TIDMIBPO
RNS Number : 8549P
iEnergizer Limited
23 June 2022
iEnergizer Limited
("iEnergizer" or the "Company" or the "Group")
ANNUAL RESULTS FOR THE YEARED 31 MARCH 2022
iEnergizer, the technology services and media solutions leader
for the digital age, reports annual results for the year ended
March 31, 2022 with strong revenue and margin growth generating a
substantial return and exceeding market expectations. 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 13.8p final dividend payment to
shareholders, representing a total dividend payment of 21.92p, a
55% increase compared to 2021.
Financial Highlights:
Highly profitable revenue growth and continued margin
improvements, achieved through deepening existing customer
relationships, securing new customer contracts, and continued focus
on higher margin work, along with careful and active cost
management.
-- Total Revenue up 32.4% at $265.2m (2021: $200.3m)
-- Service Revenue up 32.8% at $260.3m (2021: $196.0m)
-- EBITDA up 51.3% at $97.3m (2021: $64.3m) representing an EBITDA margin of 36.8% (2021: 32.1%)
-- Operating Profit up 58.5% at $91.3m (2021: $57.6m)
-- Profit Before Tax (PBT) up 55.5% at $83.2m (2021: $53.5m)
-- Profit After Tax (PAT) up 52.3% at $74.5m (2021: $48.9m)
-- Earnings per share up 50% at $0.39 (2021: $0.26)
-- Net debt of $100.0m (2021: $115.9m)
-- Total dividend of 21.92p per ordinary share ($52.8m) (2021:
14.12p) including interim dividend of 8.12p, an increase of 55%
Operational Highlights:
Success in securing further higher margin work with existing and
new customers, capitalizing on growth opportunities in the
entertainment and digital learning markets.
-- Overall Group revenue and profitability was supported by
significant growth in higher margin International BPO business, and
Financial Reporting and Compliance services in the Content Services
division
-- iEnergizer increased share of revenue from most of its key
international clients operating across verticals of Media &
Entertainment, BFSI, Publishing Services and Online Training &
Education ; and added several new customers in E-Commerce, Telecom
and E-Learning industry segments
-- Business Process Outsource revenue grew 47.3% year on year,
increasing its revenue share to 70.1% (63.3% in 2021) as most key
customers increased workload volumes. BPO's outsized exposure to
fast-growing markets of Media & Entertainment, BFSI and
telecommunications resulted in steady and strong revenue growth
during the year. The division continued to add new customers and
maintained growth in recurring revenue streams from long-term
customer relationships across all verticals
-- Business Process Outsource division focused on the new fast
growth technology areas of Content moderation and data tagging for
Artificial Intelligence (AI) / Machine Learning (ML) applications
which are emerging as large opportunities for future growth. The
group plans to invest in sales to promote the new-age
technology-driven digital customer experience (CX) services
-- Business Process Outsource EBITDA margins grew to 41.0%
(2021: 34.9%) on account of increased volumes of high margin
international business and the cost efficiencies of seamless
operational delivery
-- Content Services segment grew its revenue by 7.9% over fiscal
2021 on account of increased volumes from the majority of key
clients. Revenue from new clients, primarily in its E-Learning and
Digital divisions, contributed $1.2m to Group revenue
-- Content Services maintained EBITDA margins of 26.8% owing to
the productivity gains and overhead-related cost savings of more
automated workflows
-- Content Services delivered an award-winning performance in
E-Learning. Online training and education segments remain key focus
areas
-- Content Services' US based sales team continues focus on
cross-selling and securing business leads from new and existing
customers for fast growth technology services including:
o Digital Training
o SAAS services for propositions including Technology Tools such
as Scipris and PXE5
o Providing immersive content for learners (specifically middle
to high school), partnering with EdTech groups with select revenue
share models
-- Higher EBITDA growth through fiscal 2022 reflects revenue
growth and ongoing cost saving initiatives:
o Improved shift utilization via a 24/7 delivery model based out
of Group's delivery centers in India, in line with the requirements
of different customers
o Continued investment in technology generated productivity
gains and higher margins
Dividend:
-- In line with its progressive dividend policy, the Company is
pleased to announce a final dividend of 13.8p with the Dividend
record date of 1st July, 2022 in addition to the interim dividend
of 8.12p which was paid in December 2021.
-- The Company's Ordinary Shares are expected to go ex-dividend
on 30th June, 2022 and the dividend is expected to be paid on 1st
August, 2022.
-- 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 significant growth in revenue and 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 13.8p for fiscal 2022, in
line with our progressive dividend policy adopted in 2019.
"Importantly, we have secured several new customers across each
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 2023 have started well,
continuing the recent positive trend, with extensions of existing
contracts.
"With iEnergizer's solid foundation, its 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 Li mited +44 (0)1481 242233
Chris de Putron
Mark De La Rue
+44 (0)20 3727
FTI Consulting - Communications adviser 1000
A lex Beagley / Eleanor Purdon
+44 (0)20 7409
Strand Hanson - Nominated adviser 3494
James Dance / James Bellman
+44 (0)20 7614
Arden Partners - F inancial adviser and broker 5900
Antonio Bossi (Corporate Finance)
James Reed-Daunter (Equity Sales)
Company Overview
iEnergizer is an AIM quoted, 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 2022 reflects
the excellent volume growth from existing key customer
relationships, the acquisition of new customers across all
verticals, which together with the adoption of new technology,
resulted in 55.5% growth in the Group's Profit Before Taxation
(PBT). Our strategy remains focused on offering differentiated
end-to-end services and supporting long-term value creation for our
shareholders.
The underlying businesses of each division have performed well.
The BPO division posted revenue growth of 47.3%, due to growing
wallet share from its existing International BPO customers, and it
increased its EBITDA margins from 34.9% to 41.0%. The Content
Services division also grew revenue by 7.9%, and has maintained its
EBITDA margins at 26.8% owing to demand growth across all its
verticals.
The 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, 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 2022 has been a year of strong growth marked by
considerable profitability improvements through excellent volume
growth from key customer contracts, focussing on the existing
business, generating revenue from new service lines and customers,
together with continued focus on cost management.
Financial Overview
Service revenues grew to $260.3m (2021: $196.0m) and PBT grew to
$83.2m (2021: $53.5m). Profit growth 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 47.3%, as key clients, specifically from
the Media & Entertainment, E-Commerce and BFSI segments,
continued to increase volumes throughout the year. The combined
revenue generation from the top three customers across the BPO
division grew by 53% over fiscal 2021, reflecting how the seamless
delivery and quality provision of services by the division has
helped to retain and grow the scale of key existing accounts, as
well as securing new clients.
The Content Delivery division posted revenue growth of 7.9% due
to increased volumes of work from key clients and new clients. The
division also maintained its EBITDA margins at 26.8%, managing
operational costs by utilizing resources effectively to achieve
productivity gains and cost savings. The Content delivery segment
continues to focus on: promoting high-growth service areas of
E-Learning and Digitization services; renewing key contracts with
existing customers; and entering into profitable contracts with new
clients. The Content division has maintained focus on expanding its
customer base for the existing service line of SciPris and the new
service line of Education Technology 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 Media & Entertainment, E-Commerce, Digital
Learning, Telecom and Healthcare and Pharmaceutical sectors.
Volumes processed for key customers continued to increase,
without notable additional work-force resource, by porting
expertise from one discipline to another and utilizing technology
solutions.
We are proud of our service quality, which is evident in a
client retention rate of over 90% and the increased volume of new
work generated from existing clients. We continue to up-sell
additional services that are often more complex and operate 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 -
generating increased margins through automation. On the content
side, the Company added new customers on its SaaS platform
"SciPris" which allows our clients to benefit from faster and
upfront fee collections. The Content Services division has also
focussed on marketing Education Technology Services; we offer high
margin custom content development services as per specific customer
requirements. For BPO, we have deployed automation tools such as
chatbots to allow basic information capture before human
intervention is required. This allows us to provide better service
to our customers with employees' time dedicated to value-add
technical issue resolution, driving client dependence on
services.
Our strategic focus is on providing 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 well 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. We have identified E-Commerce, Telecom, Online
Education and E-Learning related market opportunities and are
servicing these areas with a higher degree of focus, 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); Telecom; Media & Entertainment; Information Technology;
E-Commerce, Healthcare and Pharmaceuticals; Publishing and
Non-Publishing.
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 13.8p per share with dividend record date of 1st
July, 2022. The Company Ordinary Shares are expected to go
ex-dividend on 30th June, 2022 and the dividend is expected to be
paid on 1st August, 2022.
Outlook
As we look into fiscal 2023 and beyond, we see a sizeable
project pipeline in both enterprise solutions, across the Group.
These relate to our focus on Education Technology Services,
combined with continued solid momentum in our Business Process
Outsource segment. We expect the Group to continue delivering 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 capitalize substantially on the
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 (51) - 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 (61) - 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 (60) - Chief Financial Officer & Executive
Director
Mr. Madan is a business development and marketing professional
with over 34 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 positions 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 (48) - Non-Executive Director
Mr. de Putron is a financial services professional with over 26
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 (53) - 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 29 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 2021
to 31 March 2022.
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
13.8p per share for a total dividend of 21.92p for the year (FY2021
14.12p).
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 2022
was:
Particulars 31 March 31 March
2022 2021
-------------------------------- --------- ---------
Transactions during the year
Remuneration paid to directors $ $
Chris de Putron 13,574 13,086
Mark De La Rue 13,574 13,086
Marc Vassanelli 46,464 39,636
Anil Aggarwal -- --
Ashish Madan -- --
Directors share option
During the year ended 31 March 2022, 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. The
Directors 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 biographies of the board members is
included in 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 Company is subject to the UK City Code on Takeovers and
Mergers.
Disclosure and Transparency Rules
Significant 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 10,867,575 5.72
--------------------- --------------------------
Miton Asset Mgt 5,982,750 3.15
--------------------- --------------------------
Control by Substantial Shareholder
Mr. Anil Aggarwal, through private companies-mainly Geophysical
Substrata Ltd. (GSL) and EICR (Cyprus) Limited (EICR), owns a
substantial 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, Strand Hanson (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
INDEPENT AUDITOR'S REPORT
To the members of iEnergizer Limited
Opinion
We have audited the Group financial statements of iEnergizer
Limited for the year ended 31 March 2022, 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 for the year then ended, and
Notes to the consolidated 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 Group's financial statements:
-- give a true and fair view of the state of the Group's affairs
as at 31 March 2022 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 (ISAs) and applicable law. Our
responsibilities under those standards are further described in the
'Auditor's responsibilities for the audit of the Group financial
statements' section of our report. We are independent of the Group
in accordance with the International Ethics Standards Board for
Accountants' International Code of Ethics for Professional
Accountants (including International Independence Standards) (IESBA
Code), together with the ethical requirements that are relevant to
our audit of the Group financial statements in Guernsey, and we
have fulfilled our other ethical responsibilities in accordance
with these requirements and the IESBA Code. We believe that the
audit evidence we have obtained is sufficient and appropriate to
provide a basis for our opinion.
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Key audit matters
Key audit matters are those matters that, in our professional
judgement, were of most significance in our audit of the group
financial statements of the current period . 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 .
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 How the matter was addressed in our audit
Revenue recognition Our audit work included, but was not restricted
to:
Revenue is recognized when the * Obtaining an understanding by performing walkthroughs
Group satisfies of each significant class of revenue transactions and
performance obligations by transferring assessing the design and implementation of key
the promised services to its controls;
customer.
Revenue is the key driver of
the business and judgement is * Assessing the timing of revenue recognition on a
involved in determining when sample basis across revenue streams in accordance
contractual obligations have with IFRS 15;
been performed and to the extent
that the right to consideration
has been earned.
* Performing an analytical review on revenue recognised
There is a risk of overstatement to identify any material new revenue streams and
of the revenue and improper customers and to assess whether recognized revenue is
recognition of revenue. Revenue in line with the expected level; and
may be deliberately overstated
as a result of management override
resulting from the pressure
management may feel to achieve * Assessing the amount of revenue to customers on a
the targeted results. The management sample basis by agreeing the extent, timing and
of the Group focuses on revenue customer acceptance of services, where relevant.
as a key performance measure
which could create an incentive
for revenue to be recognized Our Results
before satisfying the performance Based on our audit procedures, we did not
obligations. identify any evidence of material misstatement
in the revenue recognised for the year ended
We identified revenue recognition 31 March 2022 in the Group financial statements.
as
a significant audit risk area
and a key audit matter.
Relevant Disclosures in the
Annual Report and Accounts 2022
The Group accounting policy
on revenue recognition is shown
in note 3.3 and related disclosures
are included in note 30.
------------------------------------------------------------------------
Our audit work included, but was not restricted
Employee benefits obligations to:
* Performing a walkthrough of management's process for
The Group has the following assessing the valuation of defined benefit plans and
defined benefits plans for different other long term benefits and assessing the design and
geographical entities: implementation of key controls;
1. Gratuity; and
2. Pension Cost
* Verifying the accuracy of the underlying data used by
The value of the above employee the Group actuaries for the purpose of calculating
benefit obligations (net of the scheme liabilities by selecting a sample of
plan assets) amount to employees and agreeing pertinent data such as date of
$ 3,706,023. birth, gender, date of joining etc. to underlying
records;
The valuation of the above plans
in accordance with IAS 19 Employee
Benefits involves significant
judgement and is subject to * Assessing and challenging the reasonableness of
complex actuarial assumptions. assumptions used by the Group actuary for calculation
of the scheme liabilities.
Small variations in those actuarial
assumptions can lead to materially
different values of the above
plans recognized in the Group The Group accounting policy on valuation
financial statements. of defined benefit plan is shown in note
3.9 to the financial statements and related
We therefore identified employee disclosures are included in note 18.
benefit obligation as a significant Our Results
audit risk area and a key audit Based on our audit procedures, we found
matter. the valuation
methodologies including inherent actuarial
Relevant Disclosures in the assumptions, estimates and potential impact
Annual Report and Accounts 2022 on the future period of revision of these
estimates to be reasonable.
Financial Statements: Note 3.9,
Post-Employment Benefits, Short
Term and Long Term Employee
Benefits and Employee Costs;
Note 18, Employee Benefit Obligations.
------------------------------------------------------------------------
Impairment of goodwill and Our audit work included, but was not restricted
Intangible Assets with indefinite to:
useful lives * Performing a walkthrough of management's process for
assessing the impairment of goodwill and intangible
The process of assessing whether assets with indefinite useful lives and assessing the
an impairment exists under International design and implementation of key controls;
Accounting Standard (IAS) 36
Impairment of Assets is complex.
The Group has certain intangible * Testing the methodology applied in calculating value
assets having indefinite lives in use, engaging an internal valuation specialist to
in the form of goodwill arising ensure compliance with the requirements of IAS 36,
from business combinations in Impairment of Assets;
earlier years, trademarks and
patents. Management's evaluation
of the carrying value of these
assets involves analysis of * Testing the mathematical accuracy of management's
the Group cash generating units model and wherein the management sought assistance
(CGU) which requires judgement from external valuer, using an internal valuation
about future performance of specialist;
CGU's and the discount rates
applied to future cash flow
projections.
* Testing the key underlying assumptions for the
We identified impairment of financial years ended 31 March 2022 and beyond;
goodwill and intangible assets
with indefinite useful lives
as a significant audit risk
area and a key audit matter * Challenging management on its cash flow forecast and
the implied growth rates for the Financial Year 2022
Relevant Disclosures in the and beyond, considering evidence to support these
Annual Report assumptions;
and Accounts 2022
Financial Statements: Note 3.5
and 7, Goodwill and Note 3.6
and 8, Other Intangible Assets * Testing the accuracy of the "discount rates" using
comparative Company information, risk free/risk
premium market available rate and "long-term growth
rates" by corroborating the responses received from
management in respect of revenue growth projections;
and
* Testing the sensitivity analysis performed by
management in respect of the key assumptions of
discount and growth rates to check sufficient
headroom in their calculation.
The Group accounting policy on Impairment
of goodwill and intangible assets with indefinite
useful lives is disclosed in Note 3.5 and
3.6, respectively, 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.
------------------------------------------------------------------------
Audit scope
As part of designing our audit, we determined materiality and
assessed the risks of material misstatement in the Group financial
statements. In particular, we considered where the Directors made
subjective judgements; for example, in respect of significant
accounting estimates that involved making assumptions and
considering future events that are inherently uncertain. As in all
of our audits, we also addressed the risk of the Directors override
of internal controls, including among other matters, consideration
of whether there was evidence of bias that represented a risk of
material misstatement due to fraud.
We tailored the scope of our audit in order to perform
sufficient work to enable us to provide an opinion on the Group
financial statements as a whole, taking into account the structure
of the Group, the accounting processes and controls, and the
industry in which the Group operates.
Materiality
The scope of our audit was influenced by our application of
materiality. An audit is designed to obtain reasonable assurance
whether the Group financial statements are free from material
misstatement. Misstatements may arise due to fraud or error. They
are considered material if individually or in aggregate, they could
reasonably be expected to influence the economic decisions of users
taken on the basis of the Group financial statements.
Based on our professional judgement, we determined certain
quantitative thresholds for materiality, including the overall
Group materiality for the Group financial statements as a whole as
set out in the table below. These, together with qualitative
considerations, helped us to determine the scope of our audit and
the nature, timing and extent of our audit procedures and to
evaluate the effect of misstatements, both individually and in
aggregate on the Group financial statements as a whole.
Overall Group materiality USD 4,160,993 (USD 2,676,260 in previous
year)
How we determined it 5% of the Group's Profit Before Tax
-------------------------------------------------
Rationale for the materiality We believe that Profit before tax is a primary
benchmark measure used by the shareholders in assessing
the performance of the Group. It is also
a generally accepted measure used for companies
in this industry.
-------------------------------------------------
Other information in the Annual Report
The Directors are responsible for the other information. The
other information comprises the information included in the Annual
Report and Audited Group financial statements but does not include
the Group financial statements and our auditor's report thereon.
Our opinion on the Group 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 Group financial statements or our knowledge
obtained in the audit or otherwise appears to be materially
misstated. 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's Financial Statements are not in agreement with the accounting records; 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 the directors for the consolidated financial
statements
As explained more fully in the Statement of Directors'
Responsibilities set out on page 12, the Directors are responsible
for the preparation of the Group financial statements which give a
true and fair view in accordance with IFRSs as adopted by the
European Union, and for such internal control as the Directors
determine is necessary to enable the preparation of Group financial
statements that are free from material misstatement, whether due to
fraud or error.
In preparing the Group financial statements, the Directors are
responsible for assessing the Company's 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 consolidated
financial statements
Our objectives are to obtain reasonable assurance about whether
the Group 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 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
consolidated financial statements .
As part of an audit in accordance with ISAs, we exercise
professional judgment and maintain professional scepticism
throughout the audit. We also:
-- Identify and assess the risks of material misstatement of the
Group financial statements, whether due to fraud or error, design
and perform audit procedures responsive to those risks, and obtain
audit evidence that is sufficient and appropriate to provide a
basis for our opinion. The risk of not detecting a material
misstatement resulting from fraud is higher than for one resulting
from error, as fraud may involve collusion, forgery, intentional
omissions, misrepresentations, or the override of internal
control.
-- Obtain an understanding of internal control relevant to the
audit in order to design audit procedures that are appropriate in
the circumstances, but not for the purpose of expressing an opinion
on the effectiveness of the Company's internal control.
-- Evaluate the appropriateness of accounting policies used and
the reasonableness of accounting estimates and related disclosures
made by the Directors.
-- Conclude 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 Company's ability
to continue as a going concern. If we conclude that a material
uncertainty exists, we are required to draw attention in our
auditor's report to the related disclosures in the Group financial
statements or, if such disclosures are inadequate, to modify our
opinion. Our conclusions are based on the audit evidence obtained
up to the date of our auditor's report. However, future events or
conditions may cause the Company to cease to continue as a going
concern.
a) 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.
b) 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.
c) 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.
d) 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.
-- Evaluate the overall presentation, structure and content of
the consolidated financial statements, including the disclosures,
and whether the consolidated financial statements represent the
underlying transactions and events in a manner that achieves fair
presentation.
We communicate with the directors regarding, among other
matters, the planned scope and timing of the audit and significant
audit findings, including any significant deficiencies in internal
control that we identify during our audit.
We also provide the directors with a statement that we have
complied with relevant ethical requirements regarding independence,
and to communicate with them all relationships and other matters
that may reasonably be thought to bear on our independence, and
where applicable, actions taken to eliminate threats or safeguards
applied.
From the matters communicated with the directors, we determine
those matters that were of most significance in the audit of the
consolidated financial statements of the current period and are
therefore the key audit matters. We describe these matters in our
auditor's report unless law or regulation precludes public
disclosure about the matter or when, in extremely rare
circumstances, we determine that a matter should not be
communicated in our report because the adverse consequences of
doing so would reasonably be expected to outweigh the public
interest benefits of such communication.
Use of our report
This report is made solely to the 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 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 Company and the 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, Channel Islands
Date: 22 June 2022
Consolidated Statement of Financial Position
(All amounts in United States Dollars, unless otherwise
stated)
Notes As at As at
31 March 2022 31 March 2021
------------------------------- ------ --------------- ---------------
ASSETS
Non-current
Goodwill 7 102,246,868 102,250,365
Other intangible assets 8 13,074,401 12,573,227
Property, plant and equipment 9 10,123,815 6,608,441
Right-of-use assets 25 16,140,370 4,719,671
Long-term financial asset 10 4,971,036 3,311,739
Non-current tax assets 420,895 262,166
Deferred tax asset 11 3,313,563 3,469,843
Other non-current assets 163,187 23,909
--------------- ---------------
Non-current assets 150,454,135 133,219,361
--------------- ---------------
Current
Trade and other receivables 12 40,835,944 33,893,763
Short-term financial assets 14 20,609,380 16,281,924
Cash and cash equivalents 13 56,326,421 51,378,899
Other current assets 15 5,705,929 3,562,881
--------------- ---------------
Current assets 123,477,674 105,117,467
--------------- ---------------
Total assets 273,931,809 238,336,828
=============== ===============
EQUITY AND LIABILITIES
Equity
Share capital 28 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)
Other components of equity (17,615,642) (15,136,936)
Retained earnings 57,941,804 26,482,815
--------------- ---------------
Total equity attributable to equity
holders of the parent 58,568,746 29,588,463
--------------- ---------------
Consolidated Statement of Financial Position
(All amounts in United States Dollars, unless otherwise
stated)
Notes As at As at
31 March 2022 31 March 2021
------------------------------ ------ ---------------- ----------------
Liabilities
Non-current
Borrowings 16 129,895,411 139,138,958
Lease liabilities 25 13,697,079 3,766,759
Employee benefit obligations 18 5,092,678 4,708,447
Deferred tax liability 11 8,079,436 8,929,659
---------------- ----------------
Non-current liabilities 156,764,604 156,543,823
---------------- ----------------
Current
Trade and other payables 17 17,841,935 12,929,316
Employee benefit obligations 18 1,272,362 959,887
Current tax liabilities 844,679 393,028
Borrowings 16 9,763,047 22,978,093
Lease liabilities 25 3,026,616 1,424,940
Other current liabilities 19 25,849,820 13,519,278
---------------- ----------------
Current liabilities 58,598,459 52,204,542
---------------- ----------------
Total equity and liabilities 273,931,809 238,336,828
================ ================
(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 22 June 2022.
Director
Consolidated Income Statement
(All amounts in United States Dollars, unless otherwise
stated)
Notes For the year For the year
ended 31 March ended 31 March
2022 2021
---------------------------------- ------ ---------------- ----------------
Income from operations
Revenue from services 30 260,296,323 195,964,336
Other operating income 20 4,928,921 4,364,491
265,225,244 200,328,827
---------------- ----------------
Cost and expenses
Outsourced service cost 42,491,885 38,108,886
Employee benefits expense 105,320,000 76,951,595
Depreciation and amortisation 6,897,621 5,158,089
Other expenses 26 19,160,502 22,513,371
173,870,008 142,731,941
---------------- ----------------
Operating profit 91,355,236 57,596,886
Finance income 21 976,137 1,175,923
Finance cost 22 (9,111,515) (5,247,613)
---------------- ----------------
Profit before tax 83,219,858 53,525,196
---------------- ----------------
Income tax expense 23 8,682,143 4,588,913
Profit for the year attributable
to equity holders of the parent 74,537,715 48,936,283
================ ================
Earnings per share 24
Basic 0.39 0.26
Diluted 0.39 0.26
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
2022 2021
-------------------------------------------------- ---------------- ----------------
Profit after tax for the year 74,537,715 48,936,283
Other comprehensive income
Items that will be reclassified subsequently
to the consolidated income statement
Exchange differences on translating foreign
operations (2,289,842) 2,141,313
Net other comprehensive income/(loss)
that will be reclassified subsequently
to consolidated income statement (2,289,842) 2,141,313
---------------- ----------------
Items that will not be reclassified subsequently
to income statement
Remeasurement of the net defined benefit
liability (252,384) 56,169
Income tax relating to items that will
not be reclassified 63,520 (14,137)
Net other comprehensive income/(loss)
that will not be reclassified subsequently
to consolidated income statement (188,864) 42,032
---------------- ----------------
Other comprehensive income/(loss) for
the year (2,478,706) 2,183,345
---------------- ----------------
Total comprehensive income attributable
to equity holders 72,059,009 51,119,628
---------------- ----------------
(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 compensation reserve of earnings equity
capital reserve equity
----------------------------
Foreign Net
currency defined
translation benefit
reserve liability
--------------- ---------- ----------- -------------- ------------ -------------- ------------ -------------- -------------
Balance as at
1
April 2021 3,776,175 15,451,809 63,986 (1,049,386) (15,866,598) 729,662 26,482,815 29,588,463
--------------- ---------- ----------- -------------- ------------ -------------- ------------ -------------- -------------
Dividends - - - - - - (43,078,726) (43,078,726)
Transaction
with
owners - - - - - - (43,078,726) (43,078,726)
Profit for the
year - - - - - - 74,537,715 74,537,715
Other
comprehensive
income - - - - (2,289,842) (188,864) - (2,478,706)
Total
comprehensive
income for
the period - - - - (2,289,842) (188,864) 74,537,715 72,059,009
Balance as at
31
March 2022 3,776,175 15,451,809 63,986 (1,049,386) (18,156,440) 540,798 57,941,804 58,568,746
--------------- ---------- ----------- -------------- ------------ -------------- ------------ -------------- -------------
(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
income - - - - 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 Cash Flows
(All amounts in United States Dollars, unless otherwise
stated)
For the year For the year
ended ended
31 March 2022 31 March 2021
--------------------------------------------- --------------- ---------------
(A) Cash flow from operating activities
Profit before tax 83,219,858 53,525,196
Adjustments
Depreciation and amortisation 6,897,621 5,158,089
(Profit)/ Loss on disposal of property,
plant and equipment (46,274) 1,040
Trade receivables written-off/ provision
for doubtful debts 1,055,502 3,919,116
Provision for doubtful debts written
back (2,409,663) (1,227,481)
Sundry balances written back (6,157) (3,587)
Foreign exchange gain (net) (983,642) (143,426)
Finance income (976,137) (1,175,923)
Finance cost 7,383,028 4,577,051
Interest cost on lease liability 1,187,286 529,756
Other borrowing cost at amortised cost 541,201 140,806
95,862,623 65,300,637
Changes in operating assets and liabilities
(Increase ) in trade and other receivables (3,387,237) (1,185,494)
Decrease / (Increase) in other current
assets (1,946,139) (131,833)
Increase in trade payables & other
current liabilities 13,492,201 275,462
Increase in employee benefit obligations 292,571 132,739
Cash generated from operations 104,314,019 64,391,511
Income taxes paid (9,019,643) (3,656,783)
Net cash generated from operating
activities 95,294,376 60,734,728
--------------- ---------------
(B) Cash flow for investing activities
Payments for purchase of property plant
and equipment (7,441,818) (2,343,683)
Redemption of fixed deposits 14,275,664 4,788,393
Investment in fixed deposits (19,703,773) (12,900,755)
Proceeds from disposal of property,
plant and equipment 271,204 55,401
Payments for purchase of other intangible
assets and right-of-use assets (15,844,911) (512,302)
Interest received 971,297 1,126,809
--------------- ---------------
Net cash used in investing activities (27,472,337) (9,786,137)
--------------- ---------------
For the year For the year
ended ended
31 March 2022 31 March 2021
--------------------------------------------- --------------- ---------------
(C) Cash flow from financing activities
Interest paid (7,383,028) (4,577,051)
Dividends paid to equity holders of
the parent (43,078,726) (162,131,146)
Repayment of borrowings and lease liability (26,709,653) (43,067,804)
Proceeds from borrowings and lease
liability 14,054,569 165,175,315
Net cash used in financing activities (63,116,838) (44,600,686)
--------------- ---------------
Net increase/(decrease) in cash and
cash equivalents 4,705,201 6,347,906
Cash and cash equivalents at the beginning
of the year 51,378,899 45,147,783
Effect of exchange rate changes on
cash 242,321 (116,790)
Cash and cash equivalents at the end
of the year 56,326,421 51,378,899
--------------- ---------------
Cash and cash equivalents comprise
(Refer note 13)
Cash in hand 6,316 9,637
Balances with banks in current account 35,320,105 51,369,262
Short term investments (fixed deposits 21,000,000 -
with maturity less than 3 months)
56,326,421 51,378,899
--------------- ---------------
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 (including current portion of Lease Liabilities Total
long-term borrowing)
----------------------------- --------------------------------------------------- ------------------ --------------
1 April 2021 162,117,051 5,191,699 167,308,750
Cash-flows:
Repayment (22,999,794) (3,709,859) (26,709,653)
Non-cash:
Additional lease liability - 14,549,957 14,549,957
Interest on lease liability - 1,187,286 1,187,286
Other borrowing cost at
amortized cost 541,201 - 541,201
Translation adjustment - (495,388) (495,388)
31 March 2022 139,658,458 16,723,695 156,382,153
----------------------------- --------------------------------------------------- ------------------ --------------
1 April 2020 37,837,207 5,683,551 43,520,758
----------------------------- --------------------------------------------------- ------------------ --------------
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
amortized cost 140,806 - 140,806
31 March 2021 162,117,051 5,191,699 167,308,750
----------------------------- --------------------------------------------------- ------------------ --------------
(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 admitted to trading on
the AIM market ("AIM") of the London Stock Exchange plc 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 2022 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 2022. 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 from 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 from 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 recognized 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 recognizes 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
recognizes 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. All these services are
distinct and separately identifiable from the other promises in the
contract. Transaction price/standalone selling price related to
each performance obligation is mentioned within the contracts with
customers. Revenue is recognized 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, multi-channel distribution,
post-delivery customer service and IT support. All these services
are distinct and separately identifiable from the other promises in
the contract. Transaction price/standalone selling price related to
each performance obligation is mentioned within the contracts with
customers. Revenue is recognized only upon full satisfaction of the
performance obligation, deemed to be acceptance by the customers
and transfer of control, therefore, the Group recognizes revenue
using a point in time.
In respect of content delivery services, a few customers are
eligible for rebate based on the terms of agreement entered with
them and in case of Business Process Outsourcing, few customers are
eligible for credits basis SLAs specified in the agreement entered
with them. For these contracts, a 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 considerations is taken. Therefore, revenue and
trade receivable are recognized net of rebate amount.
When either party to a contact has performed, an entity shall
present the contract in the balance sheet as a contract asset or a
contract liability, depending on the relationship between the
entity's performance and the payment
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, methods of depreciation and residual
values 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 amortized 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 amortization 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
3.7 LEASES
Measurement and recognition of leases as a lessee
At the lease commencement date, the Group recognizes 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 recognizing a right-of-use asset and a
lease liability, the payments in relation to these are recognized
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
recognized 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.
Income tax expense 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 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 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
it is probable that future taxable profits will be available
against which the 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 are
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 the financial assets are initially measured at fair value
adjusted for transaction costs (where applicable) except trade
receivables which are measured at their transaction price at the
initial recognition itself.
Financial assets, other than those designated and effective as
hedging instruments, are classified into the following
categories:
-- amortized 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 categorized 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 amortized cost
Financial assets are measured at amortized 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 amortized cost
using the effective interest rate 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
categorized at fair value through profit and loss. Further,
irrespective of the 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 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 recognized in other comprehensive income
(OCI) will be recycled upon de-recognition of the asset.
Impairment of financial assets
IFRS 9's impairment requirements use more forward-looking
information to recognize expected credit losses- the 'expected
credit loss (ECL) model'. Instruments within the scope of the new
requirements includes loans and other debt-type financial assets
measured at amortized cost and FVOCI, trade receivables, contract
assets recognized 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 assesses 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 amortized cost using the effective
interest rate 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 recognized 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 amortized 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 is 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. The
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 resources
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 are 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 the 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 lives. 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 units has been determined using constant
growth rate until perpetuity. 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 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 (see
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).
Determination of lease term
Judgements made in calculating the lease liabilities include
assessing whether the arrangement contains a lease and determining
the lease term. Lease terms are negotiated on an individual basis
and contain a wide range of different terms and conditions.
Property leases will often include an early termination or
extension option to the lease term. Extension and termination
options have been considered when determining the lease term, along
with all facts and circumstances that may create an economic
incentive to exercise an extension option, or not exercise a
termination option. Extension periods (or periods after termination
options) are only included in the lease term if the lease is
reasonably certain to be extended (or terminated).
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 2021, WHICH HAS AN IMPACT ON
THE GROUP
No new standards or amendments to standards that are mandatory
for the first time for the financial year commencing 1 April 2021
affected any of the amounts recognised in the current year or any
prior year and is not likely to affect future periods.
5. STANDARDS, AMMENTS AND INTERPRETATIONS TO EXISTING STANDARDS
THAT ARE NOT YET EFFECTIVE AND HAVE NOT BEEN ADOPTED BY THE
GROUP
There are no standards that are not yet effective and that would
be expected to have a material impact on the entity in the current
or future reporting periods and on foreseeable future
transactions
6. BASIS OF CONSOLIDATION
Composition of the Group
Details of the entities, which as of 31 March 2022 and 31 March
2021 form part of the Group and are consolidated under iEnergizer
are as follows:
Name of the entity Holding Country Effective group
company of incorporation shareholding (%)
as of
31 March 2022
and 31 March 2021
--------------------------------- ------------ ------------------ ------------------
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
--------------------------------- ------------ ------------------ ------------------
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
--------------------------------- ------------ ------------------ ------------------
7. GOODWILL
The net carrying amount of goodwill can be analysed as
follows:
Particulars Amount
----------------------------- ------------
Balance as at 1 April 2021 102,250,365
Impairment loss recognized -
Translation adjustment (3,497)
----------------------------- ------------
Balance as at 31 March 2022 102,246,868
----------------------------- ------------
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
2022 2021
-------------------------------------- --------------- ---------------
Business process outsourcing - India
business unit 112,044 115,541
Content delivery - USA business
unit 102,134,824 102,134,824
-------------------------------------- --------------- ---------------
Goodwill allocation 102,246,868 102,250,365
-------------------------------------- --------------- ---------------
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 units has been determined using constant growth rate until
perpetuity stated below:
Particulars Growth rate Discount rate
31 March 2022 31 March 2022
--------------------------------- -------------- --------------
Business process outsourcing 10.50% 12.78%
- Indian business unit
Content delivery - USA business 6.00% 13.37%
unit
--------------------------------- -------------- --------------
*Pre-tax discount rate is 13.39% which approximately equal to
post tax discount rate of the company.
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
--------------------------------- -------------- --------------
*Pre-tax discount rate is 12.84% which approximately equal to
post tax discount rate of the company.
The key assumptions for Goodwill and Other Intangible assets
with indefinite useful lives of Content delivery-USA business unit
are as follows: (refer Note 8)
Management considers 'Content Delivery' business as one product
line/service 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. Reasonably possible in the assumption would not
cause unit's carrying amount to exceed recoverable amount.
Discount rates
Discount rates reflect management's estimates of the risks
specific to the business. The post-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 are 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% was considered as a
reasonable proxy.
These assumptions are based on past experience and are
consistent with market information
Sensitivity analysis of key assumptions
31 March 2022
Item Valuation Key assumptions Input Sensitivity to the input
technique to fair value
Goodwill Free Cash Gordon - 2% 5% increase (decrease) in
and Other Flow to long term terminal growth rate would
Intangible Firm ('FCFF') growth rate result in increase (decrease)
assets with method in enterprise value by $0.57m
indefinite ($0.52m), respectively
useful lives
--------------- ---------------- ------- -------------------------------
Discount 13.37% 5% decrease (increase) in
rate discount rate would result
in increase (decrease) in
enterprise value by $5.08m
($4.47m), respectively
--------------- ---------------- ------- -------------------------------
31 March 2021
Item Valuation Key assumptions Input Sensitivity to the input
technique to fair value
Goodwill Free Cash Gordon - 2% 5% increase (decrease) in
and Other Flow to long term terminal growth rate
Intangible Firm ('FCFF') growth rate results in an increase (decrease)
assets with method in fair value
indefinite of the goodwill by $1.10m
useful lives 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 2022, 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 Trade mark Intangibles Total
contracts software under
development
---------------- ------------- ---------------- --------- ------------ ---------------- ------------
Cost
Balance as at 1
April
2021 24,105,769 4,969,336 100,000 12,000,000 132,490 41,307,595
Additions - 1,002,211 - - 306,487 1,308,698
Disposals - - - - (132,491) (132,491)
Translation
adjustment (3,911) (142,764) - - (6,486) (153,161)
Balance as at
31 March
2022 24,101,858 5,828,783 100,000 12,000,000 300,000 42,330,641
------------- ---------------- --------- ------------ ---------------- ------------
Accumulated
amortisation
Balance as at 1
April
2021 24,105,769 4,496,109 - - - 28,601,878
Amortisation
for the year - 798,314 - - - 798,314
Disposals - - - - - -
Translation
adjustment (3,911) (140,041) - - - (143,952)
Balance as at
31 March
2022 24,101,858 5,154,382 - - - 29,256,240
------------- ---------------- --------- ------------ ---------------- ------------
Impairment
Balance as at 1
April
2021 - - - - 132,490 132,490
Impairment for - - - - - -
the year
Disposals - - - - (132,490) (132,490)
Translation - - - - - -
adjustment
Balance as at - - - - - -
31 March
2022
------------- ---------------- --------- ------------ ---------------- ------------
Carrying values
as at
31 March 2022 - 674,401 100,000 12,000,000 300,000 13,074,401
---------------- ------------- ---------------- --------- ------------ ---------------- ------------
Particulars Customer Computer Patent Trade mark Intangibles Total
contracts software 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 relates 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 and 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 2020 12,100,000
Impairment loss recognized -
Balance as at 31 March 2021 12,100,000
----------------------------- ------------
Particulars Amount
----------------------------- ------------
Balance as at 1 April 2021 12,100,000
Impairment loss recognized -
Balance as at 31 March 2022 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 units has been determined using constant growth rate until
perpetuity. Also refer note 7 as key assumptions for content
delivery - USA business unit.
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 improvements and work
equipment fixtures and machinery in
generator progress
---------------- ----------- ---------- ----------- ------------ ---------- ------------- ---------- ---------- -----------
Cost
Balance as at 1
April
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
----------- ---------- ----------- ------------ ---------- ------------- ---------- ---------- -----------
Additions 3,266,111 157,151 278,515 1,247,713 - 2,268,521 114,887 - 7,332,898
Disposals
(Net)/transfer (97,133) (472) - - (5,961) - (41,489) (214,307) (359,362)
Translation
adjustment (381,044) (32,341) (39,396) (29,198) (12,239) (143,916) (66,062) - (704,196)
----------- ---------- ----------- ------------ ---------- ------------- ---------- ---------- -----------
Balance as at
31 March
2022 14,893,849 1,272,413 1,653,588 2,168,988 386,105 6,950,669 2,423,603 - 29,749,215
----------- ---------- ----------- ------------ ---------- ------------- ---------- ---------- -----------
Accumulated
depreciation
Balance as at 1
April
2021 8,588,637 879,485 1,139,616 469,188 94,194 3,646,017 2,054,297 - 16,871,434
Depreciation
for the
period 2,373,226 100,811 84,675 150,839 36,025 561,923 120,456 - 3,427,955
Disposals (Net) (95,470) (472) - - (5,460) - (33,030) - (134,432)
Translation
adjustment (288,020) (25,331) (32,271) (16,417) (3,381) (116,878) (57,259) - (539,557)
----------- ---------- ----------- ------------ ---------- ------------- ---------- ---------- -----------
Balance as at
31 March
2022 10,578,373 954,493 1,192,020 603,610 121,378 4,091,062 2,084,464 - 19,625,400
----------- ---------- ----------- ------------ ---------- ------------- ---------- ---------- -----------
Carrying values
as
at 31 March
2022 4,315,476 317,920 461,568 1,565,378 264,727 2,859,607 339,139 - 10,123,815
---------------- ----------- ---------- ----------- ------------ ---------- ------------- ---------- ---------- -----------
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
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
1 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 2022 31 March 2021
-------------------------- -------------- --------------
Security deposits 895,722 686,922
Restricted cash 2,007,253 1,398,071
Fixed deposit with banks 2,068,061 1,226,746
-------------- --------------
4,971,036 3,311,739
-------------------------- -------------- --------------
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 6% 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 derivative contracts, 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 that 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
2021 difference recognized in consolidated 2022
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 1,210,914 (22,770) - 81,098 1,269,242
Employee benefits 1,627,857 (45,954) 63,520 521,632 2,167,055
Carry forward tax losses 1,259,330 - - (40,534) 1,218,796
Accruals for expenses 978,776 (22,582) - (97,545) 858,649
Unrealised gain/ (loss)
on derivatives (1,645) - - 17,044 15,399
Minimum alternate tax 1,058,470 (29,226) - (167,506) 861,738
Others 421,234 (11,632) - 70,176 479,778
------------- ---------------- ----------------- ----------------- -------------
Total (A) 6,554,936 (132,164) 63,520 384,365 6,870,657
Deferred tax liabilities
on account of
Undistributed earnings
of the subsidiaries* 12,014,752 (378,222) - - 11,636,530
------------- ---------------- ----------------- ----------------- -------------
Total (B) 12,014,752 (378,222) - - 11,636,530
---------------------------- ------------- ---------------- ----------------- ----------------- -------------
Total (A-B) (5,459,816) 246,058 63,520 384,365 (4,765,873)
---------------------------- ------------- ---------------- ----------------- ----------------- -------------
Amounts presented in consolidated statement of financial position
considering eligibility of offsetting Deferred tax assets and Deferred
tax liabilities in various jurisdictions
------------------------------------------------------------------------------------------------------------------
Deferred tax assets 3,469,843 - - - 3,313,563
---------------------------- ------------- ---------------- ----------------- ----------------- -------------
Deferred tax liabilities (8,929,659) - - - (8,079,436)
---------------------------- ------------- ---------------- ----------------- ----------------- -------------
Net (5,459,816) - - - (4,765,873)
---------------------------- ------------- ---------------- ----------------- ----------------- -------------
In assessing the realizability 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 1,218,796
(31 March 2021: USD 1,259,330) in respect of carry forward losses
of its various subsidiaries as at 31 March 2022 and 31 March 2021
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 recognized to date amounted to
USD 11,636,530 . The Group does not foresee additional tax outflow
in respect of these undistributed earnings, therefore has
restricted recognition of deferred tax liabilities 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 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)
---------------------------- ------------- ---------------- ----------------- ----------------- -------------
12. TRADE AND OTHER RECEIVABLES
Particulars 31 March 2022 31 March 2021
-------------------------------------- -------------- --------------
Trade receivables
Gross value 47,089,160 41,376,456
Less: Provision for bad and doubtful
debts (4,329,758) (5,683,919)
Less: Rebate accrued to the customer
during the year (1,925,194) (1,799,395)
-------------------------------------- --------------
Net value 40,834,208 33,893,142
Other receivables
Gross value 60,186 60,895
Less: Provision for bad and doubtful
receivables (58,450) (60,274)
-------------------------------------- -------------- --------------
Net value 1,736 621
-------------------------------------- -------------- --------------
40,835,944 33,893,763
-------------------------------------- -------------- --------------
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 2022 amounts to USD 11,992,322, which constitutes 29.37 % (31
March 2021: USD 16,694,296 being 49.25 %) of net tra de
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
1,055,502
(31 March 2021: USD 3,919,116) has been recorded under the other
expenses.
The analysis of provision for expected credit loss is as
follows:
31 March 31 March
Particulars 2022 2021
------------------------ ------------- ------------
Opening balance 5,683,919 2,992,284
Charge during the year 1,055,502 3,919,116
Provision reversed (2,409,663) (1,227,481)
------------------------ ------------- ------------
Closing balance 4,329,758 5,683,919
------------------------ ------------- ------------
The analysis for provision for expected credit loss of other
receivables is as follows:
31 March 31 March
Particulars 2022 2021
------------------------ --------- ---------
Opening balance 60,274 59,056
Charge during the year - 1,218
Provision reversed (1,824) -
------------------------ --------- ---------
Closing balance 58,450 60,274
------------------------ --------- ---------
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 2022 31 March 2021
---------------------------------------- -------------- --------------
Opening balance 1,799,395 1,566,872
Less: Rebates utilized during the year (451,407) (416,003)
Add: Rebates provided to customers
during the year 577,206 648,526
Closing balance 1,925,194 1,799,395
---------------------------------------- -------------- --------------
13. CASH AND CASH EQUIVALENTS
Particulars 31 March 2022 31 March 2021
---------------------------------------- -------------- --------------
Cash in hand 6,316 9,637
Cash in current accounts 35,320,105 51,369,262
Short term investments (fixed deposits 21,000,000 -
with maturity less than 3 months)
56,326,421 51,378,899
---------------------------------------- -------------- --------------
14. SHORT TERM FINANCIAL ASSETS
Particulars 31 March 2022 31 March 2021
---------------------------------------- -------------- --------------
Security deposits 265,921 30,767
Restricted cash* 7,645,707 6,444,738
Short term investments (fixed deposits
with maturity less than 12 months) 12,327,421 9,550,799
Derivative financial instruments 206,382 151,913
Due from officers and employees 93,738 38,336
Interest accrued on fixed deposits 70,211 65,371
---------------------------------------- -------------- --------------
20,609,380 16,281,924
---------------------------------------- -------------- --------------
* Restricted cash represents deposits that have been pledged
with reputable banks against derivative contracts, 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.
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 33, it has negligible impact on the short-term
financial assets.
15. OTHER CURRENT ASSETS
Particulars 31 March 2022 31 March 2021
---------------------------- -------------- --------------
Prepayments 2,050,327 1,280,205
Statutory dues recoverable 1,197,617 1,484,233
Unbilled revenue 914,355 600,187
Others 1,543,630 198,256
5,705,929 3,562,881
---------------------------- -------------- --------------
16. BORROWINGS
Particulars 31 March 31 March
2022 2021
----------------------------------------------- ------------------- ------------
Total borrowings 139,658,458 162,117,051
Less: Current portion of long-term borrowings 9,763,047 22,978,093
----------------------------------------------- ------------------- ------------
Long term borrowings 129,895,411 139,138,958
----------------------------------------------- ------------------- ------------
During the previous year, the Group entered into a 5-year senior
secured term loan facility (the "Facility") for an aggregate amount
of USD 150,000,000. The senior secured term loan facility bears
floating interest rate per annum equal to LIBOR plus 3.50% 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 is measured at
fair value less directly attributable transaction cost (USD
2,350,000) and will be amortised over the period of the loan. Also,
in the previous year, USD 15,000,000 revolving credit facility was
obtained which has been fully paid by the Group in the current
year.
The above 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 previous term loan in full and
the balance was paid to the shareholders 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
2022 2021
------------------------ ----------- -----------
Due to trade creditors 8,910,657 5,499,203
Other accrued expenses 8,931,278 7,430,113
------------------------ ----------- -----------
17,841,935 12,929,316
------------------------ ----------- -----------
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 2022 31 March 2021
Current Non-current Total Current Non-current Total
---------- ------------ ---------- -------- ------------ ----------
Provision for gratuity 520,405 2,853,303 3,373,708 414,179 2,673,497 3,087,676
---------- ------------ ---------- -------- ------------ ----------
Provision for compensated
absences 567,379 2,091,638 2,659,017 358,552 1,806,219 2,164,771
---------- ------------ ---------- -------- ------------ ----------
Accrued pension liability 184,578 147,737 332,315 187,156 228,731 415,887
---------- ------------ ---------- -------- ------------ ----------
1,272,362 5,092,678 6,365,040 959,887 4,708,447 5,668,334
---------- ------------ ---------- -------- ------------ ----------
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 the 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 2022
--------------------------------------------------------------------------
Particulars Gratuity Accrued pension
-------------------------------------------- ---------- ----------------
Change in benefit obligation
Opening value of obligation 3,129,238 2,780,164
Interest expense 213,221 83,846
Current service cost 576,977 -
Benefits paid (386,804) (179,398)
Re-measurement: actuarial (gain)/ loss
from changes in assumptions 252,384 (74,410)
Translation adjustment (104,690) -
-------------------------------------------- ---------- ----------------
Defined benefit obligation at the year
end 3,680,326 2,610,202
-------------------------------------------- ---------- ----------------
Fair value of planned assets (306,618) (2,277,887)
-------------------------------------------- ---------- ----------------
Defined benefit obligation at the year-end
(net) 3,373,708 332,315
-------------------------------------------- ---------- ----------------
Expenses related to the Group's defined benefit plans are as
follows:
31 March
2022
------------------------------------------- ----------- ----------------
Particulars Gratuity Accrued pension
------------------------------------------- ----------- ----------------
Net benefit obligation
------------------------------------------- ----------- ----------------
Amounts recognized in consolidated income statement
(including plan assets)
Current service cost 576,977 -
Net interest expense 210,196 83,846
Actuarial loss/ (gain) 241,863 (74,410)
------------------------------------------- ----------- ----------------
Expense recognized in consolidated income
statement 1,029,036 9,436
------------------------------------------- ----------- ----------------
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 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 188,316 87,880
Actuarial gain (52,330) (46,152)
------------------------------------ ---------- ----------------
Expense recognized in consolidated
income statement 595,587 41,728
------------------------------------ ---------- ----------------
The assumptions used in calculation of gratuity obligation are
as follows:
Particulars 31 March 2022 31 March 2021
------------------------------------------- --------------- ---------------
Discount rate 7.03% p.a. 6.91% p.a.
Expected rate of increase in compensation 4.83% p.a. 4.03% p.a.
levels
Expected rate of return on plan assets 7.38% p.a. 7.38% p.a.
Retirement age 58 years 58 years
Mortality table IALM (2012-14) IALM (2012-14)
Withdrawal rates
Up to 30 years 44.05% 31.22%
From 31 to 44 years 21.57% 13.92%
Above 44 years 14.42% 7.79%
Enterprise's best estimate of contribution during the next year
amounts to USD 1,069,107 (31 March 2021: USD 816,404)
The assumptions used in calculation of accrued pension are as
follows:
31 March 31 March
Particulars 2022 2021
---------------------------------------- ----------- -----------
Discount rate 3.13% 3.13%
Expected rate of return on plan assets 7.5% 7.5%
Retirement age 65 years 65 years
Mortality table Pri-2012 Pri-2012
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 184,578 (31 March 2021:
USD 187,156)
Plan assets
Gratuity
Particulars 31 March 31 March
2022 2021
--------------------------------------- ---------- ----------
Opening balance of fair value of plan
assets 41,563 64,951
Expected return on plan assets 3,025 5,194
Employer contribution 390,452 109,443
Benefits paid (133,127) (135,260)
Actuarial gain/(loss) on plan assets 10,521 (3,839)
Exchange fluctuation (5,816) 1,074
--------------------------------------- ---------- ----------
Closing balance of fair value of plan
assets 306,618 41,563
--------------------------------------- ---------- ----------
Accrued pension
Particulars 31 March 31 March
2022 2021
--------------------------------------- ---------- ----------
Opening balance of fair value of plan
assets 2,364,277 1,886,022
Actual return on plan assets 25,509 581,270
Employer contributions 67,500 76,500
Benefits paid (179,399) (179,515)
--------------------------------------- ---------- ----------
Closing balance of fair value of plan
assets 2,277,887 2,364,277
--------------------------------------- ---------- ----------
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.
Particulars 31 March 2022 31 March
2021
--------------------------------- -------------- ---------
Gratuity:
Quoted
Government bonds 157,116 6,831
Infrastructure bonds 58,635 2,920
Corporate bonds 28,119 910
Unquoted
Commercial paper and deposits - -
Cash and cash equivalents 13,866 202
Mutual Funds 48,882 30,699
-------------- ---------
306,618 41,562
-------------- ---------
Particulars 31 March 2022 31 March
2021
---------------------------- ------------------ ----------
Pension plan
Quoted
Equity mutual funds 1,239,571 1,311,037
Fixed income 944,851 974,735
Unquoted
Cash and cash equivalents 93,465 78,505
------------------ ----------
2,277,887 2,364,277
---------------------------- ------------------ ----------
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 2022 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 2022
Particulars USA India Total
---------------------------- ------------- ----------- -------------
Defined benefit obligation 2,610,202 3,680,326 6,290,528
Fair value of plan assets (2,277,887) (306,618) (2,584,505)
332,315 3,373,708 3,706,023
---------------------------- ------------- ----------- -------------
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
---------------------------- ------------- ----------- -------------
Amounts recognized in other comprehensive income related to the
Group's defined benefit plans are as follows:
Particulars 31 March 2022
-------------------------------------------------------- --------------
Actuarial gain from changes in demographic assumptions 14,446
Actuarial loss from changes in financial assumptions (65,662)
Actuarial loss from changes in experience adjustments (201,168)
Total loss recognised in other comprehensive
income ( 252,384 )
-------------------------------------------------------- --------------
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
-------------------------------------------------------- --------------
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.
The weighted average duration of the defined benefit obligation
for Gratuity at 31 March 2022 is 6.6 years
(31 March 2021: 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 2022 As at 31 March 2021
------------------------- ---------------------------- ----------------------------- ----------
Discount rate for Increase Decrease Increase Decrease
gratuity by 0.5% by 0.5% by 0.5% by 0.5 %
------------------------- -------------- ------------ ----------------------------- ----------
(Decrease)/increase
in the defined benefit
liability (96,462) 101,527 (87,437) 92,319
------------------------- -------------- ------------ ----------------------------- ----------
As at 31 March 2022 As at 31 March 2021
------------------------- ----------------------- -------------------------------------------
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 101,126 (96,907) 92.850 (88,837)
------------------------- ----------- ---------- ------------------------------- ----------
As at 31 March 2022 As at 31 March 2021
------------------------- ----------------------- ---------------------------------------------
Discount rate for Increase Decrease Increase Decrease
accrued pension by 0.25% by 0.25% by 0.25% by 0.25
%
------------------------- ----------- ---------- ------------------------------- ------------
(Decrease)/ Increase
in the defined benefit
liability (700) 800 (900) 1,300
------------------------- ----------- ---------- ------------------------------- ------------
As at 31 March 2022 As at 31 March 2021
------------------------- ---------------------- -----------------------
Long-term rate of Increase Decrease Increase Decrease
return for accrued by 0.5% by 0.5% by 0.5% by 0.5 %
pension
------------------------- ---------- ---------- ---------- -----------
(Decrease)/ Increase
in the defined benefit
liability (11,500) 11,500 (9,100) 9,100
------------------------- ---------- ---------- ---------- -----------
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 2022, the Group contributed USD 4,013,584 (31 March 2021:
3,249,740 ) towards the Provident Fund Plan in India.
19. OTHER CURRENT LIABILITIES
Particulars 31 March 31 March
2022 2021
------------------------ ------------ -----------
Employee dues 12,253,269 8,238,430
Statutory dues payable 1,716,210 1,781,235
Unearned revenue 681,119 310,930
Advance from customers 9,079,729 1,427,033
Others 2,119,493 1,761,650
25,849,820 13,519,278
------------------------ ------------ -----------
Employee dues represents outstanding dues towards the employees
in respect of Salary and other incentives.
20. OTHER OPERATING INCOME
Particulars 31 March 31 March
2022 2021
------------------------------------------------- ----------- ----------
Foreign exchange gain 2,262,046 1,984,105
Fair valuation gain - 151,913
Profit on sale of property, plant and equipment 46,274 7,818
Reversal of provision for expected credit
loss 2,409,663 1,227,481
Miscellaneous income 210,938 993,174
4,928,921 4,364,491
------------------------------------------------- ----------- ----------
21. FINANCE INCOME
Particulars 31 March 31 March
2022 2021
------------------------------------- --------- ----------
Interest income on deposit accounts 973,201 961,295
Interest on tax refund - 202,800
Others 2,936 11,828
976,137 1,175,923
------------------------------------- --------- ----------
22. FINANCE COST
Particulars 31 March 31 March
2022 2021
---------------------------------------- ----------- -----------
Interest on borrowings 7,383,028 4,577,051
Interest on finance lease 1,187,286 529,756
Other borrowing cost at amortized cost 541,201 140,806
9,111,515 5,247,613
---------------------------------------- ----------- -----------
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 is taxed at 0%
in Guernsey.
Tax expense reported in the Consolidated Income Statement for
the years ended 31 March 2022 and
31 March 2021 is as follows:
Particulars 31 March 31 March
2022 2021
--------------------------------------------- ----------- -----------
Current tax expense 9,066,508 5,308,767
Deferred tax expense (384,365) (719,854)
--------------------------------------------- ----------- -----------
Income tax expense included in consolidated
income statement 8,682,143 4,588,913
--------------------------------------------- ----------- -----------
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
2022 2021
------------------------------------------------ ----------- -----------
Accounting profit for the year before
tax 83,219,858 53,525,196
Effective tax at the domestic rates applicable
to profits in the country concerned 8,641,849 5,419,338
Income not taxable/expenses not allowed 273,583 43,463
Change in US tax* - (783,438)
MAT credit utilised (179,533) -
Others (53,756) (90,450)
------------------------------------------------ ----------- -----------
Tax expense 8,682,143 4,588,913
------------------------------------------------ ----------- -----------
* 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 365,855 (31 March 2021: 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 2022 was USD 76,830 (31 March 2021: 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
2022 2021
----------------------------------------------- ------------ ------------
Profit attributable to shareholders 74,537,715 48,936,283
Weighted average number of shares outstanding 190,130,008 190,130,008
Basic earnings per share (USD) 0.39 0.26
----------------------------------------------- ------------ ------------
Diluted earnings per share
Particulars 31 March 31 March
2022 2021
----------------------------------------------- ------------ ------------
Profit attributable to shareholders 74,537,715 48,936,283
Potential ordinary shares Nil Nil
Weighted average number of shares outstanding 190,130,008 190,130,008
Diluted earnings per share (USD) 0.39 0.26
----------------------------------------------- ------------ ------------
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 2022 31 March 2021
202020
------------- --------------- ---------------
Current 3,026,616 1,424,940
Non-current 13,697,079 3,766,759
------------- --------------- ---------------
16,723,695 5,191,699
------------- --------------- ---------------
(b) The following are amounts recognized in consolidated income
statement:
Particulars 31 March 2022 31 March 2021
------------------------------------------ -------------- --------------
Depre ciation expenses of right-of-use
Interest Expense on the Lease Liability 2,671,352 1,484,349
Interest expense on lease liability 273,405 529,756
Rent expenses* 11,202 7,167
Common area maintenance expenses 114,162 165,386
------------------------------------------ -------------- --------------
Total 3,070,121 2,186,658
------------------------------------------ -------------- --------------
*Rent expense in respect of Short Term Lease (leases with a
lease term of 12 months or less. Lease payments made under such
leases are expensed on a straight line basis)
(c) Right-of-use of assets as at 31 March 2022:
Particulars Computers Buildings Total
---------------------------------- ----------- ------------ -----------
Gross block
Balance as at 1 April 2021 - 7,517,462 7,517,462
Additions during the year 2,903,363 11,646,594 14,549,957
Disposal - (326,888) (326,888)
Translation adjustment - (377,245) (377,245)
---------------------------------- ----------- ------------ -----------
Gross block as at 31 March 2022 2,903,363 18,459,923 21,363,286
---------------------------------- ----------- ------------ -----------
Accumulated depreciation
Balance as at 1 April 2021 - 2,797,791 2,797,791
Depreciation for the period 241,239 2,430,113 2,671,352
Disposal - (149,824) (149,824)
Translation adjustment (3,539) (92,864) (96,403)
---------------------------------- ----------- ------------ -----------
Accumulated depreciation as at
31 March 2022 237,700 4,985,216 5,222,916
---------------------------------- ----------- ------------ -----------
Net block as at 31 March 2022 2,665,663 13,474,707 16,140,370
---------------------------------- ----------- ------------ -----------
Right-of-use of assets as at 31 March 2021:
Particulars Computers Buildings Total
Gross block
Balance as at 1 April 2020 - 6,696,491 6,696,491
Additions during the year - 1,009,919 1,009,919
Disposal - (306,301) (306,301)
Translation adjustment - 117,353 117,353
Gross block as at 31 March
2021 - 7,517,462 7,517,462
Accumulated depreciation
Balance as at 1 April 2020 - 1,393,220 1,393,220
Depreciation for the period - 1,484,349 1,484,349
Disposal - (112,393) (112,393)
Translation adjustment - 32,615 32,615
Accumulated depreciation
as at 31 March 2021 - 2,797,791 2,797,791
Net block as at 31 March
2021 - 4,719,671 4,719,671
(d) The table below describes the nature of the Group's leasing
activities by type of right-of-use asset
recognised in the consolidated statement of financial
position:
31 March 2022
Right-of-use Number Range of remaining Average Number Number Number
asset of right-of-use term remaining of leases of leases of leases
assets (in years) lease term with extension with options with termination
leased (in years) options to purchase options
0.25 to 8.09
Buildings 17 years 2.68 years 10 - 14
4.42 to 4.92
Computers 3580 years 4.64 years - 6 -
31 March 2021
Right-of-use Number Range of Average Number Number Number
asset of right-of-use remaining remaining of leases of leases of leases
assets term lease term with extension with options with termination
leased (in years) (in years) options to purchase options
0.47 to 9.09
Buildings 10 years 2.91 6 - 7
(e) Maturity of lease liabilities
The future lease payments at 31 March 2022 were as follows:
31 March 2022 Lease payments due
Within 1-2 2-3 3-4 4-5 After Total
1 year years years years years 5 years
---------- ---------- ---------- ---------- ----------
Lease payments 4,426,970 3,953,827 3,463,111 2,649,128 2,210,382 5,433,631 22,137,049
---------- ---------- ---------- ---------- ----------
Finance charges 1,400,354 1,143,997 898,013 700,905 533,179 736,906 5,413,354
---------- ---------- ---------- ---------- ----------
Net present
values 3,026,616 2,809,830 2,565,098 1,948,223 1,677,203 4,696,725 16,723,695
---------- ---------- ---------- ---------- ----------
31 March 2021 Lease payments due
Within 1-2 2-3 3-4 4-5 After Total
1 year years years years years 5 years
Lease payments 1,872,050 1,318,618 737,379 595,518 537,465 1,997,568 7,058,598
Finance charges 447,110 338,280 271,585 231,771 196,245 381,908 1,866,899
Net present
values 1,424,940 980,338 465,794 363,747 341,220 1,615,660 5,191,699
(f) Total cash outflow for leases for the year ended 31 March
2022 was USD 3,709,859 (31 March 2021:
USD 2,031,527)
(g) The potential additional future cashflows to which the Group
are exposed if extension options are exercised are as follows
Years Within 1-2 2-3 3-4 years 4-5 years After Total
1 year years years 5 years
31 March
2022 138,282 261,162 437,723 591,503 571,791 1,306,042 3,306,503
31 March
2021 - 138,282 261,162 362,466 290,477 688,779 1,741,166
(h) The effect of a change in the incremental borrowing rate for
leases entered into during the reporting period is shown in the
table below:
31 March 2022
Estimate Change in Estimate Effect on right-of-use Effect on
assets lease liabilities
Incremental borrowing 1% increase in Decrease by USD Decrease by
rate rate 423,762 USD 423,762
31 March 2021
Estimate Change in Estimate Effect on right-of-use Effect on
assets lease liabilities
Incremental borrowing 1% increase in Decrease by Decrease by
rate rate USD 4,279 USD 4,279
26. OTHER EXPENSES
Particulars 31 March 31 March
2022 2021
-----------
Electricity and power expenses 2,413,565 1,785,746
Legal and professional fees 6,960,894 7,686,076
Communication charges 1,074,279 938,643
Repairs and maintenance 1,973,815 1,590,188
Insurance 1,550,423 1,036,319
Provision for expected credit loss 1,055,502 3,919,116
Loss on exchange rate fluctuation (net) 235,655 1,992,592
Miscellaneous expenses 3,896,369 3,564,691
----------------------------------------- -----------
19,160,502 22,513,371
----------------------------------------- -----------
27. FAIR VALUATION GAIN/ (LOSS) ON DERIVATIVES
The fair valuation gain on derivative financial instrument
amounts to USD 53,949 during the year ended
31 March 2022 and fair valuation loss on derivative financial
instrument amount to USD 151,913 during the year ended 31 March
2021. It is disclosed in line item "Fair Valuation Gain" in Note 20
"Other operating income".
28. SHARE CAPITAL
The share capital of iEnergizer Limited 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 2022 31 March 2021
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
29. 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 Beneficial
and significant shareholders: Shareholder, 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 2022 31 March
2021
-----------------------------------------
Transactions during the year
Short term employee benefits (salaries)
Chris de Putron 13,574 13,086
Mark De La Rue 13,574 13,086
Marc Vassanelli 46,464 39,636
Total remuneration 73,612 65,808
Balances at the end of the year 13,134 168,926
30. 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
2022
Business Process Content delivery Total
Outsourcing
----------------- -------------
Revenue from external
customers 182,604,588 77,691,735 260,296,323
Other income (including
realised foreign exchange
gain) 3,183,447 761,832 3,945,279
----------------- ---------------- -------------
Segment revenue 185,788,035 78,453,567 264,241,602
----------------- ---------------- -------------
Cost of outsourced Services 32,362,383 10,129,502 42,491,885
Employee benefit expense 62,766,860 42,553,140 105,320,000
Other expenses 14,420,631 4,739,871 19,160,502
----------------- ---------------- -------------
Earnings before interest,
tax, depreciation and
amortisation 76,238,161 21,031,054 97,269,215
----------------- ---------------- -------------
Unrealized foreign exchange
gain 439,647 543,995 983,642
Depreciation and amortisation (4,260,173) (2,637,448) (6,897,621)
----------------- ---------------- -------------
Segment operating profit 72,417,635 18,937,601 91,355,236
Other income/expense:
Finance income 549,570 426,567 976,137
Finance costs (5,624,717) (3,486,798) (9,111,515)
Profit before tax 67,342,488 15,877,370 83,219,858
----------------- ---------------- -------------
Income tax expense (4,577,223) (4,104,920) (8,682,143)
Profit after tax 62,765,265 11,772,450 74,537,715
----------------- ---------------- -------------
Segment assets 103,253,281 170,678,528 273,931,809
----------------- ---------------- -------------
Segment liabilities 184,647,611 30,715,452 215,363,063
----------------- ---------------- -------------
Capital expenditure 20,158,908 3,032,645 23,191,553*
----------------- ---------------- -------------
*Includes "Right-of-use assets" added and recorded worth USD
14,549,957
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*
* Includes "Right-of-use assets" added and recorded worth USD
1,009,919
The Group's revenues from external customers and its non-current
assets (other than long-term financial assets, non-current tax
assets, 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 2022 31 March 2022 31 March 2021 31 March 2021
--------------------- -------------- --------------
United Kingdom 6,370,460 15 7,217,609 15
India 45,543,961 29,705,608 26,428,167 13,903,463
USA 201,628,247 112,043,018 157,169,261 112,272,135
Rest of the
world 6,753,655 - 5,149,299 -
Total 260,296,323 141,748,641 195,964,336 126,175,613
--------------------- -------------- --------------
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 the year ended 31 March 2022, revenue from one customer (31
March 2021: one customer) amounted to 10% or more of consolidated
revenue during the year presented.
31 March 2022
Revenue from Segment Amount
Customer 1 Business process outsourcing 49,698,264
31 March 2021
Revenue from Segment Amount
Customer 1 Business process outsourcing 29,991,067
31. 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 2022 31 March
2021
Non-current assets
Financial assets measured at amortized
cost
Security deposits 895,722 686,922
Restricted cash 2,007,253 1,398,071
Fixed deposits with banks 2,068,061 1,226,746
Current assets
Financial assets measured at amortized
cost
Trade and other receivables 40,835,944 33,893,763
Cash and cash equivalents 56,326,421 51,378,899
Restricted cash 7,645,707 6,444,738
Security deposits 265,921 30,767
Fixed deposits with banks 12,327,421 9,550,799
Due from officers and employees 93,738 38,336
Interest accrued on fixed deposit 70,211 65,371
Fair value through profit and
loss:
Derivative financial instruments 206,382 151,913
122,742,781 104,866,325
Financial liabilities 31 March 2022 31 March 2021
Non-current liabilities
Financial liabilities measured at
amortized cost:
Borrowings 129,895,411 139,138,958
Lease liabilities 13,697,079 3,766,759
Current liabilities
Financial liabilities measured
at amortized cost:
Trade and other payables 17,841,935 12,929,316
Borrowings 9,763,047 22,978,093
Lease liabilities 3,026,616 1,424,940
174,224,088 180,238,066
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.
32. COMMITMENT AND CONTINGENCIES
At 31 March 2022 and 31 March 2021, the Group had capital
commitment of USD 582,089 and USD 344,537 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 116,725 and
USD 77,886 as on 31 March 2022 and 31 March 2021 respectively and
in respect of interest on Value Added Tax amounts to USD 9,251 as
on 31 March 2022 (USD 9,540 as on 31 March 2021).
Guarantees: As at 31 March 2022 and 31 March 2021, guarantees
provided by banks on behalf of the group companies to the revenue
authorities and certain other agencies, amount to approximately USD
36,280 and USD 37,412 respectively.
33. 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 2022. 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 2022.
Interest rate sensitivity
Interest rate risk primarily arises from floating rate
borrowings. As at 31 March 2022, 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 2022, additional net annual interest expense on our floating
rate borrowing would amount to approximately USD 1,418,075. 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 2022
-----------------------------------
Financial assets 124,639 1,252,964 203,058 37,815
Financial liabilities - - - -
Net short-term exposure 124,639 1,252,964 203,058 37,815
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
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 2022 31 March 2021
AUD +/- 1.54% +/- 23.89 %
GBP +/- 4.60% +/- 11.26 %
EUR +/- 5.22% +/- 6.61%
SGD +/- 0.64% +/- 5.84%
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 2022 1,433 75,645 11,790 177
31 March 2021 24,990 127,482 11,654 2,208
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
89,045 (31 March 2021: increase by USD 166,335). 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
2022 are USD 11,992,322 being 29.37% (31 March 2021 USD 16,694,296
being 49.25%) 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 2022
--------------
Not past due 29,220,872
Past due less than three months 11,189,421
Past due more than three months but not more than
six months 202,465
Past due more than six months but not more than one
year 111,128
More than one year 112,058
Total 40,835,944
--------------
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
--------------
The expected credit loss for trade receivables as at 31 March
2022 and 31 March 2021 was determined as follows
31 March 2022 Trade receivables days past due
Not past Less 3 to 6 months More than Total
due than 3 6 months to 1 1 Year
Months year
Gross carrying amount 30,758,813 12,432,690 404,930 222,256 1,405,463 45,224,152
Expected credit
loss rate 5.00% 10.00% 50.00% 50.00% 92.03% 9.70%
Lifetime expected
credit loss 1,537,941 1,243,269 202,465 111,128 1,293,405 4,388,208
31 March 2021 Trade receivables days past due
Not past Less 3 to 6 months More than Total
due than 3 6 months to 1 1 Year
Months year
Gross carrying amount 23,979,912 14,027,385 354,524 194,536 1,081,599 39,637,956
Expected credit
loss rate 10.00% 15.00% 50.00% 50.00% 89.46% 14.49%
Lifetime expected
credit loss 2,397,991 2,104,108 177,262 97,268 967,564 5,744,193
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 2022 31 March
in other financial assets is summarized 2021
as follows :
Security deposits 1,161,643 717,689
Restricted cash 9,652,960 7,842,809
Cash and cash equivalents 56,326,421 51,378,899
Fixed deposits 14,395,482 10,777,545
Due from officers and employees 93,738 38,336
Derivative financial instruments 206,382 151,913
Interest accrued on fixed deposits 70,211 65,371
Total 81,906,837 70,972,562
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 2022, the Group's financial liabilities having
contractual maturities (including interest payments where
applicable) are summarized as follows:
31 March 2022 Current Non-current
Financial liabilities Due within 60 Due in 61 days Due in more than
days to 365 days 1 year but not
later than 5 years
Trade payables 7,196,791 1,713,866 -
Other accrued
expenses 6,435,923 2,495,355 -
Borrowings 95,135 15,659,915 143,284,200
Lease liabilities 795,375 3,631,595 17,710,079
Total 14,523,224 23,500,731 160,994,279
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 Due in 61 days Due in more than
days to 365 days 1 year but not
later than 5 years
Trade payables 2,899,256 2,599,947 -
Other accrued
expenses 5,504,267 1,925,830 -
Borrowings 1,598,514 28,146,531 157,842,607
Lease liabilities 312,008 1,560,042 5,186,548
Total 10,314,045 34,232,350 163,029,155
The Group also has access to the following undrawn borrowing
facilities from banks at the end of the reporting periods
Particulars As at 31 March 2022 As at 31 March 2021
Undrawn borrowing facilities 15,545,219 528,716
34. 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 2022 Total Fair value measurements
at reporting date using
Level 2
Liabilities (Notional amount)
Derivative instruments
Forward contracts (currency
- USD/INR) 61,700,000 183,383
31 March 2021 Total Fair value measurements
at reporting date using
Level 2
Assets (Notional amount)
Derivative instruments
Forward contracts (currency
- USD/INR) 22,900,000 151,913
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.
35. REVENUE RELATED DISCLOSURES
a) Contract balances
The following table provides information about the receivables
and contract liabilities from contract with customers
Particulars As at 31 March As at 31 March
2022 2021
Contract liabilities
Advance from customers 9,079,729* 1,427,033
Unearned revenue 681,119 310,930
Total contract liabilities 9,760,848 1,737,963
Contract assets
Unbilled revenue 914,355 600,187
Total contract assets 914,355 600,187
* It majorly includes advance received during the year from two
major customers belonging to content delivery segment which will be
utilised as per the terms of the contract.
36. 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 current and non-current 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 2022 31 March 2021
Total equity 58,568,746 29,588,463
Total debts 215,363,063 208,748,365
Overall financing 273,931,809 238,336,828
Gearing ratio 0.79 0.88
The current gearing ratio of the Group is lower 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.
The Group's capital management objectives are:
-- to ensure the Group's ability to continue as a going concern,
and
-- to provide an adequate return to shareholders by pricing
services in a way that reflects the level of risk involved in
providing those services.
37. AUDIT FEES EXPENSE FOR GROUP AUDIT AND STANDALONE AUDIT:
Particulars 31 March 2022 31 March 2021
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
38. POST REPORTING DATE EVENTS
The group does not have any post Balance sheet date event to be
reported.
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