CORRECTION: INTERIM RESULTS

RNS Number : 0484U

iEnergizer Limited

20 November 2019

 

20 November 2019

CORRECTION: INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2019

The following amendments have been made to the 'Interim Results' announcement released on 13 November at 07:00am (UK Time) under RNS No 1712T.

·    The original RNS stated the Dividend record date as 21^st November 2019. This is corrected to a Dividend record date of 22^nd November 2019.  

·    The original RNS stated that the Company's Ordinary Shares were expected to go ex-dividend on 22^nd November 2019. This is corrected to 21^st November 2019. 

All other details remain unchanged.

iEnergizer Limited

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

INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2019

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

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

·    Group Revenue up 13.1% to $96.2m (H1 2019: $85.1m)

·    Service Revenue up 15.6% to $95.2m (H1 2019: $82.4m)

·    EBITDA^[1] of $29.1m (H1 2019: $24.3m)

·    Higher EBITDA margin at 30.2% (H1 2019: 29.1%)

·    Operating profit increased to $26.8m (H1 2019: $23.4m)

·    Higher operating profit margin at 27.8% (H1 2019: 27.5%)

·    Profit before tax increased to $25.0m (H1 2019: $21.0m)

·    Higher profit before tax margin at 25.9% (H1 2019: 24.6%)

·    Profit after tax increased to $21.6m (H1 2019: $17.3m)

·    Net debt^[2] of $0.43m (31 March 2019: $3.9m)

·    Proposing interim dividend of 5.2p per ordinary share ($12.7m) (H1 2019: nil p)

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

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

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

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

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

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

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

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

·    New business development:

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

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

·    Cost management:

o  Continued focus on cost saving initiatives.

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

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

·    Interim Dividend:

o  In line with the progressive dividend policy, the Company is pleased to announce an interim dividend of 5.2p with the Dividend record date of 22nd November 2019. This interim dividend reflects the Board's confidence in the Group's business plan and growth prospects.

o  The Company's Ordinary Shares are expected to go ex-dividend on 21st November 2019 and the interim dividend is expected to be paid on 20th December 2019.

Marc Vassanelli, Chairman of iEnergizer, commented:

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

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

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

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

-Ends-

iEnergizer Ltd.	[phone]
Chris de Putron
Mark De La Rue
FTI Consulting - Communications Adviser	[phone]
Jonathon Brill / Eleanor Purdon
Arden Partners - Nominated adviser and Broker Ciaran Walsh / Steve Douglas / Dan Gee-Summons (Corporate Finance) James Reed-Daunter (Equity Sales)	[phone]

iEnergizer Limited and its subsidiaries

Unaudited Condensed Consolidated Interim Financial Statements

Prepared in accordance with International Financial Reporting Standards (IFRS)

Six months ended 30 September 2019 and 2018

Unaudited Condensed Consolidated Statements of Financial Position

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

	Notes	As  at		As  at
		30 September 2019		31 March 2019
		Unaudited		Audited
ASSETS
Non-current
Goodwill	5	102,254,951		102,256,665
Other intangible assets	6	18,422,167		12,484,053
Property, plant and equipment	7	6,787,035		6,607,072
Long- term financial asset		639,442		1,681,981
Non-current tax assets		807,223		1,095,365
Deferred tax asset		4,776,269		4,726,068
Other non current assets		9,987		33,098
Non-current assets		133,697,074		128,884,302
Current
Trade and other receivables		34,623,099		36,675,342
Cash and cash equivalents		42,072,283		42,413,215
Short- term financial assets	8	7,903,185		7,058,455
Current tax assets		404,143		505,345
Other current assets		3,365,085		3,320,502
Current assets		88,367,795		89,972,859
Total assets		222,064,869		218,857,161
EQUITY AND LIABILITIES
Equity
Share capital		3,776,175		3,776,175
Share compensation reserve		63,986		63,986
Additional paid in capital		15,451,809		15,451,809
Merger reserve		(1,049,386)		(1,049,386)
Retained earnings		129,453,634		131,950,337
Other components of equity		(12,296,204)		(11,669,812)
Total equity attributable to equity holders of the parent			135,400,014		138,523,109

	Notes	As  at	As  at
		30 September 2019	31 March 2019
		Unaudited	Audited

Liabilities
Non-current
Long term borrowings		38,743,275	870,535
Employee benefit obligations		4,046,496	4,101,097
Other non-current liabilities		-	216,669
Deferred tax liability		9,313,757	8,574,576
Non-current liabilities		52,103,528	13,762,877
Current
Short term borrowings		-	8,934
Trade and other payables		13,497,589	10,574,896
Employee benefit obligations		1,000,647	858,384
Current portion of long term borrowings		10,045,091	45,403,496
Other current liabilities		10,018,000	9,725,465
Current liabilities		34,561,327	66,571,175
Total equity and liabilities		222,064,869	218,857,161

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

Unaudited Condensed Consolidated Income Statements

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

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

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

Unaudited Condensed Consolidated Statements of Other Comprehensive Income

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

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

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

Unaudited Condensed Consolidated Statements of Changes in Equity

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

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

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

iEnergizer Limited
	Share capital	Additional Paid in Capital	Share compensation reserve	Merger reserve	Other components of equity			Retained earnings	Total equity
					Foreign        currency translation reserve	Net defined  benefit  liability
Balance as at 01 April 2019	3,776,175	15,451,809	63,986	(1,049,386)	(12,448,144)	778,332		131,950,337	138,523,109
Dividends	-	-	-	-	-	-		(24,068,320)	(24,068,320)
Transaction with owners								(24,068,320)	(24,068,320)
Profit for the year	-	-	-	-	-	-		21,571,617	21,571,617
Other comprehensive loss	-	-	-	-	(808,836)	182,444		-	(626,392)
Total comprehensive income for the period	-	-	-	-	(808,836)	182,444		21,571,617	20,945,225
Balance as at 30 September 2019	3,776,175	15,451,809	63,986	(1,049,386)	(13,256,980)	960,776		129,453,634	135,400,014

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

 

Unaudited Condensed Consolidated Statements of Cash Flows

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

`		For the six months ended	For the six months ended
		30 September 2019	30 September 2018
(A) Cash flow from operating activities
Profit before tax		24,958,737	20,954,130
Adjustments
Depreciation and amortisation		2,063,317	2,680,368
Loss/(Profit) on disposal of property, plant and equipment		(6,024)	(9,312)
Trade receivables written-off/provision for doubtful debts		(65,262)	(411)
Unrealised and Realised foreign exchange gain		(174,089)	(2,398,514)
Finance income		(360,107)	(288,208)
Finance cost		2,199,643	2,760,603
		28,616,215	23,698,656
Changes in operating assets and liabilities
(Increase)/ Decrease in trade and other receivables		2,015,601	(4,050,098)
(Increase)/ Decrease in other assets (current and non-current)		941,298	(305,985)
Increase / (Decrease) Non-current liabilities, trade payables & other current liabilities		2,670,121	(3,685,214)
(Decrease)/ Increase in employee benefit obligations		307,761	(657,949)
Cash generated from operations		34,550,996	14,999,410
Income taxes paid		(2,383,750)	(2,704,661)
Net cash generated from operating activities		32,167,246	12,294,749
(B) Cash flow for investing activities
Payments for purchase of property plant and equipment		(1,521,588)	(2,005,663)
Investment in fixed deposit (Net)		(883,210)	40,211
Proceeds from disposal of property, plant & equipment		6,581	9,312
Payments for purchase of other intangible assets		(220,909)	(196,939)
Interest received		400,808	263,654
Net cash used in investing activities		(2,218,318)	(1,889,425)

		For the six months  ended	For the six months  ended
		30 September 2019	30 September 2018

(C ) Cash flow from financing activities
Interest paid		(2,145,802)	(2,371,072)
Repayment of long-term borrowings		(4,150,357)	(8,274,611)
Net cash used in financing activities		(6,296,159)	(10,645,683)
Net increase/(decrease) in cash and cash equivalents		23,652,769	(240,359)
Dividends paid to equity holders of the parent		(24,068,320)	-
Cash and cash equivalents at the beginning of the year		42,404,281	33,371,550
Effect of exchange rate changes on cash		83,553	292,269
Cash and cash equivalents at the end of the year		42,072,283	33,423,460
Cash and cash equivalents comprise
Cash in hand		8,337	12,681
Balances with banks in current account		42,063,946	33,410,779
Bank overdraft		-	-
		42,072,283	33,423,460

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

Notes to Unaudited Condensed Consolidated Interim Financial Statements

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

1.    INTRODUCTION

iEnergizer Limited (the 'Company' or 'iEnergizer ') was incorporated in Guernsey on 12 May 2010.

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

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

2.   GENERAL INFORMATION AND STATEMENT OF COMPLIANCE WITH IFRS

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

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

These Unaudited Condensed Consolidated Interim Financial Statements were approved by the Board on 12 November 2019.

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

3.   SIGNIFICANT ACCOUNTING POLICIES

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

IFRS 16 - Lease Accounting

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

The Group has applied IFRS 16 using the modified retrospective second approach, by measuring the asset at an amount equal to the lease liability, adjusted by the amount of any prepaid or accrued lease payments recognized immediately before the date of initial application.

The Group has applied the following practical expedients:-

a)    On Transition to IFRS 16 the weighted average incremental borrowing rate applied to lease liabilities recognized under IFRS 16 was 8.40%.

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

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

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

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

Policy for new leases started from or after 1 April 2019

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

o  The contract contained identified asset.

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

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

Measurement and Recognition of leases as a lessee

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

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

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

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

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

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

 Group as a lessee

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

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

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

Consolidated Lease Position as at 30th Sep 2019

Particulars	Amount in USD
Fixed Asset- Lease Hold Improvement 1 April 2019	6,352,206
Fixed Asset- Lease Hold Improvement addition during six months	258,645
Accumulated Depreciation till 30 September 2019	(619,123)
Net Block as on 30 September 2019	5,991,728

4.   SIGNIFICANT MANAGEMENT JUDGEMENT IN APPLYING ACCOUNTING POLICIES AND ESTIMATION UNCERTAINTY

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

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

5.   GOODWILL

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

Particulars	Amount
Balance as at 01 April 2018	102,265,086
Impairment loss recognized	-
Translation adjustment	(8,421)
Balance as at 31 March 2019	102,256,665

Particulars	Amount
Balance as at 01 April 2019	102,256,665
Translation adjustment	(1,714)
Balance as at 30 September 2019	102,254,951

6.   OTHER INTANGIBLE ASSETS

The Intangible assets comprise of computer software, customer contracts.

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

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

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

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

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

7.   PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment comprise of the following:

Particulars	Computer and data equipment	Office Equipment	Furniture and fixtures	Air conditioner and generator	Vehicle	Leasehold improvements	Plant and machinery	Capital work in progress	Total
Cost
Balance as at 01 April 2018	6,109,821	874,293	1,247,285	378,237	37,066	4,400,598	2,256,054	122,531	15,425,885
Additions	2,741,100	43,318	284,368	565,532	-	593,856	210,222	101,777	4,540,173
Disposals (Net)	(121,154)	(12,438)	(20,576)	(5,678)	(14,885)	-	(18,356)	-	(193,087)
Translation and other adjustment	(323,214)	(50,401)	(72,347)	(21,372)	(1,434)	(277,327)	(131,350)	-	(877,445)
Balance as at 31 March 2019	8,406,553	854,772	1,438,730	916,719	20,747	4,717,127	2,316,570	224,308	18,895,526
Accumulated depreciation
Balance as at 01 April 2018	4,782,524	719,304	740,357	208,657	30,768	2,545,403	1,748,184	-	10,775,197
Depreciation for the year	1,158,555	111,228	316,403	66,624	1,697	457,759	236,334	-	2,348,600
Disposals (Net)	(121,154)	(12,366)	(20,559)	(26)	(14,885)	-	(18,356)	-	(187,346)
Translation and other adjustments	(297,468)	(40,102)	(40,177)	(13,150)	(1,019)	(156,878)	(99,203)	-	(647,997)
Balance as at 31 March 2019	5,522,457	778,064	996,024	262,105	16,561	2,846,284	1,866,959	-	12,288,454
Carrying values as at 31 March 2019	2,884,096	76,708	442,706	654,614	4,186	1,870,843	449,611	224,308	6,607,072

Particulars	Computer and data equipment	Office Equipment		Furniture and fixtures	Air conditioner and generator	Vehicle	Leasehold improvements		Plant and machinery	Capital work in progress	Total
Cost
Balance as at 01 April 2019	8,406,553	854,772		1,438,730	916,719	20,747	4,717,127		2,316,570	224,308	18,895,526
Additions	1,037,685	18,062		13,039	17,696	280,348	83,930		92,826	(21,999)	1,521,587
Disposals (Net)	(78,892)	-		-	-	-	-		(5,215)	-	(84,107)
Translation and other adjustment	(123,241)	(10,917)		(18,707)	(13,026)	(909)	(66,006)		(29,339)	(1,572)	(263,717)
Balance as at 30 Sept 2019	9,242,105	861,917		1,433,062	921,389	300,186	4,735,051		2,374,842	200,737	20,069,289
Accumulated depreciation
Balance as at 01 April 2019	5,522,457	778,064		996,024	262,104	16,561	2,846,284		1,866,960	-	12,288,454
Depreciation for the period	767,123	37,675	50,621		57,422	5,759		230,206	97,020	-	1,245,826
Disposals (Net)	(78,335)	-		-	-	-	-		(5,215)	-	(83,550)
Translation and other adjustments	(80,279)	(9,689)		(12,807)	(4,103)	(266)	(38,569)		(22,762)	-	(168,475)
Balance as at 30 Sept 2019	6,130,966	806,050		1,033,838	315,423	22,054	3,037,921		1,936,003	-	13,282,255
Carrying values as at 30 Sept 2019	3,111,139	55,867		399,224	605,966	278,132	1,697,130		438,839	200,737	6,787,035

8.   SHORT TERM FINANCIAL ASSETS

Particulars	30 September 2019		31 March 2019
Security deposits	9,126		11,985
Restricted cash	5,055,927		4,747,604
Short term investments (fixed deposits with maturity less than 12 months)	2,758,929		1,803,959
Derivative financial instruments	9,487		426,984
Due from officers and employees	62,526		20,032
Others	7,190		47,891
	7,903,185		7,058,455

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

9.   EARNINGS PER SHARE

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

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

asic earnings per share

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

Diluted earnings per share

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

10.  RELATED PARTY TRANSACTIONS  

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

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

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

Transactions with KMP and relative of KMP

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

11.  SEGMENT REPORTING

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

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

1.    Business Process Outsource

2.    Content delivery

3.    Others

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

			30 September 2019
	Business Process Outsource	Content delivery	Others	Total
Revenue from external customers	59,433,379	35,747,517	-	95,180,896
Other income (including realised foreign exchange gain)	1,023,702	280,168	4,524	1,308,394
Segment revenue	60,457,081	36,027,685	4,524	96,489,290
Less:- Cost of outsourced Services	16,144,667	5,074,680	-	21,219,347
Employee benefit expense	20,188,248	19,392,563	-	39,580,811
Other expenses	3,339,716	2,726,155	500,227	6,566,098
Earning before interest, tax, depreciation and amortisation	20,784,450	8,834,288	(495,703)	29,123,034
Rent credit adjustment as per IFRS 16	(281,860)	(602,398)	-	(884,258)
Earning before interest, tax, depreciation and amortisation (before IFRS 16 rent credit adjustment )	20,502,589	8,231,890	(495,703)	28,238,776
Unrealized Foreign Exchange gain/(loss)	-	(261,444)	-	(261,444)
Depreciation and amortisation	959,531	1,103,786	-	2,063,317
Rent adjustment as per IFRS 16	281,860	602,398	-	884,258
Segment operating profit	19,824,918	7,469,058	(495,703)	26,798,273
Other Income/expense :
Finance income	135,427	113,968	110,712	360,107
Finance costs	(256,274)	(1,119,634)	(823,735)	(2,199,643)
Profit before tax	19,704,071	6,463,392	(1,208,726)	24,958,737
Income tax expense	1,954,446	1,432,675	-	3,387,120
Profit after tax	17,749,626	5,030,717	(1,208,726)	21,571,617
Segment assets	48,324,778	156,564,586	17,175,505	222,064,869
Segment liabilities	20,317,643	48,416,000	17,931,212	86,664,855
Capital expenditure	4,682,531	3,625,169	-	8,307,700

			30 September 2018
	Business Process Outsource	Content delivery	Others	Total
Revenue from external customers	48,093,184	34,268,125	-	82,361,309
Other income (including realized foreign exchange gains)	409,617	471,386	850	881,853
Segment revenue	48,502,801	34,739,511	850	83,243,162
Less:- Cost of outsourced Services	13,506,125	4,453,231	-	17,959,356
Employee benefit expense	15,973,780	19,310,627	-	35,284,407
Other expenses	1,749,646	3,515,201	470,577	5,735,424
Earning before interest, tax, depreciation and amortisation	17,273,250	7,460,452	(469,727)	24,263,975
Unrealized Foreign Exchange gain/(loss)	-	1,842,918	-	1,842,918
Depreciation and amortisation	605,108	2,075,260	-	2,680,368
Segment operating profit	16,668,142	7,228,110	(469,727)	23,426,525
Other Income/expense :
Finance income	138,957	126,948	22,303	288,208
Finance costs	(16,061)	(1,139,625)	(1,604,916)	(2,760,603)
Profit before tax	16,791,038	6,215,433	2,052,340	20,954,131
Income tax expense	2,526,676	1,169,797	-	3,696,473
Profit after tax	14,264,361	5,045,637	2,052,340)	17,257,658
Segment assets	43,431,117	75,456,382	86,626,765	205,514,264
Segment liabilities	15,147,228	46,029,831	22,606,489	83,783,548
Capital expenditure	1,874,708	339,414	-	2,214,122

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

30 September 2019

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

30 September 2018

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

12.  FINANCIAL ASSETS AND LIABILITIES

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

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

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

13.  FAIR VALUE HIERARCHY

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

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

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

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

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

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

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

14.  COMMITMENT AND CONTINGENCIES

As at 30 September 2019 and 31 March 2019, the Group had a capital commitment of US$ 257,684 and US$126,817 respectively for acquisition of property, plant and equipment.

The contingent liability in respect of claims filed by erstwhile employees against the group companies amounts to US$129,483 and US$122,834 as on 30 September 2019 and 31 March 2019 respectively and in respect of interest on VAT amounts to US$9,918 as on 30 September 2019 (US$10,060 as on 31 March 2019).

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

15.  ESTIMATES

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

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

16.  FINANCIAL RISK MANAGEMENT

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

 

END

 

 

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