REG - iEnergizer Limited - INTERIM RESULTS
13 November 2019
iEnergizer Limited
("iEnergizer", the "Company" or the "Group")
INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2019
iEnergizer, the technology services and media solutions leader for the digital age, reports interim results for the six months ended September 30, 2019.
Financial Highlights: Sustained profitable revenue growth and margin improvements, achieved through deepening existing customer relationships and securing new customer contracts, with ongoing careful cost management
· Group Revenue up 13.1% to $96.2m (H1 2019: $85.1m)
· Service Revenue up 15.6% to $95.2m (H1 2019: $82.4m)
· EBITDA1 of $29.1m (H1 2019: $24.3m)
· Higher EBITDA margin at 30.2% (H1 2019: 29.1%)
· Operating profit increased to $26.8m (H1 2019: $23.4m)
· Higher operating profit margin at 27.8% (H1 2019: 27.5%)
· Profit before tax increased to $25.0m (H1 2019: $21.0m)
· Higher profit before tax margin at 25.9% (H1 2019: 24.6%)
· Profit after tax increased to $21.6m (H1 2019: $17.3m)
· Net debt2 of $0.43m (31 March 2019: $3.9m)
· Proposing interim dividend of 5.2p per ordinary share ($12.7m) (H1 2019: nil p)
Operational Highlights: Continued focus on higher margin work and success in business development with existing and new customers.
· Services: Double-digit revenue growth to $95.2m (H1 2019: $82.4m) through: the addition of several new clients; and increased billable work volumes and new contract wins from existing clients, including higher margin activity.
· Business Process Outsource ("BPO"): Strong revenue growth of 23.6% to $59.4m in H1 2020 (H1 2019: $48.1m) and EBITDA margins 20.3% higher at $20.8m (H1 2019: $17.3m), as key customers continued to increase workload volumes. The focus remains on recurring revenue streams from long-term customer relationships across all verticals.
· Content Division: Revenue growth of 4.3% to $35.7m in H1 2020 (H1 2019: $34.3m) and increased EBITDA margins by 18.4% to $8.8m (H1 2019: $7.5m), achieved despite structural pressures in the traditional publishing market.
o New E-Learning projects, related to design and development of class room training material for virtualization projects, supported revenue growth in Content Division.
o Continued development of new course material and Learning Management Systems (LMS) for the Off-The-Shelf (OTS) content service.
o Growing customer base, amongst existing and new customers, for the Scientific Publishing and Remittance Integration Services ("SciPris") product line.
o Growing customer pipeline for new services, such as Anti Money Laundering KYC service.
· New business development:
o US based sales team continued to focus on three strategic priorities: to enhance and grow key accounts; to identify and win new business through new customers as well as target our existing accounts; and to cross-sell and generate leads for additional services.
o Acquisition of multiple new customers in H1 2020 across iEnergizer's business lines of Business Process Outsource and Content Services Division, with revenue expected to contribute from H2 2020.
· Cost management:
o Continued focus on cost saving initiatives.
o Increased proportion of division-specific higher margin work, particularly in non-voice based processes including content writing, financials, entertainment gaming support, content technology and digital solutions.
o Effective use of technology to handle greater volumes from key customers without notable additional human resource.
· Interim Dividend:
o In line with the progressive dividend policy, the Company is pleased to announce an interim dividend of 5.2p with the Dividend record date of 21st November, 2019. This interim dividend reflects the Board's confidence in the Group's business plan and growth prospects.
o The Company's Ordinary Shares are expected to go ex-dividend on 22nd November 2019 and the interim dividend is expected to be paid on 20th December, 2019.
Marc Vassanelli, Chairman of iEnergizer, commented:
"This has been another successful period for iEnergizer across each division, despite structural challenges in some business areas. The continuation of profitable growth has been driven by our colleagues' continued efforts, in deepening existing customer relationships and attracting new customers via iEnergizer's compelling and evolving proposition, coupled with careful cost management. As a result, we are pleased to announce an interim dividend of 5.2p, for the first time.
"We benefit from a solid foundation, and with continued strong operational execution, the development of new sales initiatives and differentiated offerings, underpinned by a healthy balance sheet and substantial growth opportunities, we expect sustained business performance through the second half of the year. The Board looks forward to the remainder of the year with confidence."
[1] EBITDA has been calculated under the IFRS 16 accounting standards, under which a company’s operating lease liabilities are shown as liabilities on the balance sheet, together with the related assets that correspond to the right to use such assets over the remaining life of the related lease contracts. If these impacts had not been taken into consideration, the EBITDA would have been $28.24m.
[2] Net Debt has been calculated after excluding IFRS 16 impact of capitalization of leases as “Right of Use Assets” and their consequent lease liability creation. If these impacts had been included, Net Debt would have been $6.72m.
-Ends-
iEnergizer Ltd.
+44 (0)1481 242233
Chris de Putron
Mark De La Rue
FTI Consulting - Communications Adviser
+44 (0)20 3727 1000
Jonathon Brill / Eleanor Purdon
Arden Partners - Nominated adviser and Broker
Ciaran Walsh / Steve Douglas / Dan Gee-Summons (Corporate Finance)
James Reed-Daunter (Equity Sales)
+44 (0)20 7614 5900
iEnergizer Limited and its subsidiaries
Unaudited Condensed Consolidated Interim Financial Statements
Prepared in accordance with International Financial Reporting Standards (IFRS)
Six months ended 30 September 2019 and 2018
Unaudited Condensed Consolidated Statements of Financial Position
(All amounts in United States Dollars, unless otherwise stated)
Notes
As at
As at
30 September 2019
31 March 2019
Unaudited
Audited
ASSETS
Non-current
Goodwill
5
102,254,951
102,256,665
Other intangible assets
6
18,422,167
12,484,053
Property, plant and equipment
7
6,787,035
6,607,072
Long- term financial asset
639,442
1,681,981
Non-current tax assets
807,223
1,095,365
Deferred tax asset
4,776,269
4,726,068
Other non current assets
9,987
33,098
Non-current assets
133,697,074
128,884,302
Current
Trade and other receivables
34,623,099
36,675,342
Cash and cash equivalents
42,072,283
42,413,215
Short- term financial assets
8
7,903,185
7,058,455
Current tax assets
404,143
505,345
Other current assets
3,365,085
3,320,502
Current assets
88,367,795
89,972,859
Total assets
222,064,869
218,857,161
EQUITY AND LIABILITIES
Equity
Share capital
3,776,175
3,776,175
Share compensation reserve
63,986
63,986
Additional paid in capital
15,451,809
15,451,809
Merger reserve
(1,049,386)
(1,049,386)
Retained earnings
129,453,634
131,950,337
Other components of equity
(12,296,204)
(11,669,812)
Total equity attributable to equity holders of the parent
135,400,014
138,523,109
Notes
As at
As at
30 September 2019
31 March 2019
Unaudited
Audited
Liabilities
Non-current
Long term borrowings
38,743,275
870,535
Employee benefit obligations
4,046,496
4,101,097
Other non-current liabilities
-
216,669
Deferred tax liability
9,313,757
8,574,576
Non-current liabilities
52,103,528
13,762,877
Current
Short term borrowings
-
8,934
Trade and other payables
13,497,589
10,574,896
Employee benefit obligations
1,000,647
858,384
Current portion of long term borrowings
10,045,091
45,403,496
Other current liabilities
10,018,000
9,725,465
Current liabilities
34,561,327
66,571,175
Total equity and liabilities
222,064,869
218,857,161
(The accompanying notes are an integral part of these Unaudited Condensed Consolidated Interim Financial Statements)
Unaudited Condensed Consolidated Income Statements
(All amounts in United States Dollars, unless otherwise stated)
(The accompanying notes are an integral part of these Unaudited Condensed Consolidated Interim Financial Statements)
Notes
For the year
ended
For the six months ended
30 September 2019
30 September 2018
Unaudited
Unaudited
Income from operations
Revenue from services
95,180,896
82,361,309
Other operating income
1,046,950
2,724,771
96,227,846
85,086,080
Cost and expenses
Outsourced service cost
21,219,347
17,959,356
Employee benefits expense
39,580,811
35,284,407
Depreciation and amortization
2,063,317
2,680,368
Other expenses
6,566,098
5,735,424
69,429,573
61,659,555
Operating profit
26,798,273
23,426,525
Finance income
360,107
288,208
Finance cost
(2,199,643)
(2,760,603)
Profit before tax
24,958,737
20,954,130
Income tax expense
3,387,120
3,696,473
Profit for the year attributable to equity holders of the parent
21,571,617
17,257,657
Earnings per share
9
Basic
0.11
0.09
Diluted
0.11
0.09
Par value of each share in GBP
0.01
0.01
Unaudited Condensed Consolidated Statements of Other Comprehensive Income
(All amounts in United States Dollars, unless otherwise stated)
For the six months ended
For the six months ended
30 September 2019
30 September 2018
Unaudited
Unaudited
Profit after tax for the year
21,571,617
17,257,657
Other comprehensive income
Items that will be reclassified subsequently to the consolidated income statement
Exchange differences on translating foreign operations
(808,836)
(5,458,225)
Net other comprehensive (loss) that will be reclassified subsequently to consolidated income statement
(808,836)
(5,458,225)
Items that will not be reclassified subsequently to income statement
Remeasurement of the net defined benefit liability
257,399
-
Income tax relating to items that will not be reclassified
(74,954)
-
Net other comprehensive income that will be not be reclassified subsequently to consolidated income statement
182,445
-
Other comprehensive income/(loss) for the year
(626,391)
(5,458,225)
Total comprehensive income attributable to equity holders
20,945,226
11,799,432
(The accompanying notes are an integral part of these Unaudited Condensed Consolidated Interim Financial Statements)
Unaudited Condensed Consolidated Statements of Changes in Equity
(All amounts in United States Dollars, unless otherwise stated)
Share capital
Additional Paid in Capital
Share compensation reserve
Merger reserve
Other components of equity
Retained earnings
Total equity
Foreign currency translation reserve
Net defined
benefit
liability
Balance as at 01 April 2018
3,776,175
15,451,809
63,986
(1,049,386)
(9,219,409)
706,857
100,201,260
109,931,292
Profit for the year
-
-
-
-
-
-
31,749,077
31,749,077
Other comprehensive loss
-
-
-
-
(3,228,735)
71,475
-
(3,157,260)
Total comprehensive income for the year
-
-
-
-
(3,228,735)
71,475
31,749,077
28,591,817
Balance as at 31 March 2019
3,776,175
15,451,809
63,986
(1,049,386)
(12,448,144)
778,332
131,950,337
138,523,109
(The accompanying notes are an integral part of the Consolidated Financial Statements)
iEnergizer Limited
Share capital
Additional Paid in Capital
Share compensation reserve
Merger reserve
Other components of equity
Retained earnings
Total equity
Foreign currency translation reserve
Net defined
benefit
liability
Balance as at 01 April 2019
3,776,175
15,451,809
63,986
(1,049,386)
(12,448,144)
778,332
131,950,337
138,523,109
Dividends
-
-
-
-
-
-
(24,068,320)
(24,068,320)
Transaction with owners
(24,068,320)
(24,068,320)
Profit for the year
-
-
-
-
-
-
21,571,617
21,571,617
Other comprehensive loss
-
-
-
-
(808,836)
182,444
-
(626,392)
Total comprehensive income for the period
-
-
-
-
(808,836)
182,444
21,571,617
20,945,225
Balance as at 30 September 2019
3,776,175
15,451,809
63,986
(1,049,386)
(13,256,980)
960,776
129,453,634
135,400,014
(The accompanying notes are an integral part of these Unaudited Condensed Consolidated Interim Financial Statements)
Unaudited Condensed Consolidated Statements of Cash Flows
(All amounts in United States Dollars, unless otherwise stated)
`
For the six months ended
For the six months ended
30 September 2019
30 September 2018
(A) Cash flow from operating activities
Profit before tax
24,958,737
20,954,130
Adjustments
Depreciation and amortisation
2,063,317
2,680,368
Loss/(Profit) on disposal of property, plant and equipment
(6,024)
(9,312)
Trade receivables written-off/provision for doubtful debts
(65,262)
(411)
Unrealised and Realised foreign exchange gain
(174,089)
(2,398,514)
Finance income
(360,107)
(288,208)
Finance cost
2,199,643
2,760,603
28,616,215
23,698,656
Changes in operating assets and liabilities
(Increase)/ Decrease in trade and other receivables
2,015,601
(4,050,098)
(Increase)/ Decrease in other assets (current and non-current)
941,298
(305,985)
Increase / (Decrease) Non-current liabilities, trade payables & other current liabilities
2,670,121
(3,685,214)
(Decrease)/ Increase in employee benefit obligations
307,761
(657,949)
Cash generated from operations
34,550,996
14,999,410
Income taxes paid
(2,383,750)
(2,704,661)
Net cash generated from operating activities
32,167,246
12,294,749
(B) Cash flow for investing activities
Payments for purchase of property plant and equipment
(1,521,588)
(2,005,663)
Investment in fixed deposit (Net)
(883,210)
40,211
Proceeds from disposal of property, plant & equipment
6,581
9,312
Payments for purchase of other intangible assets
(220,909)
(196,939)
Interest received
400,808
263,654
Net cash used in investing activities
(2,218,318)
(1,889,425)
For the six months ended
For the six months ended
30 September 2019
30 September 2018
(C ) Cash flow from financing activities
Interest paid
(2,145,802)
(2,371,072)
Repayment of long-term borrowings
(4,150,357)
(8,274,611)
Net cash used in financing activities
(6,296,159)
(10,645,683)
Net increase/(decrease) in cash and cash equivalents
23,652,769
(240,359)
Dividends paid to equity holders of the parent
(24,068,320)
-
Cash and cash equivalents at the beginning of the year
42,404,281
33,371,550
Effect of exchange rate changes on cash
83,553
292,269
Cash and cash equivalents at the end of the year
42,072,283
33,423,460
Cash and cash equivalents comprise
Cash in hand
8,337
12,681
Balances with banks in current account
42,063,946
33,410,779
Bank overdraft
-
-
42,072,283
33,423,460
(The accompanying notes are an integral part of these Consolidated Financial Statements)
Notes to Unaudited Condensed Consolidated Interim Financial Statements
(All amounts in United States Dollars, unless otherwise stated)
1. INTRODUCTION
iEnergizer Limited (the 'Company' or 'iEnergizer ') was incorporated in Guernsey on 12 May 2010.
iEnergizer Limited is a 'Company limited by shares' and is domiciled in Guernsey. The registered office of the Company is located at Mont Crevelt House, Bulwer Avenue, St. Sampson, Guernsey, GY2 4 LH. iEnergizer was listed on the Alternative Investment Market ('AIM') of London Stock Exchange on 14 September 2010.
iEnergizer through its subsidiaries iEnergizer Holdings Limited, iEnergizer IT Services Private Limited, iEnergizer Management Services Limited, iEnergizer BPO Limited, iEnergizer BPO Inc, iEnergizer Aptara Limited and Aptara Inc and subsidiaries. (together the 'Group') is engaged in the business of call centre operations, providing business process outsource (BPO) and content delivery services, and back office services to their customers, who are primarily based in the United States of America and India, from its operating offices in Mauritius and India.
2. GENERAL INFORMATION AND STATEMENT OF COMPLIANCE WITH IFRS
These Unaudited Condensed Consolidated Interim Financial Statements are for the six months ended 30 September 2019 and 2018. They have been prepared in accordance with IAS 34 Interim Financial Reporting as developed and published by the International Accounting Standards Board ('IASB'), on a going concern basis. They do not include all of the information required in annual financial statements in accordance with IFRS, and should be read in conjunction with the annual financial statements for the years ended 31 March 2019 and 2018.
The Unaudited Condensed Consolidated Interim Financial Statements have been prepared and presented in United States Dollar (US$) which is the Company's functional currency.
These Unaudited Condensed Consolidated Interim Financial Statements were approved by the Board on 12 November 2019.
The Group has applied the same accounting policies in preparing these unaudited management financial information as adopted in the most recent annual audited financial information of the Group.
3. SIGNIFICANT ACCOUNTING POLICIES
The interim financial statements have been prepared in accordance with the accounting policies adopted in the Group's most recent annual financial statements for the years ended 31 March 2019 and 2018.
IFRS 16 - Lease Accounting
IFRS 16 will replace the existing leases Standard, IAS 17 Leases, and related interpretations. The standard sets out the principles for the recognition, measurement, presentation and disclosure of leases. IFRS 16 introduces a single lease accounting model and requires a lessee to recognize assets and liabilities for all leases with a term of more than 12 months, unless the underlying asset is of low value. The effective date for adoption of IFRS 16 is annual periods beginning on or after 1 April 2019
The Group has applied IFRS 16 using the modified retrospective second approach, by measuring the asset at an amount equal to the lease liability, adjusted by the amount of any prepaid or accrued lease payments recognized immediately before the date of initial application.
The Group has applied the following practical expedients:-
a) On Transition to IFRS 16 the weighted average incremental borrowing rate applied to lease liabilities recognized under IFRS 16 was 8.40%.
b) On Transition for Leases previously accounted for as operating leases with a remaining lease term of less than 12 months and for leases of low- value assets the Group has applied the optional exemptions to not recognize right of use assets but to account for the lease expense on a straight-line method over the remaining lease term.
The changes in accounting policies are also expected to be reflected in the Group's consolidated financial statements as at and for the year ending 31 March 2020. The Group has initially adopted IFRS 16 Leases from 1 April 2019. The Group has applied IFRS 16 using the modified retrospective approach and therefore comparative information is still reported under IAS -17.
The following is a reconciliation of total operating lease commitments at 31 March 2019 to the lease liabilities recognised at 1 April 2019:
Reconciliation at 31st March 2019
Amount in USD
Particulars
Gross Lease Liabilities at 31 March 2019
7,308,682
Less - Lease with remaining lease term of less than 12 months
-
Less - Discounted using incremental borrowing rate
(956,476)
Add - Other Finance Lease liabilities
-
Present value of Lease Liabilities at 31 March 2019
6,352,206
Policy for new leases started from or after 1 April 2019
For any new contracts entered into on or after 1 April 2019, the Group considers whether a contract is, or contains a lease. A lease is defined as a contract or part of contract that conveys the right to use an asset for a period of time in exchange for consideration'. To apply this definition the Group assesses whether it meets three key evaluation points:
o The contract contained identified asset.
o Group has the right to obtain substantially all the economic benefit from the use of identified asset throughout the period of use.
o The Group has right to direct the use of the identified asset throughout the period of use.
Measurement and Recognition of leases as a lessee
At the commencement date, the Group recognizes a right of use asset and a lease liability on the balance sheet date. The right of use asset is measured at cost, which is made up of initial measurement of a lease liability and any initial direct cost incurred by the Group.
The Group depreciates the right of use assets on a straight line basis from the lease commencement date to the earlier of the end of the useful life of the right of use asset or the end of lease term. The Group also assesses the right of use asset for impairment when such indicator exists.
At the commencement date, the Group measures the lease liability at the present value of the lease payments unpaid at that date, discounted using the interest rate implicit in the lease if that rate is readily available or the Group's incremental borrowing rate
The Group has elected to account for short-term leases and leases of low-value assets using the practical expedients. Instead of recognising a right-of-use asset and lease liability, the payments in relation to these are recognised as an expense in profit or loss on a straight-line basis over the lease term.
Policy for the comparative period (which has not been restated) has been repeated as follows:-
Determination of whether an arrangement is, or contains, a lease is based on the substance of the arrangement at inception date whether fulfilment of the arrangement is dependent on the use of a specific asset or assets and the arrangement conveys a right to use the asset.
Group as a lessee
Finance leases, which transfer to the Group substantially all the risks and benefits incidental to ownership of the leased item, are capitalized at the commencement of the lease at the fair value of the leased property or, if lower, at the present value of the minimum lease payments. Lease payments are apportioned between finance charges and reduction of the lease liability so as to achieve a constant rate of interest on the remaining balance of the liability. Finance charges are recognized in the consolidated income statement.
Leased assets are depreciated over the useful life of the asset. However, if there is no reasonable certainty that the Group will obtain ownership by the end of the lease term, the asset is depreciated over the shorter of the estimated useful life of the asset and the lease term.
Operating lease payments are recognized as an expense in the consolidated income statement on a straight line basis over the lease term. Rent abatements and escalations are considered in the calculation of minimum lease payments in the Group's capital lease testing and in determining straight line rent expense for operating leases.
Consolidated Lease Position as at 30th Sep 2019
Particulars
Amount in USD
Fixed Asset- Lease Hold Improvement 1 April 2019
6,352,206
Fixed Asset- Lease Hold Improvement addition during six months
258,645
Accumulated Depreciation till 30 September 2019
(619,123)
Net Block as on 30 September 2019
5,991,728
4. SIGNIFICANT MANAGEMENT JUDGEMENT IN APPLYING ACCOUNTING POLICIES AND ESTIMATION UNCERTAINTY
When preparing the Unaudited Condensed Consolidated Interim Financial Statements, management undertakes a number of judgements, estimates and assumptions about recognition and measurement of assets, liabilities, income and expenses. The actual results may differ from the judgements, estimates and assumptions made by management, and will seldom equal the estimated results.
The judgements, estimates and assumptions applied in the Unaudited Condensed Consolidated Interim Financial Statements, including the key sources of estimation uncertainty were the same as those applied in the Group's last audited financial statements for the year ended 31 March 2019.
5. GOODWILL
The net carrying amount of goodwill can be analysed as follows:
Particulars
Amount
Balance as at 01 April 2018
102,265,086
Impairment loss recognized
-
Translation adjustment
(8,421)
Balance as at 31 March 2019
102,256,665
Particulars
Amount
Balance as at 01 April 2019
102,256,665
Translation adjustment
(1,714)
Balance as at 30 September 2019
102,254,951
6. OTHER INTANGIBLE ASSETS
The Intangible assets comprise of computer software, customer contracts.
Particulars
Customer contracts*
Computer software
Patent
Trademark
Intangibles under development
Total
Cost
Balance as at 01 April 2018
24,122,232
3,589,438
100,000
12,000,000
132,490
39,944,160
Additions
-
576,081
576,081
Disposals
-
-
-
-
-
-
Translation adjustment
(9,418)
(221,500)
-
-
-
(230,918)
Balance as at 31 March 2019
24,112,814
3,944,019
100,000
12,000,000
132,490
40,289,323
Accumulated amortisation
Balance as at 01 April 2018
21,806,084
3,235,118
-
-
132,490
25,173,692
Amortisation/ impairment for the period
2,316,148
523,642
-
-
-
2,839,790
Disposals
-
-
-
-
-
-
Translation adjustment
(9,418)
(198,794)
-
-
-
(208,212)
Balance as at 31 March 2019
24,112,814
3,559,966
-
-
132,490
27,805,270
Carrying values as at 31 March 2019
-
384,053
100,000
12,000,000
-
12,484,053
*Customer contracts are intangible assets created for long standing customer relationships in the content delivery segment. Once the relationship is established the work continues to flow on a year to year basis. The carrying amount of such contracts is Nil.
Particulars
Customer contracts*
Computer software
Patent
Trademark
Intangibles under development
Right of Use Asset**
Total
Cost
Balance as at 01 April 2019
24,112,814
3,944,019
100,000
12,000,000
132,490
-
40,289,323
Additions
-
150,903
-
-
-
6,635,210
6,786,113
Disposals
-
-
-
-
-
-
-
Translation adjustment
(1,917)
(52,902)
-
-
(45,647)
(24,359)
(124,825)
Balance as at 30 Sept 2019
24,110,897
4,042,020
100,000
12,000,000
132,490
6,610,851
46,996,258
Accumulated amortisation
Balance as at 01 April 2019
24,112,814
3,559,966
-
-
132,490
-
27,805,270
Amortisation/impairment for the period
-
198,937
-
-
-
618,554
817,491
Disposals
-
-
-
-
-
-
-
Translation adjustment
(1,917)
(47,322)
-
-
-
569
(48,670)
Balance as at 30 Sept 2019
24,110,897
3,711,581
-
-
132,490
619,123
28,574,091
Carrying values as at 30 Sept 2019
-
330,439
100,000
12,000,000
-
5,991,728
18,422,167
*Customer contracts are intangible assets created for long standing customer relationships in the content delivery segment. Once the relationship is established the work continues to flow on a year to year basis. The carrying amount of such contracts is Nil.
**Right of Use Asset has been generated in compliance with adoption of IFRS 16 on Lease Accounting.
7. PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment comprise of the following:
Particulars
Computer and data equipment
Office Equipment
Furniture and fixtures
Air conditioner and generator
Vehicle
Leasehold improvements
Plant and machinery
Capital work in progress
Total
Cost
Balance as at 01 April 2018
6,109,821
874,293
1,247,285
378,237
37,066
4,400,598
2,256,054
122,531
15,425,885
Additions
2,741,100
43,318
284,368
565,532
-
593,856
210,222
101,777
4,540,173
Disposals (Net)
(121,154)
(12,438)
(20,576)
(5,678)
(14,885)
-
(18,356)
-
(193,087)
Translation and other adjustment
(323,214)
(50,401)
(72,347)
(21,372)
(1,434)
(277,327)
(131,350)
-
(877,445)
Balance as at 31 March 2019
8,406,553
854,772
1,438,730
916,719
20,747
4,717,127
2,316,570
224,308
18,895,526
Accumulated depreciation
Balance as at 01 April 2018
4,782,524
719,304
740,357
208,657
30,768
2,545,403
1,748,184
-
10,775,197
Depreciation for the year
1,158,555
111,228
316,403
66,624
1,697
457,759
236,334
-
2,348,600
Disposals (Net)
(121,154)
(12,366)
(20,559)
(26)
(14,885)
-
(18,356)
-
(187,346)
Translation and other adjustments
(297,468)
(40,102)
(40,177)
(13,150)
(1,019)
(156,878)
(99,203)
-
(647,997)
Balance as at 31 March 2019
5,522,457
778,064
996,024
262,105
16,561
2,846,284
1,866,959
-
12,288,454
Carrying values as at 31 March 2019
2,884,096
76,708
442,706
654,614
4,186
1,870,843
449,611
224,308
6,607,072
Particulars
Computer and data equipment
Office Equipment
Furniture and fixtures
Air conditioner and generator
Vehicle
Leasehold improvements
Plant and machinery
Capital work in progress
Total
Cost
Balance as at 01 April 2019
8,406,553
854,772
1,438,730
916,719
20,747
4,717,127
2,316,570
224,308
18,895,526
Additions
1,037,685
18,062
13,039
17,696
280,348
83,930
92,826
(21,999)
1,521,587
Disposals (Net)
(78,892)
-
-
-
-
-
(5,215)
-
(84,107)
Translation and other adjustment
(123,241)
(10,917)
(18,707)
(13,026)
(909)
(66,006)
(29,339)
(1,572)
(263,717)
Balance as at 30 Sept 2019
9,242,105
861,917
1,433,062
921,389
300,186
4,735,051
2,374,842
200,737
20,069,289
Accumulated depreciation
Balance as at 01 April 2019
5,522,457
778,064
996,024
262,104
16,561
2,846,284
1,866,960
-
12,288,454
Depreciation for the period
767,123
37,675
50,621
57,422
5,759
230,206
97,020
-
1,245,826
Disposals (Net)
(78,335)
-
-
-
-
-
(5,215)
-
(83,550)
Translation and other adjustments
(80,279)
(9,689)
(12,807)
(4,103)
(266)
(38,569)
(22,762)
-
(168,475)
Balance as at 30 Sept 2019
6,130,966
806,050
1,033,838
315,423
22,054
3,037,921
1,936,003
-
13,282,255
Carrying values as at 30 Sept 2019
3,111,139
55,867
399,224
605,966
278,132
1,697,130
438,839
200,737
6,787,035
8. SHORT TERM FINANCIAL ASSETS
Particulars
30 September 2019
31 March 2019
Security deposits
9,126
11,985
Restricted cash
5,055,927
4,747,604
Short term investments (fixed deposits with maturity less than 12 months)
2,758,929
1,803,959
Derivative financial instruments
9,487
426,984
Due from officers and employees
62,526
20,032
Others
7,190
47,891
7,903,185
7,058,455
Short term investments comprise of investment through banks in deposits denominated in various currency units bearing fixed rate of interest.
9. EARNINGS PER SHARE
The calculation of the basic earnings per share is based on the profits attributable to ordinary shareholders divided by the weighted average number of shares in issue during the period.
Calculation of basic and diluted profit per share for the period ended 30 September 2019 is as follows:
asic earnings per share
Particulars
30 September 2019
30 September 2018
Profit attributable to shareholders
21,571,617
17,257,657
Weighted average numbers shares outstanding
190,130,008
190,130,008
Basic earnings per share (US$)
0.11
0.09
Diluted earnings per share
Particulars
30 September 2019
30 September 2018
Profit attributable to shareholders
21,571,617
17,257,657
Weighted average numbers shares outstanding
190,130,008
190,130,008
Diluted earnings per share (US$)
0.11
0.09
10. RELATED PARTY TRANSACTIONS
The related parties for each of the entities in the Group have been summarised in the table below:
Nature of the relationship
Related Party's Name
I. Ultimate controlling party
Mr. Anil Aggarwal
II. Entities directly or indirectly through one or more intermediaries, control, are controlled by, or are under common control with, the reported enterprises
EICR (Cyprus) Limited (Parent of iEnergizer Limited)
III. Key management personnel ("KMP") and significant shareholders
Mr. Anil Aggarwal (Ultimate Shareholder, EICR Limited)
Mr. Chris de Putron (Director, iEnergizer Limited)
Mr. Mark De La Rue (Director, iEnergizer Limited)
Mr. Marc Vassanelli (Director, iEnergizer Limited)
Mr. Ashish Madan (Director, iEnergizer Limited) w.e.f. 16 August 2018
Disclosure of transactions between the Group and related parties and the outstanding balances is as under:
Transactions with KMP and relative of KMP
Particulars
30 September 2019
30 September 2018
Transactions during the period ended
Short term employee benefits
Remuneration paid to directors
Chris de Putron
6,249
6,559
Mark De La Rue
6,249
6,559
Marc Vassanelli
18,747
19,678
Balances at the end of
Total remuneration payable
109,385
71,678
11. SEGMENT REPORTING
Management currently identifies the Group's two service lines business process outsource and content delivery as operating segments on the basis of operations. These operating segments are monitored and operating and strategic decisions are made on the basis of operating segment results.
The Chief Operating Decision Maker ("CODM") evaluates the Group's performance and allocates resources based on an analysis of various performance indicators by reportable segments. The Group's reportable segments are as follows:
1. Business Process Outsource
2. Content delivery
3. Others
The measurement of each segment's revenues, expenses and assets is consistent with the accounting policies that are used in preparation of the Unaudited Condensed Consolidated Interim Financial Statements. In addition, two minor operating segments, for which the quantitative thresholds have not been met, are currently combined below under 'Others'. Segment information can be analysed as follows for the reporting periods under review:
30 September 2019
Business Process Outsource
Content delivery
Others
Total
Revenue from external customers
59,433,379
35,747,517
-
95,180,896
Other income (including realised foreign exchange gain)
1,023,702
280,168
4,524
1,308,394
Segment revenue
60,457,081
36,027,685
4,524
96,489,290
Less:-
Cost of outsourced Services
16,144,667
5,074,680
-
21,219,347
Employee benefit expense
20,188,248
19,392,563
-
39,580,811
Other expenses
3,339,716
2,726,155
500,227
6,566,098
Earning before interest, tax, depreciation and amortisation
20,784,450
8,834,288
(495,703)
29,123,034
Rent credit adjustment as per IFRS 16
(281,860)
(602,398)
-
(884,258)
Earning before interest, tax, depreciation and amortisation (before IFRS 16 rent credit adjustment )
20,502,589
8,231,890
(495,703)
28,238,776
Unrealized Foreign Exchange gain/(loss)
-
(261,444)
-
(261,444)
Depreciation and amortisation
959,531
1,103,786
-
2,063,317
Rent adjustment as per IFRS 16
281,860
602,398
-
884,258
Segment operating profit
19,824,918
7,469,058
(495,703)
26,798,273
Other Income/expense :
Finance income
135,427
113,968
110,712
360,107
Finance costs
(256,274)
(1,119,634)
(823,735)
(2,199,643)
Profit before tax
19,704,071
6,463,392
(1,208,726)
24,958,737
Income tax expense
1,954,446
1,432,675
-
3,387,120
Profit after tax
17,749,626
5,030,717
(1,208,726)
21,571,617
Segment assets
48,324,778
156,564,586
17,175,505
222,064,869
Segment liabilities
20,317,643
48,416,000
17,931,212
86,664,855
Capital expenditure
4,682,531
3,625,169
-
8,307,700
30 September 2018
Business Process Outsource
Content delivery
Others
Total
Revenue from external customers
48,093,184
34,268,125
-
82,361,309
Other income (including realized foreign exchange gains)
409,617
471,386
850
881,853
Segment revenue
48,502,801
34,739,511
850
83,243,162
Less:-
Cost of outsourced Services
13,506,125
4,453,231
-
17,959,356
Employee benefit expense
15,973,780
19,310,627
-
35,284,407
Other expenses
1,749,646
3,515,201
470,577
5,735,424
Earning before interest, tax, depreciation and amortisation
17,273,250
7,460,452
(469,727)
24,263,975
Unrealized Foreign Exchange gain/(loss)
-
1,842,918
-
1,842,918
Depreciation and amortisation
605,108
2,075,260
-
2,680,368
Segment operating profit
16,668,142
7,228,110
(469,727)
23,426,525
Other Income/expense :
Finance income
138,957
126,948
22,303
288,208
Finance costs
(16,061)
(1,139,625)
(1,604,916)
(2,760,603)
Profit before tax
16,791,038
6,215,433
2,052,340
20,954,131
Income tax expense
2,526,676
1,169,797
-
3,696,473
Profit after tax
14,264,361
5,045,637
2,052,340)
17,257,658
Segment assets
43,431,117
75,456,382
86,626,765
205,514,264
Segment liabilities
15,147,228
46,029,831
22,606,489
83,783,548
Capital expenditure
1,874,708
339,414
-
2,214,122
Revenue from the following customer's amounts to more than 10% of consolidated revenue during the period presented.
30 September 2019
Revenue from
Segment
Amount
Customer 1
Business Process Outsource
9,928,185
30 September 2018
Revenue from
Segment
Amount
Customer 1
Business Process Outsource
9,763,189
12. FINANCIAL ASSETS AND LIABILITIES
Fair value of carrying amounts of assets and liabilities presented in the statement of financial position relates to the following categories of assets and liabilities:
Financial assets
30 September 2019
31 March 2019
Non-current assets
Loans and receivables
Security deposits
530,183
507,498
Restricted cash
109,259
108,591
Fixed deposit
-
1,065,892
Current assets
Loans and receivables
Trade receivables
34,623,099
36,675,342
Cash and cash equivalents
42,072,283
42,413,215
Restricted cash
5,055,927
4,747,604
Security deposits
9,126
11,985
Short term investments
2,758,929
1,803,959
Due from officers and employees
62,526
20,032
Other short term financial assets
7,190
47,891
Fair value through profit and loss:
Derivative financial instruments
9,487
426,984
85,238,009
87,828,993
Financial liabilities
30 September 2019
31 March 2019
Non-current liabilities
Financial liabilities measured at amortized cost:
Long term borrowings
38,743,275
870,535
Current liabilities
Financial liabilities measured at amortized cost:
Short term borrowings
-
8,934
Trade payables
13,497,589
10,574,896
Current portion of long term borrowings
10,045,091
45,403,496
Other current liabilities
10,018,000
9,725,465
Fair value through profit and loss:
Derivative financial instruments
-
-
72,303,955
66,583,326
These non-current financial assets and liabilities, current financial assets and liabilities have been recorded at their respective carrying amounts as the management considers the fair values to be not materially different from their carrying amounts recognised in the statement of financial positions as these are expected to realise within one year from the reporting dates. Derivative financial instruments, recorded at fair value through profit and loss, are recorded at their respective fair values on the reporting dates.
13. FAIR VALUE HIERARCHY
Level 1 - Quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2 - Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).
Level 3 - Inputs for the assets or liabilities that are not based on observable market data (unobservable inputs).
No financial assets/liabilities have been valued using level 1 and 3 fair value measurements.
The following table presents fair value hierarchy of assets and liabilities measured at fair value on a recurring basis:
30 September 2019
Total
Fair value measurements at reporting date using
Level 2
Liabilities
(Notional amount)
Derivative instruments
Forward contracts (currency - US$/INR)
32,440,000
9,487
31 March 2019
Total
Fair value measurements at reporting date using
Level 2
Assets
(Notional amount)
Derivative instruments
Forward contracts (currency - US$/INR)
18,700,000
426,984
14. COMMITMENT AND CONTINGENCIES
As at 30 September 2019 and 31 March 2019, the Group had a capital commitment of US$ 257,684 and US$126,817 respectively for acquisition of property, plant and equipment.
The contingent liability in respect of claims filed by erstwhile employees against the group companies amounts to US$129,483 and US$122,834 as on 30 September 2019 and 31 March 2019 respectively and in respect of interest on VAT amounts to US$9,918 as on 30 September 2019 (US$10,060 as on 31 March 2019).
Guarantees: As at 30 September 2019 and 31 March 2019, guarantees provided by banks on behalf of the group companies to the revenue authorities and certain other agencies, amount to approximately US$34,555 and US$35,049 respectively.
15. ESTIMATES
The preparation of interim financial statements require management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities, income and expense. Actual results may differ from these estimates.
In preparing these Unaudited Condensed Consolidated Interim Financial Statements, the significant judgments made by the management in applying the Group's accounting policies and the key sources of estimation uncertainty were the same as those that applied to the consolidated financial statements as at and for the years ended 31 March 2019 and 2018.
16. FINANCIAL RISK MANAGEMENT
The Group's financial risk management objectives and policies are consistent with those disclosed in the consolidated financial statements as at and for the years ended 31 March 2019 and 2018.
1 EBITDA has been calculated under the IFRS 16 accounting standards, under which a company's operating lease liabilities are shown as liabilities on the balance sheet, together with the related assets that correspond to the right to use such assets over the remaining life of the related lease contracts. If these impacts had not been taken into consideration, the EBITDA would have been $28.24m.
2 Net Debt has been calculated after excluding IFRS 16 impact of capitalization of leases as "Right of Use Assets" and their consequent lease liability creation. If these impacts had been included, Net Debt would have been $6.72m
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.ENDIR LLFLRLSLFLIA
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