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iEnergizer Ltd. ("iEnergizer" or the "Company" or the "Group")

ANNUAL RESULTS FOR THE YEAR ENDED 31 MARCH 2017 

iEnergizer, the technology services and media solutions leader for the digital age, reports annual results for the year ended March 31, 2017.

Financial Highlights:

Revenue and Profit margin growth sustained through maintenance of key customer relationships and active monitoring of costs across all verticals of the company.

· Revenue up 4.7% at $146.3m (2016: $139.7m)

· EBITDA up 4.1% at $35.1m (2016: $33.7m)

· Adjusted EBITDA $35.7m[1] (see note below)

· Profit before tax (PBT) up 9.7% at $22.7m (2016: $20.7m)

· PBT margin increased to 15.4% (2016: 14.6%)

· Reduced Long Term Debt to $61.1m (2016: $73.7m)

· Earnings per share $0.08 (2016: $0.10)

Operational Highlights:

Continued focus on higher margin work in non-voice based processes, content writing, financials, entertainment gaming support, content technology and digital solutions.

· Real Time Processing revenue grew 19.1% year on year (Y/Y) and now accounts for 17.5% of revenues (15.4% in 2016)

· Back Office Services revenues grew 6.8% year on year Y/Y and now accounts for 31.3% of revenues (30.6% in 2016)

· Content Delivery Services revenues were stable and EBITDA up by 3% at $17.1m ($16.6m in 2016).

Marc Vassanelli, Chairman of iEnergizer, commented:

"I am pleased to report on the continued growth of our business with significant improvements in our financial performance for the year ended March 31, 2017. Fiscal 2017 has been a year in which we have maintained our focus on fostering key client relationships and further developing our go-to-market sales and services delivery model. The result is that the Company ended the year on a stronger financial and operational footing than at the start of the reporting period.

"Across the business, the emphasis has been on active monitoring of costs and optimization of resources through the use of technology. We have focused on the investments, technologies and people to capitalize on the progress and opportunities that we have in each of our key strategic areas.

"In terms of specific divisions, the Company's focus has centered on higher margin work in non-voice based processes including content writing, financials, entertainment gaming support, content technology and digital solutions.

"Fiscal 2018 will be a year in which we intend to extend key global sales initiatives, which should lead to new opportunities across all of our segments. In Content services, we additionally intend to take advantage of vendor consolidations among our key customers, launch of new products, and verticals through leveraging our strengths in seamless, best-in-class deliverable services, supported by the growth momentum in Back Office Services and Real Time Processing. Revenue growth, together with our focus on the go-to-market sales strategy in 2017, will see the company well set to deliver on its strategies, and we look forward to the year with confidence."

Company Overview

iEnergizer is an AIM listed, independent, integrated software and service pioneer. The Company is a publishing and technology leader, which is set to benefit from the dual disruptive waves of big data and the cloud in the digital age. With its expertise and cutting-edge technology, iEnergizer is uniquely positioned to facilitate the transformation to a digital world and support clients in this transition.

iEnergizer provides services across the entire customer lifecycle and offers a comprehensive suite of Content & Publishing Process Outsourcing Solutions (Content Services) and Customer Management Services (Back Office Services and Real Time Processing) that include Transaction Processing, customer acquisition, customer care, technical support, billing & collections, dispute handling and market research & analytics using various platforms including voice - inbound and outbound, back-office support, online chat, mail room and other business support services.

Our award-winning content and publishing services provide complete, end-to-end solutions for information providers and all businesses involved in content production. Our differentiation is in focusing on solutions and services that enable customers to find new ways to monetize their content assets, measurably improve performance, and increase revenues across their entire operation. From digital product conception, content creation and multichannel distribution, to post-delivery customer and IT support, we align ourselves with our customers as they streamline their operations to maximise cost-efficiencies and improve their ROI while connecting them with new, digitally savvy audiences.

Chairman's Statement

The strong financial performance of iEnergizer in 2017 reflects the outcome of adding several new customers across all verticals, together with continued maintenance of existing key customer relationships, and active monitoring of costs, which resulted in an overall profit (PBT) growth of around 10%. Our strategy, focused on offering differentiated services, has been designed to ensure long-term value creation for our shareholders.

The underlying businesses in all of our three divisions have performed well. The RTP (Real Time Processing) division posted revenue growth of over 19.1%, outperforming expectations as key clients continued to increase workload volumes throughout the year. The BOS division continued to deliver seamlessly, with top line growth of 6.8%. The Content Services division revenue has been stable with the operating profits maintained at $12.2m ($12.4m in 2016).

Following our review, the management team now operates with more simplified reporting structures and streamlined management positions. Investments in technology, identification of significant opportunities in complementary processes and diversification into new product lines (Author Marketing Services, Conference & Abstract Management Services etc.) have put us on a profitable growth path, which is expected to continue in coming years.

The overall outsourcing global market continues to expand, but increasingly the functions of outsourcing are changing dramatically. The number of preferred vendors in any given contract is consolidating and the functions outsourced are becoming increasingly sophisticated. iEnergizer is well positioned to benefit from this trend as an essential long-term-partner that delivers high quality, complex processes. The Company has developed end-to-end Lifecycle Management (LCM) solutions, so that as companies streamline and consolidate their operations, iEnergizer can act as a preferred vendor and single partner who can meet all of these needs while providing maximum cost-efficiencies.

The Management

Through their strength of leadership, our management team has helped iEnergizer grow over the last decade. The entrepreneurial approach has been a true asset to the Company. It has enabled us to identify new markets, customers and product lines in addition to providing high quality service to our existing clients.

I would like to thank each and every one of our colleagues for their hard work and commitment to iEnergizer. It has been a tough year but the focus on execution remains outstanding and sets the company on a sustainable path of real growth.

Marc VassanelliChairman of the Board 

Executive Director's Statement

Overall profitability of the company has improved through addition of new customers together with sustained maintenance of key customer contracts and focus on existing business. Fiscal 2017 has been a year of maintained growth with a positive outlook.

Financial Overview

Revenues grew to $146.3m (2016: $139.7m). Profit before taxation grew to $22.7m (2016: $20.7m). Growth in profit is primarily on account of maintaining profitable vendor contracts with key customers and effective cost management across all verticals of the company. Further, through repayments, long term Debt of the Company reduced from $73.7 million to $61.1 million.

By service line, the RTP (Real Time Processing) division posted revenue growth of 19.1%, outperforming our own expectations as key clients continued to increase volumes throughout the year. The Back Office Service division continued to grow, delivering 6.8% revenue growth over fiscal 2016. The top five customers across the RTP and BOS divisions together grew revenues 3.3% over fiscal 2016, reflective of both retaining key clients and growing 'wallet share' within key accounts.

Content delivery services revenue has been stable with the operating margins maintained delivering an operating profit of $12.2m ($12.4m in 2016) with the management being able to manage operational costs by active monitoring and effective utilization of resources. The content delivery segment is focusing on existing business by renewing key contracts, entering into more profitable contracts with new clients, and entering into new service lines based on requirements of existing and new clients.

Business Review

We have more fully aligned the Company with the market opportunity to take advantage of the rapid evolution in digital technology and solutions. Existing and new business from key customers has contributed to revenue growth. Volumes processed for key customers increased, without much additional work-force resource, reflective of the opportunity to port expertise from one discipline to another and to utilize technology solutions. The digital age presents both unprecedented opportunities and challenges to enterprises. It requires that companies adapt the way that they do business. iEnergizer's focus is to provide enterprises with an integrated suite of solutions. Digital-first production is a way to produce exciting and more effective new content products and forge new revenue streams. It is an opportunity to streamline workflows while generating revenue and eliminating expenses. iEnergizer's expertise helps companies in any industry to apply digital technology to monetize legacy content, produce valuable new product offerings, and increase revenues across their entire operation.

From digital product conception, content creation and multichannel distribution, to post-delivery customer and IT support, we are positioned to work alongside our customers as they streamline their operations to maximise their cost-efficiencies and improve their ROI while connecting them with new, digitally savvy audiences. Our direct customers include a number of the world's largest publishers, Fortune 500 corporations and professional service providers.

We have worked hard to develop our differentiated offering and advantageous market positioning. Enterprise continues to offer the greatest long-term opportunity for the company and this is applicable across the Group's segments. The sales focus has three clear, concise strategies: to enhance and grow key accounts; to identify and win new business through new customers as well as our existing target accounts; and to cross-sell and generate leads for additional services.

The Company's outsourcing services remain structured around industry-focused Business Process Outsourcing (BPO) services, across all three segments. The verticals served include: Banking Financial Services and Insurance (BFSI); Publishing; Entertainment and Online Video Gaming; Information Technology; Healthcare and Pharmaceuticals.

Outlook

As we look into fiscal 2018 and beyond, we see a sizeable project pipeline, in both enterprise solutions across the group and further growth in the content services segment. These relate to new product launches such as Conference & Abstract Management (CAMPS), Author Marketing Service (Narritas) and Article Processing Charge Collections System (SciPris), combined with continued solid momentum in both Real Time Processing and Back Office Service segments. We expect the business to continue to deliver on its strategy, and we continue to keep a close eye on our costs, as the revised structure and new initiatives continue to take effect in the content delivery segment. The operational leverage in the business model enables us to capitalise substantially on revenue growth opportunities presented in the pipeline. With a solid foundation, strong operational execution, new sales initiatives, focused differentiated offerings, a healthy balance sheet, and the substantial opportunities identified, the Board has confidence that the Company is well-set on its growth path as a unique, end-to-end digital solution enabler.

Anil AggarwalChief Executive Officer and Executive Director

BOARD AND EXECUTIVE MANAGEMENT

Marc Vassanelli (46) - Chairman

Mr. Vassanelli brings extensive industry knowledge and experience of successfully growing businesses, from established business services (while CFO of ConvergeOne) to media start-ups (during his time as CEO and President of MV3 Ltd). He brings comprehensive expertise in change management, having successfully managed the integration of Equiniti and Xafinity to form Equiniti Group (a $510m+ revenue UK BPO firm). He also led the turnaround of the $1.5bn EMEA region of Marsh (a portfolio company of Marsh & McLennan) ahead of becoming the Marsh EMEA CFO. Mr. Vassanelli's previous strategic, operational and financial roles spanning private equity, consulting and banking across multiple industries, will bring invaluable insight and knowledge to the iEnergizer Board. Mr. Vassanelli sits on the audit, remuneration and nomination committees of the Company.

Anil Aggarwal (56) - Chief Executive Officer & Executive Director

Mr. Aggarwal is a first generation entrepreneur and is founder and promoter of iEnergizer. He has promoted and managed several successful businesses in various territories including Barker Shoes Limited in the UK. Mr. Aggarwal is primarily responsible for business development, strategy and overall growth for the company. 

Richard Day (57)-Chief Financial Officer (non-Board position)

Mr. Day joined iEnergizer in 2016 and he provides counsel and support on various financial matters including debt assistance. He was a founding partner of institutional stockbroker Arden Partners where he worked from 2002 until last year and was Head of Corporate Finance for most of his time there. Prior to this he spent 12 years in corporate finance at Cazenove & Co. Richard is a qualified solicitor having worked with a number of law firms including Simmons & Simmons and Charles Russell.

Christopher de Putron (43) - Non Executive Director

Mr. de Putron is a financial services professional with over 21 years experience in the fiduciary and funds industry in both Guernsey and Bermuda. He is the Managing Director of Jupiter Trustees Limited, a Guernsey based independent fiduciary firm and Jupiter Fund Services Limited a Guernsey based independent fund administration company, and a director of Capita Registrars (Guernsey) Limited. Previously he has worked at fiduciary companies in both Guernsey and Bermuda including Rothschild, Bank of Bermuda and HSBC. Mr. de Putron has a business economics degree from the University of Wales and is a member of the Society of Trust and Estate Practitioners. Mr. de Putron sits on the audit, remuneration and nomination committees of the Company.

Mark De La Rue (48) - Non-Executive Director

Mr. De La Rue is a Fellow of the Association of Chartered Certified Accounts (ACCA) and a financial services professional with over 24 years experience in the accounting and fiduciary industries in Guernsey. He is a director of Jupiter Trustees Limited, a Guernsey based independent fiduciary firm and Jupiter Fund Services Limited a Guernsey based independent fund administration company, and a director of Capita Registrars (Guernsey) Limited.

DIRECTORS' REPORT

The Directors present their report and the financial statements of iEnergizer Limited ("the Company") and its Subsidiaries (collectively the "Group"), which covers the year from 1 April 2016 to 31 March 2017.

Principal activity and review of the business

The principal activity of the Company is that of providing Content Transformation Services and Business Process Outsourcing Services.

Results and dividends

The trading results for the year and the Group's financial position at the end of the year are shown in the attached financial statements. The Directors have recommended payment of a dividend of nil p per share (FY2016 nil p).

Review of business and future developments

A review of the business and expected future developments of the Company are contained in the Chairman's statement attached to this report.

Directors and Directors' interests

The Directors of the Company during the year are attached to this report.

Directors remuneration

The Director's remuneration for the year ended 31 March 2017 was:

Directors share option

During the year ended 31 March 2017, no key management personnel have exercised options granted to them.

Related party contract of significance

The related party transactions are noted in the financial statement.

Internal control

The Directors acknowledge their responsibility for the Company's system of internal control and for reviewing its effectiveness. The system of internal control is designed to manage the risk of failure to achieve the Company's strategic objectives. It cannot totally eliminate the risk of failure but will provide reasonable, although not absolute, assurance against material misstatement or loss.

Going concern

After making enquiries, the Directors have a reasonable expectation that the Company will have adequate resources to continue in operational existence for the foreseeable future. For this reason, they continue to adopt the going concern basis in preparing the financial statements.

Directors' responsibilities

The Directors are responsible for preparing the Directors' reports and consolidated financial statements for each financial year, which give a true and fair view of the state of affairs of the Group and of the profit or loss of the Group for that year. In preparing those financial statements the Directors are required to:

· Select suitable accounting policies and apply them consistently;

· Make judgments and estimates that are reasonable and prudent;

· State whether International Financial Reporting Standards have been followed subject to any material departures disclosed and explained in the financial statements; and

· Prepare consolidated financial statements on a going concern basis unless it is inappropriate to presume that the Group will continue in business.

The Directors confirm that the financial statements comply with the above requirements.

The Directors are responsible for keeping proper accounting records, which disclose with reasonable accuracy at any time, the financial position of the Company and of the Group to enable them to ensure that the financial statements comply with the requirements of the Companies (Guernsey) Law, 2008. They are also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

The Directors are responsible for the maintenance and integrity of the corporate and financial information included on the Group's website.

Legislation in the Guernsey governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.

To the best of our knowledge and belief:

· The financial statements have been prepared in accordance with International Financial Reporting Standards;

· The financial statements give a true and fair view of the financial position and results of the Group;

Auditors

All of the current Directors have taken all the steps that they ought to have taken to make themselves aware of any information needed by the Company's Auditors for the purposes of their audit and to establish that the Auditors are aware of that information. The Directors are not aware of any relevant audit information of which the Auditors are unaware.

On behalf of the board

_______________________________

Director

23 June 2017

CORPORATE GOVERNANCE 

The Directors recognise the importance of sound corporate governance and intend for the Company to comply with the main provisions of the QCA Guidelines insofar as they are appropriate given the Company's size and stage of development. In maintaining a corporate governance regime, the Company is prepared beyond that required by law for Guernsey companies, again in keeping with the Company's size and stage of development.

Board of Directors

The Board is responsible for the proper management of the Company. The Board comprises of one Executive Director, Anil Aggarwal, and three Non-Executive Directors, Chris de Putron, Mark De La Rue and Marc Vassanelli (Chairman). The resume of the board members is as outlined in the statement attached to this report.

The Executive Director brings knowledge of the Business Process Outsourcing industry, the investment industry and a range of general business skills. The Non-Executive Directors form a number of committees to assist in the governance of the Company. Details are below.

All Directors have access to independent professional advice, at the Company's expense, if and when required.

Sub-Committees

The Board has appointed the three sub-committees outlined below. The sub-committees will meet at least once each year.

Audit Committee

The Audit committee comprises of Marc Vassanelli as chairman and Chris de Putron. The committee is responsible for ensuring that the financial performance of the Company is properly monitored and reported on. The committee is also responsible for meeting with the auditors and reviewing findings of the audit with the external auditor. It is authorised to seek any information it properly requires from any employee and may ask questions of any employee. It will meet the auditors once per year without any members of management being present and is also responsible for considering and making recommendations regarding the identity and remuneration of such auditors.

Remuneration Committee

The Remuneration committee comprises of Marc Vassanelli as chairman and Chris de Putron. The committee will consider and recommend to the Board the framework for the remuneration of the executive directors of the Company and any other senior management. It will further consider and recommend to the Board the total individual package of each executive director including bonuses, incentive payments and share options or other share awards. In addition, subject to existing contractual obligations, it will review the design of all share incentive plans for approval by the Board and the Company's shareholders and, for each such plan, will recommend whether awards are made and, if so, the overall amount of such awards, the individual awards to executive directors and performance targets to be used. No director will be involved in decisions concerning his own remuneration.

Nomination Committee

The Nomination committee comprises Chris de Putron as chairman and Marc Vassanelli. The committee will consider the selection and re-appointment of Directors. It will identify and nominate candidates to all board vacancies and will regularly review the structure, size and composition of the board (including the skills, knowledge and experience) and will make recommendations to the Board with regard to any changes.

Share Dealing

The Company has adopted a share dealing code (based on the Model Code), and the Company will take all proper and reasonable steps to ensure compliance by Directors and relevant employees.

The City Code on Takeovers and Mergers

The Code applies to offers for all listed and unlisted public companies considered by the Panel resident in the UK, the Channel Islands or the Isle of Man. The Panel will normally consider a company to be resident only if it is incorporated in the United Kingdom, the Channel Islands or the Isle of Man and has its place of central management in one of those jurisdictions. Although the Company is incorporated in Guernsey and its place of management is in Guernsey, the Panel considers that the code does not apply to the Company. It is emphasised that although the Ordinary Shares will trade on AIM, the company will not be subject to takeover regulations in the UK; however, certain provisions analogous to parts of the Code in particular the making of mandatory offers have been incorporated into the Articles, which are available on the Company website, www.ienergizer.com.

Disclosure and Transparency Rules

Majority Shareholdings:

The following persons are directly or indirectly interested (within the mean of Part VI of FSMA and DTR5) in three percent or more of the issued share capital of iEnergizer:

Control by Significant Shareholder

Mr. Anil Aggarwal, through private companies-mainly Geophysical Substrata Ltd. (GSL) and EICR (Cyprus) Limited (EICR), owns a significant percentage of the Company. Mr. Aggarwal could exercise significant influence over certain corporate governance matters requiring shareholder approval, including the election of directors and the approval of significant corporate transactions and other transactions requiring a majority vote.

The Company, Arden Partners (Broker & Nomad), GSL, EICR and Mr. Anil Aggarwal have entered into a relationship agreement to regulate the arrangements between them. The relationship agreement applies for as long as GSL/EICR directly or indirectly holds in excess of thirty per cent of the issued share capital of the Company and the Company's shares remain admitted to trading on AIM. The relationship agreement includes provisions to ensure that:

i. the Board and its committees are able to carry on their business independently of the individual interests of EICR;

ii. the constitutional documents of the Company are not changed in such a way which would be inconsistent with the Relationship Agreement;

iii. all transactions between the Group and EICR (or its affiliates) are on a normal commercial basis and concluded at arm's length;

iv. EICR shall not:

(i) exercise the voting rights attaching to its Ordinary Shares; or

(ii) procure that the voting rights attaching to its Ordinary Shares be exercised,

so as (a) to appoint any person who is connected to EICR to the Board if, as a direct consequence of such appointment, the number of persons connected to EICR appointed to the Board would exceed the number of independent Directors appointed to the Board, unless such appointment(s) has been previously approved by the nomination committee of the Board constituted by a majority of independent Directors; or (b) to remove any independent Director from the Board, unless such removal has previously been recommended by a majority of the independent Directors, excluding the independent Director in question; or (c) to cancel the Admission, unless the cancellation has previously been recommended by a majority of the independent Directors; and

v. certain restrictions are put in place to prevent interference by the Shareholder with the business of the Company.

Independent auditors' report

To the Members of iEnergizer Limited (the "Company") and its subsidiaries

(collectively the "Group")

Our opinion on the consolidated financial statements is unqualified.

In our opinion the consolidated financial statements:

· give a true and fair view of the state of the Group's affairs as at 31 March 2017 and of its profit for the year then ended;

· have been properly prepared in accordance with International Financial Reporting Standards (IFRSs) as adopted by the European Union; and

· have been prepared in accordance with the requirements of The Companies (Guernsey) Law, 2008.

Who we are reporting to

This report is made solely to the company's members, as a body, in accordance with Section 262 of The Companies (Guernsey) Law, 2008. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members as a body, for our audit work, for this report, or for the opinions we have formed.

What we have audited

The Group's consolidated financial statements comprise of the Consolidated Statement of Financial Position, the Consolidated Income Statement, the Consolidated Statement of Comprehensive Income, the Consolidated Statement of Changes in Equity, the Consolidated Statement of Cash Flows and the related notes.

The financial reporting framework that has been applied in their preparation is applicable law and IFRSs as adopted by the European Union.

Matters on which we are required to report by exception

Under The Companies (Guernsey) Law, 2008 we are required to report to you if, in our opinion:

· proper accounting records have not been kept by the Company; or

· the financial statements are not in agreement with the accounting records; or

· we have not obtained all the information and explanations, which to the best of our knowledge and belief, are necessary for the purposes of our audit.

Under the ISAs (UK and Ireland), we are required to report to you if, in our opinion, information in the annual report is:

· materially inconsistent with the information in the audited financial statements; or

· apparently materially incorrect based on, or materially inconsistent with, our knowledge of the Group acquired in the course of performing our audit; or

· otherwise misleading.

We have nothing to report in respect of the above.

Responsibilities for the financial statements and the audit

What an audit of financial statements involves:

A description of the scope of an audit of financial statements is provided on the Financial Reporting Council's website at www.frc.org.uk/auditscopeukprivate

What the directors are responsible for:

As explained more fully in the Directors' Responsibilities Statement set out on page 13, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view.

What are we responsible for:

Our responsibility is to audit and express an opinion on the financial statements in accordance with applicable law and International Standards on Auditing (UK and Ireland). Those standards require us to comply with the Auditing Practices Board's Ethical Standards for Auditors.

Grant Thornton Limited

Chartered Accountants

St Peter Port, Guernsey, Channel Islands

23 June 2017

Consolidated Statement of Financial Position

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

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

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

The Consolidated Financial Statements have been approved and authorized for issue by the Board of Directors on 23 June 2017

Director

Consolidated Income Statement

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

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

Consolidated Statement of Comprehensive Income

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

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

Consolidated Statement of Changes in Equity

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

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

Consolidated Statement of Changes in Equity

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

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

Consolidated Statement of Cash Flows

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

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

Notes to the Consolidated Financial Statements

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

1. INTRODUCTION

iEnergizer Limited (the 'Company' or 'iEnergizer') was incorporated in Guernsey on 12 May 2010. It is a 'Company limited by shares' and is domiciled in Guernsey. The registered office of the Company is located at Mont Crevelt House, Bulwer Avenue, St. Sampson, Guernsey, GY2 4 LH. iEnergizer was listed on the Alternative Investment Market ('AIM') of the 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 Aptara Limited and Aptara Inc. and subsidiaries (together the 'Group') is engaged in the business of call centre operations, providing business process outsourcing (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

The consolidated financial statements of the Group for the year ended 31 March 2017 have been prepared in accordance with International Financial Reporting Standards (IFRS) as adopted by European Union (EU) under the historical cost convention on the accrual basis except for certain financial instruments and some of the employee benefits as give in Note 18, which have been measured at fair values.

The significant accounting policies that have been used in the preparation of these consolidated financial statements are summarized below. The consolidated financial statements have been prepared on a going concern basis.

3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

3.1 BASIS OF CONSOLIDATION

The Group's consolidated financial statements include financial statements of iEnergizer Limited, the parent company and all of its subsidiaries for the year ended 31 March 2017. Subsidiaries are all entities over which the Group has the power to control. Control exists when the parent has power to control the financial and operating policies of the entity, is exposed, or has rights, to variable returns from its involvement with the entity and has the ability to affect those returns by using its power over the entity. iEnergizer obtains and exercises control through more than half of the voting rights of the entity.

All intra-group balances, transactions, income and expenses including unrealized income or expenses are eliminated in full on consolidation. Amounts reported in the financial statements of subsidiaries have been adjusted where necessary to ensure consistency with the accounting policies adopted by the Group.

3.2 FOREIGN CURRENCY TRANSLATION

These consolidated financial statements are presented in USD ('United States Dollar'), which is also the Company's functional currency. Each entity in the Group determines its own functional currency and items included in the financial statement of each entity are measured using that functional currency. The functional currency of each entity has been determined on the basis of the primary economic environment in which each entity of the Group operates.

a. Transactions and balances

Transactions in foreign currencies are initially recorded by the Group entities at their respective functional currency rates prevailing at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are retranslated at the functional currency spot rate of exchange ruling at the reporting date and the resultant foreign exchange gain or loss on re-measurement of monetary item or settlement of such transactions are recognized in profit or loss.

Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rates as at the dates of the initial transactions.

b. Group companies

In the Group's consolidated financial statements, all assets, liabilities and transactions of Group entities with a functional currency other than USD (the Group's presentation currency) are translated into USD upon consolidation. The functional currencies of the entities in the Group have remained unchanged during the reporting period.

The assets and liabilities of foreign operations are translated into USD at the rate of exchange prevailing at the reporting date and their consolidated statements of comprehensive income are translated at average exchange rates where this is a reasonable approximation to actual rates during the year. The exchange differences arising on the translation are recognized in other comprehensive income. On disposal of a foreign operation, the component of other comprehensive income relating to that particular foreign operation is recognized in profit or loss. Goodwill and fair value adjustments arising on the acquisition of a foreign entity have been treated as assets and liabilities of the foreign entity and translated into USD at the closing rate.

3.3 REVENUE RECOGNITION

Revenue is recognized to the extent that it is probable that the economic benefits will flow to the Group and the revenue can be reliably measured, regardless of when the payment is being made. Revenue is measured at the fair value of the consideration received or receivable, taking into account contractually defined terms of payment and excluding taxes or duty. The specific recognition criteria described below must also be met before revenue is recognized.

Rendering of services

Revenue comprises revenue from call center operations, business process outsourcing and also content process outsourcing solutions. These services are rendered through contractual arrangements entered into with customers by the Group companies.

Revenue from call center operations and business process outsourcing is primarily recognized by reference to hours/ daily basis as the time is incurred.

Content process outsourcing solutions are primarily on fixed price contract basis. In such cases, revenue is recognized when the services have been fully rendered and deemed to be accepted by the customers as the outcome of the related transactions cannot be estimated reliably and it is not probable that the costs incurred will be recovered until accepted by the customer. The associated costs, in this case, are recognized as and when incurred.

Amounts billed, where revenue recognition criteria have not been met are recorded as deferred revenue and are recognized when all the recognition criteria have been met.

Finance income

Finance income consists of interest income on funds invested. Finance income is recognized as it accrues in profit or loss, using the effective interest rate method.

3.4 PROPERTY, PLANT AND EQUIPMENT

Items of plant and equipment are stated at cost, net of accumulated depreciation and/or accumulated impairment losses, if any. Such cost includes the cost of replacing part of the plant and equipment and borrowing costs for long- term construction projects if the recognition criteria are met. When significant parts of property, plant and equipment are required to be replaced in intervals, the Group recognizes such parts as individual assets with specific useful lives and depreciation, respectively. Likewise, when a major inspection is performed, its cost is recognized in the carrying amount of the plant and equipment as a replacement if the recognition criteria are satisfied. All other repair and maintenance costs are recognized in profit or loss as incurred.

Assets acquired under finance leases are capitalized as assets by the Group at the lower of the fair value of the leased property or the present value of the related lease payments or where applicable, the estimated fair value of such assets at the inception of the lease. Leased assets are depreciated over the useful life of the asset. However, if there is no reasonable certainty that the Group will obtain ownership by the end of the lease term, the asset is depreciated over the shorter of the estimated useful life of the asset and the lease term.

Depreciation is calculated on a straight-line basis over the estimated useful life of the asset as follows:

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

An item of property, plant and equipment and any significant part initially recognized is de-recognized upon disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss arising on de-recognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in profit or loss when the asset is derecognized.

The assets' useful lives and methods of depreciation are reviewed at each financial year end, and adjusted prospectively, if appropriate.

Advances paid for the acquisition of property, plant and equipment outstanding at the end of reporting period and the cost of property, plant and equipment not put to use before such date are disclosed as 'Capital work-in-progress'.

3.5 GOODWILL

Goodwill represents the future economic benefits arising from a business combination that are not individually identified and separately recognized. Goodwill is carried at cost less accumulated impairment losses. The impairment analysis of goodwill is carried out annually at cash generating unit (CGU) level to evaluate whether events or changes have occurred that would suggest an impairment of carrying value.

3.6 OTHER INTANGIBLE ASSETS

Intangible assets acquired separately are measured on initial recognition at cost. The cost of intangible assets acquired in a business combination is initially recorded at its fair value as at the date of acquisition. Following initial recognition, intangible assets are carried at cost less any accumulated amortization and any accumulated impairment losses.

Intangible assets are amortized over their useful economic life on a straight line basis and assessed for impairment whenever there is an indication that the intangible asset may be impaired. Intangibles with definite useful lives are amortized on a straight line basis. The amortization period and the amortization method for an intangible asset are reviewed at least at each financial year end. Changes in the expected useful life or the expected pattern of consumption of future economic benefits embodied in the asset are accounted for by changing the amortization period or method, as appropriate, and are treated as changes in accounting estimates.

Gains or losses arising from de-recognition of an intangible asset are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognized in profit or loss when the asset is derecognized.

Useful lives are reviewed at each reporting date. In addition, intangibles with indefinite useful lives are subject to impairment testing annually. Amortization has been included within 'depreciation and amortization'. The following useful lives are applied:

• Software: 2-5 years

• Customer contracts and relationships: 2-7 years

• Trademark and patents (having indefinite life): Tested for impairment annually

3.7 LEASES

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 profit or loss 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.

3.8 ACCOUNTING FOR INCOME TAXES

Income tax expense recognized in profit or loss comprise of current and deferred tax. Income tax expense is recognized in profit or loss except to the extent that it relates to items recognized directly in equity or other comprehensive income, in which case it is recognized in equity or other comprehensive income respectively. Current tax is the expected tax payable on the taxable income for the year, using tax rates and laws enacted or substantively enacted at the reporting date, and any adjustment to tax payable in respect of previous years.

Deferred income tax is recognized using the liability method, providing for temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes.

Deferred income tax is not recognized for the following temporary differences:

(i) the initial recognition of assets or liabilities in a transaction that is not a business combination and that affects neither accounting nor taxable profit, and

(ii) Differences relating to investments in subsidiaries and jointly controlled entities to the extent that it is probable that they will not reverse in the foreseeable future.

In addition, deferred tax is not recognized for taxable temporary differences arising upon the initial recognition of goodwill. Deferred tax is measured at the tax rates and laws that are expected to be applied to the temporary differences when they reverse, based on the laws that have been enacted or substantively enacted by the reporting date. Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax liabilities and assets, and they relate to income taxes levied by the same tax authority on the same taxable entity, or on different tax entities, but they intend to settle current tax liabilities and assets on a net basis or their tax assets and liabilities will be realized simultaneously.

A deferred tax asset is recognized to the extent that it is probable that future taxable profits will be available against which the temporary difference can be utlized. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realized.

Changes in deferred tax assets or liabilities are recognized as a component of tax income or expense in profit or loss, except where they relate to items that are recognized in other comprehensive income or directly in equity, in which case the related deferred tax is also recognized in other comprehensive income or equity, respectively.

Deferred tax in respect of undistributed earnings of subsidiaries is recognized except where the Group is able to control the timing of the reversal of the temporary difference and that the temporary difference will not reverse in the foreseeable future.

Deferred tax asset/liability has been recognized for the carry forward of unused tax losses and unused tax credits to the extent that it is probable that future taxable profits will be available against which the unused tax losses and unused tax losses and unused tax credits can be utilized.

3.9 POST EMPLOYMENT BENEFITS, SHORT-TERM AND LONG TERM EMPLOYEE BENEFITS AND EMPLOYEE COSTS

The Group provides post-employment benefits through defined contribution plans as well as defined benefit plans.

Defined contribution plan

A defined contribution plan is a post-employment benefit plan under which an entity pays fixed contributions into a separate entity and will have no legal or constructive obligation to pay further amounts. Obligations for contributions to recognized provident funds and other social securities which are defined contribution plans are recognized as an employee benefit expense in profit or loss when they are incurred.

Defined benefit plans

A defined benefit plan is a post-employment benefit plan other than a defined contribution plan. Under a defined benefit plan, it is the Group's obligation to provide agreed benefits to the employees. The related actuarial and investment risks fall on the Group.

Liabilities with regard to the defined benefit plans are determined by actuarial valuation, performed by an independent actuary, at each balance sheet date using the projected unit credit method.

The Group recognizes the net obligation of a defined benefit plan in its balance sheet as an asset or liability. Gains and losses through re-measurements of the net defined benefit liability/ (asset) are recognized in other comprehensive income. The actual return of the portfolio of plan assets, in excess of the yields computed by applying the discount rate used to measure the defined benefit obligation is recognized in other comprehensive income. The effect of any plan amendments is recognized in net profits in the statement of comprehensive income. The net interest cost, past service cost and current service cost is recognized in profit or loss.

Short-term benefits

Short-term benefit obligations are measured on an undiscounted basis and are expensed as the related service is provided.

A liability is recognized for the amount expected to be paid under short-term cash bonus or profit-sharing plans if the Group has a present legal or constructive obligation to pay this amount as a result of past service provided by the employee and the obligation can be estimated reliably.

Compensated absences

Eligible employees are entitled to accumulate compensated absences up to prescribed limits in accordance with the Group's policy and receive cash in lieu thereof. The Group measures the expected cost of accumulating compensated absences as the additional amount that the Group expects to pay/incur as a result of the unused entitlement that has accumulated at the reporting date. Such measurement is based on actuarial valuation as at the reporting date carried out by a qualified actuary.

3.10 IMPAIRMENT TESTING OF FINANCIAL ASSETS, GOODWILL, INTANGIBLE ASSETS AND PROPERTY, PLANT AND EQUIPMENT

Financial assets

A financial asset is assessed at each reporting date to determine whether there is any objective evidence that it is impaired. A financial asset is considered to be impaired if objective evidence indicates that one or more events had a negative effect on the estimated future cash flows of that asset.

An impairment loss, in respect of a financial asset measured at amortized cost is calculated as the difference between its carrying amount, and the present value of the estimated future cash flows discounted at the original effective interest rate.

Individually significant financial assets are tested for impairment on an individual basis. All impairment losses are recognized in profit or loss. An impairment loss is reversed if the reversal can be related objectively to an event occurring after the impairment loss was recognized. For financial assets measured at amortized cost, the reversal is recognized in profit or loss.

Non-financial assets

The carrying amounts of the Group's non-financial assets, other than deferred tax assets are reviewed at each reporting date to determine whether there is any indication of impairment. If any such indication exists, then the asset's recoverable amount is estimated. For goodwill and intangible assets that have indefinite lives or that are not yet available for use, the recoverable amount is estimated each year at the same time.

The recoverable amount of an asset or cash-generating unit (as defined below) is the greater of its value in use or its fair value less costs to sell. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. For the purpose of impairment testing, assets are grouped together into the smallest group of assets that generates cash inflows from continuing use that are largely independent of the cash inflows of other assets or groups of assets (the "cash-generating unit"). The goodwill acquired in a business combination is, for the purpose of impairment testing, allocated to cash-generating units that are expected to benefit from the synergies of the combination and represent the lowest level within the Group at which management monitors goodwill.

An impairment loss is recognized if the carrying amount of an asset or the cash-generating unit exceeds its estimated recoverable amount. Impairment losses are recognized in profit or loss. Impairment losses recognized in respect of cash-generating units are allocated first to reduce the carrying amount of any goodwill allocated to the units and then to reduce the carrying amount of the other assets in the unit on a pro-rata basis.

An impairment loss in respect of goodwill is not reversed. In respect of other assets, impairment losses recognized in prior periods are assessed at each reporting date for any indications that the loss has decreased or no longer exists. An impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount. An impairment loss is reversed only to the extent that the asset's carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortization, if no impairment loss had been recognized.

3.11 FINANCIAL INSTRUMENTS

Financial assets and financial liabilities are recognized when the Group becomes a party to the contractual provisions of the financial instrument.

Financial assets are derecognized when the contractual rights to the cash flows from the financial asset expire, or when the financial asset and all substantial risks and rewards are transferred.

A financial liability is derecognized when it is extinguished, discharged, cancelled or expires.

Financial assets and financial liabilities are measured initially at fair value plus transaction costs, except for financial assets and financial liabilities carried at fair value through profit or loss, which are measured initially at fair value, excluding transaction costs which are expensed immediately. Financial assets and financial liabilities are measured subsequently as described below.

Financial assets

Non-derivative financial assets consist of investments in equity, trade receivables, certain other assets, cash and cash equivalents.

For the purpose of subsequent measurement, financial assets are classified into the following categories upon initial recognition:

· loans and receivables

· financial assets at fair value through profit or loss

The category determines subsequent measurement and whether any resulting income and expense is recognized in profit or loss.

All income and expenses relating to financial assets that are recognized in profit or loss are presented within 'finance costs' or 'finance income'.

Subsequent to initial recognition, non-derivative financial instruments are measured as described below.

Cash and cash equivalents

Cash and cash equivalents in the consolidated statement of financial position and consolidated statement of cash flow comprise cash at banks and on hand and short-term deposits with an original maturity of three months or less from inception and which are subject to an insignificant risk of changes in value. 

Restricted deposits

Restricted deposits consist of deposits pledged with government authorities for the Group's Indian subsidiaries and deposits restricted as to usage under lien to banks for guarantees given by the Company.

Others

Other non-derivative financial instruments are measured at amortized cost using the effective interest rate method, less any impairment losses.

The Group holds derivative financial instruments to hedge its foreign currency exposure. The Group does not apply hedge accounting to these instruments.

Derivatives are recognized initially at fair value; transaction costs are recognized in profit or loss when incurred. Subsequent to initial recognition, derivatives are measured at fair value, and changes therein are recognized in profit or loss.

Financial liabilities

The Group's financial liabilities include trade and other payables, borrowings and derivative financial instruments. Trade and other payables and borrowings are initially measured at fair value and subsequently measured at amortized cost using effective interest rate method. They are included in the consolidated statement of financial position line items 'long-term borrowings' and 'trade and other payables'.

Financial liabilities are recognized when the Group becomes a party to the contractual agreements of the instrument. All interest related charges is recognized as an expense in "finance cost" in profit or loss.

3.12 OFFSETTING OF FINANCIAL INSTRUMENTS

Financial assets and financial liabilities are offset against each other and the net amount reported in the consolidated statement of financial position only if there is a currently enforceable legal right to offset the recognized amounts and there is an intention to settle on a net basis, or to realize the assets and settle the liabilities simultaneously.

3.13 PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS

Provisions are recognized when present obligations as a result of past events will probably lead to an outflow of economic resources from the Group and they can be estimated reliably. Timing or amount of the outflow may still be uncertain. A present obligation arises from the presence of a legal or constructive obligation that has resulted from past events.

Provisions are measured at the estimated expenditure required to settle the present obligation, based on the most reliable evidence available at the end of reporting period, including the risks and uncertainties associated with the present obligation.

In those cases where the possible outflow of economic resource as a result of present obligations is considered improbable or remote, or the amount to be provided for cannot be measured reliably, no liability is recognized in the consolidated statement of financial position.

Any reimbursement that the Group can be virtually certain to collect from a third party with respect to the obligation is recognized as a separate asset. However, this asset may not exceed the amount of the related provisions. All provisions are reviewed at each reporting date and adjusted to reflect the current best estimate.

3.14 BUSINESS COMBINATIONS

The Group applies the acquisition method in accounting for business combinations. The consideration transferred by the Group to obtain control of a subsidiary is calculated as the sum of the acquisition-date fair values of assets transferred, liabilities incurred and the equity interests issued by the Group, which includes the fair value of any asset or liability arising from a contingent consideration arrangement. Acquisition costs are expensed as incurred.

The Group recognizes identifiable assets acquired and liabilities assumed in a business combination regardless of whether they have been previously recognized in the acquirer's financial statements prior to the acquisition. Assets acquired and liabilities assumed are generally measured at their acquisition-date fair values.

Goodwill is stated after separate recognition of identifiable intangible assets. It is calculated as the excess of the sum of a) fair value of consideration transferred, b) the recognized amount of any non-controlling interest in the acquiree and c) acquisition-date fair value of any existing equity interest in the acquiree, over the acquisition-date fair values of identifiable net assets. If the fair values of identifiable net assets exceed the sum calculated above, the excess amount (i.e. gain on a bargain purchase) is recognized in profit or loss immediately.

For common control transactions, not covered under IFRS 3 (revised), the Group applies pooling of interest method. Under a pooling of interests-type method, the acquirer accounts for the combination as follows:

· The assets and liabilities of the acquiree are recorded at book value not fair value (although adjustments should be recorded to achieve uniform accounting policies);

· Intangible assets and contingent liabilities are recognized only to the extent that they were recognized by the acquiree in accordance with applicable IFRS (in particular IAS 38);

· No goodwill is recorded. The difference between the acquirer's cost of investment and the acquiree's equity is presented as a separate reserve within equity on consolidation;

· Any non-controlling interest is measured as a proportionate share of the book values of the related assets and liabilities (as adjusted to achieve uniform accounting policies);

· Any expenses of the combination are written off immediately in the income statement;

· Comparative amounts are restated as if the combination had taken place at the beginning of the earliest comparative period presented.

3.15 EQUITY

Share capital is determined using the nominal value of shares that have been issued.

Additional paid-in capital includes any premium received on the issue of share capital. Any transaction costs associated with the issue of shares is deducted from additional paid-in capital, net of any related income tax benefits.

Foreign currency translation differences on translation of foreign operations are included in the currency translation reserve.

Other components of equity include the following:

· Re-measurement of net defined benefit liability - comprises the actuarial losses from changes in actuarial assumptions and the return on plan assets

· translation reserve - comprises foreign currency translation differences arising from the translation of financial statements of the Group's foreign entities into USD

Retained earnings include all current and prior period earnings, as disclosed in the consolidated income statement.

Share compensation reserve includes cumulative share-based remuneration recognized as an expense in consolidated income statement.

The balance on the merger reserve represents excess of the fair value of the consideration paid over the book value of net assets acquired in a common control transaction accounted for using pooling of interest method.

All transactions with owners of the parent are recorded separately within equity.

3.16 SHARE BASED PAYMENTS

The Group operates equity-settled share based plans for one of its directors and a consultant. Where persons are rewarded using share based payments, the fair values of services rendered by director and others are determined indirectly by reference to the fair value of the equity instruments granted, where the fair value of the services received cannot be reliably measured. This fair value is calculated using the Black Scholes model at the respective measurement date. In the case of employees and others providing services, the fair value is measured at the grant date. The fair value excludes the impact of non-market vesting conditions.

If vesting periods or other vesting conditions apply, the expense is allocated over the vesting period, based on the best available estimate of the number of share options expected to vest. Non-market vesting conditions are included in assumptions about the number of options that are expected to become exercisable. Estimates are subsequently revised, if there is any indication that the number of share options expected to vest differs from previous estimates and any impact of the change is recorded in the year in which that change occurs.

3.17 SIGNIFICANT ACCOUNTING JUDGMENTS, ESTIMATES AND ASSUMPTIONS

The preparation of the Group's consolidated financial statements requires management to make judgments, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the disclosure of contingent liabilities, at the end of the reporting period. However, uncertainty about these judgments, assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of the asset or liability affected in future periods.

In the process of applying the Group's accounting policies, management has made the following judgments, estimates and assumptions which have the most significant effect on the amounts recognized in the consolidated financial information:

Determination of functional currency of individual entities

Following the guidance in IAS 21 "The effects of changes in foreign exchange rates" the functional currency of each individual entity is determined by the management based on the currency of the primary economic environment in which the entity operates. The management believes that each of the individual entity's functional currency reflects the transactions, events and conditions under which the entity conducts its business.

Goodwill impairment review

In assessing goodwill impairment, management makes judgment in identifying the cash-generating units (CGU) to which the goodwill pertains. Management then estimates the recoverable amount of each asset based on expected future cash flows. The recoverable amount of the CGU is determined based on the value-in-use calculations. Estimation uncertainty relates to assumptions about future operating results and the determination of a suitable growth and discount rate (see Note 7).

Recognition of deferred tax assets

The extent to which deferred tax assets can be recognized is based on an assessment of the probability of the Group's future taxable income against which the deferred tax assets can be utlized. In addition, significant judgement is required in assessing the impact of any legal or economic limits or uncertainties in various tax jurisdictions (see Note 11)

Post-employment benefits

The cost of defined employee benefit obligations and the present value of these obligations are determined using actuarial valuations. An actuarial valuation involves making various assumptions. These include the determination of the discount rate, future salary increases, expected return on plan assets, mortality rates and attrition rates. Due to the complexity of the valuation, the underlying assumptions and its long term nature, a defined benefit obligation is highly sensitive to changes in these assumptions. All assumptions are reviewed at each reporting date.

In determining the appropriate discount rate, management considers the interest rates of high quality government bonds denominated in the respective currency in which the benefits will be paid, with extrapolated maturities corresponding to the expected duration of the defined benefit obligation.

The mortality rate is based on publicly available mortality tables for the specific country. Future salary increases are based on expected future inflation rates for the respective countries and expected future salary increases for the respective entities. Attrition rate is based on expected future attrition rate for the respective entities. (see Note 18)

Useful lives of various assets

Management reviews the useful lives of depreciable assets at each reporting date, based on the expected utility of the assets to the Group. The carrying amounts are analysed in Notes 8 and 9. Actual results, however, may vary due to technical obsolescence.

Impairment of trade receivables

As at each reporting date, management makes an estimate of the bad and doubtful trade receivables and records a loss for impairment against the receivables for amounts determined. Though there is a concentration of credit risk with respect to top customers of the Group, management doesn't consider the risk arising from this concentration to be significant considering the credit worthiness of customers. The impairment loss is based solely on an estimate made by management with respect to the recoverability of past due trade receivable. (see Note 12)

4. New and revised standards those are effective for annual period beginning on or after 1 January 2016, which has any impact on the Company.

IFRS 7, 'Financials Instruments - Disclosures'

IFRS-7, 'Financials instruments - Disclosures', provide specific guidance for transferred financials assets to help management determine whether the terms of a servicing arrangement constitute 'Continuing involvement' and, therefore, whether the assets qualified for derecognition. It also provides additional disclosures relating to the offsetting of financials assets and financials liabilities that only need to be included in interim reports if required by IAS-34.

Amendments to IAS-1, 'Presentation of Financials Statements'

Amendments to IAS-1, 'Presentation of Financials Statements', are made in the context of the IASB's disclosure initiative adopted by EU, which explores how financials Statements disclosures can be improved. The Amendments provide clarifications on a number of issues, including materiality, disaggregation and subtotals, notes and other comprehensive income.

5. STANDARDS, AMENDMENTS AND INTERPRETATIONS TO EXISTING STANDARDS THAT ARE NOT YET EFFECTIVE AND HAVE NOT BEEN ADOPTED BY THE GROUP

Summarized in the paragraphs below are standards, interpretations or amendments that have been issued prior to the date of approval of these consolidated financial statements and will be applicable for transactions in the Group but are not yet effective. These have not been adopted early by the Group and accordingly, have not been considered in the preparation of the consolidated financial statements of the Group.

Management anticipates that all of these pronouncements will be adopted by the Group in the first accounting period beginning after the effective date of each of the pronouncements. Information on the new standards, interpretations and amendments that are expected to be relevant to the Group's consolidated financial statements is provided below.

· IFRS 9 Financial Instruments Classification and Measurement

In July 2014, the IASB completed its project to replace IAS 39, Financial Instruments: Recognition and Measurement by publishing the final version of IFRS 9: Financial Instruments. IFRS 9 introduces a single approach for the classification and measurement of financial assets according to their cash flow characteristics and the business model they are managed in, and provides a new impairment model based on expected credit losses. IFRS 9 also includes new guidance regarding the application of hedge accounting to better reflect an entity's risk management activities especially with regard to managing non-financial risks. The new standard is effective for annual reporting periods beginning on or after January 1, 2018 (but not yet endorsed in EU), while early application is permitted. The management is currently evaluating the impact that this new standard will have on its consolidated financial statements.

• IFRS 15 Revenue from contracts with customers

IFRS 15 supersedes all existing revenue requirements in IFRS (IAS 11 Construction Contracts, IAS 18 Revenue and related interpretations). According to the new standard, revenue is recognized to depict the transfer of promised goods or services to a customer in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. IFRS 15 establishes a five step model that will apply to revenue earned from a contract with a customer (with limited exceptions), regardless of the type of revenue transaction or the industry. Extensive disclosures will be required, including disaggregation of total revenue; information about performance obligation; changes in contract asset and liability account balances between periods and key judgments and estimates. The standard permits the use of either the retrospective or cumulative effect transition method. The effective date for adoption of IFRS is annual period beginning on or after 1 January 2018 (but not yet endorsed in EU). The Group is currently evaluating the impact of the above pronouncements on the Group's consolidated financial statements.

• IFRS 16 Leases

On 13 January 2016, the International Accounting Standards Board issued the final version of IFRS 16, Leases. 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 lessee 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 Standard also contains enhanced disclosure requirements for lessees. The effective date for adoption of IFRS 16 is annual periods beginning on or after 1 January 2019 (but not yet endorsed in EU), though early adoption is permitted for companies applying IFRS 15 Revenue from Contracts with Customers. The Company is currently assessing the impact of adopting IFRS 16 on the Company's consolidated financial statements.

6. BASIS OF CONSOLIDATION

Composition of the Group

Details of the entities, which as of 31 March 2017 form part of the Group and are consolidated under iEnergizer are as follows:

7. GOODWILL

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

For the purpose of annual impairment testing goodwill is allocated to the following CGU, which are expected to benefit from the synergies of the business combinations in which the goodwill arises.

The recoverable amounts of the CGU was determined based on value-in-use calculations, by applying Free Cash Flow to Firm ('FCFF') method, covering a four year forecast of expected cash flows and the terminal value for the unit's remaining useful lives using the growth rates stated below:

The key assumptions for Content delivery-USA business unit are as follows:

Management considers 'Content Delivery' business as one product line/services and therefore as one group of similar assets for internal management reporting purposes. It is the smallest identifiable group of assets that generates cash inflows that are largely independent of the cash inflows from other assets or group of assets. The goodwill is therefore allocated to this unit and accordingly tested for impairment.

Growth rates

The forecasted growth rates are based on management estimation derived from past experience, comparable company data and external sources of information available. The Group is expected to continue to grow at the above rates for the foreseeable future as it is getting work from customers on a continued basis rather than one-time work.

Discount rates

Discount rates reflect management's estimates of the risks specific to the business. The pre-tax discount rates used are based on the weighted average cost of capital of the relevant underlying cash-generating unit. 

Cash flow assumptions

Estimated cash flows for 4 years based on internal management budgets prepared using past experience. Management's key assumptions include stable profit margins, based on past experience in this market. The Group's management believes that this is the best available input for forecasting this mature market. Cash flow projections reflect stable profit margins going forward and prices and wages reflect publicly available forecasts of inflation for the industry.

Terminal value

Terminal value for the USA business unit is arrived by applying 10.75x multiple to the LTM EBITDA in the last year of the explicit forecast period. This long-term growth rate takes into consideration external macroeconomic sources of data. Such long-term growth rate considered does not exceed that of the relevant business and industry sector.

These assumptions are based on past experience and are consistent with market information.

Sensitivity analysis of key assumptions

8. OTHER INTANGIBLE ASSETS

The other intangible assets comprise of the following:

*Customer contracts are intangible assets created for long standing customer relationships in 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 USD 7,874,980 and remaining amortization period is 3.8 years.

*Customer contracts are intangible assets created for long standing customer relationships 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 USD 5,095,564 and remaining amortization period is 2.8 years.

Intangible assets with indefinite useful lives

Trademark relate to Group's branding in publishing industry and are associated with its long standing history in the trade and its working relationship with big publishing houses in the world. It distinguishes the Group in Content delivery segment from competition. The Company has developed a proprietary technology platform, comprising a standardized set of technological tools namely Powersuite, PXE4, PowerLearn, PowerL2X, Power Eye, BaKoMa Plug-in through an extensive research and development initiative which thereby gives the Company an edge over its competitors. The management believes that the Group's branding would continue to contribute towards revenue growth in perpetuity and the value is not expected to diminish in the foreseeable future. Accordingly, the useful lives have been determined to be indefinite.

For the purpose of annual impairment testing trademark and patent is allocated to the 'Content delivery' business of the Company with respect to the US business unit.

The net carrying amount of intangible assets with indefinite lives can be analysed as follows:

The recoverable amounts of the CGU was determined based on value-in-use calculations, by applying Free Cash Flow to Firm ('FCFF') method, covering a four year forecast, followed by an extrapolation of expected cash flows for the unit's remaining useful lives. For assumptions used refer Note 7 on Goodwill.

9. PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment comprise of the following:

10 LONG TERM FINANCIAL ASSETS

Security deposits are interest free unsecured deposits placed with owners of the property leased in India to the Group for operations in operating centres. The above security deposits have been discounted to arrive at their fair values at initial recognition using market interest rates applicable in India which approximates 8% per annum. These security deposits have maturity terms of 1-14 years. The management estimates the fair value of these deposits to be not materially different from the amounts recognized in the financial statements at amortized cost at each reporting date.

Restricted cash represents deposits that have been pledged with banks against guarantees issued to tax and other local authorities as security to meet contractual obligations towards other parties along with accrued interest on these deposits which is also inaccessible for use by the Group. These deposits have an average maturity period of more than 12 months from the end of the financial year.

Fixed deposits with banks represents deposits with banks have an average maturity period of more than 12 months from the end of the financial year.

11 DEFERRED TAX ASSETS AND LIABILITIES

The amounts recognized in other comprehensive income relate to exchange differences on translating foreign operations and the remeasurement of net defined benefit liability. Refer consolidated statement of comprehensive income for the income tax relating to these components of other comprehensive income.

In assessing the realizability of deferred tax assets, the Company considers the extent to which, it is probable that the deferred tax asset will be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable profits during the periods in which those temporary differences and tax loss carry-forwards become deductible. The Company considers the expected reversal of deferred tax liabilities, projected future taxable income and tax planning strategies in making this assessment.

Based on this, the Company believes that it is probable that the Company will realize the benefits of these deductible differences. The amount of the deferred tax asset considered realizable, however, could be reduced in the near term if the estimates of future taxable income during the carry-forward period are reduced.

The Company has recognized deferred tax assets of USD 9,268,840 in respect of carry forward losses of its various subsidiaries as at 31 March 2017. Management's projections of future taxable income and tax planning strategies support the assumption that it is probable that sufficient taxable income will be available to utilize these deferred tax assets.

12 TRADE AND OTHER RECEIVABLES

The trade receivables have been recorded at their respective carrying amounts and are not considered to be materially different from their fair values as these are expected to realize within a short period from the reporting dates. All of the Group's trade and other receivables have been reviewed for indicators of impairment.

Gross value of top five customer balances for the year ended 31 March 2017 amounts to USD 9,746,500 which constitutes 38.82 % (31 March 2016: USD 8,915,686 being 32.40 %) of net trade receivables.

All of the Group's trade and other receivables have been reviewed for indicators of impairment. Certain receivables were found to be impaired and an allowance for credit losses/bad debts of USD 156,000  (31 March 2016: USD 222,823) has been recorded accordingly within other expenses. The impaired receivables are mostly due from parties that are experiencing financial difficulties.

The analysis of provision for bad and doubtful debts is as follows :

The analysis for provision for other receivables is as follows:

An impairment analysis is performed at each reporting date on an individual basis for major clients. In addition, a large number of minor receivables are grouped into homogenous groups and assessed for impairment collectively. The calculation is based on actual incurred historical data. The maximum exposure to credit risk at the reporting date is the carrying value of each class of financial assets disclosed in Note 32.

The analysis of rebate accruals is as follows:-

13 CASH AND CASH EQUIVALENTS

14 SHORT TERM FINANCIAL ASSETS

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

15 OTHER CURRENT ASSETS

16 LONG TERM AND SHORT TERM BORROWINGS

Long term borrowings

Non-current portion of borrowings

* The term loan bears interest at a rate per annum equal to Alternate Base Rate currently at 2.25% plus 5% per annum. Final maturity date of the term loan is 30 April 2019.

The term loan is secured by all the assets of iEnergizer Limited and its subsidiaries Aptara Inc., iEnergizer Holdings Ltd, iEnergizer Aptara Ltd and iEnergizer BPO Ltd.

Short term borrowings

The short term borrowings comprises a bank overdraft facility amounting to USD 97,955 (Previous year USD 642,751) obtained from the bank. It carries interest at fixed deposit rate plus 2% per annum.

The overdraft limit would be released equivalent to 90% of the fixed deposit amount under lien.

17 TRADE AND OTHER PAYABLES

18 EMPLOYEE BENEFIT OBLIGATIONS

Employee benefits are accrued in the period in which the associated services are rendered by employees of the Group. Employee benefit obligations include the components as follows:

Gratuity

The Group provides gratuity benefit to its employees working in India. The gratuity plan is a defined benefit plan that, at retirement or termination of employment, provides eligible employees with a lump sum payment, which is a function of the last drawn salary and completed years of service.

Compensated absences

The Group has accumulating compensated absences policy. The Group measures the expected cost of accumulating compensated absences as the additional amount expected to be paid or availed as a result of the unused entitlement that has accumulated at the end of reporting period.

Accrued pension

The Group sponsors a non-contributory defined benefit pension plan (the "DB Plan") covering all full-time employees of one of its subsidiaries meeting specified entry-age requirements. Pension benefits were based upon a formula contained in the DB Plan documents that takes into consideration years of service. The Company's funding policy is based on actuarial recommended contribution. The actuarial cost method utlized to calculate the present value of benefit obligations is the projected unit credit cost method. The DB Plan assets are held by a bank, as trustee, principally in the form of mutual fund units, money market securities, corporate bonds, and U.S. government securities. The DB Plan has no liabilities.

The defined benefit obligation is calculated annually by an independent actuary using projected unit credit method. Changes in the present value of the defined benefit obligation with respect to gratuity and accrued pension liability are as follows:

31 March 2017

Expenses related to the Company's defined benefit plans are as follows:

31 March 2017

31 March 2016