12 Nov 2020 07:00
12 November 2020
iEnergizer Limited
("iEnergizer", the "Company" or the "Group")
INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2020
iEnergizer, the technology services and media solutions leader for the digital age, reports another record set of interim results for the six months ended September 30, 2020. Following the increase in both earnings and interim dividend the Board looks forward to the remainder of the year with confidence.
Financial Highlights: Enhanced profitability and margin improvements despite temporary revenue impact of the COVID-19 pandemic.
· EBITDA[1] up by $1.6m to $30.7m (H1 2020: $29.1m)
· Increased EBITDA margin at 34.1% (H1 2020: 30.2%)
· Group Revenue down 6.5% to $90.2m (H1 2020: $96.5m), reflecting reduced business from clients impacted by government lockdown measures
· Operating profit increased to $27.9m (H1 2020: $26.8m)
· Increased operating profit margin at 30.9% (H1 2020: 27.8%)
· Profit before tax increased to $26.9m (H1 2020: $25.0m)
· Higher profit before tax margin at 29.9% (H1 2020: 25.9%)
· Profit after tax increased to $23.5m (H1 2020: $21.6m)
· Net Cash of $5.6m (31 March 2020: $1.6m)
· Proposing interim dividend of 5.72p per ordinary share ($14.36m) (H1 2020: 5.2p)
Operational Highlights: Continued focus on higher margin work and success in business development with existing international customers.
· Business Process Outsource ("BPO"): Service Revenue reduced by 7.6% to $54.9m in H1 2021 (H1 2020: $59.4m), due to reduced business from some clients in India. EBITDA margin grew to 37.3% at $20.8m (H1 2020: 33.5% at $20.3m), as COVID-19 positively impacted iEnergizer's largest and higher margin generating international verticals, offsetting the negative impact on smaller verticals (low-margin India-based travel and e-commerce work). BPO's outsized exposure to fast-growing markets of video gaming, BFSI, telecom and healthcare is expected to result in revenue growth going forward after the temporary decline in the first half of the year.
· Content Division: Service Revenue reduced by 5.6% to $33.7m in H1 2021 (H1 2020: $35.7m), as some key clients postponed high value projects to H2 2021, due to COVID-19. EBITDA margins grew to 28.8% at $9.9m (H1 2020: 24.5% at $8.8m) due to cost-savings and productivity enhancements from 90% of employees transitioning to work from home.
o Increase in revenue share from higher margin E-Learning contracts helped to reduce the larger negative revenue impact on traditional publishing segments during global lockdowns in H1 2021.
o Focussed on increasing its revenue share from the SaaS product line of "Scipris", investing in sales to promote this product line.
o Continuing to identify further opportunities in Anti Money Laundering /Know Your Customer services.
· New business development: US based sales team is acutely focussed on selling additional services, specifically in the online learning market, which is expected to grow significantly due to new opportunities presented by remote education and operating systems, while working on its 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 new product launches.
o Scalability, breadth of services and a highly trained workforce allows iEnergizer to take advantage of industry tailwinds in highly profitable verticals.
o The Company has continued to acquire new customers, in H1 2021 across iEnergizer's business lines of Business Process Outsource and Content Services Division, with revenue expected to grow from H2 2021 onwards for these new customers.
· Cost management:
o Transition to agent work-from-home ("WFH") model has increased efficiency, profitability, client loyalty, productivity, and decreased costs.
o Increased proportion of division-specific higher margin international work, particularly in non-voice-based processes including: entertainment gaming support; BFSI; Content technology; and E-Learning.
o Effective use of technology to handle greater volumes from key customers.
· COVID-19
o The Company has taken important steps to ensure that it is well positioned to fully support the requirements of its customers and staff. Business is operating efficiently in servicing its customers, with most employees successfully transitioned to remote working.
o As the lockdown measures are being eased, employees catering to Indian customers are now returning to the Company's offices, following government and local authority best-practice guidelines.
o This provides the Directors with confidence that the Group's operational efficiency will increase to normal levels as the Government of India continue to reduce the lockdown measures.
o The Company's balance sheet, net cash position and its long-term customer relationships remain strong.
· Interim Dividend:
o In line with the progressive dividend policy, the Company is pleased to announce an interim dividend of 5.72p with the dividend record date of 27 November, 2020. 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 26 November, 2020 and the interim dividend is expected to be paid on 18 December, 2020.
Marc Vassanelli, Chairman of iEnergizer, commented:
"Despite challenges in some business areas due to the impact of COVID-19 on our customers, iEnergizer has demonstrated high resilience during this period. The continued growth in profit margins has been driven by our colleagues' continued efforts in deepening existing customer relationships and via iEnergizer's compelling and evolving proposition, combined with careful and focused cost management. Reflecting the Group's strong balance sheet and the cash generative nature of the business, we are pleased to announce an interim dividend of 5.72p, continuing the trend started in H1 2020.
"During this unprecedented time of COVID-19, we remain in close discussions with our customers to ensure that we meet their needs and requirements, while supporting our staff to work safely and remotely as per government guidelines, to serve customers at maximum capacity and efficiency on all our services.
"With iEnergizer's solid foundation, proven strength in operational execution, new sales initiatives, differentiated offerings, healthy balance sheet, and with substantial opportunities for further growth identified, we expect sustained business performance and the Board looks forward to the remainder of the year with confidence."
-Ends-
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 $29.8m.
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iEnergizer Ltd. | +44 (0)1481 242233 |
Chris de Putron |
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Mark De La Rue |
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FTI Consulting - Communications Adviser | +44 (0)20 3727 1000 |
Jonathon Brill / Eleanor Purdon |
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Arden Partners - Nominated adviser and Broker Ciaran Walsh / Benjamin Cryer/ 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 2020 and 2019
Unaudited Condensed Consolidated Statements of Financial Position
(All amounts in United States Dollars, unless otherwise stated)
| Notes | As at | As at | ||
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| 30 September 2020 | 31 March 2020 | ||
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| Unaudited | Audited | ||
ASSETS |
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Non-current |
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Goodwill | 5 | 102,249,839 | 102,248,030 | ||
Other intangible assets | 6 | 12,745,302 | 12,557,319 | ||
Right to use | 10 | 4,912,802 | 5,303,271 | ||
Property, plant and equipment | 7 | 6,189,439 | 7,142,700 | ||
Long- term financial asset |
| 2,511,424 | 3,351,981 | ||
Non-current tax assets |
| 248,946 | 1,238,883 | ||
Deferred tax asset |
| 3,866,593 | 3,623,361 | ||
Other non current assets |
| 2,915 | 21,047 | ||
Non-current assets |
| 132,727,260 | 135,486,592 | ||
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Current |
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Trade and other receivables |
| 30,608,165 | 32,044,127 | ||
Cash and cash equivalents |
| 44,208,431 | 45,147,783 | ||
Short- term financial assets | 8 | 14,594,266 | 7,642,641 | ||
Current tax assets |
| - | 211,055 | ||
Other current assets |
| 4,042,739 | 2,589,023 | ||
Current assets |
| 93,453,601 | 87,634,629 | ||
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Total assets |
| 226,180,861 | 223,121,221 | ||
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EQUITY AND LIABILITIES |
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Equity |
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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 |
| 142,839,866 | 139,677,678 | ||
Other components of equity |
| (16,591,327) | (17,320,281) | ||
Total equity attributable to equity holders of the parent | 144,491,123 | 140,599,981 | |||
| Notes | As at | As at |
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| 30 September 2020 | 31 March 2020 |
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| Unaudited | Audited |
Liabilities |
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Non-current |
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Long term borrowings |
| 28,561,619 | 32,992,983 |
Employee benefit obligations |
| 4,667,389 | 4,667,061 |
Deferred tax liability |
| 10,664,867 | 9,717,709 |
Non-current liabilities |
| 43,893,875 | 47,377,753 |
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Current |
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Trade and other payables |
| 14,616,199 | 11,481,885 |
Employee benefit obligations |
| 828,923 | 810,614 |
Current tax liabilities |
| 300,107 | - |
Current portion of long term borrowings |
| 10,049,427 | 10,527,775 |
Other current liabilities |
| 12,001,207 | 12,323,213 |
Current liabilities |
| 37,795,863 | 35,143,487 |
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Total equity and liabilities |
| 226,180,861 | 223,121,221 |
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(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 six months ended | For the six months ended |
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| 30 September 2020 | 30 September 2019 |
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| Unaudited | Unaudited |
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Income from operations |
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Revenue from services |
| 88,675,643 | 95,180,896 |
Other operating income |
| 1,070,303 | 1,046,950 |
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| 89,745,946 | 96,227,846 |
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Cost and expenses |
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Outsourced service cost |
| 17,960,207 | 21,219,347 |
Employee benefits expense |
| 34,138,255 | 39,580,811 |
Depreciation and amortisation |
| 2,343,227 | 2,063,317 |
Other expenses |
| 7,391,648 | 6,566,098 |
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| 61,833,337 | 69,429,573 |
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Operating profit |
| 27,912,609 | 26,798,273 |
Finance income |
| 590,691 | 360,107 |
Finance cost |
| (1,603,155) | (2,199,643) |
Profit before tax |
| 26,900,145 | 24,958,737 |
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Income tax expense |
| 3,363,846 | 3,387,120 |
Profit for the year attributable to equity holders of the parent |
| 23,536,299 | 21,571,617 |
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Earnings per share | 9 |
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Basic |
| 0.12 | 0.11 |
Diluted |
| 0.12 | 0.11 |
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)
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| For the six months ended | For the six months ended |
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| 30 September 2020 | 30 September 2019 |
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| Unaudited | Unaudited |
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Profit after tax for the year |
| 23,536,299 | 21,571,617 |
Other comprehensive income |
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Items that will be reclassified subsequently to the consolidated income statement |
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Exchange differences on translating foreign operations |
| 728,954 | (808,836) |
Net other comprehensive (loss) that will be reclassified subsequently to consolidated income statement | 728,954 | (808,836) | |
Items that will not be reclassified subsequently to income statement |
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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 | |
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Other comprehensive income/(loss) for the year |
| 728,954 | (626,391) |
Total comprehensive income attributable to equity holders | 24,265,253 | 20,945,226 | |
(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 |
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| Foreign currency translation reserve | Net defined benefit liability |
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Balance as at 1 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 | - | - | - | - | - | - | (37,294,827) | (37,294,827) | |
Transaction with owners | - | - | - | - | - | - | (37,294,827) | (37,294,827) | |
Profit for the year | - | - | - | - | - | - | 45,022,168 | 45,022,168 | |
Other comprehensive loss | - | - | - | - | (5,559,767) | (90,702) | - | (5,650,469) | |
Total comprehensive income for the period | - | - | - | - | (5,559,767) | (90,702) | 45,022,168 | 39,371,699 | |
Balance as at 31 March 2020 | 3,776,175 | 15,451,809 | 63,986 | (1,049,386) | (18,007,911) | 687,630 | 139,677,678 | 140,599,981 | |
(The accompanying notes are an integral part of the Consolidated Financial Statements)
| Share capital | Additional Paid in Capital | Share compensation reserve | Merger reserve | Other components of equity | Retained earnings | Total equity | |
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| Foreign currency translation reserve | Net defined benefit liability | ||
Balance as at 01 April 2020 | 3,776,175 | 15,451,809 | 63,986 | (1,049,386) | (18,007,911) | 687,630 | 139,677,678 | 140,599,981 |
Dividends | - | - | - | - | - | - | (20,374,113) | (20,374,113) |
Transaction with owners | - | - | - | - | - | - | (20,374,113) | (20,374,113) |
Profit for the year | - | - | - | - | - | - | 23,536,300 | 23,536,300 |
Other comprehensive gain | - | - | - | - | 728,954 | - | - | 728,954 |
Total comprehensive income for the period | - | - | - | - | 728,954 | - | 23,536,300 | 24,265,254 |
Balance as at 30 September 2020 | 3,776,175 | 15,451,809 | 63,986 | (1,049,386) | (17,278,957) | 687,630 | 142,839,866 | 144,491,123 |
(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)
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| For the six months ended | For the six months ended |
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| 30 September 2020 | 30 September 2019 |
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(A) Cash flow from operating activities |
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Profit before tax |
| 26,900,145 | 24,958,737 |
Adjustments |
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Depreciation and amortisation |
| 2,343,227 | 2,063,317 |
Loss/(Profit) on disposal of property, plant and equipment |
| (2,064) | (6,024) |
Trade receivables written-off/provision for doubtful debts |
| 1,089,700 | (65,262) |
Sundry balances written back |
| (2,750) | - |
Unrealised foreign exchange gain |
| (651,277) | (174,089) |
Finance income |
| (590,691) | (360,107) |
Finance cost |
| 1,603,155 | 2,199,643 |
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| 30,689,445 | 28,616,215 |
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Changes in operating assets and liabilities |
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(Increase)/ Decrease in trade and other receivables |
| (484,556) | 2,015,601 |
(Increase)/ Decrease in other assets (current and non-current) |
| 2,081,433 | 941,298 |
Increase / (Decrease) Non-current liabilities, trade payables & other current liabilities | (1,304,119) | 2,670,121 | |
(Decrease)/ Increase in employee benefit obligations |
| (9,053) | 307,761 |
Cash generated from operations |
| 30,973,150 | 34,550,996 |
Income taxes paid |
| (1,158,820) | (2,383,750) |
Net cash generated from operating activities |
| 29,814,330 | 32,167,246 |
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(B) Cash flow for investing activities |
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Payments for purchase of property plant and equipment |
| (256,175) | (1,521,588) |
Investment in fixed deposit (Net) |
| (3,256,262) | (883,210) |
Proceeds from disposal of property, plant & equipment |
| 2,258 | 6,581 |
Payments for purchase of other intangible assets |
| (505,703) | (220,909) |
Interest received |
| 585,282 | 400,808 |
Net cash used in investing activities |
| (3,430,600) | (2,218,318) |
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| For the six months ended | For the six months ended |
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| 30 September 2020 | 30 September 2019 |
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(C ) Cash flow from financing activities |
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Interest paid |
| (1,603,155) | (2,145,802) |
Repayment of borowings and lease liability |
| (5,179,793) | (4,150,357) |
Net cash used in financing activities |
| (6,782,948) | (6,296,159) |
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Net increase/(decrease) in cash and cash equivalents |
| 19,600,782 | 23,652,769 |
Dividends paid to equity holders of the parent |
| (20,374,113) | (24,068,320) |
Cash and cash equivalents at the beginning of the year |
| 45,147,783 | 42,404,281 |
Effect of exchange rate changes on cash |
| (166,022) | 83,553 |
Cash and cash equivalents at the end of the year |
| 44,208,431 | 42,072,283 |
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Cash and cash equivalents comprise |
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Cash in hand |
| 13,801 | 8,337 |
Balances with banks in current account |
| 44,194,630 | 42,063,946 |
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| 44,208,431 | 42,072,283 |
(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 2020 and 2019. 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 2020 and 2019.
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 11 November 2020.
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 2020 and 2019.
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 2020.
5. GOODWILL
The net carrying amount of goodwill can be analysed as follows:
Particulars | Amount |
Balance as at 1 April 2019 | 102,256,665 |
Impairment loss recognized | - |
Translation adjustment | (8,635) |
Balance as at 31 March 2020 | 102,248,030 |
Particulars | Amount |
Balance as at 01 April 2020 | 102,248,030 |
Translation adjustment | 1,809 |
Balance as at 30 September 2020 | 102,249,839 |
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 |
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Balance as at 1 April 2019 | 24,112,814 | 3,944,019 | 100,000 | 12,000,000 | 132,490 | 40,289,323 |
Additions | - | 511,654 | - | - | - | 511,654 |
Disposals | - | - | - | - | - | - |
Translation and other adjustments | (9,657) | (276,192) | - | - | - | (285,849) |
Balance as at 31 March 2020 | 24,103,157 | 4,179,481 | 100,000 | 12,000,000 | 132,490 | 40,515,128 |
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Accumulated amortisation |
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Balance as at 1 April 2019 | 24,112,814 | 3,559,966 | - | - | 132,490 | 27,805,270 |
Amortisation/impairment for the period | - | 423,580 | - | - | - | 423,580 |
Disposals | - | - | - | - | - | - |
Translation and other adjustments | (9,657) | (261,384) | - | - | - | (271,041) |
Balance as at 31 March 2020 | 24,103,157 | 3,722,162 | - | - | 132,490 | 27,957,809 |
Carrying values as at 31 March 2020 | - | 457,319 | 100,000 | 12,000,000 | - | 12,557,319 |
Particulars | Customer contracts* | Computer softwares | Patent | Trade mark | Intangibles under development | Total |
Cost |
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Balance as at 01 April 2020 | 24,103,157 | 4,179,481 | 100,000 | 12,000,000 | 132,490 | 40,515,128 |
Additions | - | 505,703 | - | - | - | 505,703 |
Disposals | - | - | - | - | - | - |
Translation and other adjustments | 2,024 | 64,686 | - | - | - | 66,710 |
Balance as at 30 September 2020 | 24,105,181 | 4,749,870 | 100,000 | 12,000,000 | 132,490 | 41,087,541 |
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Accumulated amortisation |
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Balance as at 01 April 2020 | 24,103,157 | 3,722,162 | - | - | 132,490 | 27,957,809 |
Amortisation/impairment for the period | - | 319,700 | - | - | - | 319,700 |
Disposals | - | - | - | - | - | - |
Translation and other adjustments | 2,024 | 62,706 | - | - | - | 64,730 |
Balance as at 30 September 2020 | 24,105,181 | 4,104,568 | - | - | 132,490 | 28,342,239 |
Carrying values as at 30 September 2020 | - | 645,302 | 100,000 | 12,000,000 | - | 12,745,302 |
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 improve-ments | Plant and machinery | Capital work in progress | Total |
Cost |
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Balance as at 1 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 | 2,467,719 | 274,357 | 39,541 | 34,233 | 398,792 | 152,713 | 120,773 | 114,088 | 3,602,216 |
Disposals | (85,706) | - | (16,167) | - | - | - | (15,686) | - | (117,559) |
Translation and other adjustments | (684,194) | (66,510) | (95,586) | (67,004) | (23,407) | (334,231) | (147,647) | (7,175) | (1,425,754) |
Balance as at 31 March 2020 | 10,104,372 | 1,062,619 | 1,366,518 | 883,948 | 396,132 | 4,535,609 | 2,274,010 | 331,221 | 20,954,429 |
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Balance as at 1 April 2019 | 5,522,457 | 778,064 | 996,024 | 262,105 | 16,561 | 2,846,284 | 1,866,959 | - | 12,288,454 |
Depreciation for the period | 1,628,060 | 62,006 | 117,881 | 114,565 | 29,858 | 461,149 | 187,790 | - | 2,601,309 |
Disposals | (85,037) | - | (16,083) | - | - | - | (15,261) | - | (116,381) |
Translation and other adjustments | (466,409) | (52,044) | (69,242) | (24,599) | (2,745) | (220,207) | (126,407) | - | (961,653) |
Balance as at 31 March 2020 | 6,599,071 | 788,026 | 1,028,580 | 352,071 | 43,674 | 3,087,226 | 1,913,081 | - | 13,811,729 |
Carrying values as at 31 March 2020 | 3,505,301 | 274,593 | 337,938 | 531,877 | 352,458 | 1,448,383 | 360,929 | 331,221 | 7,142,700 |
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 2020 | 10,104,372 | 1,062,619 | 1,366,518 | 883,948 | 396,132 | 4,535,609 | 2,274,011 | 331,221 | 20,954,430 |
Additions | 355,308 | 27,857 | 15,019 | 45,619 | - | 21,528 | 43,940 | (253,097) | 256,174 |
Disposals (Net) | (58,497) | - | - | - | - | - | - | - | (58,497) |
Translation and other adjustments | 158,534 | 15,872 | 20,117 | 13,761 | 6,333 | 71,299 | 32,611 | 5,478 | 324,005 |
Balance as at 30 September 2020 | 10,559,717 | 1,106,348 | 1,401,654 | 943,328 | 402,465 | 4,628,436 | 2,350,562 | 83,602 | 21,476,112 |
|
|
|
|
|
|
|
|
|
|
Accumulated depreciation |
|
|
|
|
|
|
|
|
|
Balance as at 01 April 2020 | 6,599,071 | 788,028 | 1,028,580 | 352,070 | 43,674 | 3,087,225 | 1,913,082 | - | 13,811,730 |
Depreciation for the period | 859,562 | 33,731 | 53,728 | 53,916 | 1,596 | 232,032 | 65,810 | - | 1,300,375 |
Disposals (Net) | (58,303) | - | - | - | - | - | - | - | (58,303) |
Translation and other adjustments | 117,019 | 11,715 | 15,593 | 6,534 | 730 | 52,860 | 28,421 | - | 232,872 |
Balance as at 30 September 2020 | 7,517,349 | 833,474 | 1,097,901 | 412,520 | 46,000 | 3,372,117 | 2,007,313 | - | 15,286,674 |
Carrying values as at 30 September 2020 | 3,042,368 | 272,874 | 303,753 | 530,808 | 356,465 | 1,256,319 | 343,249 | 83,602 | 6,189,438 |
8. SHORT TERM FINANCIAL ASSETS
Particulars | 30 September 2020 | 31 March 2020 | ||
Security deposits | 61,483 | 60,516 | ||
Restricted cash | 5,815,886 | 4,293,982 | ||
Short term investments (fixed deposits with maturity less than 12 months) | 8,648,935 | 3,244,643 | ||
Derivative financial instruments | 23,942 | - | ||
Due from officers and employees | 22,354 | 27,244 | ||
Others | 21,666 | 16,256 | ||
| 14,594,266 | 7,642,641 | ||
|
|
|
| |
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 2020 is as follows:
Basic earnings per share
Particulars | 30 September 2020 | 30 September 2019 | |
Profit attributable to shareholders |
| 23,536,299 | 21,571,617 |
Weighted average numbers shares outstanding | 190,130,008 | 190,130,008 | |
Basic earnings per share (US$) |
| 0.12 | 0.11 |
Diluted earnings per share
Particulars | 30 September 2020 | 30 September 2019 | ||
Profit attributable to shareholders |
| 23,536,299 | 21,571,617 | |
Weighted average numbers shares outstanding | 190,130,008 | 190,130,008 | ||
Diluted earnings per share (US$) |
|
0.12 | 0.09 | |
10. LEASES
(a) Lease liabilities are presented in the statement of financial position as follows:
Particulars | 30 September 2020 | 31 March 2020 |
Current | 1,108,453 | 1,216,547 |
Non-current | 4,293,899 | 4,467,004 |
| 5,402,352 | 5,683,551 |
(b) The following are amounts recognised in consolidated income statement:
Particulars | 30 September 2020 | 31 March 2020 |
Depreciation expenses of right-of-use Interest Expense on the Lease Liability | 723,152 | 1,451,931 |
Interest expense on lease liability | 266,387 | 587,564 |
Rent expenses*
| 29,448 | 9,323 |
Common area maintenance expenses | 60,887 | 175,566 |
Total | 1,079,874 | 2,224,384 |
*Rent expense in respect of Short Term Lease
(c) Right to use of assets as at 31 March 2020:
Particulars | Leased premises |
Gross block |
|
Balance as at 31 March 2019 | - |
IFRS-16 transition | 6,311,071 |
Gross block as at 1 April 2019 | 6,311,071 |
Additions during the year | 580,409 |
Translation adjustment | (194,989) |
Gross block as at 31 March 2020 | 6,696,491 |
|
|
Accumulated depreciation |
|
Balance as at 1 April 2019 | - |
Depreciation for the period | 1,451,931 |
Translation adjustment | (58,711) |
Accumulated depreciation as at 31 March 2020 | 1,393,220 |
Net block as at 31 March 2020 | 5,303,271 |
Particulars | Leased premises |
Gross block as at 1 April 2020 | 6,696,491 |
Additions during the year | 270,081 |
Translation adjustment | 90,297 |
Gross block as at 30 September 2020 | 7,056,869 |
|
|
Accumulated depreciation |
|
Balance as at 1 April 2020 | 1,393,220 |
Depreciation for the period | 723,152 |
Translation adjustment | 27,695 |
Accumulated depreciation as at 30 September 2020 | 2,144,067 |
Net block as at 30 September 2020 | 4,912,802 |
The lease liabilities were USD 5,402,352 as of 30 September 2020 (USD 5,683,551 as of 31 March 2020). The corresponding interest expense for the six month ended 30 September 2020 amounted to USD 266,387 (interest expense for the year ended 31 March 2020 amounted to USD 587,564).
(e) The maturity analysis of the lease liabilities as of 31 March 2020, is as follows:
Payments falling due | Gross future minimum lease payments | |
| 30 September 2020 | 31 March 2020 |
Within 1 year | 1,699,280 | 1,616,248 |
Later than 1 year but less than 5 years | 3,929,693 | 3,341,682 |
More than 5 years | 1,744,994 | 2,436,638 |
| 7,373,967 | 7,394,568 |
11. 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) |
|
|
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 2020 | 30 September 2019 |
Transactions during the period ended |
|
|
Short term employee benefits |
|
|
Remuneration paid to directors |
|
|
Chris de Putron | 6,300 | 6,249 |
Mark De La Rue | 6,300 | 6,249 |
Marc Vassanelli | 18,899 | 18,747 |
|
|
|
Balances at the end of |
|
|
Total remuneration payable | 147,741 | 109,385 |
12. 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
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. Segment information can be analysed as follows for the reporting periods under review:
|
| 30 September 2020 | |||||
| Business Process Outsource | Content delivery | Total | ||||
Revenue from external customers | 54,935,441 | 33,740,202 | 88,675,643 | ||||
Other income (including realised foreign exchange gain) | 934,741 | 135,563 | 1,070,304 | ||||
Realized Foreign Exchange gain/(loss) | (23,942) | 497,113 | 473,171 | ||||
Segment revenue | 55,846,240 | 34,372,878 | 90,219,118 | ||||
Cost of outsourced Services | 13,537,655 | 4,422,552 | 17,960,207 | ||||
Employee benefit expense | 15,971,568 | 18,166,687 | 34,138,255 | ||||
Other expenses | 5,513,055 | 1,878,593 | 7,391,648 | ||||
Earning before interest, tax, depreciation and amortization | 20,823,961 | 9,905,046 | 30,729,007 | ||||
Rent adjustment as per IFRS 16 | 321,533 | 568,176 | 889,709 | ||||
Earning before interest, tax, depreciation and amortisation (before rent adjustment) | 20,502,428 | 9,336,870 | 29,839,298 | ||||
Unrealized Foreign Exchange gain/(loss) | 23,942 | (497,113) | (473,171) | ||||
Depreciation and amortisation | (1,186,847) | (1,156,380) | (2,343,227) | ||||
Rent adjustment as per IFRS 16 | 321,533 | 568,176 | 889,709 | ||||
Segment operating profit | 19,661,056 | 8,251,553 | 27,912,609 | ||||
Other Income/expense : |
|
|
| ||||
Finance income | 433,615 | 157,076 | 590,691 | ||||
Finance costs | (258,483) | (1,344,672) | (1,603,155) | ||||
Profit before tax | 19,836,189 | 7,063,957 | 26,900,146 | ||||
Income tax expense | (2,145,367) | (1,218,479) | (3,363,846) | ||||
Profit after tax | 17,690,822 | 5,845,478 | 23,536,300 | ||||
Segment assets | 72,950,460 | 153,230,400 | 226,180,860 | ||||
Segment liabilities | 22,136,831 | 59,441,566 | 81,578,397 | ||||
Capital expenditure | 692,921 | 339,037 | 1,031,958 | ||||
|
| 30 September 2019 |
| ||||
| Business Process Outsource | Content delivery | Total |
| |||
Revenue from external customers | 59,433,379 | 35,747,517 | 95,180,896 |
| |||
Other income (including realised foreign exchange gain) | 1,028,226 | 280,168 | 1,308,394 |
| |||
Realized Foreign Exchange gain/(loss) | - | - | - |
| |||
Segment revenue | 60,461,605 | 36,027,685 | 96,489,290 |
| |||
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 | 3,839,943 | 2,726,155 | 6,566,098 |
| |||
Earning before interest, tax, depreciation and amortisation | 20,288,747 | 8,834,287 | 29,123,034 |
| |||
Rent adjustment as per IFRS 16 | (281,860) | (602,398) | (884,258) |
| |||
Earning before interest, tax, depreciation and amortisation (before rent adjustment) | 20,006,887 | 8,231,889 | 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 | 19,329,216 | 7,469,057 | 26,798,273 |
| |||
Other Income/expense : |
|
|
|
| |||
Finance income | 246,139 | 113,968 | 360,107 |
| |||
Finance costs | (256,274) | (1,943,369) | (2,199,643) |
| |||
Profit before tax | 19,319,081 | 5,639,656 | 24,958,737 |
| |||
Income tax expense | (1,954,446) | (1,432,675) | (3,387,121) |
| |||
Profit after tax | 17,364,635 | 4,206,981 | 21,571,616 |
| |||
Segment assets | 65,500,283 | 156,564,586 | 222,064,869 |
| |||
Segment liabilities | 38,248,855 | 48,416,000 | 86,664,855 |
| |||
Capital expenditure | 4,682,531 | 3,625,169 | 8,307,700 |
| |||
Revenue from the following customer's amounts to more than 10% of consolidated revenue during the period presented.
30 September 2020
Revenue from | Segment | Amount |
Customer 1 | Business Process Outsource | 12,959,751 |
30 September 2019
Revenue from | Segment | Amount |
Customer 1 | Business Process Outsource | 9,928,185 |
13. 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 2020 | 31 March 2020 |
|
|
|
Non-current assets |
|
|
Loans and receivables |
|
|
Security deposits | 408,735 | 382,614 |
Restricted cash | 1,424,263 | 1,881,726 |
Fixed deposit | 678,426 | 1,087,641 |
Current assets |
|
|
Loans and receivables |
|
|
Trade receivables | 30,608,165 | 32,044,127 |
Cash and cash equivalents | 44,198,534 | 45,147,783 |
Restricted cash | 5,815,886 | 4,293,982 |
Security deposits | 61,483 | 60,516 |
Fixed deposits with banks | 8,648,934 | 3,244,643 |
Due from officers and employees | 22,354 | 27,244 |
Interest accrued on fixed deposit | 21,666 | 16,256 |
|
|
|
Fair value through profit and loss: |
|
|
Derivative financial instruments | - | - |
| 91,888,446 | 88,186,532 |
|
|
|
Financial liabilities | 30 September 2020 | 31 March 2020 |
|
|
|
Non-current liabilities |
|
|
Financial liabilities measured at amortized cost: |
|
|
Long term borrowings | 28,561,619 | 32,992,983 |
Current liabilities |
|
|
Financial liabilities measured at amortized cost: |
|
|
Short term borrowings |
|
|
Trade payables | 14,616,172 | 11,481,885 |
Current portion of long term borrowings | 10,049,427 | 10,527,775 |
Other current liabilities | 12,001,206 | 12,323,213 |
|
|
|
Fair value through profit and loss: |
|
|
Derivative financial instruments | - | - |
|
|
|
| 65,228,424 | 67,325,856 |
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.
14. 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 2020 | Total | Fair value measurements at reporting date using | |
| Level 2 | ||
Liabilities | (Notional amount) |
|
|
Derivative instruments |
|
|
|
Forward contracts (currency - US$/INR) | 19,100,000 |
| (89,733) |
31 March 2020 | Total | Fair value measurements at reporting date using | |
| Level 2 | ||
Assets | (Notional amount) |
|
|
Derivative instruments |
|
|
|
Forward contracts (currency - US$/INR) | 35,850,000 |
| (1,891,422) |
15. COMMITMENT AND CONTINGENCIES
As at 30 September 2020 and 31 March 2020, the Group had a capital commitment of US$ 318,845 and US$141,848 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$62,876 and US$55,427 as on 30 September 2020 and 31 March 2020 respectively and in respect of interest on VAT amounts to US$9,496 as on 30 September 2020 (US$9,347 as on 31 March 2020).
Guarantees: As at 30 September 2020 and 31 March 2020, guarantees provided by banks on behalf of the group companies to the revenue authorities and certain other agencies, amount to approximately US$37,320 and US$36,732 respectively.
16. 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 2020 and 2019.
17. 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 2020 and 2019.