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iEnergizer Limited (IBPO)

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Wednesday 20 November, 2019

iEnergizer Limited

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 21st November 2019. This is corrected to a Dividend record date of 22nd November 2019.  

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

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

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

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

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

 

·    New business development:

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.

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:

Continued focus on cost saving initiatives.

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.

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

 

·    Interim Dividend:

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.

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.

+44 (0)1481 242233

Chris de Putron

 

Mark De La Rue

 

 

 

FTI Consulting - Communications Adviser

+44 (0)20 3727 1000

Jonathon Brill / Eleanor Purdon

 

 

 

Arden Partners - Nominated adviser and Broker

Ciaran Walsh / Steve Douglas / Dan Gee-Summons (Corporate Finance)

James Reed-Daunter (Equity Sales)

+44 (0)20 7614 5900

 

 

iEnergizer Limited and its subsidiaries

Unaudited Condensed Consolidated Interim Financial Statements

Prepared in accordance with International Financial Reporting Standards (IFRS)

Six months ended 30 September 2019 and 2018

 

Unaudited Condensed Consolidated Statements of Financial Position

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

 

 

Notes

As  at

As  at

 

 

 

30 September 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:

The contract contained identified asset.

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

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

                -  

                  -  

        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.

 


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