 
  liability                                          -                     -           1,009,919           1,009,919 
 Interest on lease 
  liability                                          -                     -             529,756             529,756 
 Other borrowing 
  cost at amortised 
  cost                                         140,806                     -                   -             140,806 
 31 March 2021                             162,117,051                     -           5,191,699         167,308,750 
--------------------  --------------------------------  --------------------  ------------------  ------------------ 
 
 1 April 2019                               46,222,538                 8,934              51,493          46,282,965 
 Adoption of IFRS 
  16                                                 -                     -           6,369,011           6,369,011 
 Cash-flows: 
 Repayment                                 (9,478,373)               (8,934)         (1,884,602)        (11,371,909) 
 Proceeds                                    1,093,042                     -                   -           1,093,042 
 Non-cash: 
 Additional lease 
  liability                                          -                     -             579,615             579,615 
 Interest on lease 
  liability                                          -                     -             568,034             568,034 
 31 March 2020                              37,837,207                     -           5,683,551          43,520,758 
--------------------  --------------------------------  --------------------  ------------------  ------------------ 
 

(The accompanying notes are an integral part of these the Consolidated Financial Statements)

Notes to the Consolidated Financial Statements

(All amounts in United States Dollars, unless otherwise stated)

   1.    INTRODUCTION 

iEnergizer Limited (the 'Company' or 'iEnergizer') was incorporated in Guernsey on 12 May 2010. It is a 'Company limited by shares' and is domiciled in Guernsey. The registered office of the Company is located at Mont Crevelt House, Bulwer Avenue, St. Sampson, Guernsey, GY2 4 LH. iEnergizer was listed on the Alternative Investment Market ('AIM') of the London Stock Exchange on 14 September 2010.

iEnergizer through its subsidiaries iEnergizer Holdings Limited, iEnergizer IT Services Private Limited, iEnergizer BPO Inc., iEnergizer Management Services Limited, iEnergizer BPO Limited, iEnergizer Aptara Limited and Aptara Inc., Techbooks International Private Limited, Techbooks Electronic Services Private Limited, Global Content Transformation Private Limited, Aptara Learning Private Limited, Aptara New Media Private Limited and Aptara Technologies Private Limited is engaged in the business of call centre operations, providing business process outsourcing (BPO) and content delivery services to their customers, who are primarily based in the United States of America and India, from its operating offices in United States of America, Mauritius and India.

   2.   GENERAL INFORMATION AND STATEMENT OF COMPLIANCE WITH IFRS 

The consolidated financial statements of the Group for the year ended 31 March 2021 have been prepared in accordance with International Financial Reporting Standards (IFRS) as adopted by European Union (EU) under the historical cost convention on the accrual basis except for certain financial instruments and some of the employee benefits which are as per IFRS 9 and IAS 19, being measured at fair values.

The significant accounting policies that have been used in the preparation of these consolidated financial statements are summarized below. The consolidated financial statements have been prepared on a going concern basis.

   3.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES 
   3.1   BASIS OF CONSOLIDATION 

The Group's consolidated financial statements include financial statements of iEnergizer Limited, the parent company and all of its subsidiaries for the year ended 31 March 2021. Subsidiaries are entities over which the Group has the power to control. Control exists when the parent has the power to control the financial and operating policies of the entity, is exposed, or has rights, to variable returns from its involvement with the entity and has the ability to affect those returns by using its power over the entity. iEnergizer obtains and exercises control through more than half of the voting rights of the entity.

All intra-group balances, transactions, income and expenses including unrealized income or expenses are eliminated in full on consolidation. Amounts reported in the financial statements of subsidiaries have been adjusted where necessary to ensure consistency with the accounting policies adopted by the Group.

   3.2   FOREIGN CURRENCY TRANSLATION 

These consolidated financial statements are presented in USD ('United States Dollar'), which is also the Company's functional currency. Each entity in the Group determines its functional currency and items included in the financial statement of each entity are measured using that functional currency. The functional currency of each entity has been determined based on the primary economic environment in which each entity of the Group operates.

   a.   Transactions and balances 

Transactions in foreign currencies are initially recorded by the Group entities at their respective functional currency rates prevailing at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are translated at the functional currency spot rate of exchange ruling at the reporting date and the resultant foreign exchange gain or loss on re-measurement of monetary item or settlement of such transactions are recognized in the consolidated income statement.

Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rates as at the dates of the initial transactions.

   b.   Group companies 

In the Group's consolidated financial statements, all assets, liabilities and transactions of Group entities with a functional currency other than USD (the Group's presentation currency) are translated into USD upon consolidation. The functional currencies of the entities in the Group have remained unchanged during the reporting period.

The assets and liabilities of foreign operations are translated into USD at the rate of exchange prevailing at the reporting date and their consolidated statements of comprehensive income are translated at average exchange rates where this is a reasonable approximation to actual rates during the year. The exchange differences arising on the translation are recognized in other comprehensive income. On disposal of a foreign operation, the component of other comprehensive income relating to that particular foreign operation is recognized in the consolidated income statement. Goodwill and fair value adjustments arising on the acquisition of a foreign entity have been treated as assets and liabilities of the foreign entity and translated into USD at the closing rate.

   3.3   REVENUE RECOGNITION 

IFRS 15 provides a control-based revenue recognition model and to determine whether to recognize revenue, the Group follows a 5-step process:

   1)         Identification of the contracts with the customer 
   2)         Identification of the performance obligations in the contract 
   3)         Determination of the transaction price 

4) Allocation of the transaction price to performance obligations in the contract (as identified in step ii)

   5)         Recognition of revenue when a performance obligation is satisfied. 

Revenue is recognised either at a point in time or over time, when (or as) the Group satisfies performance obligations by transferring the promised goods or services to its customers. The Group recognises contract liabilities for consideration received in respect of unsatisfied performance obligations and reports these amounts as other liabilities in the statement of financial position. Similarly, if the Group satisfies a performance obligation before it receives the consideration, the Group recognises either a contract asset or a receivable in its statement of financial position, depending on whether something other than the passage of time is required before the consideration is due.

Revenue is measured at transaction price which is the amount of consideration to which the Group expects to be entitled in exchange for transferring promised goods or services to a customer, excluding amounts collected on behalf of third parties (for example, taxes or duties).

Rendering of services

Revenue comprises revenue from business process outsourcing and also content delivery services. These services are rendered through contractual arrangements entered into with customers by the Group companies.

Revenue from business process outsourcing includes transaction processing, customer care, technical support, billing and collections, dispute handling, off the shelf courseware , KYC services, and market research and analytics in which revenue is recognised on the basis of number of hours or days services have been rendered as the customer simultaneously receives and consumes the benefits provided by the Group performance obligation, therefore revenue is being recognized over the time basis. Customers are invoiced on the monthly basis.

In respect of Content delivery services segment, it majorly includes content process outsourcing solutions, digital product conception, content creation, multichannel distribution, post-delivery customer service and IT support. All these are primarily on a fixed price contract on which revenue is recognised only upon full satisfaction of the performance obligation, deemed to be acceptance by the customers and transfer of control, therefore, the Group recognises revenue using point in time.

Further, in respect of content delivery services segment which are generally a fixed price contract, where, in respect of few customers who are eligible for rebate based on the agreement entered with them. For these contacts, variable amount of consideration is estimated. The Group calculates this estimation using expected value method in which the sum of probability-weighted amounts in a range of possible consideration is taken. Therefore, revenue and trade receivable are recognised net of rebate amount.

Finance income

Finance income consists of interest income on funds invested. Finance income is recognized as it accrues in the consolidated income statement, using the effective interest rate method.

   3.4   PROPERTY, PLANT AND EQUIPMENT 

Items of plant and equipment are stated at cost, net of accumulated depreciation and/or accumulated impairment losses, if any. Such cost includes the cost of replacing part of the plant and equipment and borrowing costs for long- term construction projects if the recognition criteria are met. When significant parts of property, plant and equipment are required to be replaced in intervals, the Group recognizes such parts as individual assets with specific useful lives and depreciation, respectively. Likewise, when a major inspection is performed, its cost is recognized in the carrying amount of the plant and equipment as a replacement if the recognition criteria are satisfied. All other repair and maintenance costs are recognized in the consolidated income statement as incurred.

Assets acquired under finance leases are capitalized as assets by the Group at the lower of the fair value of the leased property or the present value of the related lease payments or where applicable, the estimated fair value of such assets at the inception of the lease. Leased assets are depreciated over the useful life of the asset. However, if there is no reasonable certainty that the Group will obtain ownership by the end of the lease term, the asset is depreciated over the shorter of the estimated useful life of the asset and the lease term.

Depreciation is calculated on a straight-line basis over the estimated useful life of the asset as follows:

 
 Asset                                                              Useful Life 
--------------------------------  --------------------------------------------- 
 Computers and data equipment                                      1 to 6 years 
 Office equipment                                                       5 years 
 Furniture and fixtures                                                10 years 
 Plant and machinery                                               6 to15 years 
 Air conditioners and generators                                   6 to15 years 
 Vehicles                                                         8 to 10 years 
--------------------------------  --------------------------------------------- 
 

Leasehold improvements are depreciated over the useful life of the asset. However, if there is no reasonable certainty that the Group will obtain ownership of the leased asset by the end of the lease term, the asset is depreciated over the shorter of the estimated useful life of the asset and the lease term.

An item of property, plant and equipment and any significant part initially recognized is de-recognized upon disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss arising on de-recognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in the consolidated income statement when the asset is de-recognized.

The assets' useful lives and methods of depreciation are reviewed at each financial year-end, and adjusted prospectively, if appropriate.

Advances paid for the acquisition of property, plant and equipment outstanding at the end of the reporting period and the cost of property, plant and equipment not put to use before such date are disclosed as 'Capital work-in-progress'.

   3.5   GOODWILL 

Goodwill represents the future economic benefits arising from a business combination that are not individually identified and separately recognized. Goodwill is carried at cost less accumulated impairment losses. The impairment analysis of goodwill is carried out annually at the cash generating unit (CGU) level to evaluate whether events or changes have occurred that would suggest an impairment of carrying value.

   3.6   OTHER INTANGIBLE ASSETS 

Intangible assets acquired separately are measured on initial recognition at cost. The cost of intangible assets acquired in a business combination is initially recorded at its fair value as at the date of acquisition. Following initial recognition, intangible assets are carried at cost less any accumulated amortization and any accumulated impairment losses.

Intangible assets are amortised over their useful economic life on a straight-line basis and assessed for impairment whenever there is an indication that the intangible asset may be impaired. Intangibles with finite useful lives are amortized on a straight-line basis. The amortisation period and the amortization method for an intangible asset are reviewed at least at each financial year end. Changes in the expected useful life or the expected pattern of consumption of future economic benefits embodied in the asset are accounted for by changing the amortization period or method, as appropriate, and are treated as changes in accounting estimates.

Gains or losses arising from the de-recognition of an intangible asset are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognized in the consolidated income statement when the asset is de-recognized.

Useful lives are reviewed at each reporting date. Further, intangibles with indefinite useful lives are subject to impairment testing annually. Amortization has been included within 'depreciation and amortization'. The following useful lives are applied:

-- Software: 2-5 years

-- Customer contracts and relationships: 2-7 years

-- Trademark and patents (having indefinite life): Tested for impairment annually

-- Right-of-use asset: refer note 3.7

   3.7   LEASES 

The Group has applied IFRS 16 with effect from 1 April 2019. The group is using the transition methodology provided in para C5(b) of IFRS 16 ("the modified retrospective approach"), by measuring the asset at an amount equal to the lease liability, adjusted by the amount of any prepaid or accrued lease payments recognized immediately before the date of initial application.

The Group has applied the following practical expedients:

(a) On transition to IFRS 16, the weighted average incremental borrowing rate applied to lease liabilities recognized under IFRS 16 range between 8% to 10.75% p.a.

(b) On transition for leases previously accounted for as operating leases with a remaining lease term of less than 12 months and for leases of low- value assets the Group has applied the optional exemptions to not recognize right of use assets but to account for the lease expense on a straight-line method over the remaining lease term.

(c) On transition, the Group relied on its assessment made under IAS 37 Provisions, Contingent Liabilities and Contingent Assets as for whether any of the lease contracts are Onerous Contracts instead of testing ROU's for impairment.

For any new contracts entered into on or after 1 April 2019, the Group has considered whether a contract is, or contains a lease. A lease is defined as a contract or part of a contract that conveys the right to use an asset for a period of time in exchange for consideration'. To apply this definition, the Group assesses whether meets three key evaluation, which is whether:

-- The contract contains an identified asset, which is either explicitly identified in the contract or implicitly specified by being identified at the time the asset is made available to the Group.

-- The Group has the right to obtain substantially all of the economic benefits from the use of the identified asset throughout the period of use, considering its rights within the defined scope of the contract.

-- The Group has the right to direct the use of the identified asset throughout the period of use. The Group assess whether it has the right to direct 'how and for what purpose' the asset is used throughout the period of use.

Measurement and recognition of leases as a lessee

At the lease commencement date, the Group recognises a right-of-use asset and a lease liability on the balance sheet. The right-of-use asset is measured at cost, which is made up of the initial measurement of the lease liability, any initial direct costs incurred by the Group, an estimate of any costs to dismantle and remove the asset at the end of the lease, and any lease payments made in advance of the lease commencement date (net of any incentives received).

At the commencement date, the Group measures the lease liability at the present value of the lease payments unpaid at that date, discounted using the interest rate implicit in the lease if that rate is readily available or the Group's incremental borrowing rate.

Lease payments included in the measurement of the lease liability are made up of fixed payments (including in substance fixed), variable payments based on an index or rate, amounts expected to be payable under a residual value guarantee and payments arising from options reasonably certain to be exercised. Subsequent to the initial measurement, the liability will be reduced for payments made and increased for interest.

Subsequent to the initial recognition, a right-of-use asset is depreciated on a straight-line basis from the lease commencement date to the earlier of either the end of the useful life of the right-of-use asset or, the end of the lease term. The Group also assesses the right-of-use asset for impairment when such indicators exist.

The Group has elected to account for new short-term leases and leases of low-value assets using the practical expedients given in IFRS 16, that is instead of recognising a right-of-use asset and a lease liability, the payments in relation to these are recognised as an expense in the consolidated income statement on a straight-line basis over the period of the lease term.

The Group as a lessor

The Group's accounting policy under IFRS 16 has not changed from the comparative period. As a lessor, the Group classifies its leases as either operating or finance leases. A lease is classified as a finance lease if it transfers substantially all the risks and rewards incidental to ownership of the underlying asset, and classified as an operating lease if it does not.

Operating leases

All other leases are treated as operating leases. Where the Group is a lessee, payments on operating lease agreements are recognised as an expense on a straight-line basis over the lease term. Associated costs, such as maintenance and insurance, are expensed as incurred.

   3.8   ACCOUNTING FOR INCOME TAXES 

Income tax expense recognized in the consolidated income statement comprises of current and deferred tax.

The same is recognized in the consolidated income statement except to the extent that it relates to items recognized directly in equity or other comprehensive income, in which case it is recognized in equity or other comprehensive income respectively. Current tax is the expected tax payable on the taxable income for the year, using tax rates and laws enacted or substantively enacted at the reporting date, and any adjustment to tax payable in respect of previous years.

Deferred income tax is recognized using the Balance sheet approach, providing for temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes.

Deferred income tax is not recognized for the following temporary differences:

(i) the initial recognition of assets or liabilities in a transaction that is not a business combination and that affects neither accounting nor taxable profit, and

(ii) Differences relating to investments in subsidiaries and jointly controlled entities to the extent that it is probable that they will not reverse in the foreseeable future.

Also, deferred tax is not recognized for taxable temporary differences arising upon the initial recognition of goodwill. Deferred tax is measured at the tax rates and laws that are expected to be applied to the temporary differences when they reverse, based on the laws that have been enacted or substantively enacted by the reporting date.

Further, the deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax liabilities and assets, and they relate to income taxes levied by the same tax authority on the same taxable entity, or different tax entities, and they intend to settle current tax liabilities and assets on a net basis or their tax assets and liabilities will be realized simultaneously.

A deferred tax asset is recognized to the extent that it is probable that future taxable profits will be available against which the temporary difference can be utilized. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realized.

Changes in deferred tax assets or liabilities are recognized as a component of tax income or expense in the consolidated income statement, except where they relate to items that are recognized in other comprehensive income or directly in equity, in which case the related deferred tax is also recognized in other comprehensive income or equity, respectively.

Deferred tax in respect of undistributed earnings of subsidiaries is recognized except where the Group is able to control the timing of the reversal of the temporary difference and that the temporary difference will not reverse in the foreseeable future.

Deferred tax asset/liability has been recognized for the carry forward of unused tax losses and unused tax credits to the extent that it is probable that future taxable profits will be available against which the unused tax losses and unused tax losses and unused tax credits can be utilized.

   3.9   POST EMPLOYMENT BENEFITS, SHORT-TERM AND LONG-TERM EMPLOYEE BENEFITS AND EMPLOYEE COSTS 

The Group provides post-employment benefits through defined contribution plans as well as defined benefit plans.

Defined contribution plan

A defined contribution plan is a post-employment benefit plan under which an entity pays fixed contributions into a separate entity and will have no legal or constructive obligation to pay further amounts. Obligations for contributions to recognized provident funds and other social securities which are defined contribution plans are recognized as an employee benefit expense in the consolidated income statement when they are incurred.

Defined benefit plans

A defined benefit plan is a post-employment benefit plan other than a defined contribution plan. Under a defined benefit plan, it is the Group's obligation to provide agreed benefits to the employees. The related actuarial and investment risks fall on the Group.

Liabilities with regard to the defined benefit plans are determined by actuarial valuation, performed by an independent actuary, at each balance sheet date using the projected unit credit method .

The Group recognizes the net obligation of a defined benefit plan in its balance sheet as an asset or liability. Gains and losses through re-measurements of the net defined benefit liability/(asset) are recognized in other comprehensive income. The actual return of the portfolio of plan assets, in excess of the yields computed by applying the discount rate used to measure the defined benefit obligation, is recognized in other comprehensive income. The effect of any plan amendments is recognized in net profits in the consolidated statement of comprehensive income. The net interest cost, past service cost and current service cost is recognized in the consolidated income statement.

Short-term benefits

Short-term benefit obligations are measured on an undiscounted basis and are expensed as the related service is provided.

A liability is recognized for the amount expected to be paid under short-term cash bonus or profit-sharing plans if the Group has a present legal or constructive obligation to pay this amount as a result of past service provided by the employee and the obligation can be estimated reliably.

Compensated absences

Eligible employees are entitled to accumulate compensated absences up to prescribed limits in accordance with the Group's policy and receive cash in lieu thereof. The Group measures the expected cost of accumulating compensated absences as the additional amount that the Group expects to pay/incur as a result of the unused entitlement that has accumulated at the reporting date. Such measurement is based on actuarial valuation as at the reporting date carried out by a qualified actuary.

3.10 IMPAIRMENT TESTING OF NON-FINANCIAL ASSETS, GOODWILL, INTANGIBLE ASSETS AND PROPERTY, PLANT AND EQUIPMENT

Non-financial assets

The carrying amounts of the Group's non-financial assets, other than deferred tax assets are reviewed at each reporting date to determine whether there is any indication of impairment. If any such indication exists, then the asset's recoverable amount is estimated. For goodwill and intangible assets that have indefinite lives or that are not yet available for use, the recoverable amount is estimated each year at the same time.

The recoverable amount of an asset or cash-generating unit (as defined below) is the greater of its value in use or its fair value less cost to sell. In assessing value in use, the estimated future cash flows are discounted to their present value using a post-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. For the purpose of impairment testing, assets are grouped together into the smallest group of assets that generates cash inflows from continuing use that are largely independent of the cash inflows of other assets or groups of assets (the "cash-generating unit"). The goodwill acquired in a business combination is, for the purpose of impairment testing, allocated to cash-generating units that are expected to benefit from the synergies of the combination and represent the lowest level within the Group at which management monitors goodwill.

An impairment loss, if any, is recognized in the consolidated income statement if the carrying amount of an asset or the cash-generating unit exceeds its estimated recoverable amount. Impairment losses recognized in respect of cash-generating units are allocated first to reduce the carrying amount of any goodwill allocated to the units and then to reduce the carrying amount of the other assets in the unit on a pro-rata basis.

An impairment loss in respect of goodwill is not reversed. In respect of other assets, impairment losses recognized in prior periods are assessed at each reporting date for any indications that the loss has decreased or no longer exists. An impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount. An impairment loss is reversed only to the extent that the asset's carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortization if no impairment loss had been recognized.

3.11 FINANCIAL INSTRUMENTS

Financial assets and financial liabilities are recognized when the Group becomes a party to the contractual provisions of the financial instrument.

Financial assets are de-recognized when the contractual rights to cash flows from the financial asset expire, or when the financial asset and all substantial risks and rewards are transferred.

A financial liability is de-recognized when it is extinguished, discharged, cancelled or expires.

Financial assets

Classification and initial measurement of financial assets

All financial assets are initially measured at fair value adjusted for transaction costs (where applicable).

Financial assets, other than those designated and effective as hedging instruments, are classified into the following categories:

-- amortised cost

-- fair value through profit or loss (FVTPL)

-- fair value through comprehensive income (FVOCI)

In the periods presented, the Group does not have any financial assets categorised as FVOCI.

The classification is determined by both:

-- the entity's business model for managing the financial asset

-- the contractual cash flow characteristics of the financial asset

All income and expenses relating to financial assets that are recognized in the consolidated income statement and are presented within finance costs, finance income or other financial items, except for impairment of trade receivables, which is presented within other expenses.

Subsequent measurement of financial assets

Financial assets at amortised cost

Financial assets are measured at amortised cost if the assets meet the following conditions (and are not designated as FVTPL):

-- they are held within a business model whose objective is to hold the financial assets and collect its contractual cash flows

-- the contractual terms of the financial assets give rise to cash flows that are solely payments of principal and interest on the principal amount outstanding

After initial recognition, these are measured at amortised cost using the effective interest method. Discounting is omitted where the effect of discounting is immaterial. The Group's cash and cash equivalents, trade and most other receivables fall into this category of financial instruments.

Financial assets at fair value through profit or loss (FVTPL)

Financial assets that are held within a different business model other than 'hold to collect' or 'hold to collect and sell' are categorised at fair value through profit and loss. Further, irrespective of business model financial assets whose contractual cash flows are not solely payments of principal and interest are accounted for at FVTPL.

Financial assets at fair value through other comprehensive income (FVOCI)

The Group accounts for financial assets at FVOCI if the assets meet the following conditions:

-- they are held under a business model whose objective it is "hold to collect" the associated cash flows and sell and

-- the contractual terms of the financial assets give rise to cash flows that are solely payments of principal and interest on the principal amount outstanding.

Any gains or losses recognised in other comprehensive income (OCI) will be recycled upon derecognition of the asset.

Impairment of financial assets

IFRS 9's impairment requirements use more forward-looking information to recognise expected credit losses- the 'expected credit loss (ECL) model'. This replaced IAS 39's 'incurred loss model'. Instruments within the scope of the new requirements included loans and other debt-type financial assets measured at amortised cost and FVOCI, trade receivables, contract assets recognised and measured under IFRS 15 and loan commitments and some financial guarantee contracts (for the issuer) that are not measured at fair value through profit or loss.

Trade and other receivables

The Group makes use of a simplified approach in accounting for trade and other receivables and records the loss allowance as lifetime expected credit losses. These are the expected shortfalls in contractual cash flows, considering the potential for default at any point during the life of the financial instrument. In calculating the same, Group uses its historical experience, external indicators and forward-looking information to calculate the expected credit losses using a provision matrix.

The Group assess impairment of trade receivables on a collective basis as they possess shared credit risk characteristics they have been grouped based on the days past due.

Cash and cash equivalents

Cash and cash equivalents in the consolidated statement of financial position and consolidated statement of cash flow comprise cash at banks and on hand and short-term deposits with an original maturity of three months or less from inception and which are subject to an insignificant risk of changes in value.

Restricted deposits

Restricted deposits consist of deposits pledged with government authorities for the Group's Indian subsidiaries and deposits restricted as to usage under lien to banks for guarantees given by the Group.

Others

Other non-derivative financial instruments are measured at amortized cost using the effective interest rate method, less any impairment losses.

The Group holds derivative financial instruments to hedge its foreign currency exposure. The Group does not apply hedge accounting to these instruments.

Derivatives are recognized initially at fair value; transaction costs are recognized in the consolidated income statement when incurred. Subsequent to initial recognition, derivatives are measured at fair value, and changes therein are recognized in the consolidated income statement.

Financial liabilities

The Group's financial liabilities include trade and other payables, borrowings and derivative financial instruments. Trade and other payables and borrowings are initially measured at fair value and subsequently measured at amortized cost using the effective interest rate method. They are included in the consolidated statement of financial position line items 'long-term borrowings' and 'trade and other payables'.

Financial liabilities are recognized when the Group becomes a party to the contractual agreements of the instrument. All interest related charges are recognized as an expense in "finance cost" in the consolidated income statement. Subsequently, financial liabilities are measured at amortised cost using the effective interest method except for derivatives and financial liabilities designated at FVTPL, which are carried subsequently at fair value with gains or losses recognized in the consolidated income statement (other than derivative financial instruments that are designated and effective as hedging instruments).

All interest-related charges and, if applicable, changes in an instrument's fair value that are reported in the consolidated income statement are included within finance costs or finance income.

An exchange between an existing borrower and lender of debt instrument with substantially different terms shall be accounted for as an extinguishment of the original financial liability and the recognition of the new financial liability. Similarly, a substantial modification of the terms of the existing financial liability or a part of it shall be accounted for as an extinguishment of the original financial liability and the recognition of a new financial liability. In exchange the debt instrument or the modification of the terms is accounted as an extinguishment, any costs or fees incurred are recognised as the part of the loss or gain on the extinguishment. If the exchange or the modification of the terms is not accounted as an extinguishment, any cost or fees incurred adjust the carrying amount of the liability and amortised over the remaining term of the modified liability .

3.12 OFFSETTING OF FINANCIAL INSTRUMENTS

Financial assets and financial liabilities are offset against each other and the net amount reported in the consolidated statement of financial position only if there is a currently enforceable legal right to offset the recognized amounts and there is an intention to settle on a net basis or to realize the assets and settle the liabilities simultaneously.

3.13 PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS

Provisions are recognized when present obligations as a result of past events will probably lead to an outflow of economic resources from the Group and they can be estimated reliably. Timing or amount of the outflow may still be uncertain. A present obligation arises from the presence of a legal or constructive obligation that has resulted from past events.

Provisions are measured at the estimated expenditure required to settle the present obligation, based on the most reliable evidence available at the end of the reporting period, including the risks and uncertainties associated with the present obligation.

In those cases, where the possible outflow of economic resource as a result of present obligations is considered improbable or remote, or the amount to be provided for cannot be measured reliably, no liability is recognized in the consolidated statement of financial position.

Any reimbursement that the Group can be virtually certain to collect from a third party with respect to the obligation is recognized as a separate asset. However, this asset may not exceed the amount of the related provisions. All provisions are reviewed at each reporting date and adjusted to reflect the current best estimate.

3.14 BUSINESS COMBINATIONS

The Group applies the acquisition method in accounting for business combinations. The consideration transferred by the Group to obtain control of a subsidiary is calculated as the sum of the acquisition-date fair values of assets transferred, liabilities incurred and the equity interests issued by the Group, which includes the fair value of any asset or liability arising from a contingent consideration arrangement. Acquisition costs are expensed as incurred.

The Group recognizes identifiable assets acquired and liabilities assumed in a business combination regardless of whether they have been previously recognized in the acquirer's financial statements prior to the acquisition. Assets acquired and liabilities assumed are generally measured at their acquisition-date fair values.

Goodwill is stated after separate recognition of identifiable intangible assets. It is calculated as the excess of the sum of a) fair value of consideration transferred, b) the recognized amount of any non-controlling interest in the acquiree and c) acquisition-date fair value of any existing equity interest in the acquiree, over the acquisition-date fair values of identifiable net assets. If the fair values of identifiable net assets exceed the sum calculated above, the excess amount (i.e. gain on a bargain purchase) is recognized in the consolidated income statement immediately.

For common control transactions, not covered under IFRS 3 (revised), the Group applies the pooling of interest method. Under a pooling of interests-type method, the acquirer accounts for the combination as follows:

-- The assets and liabilities of the acquiree are recorded at book value, not fair value (although adjustments should be recorded to achieve uniform accounting policies);

-- Intangible assets and contingent liabilities are recognized only to the extent that they were recognized by the acquiree in accordance with applicable IFRS (in particular IAS 38);

-- No goodwill is recorded. The difference between the acquirer's cost of investment and the acquiree's equity is presented as a separate reserve within equity on consolidation;

-- Any non-controlling interest is measured as a proportionate share of the book values of the related assets and liabilities (as adjusted to achieve uniform accounting policies);

-- Any expenses of the combination are written off immediately in the consolidated income statement;

-- Comparative amounts are restated as if the combination had taken place at the beginning of the earliest comparative period presented.

3.15 EQUITY

Share capital is determined using the nominal value of shares that have been issued.

Additional paid-in capital includes any premium received on the issue of share capital. Any transaction costs associated with the issue of shares is deducted from additional paid-in capital, net of any related income tax benefits.

Foreign currency translation differences on translation of foreign operations are included in the currency translation reserve.

Other components of equity include the following:

-- Re-measurement of net defined benefit liability - comprises the actuarial losses from changes in actuarial assumptions and the return on plan assets

-- translation reserve - comprises foreign currency translation differences arising from the translation of financial statements of the Group's foreign entities into USD

Retained earnings include all current and prior period earnings, as disclosed in the consolidated income statement.

Share compensation reserve includes cumulative share-based remuneration recognized as an expense in the consolidated income statement.

The balance on the merger reserve represents the excess of the fair value of the consideration paid over the book value of net assets acquired in a common control transaction accounted for using pooling of interest method.

All transactions with owners of the parent are recorded separately within equity.

3.16 SIGNIFICANT ACCOUNTING JUDGMENTS, ESTIMATES AND ASSUMPTIONS

The preparation of the Group's consolidated financial statements requires management to make judgments, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the disclosure of contingent liabilities, at the end of the reporting period. However, uncertainty about these judgments, assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of the asset or liability affected in future periods.

The Group has also considered the possible effects that may result from the pandemic relating to COVID-19 on the carrying amounts of receivables, goodwill and intangible assets with indefinite life. In developing the assumptions relating to the possible future uncertainties in the global economic conditions because of this pandemic, the Group, as at the date of approval of these financial statements has used internal and external sources of information including credit reports and related information, economic forecasts. The Group has performed sensitivity analysis on the assumptions used and based on current estimates expects the carrying amount of these assets will be recovered. The impact of COVID-19 on the Group's consolidated financial statements may differ from that estimated as at the date of approval of these consolidated financial statements.

In the process of applying the Group's accounting policies, management has made the following judgments, estimates and assumptions which have the most significant effect on the amounts recognized in the consolidated financial information:

Significant Estimations

Goodwill impairment review

In assessing goodwill impairment, management makes a judgment in identifying the cash-generating units (CGU) to which the goodwill pertains. Management then estimates the recoverable amount of each asset based on discounted free cash flow to firm ('FCFF') method, covering a four-year forecast of expected cash flows and the terminal value for the unit's remaining useful lives using the growth rates. Estimation uncertainty relates to assumptions about future operating results and the determination of a suitable growth and discount rate (see Note 7).

Post-employment benefits

The cost of defined employee benefits obligations and the present value of these obligations are determined using actuarial valuations. An actuarial valuation involves making various assumptions. These include the determination of the discount rate, future salary increases, expected return on plan assets, mortality rates and attrition rates. Due to the complexity of the valuation, the underlying assumptions and its long-term nature, a

defined benefit obligation is highly sensitive to changes in these assumptions. All assumptions are reviewed at each reporting date.

In determining the appropriate discount rate, management considers the interest rates of high-quality government bonds denominated in the respective currency in which the benefits will be paid, with extrapolated maturities corresponding to the expected duration of the defined benefit obligation.

The mortality rate is based on publicly available mortality tables for the specific country. Future salary increases are based on expected future inflation rates for the respective countries and expected future salary increases for the respective entities. The attrition rate is based on expected future attrition rate for the respective entities. (see Note 18).

Expected credit loss on trade receivables

As at each reporting date, management uses a simplified approach to estimate for trade and other receivables and records the loss allowance as lifetime expected credit losses. These are the expected shortfalls in contractual cash flows, considering the potential for default at any point during the life of the financial instrument. In calculating, the Group uses its historical experience, external indicators and forward-looking information to calculate the expected credit los ses using a provision matrix. Further for the year ended

31 March 2021, the Group has also considered credit reports and other related credit information for its customers to estimate the probability of default in future and has taken-into account estimates of possible effect from the pandemic relating to COVID -19 (Note 12).

Significant judgements

Recognition of deferred tax assets

The extent to which deferred tax assets can be recognized is based on an assessment of the probability of the Group's future taxable income against which the deferred tax assets can be utilized. In addition, significant judgement is required in assessing the impact of any legal or economic limits or uncertainties in various tax jurisdictions (see Note 11).

3.17 OUTSOURCED SERVICE COSTS

Outsourced service costs are expenses towards sub-contractors. They are recognized on the basis of contractual terms and invoices received from respective vendors .

4. NEW AND REVISED STANDARDS THAT ARE EFFECTIVE FOR ANNUAL PERIOD BEGINNING ON OR AFTER 1 APRIL 2020, WHICH HAS AN IMPACT ON THE GROUP

-- The International Accounting Standard Board has issued amendments to IFRS 3, 'Business Combinations', in connection with clarification of business definition, which help in determining whether an acquisition made is of a business or a group of assets. The amendment added a test that makes it easier to conclude that a Group has acquired a group of assets, rather than a business, if the value of the assets acquired is substantially all concentrated in a single asset or group of similar assets. The adoption of amendment to IFRS 3 is applicable to new acquisition on a prospective basis and did not have any impact on the consolidated financial statements of the Group.

-- The IASB issued Amendment to IAS 1 "Presentation of Financial Statements" and IAS 8 "Accounting Policies, Changes in Accounting Estimates and Errors" to update a new definition of material in IAS 1. The amendments clarify the definition of "material" and how it should be applied by including in the definition guidance that until now has featured elsewhere in IFRS Standards. The new definition clarifies that, information is considered material if omitting, misstating, or obscuring such information, could reasonably be expected to influence the decisions that the primary users of general-purpose financial statements make on the basis of those financial statements. The definition of material in IAS 8 has been replaced by a reference to the definition of material in IAS 1. In addition, the IASB amended other Standards and the Conceptual Framework that contain a definition of material or refer to the term 'material' to ensure consistency. The adoption of the amendment to IAS 1 and IAS 8 did not have any material impact on its evaluation of materiality in relation to the consolidated financial statements.

-- 'Interest Rate Benchmark Reform Phase 2 - Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16' was issued in August 2020 and will be effective from 1 January 2021. The Phase 2 amendments address issues that arise from implementation of the reforms, including the replacement of one benchmark with an alternative one. A practical expedient is provided such that the change to contractual cash flows for financial assets and liabilities (including lease liabilities) is accounted for prospectively by revising the effective interest rate. In addition, hedge accounting will not be discontinued solely because of the IBOR reform.

The amendments are not expected to have a material impact on the results or financial position of the Group.

5. STANDARDS, AMMENTS AND INTERPRETATIONS TO EXISTING STANDARDS THAT ARE NOT YET EFFECTIVE AND HAVE NOT BEEN ADOPTED BY THE GROUP

-- Amendment to IAS 1 - "Presentation of Financial Statements". On 23 January 2020 the IASB has issued "Classification of liabilities as Current or Non-Current (Amendments to IAS 1)" providing a more general approach to the classification of liabilities under IAS 1 based on the contractual arrangement in place at the reporting date. The amendments aim to promote consistency in applying the requirements by helping companies to determine whether, in the statement of financial position, debt and other liabilities with an uncertain settlement date should be classified as current (due or potentially due to be settled within one year) or noncurrent. The amendments also clarified the classification requirements for debt a Group might settle by converting it into equity. These amendments are effective for annual reporting periods beginning on or after January 1, 2023 and are to be applied retrospectively, with earlier application permitted. The Group is currently evaluating the impact of amendment to IAS 1 on the consolidated financial statements.

-- On 14 May 2020 the IASB issued "Onerous Contracts - Cost of Fulfilling a Contract (Amendments to IAS 37)", amending the standard regarding costs a Group should include as the cost of fulfilling a contract when assessing whether a contract is onerous. The amendment specifies that the "cost of fulfilling" a contract comprises the "costs that relate directly to the contract". Costs that relate directly to a contract can either be incremental costs of fulfilling that contract or an allocation of other costs that relate directly to fulfilling contracts. These amendments are effective for annual reporting periods beginning on or after January 1, 2022, with earlier application permitted. The Group is currently evaluating the impact of amendment to IAS 37 on the consolidated financial statements.

-- On 14 May 2020 IASB amended IFRS 9 as part of its Annual Improvements to IFRS Standards 2018-2020. The amendment clarifies which fees an entity includes when it applies the '10 percent' test of IFRS 9 in assessing whether to derecognize a financial liability. This amendment is effective for annual reporting periods beginning on or after January 1, 2022, with earlier application permitted. The Group is currently evaluating the impact of amendment to IFRS 9 on the financial statements.

   6.   BASIS OF CONSOLIDATION 

Composition of the Group

Details of the entities, which as of 31 March 2021 and 31 March 2020 form part of the Group and are consolidated under iEnergizer are as follows:

 
Name of the entity                 Holding       Country of        Effective group 
                                    company       incorporation    shareholding (%) 
                                                                         as of 
                                                                     31 March 2021 
                                                                   and 31 March 2020 
---------------------------------  ------------  ---------------  ------------------ 
iEnergizer Holdings Limited 
 ('IHL')                           iEnergizer    Mauritius               100 
---------------------------------  ------------  ---------------  ------------------ 
iEnergizer IT Services Private 
 Limited ('IITS')                  IHL           India                   100 
---------------------------------  ------------  ---------------  ------------------ 
iEnergizer BPO Limited             IHL           Mauritius               100 
---------------------------------  ------------  ---------------  ------------------ 
iEnergizer BPO Inc.*               IITS          USA                     100 
---------------------------------  ------------  ---------------  ------------------ 
iEnergizer Management Services 
 Limited                           iEnergizer    Hong Kong               100 
---------------------------------  ------------  ---------------  ------------------ 
Aptara Inc.                        iEnergizer    USA                     100 
---------------------------------  ------------  ---------------  ------------------ 
Techbooks International Private 
 Limited                           Aptara Inc.   India                   100 
---------------------------------  ------------  ---------------  ------------------ 
Techbooks Electronic Services 
 Private Limited                   Aptara Inc.   India                   100 
---------------------------------  ------------  ---------------  ------------------ 
Global Content Transformation 
 Private Limited                   Aptara Inc.   India                   100 
---------------------------------  ------------  ---------------  ------------------ 
Aptara Learning Private Limited    Aptara Inc.   India                   100 
---------------------------------  ------------  ---------------  ------------------ 
Aptara New Media Private Limited   Aptara Inc.   India                   100 
---------------------------------  ------------  ---------------  ------------------ 
Aptara Technologies Private 
 Limited                           Aptara Inc.   India                   100 
---------------------------------  ------------  ---------------  ------------------ 
iEnergizer Aptara Limited          iEnergizer    Mauritius               100 
---------------------------------  ------------  ---------------  ------------------ 
 

* During the year ended 31 March 2020, iEnergizer IT Services Private Limited incorporated a wholly-owned subsidiary namely iEnergizer BPO Inc. (USA).

   7.   GOODWILL 

The net carrying amount of goodwill can be analysed as follows:

 
 Particulars                              Amount 
-----------------------------  ----------------- 
 Balance as at 1 April 2019          102,256,665 
 Impairment loss recognized                    - 
 Translation adjustment                  (8,635) 
 Balance as at 31 March 2020         102,248,030 
-----------------------------  ----------------- 
 
 
 Particulars                              Amount 
-----------------------------  ----------------- 
 Balance as at 1 April 2020          102,248,030 
 Impairment loss recognized                    - 
 Translation adjustment                    2,335 
 Balance as at 31 March 2021         102,250,365 
-----------------------------  ----------------- 
 

For the purpose of annual impairment testing goodwill is allocated to the following Cash Generating Unit (CGU), which are expected to benefit from the synergies of the business combinations in which the goodwill arises.

 
 Particulars                                                   Amount                             Amount 
                                                       As at 31 March                     As at 31 March 
                                                                 2021                               2020 
----------------------------------  ---------------------------------  --------------------------------- 
 Business process outsourcing - 
  India business unit 
  Content delivery - USA business 
  unit                                            115,541 102,134,824                113,206 102,134,824 
 Goodwill allocation                                      102,250,365                        102,248,030 
----------------------------------  ---------------------------------  --------------------------------- 
 

The recoverable amounts of the CGU were determined based on discounted free cash flow to firm ('FCFF') method, covering a four-year forecast of expected cash flows and the terminal value for the unit's remaining useful lives using the growth rates stated below:

 
 Particulars                          Growth rate   Discount rate 
                                    31 March 2021   31 March 2021 
---------------------------------  --------------  -------------- 
 Business process outsourcing              10.50%          12.78% 
  - Indian business unit 
  Content delivery - USA business           5.00%          12.78% 
   unit 
---------------------------------  --------------  -------------- 
 
 
 Particulars                          Growth rate   Discount rate 
                                    31 March 2020   31 March 2020 
---------------------------------  --------------  -------------- 
 Business process outsourcing              10.50%          13.58% 
  - Indian business unit 
  Content delivery - USA business           8.00%          13.58% 
   unit 
---------------------------------  --------------  -------------- 
 

The key assumptions for Content delivery-USA business unit are as follows:

Management considers 'Content Delivery' business as one product line/services and therefore as one group of similar assets for internal management reporting purposes. It is the smallest identifiable group of assets that generates cash inflows that are largely independent of the cash inflows from other assets or group of assets. The goodwill is therefore allocated to this unit and accordingly tested for impairment.

Growth rates

The forecasted growth rates are based on management estimation derived from past experience, comparable company data and external sources of information available. The Group is expected to continue to grow at the above rates for the foreseeable future as it is getting work from customers on a continuous basis rather than one-time work.

Discount rates

Discount rates reflect management's estimates of the risks specific to the business. The pre-tax discount rates used are based on the weighted average cost of capital of the relevant underlying cash-generating unit.

Cash flow assumptions

Estimated cash flows for 4 years based on internal management budgets prepared using past experience. Management's key assumptions include stable profit margins, based on past experience in this market. The Group's management believes that this is the best available input for forecasting this mature market. Cash flow projections reflect stable profit margins going forward and prices and wages reflect publicly available forecasts of inflation for the industry.

Terminal value

Terminal value has been estimated using Gordon Growth model, which assumes constant growth in cash flows until perpetuity. To estimate long-term perpetual growth rate in future cash flows, expected long-term US economy growth rate of 2.00% was considered as a reasonable proxy.

EV/EBIDTA Multiple

On the basis guidelines companies, financial performance, the market dynamics and current global scenario, the group has taken an EV/LTM EBITDA multiple of 7.5x for estimating the enterprise value as on

31 March 2021.

These assumptions are based on past experience and are consistent with market information.

Sensitivity analysis of key assumptions

 
   Item       Valuation      Key assumptions   Input        Sensitivity to the input to 
               technique                                             fair value 
 Goodwill   Free Cash        Gordon -          2.00%    5% increase (decrease) in 
             Flow to          long term                  terminal value results in 
             Firm ('FCFF')    growth rate                an increase (decrease) in 
             method                                      fair value of the goodwill 
                                                         by $1.10m and ($1.08m) respectively 
           ---------------  ----------------  -------  ------------------------------------- 
                             Discount          12.78%   5% increase (decrease) in 
                              rate                       the discount rate would result 
                                                         in (decrease) increase of 
                                                         enterprise value by ($8.5m) 
                                                         and $9.5m respectively 
           ---------------  ----------------  -------  ------------------------------------- 
 

The discount rate above is based on the Weighted Average Cost of Capital (WACC) of the Group. As at

31 March 2021, the estimated recoverable amount of the CGU exceeded its carrying amount. Reasonable sensitivities in the key assumptions consequent to the change in estimated future economic conditions on account of possible effects relating to COVID-19 is unlikely to cause the carrying amount to exceed the recoverable amount of the cash generating unit.

8. OTHER INTANGIBLE ASSETS

The other intangible assets comprise of the following:

 
 Particulars           Customer           Computer          Patent          Trademark       Intangibles       Total 
                       contracts          software                                             under 
                                                                                            development 
---------------  -------------------  ---------------  ---------------  ----------------  --------------  ------------ 
 Cost 
 Balance as at 
  1 April 2019            24,112,814        3,944,019          100,000        12,000,000         132,490    40,289,323 
                 -------------------  ---------------  ---------------  ----------------  --------------  ------------ 
 
 Additions                         -          511,654                -                 -               -       511,654 
 Disposals                         -                -                -                 -               -             - 
 Translation 
  adjustment                 (9,657)        (276,192)                -                 -               -     (285,849) 
 Balance as at 
  31 March 2020           24,103,157        4,179,481          100,000        12,000,000         132,490    40,515,128 
                 -------------------  ---------------  ---------------  ----------------  --------------  ------------ 
 
 Accumulated 
 amortisation 
 Balance as at 
  1 April 2019            24,112,814        3,559,966                -                 -               -    27,672,780 
                 -------------------  ---------------  ---------------  ----------------  --------------  ------------ 
 Amortisation 
  for the 
  period                           -          423,580                -                 -               -       423,580 
 Disposals                         -                -                -                                               - 
                                                                                       -               - 
 Translation 
  adjustment                 (9,657)        (261,384)                -                 -               -     (271,041) 
                 -------------------  ---------------  ---------------  ----------------  --------------  ------------ 
 Balance as at 
  31 March 2020           24,103,157        3,722,162                -                 -               -    27,825,319 
                 -------------------  ---------------  ---------------  ----------------  --------------  ------------ 
 
 Impairment 
 Balance as at 
  1 April 2019                     -                -                -                 -         132,490       132,490 
                 -------------------  ---------------  ---------------  ----------------  --------------  ------------ 
 Impairment for                    -                -                -                 -               -             - 
 the period 
 Disposals                         -                -                -                 -               -             - 
 Translation                       -                -                -                 -               -             - 
 adjustment 
 Balance as at 
  31 March 2020                    -                -                -                 -         132,490       132,490 
                 -------------------  ---------------  ---------------  ----------------  --------------  ------------ 
 Carrying 
  values as at 
  31 
  March 2020                       -          457,319          100,000        12,000,000               -    12,557,319 
---------------  -------------------  ---------------  ---------------  ----------------  --------------  ------------ 
 
 
    Particulars       Customer    Computer software     Patent       Trade mark        Intangibles          Total 
                      contracts                                                     under development 
------------------  -----------  ------------------  -----------  ---------------  ------------------  --------------- 
 Cost 
 Balance as at 1 
  April 2020         24,103,157           4,179,481      100,000       12,000,000             132,490       40,515,128 
                    -----------  ------------------  -----------  ---------------  ------------------  --------------- 
 Additions                    -             706,210            -                -                   -          706,210 
 Disposals                    -                   -            -                -                   -                - 
 Translation 
  adjustment              2,612              83,645            -                -                   -           86,257 
 Balance as at 31 
  March 
  2021               24,105,769           4,969,336      100,000       12,000,000             132,490       41,307,595 
                    -----------  ------------------  -----------  ---------------  ------------------  --------------- 
 
 Accumulated 
 amortisation 
 Balance as at 1 
  April 2020         24,103,157           3,722,162            -                -                   -       27,825,319 
                    -----------  ------------------  -----------  ---------------  ------------------  --------------- 
 Amortisation for 
  the period                  -             694,385            -                -                   -          694,385 
 Disposals                    -                   -            -                -                   -                - 
 Translation 
  adjustment              2,612              79,562            -                -                   -           82,174 
                                                                                                       --------------- 
 Balance as at 31 
  March 
  2021               24,105,769           4,496,109            -                -                   -       28,601,878 
                    -----------  ------------------  -----------  ---------------  ------------------  --------------- 
 
 
 Impairment 
 Balance as at 1 
  April 2020                  -                   -            -                -             132,490          132,490 
                    -----------  ------------------  -----------  ---------------  ------------------  --------------- 
 Impairment for               -                   -            -                -                   -                - 
 the period 
 Disposals                    -                   -            -                -                   -                - 
 Translation                  -                   -            -                -                   -                - 
 adjustment 
                    -----------  ------------------  -----------  ---------------  ------------------  --------------- 
 Balance as at 31 
  March 
  2020                        -                   -            -                -             132,490          132,490 
                    -----------  ------------------  -----------  ---------------  ------------------  --------------- 
 Carrying values 
  as at 31 
  March 2021                  -             473,227      100,000       12,000,000                   -       12,573,227 
------------------  -----------  ------------------  -----------  ---------------  ------------------  --------------- 
 

Intangible assets with indefinite useful lives

Trademark relate to Group's branding in the publishing industry and is associated with its long-standing history in the trade and its working relationship with big publishing houses in the world. It distinguishes the Group in Content delivery segment from the competition. The Group has developed a proprietary technology platform, comprising a standardized set of technological tools namely Powersuite, PXE4, PowerLearn, PowerL2X, Power Eye through an extensive research and development initiative which thereby gives the Group an edge over its competitors. The management believes that the Group's branding would continue to contribute towards revenue growth in perpetuity and the value is not expected to diminish in the foreseeable future. Accordingly, the useful lives have been determined to be indefinite.

For the purpose of annual impairment testing, trademark and patent are allocated to the 'Content delivery' business of the Group with respect to the US business unit.

The net carrying amount of intangible assets with indefinite lives can be analysed as follows:

 
 Particulars                               Amount 
-----------------------------  ------------------ 
 Balance as at 1 April 2019            12,100,000 
 Impairment loss recognized                     - 
 Balance as at 31 March 2020           12,100,000 
-----------------------------  ------------------ 
 
 
 Particulars                               Amount 
-----------------------------  ------------------ 
 Balance as at 1 April 2020            12,100,000 
 Impairment loss recognized                     - 
 Balance as at 31 March 2021           12,100,000 
-----------------------------  ------------------ 
 

The recoverable amounts of the CGU were determined based on discounted free cash flow to firm ('FCFF') method, covering a four-year forecast of expected cash flows and the terminal value for the unit's remaining useful lives using the growth rates.

   9.   PROPERTY, PLANT AND EQUIPMENT 

Property, plant and equipment comprise of the following:

 
 Particulars      Computer     Office     Furniture       Air       Vehicle      Leasehold       Plant     Capital          Total 
                  and data    equipment      and      conditioner              improve-ments      and      work in 
                  equipment               fixtures        and                                  machinery   progress 
                                                       generator 
--------------  -----------  ----------  ----------  ------------  ---------  --------------  ----------  ---------  ------------------ 
 Cost 
 Balance as at 
  1 April 
  2019            8,406,553     854,772   1,438,730       916,719     20,747       4,717,127   2,316,570    224,308          18,895,526 
                -----------  ----------  ----------  ------------  ---------  --------------  ----------  ---------  ------------------ 
 Additions        2,467,719     274,357      39,541        34,233    398,792         152,713     120,773    114,088           3,602,216 
 Disposals / 
  transfer         (85,706)           -    (16,167)             -          -               -    (15,686)          -           (117,559) 
 Translation 
  and other 
  adjustment      (684,194)    (66,510)    (95,586)      (67,004)   (23,407)       (334,231)   (147,647)    (7,175)         (1,425,754) 
 Balance as at 
  31 March 
  2020           10,104,372   1,062,619   1,366,518       883,948    396,132       4,535,609   2,274,010    331,221          20,954,429 
                -----------  ----------  ----------  ------------  ---------  --------------  ----------  ---------  ------------------ 
 
 Balance as at 
  1 April 
  2019            5,522,457     778,064     996,024       262,105     16,561       2,846,284   1,866,959          -          12,288,454 
                -----------  ----------  ----------  ------------  ---------  --------------  ----------  ---------  ------------------ 
 Depreciation 
  for the 
  period          1,628,060      62,006     117,881       114,565     29,858         461,149     187,790          -           2,601,309 
 Disposals         (85,037)           -    (16,083)             -          -               -    (15,261)          -           (116,381) 
 Translation 
  and other 
  adjustments     (466,409)    (52,044)    (69,242)      (24,599)    (2,745)       (220,207)   (126,407)          -           (961,653) 
 Balance as at 
  31 March 
  2020            6,599,071     788,026   1,028,580       352,071     43,674       3,087,226   1,913,081          -          13,811,729 
                -----------  ----------  ----------  ------------  ---------  --------------  ----------  ---------  ------------------ 
 Carrying 
  values as 
  at 31 March 
  2020            3,505,301     274,593     337,938       531,877    352,458       1,448,383     360,929    331,221           7,142,700 
--------------  -----------  ----------  ----------  ------------  ---------  --------------  ----------  ---------  ------------------ 
 
 
 Particulars       Computer         Office        Furniture         Air            Vehicle        Leasehold        Plant          Capital           Total 
                   and data        Equipment         and        conditioner                     improve-ments       and           work in 
                   equipment                       fixtures    and generator                                     machinery        progress 
--------------  -------------  ----------------  -----------  ---------------  --------------  --------------  -------------  --------------  ---------------- 
 Cost 
 Balance as at 
  01 April 
  2020             10,104,372         1,062,619    1,366,518          883,948         396,132       4,535,609      2,274,010         331,221        20,954,429 
                -------------  ----------------  -----------  ---------------  --------------  --------------  -------------  --------------  ---------------- 
 Additions          2,011,543            65,076       21,965           48,436               -         198,516        121,393               -         2,466,929 
 Disposals 
  (Net)/ 
  transfer          (256,417)             (129)            -                -               -               -       (21,213)       (123,247)         (401,006) 
 Translation 
  and other 
  adjustment          246,417            20,509       25,986           18,089           8,173          91,939         42,077           6,333           459,523 
 Balance as at 
  31 March 
  2021             12,105,915         1,148,075    1,414,469          950,473         404,305       4,826,064      2,416,267        214,307         23,479,875 
                -------------  ----------------  -----------  ---------------  --------------  --------------  -------------  --------------  ---------------- 
 
 
 Balance as at 
  01 April 
  2020              6,599,071           788,026    1,028,580          352,071          43,674       3,087,226      1,913,081               -        13,811,729 
                -------------  ----------------  -----------  ---------------  --------------  --------------  -------------  --------------  ---------------- 
 Depreciation 
  for the 
  period            2,036,286            76,359       91,142          108,634          49,068         491,560        126,306               -         2,979,355 
 Disposals 
  (Net)             (199,976)             (129)            -                -               -               -       (21,213)               -         (221,318) 
 Translation 
  and other 
  adjustments         153,256            15,229       19,894            8,483           1,452          67,231         36,123               -           301,668 
 Balance as at 
  31 March 
  2021              8,588,637           879,485    1,139,616          469,188          94,194       3,646,017      2,054,297               -        16,871,434 
                -------------  ----------------  -----------  ---------------  --------------  --------------  -------------  --------------  ---------------- 
 Carrying 
  values as 
  at 31 March 
  2021              3,517,278           268,590      274,853          481,285         310,111       1,180,047        361,970         214,307         6,608,441 
--------------  -------------  ----------------  -----------  ---------------  --------------  --------------  -------------  --------------  ---------------- 
 
   10.   LONG TERM FINANCIAL ASSETS 
 
 Particulars                        31 March 2021          31 March 2020 
--------------------------  ---------------------  --------------------- 
 Security deposits                        686,922                382,614 
 Restricted cash                        1,398,071              1,881,726 
 Fixed deposit with banks               1,226,746              1,087,641 
                            ---------------------  --------------------- 
                                        3,311,739              3,351,981 
--------------------------  ---------------------  --------------------- 
 

Security deposits are interest free unsecured deposits placed with owners of the property leased in India to the Group for operations in operating centres. The above security deposits have been discounted to arrive at their fair values at initial recognition using market interest rates applicable in India, which approximates 5.89% per annum. These security deposits have maturity terms of 1-14 years. The management estimates the fair value of these deposits to be not materially different from the amounts recognized in the financial statements at amortized cost at each reporting date.

Restricted cash represents deposits that have been pledged with reputable banks against guarantees issued to tax and other local authorities as security to meet contractual obligations towards other parties along with accrued interest on these deposits which is also inaccessible for use by the Group. These deposits have an average maturity period of more than 12 months from the end of the financial year.

Fixed deposits with banks represent deposits with reputable banks have an average maturity period of more than 12 months from the end of the financial year.

The credit analysis has been performed as per the IFRS 9 requirement, whereas same has no impact on the long term financial assets.

11. DEFERRED TAX ASSETS AND LIABILITIES

 
 
 Particulars              1 April            Exchange        Other amounts          Recognized            31 March 
                            2020            difference         recognized         in consolidated           2021 
                                          on translation     in consolidated          income 
                                            of foreign          statement            statement 
                                            operations          of other 
                                                              comprehensive 
                                                                 income 
------------------  ------------------  -----------------  -----------------  ---------------------  ----------------- 
 Deferred tax 
 assets 
 on account of : 
 Property, plant 
  and 
  equipment and 
  intangibles                  960,610             12,699                  -                237,605          1,210,914 
 Employee benefits           1,065,921             27,780           (14,137)                548,293          1,627,857 
 Net operating 
  losses                     1,490,749                  -                  -              (231,419)          1,259,330 
 Accruals for 
  expenses                     729,023             12,582                  -                237,171            978,776 
 Unrealised gain/ 
  (loss) on 
  derivatives                   13,006               (12)                  -               (14,639)            (1,645) 
 Minimum alternate 
  tax                        1,037,079             21,391                  -                      -          1,058,470 
 Others                        469,851              8,540                  -               (57,157)            421,234 
                    ------------------  -----------------  -----------------  ---------------------  ----------------- 
 Total (A)                   5,766,239             82,980           (14,137)                719,854          6,554,936 
 Deferred tax 
 liabilities 
 on account of 
 Undistributed 
  earnings 
  of the 
  subsidiaries*             11,860,587            154,165                  -                      -         12,014,752 
 Total (B)                  11,860,587            154,165                  -                      -         12,014,752 
 Total (A-B)               (6,094,348)           (71,185)           (14,137)                719,854        (5,459,816) 
------------------  ------------------  -----------------  -----------------  ---------------------  ----------------- 
 
 Amounts presented in consolidated statement of financial position 
---------------------------------------------------------------------------------------------------------------------- 
 Deferred tax 
  assets                     3,623,361                  -                  -                      -          3,469,843 
------------------  ------------------  -----------------  -----------------  ---------------------  ----------------- 
 Deferred tax 
  liabilities              (9,717,709)                  -                  -                      -        (8,929,659) 
------------------  ------------------  -----------------  -----------------  ---------------------  ----------------- 
 Net                       (6,094,348)                  -                  -                      -        (5,459,816) 
------------------  ------------------  -----------------  -----------------  ---------------------  ----------------- 
 

In assessing the realisability of deferred tax assets, the Group considers the extent to which, it is probable that the deferred tax asset will be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable profits during the periods in which those temporary differences and tax loss carry-forwards become deductible. The Group considers the expected reversal of deferred tax liabilities, projected future taxable income and tax planning strategies in making this assessment.

Based on this, the Group believes that it is probable that the Group will realize the benefits of these deductible differences. The amount of the deferred tax asset considered realizable, however, could be reduced in the near term if the estimates of future taxable income during the carry-forward period are reduced.

The Group has recognized deferred tax assets of USD 1,259,330 (31 March 2020: USD 1,490,749) in respect of carry forward losses of its various subsidiaries as at 31 March 2021 and 31 March 2020 respectively. Management's projections of future taxable income and tax planning strategies support the assumption that it is probable that sufficient taxable income will be available to utilize these deferred tax assets.

*At the balance sheet date, the aggregate amount of temporary differences associated with undistributed earnings of subsidiaries for which deferred tax liabilities recognised till date amounted to USD 12,014,752. The Group does not foresee additional tax outflow in respect of these undistributed earnings, therefore has restricted recognition of DTL to the said amount as the Group is in a position to control the timing of the reversal of the temporary differences, and it is probable that any additional temporary differences will not reverse in the foreseeable future.

 
 Particulars           1 April 2019        Exchange          Other amounts       Recognized in        31 March 2020 
                                        difference on        recognized in        consolidated 
                                        translation of       consolidated       income statement 
                                      foreign operations     statement of 
                                                                 other 
                                                             comprehensive 
                                                                income 
--------------------  -------------  -------------------  ------------------  -------------------  ------------------- 
 Deferred tax assets 
 on account of: 
 Property, plant and 
  equipment and 
  intangibles             1,121,727             (36,179)                   -            (124,938)              960,610 
 Employee benefits        1,140,461             (81,205)              37,738             (31,073)            1,065,921 
 Net operating 
  losses                  2,384,668                    -                   -            (893,919)            1,490,749 
 Accruals for 
  expenses                  546,285             (33,494)                   -              216,232              729,023 
 Unrealised gain/ 
  (loss) on 
  derivatives                21,700                   35                   -              (8,729)               13,006 
 Minimum alternate 
  tax                     1,276,919             (82,016)                   -            (157,824)            1,037,079 
 Others                     170,935             (64,784)                   -              363,700              469,851 
 Total (A)                6,662,695            (297,643)              37,738            (636,551)            5,766,239 
 Deferred tax 
 liabilities on 
 account of: 
 Undistributed 
  earnings of the 
  subsidiaries           10,426,088            (542,076)                   -            1,976,575           11,860,587 
 Others                      85,115                    -                   -             (85,115)                    - 
 Total (B)               10,511,203            (542,076)                   -            1,891,460           11,860,587 
 Total (A-B)            (3,848,508)              244,433              37,738          (2,528,011)          (6,094,348) 
--------------------  -------------  -------------------  ------------------  -------------------  ------------------- 
 
   Amounts presented in consolidated statement of financial position 
---------------------------------------------------------------------------------------------------------------------- 
 Deferred tax assets      4,726,068                    -                   -                    -            3,623,361 
--------------------  -------------  -------------------  ------------------  -------------------  ------------------- 
 Deferred tax 
  liabilities           (8,574,576)                    -                   -                    -          (9,717,709) 
--------------------  -------------  -------------------  ------------------  -------------------  ------------------- 
 Net                    (3,848,508)                    -                   -                    -          (6,094,348) 
--------------------  -------------  -------------------  ------------------  -------------------  ------------------- 
 

12. TRADE AND OTHER RECEIVABLES

 
 Particulars                                  31 March 2021        31 March 2020 
--------------------------------------  -------------------  ------------------- 
 Trade receivables 
 Gross value                                     41,376,456           36,602,112 
 Less: Provision for bad and doubtful 
  debts                                         (5,683,919)          (2,992,284) 
 Less: Rebate accrued to the customer 
  during the year                               (1,799,395)          (1,566,872) 
--------------------------------------                       ------------------- 
 Net value                                       33,893,142           32,042,956 
 Other receivables 
 Gross value                                         60,895               60,227 
 Less: Provision for bad and doubtful 
  receivables                                      (60,274)             (59,056) 
--------------------------------------  -------------------  ------------------- 
 Net value                                              621                1,171 
--------------------------------------  -------------------  ------------------- 
                                                 33,893,763           32,044,127 
--------------------------------------  -------------------  ------------------- 
 

The trade receivables have been recorded at their respective carrying amounts and are not considered to be materially different from their fair values as these are expected to realize within a short period from the reporting dates. All of the Group's trade and other receivables have been reviewed for indicators of impairment.

Gross value of top five customer balances for the year ended 31 March 2021 amounts to USD 16,694,296 which constitutes 49.25 % (31 March 2020: USD 13,218,363 being 40.38 %) of net trade receivables.

All of the Group's trade and other receivables have been reviewed as per the requirement of IFRS 9 expected credit loss. Out of the total receivable an allowance for credit losses of USD 3,919,116

(31 March 2020: USD 1,585,399) has been recorded under the other expenses.

The analysis of provision for expected credit loss is as follows:

 
 Particulars               31 March 2021   31 March 2020 
------------------------  --------------  -------------- 
 Opening balance               2,992,284       2,216,112 
 Charge during the year        3,919,116       1,585,399 
 Provision reversed          (1,227,481)       (809,227) 
------------------------  --------------  -------------- 
 Closing balance               5,683,919       2,992,284 
------------------------  --------------  -------------- 
 

The analysis for provision for expected credit loss of other receivables is as follows:

 
 Particulars                31 March 2021    31 March 2020 
------------------------  ---------------  --------------- 
 Opening balance                   59,056           63,561 
 Charge during the year                 -                - 
 Provision utilized                 1,218          (4,505) 
------------------------  ---------------  --------------- 
 Closing balance                   60,274           59,056 
------------------------  ---------------  --------------- 
 

As a practical expedient, the Group uses a provision matrix to determine impairment loss allowance on portfolio of its trade receivables. The provision matrix is based on its historically observed default rates over the expected life of the trade receivables and is adjusted for forward looking estimates. At every reporting date, the historical observed default rates are updated and changes in the forward-looking estimates are analysed. On that basis, the Group estimates the following provision matrix at the reporting date, except to the individual cases where recoverability is certain.

ECL impairment loss allowance (or reversal) recognised during the period is recognised as income/ expense in the consolidated income statement. This amount is reflected under the head 'other expenses' in the consolidated income statement.

The analysis of rebate accruals is as follows:

 
 Particulars                               31 March 2021   31 March 2020 
----------------------------------------  --------------  -------------- 
 Opening balance                               1,566,872       1,793,241 
 Less: Rebates utilized during the year        (416,003)       (543,091) 
 Add: Rebates provided to customers 
  during the year                                648,526         316,722 
 Closing balance                               1,799,395       1,566,872 
----------------------------------------  --------------  -------------- 
 

13. CASH AND CASH EQUIVALENTS

 
 Particulars                      31 March 2021       31 March 2020 
--------------------------  -------------------  ------------------ 
 Cash in hand                             9,637              20,190 
 Cash in current accounts            51,369,262          43,525,802 
 Remittance in transit                        -           1,601,791 
                                     51,378,899          45,147,783 
--------------------------  -------------------  ------------------ 
 

14. SHORT TERM FINANCIAL ASSETS

 
 Particulars                                31 March 2021     31 March 2020 
----------------------------------------  ---------------  ---------------- 
 Security deposits                                 30,767            60,516 
 Restricted cash                                6,444,738         4,293,982 
 Short term investments (fixed deposits 
  with maturity less than 12 months)            9,550,799         3,244,643 
 Derivative financial instruments                 151,913                 - 
 Due from officers and employees                   38,336            27,244 
 Others                                            65,371            16,256 
----------------------------------------  ---------------  ---------------- 
                                               16,281,924         7,642,641 
----------------------------------------  ---------------  ---------------- 
 

Short term investments comprise of investment in deposits, denominated in various currency, with reputed banks having high ratings assigned by international and domestic credit rating agencies, bearing fixed rate of interest. Ratings are monitored periodically and the Group has considered the latest available credit ratings in view of COVID - 19 as at the date of approval of these consolidated financial statements.

The credit risk analysis has been performed as per the IFRS 9 requirement in Note 32, whereas the same has negligible impact on the short-term financial assets.

15. OTHER CURRENT ASSETS

 
 Particulars                      31 March 2021      31 March 2020 
----------------------------  -----------------  ----------------- 
 Prepayments                          1,280,205          1,248,854 
 Statutory dues recoverable           1,484,233            982,302 
 Unbilled revenue                       600,187                  - 
 Others                                 198,256            357,867 
                                      3,562,881          2,589,023 
----------------------------  -----------------  ----------------- 
 

16. LONG TERM BORROWINGS AND CURRENT PORTION OF LONG-TERM BORROWINGS

 
 Particulars                                                31 March 2021   31 March 2020 
-----------------------------------------------  ------------------------  -------------- 
 Finance lease obligation (refer note 25)                       5,191,699       5,683,551 
 Term loan*                                                   162,117,051      37,837,207 
 Total borrowings                                             167,308,750      43,520,758 
 
 Less: Current portion of long-term borrowings 
 Finance lease obligation (refer note 25)                       1,424,940       1,216,547 
 Term loan*                                                    22,978,093       9,311,228 
-----------------------------------------------  ------------------------  -------------- 
 Current portion of long-term borrowings                       24,403,033      10,527,775 
-----------------------------------------------  ------------------------  -------------- 
 Long term borrowings                                         142,905,717      32,992,983 
-----------------------------------------------  ------------------------  -------------- 
 

On 29 December 2020, the Group entered into a 5-year senior secured term loan facility (the "Facility") for an aggregate amount of USD 165,000,000, including a USD 15,000,000 revolving credit facility. The senior secured term loan facility bears floating interest rate per annum equal to LIBOR plus 3.75% per annum (with a 0.75% LIBOR floor) and the term loan facility is repayable in quarterly instalments with an annual principal amortization of 5% in the first two years and 10% in the next three years commencing from 31 March 2021. The term loan are measured at fair value less directly attributable transaction cost (USD 2,350,000) and will be amortised over the period of loan.

The said facility was secured by all the assets of iEnergizer Limited and its subsidiaries Aptara Inc.,

iEnergizer Holdings Limited and iEnergizer Aptara Limited the loan amount was used to repay its existing term loan in full and the balance amount paid to the shareholders subsequently on 5 February 2021 as a special dividend as per the purpose of the loan.

17. TRADE AND OTHER PAYABLES

 
 Particulars                       31 March           31 March 
                                       2021               2020 
------------------------  -----------------  ----------------- 
 Due to trade creditors           5,499,203          6,236,578 
 Other accrued expenses           7,430,113          5,245,307 
                                 12,929,316         11,481,885 
------------------------  -----------------  ----------------- 
 

18. EMPLOYEE BENEFIT OBLIGATIONS

Employee benefits are accrued in the period in which the associated services are rendered by employees of the Group. Employee benefit obligations include the components as follows:

 
        Particulars                     31 March 2021                       31 March 2020 
                              Current   Non-current     Total     Current   Non-current     Total 
                             --------                            --------  ------------  ---------- 
 Provision for gratuity       414,179     2,673,497   3,087,676   344,371     2,364,018   2,708,389 
 Provision for compensated 
  absences                    358,552     1,806,219   2,164,771   279,281     1,458,076   1,737,357 
 Accrued pension liability    187,156       228,731     415,887   186,962       844,967   1,031,929 
                              959,887     4,708,447   5,668,334   810,614     4,667,061   5,477,675 
                             --------  ------------  ----------  --------  ------------  ---------- 
 

Gratuity

The Group provides gratuity benefit to its employees working in India. The gratuity plan is a defined benefit plan that, at retirement or termination of employment, provides eligible employees with a lump sum payment, which is a function of the last drawn salary and completed years of service.

Compensated absences

The Group has accumulating compensated absences policy. The Group measures the expected cost of accumulating compensated absences as the additional amount expected to be paid or availed as a result of the unused entitlement that has accumulated at the end of reporting period.

Accrued pension

The Group sponsors a non-contributory defined benefit pension plan (the "DB Plan") covering all full-time employees of one of its subsidiaries meeting specified entry-age requirements. Pension benefits are based upon a formula contained in the DB Plan documents that takes into consideration years of service. The Group's funding policy is based on actuarial recommended contribution. The actuarial cost method utilized to calculate the present value of benefit obligations is the projected unit credit cost method. The DB Plan assets are held by a bank, as trustee, principally in the form of mutual fund units, money market securities, corporate bonds, and U.S. government securities. The DB Plan has no liabilities.

The defined benefit obligation is calculated annually by an independent actuary using projected unit credit method. Changes in the present value of the defined benefit obligation with respect to gratuity and accrued pension liability are as follows:

31 March 2021

 
 Particulars                                     Gratuity   Accrued pension 
--------------------------------------------  -----------  ---------------- 
 Change in benefit obligation 
 Opening value of obligation                    2,767,579         2,917,951 
 Interest expense                                 193,510            87,880 
 Current service cost                             459,601                 - 
 Benefits paid                                  (301,508)         (179,515) 
 Re-measurement: actuarial (gain)/loss 
  from changes in assumptions                    (56,169)          (46,152) 
 Translation adjustment                            66,225                 - 
-------------------------------------------- 
 Defined benefit obligation at the year 
  end                                           3,129,238         2,780,164 
--------------------------------------------  -----------  ---------------- 
 
 Fair value of planned assets                    (41,563)       (2,364,277) 
--------------------------------------------  -----------  ---------------- 
 
 Defined benefit obligation at the year-end 
  (net)                                         3,087,675           415,887 
--------------------------------------------  -----------  ---------------- 
 

Expenses related to the Group's defined benefit plans are as follows:

31 March 2021

 
 Particulars                                    Gratuity   Accrued pension 
-------------------------------------------  -----------  ---------------- 
 Net benefit obligation 
-------------------------------------------  -----------  ---------------- 
 Amounts recognized in consolidated income 
  statement 
  (including plan assets) 
 Current service cost                            459,601                 - 
 Net interest expense                            193,510            87,880 
 Actuarial gain                                 (52,330)          (46,152) 
 Expense recognized in consolidated income 
  statement                                      600,781            41,728 
-------------------------------------------  -----------  ---------------- 
 

31 March 2020

 
 Particulars                                     Gratuity   Accrued pension 
--------------------------------------------  -----------  ---------------- 
 Change in benefit obligation 
 Opening value of obligation                    2,487,375         2,854,006 
 Interest expense                                 186,860           105,373 
 Current service cost                             433,862                 - 
 Benefits paid                                  (260,745)         (175,745) 
 Re-measurement: actuarial loss from 
  changes in assumptions                          128,440           134,317 
 Translation adjustment                         (202,452)                 - 
-------------------------------------------- 
 Defined benefit obligation at the year 
  end                                           2,773,340         2,917,951 
--------------------------------------------  -----------  ---------------- 
 
 Fair value of planned assets                    (64,951)       (1,886,022) 
--------------------------------------------  -----------  ---------------- 
 
 Defined benefit obligation at the year-end 
  (net)                                         2,708,389         1,031,929 
--------------------------------------------  -----------  ---------------- 
 

Expenses related to the Group's defined benefit plans are as follows:

31 March 2020

 
 Particulars                                    Gratuity   Accrued pension 
-------------------------------------------  -----------  ---------------- 
 Net benefit obligation 
-------------------------------------------  -----------  ---------------- 
 Amounts recognized in consolidated income 
  statement 
  (including plan assets) 
 Current service cost                            433,862                 - 
 Net interest expense                            183,795           222,628 
 Abnormal loss                                   129,333           134,317 
 Expense recognized in consolidated income 
  statement                                      746,990           356,945 
-------------------------------------------  -----------  ---------------- 
 

The assumptions used in calculation of gratuity obligation are as follows:

 
 Particulars                                   31 March 2021    31 March 2020 
-------------------------------------------  ---------------  --------------- 
 Discount rate                                    6.91% p.a.        7.51% p.a 
 Expected rate of increase in compensation        4.03% p.a.       4.03% p.a. 
  levels 
 Expected rate of return on plan assets           7.38% p.a.       8.00% p.a. 
 Retirement age                                     58 years         58 years 
 Mortality table                              IALM (2012-14)   IALM (2006-08) 
 
 Withdrawal rates 
 Up to 30 years                                       31.22%           29.93% 
 From 31 to 44 years                                  13.92%           13.19% 
 Above 44 years                                        7.79%            7.70% 
 
 

Enterprise's best estimate of contribution during the next year amounts to USD 816,404.

The assumptions used in calculation of accrued pension are as follows:

 
                                             31 March     31 March 
 Particulars                                     2021         2020 
----------------------------------------  -----------  ----------- 
 Discount rate                                  3.13%        3.12% 
 Expected rate of return on plan assets          7.5%         7.5% 
 Retirement age                              65 years     65 years 
 Mortality table                             Pri-2012      RP-2014 
 
 Withdrawal rates 
 Up to 30 years 
                                           Refer Note   Refer Note 
 From 31 to 44 years                                1            1 
 Above 44 years 
 
 

Note 1: Due to the small size of plan, no turnover was assumed.

Enterprise's best estimate of contribution during the next year amounts to USD 187,156.

Plan assets

Gratuity

 
 Particulars                              31 March 2021   31 March 2020 
---------------------------------------  --------------  -------------- 
 Opening balance of fair value of plan 
  assets                                         64,951          40,795 
 Expected return on plan assets                   5,194           3,065 
 Employer contribution                          109,443         171,034 
 Benefits paid                                (135,260)       (144,617) 
 Actuarial loss on plan assets                  (3,839)           (893) 
 Exchange fluctuation                             1,074         (4,433) 
---------------------------------------                  -------------- 
 Closing balance of fair value of plan 
  assets                                         41,563          64,951 
---------------------------------------  --------------  -------------- 
 

Accrued pension

 
 Particulars                              31 March 2021   31 March 2020 
---------------------------------------  --------------  -------------- 
 Opening balance of fair value of plan 
  assets                                      1,886,022       2,103,022 
 Actual return on plan assets                   581,270       (117,255) 
 Employer contributions                          76,500          76,000 
 Benefits paid                                (179,515)       (175,745) 
 Closing balance of fair value of plan 
  assets                                      2,364,277       1,886,022 
---------------------------------------  --------------  -------------- 
 
 
 Particulars                        31 March 2021   31 March 2020 
--------------------------------   --------------  -------------- 
 Gratuity: 
 Quoted 
  Government bonds                          6,831          13,958 
  Infrastructure bonds                      2,920           8,037 
  Corporate bonds                             910           5,594 
 Unquoted 
  Commercial paper and deposits                 -               - 
  Cash and cash equivalents                   202           1,883 
  Mutual Funds                             30,699          35,479 
 
   Accrued Pension: 
 Quoted 
  Equity mutual funds                   1,311,037         984,754 
  Fixed income                            974,735         846,871 
 Unquoted 
   Cash and cash equivalents               78,505          54,397 
---------------------------------  --------------  -------------- 
 

Plan assets do not comprise any of the Group's own financial instruments or any assets used by Group companies . The gratuity plan of the Group is administered by TATA AIA Life Insurance Company Ltd. Plan assets for gratuity and pension plans are invested in below category of investments.

The plans expose the Group to actuarial risks such as interest rate risk, investment risk and longevity risk.

Interest rate risk

The present value of the defined benefit liability is calculated using a discount rate determined by reference to market yields on high quality corporate bonds and government bonds where there is no deep market for high quality corporate bonds. The estimated term of the bonds is consistent with the estimated term of the defined benefit obligation and it is denominated in functional currencies of respective subsidiaries. A decrease in market yield on high quality corporate bonds and government bonds will increase the Group's defined benefit liability, although it is expected that this would be offset partially by an increase in the fair value of certain of the plan assets.

Investment risk

The plan assets at 31 March 2021 are predominantly risk-free government securities, money market and mutual funds. The mutual funds are significantly weighted towards international market funds.

Longevity risk

The Group is required to provide benefits for life for the members of the defined benefit liability. Increase in the life expectancy of the members will increase the defined benefit liability.

The defined benefit obligation and plan assets are composed by geographical locations as follows:

31 March 2021

 
 Particulars                            USA         India           Total 
----------------------------  -------------  ------------  -------------- 
 Defined benefit obligation       2,780,164     3,129,239       5,909,403 
 Fair value of plan assets      (2,364,277)      (41,563)     (2,405,840) 
                                    415,887     3,087,676       3,503,563 
----------------------------  -------------  ------------  -------------- 
 

31 March 2020

 
 Particulars                            USA         India           Total 
----------------------------  -------------  ------------  -------------- 
 Defined benefit obligation       2,917,951     2,773,340       5,691,291 
 Fair value of plan assets      (1,886,022)      (64,951)     (1,950,973) 
----------------------------  -------------  ------------  -------------- 
                                  1,031,929     2,708,389       3,740,318 
----------------------------  -------------  ------------  -------------- 
 

Amounts recognized in other comprehensive income related to the Group's defined benefit plans are as follows:

 
 Particulars                                               31 March 2021 
--------------------------------------------------------  -------------- 
 Actuarial loss from changes in demographic assumptions         (56,225) 
 Actuarial gain from changes in financial assumptions             67,882 
 Actuarial gain from changes in experience adjustments            44,512 
 Total gain recognised in other comprehensive income            (56,169) 
--------------------------------------------------------  -------------- 
 
 
 Particulars                                               31 March 2020 
--------------------------------------------------------  -------------- 
 Actuarial loss from changes in demographic assumptions         (56,528) 
 Actuarial gain from changes in financial assumptions           (90,020) 
 Actuarial loss from changes in experience adjustments           274,988 
 Total expense recognised in other comprehensive 
  income                                                         128,440 
--------------------------------------------------------  -------------- 
 

All the expenses summarized above were included within items that will not be reclassified subsequently to the income statement in the statement of the consolidated other comprehensive income.

Other defined benefit plan information

The contributions to the defined plans are funded by the Group's subsidiaries. The funding requirements are based on the pension fund's actuarial measurement framework as set out in the funding policies.

Based on historical data, the Group expects contribution of USD 816,404 for Gratuity (31 March 2020: USD 579,339) and USD 187,156 for accrued pension (31 March 2020: USD 186,962) to be paid for the financial year 2021-2022.

The weighted average duration of the defined benefit obligation for Gratuity at 31 March 2021 is 6.6 years

(31 March 2020: 6.6 years).

The significant actuarial assumptions for the determination of the defined benefit obligation are the discount rate, the salary growth rate and the withdrawal rate. The calculation of the net defined benefit liability is sensitive to these assumptions. The following table summarizes the effects of changes in these actuarial assumptions on the defined benefit liability:

 
                                       As at 31 March 2021            As at 31 March 2020 
----------------------------  ----------------------------  -----------------------------  ---------- 
 Discount rate for gratuity         Increase      Decrease                       Increase    Decrease 
                                     by 0.5%       by 0.5%                        by 0.5%    by 0.5 % 
----------------------------  --------------  ------------  -----------------------------  ---------- 
 (Decrease)/increase 
  in the defined benefit 
  liability                         (87,437)        92,319                       (93,661)      99,417 
----------------------------  --------------  ------------  -----------------------------  ---------- 
 
 
 
                                  As at 31 March 2021              As at 31 March 2020 
-------------------------  --------------------------  ------------------------------------------- 
 Salary growth rate            Increase      Decrease                         Increase    Decrease 
  for gratuity                  by 0.5%       by 0.5%                          by 0.5%    by 0.5 % 
-------------------------  ------------  ------------  -------------------------------  ---------- 
 Increase/(decrease) 
  in the defined benefit 
  liability                      92,850      (88,837)                          101,404    (96,290) 
-------------------------  ------------  ------------  -------------------------------  ---------- 
 
                                  As at 31 March 2021                As at 31 March 2020 
-------------------------  --------------------------  --------------------------------------------- 
 Discount rate for          Increase by   Decrease by                         Increase      Decrease 
  accrued pension                 0.25%         0.25%                         by 0.25%       by 0.25 
                                                                                                   % 
-------------------------  ------------  ------------  -------------------------------  ------------ 
 (Decrease)/increase 
  in the defined benefit 
  liability                         900       (1,300)                          (6,400)         6,700 
-------------------------  ------------  ------------  -------------------------------  ------------ 
 
 
 
                               As at 31 March 2021      As at 31 March 2020 
-------------------------  -----------------------  ------------------------ 
 Long-term rate of          Increase by   Decrease     Increase     Decrease 
  return for accrued               0.5%    by 0.5%      by 0.5%     by 0.5 % 
  pension 
-------------------------  ------------  ---------  -----------  ----------- 
 (Decrease)/increase 
  in the defined benefit 
  liability                     (9,100)      9,100     (10,000)       10,000 
-------------------------  ------------  ---------  -----------  ----------- 
 

The present value of the defined benefit obligation is calculated with the same method (project unit credit) as the defined benefit obligation recognized in the statement of financial position. The sensitivity analysis is based on a change in one assumption while not changing all other assumptions. This analysis may not be representative of the actual change in the defined benefit obligation as it is unlikely that the change in the assumptions would occur in isolation of one another as some of the assumptions may be correlated.

Defined contribution plans

Apart from being covered under the Gratuity Plan described earlier, employees of the Group also participate in a provident fund plan in India. Contributions paid or payable are recognized as expense in the period in which they are due. During the year ended 31 March 2021, the Group contributed USD 1,730,773 (31 March 2020: 2,544,141 ) towards the Provident Fund Plan in India.

19. OTHER CURRENT LIABILITIES

 
 Particulars                                 31 March            31 March 
                                                 2021                2020 
----------------------------------  -----------------  ------------------ 
 Employee dues                              8,238,430           6,476,652 
 Statutory dues payable                     1,781,235           1,324,876 
 Unearned revenue                             310,930              93,060 
 Advance from customers                     1,427,033           1,156,301 
 Derivative financial liabilities                   -           1,891,422 
 Others                                     1,761,650           1,380,902 
                                           13,519,278          12,323,213 
----------------------------------  -----------------  ------------------ 
 

Employee dues represents outstanding dues towards the employees in respect of Salary and other incentives.

20. OTHER OPERATING INCOME

 
 Particulars                                             31 March 2021            31 March 
                                                                                      2020 
-------------------------------------------------  -------------------  ------------------ 
 Foreign exchange gain                                       1,984,105           2,815,280 
 Fair valuation gain                                           151,913                   - 
 Profit on sale of property, plant and equipment                 7,818              10,494 
 Reversal of provision                                       1,274,848             809,227 
 Miscellaneous income                                          945,807             246,527 
                                                             4,364,491           3,881,528 
-------------------------------------------------  -------------------  ------------------ 
 

21. FINANCE INCOME

 
 Particulars                                31 March 2021             31 March 
                                                                          2020 
-------------------------------------  ------------------  ------------------- 
 Interest income on deposit accounts              961,295              856,450 
 Interest on tax refund                           202,800                    - 
 Others                                            11,828                4,864 
                                                1,175,923              861,314 
-------------------------------------  ------------------  ------------------- 
 

22. FINANCE COST

 
 Particulars                                31 March 2021          31 March 
                                                                       2020 
---------------------------------------  ----------------  ---------------- 
Interest on borrowings                          4,577,051         3,856,880 
Interest on finance lease                         529,756           587,564 
Other borrowing cost at amortised cost            140,806                 - 
                                                5,247,613         4,444,444 
---------------------------------------  ----------------  ---------------- 
 

23. INCOME TAXES

Income tax is based on the tax rate applicable in the various jurisdictions in which the Group operates. The effective tax at the domestic rates applicable to profits in the country concerned, as shown in the reconciliation below, have been computed by multiplying the accounting profit with effective tax rate in each jurisdiction in which the Group operates. The entity at Guernsey is zero tax entity.

Tax expense reported in the Consolidated Income Statement for the year ended 31 March 2021 and 31 March 2020 is as follows:

 
Particulars                                             31 March          31 March 
                                                            2021              2020 
Current tax expense                                    5,308,767         5,004,205 
Deferred tax expense                                   (719,854)         2,528,011 
Income tax expense included in consolidated 
 income statement                                      4,588,913         7,532,216 
 

The relationship between the expected tax expense based on the domestic tax rates for each of the legal entities within the Group and the reported tax expense in the consolidated income statement is reconciled as follows:

 
Particulars                                        31 March    31 March 
                                                       2021        2020 
Accounting profit for the year before tax        53,525,196  52,554,384 
Effective tax at the domestic rates applicable 
 to profits in the country concerned              5,419,338   5,228,084 
Deferred tax on undistributed earnings                    -   1,899,722 
Dividend distribution tax                                 -      87,019 
Income not taxable/expenses not allowed              43,463     249,254 
Change in US tax*                                 (783,438)   (162,163) 
MAT credit written off                                    -     180,548 
Others                                             (90,450)      49,752 
Tax expense                                       4,588,913   7,532,216 
 

* The Tax Cuts and Jobs Act (The TCJA) enacted 22 December 2017, represents the most significant change in U.S tax law since 1986. The changes in law began in 2017 with additional provisions being enacted for the 2019 tax year; significant changes that impacted the Group are as follows:

High Tax Exclusion ('The HTE') from Global Intangible low tax income ('The GILTI')

Final regulations were published in July 2020 after the completion of the Group's 31 March 2020 tax provision. Prior to filing the 2019 federal income tax return, the Group determined that their foreign income was subject to a foreign effective tax rate greater than 18.9% and was therefore excludible from the GILTI and related book-to-tax adjustments. The Group also amended their 2018 returns to reflect this exclusion. The HTE election by the Group resulted in a federal benefit of USD 473,968 and USD 750,111 on their 2019 and 2018 tax returns respectively. The federal benefits are reflected as return to provision adjustments for the US adjusted tax expense reported for the period ended 31 March 2021.

Foreign-Derived Intangible Income "FDII"

FDII is the portion of a domestic corporation's intangible income that is derived from serving foreign markets, and determined on a formulaic basis. Section 250 allows domestic corporations that have FDII to deduct a specified percentage of the excess of the corporation's income from export sales over a fixed return on its tangible depreciable assets for the year. The FDII rules operate in tandem with the GILTI rules under --951A. The FDII deduction was introduced by the TCJA. For taxable years beginning after 31 December 2017, a U.S. corporation may claim an FDII deduction that generally is determined by its net foreign-derived income relative to its total net income and its deemed intangible income, which generally is the excess of its total net income over a routine 10% rate of return on the adjusted tax basis of its total fixed assets. In September 2020, after the completion of their 31 March 2020 tax provision; the Group completed the analysis of their FDII income. The study determined that the Group was eligible for an additional deduction of USD 443,671. The federal benefits for the 2019 income tax return are reflected as return to provision adjustments for the US adjusted tax expense reported for the period ended 31 March 2021. The FDII benefit for the period ending 31 March 2021 is USD 88,638.

24. EARNINGS PER SHARE

The calculation of the basic earnings per share is based on the profits attributable to ordinary shareholders divided by the weighted average number of shares in issue during the year.

Calculation of basic and diluted earnings per share is as follows:

Basic earnings per share

 
Particulars                                                   31 March     31 March 
                                                                  2021         2020 
Profit attributable to shareholders                         48,936,283   45,022,168 
Weighted average number of shares outstanding              190,130,008  190,130,008 
Basic earnings per share (USD)                                    0.26         0.24 
 

Diluted earnings per share

 
Particulars                                                   31 March                31 March 
                                                                  2021                    2020 
Profit attributable to shareholders                         48,936,283              45,022,168 
Potential ordinary shares                                          Nil                     Nil 
Weighted average number of shares outstanding              190,130,008             190,130,008 
Diluted earnings per share (USD)                                  0.26                    0.24 
 

25. LEASES

The Group has leases for office premises. With the exception of short-term leases and leases of low-value underlying assets, each lease is reflected on the balance sheet as a right-of-use asset and a lease liability. Variable lease payments which do not depend on an index or a rate are excluded from the initial measurement of the lease liability and right of use assets. The Group has presented its right-of-use assets in the balance sheet separately from other assets.

Each lease generally imposes a restriction that, unless there is a contractual right for the Group to sublease the asset to another party, the right-of-use asset can only be used by the Group. Some leases contain an option to extend the lease for a further term. The Group is prohibited from selling or pledging the underlying leased assets as security.

Movement for lease liability in cash and non-cash has been disclosed in r econciliation of liabilities arising from financing activities.

(a) Lease liabilities are presented in the statement of financial position as follows:

 
Particulars               31 March 2021         31 March 2020 
Current                       1,424,940             1,216,547 
Non-current                   3,766,759             4,467,004 
                              5,191,699             5,683,551 
 

(b) The following are amounts recognized in consolidated income statement:

 
Particulars                                31 March 2021  31 March 2020 
Depre ciation expenses of right-of-use 
 Interest Expense on the Lease Liability       1,484,349      1,451,931 
Interest expense on lease liability              529,756        587,564 
Rent expenses*                                     7,167          9,323 
Common area maintenance expenses                 165,386        175,566 
Total                                          2,186,658      2,224,384 
 

*Rent expense in respect of Short-Term Lease

(c) Right to use of assets as at 31 March 2021:

 
Particulars                       Leased premises 
 Gross block 
Balance as at 1 April 2020              6,696,491 
Additions during the year               1,009,919 
Disposal                                (306,301) 
Translation adjustment                    117,353 
Gross block as at 31 March 2021         7,517,462 
 
 Accumulated depreciation 
Balance as at 1 April 2020              1,393,220 
Depreciation for the period             1,484,349 
Disposal                                (112,393) 
Translation adjustment                     32,615 
Accumulated depreciation as at 
 31 March 2021                          2,797,791 
Net block as at 31 March 2021           4,719,671 
 

Right to use of assets as at 31 March 2020:

 
Particulars                       Leased premises 
 Gross block 
Balance as at 31 March 2019                     - 
IFRS-16 transition                      6,311,071 
Gross block as at 1 April 2019          6,311,071 
 Additions during the year                580,409 
 Translation adjustment                 (194,989) 
Gross block as at 31 March 2020         6,696,491 
 
 Accumulated depreciation 
Balance as at 1 April 2019                      - 
Depreciation for the period             1,451,931 
Translation adjustment                   (58,711) 
Accumulated depreciation as at 
 31 March 2020                          1,393,220 
Net block as at 31 March 2020           5,303,271 
 
     (d)   The maturity analysis of the lease liabilities as of 31 March 2021, is as follows: 
 
Payments falling due                                 Gross future minimum lease 
                                                                       payments 
                                          31 March 2021           31 March 2020 
Within 1 year                                 1,870,956               1,616,248 
Later than 1 year but less than 5 years       3,670,800               3,341,682 
More than 5 years                             1,508,367               2,436,638 
                                              7,050,123               7,394,568 
 

26. FAIR VALUATION GAIN/ (LOSS) ON DERIVATIVES

The fair valuation gain on derivative financial instrument amounts to USD 151,913 during the year ended

31 March 2021 and fair valuation loss on derivative financial instrument in (31 March 2020: USD (1,891,422)). The same has been disclosed in line item "Fair Valuation Gain" in Note 20 "Other operating income".

27. SHARE CAPITAL

The share capital of iEnergizer consists only of fully paid ordinary shares with a par value of GBP 0.01 per share (previous year GBP 0.01 per share). All shares represent one vote at the shareholder's meeting of iEnergizer Limited and are equally eligible to receive dividends and the repayment of capital.

The total number of shares issued and fully paid up of the Company as on each reporting date is summarized as follows:

 
Particulars                       31 March 2021  31 March 2020 
Opening number of shares            190,130,008    190,130,008 
Number of shares authorized and               -              - 
 issued during the year 
Closing number of shares            190,130,008    190,130,008 
 

28. RELATED PARTY TRANSACTIONS

The related parties for each of the entities in the Group have been summarized in the table below:

 
Nature of the relationship            Related Party's Name 
I. Ultimate controlling party         Mr. Anil Aggarwal 
 
II. Entities directly or indirectly   EICR Cyprus Limited (Parent of iEnergizer 
 through one or more intermediaries,   Limited) 
 control, are controlled by, 
 or are under common control 
 with, the reported enterprises 
III. Key management personnel         Mr. Anil Aggarwal (Ultimate Shareholder, 
 and significant shareholders:         EICR Cyprus Limited) 
                                      Mr. Chris de Putron (Director, iEnergizer 
                                       Limited) 
                                      Mr. Marc Vassanelli (Director, iEnergizer 
                                       Limited) 
                                      Mr. Mark De La Rue (Director, iEnergizer 
                                       Limited) 
                                       Mr. Ashish Madan (CFO and Executive 
                                       Director, iEnergizer Limited) 
 
 

Disclosure of transactions between the Group and related parties and the outstanding balances is as under:

Transactions with key managerial personnel and their relative:

 
 Particulars                                               31 March 2021            31 March 2020 
---------------------------------------------- 
 Transactions during the year 
 Short term employee benefits 
 Remuneration to directors 
 Chris de Putron                                                  13,086                   12,639 
 Mark De La Rue                                                   13,086                   12,639 
 Marc Vassanelli                                                  39,636                   37,917 
 Total remuneration                                               65,808                   63,195 
 
 Balances at the end of the year                                 168,926                  128,594 
(Total remuneration payable to key managerial 
 personnel) 
 
 

29. OPERATING SEGMENT

Management currently identifies the Group's two service lines business process outsourcing and content delivery as operating segments on the basis of operations. These operating segments are monitored and operating and strategic decisions are made on the basis of operating segment results.

The Chief Operating Decision Maker ("CODM") evaluates the Group's performance and allocates resources based on an analysis of various performance indicators by operating segments. The Group's reportable segments are as follows:

   1.    Business process outsourcing 
   2.    Content delivery 

The measurement of each operating segment's revenues, expenses, assets and liabilities is consistent with the accounting policies that are used in preparation of the consolidated financial statements.

Segment information can be analysed as follows for the reporting years under review:

 
                                                                                             31 March 2021 
                                         Business Process         Content delivery            Total 
                                             Outsource 
Revenue from external customers                   123,959,092               72,005,244         195,964,336 
Other income (including realised 
 foreign exchange gain)                             3,192,481                1,172,010           4,364,491 
Segment revenue                                   127,151,573               73,177,254         200,328,827 
Cost of outsourced Services                        27,215,146               10,893,740          38,108,886 
Employee benefit expense                           38,804,605               38,146,990          76,951,595 
Other expenses                                     16,750,415                4,215,481          20,965,896 
Earnings before interest, 
 tax, depreciation and amortisation                44,381,407               19,921,043          64,302,450 
Unrealized Foreign Exchange 
 gain/(loss)                                         (65,468)              (1,482,007)         (1,547,475) 
Depreciation and amortisation                     (2,759,996)              (2,398,093)         (5,158,089) 
Segment operating profit                           41,555,943               16,040,943          57,596,886 
Other Income/expense: 
Finance income                                        747,819                  428,104           1,175,923 
Finance costs                                     (3,841,536)              (1,406,077)         (5,247,613) 
Profit before tax                                  38,462,225               15,062,971          53,525,196 
Income tax expense                                (2,393,158)              (2,195,755)         (4,588,913) 
Profit after tax                                   36,069,067               12,867,216          48,936,283 
Segment assets                                     79,829,756              158,507,072         238,336,828 
Segment liabilities                               163,746,736               45,001,629         208,748,365 
Capital expenditure                                 2,763,289                1,296,522           4,059,811 
 
 
                                                                       31 March 
                                                                           2020 
                                Business process  Content delivery        Total 
                                       outsource 
Revenue from external 
 customers                           120,788,737        70,211,754  191,000,491 
Other income (including 
 realized foreign exchange 
 gain)                                 1,828,990         1,171,138    3,000,128 
Segment revenue                      122,617,727        71,382,892  194,000,619 
Cost of outsourced 
 services                             31,802,146         8,507,410   40,309,556 
Employee benefit expense              40,854,554        38,392,489   79,247,043 
Other expenses                         9,398,315         5,312,771   14,711,086 
Earnings before interest, 
 tax, depreciation and 
 amortisation                         40,562,712        19,170,222   59,732,934 
Unrealized foreign 
 exchange gain                           237,224           644,176      881,400 
Depreciation and amortisation        (2,246,039)       (2,230,781)  (4,476,820) 
Segment operating profit              38,553,897        17,583,617   56,137,514 
Other income and expense: 
Finance income                           561,424           299,890      861,314 
Finance costs                          (535,328)       (3,909,116)  (4,444,444) 
Profit before tax                     38,579,993        13,974,391   52,554,384 
Income tax expense                   (3,276,148)       (4,256,068)  (7,532,216) 
Profit after tax                      35,303,845         9,718,323   45,022,168 
Segment assets                        70,095,268       153,025,953  223,121,221 
Segment liabilities                   20,721,093        61,800,147   82,521,240 
Capital expenditure                    3,053,120         1,060,750    4,113,870 
 
 

The Group's revenues from external customers and its non-current assets (other than financial instruments, investments accounted for using the equity method, deferred tax assets and post-employment benefit assets) are divided into the following geographical areas:

 
Location                       Revenue  Non-current                       Revenue  Non-current 
                                         assets                                     assets 
                         31 March 2021       31 March 2021          31 March 2020        31 March 2020 
United Kingdom               7,217,609                  15              8,241,221                   15 
India                       26,428,167          17,181,576             32,206,048           18,006,677 
USA                        157,169,261         112,272,135            145,801,849          112,586,600 
Rest of the 
 world                       5,149,299               9,717              4,751,373               10,009 
Total                      195,964,336         129,463,443            191,000,491          130,603,301 
 

Revenues from external customers in United Kingdom, as well as its major markets, India and the USA have been identified on the basis of the internal reporting systems.

In year ended 31 March 2021, revenue from one customer (31 March 2020: one customer) amounted to 10% or more of consolidated revenue during the year presented.

31 March 2021

 
Revenue from   Segment                           Amount 
Customer 1     Business process outsource    29,991,067 
 

31 March 2020

 
Revenue from   Segment                          Amount 
Customer 1     Business process outsource   20,703,195 
 

30. FINANCIAL ASSETS AND LIABILITIES

Carrying amounts of assets and liabilities presented in the statement of financial position relates to the following categories of assets and liabilities:

 
Financial assets                                    31 March             31 March 
                                                        2021                 2020 
Non-current assets 
 Financial assets measured at amortized 
  cost 
 Security deposits                                   686,922              382,614 
 Restricted cash                                   1,398,071            1,881,726 
 Fixed deposits with banks                         1,226,746            1,087,641 
Current assets 
 Financial assets measured at amortized 
  cost 
 Trade receivables                                33,893,763           32,044,127 
 Cash and cash equivalents                        51,378,899           45,147,783 
 Restricted cash                                   6,444,738            4,293,982 
 Security deposits                                    30,767               60,516 
 Fixed deposits with banks                         9,550,799            3,244,643 
 Due from officers and employees                      38,336               27,244 
  Interest accrued on fixed deposit                   65,371               16,256 
 
 Fair value through profit and loss: 
 Derivative financial instruments                    151,913                    - 
                                                 104,866,325           88,186,532 
 
 
 
Financial liabilities                                             31 March                 31 March 
                                                                    2021                     2020 
Non-current liabilities 
    Financial liabilities measured at 
     amortized cost: 
 Long term borrowings                                  142,905,717           32,992,983 
Current liabilities 
 Financial liabilities measured 
  at amortized cost: 
 Trade and other payables                               12,929,316           11,481,885 
 Current portion of long term borrowings                24,403,033           10,527,775 
 Other current liabilities                              13,519,278           12,323,213 
 Derivative financial instruments                                -            1,891,422 
                                                       193,757,344           69,217,278 
 
 

These non-current financial assets and liabilities, current financial assets and liabilities have been recorded at their respective carrying amounts as the management considers the fair values to be not materially different from their carrying amounts recognized in the statement of financial positions. Derivative financial instruments, recorded at fair value through profit and loss, are recorded at their respective fair values on the reporting dates.

31. COMMITMENT AND CONTINGENCIES

At 31 March 2021 and 31 March 2020, the Group had capital commitment of USD 344,537 and USD 141,848 respectively for acquisition of property, plant and equipment.

The contingent liability in respect of claims filed by erstwhile employees against the group companies amounts to USD 77,886 and USD 55,427 as on 31 March 2021 and 31 March 2020 respectively and in respect of interest on VAT amounts to USD 9,540 as on 31 March 2021 (USD 9,347 as on 31 March 2020).

Guarantees: As at 31 March 2021 and 31 March 2020, guarantees provided by banks on behalf of the group companies to the revenue authorities and certain other agencies, amount to approximately USD 37,412 and USD 36,732 respectively.

32. RISK MANAGEMENT OBJECTIVES AND POLICIES

The Group's principal financial liabilities comprise borrowings, trade and other payables. The main purpose of these financial liabilities is to raise finances for the Group's operations. The Group has trade and other receivables, other financial assets and cash and bank balances.

The Group is exposed to market risk, credit risk and liquidity risk.

MARKET RISK

Market risk is the risk that changes in market prices will have an effect on Group's income or value of the financial assets and liabilities. The Group's financial instruments affected by market risk include trade and other receivables, other financial assets, borrowings and trade and other payables.

The sensitivity analysis in the following sections relate to the position as at 31 March 2021. The analysis excludes the impact of movement in market variables on the carrying value of assets and liabilities other than financial assets and liabilities. The sensitivity of the relevant consolidated income statement is the effect of the assumed changes in respective market risks. This is based on the financial assets and financial liabilities held at 31 March 2021.

Interest rate sensitivity

Interest rate risk primarily arises from floating rate borrowings. As at 31 March 2021, substantially all of our borrowings were subject to floating interest rates, which reset at short intervals. If interest rates were to increase by 1% from 31 March 2021, additional net annual interest expense on our floating rate borrowing would amount to approximately USD 1,621,170. If interest rate were to decrease by 1% would have an equal but opposite effect.

Price risk sensitivity

The Group does not have any financial asset or liability exposed to price risk as at reporting date.

Foreign currency risk

Foreign currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rates. The Group renders services primarily to customers located in the United States including those rendered by its Indian entities. The Group's exposure to the risk of changes in foreign exchange rates relates primarily to the trades receivable in USD on account of contracts for rendering the services. The Group entity has fixed rate forward contracts that are obtained to manage the foreign currency risk in USD denominated trade receivables. Such contracts are taken considering overall receivable position and related expense and are not speculative in nature.

Net short-term exposure in USD equivalents of foreign currency denominated financial assets and liabilities at each reporting date are as follows:

 
Currency                       USD         USD       USD              USD 
Foreign currency               AUD         GBP      EURO              SGD 
31 March 2021 
                          ----------------------------------------------- 
Financial assets           104,604   1,132,170   176,309           37,815 
Financial liabilities            -           -         -                - 
Net short-term exposure    104,604   1,132,170   176,309           37,815 
 
 
Currency                      USD       USD      USD              USD 
Foreign currency              AUD       GBP     EURO              SGD 
31 March 2020 
                          ------------------------------------------- 
Financial assets           32,801   365,553   32,239              518 
Financial liabilities           -         -        -                - 
Net short-term exposure    32,801   365,553   32,239              518 
 

For the purpose of computing sensitivity analysis of the foreign currency exposure, the management has considered percentage change in the respective exchange rates with respect to USD from the previous year.

 
Functional currency   31 March 2021  31 March 2020 
  AUD                   +/- 23.89 %    +/- 15.60 % 
  GBP                   +/- 11.26 %     +/- 5.26 % 
  EUR                     +/- 6.61%      +/- 1.99% 
  SGD                     +/- 5.84%      +/- 5.04% 
 

The following table details Group's sensitivity to appreciation or depreciation in functional currency vis-a-vis the currency in which the foreign currency financial assets and liabilities are denominated:

 
Currency               USD                    USD      USD              USD 
Foreign currency       AUD                    GBP     EURO              SGD 
31 March 2021       24,990                127,482   11,654            2,208 
31 March 2020        5,117                 19,235      642               26 
 

If the functional currency of the Group would have weakened with respect to various other currencies by percentages mentioned above, then the effect will be a decrease in profit and equity by USD 166,335 (31 March 2020: increase by USD 25,013). If the functional currency had strengthened with respect to the various currencies, there would be an equal and opposite impact on profit and equity for each year.

CREDIT RISK

Credit risk arises from debtors' inability to make payment of their obligations to the Group as they become due; and by non-compliance by the counterparties in transactions in cash, which is limited, to balances deposited in banks and accounts receivable at the respective reporting dates. The Group is not exposed to any significant credit risk on other financial assets and balances with banks. Further analysis for each category is detailed below:

Trade receivables and other receivables

In case of trade receivables, its customers are given a credit period of 30 to 75 days and the customers do not generally default and make payments on time and other receivables are immediately recoverable.

Gross value of top five customers for the year ended 31 March 2021 are USD 16,694,296 being 49.25% (31 March 2020 USD 13,218,363 being 41.25%) of net trade receivables. An analysis of age of trade receivables past due net of impairment at each reporting date is summarized as follows:

 
Particulars                                                           31 March 2021 
Not past due                                                             21,581,921 
Past due less than three months                                          11,923,277 
Past due more than three months but not more than 
 six months                                                                 177,262 
Past due more than six months but not more than one 
 year                                                                        97,268 
More than one year                                                          114,035 
Total                                                                33,893,763 
 
 
Particulars                                                           31 March 2020 
                                                      ----------------------------- 
Not past due                                                             14,420,874 
Past due less than three months                                          16,029,777 
Past due more than three months but not more than 
 six months                                                               1,541,043 
Past due more than six months but not more than one 
 year                                                                        52,433 
More than one year                                                                - 
Total                                                                    32,044,127 
 

Other financial assets

In case of other financial assets, all the current balances are recoverable on demand while the non-current balances are primarily on account of security deposits given for buildings take on lease.

 
The maximum exposure to credit risk                       31 March            31 March 
in other financial assets is summarized                       2021                2020 
as follows : 
Security deposits                                          717,689             443,130 
Restricted cash                                          7,842,809           6,175,708 
Cash and cash equivalents                               51,378,899          45,147,783 
Fixed deposits                                          10,777,545           4,332,284 
Due from officers and employees                             38,336              27,244 
Derivative financial instruments                           151,913                   - 
Interest accrued on fixed deposits                          65,371              16,256 
Total                                                   70,972,562          56,142,405 
 
 
 

Cash and cash equivalents, restricted cash, fixed deposits and interest accrued thereon are held with reputable banks . The maximum exposure to credit risk is in the items stated in Note 14. For the purpose of evaluating expected credit loss as per IFRS 9, the management found the same to be negligible.

The Group's maximum exposure to credit risk arising from the Group's trade and other receivables and other financial assets at the respective reporting dates is represented by the carrying value of each of these assets.

Credit risk concentrations exist when changes in economic, industrial or geographic factors take place, affecting in the same manner the Group's counterparties whose added risk exposure is significant to the Group's total credit exposure.

LIQUIDITY RISK

Liquidity needs of the Group are monitored on the basis of future cash flow projections. The Group manages its liquidity needs by continuously monitoring cash flows from customers and by maintaining adequate cash and cash equivalents and short terms investments. Net cash requirements are compared to available cash in order to determine any shortfalls.

Short terms liquidity requirements comprise mainly of sundry creditors, expense payable, and employee dues arising during normal course of business as on each reporting date. The Group maintains a minimum of sixty days of short-term liquidity requirements in cash and cash equivalents. Long term liquidity requirement is assessed by the management on periodical basis and is managed through internal accruals and through the management's ability to negotiate borrowing facilities. Derivative financial instruments reflect forward exchange contracts that will be settled on a gross basis.

As at 31 March 2021, the Group's financial liabilities having contractual maturities (including interest payments where applicable) are summarized as follows:

 
31 March 2021                        Current                            Non-current 
Financial liabilities   Due within 60 days  Due in 61 days         Due in more than 
                                               to 365 days           1 year but not 
                                                                 later than 5 years 
Trade payables                   2,899,256       2,599,947                        - 
Expenses payable                 5,504,267       1,925,830                        - 
Borrowings                       1,910,522      29,706,573              163,029,155 
Employee dues                    6,874,119       1,364,350                        - 
Total                           17,188,164      35,596,700              163,029,155 
 

As at 31 March 2020, the Group's financial liabilities having contractual maturities (including interest payments where applicable) are summarized as follows:

 
31 March 2020                             Current                        Non-current 
Financial liabilities          Due within 60 days  Due in 61 days     Due in more than 
                                                      to 365 days       1 year but not 
                                                                    later than 5 years 
Trade payables                          5,992,417         244,161                    - 
Expenses payable                        4,143,851       1,101,456                    - 
Borrowings                                830,756      12,982,801           37,695,741 
Employee dues                           6,333,418         143,234                    - 
Bank overdraft                            233,651       1,657,771                    - 
Total                                  17,534,093      16,129,423           37,695,741 
 
 

33. FAIR VALUE HIERARCHY

Level 1 - Quoted prices (unadjusted) in active markets for identical assets or liabilities.

Level 2 - Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).

Level 3 - Inputs for the assets or liabilities that are not based on observable market data (unobservable inputs).

No financial assets/liabilities have been valued using level 1 and 3 fair value measurements.

The following table presents fair value hierarchy of assets and liabilities measured at fair value on a recurring basis:

 
31 March 2021                           Total        Fair value measurements 
                                                      at reporting date using 
                                                                     Level 2 
Liabilities                       (Notional amount) 
Derivative instruments 
Forward contracts (currency 
 - USD/INR)                          22,900,000                      151,913 
 
 
31 March 2020                           Total        Fair value measurements 
                                                      at reporting date using 
                                                             Level 2 
Assets                            (Notional amount) 
Derivative instruments 
Forward contracts (currency 
 - USD/INR)                          35,850,000             (1,891,422) 
 

The Group's foreign currency forward contracts are not traded in active markets. These have been fair valued using observable forward exchange rates and interest rates corresponding to the maturity of the contract. The effects of non-observable inputs are not significant for foreign currency forward contracts.

34. CAPITAL RISK MANAGEMENT

The Group's capital comprises of equity attributable to the equity holder of the parent.

The Group monitors gearing ratio i.e. total debt in proportion to its overall financing structure, i.e. equity and debt. Total equity comprises of all the components of equity (i.e., share capital, additional paid in capital, retained earnings etc.). Total debt comprises of all liabilities of the Group. The management of the Group regularly reviews the capital structure and makes adjustment to it in light of changes in economic conditions and the risk characteristic of the Group.

 
                             31 March 2021           31 March 2020 
Total equity                    29,588,463             140,599,981 
Total debts                    208,748,365              82,521,240 
Overall financing              238,336,828             223,121,221 
Gearing ratio                         0.88                    0.37 
 

The current gearing ratio of the Group is quite high and the primary objective of the Group's capital management is to reduce net debt over the coming financial year whilst investing in business and maximizing shareholder value. In order to meet this objective.

35. AUDIT FEES EXPENSE FOR GROUP AUDIT AND STANDALONE AUDIT:

 
Particulars                      31 March 2021  31 March 2020 
Group audit fees                       107,284        107,284 
Standalone entities audit fees          42,860         42,860 
Other Services                           6,068          6,068 
Total audit fees                       156,212        156,212 
 

36. POST REPORTING DATE EVENTS

The group does not have any post Balance sheet date event to be reported.

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END

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