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iEnergizer Limited INTERIM RESULTS

13/11/2019 7:01am

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iEnergizer Limited

13 November 2019

13 November 2019

iEnergizer Limited

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

INTERIM RESULTS FOR THE SIX MONTHSED 30 SEPTEMBER 2019

iEnergizer, the technology services and media solutions leader for the digital age, reports interim results for the six months ended September 30, 2019.

Financial Highlights: Sustained profitable revenue growth and margin improvements, achieved through deepening existing customer relationships and securing new customer contracts, with ongoing careful cost management

   --     Group Revenue up 13.1% to $96.2m (H1 2019: $85.1m) 
   --     Service Revenue up 15.6% to $95.2m (H1 2019: $82.4m) 
   --     EBITDA(1) of $29.1m (H1 2019: $24.3m) 
   --     Higher EBITDA margin at 30.2% (H1 2019: 29.1%) 
   --     Operating profit increased to $26.8m (H1 2019: $23.4m) 
   --     Higher operating profit margin at 27.8% (H1 2019: 27.5%) 
   --     Profit before tax increased to $25.0m (H1 2019: $21.0m) 
   --     Higher profit before tax margin at 25.9% (H1 2019: 24.6%) 
   --     Profit after tax increased to $21.6m (H1 2019: $17.3m) 
   --     Net debt(2) of $0.43m (31 March 2019: $3.9m) 
   --     Proposing interim dividend of 5.2p per ordinary share ($12.7m) (H1 2019: nil p) 

Operational Highlights: Continued focus on higher margin work and success in business development with existing and new customers.

-- Services: Double-digit revenue growth to $95.2m (H1 2019: $82.4m) through: the addition of several new clients; and increased billable work volumes and new contract wins from existing clients, including higher margin activity.

-- Business Process Outsource ("BPO"): Strong revenue growth of 23.6% to $59.4m in H1 2020 (H1 2019: $48.1m) and EBITDA margins 20.3% higher at $20.8m (H1 2019: $17.3m), as key customers continued to increase workload volumes. The focus remains on recurring revenue streams from long-term customer relationships across all verticals.

-- Content Division: Revenue growth of 4.3% to $35.7m in H1 2020 (H1 2019: $34.3m) and increased EBITDA margins by 18.4% to $8.8m (H1 2019: $7.5m), achieved despite structural pressures in the traditional publishing market.

o New E-Learning projects, related to design and development of class room training material for virtualization projects, supported revenue growth in Content Division.

o Continued development of new course material and Learning Management Systems (LMS) for the Off-The-Shelf (OTS) content service.

o Growing customer base, amongst existing and new customers, for the Scientific Publishing and Remittance Integration Services ("SciPris") product line.

o Growing customer pipeline for new services, such as Anti Money Laundering KYC service.

   --     New business development: 

o US based sales team continued to focus on three strategic priorities: to enhance and grow key accounts; to identify and win new business through new customers as well as target our existing accounts; and to cross-sell and generate leads for additional services.

o Acquisition of multiple new customers in H1 2020 across iEnergizer's business lines of Business Process Outsource and Content Services Division, with revenue expected to contribute from H2 2020.

   --     Cost management: 

o Continued focus on cost saving initiatives.

o Increased proportion of division-specific higher margin work, particularly in non-voice based processes including content writing, financials, entertainment gaming support, content technology and digital solutions.

o Effective use of technology to handle greater volumes from key customers without notable additional human resource.

   --     Interim Dividend: 

o In line with the progressive dividend policy, the Company is pleased to announce an interim dividend of 5.2p with the Dividend record date of 21(st) November, 2019. This interim dividend reflects the Board's confidence in the Group's business plan and growth prospects.

o The Company's Ordinary Shares are expected to go ex-dividend on 22(nd) November 2019 and the interim dividend is expected to be paid on 20(th) December, 2019.

Marc Vassanelli, Chairman of iEnergizer, commented:

"This has been another successful period for iEnergizer across each division, despite structural challenges in some business areas. The continuation of profitable growth has been driven by our colleagues' continued efforts, in deepening existing customer relationships and attracting new customers via iEnergizer's compelling and evolving proposition, coupled with careful cost management. As a result, we are pleased to announce an interim dividend of 5.2p, for the first time.

"We benefit from a solid foundation, and with continued strong operational execution, the development of new sales initiatives and differentiated offerings, underpinned by a healthy balance sheet and substantial growth opportunities, we expect sustained business performance through the second half of the year. The Board looks forward to the remainder of the year with confidence."

[1] EBITDA has been calculated under the IFRS 16 accounting standards, under which a company's operating lease liabilities are shown as liabilities on the balance sheet, together with the related assets that correspond to the right to use such assets over the remaining life of the related lease contracts. If these impacts had not been taken into consideration, the EBITDA would have been $28.24m.

[2] Net Debt has been calculated after excluding IFRS 16 impact of capitalization of leases as "Right of Use Assets" and their consequent lease liability creation. If these impacts had been included, Net Debt would have been $6.72m.

-Ends-

 
 
 
 
 iEnergizer Ltd.                                    +44 (0)1481 242233 
 Chris de Putron 
 Mark De La Rue 
 
                                                    +44 (0)20 3727 
 FTI Consulting - Communications Adviser             1000 
 Jonathon Brill / Eleanor Purdon 
 
 Arden Partners - Nominated adviser and Broker 
  Ciaran Walsh / Steve Douglas / Dan Gee-Summons 
  (Corporate Finance)                               +44 (0)20 7614 
  James Reed-Daunter (Equity Sales)                  5900 
 

iEnergizer Limited and its subsidiaries

Unaudited Condensed Consolidated Interim Financial Statements

Prepared in accordance with International Financial Reporting Standards (IFRS)

Six months ended 30 September 2019 and 2018

Unaudited Condensed Consolidated Statements of Financial Position

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

 
                                         Notes                          As at                    As at 
                                                                 30 September            31 March 2019 
                                                                         2019 
                                                                    Unaudited                  Audited 
--------------------------------------  -------  ----------------------------  ----------------------- 
 ASSETS 
 Non-current 
 Goodwill                                  5                      102,254,951              102,256,665 
 Other intangible assets                   6                       18,422,167               12,484,053 
 Property, plant and equipment             7                        6,787,035                6,607,072 
 Long- term financial asset                                           639,442                1,681,981 
 Non-current tax assets                                               807,223                1,095,365 
 Deferred tax asset                                                 4,776,269                4,726,068 
 Other non current assets                                               9,987                   33,098 
 Non-current assets                                               133,697,074              128,884,302 
                                                 ----------------------------  ----------------------- 
 
 Current 
 Trade and other receivables                                       34,623,099               36,675,342 
 Cash and cash equivalents                                         42,072,283               42,413,215 
 Short- term financial assets              8                        7,903,185                7,058,455 
 Current tax assets                                                   404,143                  505,345 
 Other current assets                                               3,365,085                3,320,502 
 Current assets                                                    88,367,795               89,972,859 
                                                 ----------------------------  ----------------------- 
 
 Total assets                                                     222,064,869              218,857,161 
                                                 ============================  ======================= 
 
 EQUITY AND LIABILITIES 
 Equity 
 Share capital                                                      3,776,175                3,776,175 
 Share compensation reserve                                            63,986                   63,986 
 Additional paid in capital                                        15,451,809               15,451,809 
 Merger reserve                                                   (1,049,386)              (1,049,386) 
 Retained earnings                                                129,453,634              131,950,337 
 Other components of equity                                      (12,296,204)             (11,669,812) 
 
 Total equity attributable to equity holders 
  of the parent                                   135,400,014                   138,523,109 
                                                 ----------------------------  ------------------------- 
 
 
 
   Notes          As at           As at 
           30 September   31 March 2019 
                   2019 
              Unaudited         Audited 
  ------  -------------  -------------- 
 
 
 
 Liabilities 
 Non-current 
 Long term borrowings                               38,743,275                  870,535 
 Employee benefit obligations                        4,046,496                4,101,097 
 Other non-current liabilities                               -                  216,669 
 Deferred tax liability                              9,313,757                8,574,576 
 Non-current liabilities                            52,103,528               13,762,877 
                                  ----------------------------  ----------------------- 
 
 Current 
 Short term borrowings                                       -                    8,934 
 Trade and other payables                           13,497,589               10,574,896 
 Employee benefit obligations                        1,000,647                  858,384 
 Current portion of long term 
  borrowings                                        10,045,091               45,403,496 
 Other current liabilities                          10,018,000                9,725,465 
 Current liabilities                                34,561,327               66,571,175 
                                  ----------------------------  ----------------------- 
 
 Total equity and liabilities                      222,064,869              218,857,161 
                                  ============================  ======================= 
 

(The accompanying notes are an integral part of these Unaudited Condensed Consolidated Interim Financial Statements)

Unaudited Condensed Consolidated Income Statements

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

(The accompanying notes are an integral part of these Unaudited Condensed Consolidated Interim Financial Statements)

 
                                  Notes   For the year     For the six 
                                                 ended    months ended 
                                          30 September    30 September 
                                                  2019            2018 
                                             Unaudited       Unaudited 
-------------------------------  ------  -------------  -------------- 
 
 Income from operations 
 Revenue from services                      95,180,896      82,361,309 
 Other operating income                      1,046,950       2,724,771 
                                            96,227,846      85,086,080 
                                         -------------  -------------- 
 
 Cost and expenses 
 Outsourced service cost                    21,219,347      17,959,356 
 Employee benefits expense                  39,580,811      35,284,407 
 Depreciation and amortization               2,063,317       2,680,368 
 Other expenses                              6,566,098       5,735,424 
                                            69,429,573      61,659,555 
                                         -------------  -------------- 
 
 Operating profit                           26,798,273      23,426,525 
 Finance income                                360,107         288,208 
 Finance cost                              (2,199,643)     (2,760,603) 
 Profit before tax                          24,958,737      20,954,130 
                                         -------------  -------------- 
 
 Income tax expense                          3,387,120       3,696,473 
 Profit for the year attributable 
  to equity holders of the parent           21,571,617      17,257,657 
                                         =============  ============== 
 
 Earnings per share                 9 
 Basic                                            0.11            0.09 
 Diluted                                          0.11            0.09 
 Par value of each share in 
  GBP                                             0.01            0.01 
 

Unaudited Condensed Consolidated Statements of Other Comprehensive Income

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

 
                                                            For the six                       For the six 
                                                           months ended                      months ended 
------------------------------------- 
                                                           30 September                      30 September 
                                                                   2019                              2018 
 
                                                              Unaudited                         Unaudited 
-------------------------------------   -------------------------------  -------------------------------- 
 
 Profit after tax for the year                               21,571,617                        17,257,657 
 Other comprehensive income 
 Items that will be reclassified 
  subsequently to the consolidated 
  income statement 
 Exchange differences on translating 
  foreign operations                                          (808,836)                       (5,458,225) 
 Net other comprehensive (loss) 
  that will be reclassified 
  subsequently to consolidated 
  income statement                                            (808,836)                       (5,458,225) 
                                        -------------------------------  -------------------------------- 
 Items that will not be reclassified 
  subsequently to income statement 
 Remeasurement of the net defined                               257,399                                 - 
  benefit liability 
 Income tax relating to items                                  (74,954)                                 - 
  that will not be reclassified 
 Net other comprehensive income                                 182,445                                 - 
  that will be not be reclassified 
  subsequently to consolidated 
  income statement 
                                        -------------------------------  -------------------------------- 
 
 Other comprehensive income/(loss) 
  for the year                                                (626,391)                       (5,458,225) 
 Total comprehensive income 
  attributable to equity holders                             20,945,226                        11,799,432 
                                        -------------------------------  -------------------------------- 
 

(The accompanying notes are an integral part of these Unaudited Condensed Consolidated Interim Financial Statements)

Unaudited Condensed Consolidated Statements of Changes in Equity

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

 
                           Share                    Additional             Share compensation            Merger                      Other components                  Retained           Total 
                          capital                 Paid in Capital                reserve                 reserve                         of equity                      earnings          equity 
                                                                                                                        ----------------------------------------- 
                                                                                                                               Foreign             Net defined 
                                                                                                                               currency              benefit 
                                                                                                                              translation           liability 
                                                                                                                                reserve 
---------------  -----------------------  ----------------------------  -----------------------  ---------------------  --------------------  -------------------  --------------------------------- 
 Balance as at 
  01 April 
  2018                         3,776,175                    15,451,809                   63,986            (1,049,386)           (9,219,409)              706,857      100,201,260       109,931,292 
---------------  -----------------------  ----------------------------  -----------------------  ---------------------  --------------------  -------------------  ---------------  ---------------- 
 Profit for the 
  year                                 -                             -                        -                      -                     -                    -     31,749,077          31,749,077 
 Other 
  comprehensive 
  loss                                 -                             -                        -                      -           (3,228,735)               71,475                -       (3,157,260) 
--------------- 
 Total 
  comprehensive 
  income for 
  the year                             -                             -                        -                      -           (3,228,735)               71,475       31,749,077        28,591,817 
---------------  -----------------------  ----------------------------  -----------------------  ---------------------  --------------------  -------------------  ---------------  ---------------- 
 Balance as at 
  31 March 
  2019                         3,776,175                    15,451,809                   63,986            (1,049,386)          (12,448,144)              778,332      131,950,337       138,523,109 
---------------  -----------------------  ----------------------------  -----------------------  ---------------------  --------------------  -------------------  ---------------  ---------------- 
 

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

 
  iEnergizer 
  Limited 
                      Share           Additional              Share compensation             Merger               Other components             Retained          Total 
                     capital        Paid in Capital                 reserve                  reserve                  of equity                earnings          equity 
                                                                                                         -------------------------------- 
                                                                                                              Foreign        Net defined 
                                                                                                              currency         benefit 
                                                                                                             translation      liability 
                                                                                                               reserve 
---------------  -------------  ---------------------  -------------------------------  ---------------  ----------------  --------------  ------------------------------- 
 Balance as at 
  01 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                   -                      -                                -                -                 -               -    (24,068,320)     (24,068,320) 
---------------  -------------  ---------------------  -------------------------------  ---------------  ----------------  --------------  --------------  --------------- 
 Transaction 
  with owners                                                                                                                                (24,068,320)     (24,068,320) 
---------------  -------------  ---------------------  -------------------------------  ---------------  ----------------  --------------  --------------  --------------- 
 Profit for the 
  year                       -                      -                                -                -                 -               -      21,571,617       21,571,617 
 Other 
  comprehensive 
  loss                       -                      -                                -                -         (808,836)         182,444               -        (626,392) 
--------------- 
 Total 
  comprehensive 
  income for 
  the period                 -                      -                                -                -         (808,836)         182,444      21,571,617       20,945,225 
---------------  -------------  ---------------------  -------------------------------  ---------------  ----------------  --------------  --------------  --------------- 
 Balance as at 
  30 September 
  2019               3,776,175             15,451,809                           63,986      (1,049,386)      (13,256,980)         960,776     129,453,634      135,400,014 
---------------  -------------  ---------------------  -------------------------------  ---------------  ----------------  --------------  --------------  --------------- 
 
 

(The accompanying notes are an integral part of these Unaudited Condensed Consolidated Interim Financial Statements)

Unaudited Condensed Consolidated Statements of Cash Flows

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

 
 `                                                            For the six months                For the six months 
                                                                           ended                             ended 
                                                                    30 September                      30 September 
                                                                            2019                              2018 
 
 (A) Cash flow from operating activities 
 Profit before tax                                                    24,958,737                        20,954,130 
 Adjustments 
 Depreciation and amortisation                                         2,063,317                         2,680,368 
 Loss/(Profit) on disposal of property, 
  plant and equipment                                                    (6,024)                           (9,312) 
 Trade receivables written-off/provision 
  for doubtful debts                                                    (65,262)                             (411) 
 Unrealised and Realised foreign exchange 
  gain                                                                 (174,089)                       (2,398,514) 
 Finance income                                                        (360,107)                         (288,208) 
 Finance cost                                                          2,199,643                         2,760,603 
                                                 -------------------------------  -------------------------------- 
                                                                      28,616,215                        23,698,656 
 
 Changes in operating assets and liabilities 
 (Increase)/ Decrease in trade and 
  other receivables                                                    2,015,601                       (4,050,098) 
 (Increase)/ Decrease in other assets 
  (current and non-current)                                              941,298                         (305,985) 
 Increase / (Decrease) Non-current liabilities, 
  trade payables & other current liabilities                           2,670,121                         (3,685,214) 
 (Decrease)/ Increase in employee benefit 
  obligations                                                            307,761                         (657,949) 
                                                 -------------------------------  -------------------------------- 
 Cash generated from operations                                       34,550,996                        14,999,410 
 
 Income taxes paid                                                   (2,383,750)                       (2,704,661) 
                                                 -------------------------------  -------------------------------- 
 Net cash generated from operating 
  activities                                                          32,167,246                        12,294,749 
                                                 -------------------------------  -------------------------------- 
 
 (B) Cash flow for investing activities 
 Payments for purchase of property 
  plant and equipment                                                (1,521,588)                       (2,005,663) 
 Investment in fixed deposit (Net)                                     (883,210)                            40,211 
 Proceeds from disposal of property, 
  plant & equipment                                                        6,581                             9,312 
 Payments for purchase of other intangible 
  assets                                                               (220,909)                         (196,939) 
 Interest received                                                       400,808                           263,654 
 Net cash used in investing activities                               (2,218,318)                       (1,889,425) 
                                                 -------------------------------  -------------------------------- 
 
 
     For the six months     For the six 
                  ended    months ended 
           30 September    30 September 
                   2019            2018 
 
 
 
 (C ) Cash flow from financing activities 
 Interest paid                                                     (2,145,802)                      (2,371,072) 
 Repayment of long-term borrowings                                 (4,150,357)                      (8,274,611) 
 Net cash used in financing activities                             (6,296,159)                     (10,645,683) 
                                               -------------------------------  ------------------------------- 
 
 Net increase/(decrease) in cash and cash 
  equivalents                                                       23,652,769                        (240,359) 
 Dividends paid to equity holders of the                          (24,068,320)                                - 
  parent 
 Cash and cash equivalents at the beginning 
  of the year                                                       42,404,281                       33,371,550 
 Effect of exchange rate changes on cash                                83,553                          292,269 
 Cash and cash equivalents at the end 
  of the year                                                       42,072,283                       33,423,460 
                                               -------------------------------  ------------------------------- 
 
 Cash and cash equivalents comprise 
 Cash in hand                                                            8,337                           12,681 
 Balances with banks in current account                             42,063,946                       33,410,779 
 Bank overdraft                                                              -                                - 
                                                                    42,072,283                       33,423,460 
                                               -------------------------------  ------------------------------- 
 

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

Notes to Unaudited Condensed Consolidated Interim 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.

iEnergizer Limited 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 London Stock Exchange on 14 September 2010.

iEnergizer through its subsidiaries iEnergizer Holdings Limited, iEnergizer IT Services Private Limited, iEnergizer Management Services Limited, iEnergizer BPO Limited, iEnergizer BPO Inc, iEnergizer Aptara Limited and Aptara Inc and subsidiaries. (together the 'Group') is engaged in the business of call centre operations, providing business process outsource (BPO) and content delivery services, and back office services to their customers, who are primarily based in the United States of America and India, from its operating offices in Mauritius and India.

   2.   GENERAL INFORMATION AND STATEMENT OF COMPLIANCE WITH IFRS 

These Unaudited Condensed Consolidated Interim Financial Statements are for the six months ended 30 September 2019 and 2018. They have been prepared in accordance with IAS 34 Interim Financial Reporting as developed and published by the International Accounting Standards Board ('IASB'), on a going concern basis. They do not include all of the information required in annual financial statements in accordance with IFRS, and should be read in conjunction with the annual financial statements for the years ended 31 March 2019 and 2018.

The Unaudited Condensed Consolidated Interim Financial Statements have been prepared and presented in United States Dollar (US$) which is the Company's functional currency.

These Unaudited Condensed Consolidated Interim Financial Statements were approved by the Board on

12 November 2019.

The Group has applied the same accounting policies in preparing these unaudited management financial information as adopted in the most recent annual audited financial information of the Group.

   3.   SIGNIFICANT ACCOUNTING POLICIES 

The interim financial statements have been prepared in accordance with the accounting policies adopted in the Group's most recent annual financial statements for the years ended 31 March 2019 and 2018.

IFRS 16 - Lease Accounting

IFRS 16 will replace the existing leases Standard, IAS 17 Leases, and related interpretations. The standard sets out the principles for the recognition, measurement, presentation and disclosure of leases. IFRS 16 introduces a single lease accounting model and requires a lessee to recognize assets and liabilities for all leases with a term of more than 12 months, unless the underlying asset is of low value. The effective date for adoption of IFRS 16 is annual periods beginning on or after 1 April 2019

The Group has applied IFRS 16 using the modified retrospective second 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 was 8.40%.

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.

The changes in accounting policies are also expected to be reflected in the Group's consolidated financial statements as at and for the year ending 31 March 2020. The Group has initially adopted IFRS 16 Leases from 1 April 2019. The Group has applied IFRS 16 using the modified retrospective approach and therefore comparative information is still reported under IAS -17.

The following is a reconciliation of total operating lease commitments at 31 March 2019 to the lease liabilities recognised at 1 April 2019:

 
 Reconciliation at 31st March 2019                                    Amount in USD 
 Particulars 
                                                  --------------------------------- 
 Gross Lease Liabilities at 31 March 2019                                 7,308,682 
                                                  --------------------------------- 
 Less - Lease with remaining lease term of less                                   - 
  than 12 months 
                                                  --------------------------------- 
 Less - Discounted using incremental borrowing 
  rate                                                                    (956,476) 
                                                  --------------------------------- 
 Add - Other Finance Lease liabilities                                            - 
                                                  --------------------------------- 
 Present value of Lease Liabilities at 31 March 
  2019                                                                    6,352,206 
                                                  --------------------------------- 
 

Policy for new leases started from or after 1 April 2019

For any new contracts entered into on or after 1 April 2019, the Group considers whether a contract is, or contains a lease. A lease is defined as a contract or part of 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 it meets three key evaluation points:

o The contract contained identified asset.

o Group has the right to obtain substantially all the economic benefit from the use of identified asset throughout the period of use.

o The Group has right to direct the use of the identified asset throughout the period of use.

Measurement and Recognition of leases as a lessee

At the commencement date, the Group recognizes a right of use asset and a lease liability on the balance sheet date. The right of use asset is measured at cost, which is made up of initial measurement of a lease liability and any initial direct cost incurred by the Group.

The Group depreciates the right of use assets on a straight line basis from the lease commencement date to the earlier of the end of the useful life of the right of use asset or the end of lease term. The Group also assesses the right of use asset for impairment when such indicator exists.

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

The Group has elected to account for short-term leases and leases of low-value assets using the practical expedients. Instead of recognising a right-of-use asset and lease liability, the payments in relation to these are recognised as an expense in profit or loss on a straight-line basis over the lease term.

Policy for the comparative period (which has not been restated) has been repeated as follows:-

Determination of whether an arrangement is, or contains, a lease is based on the substance of the arrangement at inception date whether fulfilment of the arrangement is dependent on the use of a specific asset or assets and the arrangement conveys a right to use the asset.

Group as a lessee

Finance leases, which transfer to the Group substantially all the risks and benefits incidental to ownership of the leased item, are capitalized at the commencement of the lease at the fair value of the leased property or, if lower, at the present value of the minimum lease payments. Lease payments are apportioned between finance charges and reduction of the lease liability so as to achieve a constant rate of interest on the remaining balance of the liability. Finance charges are recognized in the consolidated income statement.

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.

Operating lease payments are recognized as an expense in the consolidated income statement on a straight line basis over the lease term. Rent abatements and escalations are considered in the calculation of minimum lease payments in the Group's capital lease testing and in determining straight line rent expense for operating leases.

Consolidated Lease Position as at 30th Sep 2019

 
 Particulars                                         Amount in USD 
-------------------------------------------------- 
 Fixed Asset- Lease Hold Improvement 1 April 2019        6,352,206 
                                                    -------------- 
 Fixed Asset- Lease Hold Improvement addition 
  during six months                                        258,645 
                                                    -------------- 
 Accumulated Depreciation till 30 September 2019         (619,123) 
                                                    -------------- 
 Net Block as on 30 September 2019                       5,991,728 
                                                    -------------- 
 
   4.   SIGNIFICANT MANAGEMENT JUDGEMENT IN APPLYING ACCOUNTING POLICIES AND ESTIMATION UNCERTAINTY 

When preparing the Unaudited Condensed Consolidated Interim Financial Statements, management undertakes a number of judgements, estimates and assumptions about recognition and measurement of assets, liabilities, income and expenses. The actual results may differ from the judgements, estimates and assumptions made by management, and will seldom equal the estimated results.

The judgements, estimates and assumptions applied in the Unaudited Condensed Consolidated Interim Financial Statements, including the key sources of estimation uncertainty were the same as those applied in the Group's last audited financial statements for the year ended 31 March 2019.

   5.   GOODWILL 

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

 
 Particulars                              Amount 
-----------------------------  ----------------- 
 Balance as at 01 April 2018         102,265,086 
 Impairment loss recognized                    - 
 Translation adjustment                  (8,421) 
 Balance as at 31 March 2019         102,256,665 
-----------------------------  ----------------- 
 
 
 Particulars                             Amount 
---------------------------------  ------------ 
 Balance as at 01 April 2019        102,256,665 
 Translation adjustment                 (1,714) 
 Balance as at 30 September 2019    102,254,951 
---------------------------------  ------------ 
 
    6.   OTHER INTANGIBLE ASSETS 

The Intangible assets comprise of computer software, customer contracts.

 
  Particulars      Customer contracts*         Computer             Patent             Trademark          Intangibles            Total 
                                                software                                                     under 
                                                                                                          development 
---------------  -----------------------  ------------------  ------------------  -------------------  -----------------  ------------------ 
 Cost 
 Balance as at 
  01 April 2018               24,122,232           3,589,438             100,000           12,000,000            132,490          39,944,160 
                 -----------------------  ------------------  ------------------  -------------------  -----------------  ------------------ 
 Additions                             -             576,081                                                                         576,081 
 Disposals                             -                   -                   -                    -                  -                   - 
 Translation 
  adjustment                     (9,418)           (221,500)                   -                    -                  -           (230,918) 
 Balance as at 
  31 March 2019               24,112,814           3,944,019             100,000           12,000,000            132,490          40,289,323 
                 -----------------------  ------------------  ------------------  -------------------  -----------------  ------------------ 
 
 Accumulated 
 amortisation 
 Balance as at 
  01 April 2018               21,806,084           3,235,118                   -                    -            132,490          25,173,692 
                 -----------------------  ------------------  ------------------  -------------------  -----------------  ------------------ 
 Amortisation/ 
  impairment 
  for 
  the period                   2,316,148             523,642                   -                    -                  -           2,839,790 
 Disposals                             -                   -                   -                    -                  -                   - 
 Translation 
  adjustment                     (9,418)           (198,794)                   -                    -                  -           (208,212) 
 Balance as at 
  31 March 2019               24,112,814           3,559,966                   -                    -            132,490          27,805,270 
                 -----------------------  ------------------  ------------------  -------------------  -----------------  ------------------ 
 
 Carrying 
  values as at 
  31 March 
  2019                                 -             384,053             100,000           12,000,000                  -          12,484,053 
---------------  -----------------------  ------------------  ------------------  -------------------  -----------------  ------------------ 
 

*Customer contracts are intangible assets created for long standing customer relationships in the content delivery segment. Once the relationship is established the work continues to flow on a year to year basis. The carrying amount of such contracts is Nil.

 
       Particulars                Customer              Computer             Patent             Trademark          Intangibles          Right of            Total 
                                  contracts*             software                                                     under            Use Asset** 
                                                                                                                   development 
-------------------------  ----------------------  ------------------  ------------------  -------------------  -----------------  ------------------  --------------- 
 Cost 
 Balance as at 01 April 
  2019                                 24,112,814           3,944,019             100,000           12,000,000            132,490                   -       40,289,323 
                           ----------------------  ------------------  ------------------  -------------------  -----------------  ------------------  --------------- 
 Additions                                      -             150,903                   -                    -                  -           6,635,210        6,786,113 
 Disposals                                      -                   -                   -                    -                  -                   -                - 
 Translation adjustment                   (1,917)            (52,902)                   -                    -           (45,647)            (24,359)        (124,825) 
 Balance as at 30 Sept 
  2019                                 24,110,897           4,042,020             100,000           12,000,000            132,490           6,610,851       46,996,258 
                           ----------------------  ------------------  ------------------  -------------------  -----------------  ------------------  --------------- 
 
 Accumulated amortisation 
 Balance as at 01 April 
  2019                                 24,112,814           3,559,966                   -                    -            132,490                   -       27,805,270 
                           ----------------------  ------------------  ------------------  -------------------  -----------------  ------------------  --------------- 
 Amortisation/impairment 
  for 
  the period                                    -             198,937                   -                    -                  -             618,554          817,491 
 Disposals                                      -                   -                   -                    -                  -                   -                - 
 Translation adjustment                   (1,917)            (47,322)                   -                    -                  -                 569         (48,670) 
 Balance as at 30 Sept 
  2019                                 24,110,897           3,711,581                   -                    -            132,490             619,123       28,574,091 
                           ----------------------  ------------------  ------------------  -------------------  -----------------  ------------------  --------------- 
 
 Carrying values as at 30 
  Sept 2019                                     -             330,439             100,000           12,000,000                  -           5,991,728       18,422,167 
-------------------------  ----------------------  ------------------  ------------------  -------------------  -----------------  ------------------  --------------- 
 

*Customer contracts are intangible assets created for long standing customer relationships in the content delivery segment. Once the relationship is established the work continues to flow on a year to year basis. The carrying amount of such contracts is Nil.

**Right of Use Asset has been generated in compliance with adoption of IFRS 16 on Lease Accounting.

    7.   PROPERTY, PLANT AND EQUIPMENT 

Property, plant and equipment comprise of the following:

 
  Particulars          Computer              Office           Furniture        Air conditioner          Vehicle            Leasehold           Plant           Capital          Total 
                       and data             Equipment        and fixtures        and generator                            improvements     and machinery       work in 
                       equipment                                                                                                                               progress 
--------------  ---------------------  -----------------  ----------------  ---------------------  -----------------  ------------------  --------------  ----------------  ------------ 
 Cost 
 Balance as at 
  01 
  April 2018                6,109,821            874,293         1,247,285                378,237             37,066           4,400,598       2,256,054           122,531    15,425,885 
                ---------------------  -----------------  ----------------  ---------------------  -----------------  ------------------  --------------  ----------------  ------------ 
 Additions                  2,741,100             43,318           284,368                565,532                  -             593,856         210,222           101,777     4,540,173 
 Disposals 
  (Net)                     (121,154)           (12,438)          (20,576)                (5,678)           (14,885)                   -        (18,356)                 -     (193,087) 
 Translation 
  and other 
  adjustment                (323,214)           (50,401)          (72,347)               (21,372)            (1,434)           (277,327)       (131,350)                 -     (877,445) 
 Balance as at 
  31 
  March 2019                8,406,553            854,772         1,438,730                916,719             20,747           4,717,127       2,316,570           224,308    18,895,526 
                ---------------------  -----------------  ----------------  ---------------------  -----------------  ------------------  --------------  ----------------  ------------ 
 
 Accumulated 
 depreciation 
 Balance as at 
  01 
  April 2018                4,782,524            719,304           740,357                208,657             30,768           2,545,403       1,748,184                 -    10,775,197 
                ---------------------  -----------------  ----------------  ---------------------  -----------------  ------------------  --------------  ----------------  ------------ 
 Depreciation 
  for 
  the year                  1,158,555            111,228           316,403                 66,624              1,697             457,759         236,334                 -     2,348,600 
 Disposals 
  (Net)                     (121,154)           (12,366)          (20,559)                   (26)           (14,885)                   -        (18,356)                 -     (187,346) 
 Translation 
  and other 
  adjustments               (297,468)           (40,102)          (40,177)               (13,150)            (1,019)           (156,878)        (99,203)                 -     (647,997) 
 Balance as at 
  31 
  March 2019                5,522,457            778,064           996,024                262,105             16,561           2,846,284       1,866,959                 -    12,288,454 
                ---------------------  -----------------  ----------------  ---------------------  -----------------  ------------------  --------------  ----------------  ------------ 
 Carrying 
  values as 
  at 31 March 
  2019                      2,884,096             76,708           442,706                654,614              4,186           1,870,843         449,611           224,308     6,607,072 
--------------  ---------------------  -----------------  ----------------  ---------------------  -----------------  ------------------  --------------  ----------------  ------------ 
 
 
  Particulars     Computer          Office             Furniture         Air conditioner         Vehicle            Leasehold            Plant        Capital            Total 
                  and data         Equipment          and fixtures        and generator                            improvements      and machinery     work 
                  equipment                                                                                                                             in 
                                                                                                                                                     progress 
--------------  -----------  -------------------  ------------------  --------------------  -----------------  -------------------  --------------  ----------  ---------------------- 
 Cost 
 Balance as at 
  01 
  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        1,037,685               18,062              13,039                17,696            280,348               83,930          92,826    (21,999)               1,521,587 
 Disposals 
  (Net)            (78,892)                    -                   -                     -                  -                    -         (5,215)           -                (84,107) 
 Translation 
  and other 
  adjustment      (123,241)             (10,917)            (18,707)              (13,026)              (909)             (66,006)        (29,339)     (1,572)               (263,717) 
 Balance as at 
  30 
  Sept 2019       9,242,105              861,917           1,433,062               921,389            300,186            4,735,051       2,374,842     200,737              20,069,289 
                -----------  -------------------  ------------------  --------------------  -----------------  -------------------  --------------  ----------  ---------------------- 
 
 Accumulated 
 depreciation 
 Balance as at 
  01 
  April 2019      5,522,457              778,064             996,024               262,104             16,561            2,846,284       1,866,960           -              12,288,454 
                -----------  -------------------  ------------------  --------------------  -----------------  -------------------  --------------  ----------  ---------------------- 
 Depreciation 
  for 
  the period        767,123               37,675              50,621                57,422              5,759              230,206          97,020           -               1,245,826 
 Disposals 
  (Net)            (78,335)                    -                   -                     -                  -                    -         (5,215)           -                (83,550) 
 Translation 
  and other 
  adjustments      (80,279)              (9,689)            (12,807)               (4,103)              (266)             (38,569)        (22,762)           -               (168,475) 
 Balance as at 
  30 
  Sept 2019       6,130,966              806,050           1,033,838               315,423             22,054            3,037,921       1,936,003           -              13,282,255 
                -----------  -------------------  ------------------  --------------------  -----------------  -------------------  --------------  ----------  ---------------------- 
 Carrying 
  values as 
  at 30 Sept 
  2019            3,111,139               55,867             399,224               605,966            278,132            1,697,130         438,839     200,737               6,787,035 
--------------  -----------  -------------------  ------------------  --------------------  -----------------  -------------------  --------------  ----------  ---------------------- 
 
 
    8.   SHORT TERM FINANCIAL ASSETS 
 
 Particulars                                      30 September         31 March 2019 
                                                          2019 
----------------------------------------  --------------------  -------------------- 
 Security deposits                                       9,126                11,985 
 Restricted cash                                     5,055,927             4,747,604 
 Short term investments (fixed deposits 
  with maturity less than 12 months)                 2,758,929             1,803,959 
 Derivative financial instruments                        9,487               426,984 
 Due from officers and employees                        62,526                20,032 
 Others                                                  7,190                47,891 
----------------------------------------  --------------------  -------------------- 
                                                     7,903,185             7,058,455 
----------------------------------------  --------------------  -------------------- 
 
 
 

Short term investments comprise of investment through banks in deposits denominated in various currency units bearing fixed rate of interest.

   9.   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 period.

Calculation of basic and diluted profit per share for the period ended 30 September 2019 is as follows:

asic earnings per share

 
                  Particulars                                  30 September   30 September 
                                                                       2019       2018 
----------------------------------------------  ---------------------------  ------------- 
 Profit attributable to shareholders                             21,571,617     17,257,657 
 Weighted average numbers shares outstanding                    190,130,008    190,130,008 
 Basic earnings per share (US$)                                        0.11           0.09 
----------------------------------------------  ---------------------------  ------------- 
 

Diluted earnings per share

 
                  Particulars                    30 September        30 September 
                                                         2019             2018 
----------------------------------------------  -------------  ------------------------ 
 Profit attributable 
  to shareholders                                  21,571,617                17,257,657 
 Weighted average numbers shares outstanding      190,130,008               190,130,008 
 Diluted earnings per 
  share (US$)                                            0.11                      0.09 
----------------------------------------------  -------------  ------------------------ 
 
 

10. RELATED PARTY TRANSACTIONS

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

 
 Nature of the relationship      Related Party's Name 
------------------------------  ------------------------------------------- 
 
 I. Ultimate controlling         Mr. Anil Aggarwal 
  party 
 
 II. Entities directly 
  or indirectly through            EICR (Cyprus) Limited (Parent of 
  one or more intermediaries,      iEnergizer Limited) 
  control, are controlled 
  by, or are under common 
  control with, the reported 
  enterprises 
 
 
 III. Key management personnel   Mr. Anil Aggarwal (Ultimate Shareholder, 
  ("KMP") and significant         EICR Limited) 
  shareholders 
                                 Mr. Chris de Putron (Director, iEnergizer 
                                  Limited) 
                                  Mr. Mark De La Rue (Director, iEnergizer 
                                  Limited) 
                                  Mr. Marc Vassanelli (Director, iEnergizer 
                                  Limited) 
                                  Mr. Ashish Madan (Director, iEnergizer 
                                  Limited) w.e.f. 16 August 2018 
 
 

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

Transactions with KMP and relative of KMP

 
 Particulars                       30 September   30 September 
                                           2019           2018 
--------------------------------  -------------  ------------- 
 Transactions during the period 
  ended 
 Short term employee benefits 
 Remuneration paid to directors 
 Chris de Putron                          6,249          6,559 
 Mark De La Rue                           6,249          6,559 
 Marc Vassanelli                         18,747         19,678 
 
 Balances at the end of 
 Total remuneration payable             109,385         71,678 
--------------------------------  -------------  ------------- 
 

11. SEGMENT REPORTING

Management currently identifies the Group's two service lines business process outsource 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 reportable segments. The Group's reportable segments are as follows:

   1.    Business Process Outsource 
   2.    Content delivery 
   3.    Others 

The measurement of each segment's revenues, expenses and assets is consistent with the accounting policies that are used in preparation of the Unaudited Condensed Consolidated Interim Financial Statements. In addition, two minor operating segments, for which the quantitative thresholds have not been met, are currently combined below under 'Others'. Segment information can be analysed as follows for the reporting periods under review:

 
                                                                                                     30 September 2019 
                                                                               --------------------------------------- 
                                     Business             Content delivery           Others               Total 
                                 Process Outsource 
---------------------------  -----------------------  -----------------------  ------------------  ------------------- 
 Revenue from external 
  customers                               59,433,379               35,747,517                   -           95,180,896 
 Other income (including 
  realised foreign exchange 
  gain)                                    1,023,702                  280,168               4,524            1,308,394 
 Segment revenue                          60,457,081               36,027,685               4,524           96,489,290 
---------------------------  -----------------------  -----------------------  ------------------  ------------------- 
 Less:- 
  Cost of outsourced 
  Services                                16,144,667                5,074,680                   -           21,219,347 
 Employee benefit expense                 20,188,248               19,392,563                   -           39,580,811 
 Other expenses                            3,339,716                2,726,155             500,227            6,566,098 
---------------------------  -----------------------  -----------------------  ------------------  ------------------- 
 Earning before interest, 
  tax, depreciation and 
  amortisation                            20,784,450                8,834,288           (495,703)           29,123,034 
---------------------------  -----------------------  -----------------------  ------------------  ------------------- 
 Rent credit adjustment 
  as per IFRS 16                           (281,860)                (602,398)                   -            (884,258) 
                             -----------------------  -----------------------  ------------------  ------------------- 
 Earning before interest, 
  tax, depreciation and 
  amortisation 
  (before IFRS 16 rent 
  credit 
  adjustment )                            20,502,589                8,231,890           (495,703)           28,238,776 
---------------------------  -----------------------  -----------------------  ------------------  ------------------- 
 Unrealized Foreign 
  Exchange 
  gain/(loss)                                      -                (261,444)                   -            (261,444) 
 Depreciation and 
  amortisation                               959,531                1,103,786                   -            2,063,317 
 Rent adjustment as per 
  IFRS 16                                    281,860                  602,398                   -              884,258 
---------------------------  -----------------------  -----------------------  ------------------  ------------------- 
 Segment operating profit                 19,824,918                7,469,058           (495,703)           26,798,273 
 Other Income/expense : 
 Finance income                              135,427                  113,968             110,712              360,107 
 Finance costs                             (256,274)              (1,119,634)           (823,735)          (2,199,643) 
 Profit before tax                        19,704,071                6,463,392         (1,208,726)           24,958,737 
---------------------------  -----------------------  -----------------------  ------------------  ------------------- 
 Income tax expense                        1,954,446                1,432,675                   -            3,387,120 
 Profit after tax                         17,749,626                5,030,717         (1,208,726)           21,571,617 
---------------------------  -----------------------  -----------------------  ------------------  ------------------- 
 Segment assets                           48,324,778              156,564,586          17,175,505          222,064,869 
 Segment liabilities                      20,317,643               48,416,000          17,931,212           86,664,855 
 Capital expenditure                       4,682,531                3,625,169                   -            8,307,700 
---------------------------  -----------------------  -----------------------  ------------------  ------------------- 
 
 
                                                                                                     30 September 2018 
                                                                                   ----------------------------------- 
                                           Business            Content delivery         Others             Total 
                                       Process Outsource 
----------------------------------  ----------------------  ---------------------  ----------------  ----------------- 
 Revenue from external customers                48,093,184             34,268,125                 -         82,361,309 
 Other income (including 
  realized foreign exchange 
  gains)                                           409,617                471,386               850            881,853 
 Segment revenue                                48,502,801             34,739,511               850         83,243,162 
----------------------------------  ----------------------  ---------------------  ----------------  ----------------- 
 Less:- 
  Cost of outsourced Services                   13,506,125              4,453,231                 -         17,959,356 
 Employee benefit expense                       15,973,780             19,310,627                 -         35,284,407 
 Other expenses                                  1,749,646              3,515,201           470,577          5,735,424 
----------------------------------  ----------------------  ---------------------  ----------------  ----------------- 
 Earning before interest, 
  tax, depreciation and 
  amortisation                                  17,273,250              7,460,452         (469,727)         24,263,975 
----------------------------------  ----------------------  ---------------------  ----------------  ----------------- 
 Unrealized Foreign Exchange 
  gain/(loss)                                            -              1,842,918                 -          1,842,918 
 Depreciation and amortisation                     605,108              2,075,260                 -          2,680,368 
 Segment operating profit                       16,668,142              7,228,110         (469,727)         23,426,525 
----------------------------------  ----------------------  ---------------------  ----------------  ----------------- 
 Other Income/expense : 
 Finance income                                    138,957                126,948            22,303            288,208 
 Finance costs                                    (16,061)            (1,139,625)       (1,604,916)        (2,760,603) 
 Profit before tax                              16,791,038              6,215,433         2,052,340         20,954,131 
----------------------------------  ----------------------  ---------------------  ----------------  ----------------- 
 Income tax expense                              2,526,676              1,169,797                 -          3,696,473 
 Profit after tax                               14,264,361              5,045,637        2,052,340)         17,257,658 
----------------------------------  ----------------------  ---------------------  ----------------  ----------------- 
 Segment assets                                 43,431,117             75,456,382        86,626,765        205,514,264 
 Segment liabilities                            15,147,228             46,029,831        22,606,489         83,783,548 
 Capital expenditure                             1,874,708                339,414                 -          2,214,122 
----------------------------------  ----------------------  ---------------------  ----------------  ----------------- 
 

Revenue from the following customer's amounts to more than 10% of consolidated revenue during the period presented.

30 September 2019

 
 Revenue from              Segment                                   Amount 
--------------  ----------------------------  ----------------------------- 
 Customer 1      Business Process Outsource                       9,928,185 
--------------  ----------------------------  ----------------------------- 
 

30 September 2018

 
 Revenue from              Segment                           Amount 
--------------  ----------------------------  --------------------- 
 Customer 1      Business Process Outsource               9,763,189 
--------------  ----------------------------  --------------------- 
 

12. FINANCIAL ASSETS AND LIABILITIES

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

 
 Financial assets                                       30 September          31 March 2019 
                                                                2019 
-----------------------------------------  -------------------------  --------------------- 
 
 Non-current assets 
 Loans and receivables 
 Security deposits                                           530,183                507,498 
 Restricted cash                                             109,259                108,591 
 Fixed deposit                                                     -              1,065,892 
 Current assets 
 Loans and receivables 
 Trade receivables                                        34,623,099             36,675,342 
 Cash and cash equivalents                                42,072,283             42,413,215 
 Restricted cash                                           5,055,927              4,747,604 
 Security deposits                                             9,126                 11,985 
 Short term investments                                    2,758,929              1,803,959 
 Due from officers and employees                              62,526                 20,032 
 Other short term financial assets                             7,190                 47,891 
 
 Fair value through profit and loss: 
 Derivative financial instruments                              9,487                426,984 
                                                          85,238,009             87,828,993 
-----------------------------------------  -------------------------  --------------------- 
 
 Financial liabilities                                  30 September          31 March 2019 
                                                                2019 
-----------------------------------------  -------------------------  --------------------- 
 
 Non-current liabilities 
 Financial liabilities measured at 
  amortized cost: 
 Long term borrowings                                     38,743,275                870,535 
 Current liabilities 
 Financial liabilities measured at 
  amortized cost: 
 Short term borrowings                                             -                  8,934 
 Trade payables                                           13,497,589             10,574,896 
 Current portion of long term borrowings                  10,045,091             45,403,496 
 Other current liabilities                                10,018,000              9,725,465 
 
 Fair value through profit and loss: 
 Derivative financial instruments                                  -                      - 
 
                                                          72,303,955             66,583,326 
-----------------------------------------  -------------------------  --------------------- 
 

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 recognised in the statement of financial positions as these are expected to realise within one year from the reporting dates. Derivative financial instruments, recorded at fair value through profit and loss, are recorded at their respective fair values on the reporting dates.

13. 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:

 
                                                  Fair value measurements 
                                                   at reporting date 
                                                   using 
-----------------------------  ----------------  ------------------------ 
 30 September 2019                 Total                          Level 2 
-----------------------------  ----------------  ------------------------ 
                                   (Notional 
 Liabilities                        amount) 
 Derivative instruments 
 Forward contracts (currency 
  - US$/INR)                         32,440,000                     9,487 
-----------------------------  ----------------  ------------------------ 
 
 
                                               Fair value measurements 
                                                at reporting date 
                                                using 
-----------------------------  -------------  ------------------------ 
 31 March 2019                     Total                       Level 2 
-----------------------------  -------------  ------------------------ 
                                   (Notional 
 Assets                             amount) 
 Derivative instruments 
 Forward contracts (currency 
  - US$/INR)                     18,700,000                    426,984 
-----------------------------  -------------  ------------------------ 
 

14. COMMITMENT AND CONTINGENCIES

As at 30 September 2019 and 31 March 2019, the Group had a capital commitment of US$ 257,684 and US$126,817 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 US$129,483 and US$122,834 as on 30 September 2019 and 31 March 2019 respectively and in respect of interest on VAT amounts to US$9,918 as on 30 September 2019 (US$10,060 as on 31 March 2019).

Guarantees: As at 30 September 2019 and 31 March 2019, guarantees provided by banks on behalf of the group companies to the revenue authorities and certain other agencies, amount to approximately US$34,555 and US$35,049 respectively.

15. ESTIMATES

The preparation of interim financial statements require management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities, income and expense. Actual results may differ from these estimates.

In preparing these Unaudited Condensed Consolidated Interim Financial Statements, the significant judgments made by the management in applying the Group's accounting policies and the key sources of estimation uncertainty were the same as those that applied to the consolidated financial statements as at and for the years ended 31 March 2019 and 2018.

16. FINANCIAL RISK MANAGEMENT

The Group's financial risk management objectives and policies are consistent with those disclosed in the consolidated financial statements as at and for the years ended 31 March 2019 and 2018.

(1) EBITDA has been calculated under the IFRS 16 accounting standards, under which a company's operating lease liabilities are shown as liabilities on the balance sheet, together with the related assets that correspond to the right to use such assets over the remaining life of the related lease contracts. If these impacts had not been taken into consideration, the EBITDA would have been $28.24m.

(2) Net Debt has been calculated after excluding IFRS 16 impact of capitalization of leases as "Right of Use Assets" and their consequent lease liability creation. If these impacts had been included, Net Debt would have been $6.72m

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.

END

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