INDEPENDENT AUDITOR S REPORT To the Board of Directors of eclerx LLC Report on the Financial Statements We have audited the accompanying financial statements of eclerx LLC ( the Company ), which comprise the Balance Sheet as at March 31, 2016, the Statement of Profit and Loss and Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information. Management s Responsibility for the Financial Statements Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with accounting principles generally accepted in India. This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error. Auditor s Responsibility Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor s judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company s preparation and presentation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Opinion In our opinion and to the best of our information and according to the explanations given to us, the financial statements give a true and fair view in conformity with the accounting principles generally accepted in India of the state of affairs of the Company as at March 31, 2016, its profit, and its cash flows for the year ended on that date.
eclerx LLC Independent auditor s report Other Matter This report covering the financial statements of the Company for the year ended March 31, 2016 is intended for the information and use of the board of directors of the Company and eclerx Services Limited, the holding company to comply with the financial reporting requirements in India. These financial statements have been prepared following the generally accepted accounting principles in India as explained in Note 2 to the financial statements of the Company, which describes the basis of accounting and the related audit covered by the report was carried out following the generally accepted auditing standards in India. Use of these financial statements or the related audit report for any other purpose will be subject to the above explanation. For S.R. Batliboi & Associates LLP Chartered Accountants ICAI Firm Registration Number: 101049W/E300004 per Amit Majmudar Partner Membership Number: 36656 Place of Signature: Mumbai Date: May 20, 2016
eclerx LLC BALANCE SHEET AS AT MARCH 31, 2016 (Amount in USD) Notes March 31, 2016 March 31, 2015 EQUITY AND LIABILITIES Shareholder's Funds Share Capital 4 100 100 Reserves and Surplus 5 2,060,533 1,499,620 2,060,633 1,499,720 Non Current Liabilities Deferred Tax Liability 22 301,288 257,327 Other Non Current Liabilities 6 38,395 66,997 339,683 324,324 Current Liabilities Trade Payables 7 16,597 62,468 Other Current Liabilities 8 1,050,260 907,715 Short Term Provisions 9 1,395,829 1,606,329 2,462,686 2,576,512 Total 4,863,002 4,400,556 ASSETS Non Current Assets Fixed Assets Tangible Assets 10 625,994 631,177 Intangible Assets 10 2,002 6,687 Loans and Advances 11 110,605 50,335 738,601 688,199 Current Assets Trade Receivables 12 1,815,586 1,601,615 Cash and Bank Balances 13 1,096,283 1,306,582 Loans and Advances 11 1,025,820 349,901 Other Current Assets 14 186,712 454,259 4,124,401 3,712,357 Total 4,863,002 4,400,556 Summary of Significant accounting policies 3 The accompanying notes are an integral part of these financial statements. As per our report of even date For S. R. BATLIBOI & ASSOCIATES LLP Chartered Accountants ICAI Firm Registration Number: 101049W / E300004 For and on behalf of the Board of Directors of eclerx LLC per Amit Majmudar Anjan Malik Joseph A. Menard Partner Director Director Membership Number: 36656 Place : Mumbai Date : May 20, 2016
eclerx LLC STATEMENT OF PROFIT AND LOSS FOR THE YEAR ENDED MARCH 31, 2016 (Amount in USD) Notes Year ended Year ended March 31, 2016 March 31, 2015 Income Revenue from Operations 18,858,805 15,906,015 Other Income 15 6,256 15,193 18,865,061 15,921,208 Expenditure Employee Benefit Expenses 16 10,589,765 9,120,055 Other Expenses 17 6,874,846 5,617,054 Depreciation and Amortisation Expense 10 355,383 426,984 17,819,994 15,164,093 Profit Before Taxes 1,045,067 757,115 Tax Expense Current Tax Pertaining to current year 436,202 384,883 Pertaining to previous year 3,991 (16,658) Deferred Tax 43,961 (32,507) 484,154 335,718 Profit After Taxes 560,913 421,397 Earnings per share 21 Earnings per share [Nominal value of share USD 1(P.Y. USD 1)] Basic and Diluted 5,609.13 4,213.97 Summary of Significant accounting policies 3 The accompanying notes are an integral part of these financial statements. As per our report of even date For S. R. BATLIBOI & ASSOCIATES LLP Chartered Accountants ICAI Firm Registration Number: 101049W / E300004 For and on behalf of the Board of Directors of eclerx LLC per Amit Majmudar Anjan Malik Joseph A. Menard Partner Director Director Membership Number: 36656 Place : Mumbai Date : May 20, 2016
eclerx LLC CASH FLOW STATEMENT FOR THE YEAR ENDED Year ended March 31, 2016 (Amount in USD) Year ended March 31, 2015 A. Cash Flow from Operating Activities Profit Before Taxes 1,045,067 757,115 Adjustments for : Depreciation 355,383 426,984 Interest Income (59) (406) Operating Profit Before Working Capital Changes 1,400,391 1,183,693 Adjustments for : (Increase) in Trade and Other Receivables (213,971) (402,427) Decrease in Non Current Loans and Advances - 41,359 (Increase) in Current Loans and Advances (675,919) (155,112) Decrease/(Increase) in Other Current Assets 267,605 (434,245) (Decrease)/Increase in Trade Payables (45,871) 55,142 (Decrease)/Increase in Short Term Provisions (210,500) 749,740 Increase in Other Current Liabilities 142,545 326,670 (Decrease) in Other Non Current Liabilities (28,602) (19,440) Cash Generated by Operating Activities 635,678 1,345,379 Income Taxes paid (net of refunds) (500,463) (315,880) Net Cash Generated by Operating Activities 135,215 1,029,499 B. Cash Flow from Investing Activities : Purchase of Fixed Assets (including Capital work in progress) (345,515) (231,152) Reduction in earmarked balances 1,488 - Interest from fixed deposits 1 - Net Cash used in Investing Activities (344,026) (231,152) Net (Decrease) / Increase in Cash and cash equivalents (208,811) 798,347 Cash and Cash Equivalents at the beginning of the year 1,181,015 382,668 Cash and Cash Equivalents at the end of the year 13 972,204 1,181,015 Summary of Significant accounting policies 3 The accompanying notes are an integral part of these financial statements. As per our report of even date For S. R. BATLIBOI & ASSOCIATES LLP Chartered Accountants ICAI Firm Registration Number: 101049W / E300004 For and on behalf of the Board of Directors of eclerx LLC per Amit Majmudar Anjan Malik Joseph A. Menard Partner Director Director Membership Number: 36656 Place : Mumbai Date: May 20, 2016
eclerx LLC NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2016 1. Corporate Information eclerx LLC ( the Company ) was incorporated on March 06, 2002 in the State of Texas, United States of America. With effect from April 1, 2007 it became a 100% subsidiary of eclerx Services Limited, a Company incorporated in India. eclerx LLC is a specialist Knowledge and Business Process Outsourcing ( KPO / BPO ) company providing operational support, data management, and analytics solutions and sales and marketing support services to its Clients. 2. Basis of preparation The financial statements of the Company have been prepared in accordance with the generally accepted accounting principles in India ( Indian GAAP ). The Company has prepared these financial statements in the format prescribed under Schedule III to the Companies Act, 2013 ( the Act ). The financial statements have been prepared to comply in all material aspects with the applicable accounting standards. The financial statements have been prepared on an accrual basis and under the historical cost convention. The accounting policies adopted in the preparation of financial statements are consistent with those of previous year. However, as these financial statements are not statutory financial statements, full compliance with the above Act is not required and so they do not reflect all the disclosures requirement of the Act. 3. Summary of significant accounting policies a) Use of estimates The preparation of the financial statements in conformity with generally accepted accounting principles ( GAAP ) in India requires management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent liabilities on the date of the financial statements. Management believes that the estimates made in the preparation of financial statements are prudent and reasonable. Actual future period s results could differ from those estimates. Any revision to accounting estimates is recognised prospectively in current and future periods. b) Revenue recognition Revenue from time and material and unit priced contracts are recognised when services are rendered and related costs are incurred. The service income is recognised at cost plus mark-up on the basis of agreement between the Principal and the Company. Revenue from maintenance contracts are recognised on pro-rata basis over the period of the contract. Unbilled revenues included in other current assets represent revenue in excess of billings as at the balance sheet date. Advance billing included in other current liabilities represents billing in excess of revenue recognised. Revenue is recognised net of rebate. The rebate is accrued evenly based on the probability of achievement of the specified level of sales. Interest income is recognised on time proportion basis taking into account the amount outstanding and the interest rate applicable. Interest income is included under the head Other Income in the Statement of Profit and Loss. Dividend income is recognised when Company s right to receive dividend is established by the reporting date.
eclerx LLC NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2016 c) Retirement and Other Employee benefits The Company has a saving and investment plan under section 401(k) of the Internal Revenue Code of the United States of America. This is a defined contribution plan. Contributions are charged to income in the period in which they accrue. d) Fixed assets Tangible Assets Assets are stated at the cost of acquisition including incidental costs related to acquisition and installation less accumulated depreciation and impairment loss. Advances paid towards acquisition of fixed assets are disclosed as Capital Advances under Loans and Advances and cost of assets not ready for use before the year-end, are disclosed as capital work in progress. Gains or losses arising from disposal of tangible assets are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognized in the statement of profit and loss when the asset is disposed. Intangible Assets Intangible assets acquired separately are measured on initial recognition at cost. Following initial recognition, intangible assets are carried at cost less accumulated amortization and accumulated impairment losses, if any. e) Depreciation and amortisation The Company provides depreciation on tangible fixed assets using the written down value method using the rates arrived at based on the useful lives estimated by the management. The Company has used the following rates to provide depreciation on its fixed assets. Useful lives estimated by the management (years) Office Equipment 5 years Furniture and Fixtures 10 years Computers -End User Devices 3 years -Servers 6 years Leasehold improvements Lease term Intangible assets in the form of computer software are amortised over their respective individual estimated useful lives on a straight line basis which generally do not exceed ten years. f) Impairment of Assets The Company assesses at each reporting date whether there is an indication that an asset may be impaired. If any indication exists, or when annual impairment testing for an asset is required, the Company estimates the asset s recoverable amount. The recoverable amount of the assets (or where applicable, that of the cash generating unit to which the asset belongs) is estimated as the higher of its net selling price and its value in use. An impairment loss is recognised whenever the carrying amount of an asset or a cash generating unit exceeds its recoverable amount. Impairment loss is recognised in the statement of profit and loss or against revaluation surplus where applicable. If at the balance sheet date there is an indication that a previously assessed impairment loss no longer exists, the recoverable amount is reassessed and the asset is reflected at the recoverable amount subject to a maximum of depreciable historical cost.
eclerx LLC NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2016 g) Taxation Current taxes Current income-tax expense is recognised in accordance with the provisions of tax laws in United States of America. Deferred taxes Deferred income taxes reflect the impact of timing differences between taxable income and accounting income originating during the current year and reversal of timing differences for the earlier years. Deferred tax is measured using the tax rates and the tax laws enacted or substantively enacted at the reporting date. Deferred tax liabilities are recognised for all taxable timing differences. Deferred tax assets are recognised for deductible timing differences only to the extent that there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realised. In situations where the Company has unabsorbed depreciation or carry forward tax losses, all deferred tax assets are recognised only if there is virtual certainty supported by convincing evidence that they can be realised against future taxable profits. The carrying amount of deferred tax assets are reviewed at each reporting date. The Company writes down the carrying amount of deferred tax asset to the extent that it is no longer reasonably certain or virtually certain, as the case may be, that sufficient future taxable income will be available against which deferred tax asset can be realised. Any such write-down is reversed to the extent that it becomes reasonably certain or virtually certain, as the case may be, that sufficient future taxable income will be available. h) Leases Operating Lease Leases where the lessor effectively retains substantially all the risks and benefits of ownership of the leased item are classified as operating leases. Operating lease payments are recognised as an expense in the statement of profit and loss on a straight-line basis over the lease term. i) Foreign currency transactions Transactions in foreign currency are recorded at the exchange rate prevailing on the date of transaction. Net exchange gain or loss resulting in respect of foreign exchange transactions settled during the year is recognised in the statement of profit and loss. Foreign currency denominated monetary items at year end are translated at exchange rates as on the reporting date and the resulting net gain or loss is recognised in the statement of profit and loss. Nonmonetary items, which are measured in terms of historical cost denominated in a foreign currency, are reported using the exchange rate at the date of the transaction. j) Cash and Cash Equivalent Cash and cash equivalents for the purposes of cash flow statement comprise cash at bank and in hand and short-term investments with an original maturity of three months or less. k) Provisions and contingencies The Company creates a provision when there is present obligation as a result of a past event that probably requires an outflow of resources embodying economic benefits and a reliable estimate can be made of the amount of the obligation. A disclosure for a contingent liability is made when there is a possible obligation or a present obligation that may, but probably will not, require an outflow of resources. When there is a possible obligation or a present obligation in respect of which the likelihood of outflow of resources is remote, no provision or disclosure is made.
eclerx LLC NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2016 4 Share Capital Authorised 100 (P.Y. 100) equity share of USD 1 each Issued, Subscribed and Paid - up 100 (P.Y. 100) equity share of USD 1 each (Amount in USD) March 31, 2016 March 31, 2015 100 100 100 100 100 100 a) Reconciliation of the share outstanding at the beginning and at the end of the reporting period There has been no movement in share capital during the current and previous financial year. b) Terms / rights attached to equity shares The Company has only one class of equity shares having a par value of USD 1 per share. Each holder of equity shares is entitled to one vote per equity share. c) Details of Shareholders holding more than 5% of Shares in the Company March 31, 2016 March 31, 2015 Name of the Shareholder No. of Shares held % of Share Capital No. of Shares held % of Share Capital eclerx Services Limited 100 100 100 100 5 Reserves and Surplus Surplus in the Statement of Profit and Loss Account Balance brought forward from previous year Add: Transfer/Adjustment during the year Profit After Tax Balance carried to Balance Sheet TOTAL RESERVES AND SURPLUS 6 Other Non Current Liabilities Operating Lease Liabilities Total 7 Trade Payables Other Trade Payables Total 8 Other Current Liabilities Advance Billing Accrued Expenses Operating Lease Liabilities Total 9 Short Term Provisions Provision for Employee Benefits Incentive Payable to employees Total (Amount in USD) March 31, 2016 March 31, 2015 1,499,620 1,082,805 - (4,582) 560,913 421,397 2,060,533 1,499,620 2,060,533 1,499,620 (Amount in USD) March 31, 2016 March 31, 2015 38,395 66,997 38,395 66,997 (Amount in USD) March 31, 2016 March 31, 2015 16,597 62,468 16,597 62,468 (Amount in USD) March 31, 2016 March 31, 2015 239 17,811 1,021,422 870,464 28,599 19,440 1,050,260 907,715 (Amount in USD) March 31, 2016 March 31, 2015 1,395,829 1,606,329 1,395,829 1,606,329
eclerx LLC NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2016 10 FIXED ASSETS GROSS BLOCK - AT COST ACCUMULATED DEPRECIATION/AMORTISATION (Amount in USD) NET BLOCK ASSETS As on April 1, 2015 Additions during the year Deductions / Adjustments As on March 31, 2016 As on April 1, 2015 Additions during the year Deductions / Adjustments As on March 31, 2016 As on March 31, 2016 As on March 31, 2015 TANGIBLE LEASEHOLD IMPROVEMENTS 165,502 - - 165,502 70,484 27,184-97,668 67,834 95,018 OFFICE EQUIPMENTS 464,677 104,616-569,293 256,204 111,949-368,153 201,140 208,473 FURNITURE & FIXTURES 54,804 - - 54,804 21,922 8,785-30,707 24,097 32,882 COMPUTERS 752,684 240,899-993,583 457,880 202,780-660,660 332,923 294,804 TOTAL: (A) 1,437,667 345,515-1,783,182 806,490 350,698-1,157,188 625,994 631,177 INTANGIBLE COMPUTER SOFTWARES 20,900 - - 20,900 14,213 4,685-18,898 2,002 6,687 TOTAL: (B) 20,900 - - 20,900 14,213 4,685-18,898 2,002 6,687 TOTAL (A) + (B) 1,458,567 345,515-1,804,082 820,703 355,383-1,176,086 627,996 637,864 GROSS BLOCK - AT COST ACCUMULATED DEPRECIATION/AMORTISATION NET BLOCK ASSETS As on April 1, 2014 Additions during the year Deductions / Adjustments# As on March 31, 2015 As on April 1, 2014 Charge during the year Deductions / Adjustments *# As on March 31, 2015 As on March 31, 2015 As on March 31, 2014 TANGIBLE LEASEHOLD IMPROVEMENTS 165,502 - - 165,502 43,300 27,184-70,484 95,018 122,202 OFFICE EQUIPMENTS 525,736 40,274 101,333 464,677 82,767 220,937 47,500 256,204 208,473 442,969 FURNITURE & FIXTURES 54,804 - - 54,804 9,932 11,990-21,922 32,882 44,872 COMPUTERS 474,204 177,147 (101,333) 752,684 249,751 153,046 (55,083) 457,880 294,804 224,453 TOTAL: (A) 1,220,246 217,421-1,437,667 385,750 413,157 (7,583) 806,490 631,177 834,496 INTANGIBLE COMPUTER SOFTWARES 7,169 13,731-20,900 386 13,827-14,213 6,687 6,783 TOTAL: (B) 7,169 13,731-20,900 386 13,827-14,213 6,687 6,783 TOTAL (A) + (B) 1,227,415 231,152-1,458,567 386,136 426,984 (7,583) 820,703 637,864 841,279 * This includes amounts transferred to retained earnings. # This includes assets reclassified.
11 Loans and Advances Non Current (Unsecured, considered Good) Corporate Premises Rent Deposit Advance tax (Net) Total Current (Unsecured, considered Good) Staff Accommodation Rent Deposit Prepaid Expenses Other Advances Total 12 Trade Receivables (Unsecured) Considered good Outstanding for a period exceeding six months Other debts Total 13 Cash and Bank Balances Cash and Cash Equivalents Balances in Current accounts with banks (Amount in USD) March 31, 2016 March 31, 2015 12,445 12,445 98,160 37,890 110,605 50,335 2,650-195,034 177,002 828,136 172,899 1,025,820 349,901 (Amount in USD) March 31, 2016 March 31, 2015 - - 1,815,586 1,601,615 1,815,586 1,601,615 (Amount in USD) March 31, 2016 March 31, 2015 972,204 1,181,015 972,204 1,181,015 Other Bank Balances Earmarked balances with banks * 124,079 125,567 Total 1,096,283 1,306,582 *The company earmarked these balances against lien on deposits received on sub lease of premises. 14 Other Current Assets Unbilled Revenues Interest Accrued but not due Recoverable expenses from clients Total 15 Other Income Interest on Fixed Deposit Miscellaneous Income Foreign Exchange Gain (Net) Total 16 Employee Benefit Expense Salaries and Bonus Contribution to Provident Fund and other Employee Benefits Staff Welfare expenses Total (Amount in USD) March 31, 2016 March 31, 2015 186,639 453,886 73 15-358 186,712 454,259 (Amount in USD) Year ended Year ended March 31, 2016 March 31, 2015 59 406 3,000 14,787 3,197-6,256 15,193 (Amount in USD) Year ended Year ended March 31, 2016 March 31, 2015 10,145,793 8,924,769 443,972 195,089-197 10,589,765 9,120,055
17 Other Expenses (Amount in USD) Year ended Year ended March 31, 2016 March 31, 2015 Cost of Technical Sub-Contractors 2,542,969 1,340,883 Rent (Refer Note 19) 596,904 642,332 Legal and Professional Fees 450,419 591,498 Electricity 31,919 33,520 Communication Expenses 384,570 397,415 Office Expenses 61,326 77,895 Rates and Taxes 12,358 15,097 Bank Charges 5,677 4,475 Computer and Electrical Consumables 121,158 135,874 Printing and Stationery 19,028 18,735 Donation 26,370 10,700 Insurance 18,263 63,758 Subscription and Membership Fees 377,428 325,875 Repairs and Maintenance - - Building - - - Others 2,947 7,439 Accounts Receivable Processing Charges Traveling Expenses Business Promotion Expenses Total 1,689-1,565,529 1,215,125 656,292 736,433 6,874,846 5,617,054
eclerx LLC NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2016 18. Segment Reporting The Company s primary segments are based on the nature of services provided which is Data analytics and process outsourcing services. The Company s secondary segments are the geographic distribution of activities. Revenue and receivables are specified by location of customers while the other geographic information is specified by location of the assets. The following tables present revenue, asset and liabilities information regarding the Company s geographical segments: (Amount in USD) Year ended Year ended Operational Revenues March 31, 2016 March 31, 2015 United States of America 3,794,605 856,015 Asia Pacific 15,064,200 15,050,000 Total Revenues 18,858,805 15,906,015 (Amount in USD) Segment-wise Assets Segment-wise Assets March 31, 2016 March 31, 2015 United States of America 3,289,842 2,882,311 Asia Pacific 1,475,000 1,480,355 Unallocated 98,160 37,890 Total 4,863,002 4,400,556 (Amount in USD) Segment-wise Addition to Fixed assets Year ended Year ended March 31, 2016 March 31, 2015 United States of America 345,515 231,152 Total 345,515 231,152 19. Operating Leases The Company has various operating leases for office facilities and residential premises for employees which include leases that are renewable on a yearly basis, cancellable at its option and other long term leases. (Amount in USD) Year ended March 31, 2016 Year ended March 31, 2015 Lease expense recognised in the Statement of 596,904 642,332 Profit and Loss for the year Future minimum lease payments for noncancellable operating leases Not Later than one Year 382,246 373,088 Later than one year, but not later than five years 414,221 796,468 20. Related Party & Key Management Personnel Information A. RELATED PARTIES & KEY MANAGEMENT PERSONNEL Name of related party and related party relationship (a) Where control exists: 1. eclerx Services Limited (Holding company) 2. eclerx Limited (Fellow subsidiary)
eclerx LLC NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2016 3. eclerx Investments Limited (Fellow subsidiary) 4. eclerx Private Limited (Fellow subsidiary) 5. Agilyst Inc. (100% subsidiary of eclerx Investments Limited) 6. Agilyst Consulting Private Limited (100% subsidiary of Agilyst Inc) 7. eclerx Investments (UK) Limited (Fellow subsidiary) 8. CLX Europe S.P.A. (100% subsidiary of eclerx Investments (UK) Limited) 9. Sintetic S.R.L. (100% subsidiary of CLX Europe S.P.A.) 10. CLX Europe Media Solution GmbH (100% subsidiary of CLX Europe S.P.A.) 11. CLX Europe Media Solution Limited (100% subsidiary of CLX Europe Media Solutions GmbH) 12. CLX Thai Company Limited (49% holding of CLX Europe S.P.A.) (b) Key Management Personnel: 1. Anjan Malik (Director) 2. P. D. Mundhra (Director Resigned on March 27, 2015) 3. Joseph A. Menard (Director) B. DETAILS OF RELATED PARTY & KEY MANAGEMENT PERSONNEL TRANSACTIONS 1. eclerx Services Limited (Holding Company) 2. Agilyst Inc (100% subsidiary of eclerx Investments Limited) The following table provides the total amount of transactions that have been entered into with related parties for the relevant financial year: (Amount in USD) Transactions during the Outstanding Balance as Sr. No. Name 1 eclerx Services Limited 2. Agilyst Inc. 21. Earnings per share Nature of Transaction Income from operations Expenses incurred on behalf of the Company Amount received on behalf of the Company Amount received on behalf of Holding Company Expenses incurred by the Company Relationship Holding Company Fellow Subsidiary March 31, 2016 year ended March 31, 2015 15,064,200 15,050,000 125,903 27,626 4,700 37,030 46,935-129,312 131,205 March 31, 2016 1,460,000 Receivable 15,942 Receivable at March 31, 2015 1,480,355 Receivable 11,115 Payable The basic earnings per equity share are computed by dividing the net profit attributable to the equity shareholders for the year by the weighted average number of equity shares outstanding during the reporting period. The number of shares used in computing diluted earnings per share comprises the weighted average number of shares considered for deriving basic earnings per share, and also the weighted average number of equity shares, which may be issued on the conversion of all dilutive potential shares, unless the results would be anti dilutive.
eclerx LLC NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2016 Year ended March 31, 2016 Year ended March 31, 2015 Profit after tax attributable to shareholders A 560,913 421,397 (Amount in USD) Weighted average number of equity shares outstanding during the year -Basic B 100 100 -Diluted C 100 100 Earnings per share - Basic A/B 5,609.13 4,213.97 - Diluted A/C 5,609.13 4,213.97 Nominal value of shares USD 1 1 22. Deferred tax balances The components of deferred tax liabilities arising on account of timing differences between taxable income and accounting income are as follows: March 31, 2016 (Amount in USD) March 31, 2015 Deferred tax liabilities/(assets) Depreciation 232,339 235,823 Prepaid Expenses 75,283 24,990 Provision for lease equalization (6,334) (3,486) Net Deferred Tax Liability 301,288 257,327 23. The Company has a comprehensive system of maintenance of information and documents as required by the transfer pricing legislations. Since the law requires existence of such information and documentation to be contemporaneous in nature, the Company appoints independent consultants for conducting a Transfer Pricing Study to determine whether the transactions with associate enterprises are undertaken, during the financial year, on an arms length basis. Adjustments, if any, arising from the transfer pricing study in the respective jurisdictions shall be accounted for as and when the study is completed for the current financial year. However the management is of the opinion that its international transactions are at arms length so that the aforesaid legislation will not have any impact on the financial statements. 24. Previous year figures have been regrouped/reclassified wherever necessary to conform with the current year s presentation. As per our report of even date For S. R. Batliboi & Associates LLP Chartered Accountants ICAI Firm Registration Number: 101049W / E300004 For and on behalf of the Board of Directors of eclerx LLC per Amit Majmudar Anjan Malik Joseph A. Menard Partner Director Director Membership Number: 36656 Place : Mumbai Date: 20 th May 2016
INDEPENDENT AUDITOR S REPORT To the Board of Directors of eclerx Limited Report on the Financial Statements We have audited the accompanying financial statements of eclerx Limited ( the Company ), which comprise the Balance Sheet as at March 31, 2016, the Statement of Profit and Loss and Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information. Management s Responsibility for the Financial Statements Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with accounting principles generally accepted in India. This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error. Auditor s Responsibility Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor s judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company s preparation and presentation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Opinion In our opinion and to the best of our information and according to the explanations given to us, the financial statements give a true and fair view in conformity with the accounting principles generally accepted in India of the state of affairs of the Company as at March 31, 2016, its profit, and its cash flows for the year ended on that date.
eclerx Limited Independent auditor s report Other Matter This report covering the financial statements of the Company for the year ended March 31, 2016 is intended for the information and use of the board of directors of the Company and eclerx Services Limited, the holding company to comply with the financial reporting requirements in India. These financial statements have been prepared following the generally accepted accounting principles in India as explained in Note 2 to the financial statements of the Company, which describes the basis of accounting and the related audit covered by the report was carried out following the generally accepted auditing standards in India. Use of these financial statements or the related audit report for any other purpose will be subject to the above explanation. For S.R. Batliboi & Associates LLP Chartered Accountants ICAI Firm Registration Number: 101049W/E300004 per Amit Majmudar Partner Membership Number: 36656 Place of Signature: Mumbai Date: May 20, 2016
eclerx Limited BALANCE SHEET AS AT MARCH 31, 2016 (Amount in GBP) Notes March 31, 2016 March 31, 2015 EQUITY AND LIABILITIES Shareholder's Funds Share Capital 4 100 100 Reserves and Surplus 5 1,575,460 1,292,335 1,575,560 1,292,435 Non Current Liabilities Deferred Tax Liability 21 22,263 21,740 22,263 21,740 Current Liabilities Trade Payables 6-54,958 Other Current Liabilities 7 269,177 204,881 Short Term Provisions 8 666,197 709,440 935,374 969,279 Total 2,533,197 2,283,454 ASSETS Non Current Assets Fixed Assets Tangible Assets 9 260,822 276,709 Loans and Advances 10 33,911 37,235 294,733 313,944 Current Assets Trade Receivables 11 1,234,466 1,318,218 Cash and Bank Balances 12 723,813 426,390 Loans and Advances 10 207,699 188,185 Other Current Assets 13 72,486 36,717 2,238,464 1,969,510 Total 2,533,197 2,283,454 Summary of Significant accounting policies 3 The accompanying notes are an integral part of these financial statements. As per our report of even date For S. R. BATLIBOI & ASSOCIATES LLP Chartered Accountants ICAI Firm Registration Number: 101049W / E300004 For and on behalf of the Board of Directors of eclerx Limited per Amit Majmudar Anjan Malik Baljit Phull Partner Director Director Membership Number: 36656 Place : Mumbai Date : May 20, 2016
eclerx Limited STATEMENT OF PROFIT AND LOSS FOR THE YEAR ENDED MARCH 31, 2016 (Amount in GBP) Notes Year ended Year ended March 31, 2016 March 31, 2015 Income Revenue from Operations 5,392,998 5,524,192 5,392,998 5,524,192 Expenditure Employee Benefit Expense 14 3,243,120 3,116,908 Other Expenses 15 1,705,014 1,952,381 Depreciation and Amortisation Expense 9 93,484 67,846 5,041,618 5,137,135 Profit Before Taxes 351,380 387,057 Tax Expense Current Tax Pertaining to current year 73,348 79,816 Pertaining to previous year (5,616) - Deferred Tax 523 10,874 68,255 90,690 Profit After Tax 283,125 296,367 Earnings per share 20 Earning per share (in GBP) [nominal value of share GBP 1(P.Y. GBP 1)] -Basic and diluted 2,831.25 2,963.67 Summary of Significant accounting policies 3 The accompanying notes are an integral part of these financial statements. As per our report of even date For S. R. BATLIBOI & ASSOCIATES LLP Chartered Accountants ICAI Firm Registration Number: 101049W / E300004 For and on behalf of the Board of Directors of eclerx Limited per Amit Majmudar Anjan Malik Baljit Phull Partner Director Director Membership Number: 36656 Place : Mumbai Date : May 20, 2016
eclerx Limited CASH FLOW STATEMENT FOR THE YEAR ENDED Year ended March 31, 2016 (Amount in GBP) Year ended March 31, 2015 A. Cash Flow from Operating Activities Profit Before Tax 351,380 387,057 Adjustments for : Depreciation 93,484 67,846 Operating Profit Before Working Capital Changes 444,864 454,903 Adjustments for : Decrease / (Increase) in Trade and Other Receivables 83,752 (423,879) Decrease / (Increase) in Non Current Loans and Advances 3,324 (2,375) (Increase) / Decrease in Short Term Loans and Advances (19,514) 15,765 (Increase) in Other Current Assets (35,769) (11,217) (Decrease) / Increase in Trade Payables (54,958) 51,793 (Decrease) / Increase in Short Term Provisions (30,996) 145,216 Increase in Other Current Liabilities 64,296 80,654 Cash Generated by Operating Activities 454,999 310,860 Income Taxes paid (net of refunds) (79,979) (78,146) Net Cash Generated by Operating Activities 375,020 232,714 B. Cash Flow from Investing Activities : Purchase of Fixed Assets (including capital work in progress) (77,597) (100,252) Net Cash used in Investing Activities (77,597) (100,252) Net Increase in Cash and cash equivalents 297,423 132,462 Cash and Cash Equivalents at the beginning of the year 426,390 293,928 Cash and Cash Equivalents at the end of the year 12 723,813 426,390 Summary of Significant accounting policies 3 The accompanying notes are an integral part of these financial statements. As per our report of even date For S. R. BATLIBOI & ASSOCIATES LLP Chartered Accountants ICAI Firm Registration Number: 101049W / E300004 For and on behalf of the Board of Directors of eclerx Limited per Amit Majmudar Anjan Malik Baljit Phull Partner Director Director Membership Number: 36656 Place : Mumbai Date : May 20, 2016
eclerx Limited NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2016 1. Corporate Information eclerx Limited ( the Company ) was incorporated on January 11, 2000 in the United Kingdom. With effect from April 1, 2007 it became a 100% subsidiary of eclerx Services Limited, a Company incorporated in India. eclerx Limited is a specialist Knowledge and Business Process Outsourcing ( KPO / BPO ) company providing operational support, data management, and analytics solutions and sales and marketing support services to its clients. 2. Basis of preparation The financial statements of the Company have been prepared in accordance with the generally accepted accounting principles in India ( Indian GAAP ). The Company has prepared these financial statements in the format prescribed under Schedule III to the Companies Act, 2013 (the Act ). The financial statements have been prepared to comply in all material aspects with the applicable accounting standards. The financial statements have been prepared on an accrual basis and under the historical cost convention. The accounting policies adopted in the preparation of financial statements are consistent with those of previous year. However, as these financial statements are not statutory financial statements, full compliance with the above Act is not required and so they do not reflect all the disclosures requirement of the Act. 3. Summary of significant accounting policies a) Use of estimates The preparation of the financial statements in conformity with generally accepted accounting principle ( GAAP ) in India requires management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent liabilities on the date of the financial statements. Management believes that the estimates made in the preparation of financial statements are prudent and reasonable. Actual future period s results could differ from those estimates. Any revision to accounting estimates is recognised prospectively in current and future periods. b) Revenue recognition Revenue from time and material and unit priced contracts are recognised when services are rendered and related costs are incurred. The service income is recognised at cost plus mark-up on the basis of agreement between the Principal and the Company. Revenue from maintenance contracts are recognised on pro-rata basis over the period of the contract. Unbilled revenues included in other current assets represent revenue in excess of billings as at the balance sheet date. Advance billing included in other current liabilities represents billing in excess of revenue recognised. Revenue is recognised net of rebate. The rebate is accrued evenly based on the probability of achievement of the specified level of sales. Interest income is recognised on time proportion basis taking into account the amount outstanding and the interest rate applicable. Interest income is included under the head Other Income in the Statement of Profit and Loss.
eclerx Limited NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2016 Dividend income is recognised when Company s right to receive dividend is established by the reporting date. c) Fixed assets Tangible Assets Assets are stated at the cost of acquisition including incidental costs related to acquisition and installation less accumulated depreciation and impairment loss. Advances paid towards acquisition of fixed assets are disclosed as Capital Advances under Loans and Advances and cost of assets not ready for use before the year-end, are disclosed as capital work in progress. Gains or losses arising from disposal of tangible assets are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognized in the statement of profit and loss when the asset is disposed. Intangible Assets Intangible assets acquired separately are measured on initial recognition at cost. Following initial recognition, intangible assets are carried at cost less accumulated amortization and accumulated impairment losses, if any. d) Depreciation and amortisation The Company provides depreciation on tangible fixed assets using the written down value method using the rates arrived at based on the useful lives estimated by the management. The Company has used the following rates to provide depreciation on its fixed assets. Office Equipment Furniture and Fixtures Computers -End User Devices -Servers Leasehold improvements Useful lives estimated by the management (years) 5 years 10 years 3 years 6 years Lease term Intangible assets in the form of computer software are amortised over their respective individual estimated useful lives on a straight line basis which generally do not exceed ten years. e) Taxation Income tax expense comprises current income tax and deferred tax. Current taxes Current income-tax expense is recognised in accordance with the provision of tax laws in United Kingdom.
eclerx Limited NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2016 Deferred taxes Deferred income taxes reflect the impact of timing differences between taxable income and accounting income originating during the current year and reversal of timing differences for the earlier years. Deferred tax is measured using the tax rates and the tax laws enacted or substantively enacted at the reporting date. Deferred tax liabilities are recognised for all taxable timing differences. Deferred tax assets are recognised for deductible timing differences only to the extent that there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realised. In situations where the Company has unabsorbed depreciation or carry forward tax losses, all deferred tax assets are recognised only if there is virtual certainty supported by convincing evidence that they can be realized against future taxable profits. The carrying amount of deferred tax assets are reviewed at each reporting date. The Company writes down the carrying amount of deferred tax asset to the extent that it is no longer reasonably certain or virtually certain, as the case may be, that sufficient future taxable income will be available against which deferred tax asset can be realised. Any such write-down is reversed to the extent that it becomes reasonably certain or virtually certain, as the case may be, that sufficient future taxable income will be available. f) Leases Operating Lease Leases where the lessor effectively retains substantially all the risks and benefits of ownership of the leased item are classified as operating leases. Operating lease payments are recognised as an expense in the statement of profit and loss on a straight-line basis over the lease term. g) Investments Investments, which are readily realisable and intended to be held for not more than one year from the date on which such investments are made, are classified as current investments. All other investments are classified as non-current investments. On initial recognition, all investments are measured at cost. The cost comprises purchase price and directly attributable acquisition charges such as brokerage, fees and duties. Current investments are carried in the financial statements at lower of cost and fair value determined on an individual investment basis. Non-current investments are carried at cost and provisions recorded to recognise any decline, other than temporary, in the carrying value of each investment. Profit or loss on sale of investments is recorded on transfer of title from the Company and is determined as the difference between the sales price and the carrying value of the investment. h) Foreign currency transactions Transactions in foreign currency are recorded at the exchange rate prevailing on the date of transaction. Net exchange gain or loss resulting in respect of foreign exchange transactions settled during the year is recognised in the statement of profit and loss.
eclerx Limited NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2016 Foreign currency denominated monetary items at year end are translated at exchange rates as on the reporting date and the resulting net gain or loss is recognised in the statement of profit and loss. Nonmonetary items, which are measured in terms of historical cost denominated in a foreign currency, are reported using the exchange rate at the date of the transaction. i) Cash and Cash Equivalent Cash and cash equivalents for the purposes of cash flow statement comprise cash at bank and in hand and short-term investments with an original maturity of three months or less. j) Provisions and contingencies The Company creates a provision when there is present obligation as a result of a past event that probably requires an outflow of resources embodying economic benefits and a reliable estimate can be made of the amount of the obligation. A disclosure for a contingent liability is made when there is a possible obligation or a present obligation that may, but probably will not, require an outflow of resources. When there is a possible obligation or a present obligation in respect of which the likelihood of outflow of resources is remote, no provision or disclosure is made.
eclerx Limited NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2016 4 Share Capital (Amount in GBP) March 31, 2016 March 31, 2015 Authorised 1000 (P.Y.1000) equity shares of GBP 1 each 1,000 1,000 Issued, Subscribed and Paid - up 100 (P.Y. 100) equity shares of GBP 1 each 100 100 a) Reconciliation of the share outstanding at the beginning and at the end of the reporting period There has been no movement in share capital during the current and previous financial year. 100 100 b) Terms / rights attached to equity shares The Company has only one class of equity shares having a par value of GBP 1 per share. Each holder of equity shares is entitled to one vote per equity share. d) Details of Shareholders holding more than 5% of Shares in the Company (Amount in GBP) March 31, 2016 March 31, 2015 Name of the Shareholder No. of Shares held % of Share Capital No. of Shares held % of Share Capital eclerx Services Limited 100 100 100 100 5 Reserves and Surplus Surplus in the Statement of Profit and Loss Account Balance brought forward from previous year Add: Transfer/Adjustment during the year Profit After Tax Balance carried to balance sheet TOTAL RESERVES AND SURPLUS 6 Trade Payables Trade Payables Total 7 Other Current Liabilities Advance Billing Accrued Expenses Total 8 Short Term Provisions Provision for Employee Benefits Incentive Payable to employees Provision for Taxation (Net) Total (Amount in GBP) March 31, 2016 March 31, 2015 1,292,335 997,847 - (1,879) 283,125 296,367 1,575,460 1,292,335 1,575,460 1,292,335 (Amount in GBP) March 31, 2016 March 31, 2015-54,958-54,958 (Amount in GBP) March 31, 2016 March 31, 2015 2,747-266,430 204,881 269,177 204,881 (Amount in GBP) March 31, 2016 March 31, 2015 638,528 669,524 27,669 39,916 666,197 709,440
eclerx Limited NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2016 9 FIXED ASSETS Gross Block At Cost Accumulated Depreciation/ Amortisation (Amount in GBP) NET BLOCK ASSETS As on April 1, 2015 Additions during the year Deductions / Adjustments As on March 31, 2016 As on April 1, 2015 Additions during the year Deductions / Adjustments As on March 31, 2016 As on March 31, 2016 As on March 31, 2015 TANGIBLE LEASEHOLD IMPROVEMENTS 231,298 - - 231,298 60,886 23,295-84,181 147,117 170,412 OFFICE EQUIPMENTS 51,307 7,059-58,366 17,117 18,079-35,196 23,170 34,190 COMPUTERS 130,305 70,538-200,843 65,968 49,730-115,698 85,145 64,337 FURNITURE AND FIXTURES 26,552 - - 26,552 18,782 2,380-21,162 5,390 7,770 TOTAL 439,462 77,597-517,059 162,753 93,484-256,237 260,822 276,709 GROSS BLOCK - AT COST ACCUMULATED DEPRECIATION / AMORTISATION NET BLOCK ASSETS As on April 1, 2014 Additions during the year Deductions / Adjustments As on March 31, 2015 As on April 1, 2014 Charge during the year Deductions / Adjustments* As on March 31, 2015 As on March 31, 2015 As on March 31, 2014 TANGIBLE LEASEHOLD IMPROVEMENTS 231,298 - - 231,298 37,591 23,295-60,886 170,412 193,707 OFFICE EQUIPMENTS 18,426 32,881-51,307 3,710 13,407-17,117 34,190 14,716 COMPUTERS 64,233 66,072-130,305 35,634 27,955 (2,379) 65,968 64,337 28,599 FURNITURE AND FIXTURES 25,253 1,299-26,552 15,593 3,189-18,782 7,770 9,660 TOTAL 339,210 100,252-439,462 92,528 67,846 (2,379) 162,753 276,709 246,682 * This has been adjusted against Retained Earnings.
10 Loans and Advances Non Current (Unsecured, considered Good) Corporate Premises Rent Deposits Other Deposits Total (Amount in GBP) March 31, 2016 March 31, 2015 33,761 33,761 150 3,474 33,911 37,235 Current (Unsecured, considered Good) Staff accommodation Rent deposit 5,621 7,393 VAT credit account 25,677 45,390 Prepaid Expenses 45,814 51,975 Other Advances 130,587 83,427 Total 207,699 188,185 11 Trade Receivables (Unsecured) Considered good Outstanding for a period exceeding six months Other debts Total 12 Cash and Bank Balances Cash and Cash Equivalents Balances in Current accounts with banks Total 13 Other Current Assets Unbilled Revenues Total (Amount in GBP) March 31, 2016 March 31, 2015 - - 1,234,466 1,318,218 1,234,466 1,318,218 (Amount in GBP) March 31, 2016 March 31, 2015 723,813 426,390 723,813 426,390 (Amount in GBP) March 31, 2016 March 31, 2015 72,486 36,717 72,486 36,717 14 Employee Benefit Expense Salaries and Bonus Staff Welfare expenses Total (Amount in GBP) March 31, 2016 March 31, 2015 3,247,951 3,111,984 (4,831) 4,924 3,243,120 3,116,908
15 Other Expenses Travelling Expenses Cost of Technical Sub-Contractors Rent (Refer Note 18) Legal and Professional fees Communication expenses Business Promotion Expenses Donation Subscription & Membership Fees Office expenses Auditor's remuneration (Refer Note 16) Printing and Stationery Electricity Housekeeping Services Insurance Repairs and Maintenance - Others Bank Charges Foreign Exchange Loss (Net) Rates and Taxes Computer and Server Rental Expenses Advertisement Expenses Total (Amount in GBP) March 31, 2016 March 31, 2015 557,656 566,234 501,150 303,037 243,158 253,711 179,924 358,049 83,904 130,344 54,862 163,045 19,405 19,215 14,376 8,504 11,429 60,488 9,000 8,573 7,231 12,536 5,965 5,128 4,308 5,360 4,364 4,204 3,432 4,949 3,181 3,402 1,677 4,013 713 987 (721) 40,182-420 1,705,014 1,952,381
eclerx Limited NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2016 16. Auditor s Remuneration: Year ended March 31, 2016 (Amount in GBP) Year ended March 31, 2015 As Auditor: Audit Fees 9,000 8,573 TOTAL 9,000 8,573 17. Segment Reporting: The Company s primary segments are based on the nature of services provided which is Data analytics and process outsourcing services. The Company s secondary segments are the geographic distribution of activities. Revenue and receivables are specified by location of customers while the other geographic information is specified by location of the assets. The following tables present revenue, asset and liabilities information regarding the Company s geographical segments: (Amount in GBP) Operational Revenues Year ended March 31, 2016 Year ended March 31, 2015 United Kingdom 478,020 241,564 Asia Pacific 4,907,971 5,282,628 United States of America 7,007 - Total 5,392,998 5,524,192 Segment-wise Assets (Amount in GBP) Segment-wise Assets March 31, 2015 March 31, 2016 United Kingdom 1,544,352 997,636 Asia Pacific 988,845 1,285,818 Total 2,533,197 2,283,454 Segment-wise Addition to Fixed assets Year ended March 31, 2016 (Amount in GBP) Year ended March 31, 2015 United Kingdom 77,597 100,252 Total 77,597 100,252 18. Operating Leases The Company has various operating leases for office facilities and residential premises for employees which include leases that are renewable on a yearly basis, cancellable at its option and other long term leases.
eclerx Limited NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2016 Year ended March 31, 2016 (Amount in GBP) Year ended March 31, 2015 Lease expense recognised in the statement of profit and loss 243,158 253,711 19. Related Party & Key Management Personnel Information A. RELATED PARTIES & KEY MANAGEMENT PERSONNEL Name of related party and related party relationship (a) Where control exists: 1. eclerx Services Limited (Holding company) 2. eclerx Private Limited (Fellow subsidiary) 3. eclerx LLC (Fellow subsidiary) 4. eclerx Investments Limited (Fellow subsidiary) 5. Agilyst Inc.(100% subsidiary of eclerx Investment Limited) 6. Agilyst Consulting Private Limited (100% subsidiary of Agilyst Inc) 7. eclerx Investments (UK) Limited (Fellow subsidiary) 8. CLX Europe S.P.A. (100% subsidiary of eclerx Investments (UK) Limited) 9. Sintetic S.R.L. (100% subsidiary of CLX Europe S.P.A.) 10. CLX Europe Media Solution GmbH (100% subsidiary of CLX Europe S.P.A.) 11. CLX Europe Media Solution Limited (100% subsidiary of CLX Europe Media Solutions GmbH) 12. CLX Thai Company Limited (49% holding of CLX Europe S.P.A.) (b) Related party with whom transactions have taken place during the year Key Management Personnel: 1. Anjan Malik (Director) 2. P. D. Mundhra (Director Resigned on March 16, 2015) 3. Baljit Phull (Director) B. DETAILS OF RELATED PARTY & KEY MANAGEMENT PERSONNEL TRANSACTIONS : The following table provides the total amount of transactions that have been entered into with related parties for the relevant financial year:
eclerx Limited NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2016 Transactions during the year (Amount in GBP) Outstanding Balance as at Sr. No. Name Nature of Transaction Relation ship March 31, 2016 March 31, 2015 March 31, 2016 1 eclerx Services Income from Limited operations 4,766,500 5,249,000 Expenses incurred on behalf of the 12,880 7,390 Company Expenses incurred Holding 954,400 by Company on Company - 1,689 Receivable behalf of Holding Company Amount received by Holding Company on behalf 108,100 - of Company 2 eclerx Investments Expenses incurred Fellow 3,000 (UK) Limited on behalf of fellow Subsidiary 3,000 - Receivable subsidiary - 3 Anjan Malik Remuneration Director 227,114 160,000 - - 20. Earnings per share The basic earnings per equity share are computed by dividing the net profit attributable to the equity shareholders for the year by the weighted average number of equity shares outstanding during the reporting period. The number of shares used in computing diluted earnings per share comprises the weighted average number of shares considered for deriving basic earnings per share, and also the weighted average number of equity shares, which may be issued on the conversion of all dilutive potential shares, unless the results would be anti dilutive. Year ended March 31, 2016 Year ended March 31, 2015 Profit after tax attributable to shareholders (Amount in A 283,125 296,367 GBP) Weighted average number of equity shares outstanding during the year. - Basic B 100 100 - Diluted C 100 100 Earnings per share (GBP) - Basic A/B 2,831.25 2,963.67 - Diluted A/C 2,831.25 2,963.67 Nominal value of shares (GBP) 1 1 March 31, 2015 1,251,688 Receivable
eclerx Limited NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2016 21. Deferred tax balances The components of deferred tax liabilities arising on account of timing differences between taxable income and accounting income are as follows: (Amount in GBP) March 31, 2016 March 31, 2015 Deferred Tax Liabilities Depreciation 22,263 21,740 Total 22,623 21,740 22. The Company has a comprehensive system of maintenance of information and documents as required by the transfer pricing legislation. Since the law requires existence of such information and documentation to be contemporaneous in nature, the Company appoints independent consultants for conducting a Transfer Pricing Study to determine whether the transactions with associate enterprises are undertaken, during the financial period, on an arms length basis. Adjustments, if any, arising from the transfer pricing study in the respective jurisdictions shall be accounted for as and when the study is completed for the current financial period. However the management is of the opinion that its international transactions are at arms length so that the aforesaid legislation will not have any impact on the financial statements. 23. Previous year figures have been regrouped/reclassified wherever necessary to conform with the current year s presentation. As per our report of even date For S. R. BATLIBOI & ASSOCIATES LLP Chartered Accountants ICAI Firm Registration Number: 101049W / E300004 For and on behalf of the Board of Directors of eclerx Limited per Amit Majmudar Anjan Malik Baljit Phull Partner Director Director Membership Number: 36656 Place : Mumbai Date : 20 th May 2016
INDEPENDENT AUDITOR S REPORT To the Board of Directors of eclerx Private Limited Report on the Financial Statements We have audited the accompanying financial statements of eclerx Private Limited ( the Company ), which comprise the Balance Sheet as at March 31, 2016, the Statement of Profit and Loss and Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information. Management s Responsibility for the Financial Statements Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with accounting principles generally accepted in India. This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error. Auditor s Responsibility Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor s judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company s preparation and presentation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Opinion In our opinion and to the best of our information and according to the explanations given to us, the financial statements give a true and fair view in conformity with the accounting principles generally accepted in India of the state of affairs of the Company as at March 31, 2016, its profit, and its cash flows for the year ended on that date.
eclerx Private Limited Independent auditor s report Other Matter This report covering the financial statements of the Company for the year ended March 31, 2016 is intended for the information and use of the board of directors of the Company and eclerx Services Limited, the holding company to comply with the financial reporting requirements in India. These financial statements have been prepared following the generally accepted accounting principles in India as explained in Note 2 to the financial statements of the Company, which describes the basis of accounting and the related audit covered by the report was carried out following the generally accepted auditing standards in India. Use of these financial statements or the related audit report for any other purpose will be subject to the above explanation. For S.R. Batliboi & Associates LLP Chartered Accountants ICAI Firm Registration Number: 101049W/E300004 per Amit Majmudar Partner Membership Number: 36656 Place of Signature: Mumbai Date: May 20, 2016
eclerx Private Limited BALANCE SHEET AS AT MARCH 31, 2016 Notes March 31, 2016 (Amount in SGD) March 31, 2015 EQUITY AND LIABILITIES Shareholder's Funds Share Capital 4 1 1 Reserves and Surplus 5 557,483 511,546 557,484 511,547 Current Liabilities Trade Payables 6-444 Other Current Liabilities 7 44,523 19,616 Short Term Provisions 8 143,834 89,546 188,357 109,606 Total 745,841 621,153 ASSETS Non Current Assets Fixed Assets Tangible Assets 9 5,627 14,992 Loans and Advances 10 24,150 24,150 29,777 39,142 Current Assets Trade Receivables 11 301,512 245,380 Cash and Bank Balances 12 349,991 254,773 Loans and Advances 10 9,350 19,273 Other Current Assets 13 55,211 62,585 716,064 582,011 Total 745,841 621,153 Summary of Significant accounting policies 3 The accompanying notes are an integral part of these financial statements. As per our report of even date For S. R. BATLIBOI & ASSOCIATES LLP Chartered Accountants ICAI Firm Registration Number: 101049W / E300004 For and on behalf of the Board of Directors of eclerx Private Limited per Amit Majmudar Anjan Malik Lionel Koh Jin Kiat Partner Director Director Membership Number: 36656 Place : Mumbai Date : May 20, 2016
eclerx Private Limited STATEMENT OF PROFIT AND LOSS FOR THE YEAR ENDED MARCH 31, 2016 (Amount in SGD) Notes Year Ended Year Ended March 31, 2016 March 31, 2015 Income Revenue from Operations 1,810,067 1,866,209 Other Income 14 (4,516) 225 1,805,551 1,866,434 Expenditure Employee Benefit Expense 15 1,299,855 1,250,037 Other Expenses 16 450,147 471,991 Depreciation and Amortisation Expense 9 9,365 11,819 1,759,367 1,733,847 Profit before Taxes 46,184 132,587 Tax Expense Current Tax - Pertaining to current year 247 7,606 - Pertaining to previous year - 3,884 Deferred Tax - (430) 247 11,060 Profit After Tax 45,937 121,527 Earnings per share 21 Earnings per share [Nominal value of share SGD 1(P.Y. SGD 1)] -Basic and Diluted 45,937.00 121,526.64 Summary of Significant accounting policies 3 The accompanying notes are an integral part of these financial statements. As per our report of even date For and on behalf of the Board of For S. R. BATLIBOI & ASSOCIATES LLP Directors of eclerx Private Limited Chartered Accountants ICAI Firm Registration Number: 101049W / E300004 per Amit Majmudar Anjan Malik Lionel Koh Jin Kiat Partner Director Director Membership Number: 36656 Place : Mumbai Date : May 20, 2016
eclerx Private Limited CASH FLOW STATEMENT FOR THE YEAR ENDED Year ended March 31, 2016 (Amount in SGD) Year ended March 31, 2015 A. Cash Flow from Operating Activities Net Profit Before Tax 46,184 132,587 Adjustments for : Depreciation 9,365 11,819 Operating Profit Before Working Capital Changes 55,549 144,406 Adjustments for : (Increase)/Decrease in Trade Receivables (56,132) 156,620 (Increase) in Long Term Loans and Advances - (900) Decrease in Short Term Loans and Advances 9,923 13,125 (Decrease)/Increase in Trade Payables (444) 444 Decrease / (Increase) in Other Current Assets 7,374 (62,585) Increase in Other Current Liabilities 24,907 1,819 Increase / (Decrease) in Short Term Provisions 59,315 (76,953) Cash Generated by Operating Activities 100,492 175,976 Income Taxes paid (net of refunds) (5,274) (9,844) Net Cash generated from Operating Activities 95,218 166,132 B. Cash Flow from Investing Activities : Purchase of Fixed Assets (including Capital work in progress) - (18,941) Net Cash used in Investing Activities - (18,941) Net Increase / (Decrease) in Cash and cash equivalents 95,218 147,191 Cash and Cash Equivalents at the beginning of the year 254,773 107,582 Cash and Cash Equivalents at the end of the year 12 349,991 254,773 Summary of Significant accounting policies 3 The accompanying notes are an integral part of these financial statements As per our report of even date For S. R. BATLIBOI & ASSOCIATES LLP Chartered Accountants ICAI Firm Registration Number: 101049W / E300004 For and on behalf of the Board of Directors of eclerx Private Limited per Amit Majmudar Anjan Malik Lionel Koh Jin Kiat Partner Director Director Membership Number: 36656 Place : Mumbai Date : May 20, 2016
eclerx Private Limited NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2016 1. Corporate information eclerx Private Limited ( the Company ) was incorporated on December 29, 2009 in Singapore. It is a wholly owned subsidiary of eclerx Services Limited, a Company incorporated in India. eclerx Private Limited is a specialist Knowledge and Business Process Outsourcing ( KPO / BPO ) company providing operational support, data management, and analytics solutions and sales and marketing support services to its clients. 2. Basis of preparation The financial statements of the Company have been prepared in accordance with the generally accepted accounting principles in India ( Indian GAAP ). The Company has prepared these financial statements in the format prescribed under Schedule III to the Companies Act, 2013 (the Act ). The financial statements have been prepared to comply in all material aspects with the applicable accounting standards. The financial statements have been prepared on an accrual basis and under the historical cost convention. The accounting policies adopted in the preparation of financial statements are consistent with those of previous year. However, as these financial statements are not statutory financial statements, full compliance with the above Act is not required and so they do not reflect all the disclosures requirement of the Act. 3. Summary of significant accounting policies a) Use of estimates The preparation of the financial statements in conformity with generally accepted accounting principles ( GAAP ) in India requires management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent liabilities on the date of the financial statements. Management believes that the estimates made in the preparation of financial statements are prudent and reasonable. Actual future period s results could differ from those estimates. Any revision to accounting estimates is recognised prospectively in current and future periods. b) Revenue recognition Revenue from time and material and unit priced contracts are recognised when services are rendered and related costs are incurred. The service income is recognised at cost plus mark-up on the basis of agreement between the Principal and the Company. Revenue from maintenance contracts are recognised on pro-rata basis over the period of the contract. Unbilled revenues included in other current assets represent revenue in excess of billings as at the balance sheet date. Advance billing included in other current liabilities represents billing in excess of revenue recognised. Revenue is recognised net of rebate. The rebate is accrued evenly based on the probability of achievement of the specified level of sales. Interest income is recognised on time proportion basis taking into account the amount outstanding and the interest rate applicable. Interest income is included in Other Income in the Statement of Profit and Loss.
eclerx Private Limited NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2016 Dividend income is recognised when Company s right to receive dividend is established by the reporting date. c) Fixed assets Tangible Assets Assets are stated at the cost of acquisition including incidental costs related to acquisition and installation less accumulated depreciation and impairment loss. Advances paid towards acquisition of fixed assets are disclosed as Capital Advances under Loans and Advances and cost of assets not ready for use before the year-end, are disclosed as capital work in progress. Gains or losses arising from disposal of tangible assets are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognized in the statement of profit and loss when the asset is disposed. Intangible Assets Intangible assets acquired separately are measured on initial recognition at cost. Following initial recognition, intangible assets are carried at cost less accumulated amortization and accumulated impairment losses, if any. d) Depreciation and amortisation The Company provides depreciation on tangible fixed assets using the written down value method The Company has used the following rates to provide depreciation on its fixed assets. Office Equipment Computers -End User Devices -Servers Useful lives estimated by the management (years) 5 years 3 years 6 years e) Impairment of Assets The Company assesses at each reporting date whether there is an indication that an asset may be impaired. If any indication exists, or when annual impairment testing for an asset is required, the Company estimates the asset s recoverable amount. The recoverable amount of the assets (or where applicable, that of the cash generating unit to which the asset belongs) is estimated as the higher of its net selling price and its value in use. An impairment loss is recognised whenever the carrying amount of an asset or a cash generating unit exceeds its recoverable amount. Impairment loss is recognised in the statement of profit and loss or against revaluation surplus where applicable. If at the balance sheet date there is an indication that a previously assessed impairment loss no longer exists, the recoverable amount is reassessed and the asset is reflected at the recoverable amount subject to a maximum of depreciable historical cost. f) Retirement and Other Employee benefits Central Provident Fund As required by law, the Company contributes to the Central Provident Fund (CPF), a defined contribution plan regulated and managed by the Government of Singapore in respect of eligible
eclerx Private Limited NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2016 employees. The Company s contributions are charged to the statement of profit and loss on accrual basis. g) Taxation Current taxes Current income-tax expense is recognised in accordance with the provision of tax laws in Singapore. Deferred taxes Deferred income taxes reflect the impact of timing differences between taxable income and accounting income originating during the current year and reversal of timing differences for the earlier years. Deferred tax is measured using the tax rates and the tax laws enacted or substantively enacted at the reporting date. Deferred tax liabilities are recognised for all taxable timing differences. Deferred tax assets are recognised for deductible timing differences only to the extent that there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realised. In situations where the Company has unabsorbed depreciation or carry forward tax losses, all deferred tax assets are recognised only if there is virtual certainty supported by convincing evidence that they can be realised against future taxable profits. The carrying amount of deferred tax assets are reviewed at each reporting date. The Company writes down the carrying amount of deferred tax asset to the extent that it is no longer reasonably certain or virtually certain, as the case may be, that sufficient future taxable income will be available against which deferred tax asset can be realised. Any such write-down is reversed to the extent that it becomes reasonably certain or virtually certain, as the case may be, that sufficient future taxable income will be available. h) Leases Operating Lease Leases, where the lessor effectively retains substantially all the risks and benefits of ownership of the leased item are classified as operating leases. Operating lease payments are recognised as an expense in the statement of profit and loss on a straight-line basis over the lease term. i) Foreign currency transactions Transactions in foreign currency are recorded at the exchange rate prevailing on the date of transaction. Net exchange gain or loss resulting in respect of foreign exchange transactions settled during the year is recognised in the Statement of Profit and Loss. Foreign currency denominated monetary items at year end are translated at exchange rates as on the reporting date and the resulting net gain or loss is recognised in the statement of profit and loss. Non-monetary items, which are measured in terms of historical cost denominated in a foreign currency, are reported using the exchange rate at the date of the transaction.
eclerx Private Limited NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2016 j) Cash and Cash Equivalent Cash and cash equivalents for the purposes of cash flow statement comprise cash at bank and in hand and short-term investments with an original maturity of three months or less. k) Provisions and contingencies The Company creates a provision when there is present obligation as a result of a past event that probably requires an outflow of resources embodying economic benefits and a reliable estimate can be made of the amount of the obligation. A disclosure for a contingent liability is made when there is a possible obligation or a present obligation that may, but probably will not, require an outflow of resources. When there is a possible obligation or a present obligation in respect of which the likelihood of outflow of resources is remote, no provision or disclosure is made.
eclerx Private Limited NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2016 4 Share Capital Authorised 1 (P.Y. 1) equity share of SGD 1 Issued, Subscribed and Paid - up 1 (P.Y. 1) equity share of SGD 1 (Amount in SGD) March 31, 2016 March 31, 2015 1 1 1 1 1 1 a) Reconciliation of the share outstanding at the beginning and at the end of the reporting period There has been no movement in share capital during the current and previous financial year. b) Terms / rights attached to equity shares The Company has only one class of equity shares having a par value of SGD 1 per share. Each holder of equity shares is entitled to one vote per equity share. d) Details of Shareholders holding more than 5% of Shares in the Company (Amount in SGD) March 31, 2016 March 31, 2015 Name of the Shareholder No. of Shares held % of Share Capital No. of Shares held % of Share Capital eclerx Services Limited 1 100 1 100 5 Reserves and Surplus Surplus in the Statement of Profit and Loss Account Balance brought forward from previous year Add: Transfer/Adjustment during the year Profit After Tax Balance carried to balance sheet TOTAL RESERVES AND SURPLUS 6 Trade Payables Other Trade Payables Total (Amount in SGD) March 31, 2016 March 31, 2015 511,546 390,920 - (901) 45,937 121,527 557,483 511,546 557,483 511,546 (Amount in SGD) March 31, 2016 March 31, 2015-444 - 444 7 Other Current Liabilities Advance Billing Statutory Dues Accrued Expenses GST Payable Total (Amount in SGD) March 31, 2016 March 31, 2015 1,885-6,690 1,951 35,134 17,665 814-44,523 19,616 8 Short Term Provisions Provision for Employee Benefits Incentive Payable to employees Provision for Taxation (Net) (Amount in SGD) March 31, 2016 March 31, 2015 141,685 82,370 2,149 7,176 143,834 89,546
eclerx Private Limited NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2016 9 FIXED ASSETS (Amount in SGD) As on April 1, 2015 GROSS BLOCK - AT COST Additions during Deductions / the year Adjustments As on March 31 2016 ACCUMULATED DEPRECIATION / AMORTISATION Additions during Deductions / the year Adjustments As on April 1, 2015 As on March 31 2016 As on March 31 2016 NET BLOCK As on March 31 2015 ASSETS TANIGBLES OFFICE EQUIPMENTS 5,849 - - 5,849 4,564 771-5,335 514 1,285 COMPUTERS 34,327 - - 34,327 20,620 8,594-29,214 5,113 13,707 TOTAL 40,176 - - 40,176 25,184 9,365-34,549 5,627 14,992 ASSETS As on April 1, 2014 GROSS BLOCK - AT COST Additions during Deductions / the year Adjustments As on March 31 2015 ACCUMULATED DEPRECIATION / AMORTISATION Charge during Deductions / the year Adjustments As on April 1, 2014 As on March 31 2015 As on March 31 2015 NET BLOCK As on March 31 2014 TANIGBLES OFFICE EQUIPMENTS 5,849-5,849 1,974 2,590-4,564 1,285 3,875 COMPUTERS 15,387 18,940-34,327 10,490 9,229 (901) 20,620 13,707 4,897 TOTAL 21,236 18,940-40,176 12,464 11,819 (901) 25,184 14,992 8,772
10 Loans and Advances Non Current (Unsecured, considered Good) Corporate Premises Rent Deposit Other Deposits Total (Amount in SGD) March 31, 2016 March 31, 2015 19,150 19,150 5,000 5,000 24,150 24,150 Current (Unsecured, considered Good) GST Receivable Prepaid Expenses Other Advances Total 11 Trade Receivables (Unsecured) Considered good Outstanding for a period exceeding six months Other debts Total - 2,355 9,350 - - 16,918 9,350 19,273 (Amount in SGD) March 31, 2016 March 31, 2015 - - 301,512 245,380 301,512 245,380 12 Cash and Bank Balances Cash and Cash Equivalents Balances in Current accounts with banks Total 13 Other Current Assets Unbilled Revenues Total (Amount in SGD) March 31, 2016 March 31, 2015 349,991 254,773 349,991 254,773 (Amount in SGD) March 31, 2016 March 31, 2015 55,211 62,585 55,211 62,585 14 Other Income (Amount in SGD) Year ended Year ended March 31, 2016 March 31, 2015 Foreign Exchange (Loss) / Gain (Net) (4,516) 225 Total (4,516) 225 15 Employee Benefit Expenses Salaries and Bonus Total (Amount in SGD) Year ended Year ended March 31, 2016 March 31, 2015 1,299,855 1,250,037 1,299,855 1,250,037 16 Other Expenses (Amount in SGD) Year ended Year ended March 31, 2016 March 31, 2015 Cost of Technical Sub-Contractors 123,429 78,936 Rent (Refer Note 18) 137,336 147,726 Travelling Expenses 67,528 128,781 Legal and Professional Fees 57,823 21,389 Communication Expenses 49,490 40,785 Auditors' remuneration (Refer Note 17) - 4,517 Office Expenses 2,595 1,460 Bank Charges 3,299 3,421 Computer and Electrical Consumables 2,967 289 Printing and Stationery 816 564 Insurance - 3,931 Subscription and Membership 100 8,930 Business Promotion Expenses 4,764 31,262 Total 450,147 471,991
eclerx Private Limited NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2016 17. Auditors Remuneration Year ended March 31, 2016 (Amount in SGD) Year ended March 31, 2015 As Auditor: Audit Fees - 4,517 Total - 4,517 18. Operating Leases The Company has various operating leases for office facilities and residential premises for employees which include leases that are renewable on a yearly basis, cancellable at its option and other long term leases. (Amount in SGD) Lease expenses recognised in the Statement of Profit and Loss 19. Segment Reporting: Year ended March 31, 2016 Year ended March 31, 2015 137,336 147,726 The Company s primary segments are based on the nature of services provided which is Data analytics and process outsourcing services. The Company s secondary segments are the geographic distribution of activities. Revenue and receivables are specified by location of customers while the other geographic information is specified by location of the assets. The following tables present revenue, asset and liabilities information regarding the Company s geographical segments: Operational Revenues Year ended March 31, 2016 (Amount in SGD) Year ended March 31, 2015 United States of America 82,400 5,120 Asia Pacific 1,727,667 1,861,089 Total Revenues 1,810,067 1,866,209 Segment-wise Assets March 31, 2016 (Amount in SGD) March 31, 2015 United States of America 13,480 5,120 Asia Pacific 732,361 616,033 Total 745,841 621,153 Segment-wise Addition to Fixed assets March 31, 2016 (Amount in SGD) March 31, 2015 Asia Pacific - 18,940 Total - 18,940
eclerx Private Limited NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2016 20. Related Party & Key Management Personnel Information A. RELATED PARTIES & KEY MANAGEMENT PERSONNEL Name of related party and related party relationship (a) Where control exists: 1. eclerx Services Limited (Holding company) 2. eclerx Limited (Fellow subsidiary) 3. eclerx LLC (Fellow subsidiary) 4. eclerx Investments Limited (Fellow subsidiary) 5. Agilyst Inc.(100% subsidiary of eclerx Investment Limited) 6. Agilyst Consulting Private Limited (100% subsidiary of Agilyst Inc) 7. eclerx Investments (UK) Limited (Fellow subsidiary) 8. CLX Europe S.P.A. (100% subsidiary of eclerx Investments (UK) Limited) 9. Sintetic S.R.L. (100% subsidiary of CLX Europe S.P.A.) 10. CLX Europe Media Solution GmbH (100% subsidiary of CLX Europe S.P.A.) 11. CLX Europe Media Solution Limited (100% subsidiary of CLX Europe Media Solutions GmbH) 12. CLX Thai Company Limited (49% holding of CLX Europe S.P.A.) (b) Key Management Personnel: 1. Anjan Malik (Director) B. DETAILS OF RELATED PARTY & KEY MANAGEMENT PERSONNEL TRANSACTIONS: The following table provides the total amount of transactions that have been entered into with related party for the relevant financial year: (Amount in SGD) Sr. No. Name 1 eclerx Services Limited Nature of Transaction Income from Operations Expenses incurred on behalf of the Company Expenses incurred by Company on behalf of Holding Company Relationship Holding Company Transactions during the Year March 31, 2016 March 31, 2015 1,313,561 1,741,000 8,700 15,514 7,443 - Outstanding Balance as at March 31, 2016 240,500 Receivable March 31, 2015 218,000 Receivable 21. Earnings Per Share The basic earnings per equity share are computed by dividing the net profit attributable to the equity shareholders for the year by the weighted average number of equity shares outstanding during the reporting period. The number of shares used in computing diluted earnings per share comprises the weighted average number of shares considered for deriving basic earnings per share, and also the weighted average number of equity shares, which may be issued on the conversion of all dilutive potential shares, unless the results would be anti dilutive.
eclerx Private Limited NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2016 Year ended March 31, 2016 Year ended March 31, 2015 Profit after tax attributable to shareholders (Amount A 45,937 121,527 in SGD) Weighted average number of equity shares outstanding during the year -Basic B 1 1 -Diluted C 1 1 Earnings per share (SGD) - Basic A/B 45,937.00 121,526.66 - Diluted A/C 45,937.00 121,526.66 Nominal value of share (SGD) 1 1 22. The Company has a comprehensive system of maintenance of information and documents as required by the transfer pricing legislations. Since the law requires existence of such information and documentation to be contemporaneous in nature, the Company appoints independent consultants for conducting a Transfer Pricing Study to determine whether the transactions with associate enterprises are undertaken, during the financial year, on an arms length basis. Adjustments, if any, arising from the transfer pricing study in the respective jurisdictions shall be accounted for as and when the study is completed for the current financial year. However the management is of the opinion that its international transactions are at arms length so that the aforesaid legislation will not have any impact on the financial statements. 23. Previous year figures have been regrouped/reclassified wherever necessary to conform with the current year s presentation. As per our report of even date For S. R. BATLIBOI & ASSOCIATES LLP Chartered Accountants ICAI Firm Registration Number: 101049W / E300004 For and on behalf of the Board of Directors of eclerx Private Limited per Amit Majmudar Anjan Malik Lionel Koh Jin Kiat Partner Director Director Membership Number: 36656 Place : Mumbai Date : 20 th May 2016
INDEPENDENT AUDITOR S REPORT To the Board of Directors of eclerx Investments Limited Report on the Financial Statements We have audited the accompanying financial statements of eclerx Investments Limited ( the Company ), which comprise the Balance Sheet as at March 31, 2016, the Statement of Profit and Loss and Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information. Management s Responsibility for the Financial Statements Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with accounting principles generally accepted in India. This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error. Auditor s Responsibility Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor s judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company s preparation and presentation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Opinion In our opinion and to the best of our information and according to the explanations given to us, the financial statements give a true and fair view in conformity with the accounting principles generally accepted in India of the state of affairs of the Company as at March 31, 2016, its loss, and its cash flows for the year ended on that date.
eclerx Investments Limited Independent auditor s report Other Matter This report covering the financial statements of the Company for the year ended March 31, 2016 is intended for the information and use of the board of directors of the Company and eclerx Services Limited, the holding company to comply with the financial reporting requirements in India. These financial statements have been prepared following the generally accepted accounting principles in India as explained in Note 2 to the financial statements of the Company, which describes the basis of accounting and the related audit covered by the report was carried out following the generally accepted auditing standards in India. Use of these financial statements or the related audit report for any other purpose will be subject to the above explanation. For S.R. Batliboi & Associates LLP Chartered Accountants ICAI Firm Registration Number: 101049W/E300004 per Amit Majmudar Partner Membership Number: 36656 Place of Signature: Mumbai Date: May 20, 2016
eclerx Investments Limited BALANCE SHEET AS AT MARCH 31, 2016 (Amount in GBP) Notes March 31, 2016 March 31, 2015 EQUITY AND LIABILITIES Shareholder's Funds Share Capital 4 13,595,323 13,595,323 Reserves and Surplus 5 (6,205,564) (1,487,247) 7,389,759 12,108,076 Total 7,389,759 12,108,076 ASSETS Non Current Assets Non-Current Investments 6 7,377,721 12,090,205 7,377,721 12,090,205 Current Assets Cash and Bank Balances 7 12,038 17,871 12,038 17,871 Total 7,389,759 12,108,076 0.15 0.08 Summary of Significant accounting policies 3 The accompanying notes are an integral part of these financial statements. As per our report of even date For S. R. BATLIBOI & ASSOCIATES LLP Chartered Accountants ICAI Firm Registration Number: 101049W / E300004 For and on behalf of the Board of Directors of eclerx Investments Limited per Amit Majmudar Partner Membership Number: 36656 Place : Mumbai Date : May 20, 2016 CDS International Limited Authorised Signatory
eclerx Investments Limited STATEMENT OF PROFIT AND LOSS FOR THE YEAR ENDED MARCH 31, 2016 (Amount in GBP) Notes Year ended Year ended March 31, 2016 March 31, 2015 Income Other Income 8 47 2,227 47 2,227 Expenditure Other Expenses 9 5,880 6,092 5,880 6,092 Loss Before Tax and Exceptional Item (5,833) (3,865) Exceptional Item 13 4,712,484 - Tax Expense - Current Tax - - Loss After Tax and Exceptional Item (4,718,317) (3,865) Loss per share 12 Loss per share (in GBP) [Nominal value of share GBP 1 (P.Y.: GBP 1)] -Basic and Diluted (0.811) (0.001) Summary of Significant accounting policies 3 The accompanying notes are an integral part of these financial statements. As per our report of even date For S. R. BATLIBOI & ASSOCIATES LLP Chartered Accountants ICAI Firm Registration Number: 101049W / E300004 For and on behalf of the Board of Directors of eclerx Investments Limited per Amit Majmudar Partner Membership Number: 36656 Place : Mumbai Date : May 20, 2016 CDS International Limited Authorised Signatory
eclerx Investments Limited CASH FLOW STATEMENT FOR THE YEAR ENDED (Amount in GBP) Year ended March 31, 2016 Year ended March 31, 2015 Cash Flow from Operating Activities Loss Before Tax and Exceptional Items (5,833) (3,865) Adjustments for : Increase / (Decrease) in Trade Payables - (401) Cash (Used) by Operating Activities (5,833) (4,266) Income Taxes paid (Net of refunds) - - Net Cash used in Operating Activities (5,833) (4,266) Net Decrease in Cash and cash equivalents (5,833) (4,266) Cash and Cash Equivalents at the beginning of the year 17,871 22,137 Cash and Cash Equivalents at the end of the year 7 12,038 17,871 Summary of Significant accounting policies 3 The accompanying notes are an integral part of these financial statements As per our report of even date For S. R. BATLIBOI & ASSOCIATES LLP Chartered Accountants ICAI Firm Registration Number: 101049W / E300004 For and on behalf of the Board of Directors of eclerx Investments Limited per Amit Majmudar Partner Membership Number: 36656 Place : Mumbai Date : May 20, 2016 CDS International Limited Authorised Signatory
eclerx Investments Limited NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2016 1. Corporate Information eclerx Investments Limited ( the Company ) was incorporated on June 25, 2007 in the British Virgin Islands. It is a wholly owned subsidiary of eclerx Services Limited, a Company incorporated in India. 2. Basis of preparation The financial statements of the Company have been prepared in accordance with the generally accepted accounting principles in India ( Indian GAAP ). The Company has prepared these financial statements in the format prescribed under Schedule III to the Companies Act, 2013 ( the Act ). The financial statements have been prepared to comply in all material aspects with the applicable accounting standards. The financial statements have been prepared on an accrual basis and under the historical cost convention. The accounting policies adopted in the preparation of financial statements are consistent with those of previous year. However, as these financial statements are not statutory financial statements, full compliance with the above Act is not required and so they do not reflect all the disclosures requirement of the Act. 3. Summary of significant accounting policies a) Use of estimates The preparation of the financial statements in conformity with generally accepted accounting principles ( GAAP ) in India requires management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent liabilities on the date of the financial statements. Management believes that the estimates made in the preparation of financial statements are prudent and reasonable. Actual future period s results could differ from those estimates. Any revision to accounting estimates is recognized prospectively in current and future periods. b) Revenue recognition Interest income is recognised using the time proportion basis taking into account the amount outstanding and the interest rate applicable. Interest income is included under the head Other Income in the Statement of Profit and Loss. Dividend income is recognised when Company s right to receive dividend is established by the reporting date. c) Investments Investments, which are readily realisable and intended to be held for not more than one year from the date on which such investments are made, are classified as current investments. All other investments are classified as non-current investments. On initial recognition, all investments are measured at cost. The cost comprises purchase price and directly attributable acquisition charges such as brokerage, fees and duties.
eclerx Investments Limited NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2016 Current investments are carried in the financial statements at lower of cost and fair value determined on an individual investment basis.. Non-current investments are carried at cost and provisions recorded to recognise any decline, other than temporary, in the carrying value of each investment. Profit or loss on sale of investments is recorded on transfer of title from the Company and is determined as the difference between the sales price and the then carrying value of the investment. d) Impairment of Assets The Company assesses at each reporting date whether there is an indication that an asset may be impaired. If any indication exists, or when annual impairment testing for an asset is required, the Company estimates the asset s recoverable amount. The recoverable amount of the assets (or where applicable, that of the cash generating unit to which the asset belongs) is estimated as the higher of its net selling price and its value in use. An impairment loss is recognised whenever the carrying amount of an asset or a cash generating unit exceeds its recoverable amount. Impairment loss is recognised in the statement of profit and loss or against revaluation surplus where applicable. If at the balance sheet date there is an indication that a previously assessed impairment loss no longer exists, the recoverable amount is reassessed and the asset is reflected at the recoverable amount subject to a maximum of depreciable historical cost. e) Foreign currency transactions Transactions in foreign currency are recorded at the exchange rate prevailing on the date of transaction. Net exchange gain or loss resulting in respect of foreign exchange transactions settled during the year is recognised in the statement of profit and loss. Foreign currency denominated monetary items at year end are translated at exchange rates as on the reporting date and the resulting net gain or loss is recognised in the statement of profit and loss. Non-monetary items, which are measured in terms of historical cost denominated in a foreign currency, are reported using the exchange rate at the date of the transaction. f) Cash and Cash Equivalent Cash and cash equivalents for the purposes of cash flow statement comprise cash at bank and in hand and short-term investments with an original maturity of three months or less. g) Provisions and contingencies The Company creates a provision when there is present obligation as a result of a past event that probably requires an outflow of resources embodying economic benefits and a reliable estimate can be made of the amount of the obligation. A disclosure for a contingent liability is made when there is a possible obligation or a present obligation that may, but probably will not, require an outflow of resources. When there is a possible obligation or a present obligation in respect of which the likelihood of outflow of resources is remote, no provision or disclosure is made.
eclerx Investments Limited NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2016 4 Share Capital Authorised 11,000,000 (P.Y. 11,000,000) Convertible and Redeemable Preference shares, nominal value GBP 1 each 19,000,000 (P.Y.19,000,000) equity shares of GBP 1 each Issued, Subscribed and Paid - up 7,776,000 (P.Y.11,000,000 ) Convertible and Redeemable Preference shares, nominal value GBP 1 each 5,819,323 (P.Y. 5,819,323) equity shares of GBP 1 each (Amount in GBP) March 31, 2016 March 31, 2015 11,000,000 11,000,000 19,000,000 19,000,000 7,776,000 7,776,000 5,819,323 5,819,323 13,595,323 13,595,323 a) Reconciliation of the share outstanding at the beginning and at the end of the reporting period Preference Shares March 31, 2016 March 31, 2015 No. Amount in GBP No. Amount in GBP At the beginning of the year 7,776,000 7,776,000 7,776,000 7,776,000 Add : Shares allotted during the year - - - - Less : Redeemed during the year - - - - Outstanding at the end of the year 7,776,000 7,776,000 7,776,000 7,776,000 Equity Shares March 31, 2016 March 31, 2015 No. Amount in GBP No. Amount in GBP At the beginning of the year 5,819,323 5,819,323 5,819,323 5,819,323 Add : Shares allotted during the year - - - - Less: Buyback during the year - - - - Outstanding at the end of the year 5,819,323 5,819,323 5,819,323 5,819,323 b) Terms / rights attached to equity shares The Company has only one class of equity shares having a par value of USD 0.0001 per share. Each holder of equity shares is entitled to one vote per equity share. c) Terms of conversion / redemption of preference shares The Company has only one class of optionally convertible and redeemable preference shares (OCRPS) having a par value of GBP 1 per share. Each holder of OCRPS can either opt to convert its preference shares into equity shares or redeem for consideration for which the OCRPS was issued, at any time within three years from date on which the OCRPS was originally issued. If the holder exercises its conversion option, the company will issue 1 equity share for each preference share held. d) Details of Shareholders holding more than 5% of Shares in the Company Preference Shares March 31, 2016 March 31, 2015 Name of the Shareholder No. of Shares held % of Share Capital No. of Shares held % of Share Capital eclerx Services Limited 7,776,000 100 7,776,000 100 Equity Shares March 31, 2016 March 31, 2015 Name of the Shareholder No. of Shares held % of Share Capital No. of Shares held % of Share Capital eclerx Services Limited 5,819,323 100 5,819,323 100 5 Reserves and Surplus Surplus in the Statement of Profit and Loss Account Balance brought forward from previous year Loss After Tax Balance carried to Balance Sheet TOTAL RESERVES AND SURPLUS (Amount in GBP) March 31, 2016 March 31, 2015 (1,487,247) (1,483,382) (4,718,317) (3,865) (6,205,564) (1,487,247) (6,205,564) (1,487,247)
eclerx Investments Limited NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2016 6 Investments (Amount in GBP) March 31, 2016 March 31, 2015 Non Current Investments (Non - Trade, unquoted) (At cost) Investments in Equity Instruments Investments in subsidiaries 1,000,000 (P.Y. 1,000,000) shares of US $ 0.0001 each in Investment in Agilyst Inc. 12,090,205 12,090,205 Less: Provision for diminution in value of investments (Refer Note 14) (4,712,484) - Total 7,377,721 12,090,205 7 Cash and Bank Balances Cash and Cash Equivalents Balances in Current accounts with banks Total 8 Other Income Foreign Exchange Gain (net) Total 9 Other Expenses (Amount in GBP) March 31, 2016 March 31, 2015 12,038 17,871 12,038 17,871 (Amount in GBP) Year ended Year ended March 31, 2016 March 31, 2015 47 2,227 47 2,227 (Amount in GBP) Year ended Year ended March 31, 2016 March 31, 2015 Legal and Professional fees 5,030 5,284 Rates and Taxes 764 715 Bank Charges 86 93 Total 5,880 6,092
eclerx Investments Limited NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2016 10. Segment Reporting: Primary segment information: The disclosure requirements of AS-17 "Segment Reporting", to the extent it relates to disclosure of primary segment information is not applicable to the Company. Secondary segment information: The entire operations of the Company are within British Virgin Islands and therefore the secondary segment reporting based on geographical location is not applicable to the Company. 11. Related Party & Key Management Personnel Information A. RELATED PARTIES & KEY MANAGEMENT PERSONNEL Name of related party and related party relationship (a) Where control exists: 1. eclerx Services Limited (Holding company) 2. eclerx LLC (Fellow subsidiary) 3. eclerx Limited (Fellow subsidiary) 4. eclerx Private Limited, (Fellow subsidiary) 5. eclerx Investments (UK) Limited (Fellow subsidiary) 6. Agilyst Consulting Private Limited (100% subsidiary of Agilyst Inc) 7. Agilyst Inc.(100% subsidiary) 8. CLX Europe S.P.A. (100% subsidiary) 9. Sintetic S.R.L.(100% subsidiary of CLX Europe S.P.A.) 10. CLX Europe Media Solution GmbH (100% subsidiary of CLX Europe S.P.A.) 11. CLX Europe Media Solution Limited (100% subsidiary of CLX Europe Media Solutions GmbH) 12. CLX Thai Company Limited (49% holding of CLX Europe S.P.A.) B. DETAILS OF RELATED PARTY & KEY MANAGEMENT PERSONNEL TRANSACTIONS: There are no related party & Key management personnel transactions in the years ended March 31, 2016 and March 31, 2015. 12. Losses Per Share The basic (losses) per equity share are computed by dividing the net (loss) attributable to the equity shareholders for the year by the weighted average number of equity shares outstanding during the reporting period. The number of shares used in computing diluted (losses) per share comprises the weighted average number of shares considered for deriving basic (losses) per share, and also the weighted average number of equity shares, which may be issued on the conversion of all dilutive potential shares, unless the results would be anti-dilutive.
eclerx Investments Limited NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2016 Year ended March 31, 2016 Year ended March 31, 2015 Loss after tax before exceptional item (Amount (5,833) (3,865) A in GBP) (Less): Exceptional Item 13 (4,712,484) - Losses after tax and exceptional item attributable (4,718,317) (3,865) C to shareholders (Amount in GBP) Weighted average number of equity shares outstanding during the year - Basic and Diluted B 5,819,323 5,819,323 Loss per share before exceptional item (GBP) - Basic and Diluted A/B (0.001) (0.001) Loss per share after exceptional item (GBP) - Basic and Diluted A/C (0.811) (0.001) Nominal value of share (GBP) 1 1 13. Exceptional Item The Company acquired Agilyst Inc. in May 2012. One of the major clients of Agilyst Inc. decided to move its service agreement from Agilyst Inc. to the Company s holding company for better physical and IT infrastructure and stronger financial position, with effect from October 22, 2015. The Company had hence reviewed the carrying value of investment in Agilyst Inc. and made a provision for diminution in value of GBP 4,712,484 in the financial statements in the year ended March 31, 2016. 14. Previous year figures have been regrouped / reclassified wherever necessary to conform with the current year s presentation. As per our report of even date For S. R. BATLIBOI & ASSOCIATES LLP Chartered Accountants ICAI Firm Registration Number: 101049W For and on behalf of the Board of Directors of eclerx Investments Limited per Amit Majmudar Partner Membership Number: 36656 Place : Mumbai Date: May 20, 2016 CDS International Limited Authorised Signatory
INDEPENDENT AUDITOR S REPORT To the Board of Directors of Agilyst, Inc. Report on the Financial Statements We have audited the accompanying financial statements of Agilyst, Inc. ( the Company ), which comprise the Balance Sheet as at March 31, 2016, the Statement of Profit and Loss and Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information. Management s Responsibility for the Financial Statements Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with accounting principles generally accepted in India. This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error. Auditor s Responsibility Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor s judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company s preparation and presentation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Opinion In our opinion and to the best of our information and according to the explanations given to us, the financial statements give a true and fair view in conformity with the accounting principles generally accepted in India of the state of affairs of the Company as at March 31, 2016, its profit, and its cash flows for the year ended on that date.
Agilyst, Inc. Independent auditor s report Other Matter This report covering the financial statements of the Company for the year ended March 31, 2016 is intended for the information and use of the board of directors of the Company and eclerx Services Limited, the holding company to comply with the financial reporting requirements in India. These financial statements have been prepared following the generally accepted accounting principles in India as explained in Note 2 to the financial statements of the Company, which describes the basis of accounting and the related audit covered by the report was carried out following the generally accepted auditing standards in India. Use of these financial statements or the related audit report for any other purpose will be subject to the above explanation. For S.R. Batliboi & Associates LLP Chartered Accountants ICAI Firm Registration Number: 101049W/E300004 per Amit Majmudar Partner Membership Number: 36656 Place of Signature: Mumbai Date: May 20, 2016
Agilyst, Inc. BALANCE SHEET AS AT MARCH 31, 2016 Notes March 31, 2016 (Amount in USD) March 31, 2015 EQUITY AND LIABILITIES Shareholders funds Share Capital 4 100 100 Reserves and Surplus 5 7,578,928 5,113,733 7,579,028 5,113,833 Current Liabilities Trade Payables 6 15,943 1,052,117 Other Current Liabilities 7 20,000 64,898 Short Term Provisions 8 464,392 806,159 500,335 1,923,174 Total 8,079,363 7,037,007 ASSETS Non Current Assets Non Current Investments 9 2,500 2,500 Loans and Advances 10 27,643-30,143 2,500 Deferred Tax Assets 20 159,302 250,486 Current Assets Trade Receivables 11 931,239 1,703,407 Cash and Bank Balances 12 6,950,708 4,491,228 Loans and Advances 10 7,971 13,627 Other Current Assets 13-575,759 7,889,918 6,784,021 Total 8,079,363 7,037,007 Summary of Significant accounting policies 3 The accompanying notes are an integral part of these financial statements. As per our report of even date For S. R. BATLIBOI & ASSOCIATES LLP Chartered Accountants ICAI Firm Registration Number: 101049W / E300004 For and on behalf of the Board of Directors of Agilyst, Inc. per Amit Majmudar Anjan Malik Jinny Jun Partner Director Director Membership Number: 36656 Place : Mumbai Date : May 20, 2016
Agilyst, Inc. STATEMENT OF PROFIT AND LOSS FOR THE YEAR ENDED MARCH 31, 2016 (Amount in USD) Year Ended Year Ended Notes March 31, 2016 March 31, 2015 Income Revenue from Operations 13,428,539 18,837,886 Other Income 14 6,582 (39,016) 13,435,121 18,798,870 Expenditure Employee Benefit Expense 15 1,955,694 2,265,161 Other Expenses 16 7,645,852 13,240,999 9,601,546 15,506,160 Profit Before Taxes 3,833,575 3,292,710 Tax Expense Current Income tax Pertaining to Current year 1,328,259 1,374,846 Pertaining to Previous year (51,063) (2,214) Deferred Income Tax 91,184 (147,732) 1,368,380 1,224,900 Profit After Taxes 2,465,195 2,067,810 Earnings per Share 19 Earnings per share (in USD) [Nominal value of share USD 0.0001(P.Y. USD 0.0001)] - Basic and Diluted 2.47 2.07 Summary of Significant accounting policies 3 The accompanying notes are an integral part of these financial statements. As per our report of even date For S. R. BATLIBOI & ASSOCIATES LLP Chartered Accountants ICAI Firm Registration Number: 101049W / E300004 For and on behalf of the Board of Directors of Agilyst, Inc. per Amit Majmudar Anjan Malik Jinny Jun Partner Director Director Membership Number: 36656 Place : Mumbai Date : May 20, 2016
Agilyst Inc. CASH FLOW STATEMENT FOR THE YEAR ENDED MARCH 31, 2016 Year ended March 31, 2016 (Amount in USD) Year ended March 31, 2015 A. Cash Flow from Operating Activities Profit Before Taxes 3,833,575 3,292,710 Operating Profit Before Working Capital Changes 3,833,575 3,292,710 Adjustments for : Decrease in Trade and Other Receivables 772,168 599,459 Decrease / (Increase) in Short Term Loans and Advances 5,656 (13,326) Decrease in Other Current Assets 575,759 25,322 (Decrease) in Trade Payables (1,036,174) (111,920) (Decrease) / Increase in Short Term Provisions (243,246) 436,684 (Decrease) in Other Current Liabilities (44,898) (42,999) Cash Generated from Operating Activities 3,862,840 4,185,930 Income Taxes paid (net of refunds) (1,403,360) (1,271,072) Net Cash Generated from Operating Activities 2,459,480 2,914,858 Net Increase in Cash and cash equivalents 2,459,480 2,914,858 Cash and Cash Equivalents at the beginning of the year 4,491,228 1,576,370 Cash and Cash Equivalents at the end of the year 12 6,950,708 4,491,228 Summary of Significant accounting policies 3 The accompanying notes are an integral part of these financial statements. As per our report of even date For S. R. BATLIBOI & ASSOCIATES LLP Chartered Accountants ICAI Firm Registration Number: 101049W / E300004 For and on behalf of the Board of Directors of Agilyst, Inc. per Amit Majmudar Anjan Malik Jinny Jun Partner Director Director Membership Number: 36656 Place : Mumbai Date : May 20, 2016
Agilyst Inc. NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2016 1. Corporate Information Agilyst Inc. ( the Company ) was incorporated on March 21, 2007 in the State of Delaware, United States of America. With effect from May 5, 2012 it became a 100% subsidiary of eclerx Investments Limited. Agilyst Inc. is engaged in providing back office Business Process Outsourcing (BPO) services for companies within the North American cable and broadband industry. 2. Basis of preparation The financial statements of the Company have been prepared in accordance with the generally accepted accounting principles in India ( Indian GAAP ). The Company has prepared these financial statements in the format prescribed under Schedule III to the Companies Act, 2013 ( the Act ). The financial statements have been prepared to comply in all material aspects with the applicable accounting standards. The financial statements have been prepared on an accrual basis and under the historical cost convention. The accounting policies adopted in the preparation of financial statements are consistent with those of previous year. However, as these financials statements are not statutory financial statements, full compliance with the above Act is not required and so they do not reflect all the disclosures requirement of the Act. 3. Summary of significant accounting policies a) Use of estimates The preparation of the financial statements in conformity with generally accepted accounting principles ( GAAP ) in India requires management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent liabilities on the date of the financial statement. Management believes that the estimates made in the preparation of financial statements are prudent and reasonable. Actual future period s results could differ from those estimates. Any revision to accounting estimates is recognised prospectively in current and future periods. b) Revenue recognition Revenue from time and material and unit priced contracts are recognised when services are rendered and related costs are incurred. Revenue from fixed price contracts, are recognised over the life of the contract using the proportionate completion method, with contract costs determining the degree of completion. Foreseeable losses on such contracts are recognised when probable. Revenue from maintenance contracts are recognised on pro-rata basis over the period of the contract. Unbilled revenues included in other current assets represent revenue in excess of billings as at the Balance Sheet date. Advance Billing included in other current liabilities represents billing in excess of revenue recognised. Revenue is recognised net of rebate. The rebate is accrued evenly based on the probability of achievement of the specified level of sales.
Agilyst Inc. NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2016 Interest income is recognised on time proportion basis taking into account the amount outstanding and the interest rate applicable. Interest income is included under the head Other Income in the Statement of Profit and Loss. Dividend income is recognised when Company s right to receive dividend is established by the reporting date. c) Retirement and Other Employee benefits The Company has a saving and investment plan under section 401(k) of the Internal Revenue Code of the United States of America. This is a defined contribution plan. Contributions are charged to income in the period in which they accrue. d) Taxation Tax expense comprises current income tax and deferred tax. Current taxes Current income-tax expense is recognised in accordance with the provisions of tax laws in United States of America. Deferred taxes Deferred income taxes reflect the impact of timing differences between taxable income and accounting income originating during the current year and reversal of timing differences for the earlier years. Deferred tax is measured using the tax rates and the tax laws enacted or substantively enacted at the reporting date. Deferred tax liabilities are recognised for all taxable timing differences. Deferred tax assets are recognised for deductible timing differences only to the extent that there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realised. In situations where the Company has unabsorbed depreciation or carry forward tax losses, all deferred tax assets are recognised only if there is virtual certainty supported by convincing evidence that they can be realised against future taxable profits. The carrying amount of deferred tax assets are reviewed at each reporting date. The Company writes down the carrying amount of deferred tax asset to the extent that it is no longer reasonably certain or virtually certain, as the case may be, that sufficient future taxable income will be available against which deferred tax asset can be realised. Any such write-down is reversed to the extent that it becomes reasonably certain or virtually certain, as the case may be, that sufficient future taxable income will be available. e) Leases Operating Lease Leases where the lessor effectively retains substantially all the risks and benefits of ownership of the leased item are classified as operating leases. Operating lease payments are recognised as an expense in the statement of profit and loss on a straight-line basis over the lease term.
Agilyst Inc. NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2016 f) Foreign currency transactions Transactions in foreign currency are recorded at the exchange rate prevailing on the date of transaction. Net exchange gain or loss resulting in respect of foreign exchange transactions settled during the year is recognised in the Statement of Profit and Loss. Foreign currency denominated monetary items at year end are translated at exchange rates as on the reporting date and the resulting net gain or loss is recognised in the statement of profit and loss. Non-monetary items, which are measured in terms of historical cost denominated in a foreign currency, are reported using the exchange rate at the date of the transaction. g) Cash and Cash Equivalent Cash and cash equivalents for the purposes of cash flow statement comprise cash at bank and in hand and short-term investments with an original maturity of three months or less. h) Provisions and contingencies The Company creates a provision when there is present obligation as a result of a past event that probably requires an outflow of resources embodying economic benefits and a reliable estimate can be made of the amount of the obligation. A disclosure for a contingent liability is made when there is a possible obligation or a present obligation that may, but probably will not, require an outflow of resources. When there is a possible obligation or a present obligation in respect of which the likelihood of outflow of resources is remote, no provision or disclosure is made.
Agilyst Inc. NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2016 4 Share Capital (Amount in USD) March 31, 2016 March 31, 2015 Authorised 1,500,000 (P.Y.1,500,000) equity shares of USD 0.0001 each 150 150 Issued, Subscribed and Paid - up 1,000,000 (P.Y.1,000,000 ) equity shares of USD 0.0001 each 100 100 100 100 a) Reconciliation of the share outstanding at the beginning and at the end of the reporting period There has been no movement in share capital during the current and previous financial year. b) Terms / rights attached to equity shares The Company has only one class of equity shares having a par value of USD 0.0001 per share. Each holder of equity shares is entitled to one vote per equity share. c) Details of Shareholders holding more than 5% of Shares in the Company March 31, 2016 March 31, 2015 Name of the Shareholder No. of Shares held % of Share Capital No. of Shares held % of Share Capital eclerx Investments Limited 1,000,000 100 1,000,000 100 5 Reserves and Surplus (Amount in USD) March 31, 2016 March 31, 2015 Securities Premium Opening balance 29,190 29,190 Closing Balance 29,190 29,190 Surplus in the Statement of Profit and Loss Account Balance brought forward from previous year 5,084,543 3,016,733 Profit After Tax 2,465,195 2,067,810 Balance carried to Balance Sheet 7,549,738 5,084,543 TOTAL RESERVES AND SURPLUS 6 Trade Payables Other Trade Payables Total 7 Other Current Liabilities Accrued Expenses Total 7,578,928 5,113,733 (Amount in USD) March 31, 2016 March 31, 2015 15,943 1,052,117 15,943 1,052,117 (Amount in USD) March 31, 2016 March 31, 2015 20,000 64,898 20,000 64,898
8 Short Term Provisions Provision for Employee Benefits Incentive Payable to employees Others Provision for Taxation (Net) Total (Amount in USD) March 31, 2016 March 31, 2015 464,392 707,638-98,521 464,392 806,159 9 Investments (Amount in USD) March 31, 2016 March 31, 2015 Non Current Investments (Non Trade) (At cost) Investments in Equity Instruments Investments in subsidiaries 10,000 (P.Y. 10,000) shares of Rs 10 each in Agilyst Consulting Private Limited 2,500 2,500 Total 2,500 2,500 10 Loans and Advances Non Current (Unsecured, considered Good) Advance tax (Net) Total Current (Unsecured, considered Good) Prepaid Expenses Other Advances Total Total (Amount in USD) March 31, 2016 March 31, 2015 27,643-27,643-7,971 9,683-3,944 7,971 13,627 35,614 13,627 11 Trade Receivables (Unsecured) (Amount in USD) March 31, 2016 March 31, 2015 Considered good Outstanding for a period exceeding six months - 83,594 Other debts 931,239 1,619,813 Total 931,239 1,703,407 12 Cash and Bank Balances Cash and Cash Equivalents Balances in Current accounts with banks Total 13 Other Current Assets Unbilled Revenues Total (Amount in USD) March 31, 2016 March 31, 2015 6,950,708 4,491,228 6,950,708 4,491,228 (Amount in USD) March 31, 2016 March 31, 2015-575,759-575,759
14 Other Income (Amount in USD) Year ended Year ended March 31, 2016 March 31, 2015 Foreign Exchange Gain / (loss) (net) 6,582 (39,016) Total 6,582 (39,016) 15 Employee Benefit Expenses Salaries and Bonus Contribution to Provident Fund and other Employee Benefits Total (Amount in USD) Year ended Year ended March 31, 2016 March 31, 2015 1,859,051 2,212,337 96,643 52,823 1,955,694 2,265,161 16 Other Expenses Sales and Marketing Services Traveling Expenses Legal and Professional Fees Computer and Electrical Consumables Donation Business Promotion Expenses Bank Charges Subscription & Membership Fees Rates and Taxes Office Expenses Total (Amount in USD) Year ended Year ended March 31, 2016 March 31, 2015 7,405,597 12,695,480 183,665 441,341 28,562 80,992 15,796 18,193 6,000-3,499-1,603 3,784 1,130 - - 298-911 7,645,852 13,240,999
Agilyst Inc. NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2016 17. Segment Reporting The Company s primary segments are based on the nature of services provided which is Data analytics and process outsourcing services. The Company s secondary segments are the geographic distribution of activities. Revenue and receivables are specified by location of customers while the other geographic information is specified by location of the assets. The following tables present revenue, asset and liabilities information regarding the Company s geographical segments: (Amount in USD) Operational Revenues Year ended Year ended March 31, 2016 March 31, 2015 United States of America 12,504,739 17,932,997 United Kingdom - 904,889 Asia Pacific 923,800 - Total Revenues 13,428,539 18,837,886 (Amount in USD) Segment wise Assets March 31, 2016 March 31, 2015 United States of America 6,966,118 6,700,427 United Kingdom - 76,274 Asia Pacific 926,300 9,820 Unallocated 186,945 250,486 Total 8,079,363 7,037,007 18. Related Party & Key Management Personnel Information A. RELATED PARTIES & KEY MANAGEMENT PERSONNEL Name of related party and related party relationship (a) Where control exists: 1. eclerx Investments Limited (Holding company) 2. eclerx Services Limited (Ultimate Holding company) 3. Agilyst Consulting Private Limited (100% subsidiary) 4. eclerx Limited (Fellow subsidiary) 5. eclerx LLC (Fellow subsidiary) 6. eclerx Private Limited (Fellow subsidiary) 7. eclerx Investments (UK) Limited (Fellow subsidiary) 8. CLX Europe S.P.A. (100% subsidiary of eclerx Investments (UK) Limited) 9. Sintetic S.R.L. (100% subsidiary of CLX Europe S.P.A.) 10. CLX Europe Media Solution GmbH (100% subsidiary of CLX Europe S.P.A.) 11. CLX Europe Media Solution Limited (100% subsidiary of CLX Europe Media Solutions GmbH) 12. CLX Thai Company Limited (49% holding of CLX Europe S.P.A.) (b) Key Management Personnel: 1. Anjan Malik (Director) 2. Jinny Jun (Director)
Agilyst Inc. NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2016 B. DETAILS OF RELATED PARTY & KEY MANAGEMENT PERSONNEL TRANSACTIONS 1. eclerx LLC (Fellow Subsidiary) 2. Agilyst Consulting Private Limited (100% Subsidiary) 3. eclerx Services Limited (Ultimate Holding Company) Sr. No. Name 1. eclerx LLC 2. Agilyst Consulting Private Limited 3. eclerx Services Limited The following table provides the total amount of transactions that have been entered into with related parties for the relevant financial year (Amount in USD) Transactions during Outstanding Balance as 19. Earnings per share the year ended at Nature of Transaction Relationship March 31, 2016 March 31, 2015 March 31, 2016 March 31, 2015 Expenses incurred on Fellow 15,942 11,115 129,312 131,205 behalf of the Company Subsidiary Payable Receivable Subcontract Charges 27,825 12,695,480 Expenses incurred by 100% 1,052,117 the Company on - Subsidiary - 85,596 Payable behalf of the Subsidiary Income from Ultimate 923,800-923,800 operations Holding Receivable Subcontract Charges Company 7,377,772 - - The basic earnings per equity share are computed by dividing the net profit attributable to the equity shareholders for the year by the weighted average number of equity shares outstanding during the reporting period. The number of shares used in computing diluted earnings per share comprises the weighted average number of shares considered for deriving basic earnings per share, and also the weighted average number of equity shares, which may be issued on the conversion of all dilutive potential shares, unless the results would be anti dilutive. Year ended March 31, 2016 Year ended March 31, 2015 Profit after tax attributable to shareholders A 2,465,195 2,067,810 (Amount in USD) Weighted average number of equity shares outstanding during the year. - Basic B 1,000,000 1,000,000 -Diluted C 1,000,000 1,000,000 Earnings per share in USD -Basic A/B 2.47 2.07 -Diluted A/C 2.47 2.07 Nominal value of share in USD 0.0001 0.0001
Agilyst Inc. NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2016 20. Deferred tax balances The component of deferred tax assets arising on account of timing differences between taxable income and accounting income are as follows: March 31, 2016 (Amount in USD) March 31, 2015 Deferred tax assets Provision for Bonus 159,302 250,486 Total 159,302 250,486 21. The Company has a comprehensive system of maintenance of information and documents as required by the transfer pricing legislations. Since the law requires existence of such information and documentation to be contemporaneous in nature, the Company appoints independent consultants for conducting a Transfer Pricing Study to determine whether the transactions with associate enterprises are undertaken, during the financial year, on an arms length basis. Adjustments, if any, arising from the transfer pricing study in the respective jurisdictions shall be accounted for as and when the study is completed for the current financial year. However the management is of the opinion that its international transactions are at arms length so that the aforesaid legislation will not have any impact on the financial statements. 22. Previous year figures have been regrouped/reclassified wherever necessary to conform with the current year s presentation. As per our report of even date For and on behalf of the Board of Directors For S. R. BATLIBOI & ASSOCIATES LLP of Agilyst Inc. Chartered Accountants ICAI Firm Registration Number: 101049W / E300004 per Amit Majmudar Anjan Malik Jinny Jun Partner Director Director Membership Number: 36656 Place : Mumbai Date : 20 th May 2016
To the Members of Agilyst Consulting Private Limited Report on the Financial Statements INDEPENDENT AUDITOR S REPORT We have audited the accompanying financial statements of Agilyst Consulting Private Limited ( the Company ), which comprise the Balance Sheet as at March 31, 2016, the Statement of Profit and Loss and Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information. Management s Responsibility for the Financial Statements The Company s Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 ( the Act ) with respect to the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with accounting principles generally accepted in India, including the Accounting Standards specified under section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and the design, implementation and maintenance of adequate internal financial control that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error. Auditor s Responsibility Our responsibility is to express an opinion on these financial statements based on our audit. We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made thereunder. We conducted our audit in accordance with the Standards on Auditing, issued by the Institute of Chartered Accountants of India, as specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company s preparation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by the Company s Directors, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the financial statements. Opinion In our opinion and to the best of our information and according to the explanations given to us, the financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India of the state of affairs of the Company as at March 31, 2016, its loss and its cash flows for the year ended on that date.
Agilyst Consulting Private Limited Independent auditor s report Emphasis of Matter We draw attention to Note 2 in the financial statements in respect of the Scheme of Amalgamation between the Company and eclerx Services Limited, ultimate parent company, with effect from April 1, 2015 subject to necessary approvals more fully described therein. Pending such approvals, no adjustment has been made in these accounts and these financial statements have been prepared on a going concern basis. Our opinion is not qualified in respect of this matter. Report on Other Legal and Regulatory Requirements 1. As required by the Companies (Auditor s report) Order, 2016 ( the Order ) issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act, we give in the Annexure 1 a statement on the matters specified in paragraphs 3 and 4 of the Order. 2. As required by section 143 (3) of the Act, we report that: (a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit; (b) In our opinion proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books; (c) The Balance Sheet, Statement of Profit and Loss, and Cash Flow Statement dealt with by this Report are in agreement with the books of account; (d) In our opinion, the aforesaid financial statements comply with the Accounting Standards specified under section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014; (e) On the basis of written representations received from the directors as on March 31, 2016, and taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2016, from being appointed as a director in terms of section 164 (2) of the Act; (f) With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate Report in Annexure 2 to this report; (g) With respect to the other matters to be included in the Auditor s Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us: i. The Company has disclosed the impact of pending litigations on its financial position in its financial statements Refer Note 30 to the financial statements; ii. The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses; and
Agilyst Consulting Private Limited Independent auditor s report iii. There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Company. For S.R. Batliboi & Associates LLP Chartered Accountants ICAI Firm Registration Number: 101049W/E300004 per Amit Majmudar Partner Membership Number: 36656 Place of Signature: Mumbai Date: May 20, 2016
Agilyst Consulting Private Limited Independent auditor s report Annexure 1 referred to in paragraph [1] under Report on Legal and Other Regulatory Requirements of our report of even date Re: Agilyst Consulting Private Limited (the Company ) (i) (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets. (b) All fixed assets have not been physically verified by the management during the year but there is a regular programme of verification which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. No material discrepancies were noticed on such verification. (c) According to the information and explanations given by the management, there are no immovable properties, included in fixed assets of the Company and accordingly, the requirements under paragraph 3(i)(c) of the Companies (Auditor s report) Order, 2016 ( the Order ) are not applicable to the Company. (ii) (iii) (iv) (v) (vi) The Company s business does not involve inventories and, accordingly, the requirements under paragraph 3 (ii) of the Order are not applicable to the Company. According to the information and explanations given to us, the Company has not granted any loans, secured or unsecured to companies, firms, limited liability partnerships or other parties covered in the register maintained under section 189 of the Companies Act, 2013 ( the Act ). Accordingly, the provisions of clause 3 (iii) (a), (b) and (c) of the Order are not applicable to the Company and hence not commented upon. In our opinion and according to the information and explanations given to us, there are no loans, investments, guarantees, and securities granted in respect of which provisions of section 185 and 186 of the Act are applicable and hence not commented upon. The Company has not accepted any deposits from the public. To the best of our knowledge and as explained, the Central Government has not specified the maintenance of cost records under clause 148(1) of the Act, for the products/services of the Company. (vii)(a) Undisputed statutory dues including income-tax, sales-tax, service tax, duty of customs, value added tax, cess and other material statutory dues have generally been regularly deposited with the appropriate authorities though there has been a slight delay in a few cases. The provisions relating to provident fund, employees state insurance and duty of excise are not applicable to the Company. (b) According to the information and explanations given to us, no undisputed amounts payable in respect of income-tax, service tax, sales-tax, duty of customs, value added tax, cess and other material statutory dues were outstanding, at the year end, for a period of more than six months from the date they became payable. (c) According to the records of the Company, the dues outstanding of income-tax, sales-tax, service tax, duty of customs, duty of excise, value added tax and cess on account of any dispute, are as follows:
Agilyst Consulting Private Limited Independent auditor s report Name of the statute Income tax Act, 1961 Income tax Act, 1961 Income tax Act, 1961 Nature of the dues Income tax demand Income tax demand Income tax demand Amount (Rs) Period to which the amount relates Note 1 Assessment Year 2010-11 7,264,170 Assessment Year 2011-12 12,242,610 Assessment Year 2012-13 Forum where dispute is pending Commissioner of Income Tax ( Appeal) Commissioner of Income Tax ( Appeal) Note 2 Commissioner of Income tax ( Appeal) Note 1 Demand of Rs. 1,576,730 has been paid under protest. Note 2 Demand of Rs. 3,660,000 has been paid under protest. (viii) The Company did not have any dues to any financial institution, bank or debenture holder during the year. (ix) According to the information and explanations given by the management, the Company has not raised any money by way of initial public offer or further public offer or debt instruments and term loans, hence reporting under clause (ix) is not applicable to the Company and not commented upon. (x) Based upon the audit procedures performed for the purpose of reporting the true and fair view of the financial statements and according to the information and explanations given by the management, we report that no fraud by the Company or no fraud on the Company by the officers and employees of the Company has been noticed or reported during the year. (xi) The Company has not paid / provided any managerial remuneration during the year and hence reporting under clause (xi) is not applicable to the Company and not commented upon. (xii) In our opinion, the Company is not a nidhi company. Therefore, the provisions of clause 3(xii) of the order are not applicable to the Company and hence not commented upon. (xiii) According to the information and explanations given by the management, transactions with the related parties are in compliance with section 177 and 188 of the Act where applicable and the details have been disclosed in the notes to the financial statements, as required by the applicable accounting standards. (xiv) According to the information and explanations given to us and on an overall examination of the balance sheet, the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year under review and hence, reporting requirements under clause 3(xiv) are not applicable to the Company and, not commented upon. (xv) According to the information and explanations given by the management, the Company has not entered into any non-cash transactions with directors or persons connected with him as referred to in Section 192 of the Act.
Agilyst Consulting Private Limited Independent auditor s report (xvi) According to the information and explanations given to us, the provisions of section 45-IA of the Reserve Bank of India Act, 1934 are not applicable to the Company. For S.R. Batliboi & Associates LLP Chartered Accountants ICAI Firm Registration Number: 101049W/E300004 per Amit Majmudar Partner Membership Number: 36656 Place of Signature: Mumbai Date: May 20, 2016
Agilyst Consulting Private Limited Independent auditor s report Annexure 2 to the Independent Auditor s Report of even date on the standalone financial statements of Agilyst Consulting Private Limited Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 ( the Act ) We have audited the internal financial controls over financial reporting of Agilyst Consulting Private Limited ( the Company ) as of March 31, 2016 in conjunction with our audit of the standalone financial statements of the Company for the year ended on that date. Management s Responsibility for Internal Financial Controls The Company s Management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India. These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to the Company s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Act. Auditor s Responsibility Our responsibility is to express an opinion on the Company's internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the Guidance Note ) and the Standards on Auditing as specified under section 143(10) of the Act, to the extent applicable to an audit of internal financial controls, both applicable to an audit of Internal Financial Controls and, both issued by the Institute of Chartered Accountants of India. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects. Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditor s judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the internal financial controls system over financial reporting. Meaning of Internal Financial Controls Over Financial Reporting A company's internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company's internal financial control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in
Agilyst Consulting Private Limited Independent auditor s report accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorisations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorised acquisition, use, or disposition of the company's assets that could have a material effect on the financial statements. Inherent Limitations of Internal Financial Controls Over Financial Reporting Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. Opinion In our opinion, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at March 31, 2016, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India. For S.R. Batliboi & Associates LLP Chartered Accountants ICAI Firm Registration Number: 101049W/E300004 per Amit Majmudar Partner Membership Number: 36656 Place of Signature: Mumbai Date: May 20, 2016
AGILYST CONSULTING PRIVATE LIMITED BALANCE SHEET AS AT MARCH 31, 2016 EQUITY AND LIABILITIES (Rupees in million) Notes March 31, 2016 March 31, 2015 Shareholder's Funds Share Capital 4 0.10 0.10 Reserves and Surplus 5 263.45 266.04 263.55 266.14 Non Current Liabilities Long-term Provisions 6-15.28 Current Liabilities Trade Payables 7-3.86 Other Current Liabilities 8-14.25 Short-term Provisions 9-41.27-59.38 GRAND TOTAL 263.55 340.80 ASSETS Non Current Assets Fixed Assets Tangible Assets 10 41.99 73.38 Intangible Assets 10 9.29 20.74 Deferred Tax Assets (Net) 20 2.34 6.44 Long-term Loans and Advances 11 10.54 9.12 64.16 109.68 Current Assets Current Investments 12 191.68 77.60 Trade Receivables 13-65.85 Cash and Bank Balances 14 2.48 71.50 Short-term Loans and Advances 11 5.02 16.02 Other Current Assets 15 0.21 0.15 199.39 231.12 GRAND TOTAL 263.55 340.80 Summary of Significant accounting policies 3 The accompanying notes are an integral part of these financial statements. As per our report of even date For S. R. BATLIBOI & ASSOCIATES LLP Chartered Accountants ICAI Firm Registration Number: 101049W / E300004 For and on behalf of the Board of Directors of Agilyst Consulting Private Limited per Amit Majmudar P.D.Mundhra Rohitash Gupta Partner Director Director Membership Number: 36656 Place : Mumbai Place : Mumbai Date : May 20, 2016 Date : May 20, 2016
AGILYST CONSULTING PRIVATE LIMITED STATEMENT OF PROFIT AND LOSS FOR THE YEAR ENDED MARCH 31, 2016 (Rupees in million, except share data) Notes Year ended Year ended March 31, 2016 March 31, 2015 Income Revenue From Sale Of Services 1.77 776.53 Other Income 16 53.10 5.81 Total 54.87 782.34 Expenditure Employee Benefit expenses 17 (0.33) 512.54 Other Expenses 18 7.02 101.88 Depreciation and Amortisation 10 42.61 61.44 Total 49.30 675.86 Profit before Taxes 5.57 106.48 Tax Expense - Current Income Tax 4.06 39.22 - Deferred Income Tax 4.10 (4.16) Total Tax Expense 8.16 35.06 (Loss) / Profit After Taxes (2.59) 71.42 (Losses) / Earnings per Share 24 Weighted average number of equity shares outstanding during the year Basic and diluted 10,000 10,000 (Losses) / Earnings per equity share Basic and diluted (258.17) 7,141.15 Nominal Value of Share (In Rs.) 10.00 10.00 Summary of Significant accounting policies 3 The accompanying notes are an integral part of these financial statements. As per our report of even date For S. R. BATLIBOI & ASSOCIATES LLP Chartered Accountants ICAI Firm Registration Number: 101049W / E300004 For and on behalf of the Board of Directors of Agilyst Consulting Private Limited per Amit Majmudar P. D. Mundhra Rohitash Gupta Partner Director Director Membership Number: 36656 Place : Mumbai Place : Mumbai Date : May 20, 2016 Date : May 20, 2016
AGILYST CONSULTING PRIVATE LIMITED CASH FLOW STATEMENT FOR THE YEAR ENDED MARCH 31, 2016 Year ended March 31, 2016 (Rupees in million) Year ended March 31, 2015 A. Cash Flow from Operating Activities Net Profit Before Tax and Exceptional Items 5.57 106.48 Adjustments for : Depreciation 42.61 61.44 Loss on Sale of investments 0.01 - Loss on Sale of fixed assets 0.10 0.02 Dividend Income (9.07) (4.67) Interest Income (0.11) (0.48) Operating Profit Before Working Capital Changes 39.11 162.79 Adjustments for : Trade Receivables 65.85 3.97 Long-term Loans and Advances 8.59 8.40 Short-term Loans and Advances 11.00 3.84 Other Current Assets - 1.94 Trade Payables (3.86) (6.43) Other Current Liabilities (14.25) (13.40) Long Term Provisions (15.28) 5.05 Short Term Provisions (35.75) 10.11 Cash Generated by Operating Activities 55.41 176.27 Income Taxes (received) (net of refunds) (19.59) (31.73) Net Cash generated by Operating Activities 35.82 144.54 B. Cash Flow from Investing Activities : Sale of Investments 65.94 552.71 Purchase of Investments (180.01) (597.01) Redemption/matuity of bank deposits(having original maturity of more than three months) - 0.10 Sale of Fixed Assets 0.11 0.01 Purchase of Fixed Assets (including Capital work in progress) - (52.72) Interest received 0.05 0.44 Dividend received 9.07 4.67 Net Cash used in Investing Activities (104.84) (91.80) C. Cash Flow from Financing Activities : Net Cash used in Financing Activities - - Net (Decrease) / Increase in Cash and cash equivalents (69.02) 52.74 Cash and Cash Equivalents at the beginning of the year 70.85 18.11 Cash and Cash Equivalents at the end of the year (refer note 14) 1.83 70.85 As per our report of even date For S. R. BATLIBOI & ASSOCIATES LLP Chartered Accountants ICAI Firm Registration Number: 101049W / E300004 For and on behalf of the Board of Directors of Agilyst Consulting Private Limited per Amit Majmudar P.D.Mundhra Rohitash Gupta Partner Director Director Membership Number: 36656 Place : Mumbai Place : Mumbai Place : Mumbai Date : May 20, 2016 Date : 20th May 2016 Date : 20th May 2016
Agilyst Consulting Private Limited NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2016 1. Corporate information Agilyst Consulting Private Limited ( ACPL ) was incorporated on April 11, 2008 in India. It is a wholly owned subsidiary of Agilyst Inc., a Company incorporated in State of Delaware, United States of America. 2. Basis of preparation The financial statements of the company have been prepared in accordance with the generally accepted accounting principles in India ( Indian GAAP ). The Company has prepared these financial statements to comply in all material respects with the accounting standards notified under section 133 of the Companies Act 2013, read together with paragraph 7 of the Companies (Accounts) Rules 2014. The financial statements have been prepared on an accrual basis and under the historical cost convention. The accounting policies adopted in the preparation of financial statements are consistent with those of previous year. The services of all employees of the Company have been transferred to eclerx Services Limited, ultimate holding Company, with effect from April 01, 2015. The management of the Company is in the process of merging the Company with the Ultimate Parent Company, eclerx Services Limited. The Company has filed the Scheme of Amalgamation with the High Court of India and is awaiting the approval of the High Court. 3. Summary of significant accounting policies a) Use of estimates The preparation of the financial statements in conformity with generally accepted accounting principles ( GAAP ) in India requires management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent liabilities on the date of the financial statements. Management believes that the estimates made in the preparation of financial statements are prudent and reasonable. Actual future period s results could differ from those estimates. Any revision to accounting estimates is recognized prospectively in current and future periods. b) Revenue Recognition Revenue from time and material and unit priced contracts are recognised when services are rendered and related costs are incurred. The service income is recognised at cost plus mark-up on the basis of agreement between the Principal and the Company. Revenue from maintenance contracts are recognised on pro-rata basis over the period of the contract. Unbilled revenues included in other current assets represent revenue in excess of billings as at the balance sheet date Interest income is recognised on time proportion basis taking into account the amount outstanding and the interest rate applicable. Interest Income is included under the head Other Income in the Statement of Profit and Loss. Dividend income is recognised when Company s right to receive dividend is established by the reporting date.
Agilyst Consulting Private Limited NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2016 c) Fixed assets Tangible assets Assets are stated at the cost of acquisition including incidental costs related to acquisition and installation less accumulated depreciation and impairment loss. Gains or losses arising from disposal of tangible assets are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognized in the statement of profit and loss when the asset is disposed. Intangible assets Intangible assets acquired separately are measured on initial recognition at cost. Following initial recognition, intangible assets are carried at cost less accumulated amortization and accumulated impairment losses, if any. d) Depreciation and amortisation The Company provides depreciation on tangible fixed assets using the written down value method using the rates arrived at based on the useful lives estimated by the management. The Company has used the following rates to provide depreciation on its fixed assets. Office equipment Furniture and fixtures Computers -End user devices -Servers Useful lives estimated by the management (years) 5 years 10 years 3 years 6 years Intangible assets in the form of computer software are amortised over their respective individual estimated useful lives on a straight line basis which generally do not exceed ten years. e) Impairment of Assets The Company assesses at each reporting date whether there is an indication that an asset may be impaired. If any indication exists, or when annual impairment testing for an asset is required, the Company estimates the asset s recoverable amount. The recoverable amount of the assets (or where applicable, that of the cash generating unit to which the asset belongs) is estimated as the higher of its net selling price and its value in use. An impairment loss is recognised whenever the carrying amount of an asset or a cash generating unit exceeds its recoverable amount. Impairment loss is recognised in the statement of profit and loss or against revaluation surplus where applicable. If at the balance sheet date there is an indication that a previously assessed impairment loss no longer exists, the recoverable amount is reassessed and the asset is reflected at the recoverable amount subject to a maximum of depreciable historical cost. f) Investments Investments, which are readily realisable and intended to be held for not more than one year from the date on which such investments are made, are classified as current investments. All other investments are classified as non-current investments.
Agilyst Consulting Private Limited NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2016 On initial recognition, all investments are measured at cost. The cost comprises purchase price and directly attributable acquisition charges such as brokerage, fees and duties. Current investments are carried in the financial statements at lower of cost and fair value determined on an individual investment basis. Non-current investments are carried at cost and provisions recorded to recognise any decline, other than temporary, in the carrying value of each investment. Profit or loss on sale of investments is recorded on transfer of title from the Company and is determined as the difference between the sales price and the carrying value of the investment. g) Retirement and Other Employee benefits Provident Fund Retirement benefit in the form of provident fund is a defined contribution scheme. Both the employee and the employer make monthly contributions to the plan at a predetermined rate of the employees' basic salary. These contributions are made to the fund administered and managed by the Government of India. The Company's contributions are charged to statement of profit and Loss account on accrual basis. The Company has no further obligations under these plans beyond its monthly contributions. Gratuity The Company provides for gratuity benefit, which is a defined benefit plan, covering all its eligible employees. Actuarial valuation is done by an independent actuary as at the balance sheet date using projected unite credit method and actuarial gains and losses are recognised in full in the period in which they occur in the statement of profit and loss. Compensated Absences Accumulated leave, which is expected to be utilized within the next 12 months, is treated as short-term employee benefit. The Company measures the expected cost of such absences as the additional amount that it expects to pay as a result of the unused entitlement that has accumulated at the reporting date. The Company treats accumulated leave expected to be carried forward beyond twelve months, as long-term employee benefit for measurement purposes. Such long-term compensated absences are provided for based on the actuarial valuation using the projected unit credit method at the year-end. The Company treats the entire leave as current liability in the balance sheet, since it does not have an unconditional right to defer its settlement for 12 months after the reporting date. Actuarial gains / losses are immediately taken to the statement of profit and loss and are not deferred. h) Taxation Current taxes Current income - tax expense is recognised in accordance with the provisions of the Income Tax Act, 1961. Minimum alternate tax (MAT) paid in a year is charged to the statement of profit and loss as current tax. The Company recognises MAT credit available as an asset only to the extent that there is convincing evidence that the Company will pay normal income tax during the specified period, i.e., the period for which MAT credit is allowed to be carried forward. Accordingly, MAT credit is recognised as an asset in the Balance Sheet when it is probable that the future economic benefit associated with it will flow to the Company and the asset can be measured reliably.
Agilyst Consulting Private Limited NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2016 Deferred taxes Deferred income taxes reflect the impact of timing differences between taxable income and accounting income originating during the current year and reversal of timing differences for the earlier years. Deferred tax is measured using the tax rates and the tax laws enacted or substantively enacted at the reporting date. Deferred tax liabilities are recognised for all taxable timing differences. Deferred tax assets are recognised for deductible timing differences only to the extent that there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realised. In situations where the Company has unabsorbed depreciation or carry forward tax losses, all deferred tax assets are recognised only if there is virtual certainty supported by convincing evidence that they can be realised against future taxable profits. In the situations where the Company is entitled to a tax holiday under the Income-tax Act, 1961 enacted in India or tax laws prevailing in the respective tax jurisdictions where it operates, no deferred tax (asset or liability) is recognised in respect of timing differences which reverse during the tax holiday period, to the extent the Company s gross total income is subject to the deduction during the tax holiday period. Deferred tax in respect of timing differences which reverse after the tax holiday period is recognised in the year in which the timing differences originate. The carrying amount of deferred tax assets are reviewed at each reporting date. The Company writes down the carrying amount of deferred tax asset to the extent that it is no longer reasonably certain or virtually certain, as the case may be, that sufficient future taxable income will be available against which deferred tax asset can be realised. Any such write-down is reversed to the extent that it becomes reasonably certain or virtually certain, as the case may be, that sufficient future taxable income will be available. i) Leases Operating Lease Leases, where the lessor effectively retains substantially all the risks and benefits of ownership of the leased item are classified as operating leases. Operating lease payments are recognised as an expense in the statement of profit and loss on a straight-line basis over the lease term. j) Foreign currency transactions Transactions in foreign currency are recorded at the exchange rate prevailing on the date of transaction. Net exchange gain or loss resulting in respect of foreign exchange transactions settled during the year is recognised in the statement of profit and loss. Foreign currency denominated monetary items at year end are translated at exchange rates as on the reporting date and the resulting net gain or loss is recognised in the statement of profit and loss. Nonmonetary items, which are measured in terms of historical cost denominated in a foreign currency, are reported using the exchange rate at the date of the transaction. k) Cash and Cash Equivalent Cash and cash equivalents for the purposes of cash flow statement comprise cash at bank and in hand and short-term investments with an original maturity of three months or less.
Agilyst Consulting Private Limited NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2016 l) Provisions and contingencies The Company creates a provision when there is a present obligation as a result of a past event that probably requires an outflow of resources embodying economic benefits and a reliable estimate can be made of the amount of the obligation. A disclosure for a contingent liability is made when there is a possible obligation or a present obligation that may, but probably will not, require an outflow of resources. When there is a possible obligation or a present obligation in respect of which the likelihood of outflow of resources is remote, no provision or disclosure is made.
AGILYST CONSULTING PRIVATE LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2016 4 SHARE CAPITAL (Rupees in million) March 31, 2016 March 31, 2015 Authorized 10,000 (P.Y. 10,000) equity shares of Rs. 10 each 0.10 0.10 Issued, Subscribed and Paid - up 10,000 (P.Y. 10,000) equity shares of Rs. 10 each 0.10 0.10 a) Reconciliation of number of shares There was no movement in the number and value of shares during the year. b) Terms / rights attached to equity shares 0.10 0.10 The Company has only one class of equity shares having face value of Rs. 10 each. Every holder of equity shares is entitled to one vote per share. Subject to the provisions of Companies Act 2013 as to preferential payments, the assets of the Company shall, on its winding up be applied in satisfaction of its liabilities pari-passu and, subject to such application, shall, unless the articles otherwise provide, will be distributed among the members according to their rights and interest in the company. c) Details of shares held by shareholders holding more than 5% shares Name of Shareholder 31 March 2016 Number of Shares held % of Share Capital 31 March 2015 Number of Shares held % of Share Capital Agilyst Inc. 10,000 100% 10,000 100% 5 RESERVES AND SURPLUS (Rupees in million) March 31, 2016 March 31, 2015 Net Surplus in the Statement of Profit and Loss 263.45 266.04 TOTAL 263.45 266.04 Details of appropriations made: Loss after tax (2.59) 71.42 Balance brought forward from previous year 266.04 194.94 Add: Transfer / adjustments during the year - (0.32) Surplus available for appropriation 263.45 266.04 Balance carried to Balance Sheet 263.45 266.04
6 LONG TERM PROVISIONS (Rupees in million) March 31, 2016 March 31, 2015 Provision for Gratuity (Refer Note 25) - 15.28 Total - 15.28 7 TRADE PAYABLES (Rupees in million) March 31, 2016 March 31, 2015 Payable to Micro, Small and Medium Enterprises (Refer Note 26) - - Other Trade Payables - 3.86 Total - 3.86 8 OTHER CURRENT LIABILITIES (Rupees in million) March 31, 2016 March 31, 2015 Statutory Dues - 6.15 Accrued Expenses - 8.10 Total - 14.25 9 SHORT TERM PROVISIONS (Rupees in million) March 31, 2016 March 31, 2015 Provision for Employee Benefits Incentive Payable to employees - 23.87 Provision for Gratuity (Refer Note 25) - 0.10 Provision for Leave Encashment - 11.78 Total - 35.75 Others Provision for Taxation (Net) - 5.52 TOTAL - 41.27
AGILYST CONSULTING PRIVATE LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2016 10 FIXED ASSETS ASSETS April 1, 2015 Additions During Year (Rupees in million) Gross Block - At Cost Depreciation / Amortization Net Block Additions Deductions/Adjustments March 31, 2016 April 1, 2015 Deductions/Adjustments During Year March 31, 2016 March 31, 2016 March 31, 2015 TANGIBLE OFFICE EQUIPMENTS 45.38-0.01 45.37 20.45 11.37-31.82 13.55 24.93 FURNITURE AND FIXTURES 10.09-0.61 9.48 8.60 0.39 0.57 8.42 1.06 1.49 COMPUTERS 111.13-2.05 109.08 71.00 17.35 1.87 86.48 22.60 40.13 LEASEHOLD IMPROVEMENTS 17.58 - - 17.58 10.75 2.05-12.80 4.78 6.83 TOTAL: (A) 184.18-2.67 181.51 110.80 31.16 2.44 139.52 41.99 73.38 INTANGIBLE COMPUTER SOFTWARE 59.22 - - 59.22 38.48 11.45-49.93 9.29 20.74 TOTAL: (B) 59.22 - - 59.22 38.48 11.45-49.93 9.29 20.74 TOTAL (A) + (B) 243.40-2.67 240.73 149.28 42.61 2.44 189.45 51.28 94.12 ASSETS April 1, 2014 Additions During Year GROSS BLOCK - AT COST ACCUMULATED DEPRECIATION / AMORTISATION NET BLOCK Additions Deductions/Adjustments March 31, 2015 April 1, 2014 Deductions/Adjustments During Year March 31, 2015 March 31, 2015 March 31, 2014 TANGIBLE LEASEHOLD IMPROVEMENTS 14.86 2.72-17.58 8.73 2.02-10.75 6.83 6.13 OFFICE EQUIPMENTS 31.23 14.22 0.07 45.38 5.99 14.46 0.00 20.45 24.93 25.24 FURNITURE AND FIXTURES 9.92 0.44 0.27 10.09 7.84 1.04 0.27 8.61 1.48 2.08 COMPUTERS 87.86 23.57 0.30 111.13 41.48 29.29 (0.23) 71.00 40.13 46.38 TOTAL: (A) 143.87 40.95 0.64 184.18 64.04 46.81 0.04 110.81 73.38 79.83 INTANGIBLE COMPUTER SOFTWARE 47.45 11.77-59.22 23.85 14.63 0.00 38.48 20.74 23.60 TOTAL: (B) 47.45 11.77-59.22 23.85 14.63 0.00 38.48 20.74 23.60 TOTAL (A) + (B) 191.32 52.72 0.64 243.40 87.89 61.44 0.04 149.29 94.12 103.43
11 LOANS AND ADVANCES (Rupees in million) March 31, 2016 March 31, 2015 Non Current (Unsecured, Considered good) Corporate Premises Rent Deposit - 8.13 Other Deposits - 0.99 Advance tax (Net) 10.01 - LIC Fund of India (Gratuity Fund) 0.53 - Total 10.54 9.12 Current (Unsecured, Considered good) Service Tax Credit 2.94 11.84 CST Credit 2.08 2.49 Prepaid Expenses - 0.28 Other Advances - 1.41 Total 5.02 16.02 12 INVESTMENTS Current Investments (Non Trade, quoted) (valued at lower of cost and fair value) (Rupees in million) March 31, 2016 March 31, 2015 Investment in Mutual Funds 591,296.991 (P.Y. 572,986.264) Birla Sun Life Savings Fund-Daily div.-direct Plan 59.31 57.47 492,682.211 (P.Y. Nil) Birla Sun Life Floating Rate Fund STP-IP-Daily Div-Reinvestment 49.28-51,054.396 (P.Y. Nil) Birla Sun Life Floating Rate Fund LTP-IP-DD 5.13-151557.243 (P.Y. 190,391.757)ICICI Prudential Flexible Income Plan 16.03 20.13 61,782.063 (P.Y. Nil)UTI Treasury Advantage (Liquid Plus) 61.93 - Total 191.68 77.60 Aggregate value of quoted investments (Market value: Rs. 191.68 million (P.Y. Rs. 77.60 million)) 191.68 77.60 13 TRADE RECEIVABLES (UNSECURED) (Rupees in million) March 31, 2016 March 31, 2015 Considered good Outstanding for period exceeding six months - - Other debts - 65.85 Total - 65.85 14 CASH AND BANK BALANCES (Rupees in million) March 31, 2016 March 31, 2015 Cash and Cash Equivalents Cash on Hand - 0.01 Balances in Current accounts with scheduled banks 1.83 70.84 1.83 70.85 Other Bank Balances Fixed deposits pledged with banks against bank guarantees 0.65 0.65 0.65 0.65 Total 2.48 71.50
15 OTHER CURRENT ASSETS (Rupees in million) March 31, 2016 March 31, 2015 Interest accrued but not due 0.21 0.15 Total 0.21 0.15 16 OTHER INCOME (Rupees in million) Year ended Year ended March 31, 2016 March 31, 2015 Interest on fixed deposit 0.11 0.48 Dividend income 9.07 4.67 Income from lease of assets 42.61 - Miscellaneous Income 0.04 - Foreign exchange gain (net) 1.27 0.66 Total 53.10 5.81 17 EMPLOYEE BENEFIT EXPENSES (Rupees in million) Year ended Year ended March 31, 2016 March 31, 2015 Salaries, Wages and Bonus (0.44) 491.86 Benefits 0.01 9.49 Gratuity (Refer Note 25) - 5.51 Staff Welfare 0.10 5.68 Total (0.33) 512.54 18 OTHER EXPENSES (Rupees in million) Year ended Year ended March 31, 2016 March 31, 2015 Cost of technical sub-contractors - 2.52 Rent (Refer Note 21) (2.05) 7.84 Legal and Professional fees 1.15 8.22 Electricity - 4.70 Communication expenses 0.11 32.40 Auditor's remuneration (Refer Note 19) - 0.50 Office expenses 0.02 1.13 Rates and Taxes 4.76 2.16 Computer and Server Rental Expenses 0.31 6.69 Printing and Stationery - 0.55 Local Conveyance 0.07 6.88 CSR Expenditure (Refer Note 29) 1.96 1.58 Housekeeping Services - 3.29 Security Charges 0.03 2.90 Insurance - 0.04 Subscription & Membership Fees 0.02 - Repairs and Maintenance - Building - 1.39 - Others 0.13 0.37 Advertisement Expenses - - Travelling Expenses 0.40 18.20 Business Promotion Expenses - 0.26 Miscellaneous Expenses - 0.24 Loss on Sale of Investments (net) 0.01 - Loss on Sale of Fixed Assets (net) 0.10 0.02 Total 7.02 101.88
Agilyst Consulting Private Limited NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2016 19. Auditors remuneration As Auditor Year ended March 31, 2016 (Rupees in million) Year ended March 31, 2015 Statutory Audit fees - 0.50 Total - 0.50 20. Deferred tax balances The components of deferred tax assets arising on account of timing differences between taxable income and accounting income are as follows: March 31, 2016 (Rupees in million) March 31, 2015 Deferred tax assets /(liability) Depreciation 2.34 (2.79) Provision for Gratuity - 5.23 Provision for Compensated Absences - 4.00 Net Deferred Tax Assets 2.34 6.44 21. Operating leases The Company has various operating leases for office facilities and residential premises for employees which include leases that are renewable on a yearly basis, cancellable at its option and other long term leases. The leases have been terminated in the current year. (Rupees in million) Year ended Year ended Lease expense recognised in the statement of profit and loss March 31, 2016 March 31, 2015 (2.05) 7.84 22. Segment Reporting: The Company s primary segments are based on the nature of services provided which is Data analytics and process outsourcing services. The Company s secondary segments are the geographic distribution of activities. Revenue and receivables are specified by location of customers while the other geographic information is specified by location of the assets. The following tables present revenue and asset information regarding the Company s geographical segments: (Rupees in million) Operational Revenues Year ended March 31, 2016 Year ended March 31, 2015 United States of America 1.77 776.53 Total 1.77 776.53
Agilyst Consulting Private Limited NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2016 (Rupees in million) Segment-wise Assets March 31, 2016 March 31, 2015 United States of America - 65.85 Asia Pacific 251.20 268.49 Unallocated 12.35 6.44 Total 263.55 340.78 (Rupees in million) Segment-wise Addition to Fixed Assets Year ended March 31, 2016 Year ended March 31, 2015 Asia Pacific - 52.72 Total - 52.72 23. Related Party & Key Management Personnel Information A. RELATED PARTIES & KEY MANAGEMENT PERSONNEL Name of related party and related party relationship (a) Where control exists: 1. eclerx Services Limited (Ultimate Holding Company) 2. eclerx Investments Limited (Holding Company of Agilyst Inc) 3. Agilyst Inc (Holding Company) 4. eclerx LLC (Fellow Subsidiary) 5. eclerx Limited (Fellow Subsidiary) 6. eclerx Private Limited (Fellow Subsidiary) 7. eclerx Investments (UK) Limited (Fellow Subsidiary) 8. CLX Europe S.P.A. (100% subsidiary of eclerx Investments (UK) Limited) 9. Sintetic S.R.L. (100% subsidiary of CLX Europe S.P.A.) 10. CLX Europe Media Solution GmbH (100% subsidiary of CLX Europe S.P.A.) 11. CLX Europe Media Solution Limited (100% subsidiary of CLX Europe Media Solutions GmbH) 12. CLX Thai Company Limited (49% holding of CLX Europe S.P.A.) (b) Key Management Personnel: 1. P. D. Mundhra (Director) 2. Rohitash Gupta (Director) B. Related party under Accounting Standard 18 Related Party Transactions and as per Companies Act, 2013 with whom transactions have taken place during the year 1. eclerx Services Limited (Ultimate Holding Company) 2. Agilyst Inc (Holding Company) The following table provides the total amount of transactions that have been entered into with related parties for the relevant financial year:
Agilyst Consulting Private Limited NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2016 Transactions during the year ended Sr. No. Name Nature of Transaction Relationship March 31, 2016 March 31, 2015 1 eclerx Sale of Assets - 0.05 Services Limited Liabilities transferred* 50.83 0.40 Amount received on Ultimate 1.38 - behalf of subsidiary Expenses incurred on Holding behalf of Ultimate Company 0.09 - Holding Company Assets transferred* 0.55-2 Agilyst Inc Rent on assets leased 42.61 - Income from Operations 1.77 776.53 Expenses incurred by Holding the Company on behalf Company - 5.26 of the Holding Company (Rupees in million) Outstanding as at March 31, 2016 - - March 31, 2015 0.02 Payable 65.85 Receivable * The services of all employees and other employee benefits of the Company have been transferred to eclerx Services Limited, ultimate Holding Company, with effect from April 01, 2015. 24. (Losses) / Earnings per share The basic (losses) / earnings per equity share are computed by dividing the net (losses) / profit attributable to the equity shareholders for the year by the weighted average number of equity shares outstanding during the reporting period. The number of shares used in computing diluted (losses) / earnings per share comprises the weighted average number of shares considered for deriving basic (losses) / earnings per share, and also the weighted average number of equity shares, which may be issued on the conversion of all dilutive potential shares, unless the results would be anti dilutive. Year ended March 31, 2016 Year ended March 31, 2015 (Loss) / Profit after tax attributable to A (2.59) 71.41 shareholders (Rupees in million) Weighted average number of equity shares outstanding during the year - Basic B 10,000 10,000 - Diluted C 10,000 10,000 (Losses) / Earnings per share (Rs.) - Basic A/B (258.17) 7,141.15 - Diluted A/C (258.17) 7,141.15 Nominal value of share (Rs.) 10 10 25. Employee Benefit Plans The Company makes annual contribution to the Employee s Group Gratuity Assurance Scheme of the Life Insurance Corporation of India (LIC). The Scheme provides for lump sum payment to vested employees at retirement, death while in employment or on termination of employment based on completed year of service or part thereof in excess of six months. Vesting occurs on completion of five years of service.
Agilyst Consulting Private Limited NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2016 The following table sets out the status of the gratuity plan for the years ended March 31, 2016 and March 31, 2015 as required under AS 15 (Revised) as notified under the Companies Act, 2013 under section 133 of the Companies Act 2013, read together with paragraph 7 of the Companies (Accounts) Rules 2014: (Rupees in million) Change in Defined Benefit Obligation March 31, 2016 March 31, 2015 Opening in Defined Benefit Obligation* - 10.86 Interest cost - 1.01 Current service cost - 4.56 Benefits paid - (0.56) Closing defined benefit obligation - 15.87 (Rupees in million) Change in fair value of assets March 31, 2016 March 31, 2015 Opening fair value of assets* - 0.33 Actuarial gain - 0.03 Contribution by employer - 0.10 Expected return on plan assets - 0.03 Closing fair value of plan assets - 0.49 Liability as per Balance Sheet - 15.38 (Rupees in million) Net Employee Benefit recognised in employee cost Year ended March 31, 2016 Year ended March 31, 2015 Current service cost* - 4.56 Interest cost - 1.01 Expected return on plan assets - (0.03) Actuarial (gains) / losses - (0.03) Total included in employment expenses - 5.51 Principle Assumptions used in determining gratuity benefit obligation for the Company s plans are shown as below: Year ended March 31, 2016 Year ended March 31, 2015 Actual return on plan assets - 9% Financial assumptions at valuation date Discount rate - 7.99% Rate of increase in compensation levels of covered employees - 7% Expected rate of return on plan assets - 7.99% * The services of all employees and other employee benefits, including gratuity, of the Company have been transferred to eclerx Services Limited, ultimate holding Company, with effect from April 01, 2015. 26. Dues to Micro and small Enterprises Based on the information available with the Company, there are no dues payable to micro and small enterprises as defined in the Micro, Small & Medium Enterprises Development Act, 2006.
Agilyst Consulting Private Limited NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2016 27. Supplementary statutory information Year ended March 31, 2016 (Rupees in million) Year ended March 31, 2015 CIF value of imports: Capital Goods - 28.88 Earnings in foreign exchange: Income from services 1.77 776.53 28. The Company has a comprehensive system of maintenance of information and documents as required by the transfer pricing legislation under sections 92-92F of the Income Tax Act, 1961. Since the law requires existence of such information and documentation to be contemporaneous in nature, the Company appoints independent consultants for conducting a Transfer Pricing Study to determine whether the transactions with associate enterprises are undertaken, during the financial year, on an arm s length basis. Adjustments, if any, arising from the transfer pricing study in the respective jurisdictions shall be accounted for as and when the study is completed for the current financial year. However the management is of the opinion that its international transactions are at arms length so that the aforesaid legislation will not have any impact on the financial statements. 29. CSR Expenditure Gross amount required to be spent: Rs. 1.98 (P.Y. 1.55) million Amount spent during Financial Year: Rs. 1.96 (P.Y. 1.55) million (Rupees in million) Year ended March 31, 2016 CSR Activities In Cash Yet to be spent in cash Total (i) Construction/acquisition of any asset - - - (ii) On purposes other than (i) above 1.96-1.96 (Rupees in million) Year ended March 31, 2015 CSR Activities In Cash Yet to be spent in cash Total (i) Construction/acquisition of any asset - - - (ii) On purposes other than (i) above 1.55-1.55 30. Contingent Liabilities (Rupees in million) March 31, 2016 March 31, 2015 Income Tax demands 21.08 8.84 The Company has received demand amounting to Rs.21.08 million for Financial Years 2009-10, 2010-11 and 2011-12 against which the Company has filed appeal with Commissioner of Income Tax (Appeals). The amounts represent best possible estimates arrived at on the basis of available information. The uncertainties and possible reimbursements are dependent on the outcome of the different legal processes which have been invoked by the Company or the claimants as the case may be and therefore cannot be predicted accurately. The Company engages reputed professional advisors to protect its interest and has been
Agilyst Consulting Private Limited NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2016 advised that it has strong legal positions against such disputes. Hence no provision has been made in the financial statements for these disputes. 31. Previous year figures have been regrouped/reclassified wherever necessary to conform with the current year s presentation. As per our report of even date For S. R. BATLIBOI & ASSOCIATES LLP ICAI Firm Registration Number: 101049W / E300004 Chartered Accountants For and on behalf of the Board of Directors of Agilyst Consulting Private Limited per Amit Majmudar P. D. Mundhra Rohitash Gupta Partner Director Director Membership Number: 36656 Place : Mumbai Place : Mumbai Date : 20 th May 2016 Date : 20 th May 2016
INDEPENDENT AUDITOR S REPORT To the Board of Directors of eclerx Investments (UK) Limited Report on the Financial Statements We have audited the accompanying financial statements of eclerx Investments (UK) Limited ( the Company ), which comprise the Balance Sheet as at March 31, 2016, the Statement of Profit and Loss and Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information. Management s Responsibility for the Financial Statements Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with accounting principles generally accepted in India. This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error. Auditor s Responsibility Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor s judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company s preparation and presentation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Opinion In our opinion and to the best of our information and according to the explanations given to us, the financial statements give a true and fair view in conformity with the accounting principles generally accepted in India of the state of affairs of the Company as at March 31, 2016, its loss, and its cash flows for the year ended on that date.
eclerx Investments (UK) Limited Independent auditor s report Other Matter This report covering the financial statements of the Company for the year ended March 31, 2016 is intended for the information and use of the board of directors of the Company and eclerx Services Limited, the holding company to comply with the financial reporting requirements in India. These financial statements have been prepared following the generally accepted accounting principles in India as explained in Note 2 to the financial statements of the Company, which describes the basis of accounting and the related audit covered by the report was carried out following the generally accepted auditing standards in India. Use of these financial statements or the related audit report for any other purpose will be subject to the above explanation. For S.R. Batliboi & Associates LLP Chartered Accountants ICAI Firm Registration Number: 101049W/E300004 per Amit Majmudar Partner Membership Number: 36656 Place of Signature: Mumbai Date: May 20, 2016
eclerx Investments (UK) Limited BALANCE SHEET AS AT MARCH 31, 2016 (Amount in GBP) Notes March 31, 2016 EQUITY AND LIABILITIES Shareholder's Funds Share Capital 4 18,686,112 Reserves and Surplus 5 438,317 19,124,429 Non Current Liabilities Other Non Current Liabilities 6 373,132 373,132 Current Liabilities Trade Payables 7 3,000 Short-term provisions 8 109,579 112,579 Total 19,610,140 ASSETS Non Current Assets Non-Current Investments 8 12,666,581 Long-term Loans and Advances 10 6,567,420 19,234,001 Current Assets Cash and Bank Balances 11 3,007 Short-term Loans and Advances 10 373,132 376,139 Total 19,610,140 - Summary of Significant accounting policies 3 The accompanying notes are an integral part of these financial statements. As per our report of even date For S. R. BATLIBOI & ASSOCIATES LLP Chartered Accountants ICAI Firm Registration Number: 101049W / E300004 For and on behalf of the Board of Directors of eclerx Investments (UK) Limited per Amit Majmudar Partner Membership Number: 36656 Place : Mumbai Date : May 20, 2016 Anjan Malik Director
eclerx Investments (UK) Limited STATEMENT OF PROFIT AND LOSS FOR THE YEAR ENDED MARCH 31, 2016 (Amount in GBP) Notes Year ended March 31, 2016 Income Other Income 12 554,481 554,481 Expenditure Other Expenses 13 6,585 6,585 Profit Before Tax 547,896 Tax Expense - Current Tax 109,579 Profit After Tax 438,317 Earnings per share 16 Earning per share (in GBP) [Nominal value of share GBP 1] -Basic and Diluted 0.083 Summary of Significant accounting policies 3 The accompanying notes are an integral part of these financial statements. As per our report of even date For S. R. BATLIBOI & ASSOCIATES LLP Chartered Accountants ICAI Firm Registration Number: 101049W / E300004 For and on behalf of the Board of Directors of eclerx Investments (UK) Limited per Amit Majmudar Partner Membership Number: 36656 Place : Mumbai Date : May 20, 2016 Anjan Malik Director
eclerx Investments (UK) Limited CASH FLOW STATEMENT FOR THE YEAR ENDED (Amount in GBP) Year ended March 31, 2016 A. Cash Flow from Operating Activities Profit Before Tax 547,896 Adjustments for : Increase in Short Term Provisions 109,579 Increase in Trade Payables 3,000 (Increase) in Short-term Loans and Advances (373,132) Decrease in Long-term Loans and Advances 373,132 Cash Generated by Operating Activities 660,475 Income Taxes paid (Net of refunds) (109,579) Net Cash generated from Operating Activities 550,896 B. Cash Flow from Investing Activities : Loans given to Subsidiaries (6,567,420) Investments in Subsidiaries (12,666,581) Net Cash used in Investing Activities (19,234,001) C. Cash Flow from Financing Activities : Proceeds from issue of equity shares 5,251,224 Proceeds from issue of preference shares 13,434,888 Net Cash generated from Financing Activities 18,686,112 Net Decrease in Cash and cash equivalents 3,007 Cash and Cash Equivalents at the beginning of the year - Cash and Cash Equivalents at the end of the year 8 3,007 - Summary of Significant accounting policies 3 The accompanying notes are an integral part of these financial statements As per our report of even date For S. R. BATLIBOI & ASSOCIATES LLP Chartered Accountants ICAI Firm Registration Number: 101049W / E300004 For and on behalf of the Board of Directors of eclerx Investments (UK) Limited per Amit Majmudar Partner Membership Number: 36656 Place : Mumbai Date : May 20, 2016 Anjan Malik Director
eclerx Investments (UK) Limited NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2016 1. Corporate information eclerx Investments (UK) Limited ( the Company ) was incorporated on March 14, 2015 in England and Wales. It is a wholly owned subsidiary of eclerx Services Limited, a Company incorporated in India. 2. Basis of preparation The financial statements of the Company have been prepared in accordance with the generally accepted accounting principles in India ( Indian GAAP ). The Company has prepared these financial statements in the format prescribed under Schedule III to the Companies Act, 2013 ( the Act ). The financial statements have been prepared to comply in all material aspects with the applicable accounting standards. The financial statements have been prepared on an accrual basis and under the historical cost convention. The accounting policies adopted in the preparation of financial statements are consistent with those of previous year. However, as these financial statements are not statutory financial statements, full compliance with the above Act is not required and so they do not reflect all the disclosures requirement of the Act. 3. Summary of significant accounting policies a) Use of estimates The preparation of the financial statements in conformity with generally accepted accounting principles ( GAAP ) in India requires management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent liabilities on the date of the financial statements. Management believes that the estimates made in the preparation of financial statements are prudent and reasonable. Actual future period s results could differ from those estimates. Any revision to accounting estimates is recognized prospectively in current and future periods. b) Revenue recognition Interest income is recognised using the time proportion basis taking into account the amount outstanding and the interest rate applicable. Interest income is included under the head Other Income in the Statement of Profit and Loss. Dividend income is recognised when Company s right to receive dividend is established by the reporting date. c) Investments Investments, which are readily realisable and intended to be held for not more than one year from the date on which such investments are made, are classified as current investments. All other investments are classified as non-current investments. On initial recognition, all investments are measured at cost. The cost comprises purchase price and directly attributable acquisition charges such as brokerage, fees and duties.
eclerx Investments (UK) Limited NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2016 Current investments are carried in the financial statements at lower of cost and fair value determined on an individual investment basis.. Non-current investments are carried at cost and provisions recorded to recognise any decline, other than temporary, in the carrying value of each investment. Profit or loss on sale of investments is recorded on transfer of title from the Company and is determined as the difference between the sales price and the then carrying value of the investment. d) Impairment of Assets The Company assesses at each reporting date whether there is an indication that an asset may be impaired. If any indication exists, or when annual impairment testing for an asset is required, the Company estimates the asset s recoverable amount. The recoverable amount of the assets (or where applicable, that of the cash generating unit to which the asset belongs) is estimated as the higher of its net selling price and its value in use. An impairment loss is recognised whenever the carrying amount of an asset or a cash generating unit exceeds its recoverable amount. Impairment loss is recognised in the statement of profit and loss or against revaluation surplus where applicable. If at the balance sheet date there is an indication that a previously assessed impairment loss no longer exists, the recoverable amount is reassessed and the asset is reflected at the recoverable amount subject to a maximum of depreciable historical cost. e) Foreign currency transactions Transactions in foreign currency are recorded at the exchange rate prevailing on the date of transaction. Net exchange gain or loss resulting in respect of foreign exchange transactions settled during the year is recognised in the statement of profit and loss. Foreign currency denominated monetary items at year end are translated at exchange rates as on the reporting date and the resulting net gain or loss is recognised in the statement of profit and loss. Nonmonetary items, which are measured in terms of historical cost denominated in a foreign currency, are reported using the exchange rate at the date of the transaction. f) Cash and Cash Equivalent Cash and cash equivalents for the purposes of cash flow statement comprise cash at bank and in hand and short-term investments with an original maturity of three months or less. g) Provisions and contingencies The Company creates a provision when there is present obligation as a result of a past event that probably requires an outflow of resources embodying economic benefits and a reliable estimate can be made of the amount of the obligation. A disclosure for a contingent liability is made when there is a possible obligation or a present obligation that may, but probably will not, require an outflow of resources. When there is a possible obligation or a present obligation in respect of which the likelihood of outflow of resources is remote, no provision or disclosure is made.
eclerx Investments (UK) Limited NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2016 4 Share Capital (Amount in GBP) March 31, 2016 Authorised 13,434,888 (P.Y. Nil) Convertible and Redeemable Preference shares,nominal value GBP 1 each 13,434,888 5,251,224 (P.Y.Nil) equity shares of GBP 1 each 5,251,224 Issued, Subscribed and Paid - up 13,434,888 (P.Y. Nil) Convertible and Redeemable Preference shares,nominal value GBP 1 each 13,434,888 5,251,224 (P.Y.Nil) equity shares of GBP 1 each 5,251,224 18,686,112 a) Reconciliation of the share outstanding at the beginning and at the end of the reporting period Preference Shares March 31, 2016 No. Amount in GBP At the beginning of the year - - Add : Shares allotted during the year 13,434,888 13,434,888 Less : Redeemed during the year - - Outstanding at the end of the year 13,434,888 13,434,888 Equity Shares At the beginning of the year Add : Shares allotted during the year Less: Buyback during the year Outstanding at the end of the year March 31, 2016 No. Amount in GBP - - 5,251,224 5,251,224 - - 5,251,224 5,251,224 d) Details of Shareholders holding more than 5% of Shares in the Company Preference Shares Name of the Shareholder eclerx Services Limited Equity Shares Name of the Shareholder eclerx Services Limited 5 Reserves and Surplus Surplus in the Statement of Profit and Loss Account Profit After Tax Balance carried to Balance Sheet March 31, 2016 No. of Shares held % of Share Capital 13,434,888 100 March 31, 2016 No. of Shares held % of Share Capital 5,251,224 100 (Amount in GBP) March 31, 2016 438,317 438,317 TOTAL RESERVES AND SURPLUS 6 Other Non Current Liabilities 438,317 (Amount in GBP) March 31, 2016 Other Non current liabilites 373,132 Total 373,132
eclerx Investments (UK) Limited NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2016 7 Trade Payables Other Trade Payables Total 8 Short Term Provisions Others Provision for Taxation (Net) 9 Investments (Amount in GBP) March 31, 2016 3,000 3,000 (Amount in GBP) March 31, 2016 109,579 109,579 (Amount in GBP) March 31, 2016 Non Current Investments (Trade, unquoted) (At cost) Investments in Equity Instruments Investments in subsidiaries CLX Europe S.P.A 12,666,581 Total 12,666,581 10 Loans and Advances Non Current (Unsecured, considered Good) Other Advances Total Current (Unsecured, considered Good) Other Advances Total 11 Cash and Bank Balances Cash and Cash Equivalents Balances in Current accounts with banks Total 12 Other Income (Amount in GBP) March 31, 2016 6,567,420 6,567,420 373,132 373,132 (Amount in GBP) March 31, 2016 3,007 3,007 (Amount in GBP) Year ended March 31, 2016 Interest on Fixed Deposits 113,091 Foreign Exchange Gain (net) 441,390 Total 554,481 13 Other Expenses Legal and Professional fees Bank Charges Total (Amount in GBP) Year ended March 31, 2016 3,000 3,585 6,585
eclerx Investments (UK) Limited NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2016 14. Segment Reporting: Primary segment information: The disclosure requirement of AS-17 "Segment Reporting", to the extent it relates to disclosure of primary segment information is not applicable to the Company. Secondary segment information: The entire operations of the Company are within England and Wales and therefore the secondary segment reporting based on geographical location is not applicable to the Company. 15. Related Party & Key Management Personnel Information A. RELATED PARTIES & KEY MANAGEMENT PERSONNEL Name of related party and related party relationship (a) Where control exists: 1. eclerx Services Limited (Holding company) 2. eclerx LLC (Fellow subsidiary) 3. eclerx Limited (Fellow subsidiary) 4. eclerx Private Limited (Fellow subsidiary) 5. eclerx Investments Limited (Fellow subsidiary) 6. Agilyst Consulting Private Limited (100% subsidiary of Agilyst Inc) 7. Agilyst Inc. (100% subsidiary of eclerx Investments Limited) 8. CLX Europe S.P.A. (100% subsidiary) 9. Sintetic S.R.L.(100% subsidiary of CLX Europe S.P.A.) 10. CLX Europe Media Solution GmbH (100% subsidiary of CLX Europe S.P.A.) 11. CLX Europe Media Solution Limited (100% subsidiary of CLX Europe Media Solutions GmbH) 12. CLX Thai Company Limited (49% holding of CLX Europe S.P.A.) B. DETAILS OF RELATED PARTY & KEY MANAGEMENT PERSONNEL TRANSACTIONS: The following table provides the total amount of transactions that have been entered into with related parties for the relevant financial year: (Amount in GBP) March 31, 2016 Relationship Transactions Outstanding during the year Balance as at Fellow 3,000 3,000 Subsidiary Payable behalf of Company Investment in Equity 12,666,581 Shares 113,091 Subsidiary Interest income accrued 113,091 Payable Sr. No Name Nature of Transaction eclerx Expenses incurred by 1 Limited fellow subsidiary on 2 CLX Europe S.P.A
eclerx Investments (UK) Limited NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2016 16. Earnings per share The basic earnings per equity share are computed by dividing the net profit attributable to the equity shareholders for the year by the weighted average number of equity shares outstanding during the reporting period. The number of shares used in computing diluted earnings per share comprises the weighted average number of shares considered for deriving basic earnings per share, and also the weighted average number of equity shares, which may be issued on the conversion of all dilutive potential shares, unless the results would be anti dilutive. Year ended March 31, 2016 Profit after tax attributable to shareholders (Amount in GBP) A 438,317 Weighted average number of equity shares outstanding during the year - Basic and Diluted B 5,251,224 Earnings per share (GBP) - Basic and Diluted A/B 0.083 Nominal value of share (GBP) 1 As per our report of even date For S. R. BATLIBOI & ASSOCIATES LLP Chartered Accountants ICAI Firm Registration Number: 101049W / E300004 For and on behalf of the Board of Directors of eclerx Investments (UK) Limited per Amit Majmudar Anjan Malik Baljit Phull Partner Director Director Membership Number: 36656 Place: Mumbai Date: May 20, 2016
REPORT OF INDEPENDENT AUDITORS PURSUANT TO ART. 14 OF LEGISLATIVE DECREE 27 JANUARY 2010, N. 39 To the Sole Shareholder of CLX EUROPE S.p.A. Report on the Financial Statements We have audited the financial statements of CLX Europe S.p.A. (hereinafter also the "Company"), consisting of the Balance Sheet as at 31 December 2015, the income statement for the year that ended on that date and the notes. Directors' responsibility for the financial statements The Directors are responsible for the preparation of Financial Statements that provide a true and fair representation in compliance with the Italian regulations governing the preparation criteria. Auditors' responsibility Our responsibility is to judge the financial statements on the basis of our audit. We conducted our audit in accordance with International Standards for Auditing (ISA Italy) established pursuant to art. 11, paragraph 3 of Legislative Decree no. 39/10. These standards require compliance with ethical principles, as well as the planning and conducting of the audit in order to obtain a reasonable assurance that the financial statements are free from material misstatement. The audit involves performing procedures aimed at obtaining audit evidence about the amounts and information contained in the financial statements. The selected procedures depend on the professional judgement of the auditor, including the assessment of risks of material misstatement in the financial statements due to fraud or conducts or unintentional events. In making those risk assessments, the auditor considers the internal control relevant to the preparation of the company's financial statements that provide a true and fair representation in order to define the audit procedures appropriate to the circumstances, and not to judge the effectiveness of the company's internal control. An audit includes also evaluating the appropriateness of the accounting principles used, the reasonableness of the accounting estimates made by the Directors, as well as evaluating the presentation of the financial statements as a whole. We believe that we have obtained sufficient and appropriate audit evidence on which to base our judgement.
2 Judgement In our opinion, the financial statements provide a true and fair representation of the financial position of CLX Europe S.p.A. as at 31 December 2015 and of the results for the year that ended on that date in compliance with the Italian regulations governing their preparation criteria. Report on other legal and regulatory requirements Judgement on the consistency of the management report with the financial statements We have carried out the procedures specified in the audit standard (SA Italy) n. 720B in order to express, as required by law, a judgement on the consistency of the management report, which is the responsibility of the CLX Europe S.p.A. Directors, with the financial statements of the Company as at 31 December 2015. In our opinion, the business performance report is consistent with the CLX Europe S.p.A. financial statements for the year ending on 31 December 2015. DELOITTE & TOUCHE S.p.A. Riccardo Raffo Associate Milan, 7 April 2016