IBPO.L Regulatory News (IBPO)

15 August 2012

iEnergizer Limited

("iEnergizer" or "the Company")

ANNUAL RESULTS FOR THE YEAR ENDED 31 MARCH 2012

iEnergizer Limited, a leading international provider of third-party integrated business process solutions, is pleased to announce its Annual Results for the year ended 31 March 2012.

Highlights

·; Revenue up 45.32% to $71.73m (2011: $49.36m)

·; Underlying operating profit $18.9m (2011: $16.3m)

·; Integration of Aptara, the market leader in outsourced multi-channel content production and digital media solutions, is progressing well

·; Proposed dividend of 8p

Sara Latham, Chairman said:

"iEnergizer has performed well over the past year, delivering on expectations by executing on its strategy of providing high quality services in complementary areas to deliver client orientated services. Through this we have grown our order book and continue to work with blue chip companies within a variety of sectors including Banking Financial Services and Insurance, Online Video Game and Telecom/Electronics.

Our strategic acquisition of Aptara during the end of the period, which supplements our existing business, is integrating well and we look forward to further expanding the business through the additional cross selling opportunities provided by the integration of Aptara."

-Ends-

Enquiries:

Chairman's Statement

I am pleased to report that the Company has continued on its path of significant operational and financial progress during this financial year.

While the underlying iEnergizer business has continued to grow organically, particularly in the Indian domestic BPO market, significant long term growth is expected to come from the acquisition of Aptara Inc., United States ("Aptara"), which was completed on 7th February 2012.

Aptara is a leading outsourced service provider in publishing and content process solution industries. Aptara provides services through its 4 delivery facilities in Delhi, Pune, Trivandrum and Dehradun employing over 5500 persons. Aptara is expected to help iEnergizer expand its service capabilities, client base & markets, employees headcount, revenues and profitability in a significant manner. Aptara provides content process outsourcing solutions, delivering a comprehensive offering for the transformation and management of content such as text, audio, video and graphic assets.

The overall outsourcing global market continues to expand as companies in the developed world, particularly the US, continue to exploit India's cost advantage and outsource operations. The type of functions which are outsourced are increasingly sophisticated and iEnergizer is well placed to benefit from this as it is an essential long term partner that provides of high quality, complex processes.

Importantly, more complex processes by nature tend to require a tailor made service for each client, which helps us develop deep reaching relationships that in turn result in high client retention rates. We also leverage these strong relationships to cross sell other outsourcing services and identify opportunities with new service offerings. Like iEnergizer, Aptara has a pursued long term partnership model with its key client base with an average relationship of over 12 years with its top 20 clients.

We believe that the supplementary varied service offering provided by the acquisition of Aptara makes iEnergizer well placed to take advantage of the growing BPO opportunities both in the developed and emerging markets. We have seen our order book increase as we grow with the expanding global outsourcing market and take advantage of the cross selling opportunities provided by our diversified service offering.

I would like to thank our management team for their leadership which has helped iEnergizer achieve sustainable growth over the past year. The entrepreneurial approach of the management team has been a true asset to the Company and has enabled us to identify new markets in addition to providing high quality service to our existing clients.

Sara Latham

Non-Executive Chairman

14 August 2012

Chief Executive's Review

Introduction

iEnergizer has a full service BPO offering across a range of sectors and countries with a strong financial track record of delivery which consists of significant growth.

I am pleased to announce that robust performance has continued this year also as the Company has increased the top line revenues to $72.2m, growing it by 46.3% (2011: $49.4m). This only includes seven weeks' contribution of Aptara for the period from 7th February 2012 to 31st March 2012. In light of this, the impact of Aptara's contribution to next year's consolidated financials will be significant and is expected to result in iEnergizer becoming one of the leading BPO companies in the markets in which it operates.

Financial Overview

The acquisition of Aptara was completed for a total cash consideration of $150.1m, which was based on an enterprise valuation of $144m and cash acquisition/working capital adjustment of $6.1m. iEnergizer partly funded the acquisition by raising a debt finance of $134.5m (including $20m from EICR (Cyprus) Ltd., a major shareholder connected with Director Mr Anil Aggarwal) and partly from cash available with iEnergizer.

iEnergizer also paid the maiden dividend of £8.4m ($13.6m) out of cash generated as announced in 2011.

During the period, iEnergizer placed three million new ordinary shares raising £7.14m ($11.06m) before expenses.

Revenue for the period was up 46.3% at $72.2m (2011: $49.4m). Like for like, growth in the underlying business was 19.8% with standalone revenue of $59.2m excluding $13m revenue contribution from Aptara for the period from 7th Feb 2012 to 31st March 2012.

Adjusted Earnings before Interest, Depreciation, Tax and Amortization (EBIDTA) increased to $22.2m (2011: $17m). Adjusted operating profit* increased to $21.6m (2011: $16.3m) with consolidated operating profit margin reducing to 30% (2010: 32.9%) largely due to operating margins of approximately 20% ($2.8m on a revenue of $13m) at which Aptara currently operates. On standalone basis, the operating margin has remained stable at around 32%. Adjusted profit before tax (PBT)* increased to $20.5m (2011: $16.3m) including $1.4m contributed by Aptara. Adjusted profit after tax (PAT)* increased to $18.8m (2011: $15.7m) including $1.2m contributed by Aptara.

* The adjusted Earnings Before Interest, Depreciation, Tax and Amortization (EBIDTA), operating profit, adjusted profit before tax (PAT) and adjusted profit after tax (PAT) are derived by adjusting exceptional costs of (i) Aptara's acquisition related costs of $0.93m, (ii) new equity placement costs of $0.13m, (iii) amortisation of intangibles acquired of $0.77m and (iv) net forex related losses on the derivative contracts etc;. of $0.9m respectively) from the reported Earnings Before Interest, Depreciation, Tax and Amortization (EBIDTA) operating profit, reported profit before tax and reported profit after tax as the case may be.

Business Review

The Company's outsourcing services continue to be structured around industry-focused BPO services, including Banking Financial Services and Insurance (BFSI), Publishing, Content Process Solutions, Entertainment and Online Video Game, Information Technology and Telecom/Electronics as well as cross-industry BPO services, such as collections and customer services.

This has been extended by the acquisition of Aptara which provides services in the following areas: (i) Educational Publishing, (ii) Professional publishing, (iii) e-Learning and new media publishing, (iv) Content transformation technology (IT) services and (v) Legal solutions. Aptara customers include publishers, information aggregators, professional societies, universities, corporations and non for profit organisations located primarily in the United States, the United Kingdom and Australia.

We have expanded our business by leveraging established client relationships to cross sell across numerous verticals. This trend has been seen in both the domestic Indian BPO market and the international markets during the year. The acquisition of Aptara will enhance the Company's growth prospects by expanding its service capabilities, client base & markets, employee headcount, revenues and profitability. iEnergizer will target cross selling opportunities with Apatra's client base and as well as focus on bringing its cost efficient practices into Aptara's operations with the aim to increase Aptara's operating margins.

Dividend

The Board is pleased to announce that on the back of its strong growth and cash generation this year, it is proposing to pay a dividend of 8p per share with dividend record date of 24 August 2012. The Company Ordinary Shares are expected to go ex-dividend on 22 August 2012 and the dividend is expected to be paid on 7 September 2012. The Company will continue to review any future dividend policy with the need to utilize its cash generation for repayment of acquisition financing and invest in its operational growth, in-line with its long term stated requirements. The Board is committed to maintaining a strong but efficient balance sheet.

Strategy

The Company has delivered growth for its shareholders by following the strategies articulated in the Admission Document at the time of IPO; namely by:

§ Expanding its revenues from the domestic Indian BPO market both by taking advantage of the growth in the market itself;

§ Increasing the Company's share of that growing market;

§ Growing its international client base with a focus on the US and UK markets;

§ Maintaining and developing long term client relationships and increasing depth and breadth of services provided to them; and

§ Differentiating itself through the quality and price at which it delivers its range of services by being flexible enough to evolve and provide services in complementary areas to deliver client orientated services.

§ Undertake strategic acquisition of other market leading Business Process Outsourcing service providers, thus growing its client base, markets, service capabilities, revenues, profits & employee headcount.

The success of these strategies is evidenced in the Company's financial and operational performance and the Company is focused on pursuing these to drive growth looking forward.

Current Trading and Outlook

We continue to make progress in gaining market share within the expanding global outsourcing market where there are opportunities both in the domestic Indian BPO market and international markets. In addition, we continue to create new opportunities and develop our long term client relationships by increasing the depth and breadth of the services provided to them. Also, the acquisition of Aptara will help us grow further by providing new revenue streams and cross selling opportunities.

Current trading is in line with expectations and we expect the financial year 2012-13 to close with significant overall growth.

We continue to pursue a growth policy based on organic growth from existing operations together with any other opportunities which may arise.

Anil Aggarwal

Chief Executive

14 August 2012

Consolidated Statement of Financial Position

(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 is being signed as of 14 August 2012, pursuant to resolution approved in the board meeting held on 14 August 2012.

Anil Aggarwal

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 pursuant to the Act of Royal Court of the Island of Guernsey.

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 Group FZ - LLC, iEnergizer IT Services Private Limited, iEnergizer BPO Limited, iEnergizer Aptara Limited and Aptara Inc and subsidaries. (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.

On February 07, 2012, iEnergizer Limited acquired Aptara Inc. and accordingly Aptara Inc. became a wholly-owned subsidiary of iEnergizer. Aptara Inc. provides content process outsourcing solutions, delivering a comprehensive offering for the transformation and management of content such as text, audio, video and graphic assets. Aptara provides services in the following areas: (i) Educational Publishing, (ii) Professional publishing, (iii) e-Learning and new media publishing, (iv) Content transformation technology (IT) services and (v) Legal solutions. Aptara customers include publishers, information aggregators, professional societies, universities, corporations and non for profit organisations located primarily in the United States, the United Kingdom and Australia.

2. GENERAL INFORMATION AND STATEMENT OF COMPLIANCE WITH IFRS

The consolidated financial statements of the Group for the year ended 31 March 2012 have been prepared in accordance with International Financial Reporting Standards (IFRS) as adopted by European Union.

The significant accounting policies that have been used in the preparation of these consolidated financial statements are summarised 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 2012. Subsidiaries are all entities over which the Group has the power to control the financial and operating policies. iEnergizer obtains and exercises control through more than half of the voting rights of the entity.

Unrealised gains and losses on transactions between the Company and its subsidiaries are eliminated. Where unrealised losses on intra-group asset sales are reversed on consolidation, the underlying asset is also tested for impairment losses from the Group perspective. 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

This consolidated financial statement is 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 recognised in the income statement

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. Non-monetary items measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value is determined.

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 recognised in other comprehensive income. On disposal of a foreign operation, the component of other comprehensive income relating to that particular foreign operation is recognised in the consolidated income statement. 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 comprises revenue from call center operations and providing business process outsourcing (BPO) and also content process outsourcing solutions. These services are rendered through contractual arrangements entered into with customers by the Group companies.

In respect of the Group's call center operations and business process outsourcing, revenue is recognised to the extent that it is probable that the economic benefits will flow to the Group and the revenue can be reliably measured. Revenue is measured at the fair value of the consideration received, excluding discounts, rebates, and sales taxes or duty. The Group assesses its revenue arrangements against specific criteria in order to determine if it is acting as principal or agent. The Group has concluded that it is acting as a principal in all of its revenue arrangements. The following specific recognition criteria must also be met before revenue is recognised:

Rendering of services

Revenues earned from services billed at agreed hourly/daily charge out rates, are recognised as the services are performed with reference to time spent and agreed charge out rate.

Revenues performed on fixed-price engagements are recognised either on percentage of completion basis or upon completion of services, depending upon whether the outcome of the contract can be reliably measured. Efforts expended, measured by way of time spent on the job to the total time budgeted, have been used to measure progress towards completion as there is a direct relationship between input and productivity. Provisions for estimated losses, if any, on uncompleted contracts are recorded in the period in which such losses become probable based on the current contract estimates. Where the outcome of a transaction can be estimated reliably, revenue associated with the transaction is recognised in the income statement by reference to the stage of completion at the balance sheet date, provided that a right to consideration has been obtained through performance. When the Group cannot measure the outcome of a contract reliably, revenue is recognised only to the extent of contract costs incurred, to the extent that such contract costs are recoverable. Contract costs are recognised in the period in which they are incurred. No revenue is recognised where there are significant uncertainties regarding recovery of the consideration due or where the right to receive payment is contingent on events outside the control of the Group. When it is probable that total contract costs will exceed total contract revenue, the expected loss is recognised immediately in the consolidated income statement

Unbilled revenue represents revenue recognised based on services rendered to the customers, however not billed as of the balance sheet date as per the payment terms agreed with the customers.

Finance and other income

Finance income consists of interest income on funds invested. Interest income is recognised as it accrues in income statement, 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 recognises such parts as individual assets with specific useful lives and depreciation, respectively. Likewise, when a major inspection is performed, its cost is recognised 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 recognised in the consolidated income statement as incurred.

Assets acquired under capital leases are capitalised 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. Assets under capital leases and leasehold improvements are depreciated over the shorter of the lease term or the estimated useful life of the assets.

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

An item of property, plant and equipment and any significant part initially recognised is de-recognised 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 the consolidated income statement when the asset is derecognised.

Leasehold improvements are depreciated on a straight-line basis over the lease period or the estimated useful lives of respective items of property, plant and equipment, whichever is lower.

The assets' residual values, 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 balance sheet date 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 recognised. Goodwill is carried at cost less accumulated impairment losses. The impairment analysis of goodwill is carried out annually at the respective reporting unit levels 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 amortisation and any accumulated impairment losses. Internally generated intangible assets, excluding capitalised development costs, are not capitalised and expenditure is reflected in the consolidated income statement in the year in which the expenditure is incurred.

Intangible assets are amortised over their useful economic life and assessed for impairment whenever there is an indication that the intangible asset may be impaired. The amortisation period and the amortisation 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 amortisation 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 recognised in the consolidated income statement when the asset is derecognised.

Residual values and useful lives are reviewed at each reporting date. In addition, these intangibles are subject to impairment testing annually. Amortisation has been included within 'depreciation and amortisation'. The following useful lives are applied

• Software: 5 years

• Customer contracts and relationships: 0-7 years

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

• Non-compete fees: 2 years

3.7 LEASES

The 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 or 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 capitalised 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 recognised 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 recognised as an expense in the consolidated income statement on a straight line basis over the lease term. Rent abatements and escalations are considered in the calculation of minimum lease payments in the Group's capital lease testing and in determining straight line rent expense for operating leases.

3.8 ACCOUNTING FOR INCOME TAXES

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

Deferred income tax is recognised 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 recognised 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 recognised for taxable temporary differences arising upon the initial recognition of goodwill. Deferred tax is measured at the tax rates 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 realised simultaneously.

A deferred tax asset is recognised to the extent that it is probable that future taxable profits will be available against which the temporary difference can be utilised. 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 realised.

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

Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realised. The provision for income taxes represents the tax payable for the period and the changes during the period in deferred tax assets and liabilities. In case of profits earned by certain subsidiaries, the Company does not record the deferred taxes on its investments in foreign subsidiaries because it deems them to be permanently reinvested.

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 recognised provident funds, approved superannuation schemes and other social securities which are defined contribution plans are recognised as an employee benefit expense in the consolidated income statement when they are incurred.

Defined benefit plans

A defined benefit plan is a post-employment benefit plan other than a defined contribution plan. The Group's net obligation in respect of an approved gratuity plan, which is a defined benefit plan, and certain other defined benefit plans is calculated separately for each plan by estimating the amount of future benefit that employees have earned in return for their service in the current and prior periods; that benefit is discounted to determine its present value. Any unrecognised past service costs and the fair value of any plan assets are deducted. The discount rate is the yield at the reporting date on high quality government bonds that have maturity dates approximating the terms of the Group's obligations and that are denominated in the same currency in which the benefits are expected to be paid. The calculation is performed periodically by a qualified actuary using the projected unit credit method. When the calculation results in a benefit to the Group, the recognised asset is limited to the net total of any unrecognised past service costs and the present value of any future refunds from the plan or reductions in future contributions to the plan.

When the benefits of a plan are improved, the portion of the increased benefit relating to past service by employees is recognised in income statement on a straight-line basis over the average period until the benefits become vested. To the extent that the benefits vest immediately, the expense is recognised immediately in income statement. Actuarial gains and losses are recognised as an expense directly in the consolidated income statement.

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 recognised 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 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 amortised 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 recognised in the consolidated income statement. Any cumulative loss in respect of an available-for-sale financial asset recognised previously in equity is transferred to the consolidated income statement. An impairment loss is reversed if the reversal can be related objectively to an event occurring after the impairment loss was recognised. For financial assets measured at amortised cost, the reversal is recognised in the consolidated income statement.

Non-financial assets

The carrying amounts of the Group's non-financial assets, other than inventories and 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 recognised if the carrying amount of an asset or its cash-generating unit exceeds its estimated recoverable amount. Impairment losses are recognised in consolidated income statement. Impairment losses recognised 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 recognised 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 amortisation, if no impairment loss had been recognised.

3.11 FINANCIAL INSTRUMENTS

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

Financial assets are derecognised 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 derecognised 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 income statement, which are measured initially at fair value. 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 other than those designated and effective as hedging instruments 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 recognised in profit or loss or in other comprehensive income.

All income and expenses relating to financial assets that are recognised in the consolidated income statement are presented within 'finance costs', 'finance income' or 'other financial items, as applicable.

Non-derivative financial instruments are recognised initially at fair value plus, for instruments not at fair value through profit or loss, any directly attributable transaction costs. 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 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, for bank overdraft facility and certain letter of credit given by the Company.

Others

Other non-derivative financial instruments are measured at amortised 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 designate such instruments as effective hedge.

Derivatives are recognised initially at fair value; transaction costs are recognised in the consolidate income statement when incurred. Subsequent to initial recognition, derivatives are measured at fair value, and changes therein are recognised in the consolidated income statement.

Financial liabilities

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

Financial liabilities are recognised when the Group becomes a party to the contractual agreements of the instrument. All interest related charges is recognised as an expense in "finance cost" in the income statement.

Trade payables are recognised initially at their fair value and subsequently measured at amortised cost less settlement payments.

Dividend distributions to shareholders are included in 'other current liabilities' when the dividends are approved by the shareholders' meeting.

3.12 PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS

Provisions are recognised 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 balance sheet date, 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 recognised 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 recognised 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.

Possible inflows of economic benefits to the Group that do not yet meet the recognition criteria of an asset are considered contingent assets.

From time to time, Group entities are subject to ordinary routine litigation incidental to its normal business operations. Management believes that the outcome of these litigation matters will not have a material effect on the Group's results of operations, financial position or cash flows. No amounts have been paid or accrued toward these litigation matters as management believes any unfavourable outcome on any such litigation matters to be remote.

3.13 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 recognises identifiable assets acquired and liabilities assumed in a business combination regardless of whether they have been previously recognised in the acquiree'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 recognised 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 recognised 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 recognised only to the extent that they were recognised 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 minority 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.

3.14 EQUITY

Share capital is determined using the nominal value of shares that have been issued. Incremental costs directly attributable to the issue of ordinary shares and stock options are recognised as a deduction from equity, net of any tax effects.

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 are included in the currency translation reserve.

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

3.15 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 as 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. All share-based remuneration is recognised as an expense in consolidated income statement with a corresponding credit to share compensation reserve.

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.

3.16 SIGNIFICANT ACCOUNTING JUDGMENTS, ESTIMATES AND ASSUMPTIONS

The preparation of the Group's consolidated financial information 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 recognised 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 to be the currency of the primary economic environment in which the entity operates. The management reckons that each of the individual entity's functional currency reflects the transactions, events and conditions under which the entity conducts its business.

Business combinations

Management uses valuation techniques in determining the fair values of the various elements of a business combination (see note 3.13). Particularly, the identification of intangible assets is dependent on the outcome of many variables that affect future profitability.

Goodwill impairment review

In assessing goodwill impairment, management makes judgment of identifying the cash-generating units (CGU) to which the goodwill pertains. Management then estimates the recoverable amount of each asset or 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 recognised is based on an assessment of the probability of the Group's future taxable income against which the deferred tax assets can be utilised. In addition, significant judgement is required in assessing the impact of any legal or economic limits or uncertainties in various tax jurisdictions

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.

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, particularly relating to internally generated intangibles and software.

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 concentrationof credit 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.

4. STANDARDS AND INTERPRETATIONS THAT ARE NOT YET EFFECTIVE AND APPLIED

The following new standards, amendments to standards or interpretations have been issued, but are not effective for these Consolidated Financial Statements and have not been early adopted by the Group:

IFRS 9 Financial Instruments (Effective from 1 January 2015)

The IASB aims to replace IAS 39 Financial Instruments - Recognition and Measurement in its entirety by the end of 2011, with the replacement standard to be effective for annual period's beginning1 January 2015. IFRS 9 is the first part of Phase 1 of this project. The main phases are:

Phase 1: Classification and Measurement

Phase 2: Impairment methodology

Phase 3: Hedge accounting

In addition, a separate project is dealing with de-recognition. Management has yet to assess the impact that this amendment is likely to have on the financial statements of the Group. However, they do not expect to implement the amendments until all chapters of the IAS 39 replacement have been published and they can comprehensively assess the impact of all changes.

Amendment (issued 28 October 2010) (Effective from 1 January 2015)

In October 2010, the IASB amended IFRS 9 to incorporate requirements for classifying and measuring financial liabilities and derecognising financial assets and financial liabilities. Most of IAS 39's requirements have been carried forward unchanged to IFRS 9. Changes have however been made to address issues related to own credit risk where an entity takes the option to measure financial liabilities at fair value.

IFRS 10 Consolidated financial statements (Issued May 2011) (Effective from 1 January 2013)

IFRS 10 introduces a revised definition of control together with accompanying guidance on how to apply it. In contrast to IAS 27 and SIC-12, which resulted in different criteria for determining control being applied to special purpose vehicles, IFRS 10's requirements will apply to all types of potential subsidiaries.

Though the standard is applicable to the Group, the management is yet to assess the impact of the new standard on the consolidated financial statements.

IFRS 12 Disclosure of Interests in Other Entities (Issued May 2011) (Effective from 1 January 2013)

The new standard integrates and makes consistent the disclosure requirements for subsidiaries, joint arrangements, associates and unconsolidated structured entities. The new standard is intended to provide transparency about the risks to which a reporting entity is exposed from its involvement with structured entities.

Consequential amendments to IAS 27 and IAS 28 Investments in Associates and Joint Ventures (IAS 28)

IAS 27 now only deals with separate financial statements. IAS 28 brings investments in joint ventures into its scope. However, IAS 28's equity accounting methodology remains unchanged.

IFRS 13 Fair Value Measurement (Issued May 2011) (Effective from 1 January 2013)

The new IFRS does not affect which items are required to be 'fair-valued', but specifies how an entity should measure fair value and disclose fair value information. IFRS 13 has been developed to remedy this problem, by establishing a single source of guidance for all fair value measurements, clarifying the definition of fair value and related guidance and enhancing disclosures about fair value measurements (new disclosures increase transparency about fair value measurements, including the valuation techniques and inputs used to measure fair value).

Amendments to IAS 1 Presentation of Financial Statements (Issued June 2011) (Effective from 1 July 2012)

The IAS 1 Amendments require an entity to group items presented in other comprehensive income into those that, in accordance with other IFRSs: (a) will not be reclassified subsequently to profit or loss and (b) will be reclassified subsequently to profit or loss when specific conditions are met. The Group's management expects this will change the current presentation of items in other comprehensive income; however, it will not affect the measurement or recognition of such items.

Amendments to IAS 19 Employee Benefits (Issued June 2011) (Effective from 1 January 2013)

The IAS 19 Amendments include a number of targeted improvements throughout the Standard. The main changes relate to defined benefit plans. They:

• eliminate the 'corridor method', requiring entities to recognise all actuarial gains and losses arising in the reporting period

• streamline the presentation of changes in plan assets and liabilities

• enhance the disclosure requirements, including information about the characteristics of defined benefit plans and the risks that entities are exposed to through participation in them.

The amended version of IAS 19 is effective for financial years beginning on or after 1 January 2013. The Group's management has yet to assess the impact of this revised standard on the Group's consolidated financial statements.

5. BASIS OF CONSOLIDATION

Details of the entities, which as of 31 March 2012 form part of the Group and are consolidated under iEnergizer are as follows:

* Dormant company as of 31 March 2012

6 BUSINESS COMBINATION

On February 7, 2012 ("effective time"), iEnergizer Limited (company registered in Guernsey) acquired the Company ('Aptara, Inc.') at an agreed purchase consideration of USD 150,100,000, paid in cash. The acquisition was made through a special purpose entity, iEnergizer-Aptara Merger Sub, Inc. (set up in United States of America and a wholly owned subsidiary of iEnergizer Limited). As part of the acquisition, the special purpose entity merged into Aptara Inc, resulting in the Company becoming a wholly-owned subsidiary of iEnergizer Limited. The acquisition has been accounted for using the acquisition method as prescribed in IFRS 3 (revised). Accordingly, the financial results for the post acquisition period have been included in the consolidated financial statements of the Group. Aptara is a market leader in end to end outsourced multi-channel content production and digital media solutions. The acquisition extends iEnergizer's capabilities in the content production and digital media solution markets, while enlarging its customer base.

Following assets and liabilities are acquired in the business combination and recorded at their fair values:

* Expected life 3- 7 years

Acquisition related costs amounting to USD 930,710 are not included as part of consideration transferred and has been recognised as an expense in the consolidated income statement as part of other expenses.

Goodwill

Goodwill of USD 102,134,822 is primarily related to growth expectations, expected future profitability, Aptara Inc.'s work force and expected cost synergies. Goodwill has been allocated to content delivery unit and is not expected to be deductible for tax purposes.

Aptara Inc.'s contribution to the group result

Aptara Inc. did not have any financial information in IFRS prior to the acquisition date, hence disclosure about revenue and profit or loss of the combined entity for the current reporting year assuming the business combination occurred as of the beginning of reporting year could not be given.

Aptara earned revenue of USD 13,004,436 and incurred a loss before tax of USD 294,118 (after considering amortisation charge, net loss on the foreign exchange transactions and derivative contracts and finance cost for the period of USD 764,642, USD 903,826 and USD 1,230,955 respectively) for the period beginning from 7 February 2012 to 31 March 2012.

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 is 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, covering a detailed three to five year forecast, followed by an extrapolation of expected cash flows for the unit's remaining useful lives using the growth rates stated below.

The recoverable amount of the cash generating units is its value in use which is the present value of the future cash flows expected to be derived from the cash generating units. Management used the following key assumptions to estimate its cash flow projection for the period covered by the most recent budgets/ forecasts:

a) Estimated cash flows for 5-7 years based on internal management budgets.

b) Terminal value arrived by extrapolating last forecasted year cash flows to perpetuity, using a constant long-term growth rate of 3% to 5%. 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.

c) The pre-tax discount rates used are based on the weighted average cost of capital of the relevant underlying cash-generating unit. 

These assumptions are based on past experience and are consistent with market information. In cases where cash flows have been projected to arise for more than 5 years, the management believes that the business environment and stage in life cycle of relevant businesses justifies the use of such projections.

8 OTHER INTANGIBLE ASSETS

The Intangible assets comprises of computer software, customer contracts.

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 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 5 years. The management estimates the fair value of these deposits to be not materially different from the amounts recognised in the financial statements at amortised 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.

11 DEFERRED TAX ASSETS AND LIABILITIES

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 realise within a short period from the reporting dates. All of the Group's trade and other receivables have been reviewed for indicators of impairment. No trade receivables were found to be impaired and accordingly no provision for credit losses has been recorded.

Top five customers for the year ended 31 March 2012 are USD 11,820,842 being 45.82 % (31 March 2011 USD 4,435,616 being 44.50 %) of net trade receivables.

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

13 CASH AND CASH EQUIVALENTS

14 SHORT TERM FINANCIAL ASSETS

Short term investments comprise of investment through banks in highly liquid interest bearing deposits denominated in various currency units which are traded in the market. The changes in the interest rate of these deposits are reflected through the changes in their market values. The Group may redeem these investments at any time at the prevailing market rates.

15 OTHER CURRENT ASSETS

16 MERGER RESERVE

On 15 June 2010, the Company entered into a share exchange agreement with EICR Limited. As per the agreement, EICR Limited has transferred 2,099,346 shares of 1 USD each in iEnergizer Holdings Limited in exchange for the issue by the Company of 150,000,000 ordinary shares to EICR Limited. Consequent to this exchange, iEnergizer Holdings Limited became the wholly owned subsidiary of the Company and the Company became the wholly owned subsidiary of EICR Limited which was diluted to 78.71 percent upon listing of the Company on AIM.

In the absence of explicit guidance available under IFRS on accounting of acquisition of common control entities, the Group chose to account for this transaction using "Pooling of interest method". As per the pooling of interest method, the consolidated financial statements of year ended 31 March 2012 were prepared assuming that transfer of shares was completed on the first day of the period presented i.e. 01 April 2009. The share capital of iEnergizer Limited, Guernsey as at 1 April 2009 was determined as the equity issued to effect the transaction, equal to the net asset value of Mauritius as of 1 April 2010.

The difference between equity of iEnergizer Holdings Limited (the acquirer) and the net asset value of iEnergizer Holdings Limited (the acquiree in this case) as at 01 April 2009 was adjusted in equity under the heading 'merger reserve' as under:

17 LONG TERM BORROWINGS/SHORT TERM BORROWINGS

Non-current portion of borrowings

Short term borrowings

# Loan from others consists of loan received from a company named Gynia Holdings Ltd (a non-related company) repayable on demand and carrying an interest rate of 5.25% p.a. No assets have been pledged as security for this loan.

18 LEASES

The Group's financial lease payments are due on computers (including embedded software) taken on lease for operating activities. The net carrying value of computers and plant and machinery taken on lease as at 31 March 2012 is USD 947,677 (31 March 2011: 64,467).

The minimum lease rent payable for the assets taken on finance leases (included under current and non-current borrowings) are as under:

The Group's approximate future minimum lease payments under non-cancellable operating leases are:

The Group's operating lease payments are cancellable as well as non-cancellable and are due on premises taken on lease for operating activities.

Lease expense for premises taken on lease, recognised as expense in the consolidated income statement for the year ended 31 March 2012 is USD 935,896 (31 March 2011: USD 399,122). There were no sublease payments or contingent rent payments. Assets held under lease agreements are used exclusively by the Group and sublease of premises are not allowed as a part of the agreements.

19 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 as a result of the unused entitlement that has accumulated at the statement of financial position.

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 utilised to calculate the present value of benefit obligations is the projected unit credit cost method. The Company is using the corridor approach, which suggests a minimum amount of actuarial gains/losses to be amortised. 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, accrued pension liability and compensated absences are as follows:

31 March 2012

31 March 2011