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Notes to Accounts of Cyient Ltd.

Mar 31, 2023

The Company does not face a significant liquidity risk with regard to its lease liabilities, as the current assets are sufficient to meet the obligations related to lease liabilities as and when they fall due.

The aggregate depreciation on ROU assets has been included under depreciation and amortisation expense in the statement of profit and loss.

Rental expense for low value assets and short-term leases was ? 35 (March 31, 2022 - ? 35) included under other expenses in the statement of profit and loss (refer note 22).

Note:

During the year 2021-22, the Company entered into an agreement with a third party, wherein it was granted technology license to develop (namely Software Design Radio), test and commercially utilise the benefits from such testing and development activity. Accordingly, the initial amount and subsequent development costs aggregating to ? 791 had been classified under ''intangible assets under development’.

On December 22, 2021, the Board of Directors authorized the Company to hive off the Software Design Radio (SDR) division to Innovation Communications Systems Limited (ICS), a company in the business of wireless communication systems. The transfer was undertaken through a Business Transfer Agreement between the Company and ICS dated December 31, 2021 for ? 791.

In exchange for the SDR division and an additional cash investment of ? 100 by the Company in ICS aggregating to ? 891, the Company received a 15% stake in the paid up share capital of ICS (on a fully diluted basis). The said transfer was recorded in the books at fair value and did not result in any material profit / loss on disposal.

On May 6, 2022, the Company entered into a Business Transfer Agreement (BTA) to acquire Specified Business of Klaus IT Solutions Private Limited (''Klaus IT’) relating to provision of professional services being engineering, software and IT for an upfront cash consideration of ? 850 Mn. Klaus IT’s business has been acquired by the Company effective April 30, 2022 on completion of the closing conditions under the BTA and has been consolidated with effect from that date.

The fair value of the purchase consideration of ? 850 has been paid upfront. The fair value of net assets acquired on the acquisition date amounted to ? 740. The excess of purchase consideration over the fair value of the net assets acquired has been attributed towards goodwill of ? 110 and it also entails the movement of manpower to the Company. Goodwill arising on the acquisition is not deductible for tax purposes. ''Klaus IT’ has contributed revenues amounting to ? 612 and profit amounting to ? 105 to the Company’s performance for the year ended March 31, 2023. If the acquisition had taken place at the beginning of the year, revenues would have been ? 667 and the profit would have been ? 115.

Expected credit loss (ECL):

The Company’s exposure to credit risk is influenced mainly by the individual characteristics of each customer. Credit risk is managed through credit approvals, establishing credit limits and continuously monitoring the creditworthiness of customers to which the Company grants credit terms in the normal course of business. The average credit period is between 60- 90 days. Before accepting any new customer, the Company uses an internal credit scoring system to assess the potential customer’s credit quality and defines credit limits for each customer. Limits and scoring attributed to customers are reviewed once a year.

As a practical expedient (Ind AS 109 B5.5.35), the Company uses a provision matrix to determine impairment loss of its trade receivables. The provision matrix is based on its historically observed default rates over the expected life of the trade receivable and is adjusted for forward looking estimates. Accordingly, the Company creates provision for past due receivables less than 270 days ranging between 1%-30% and 100% for the receivables due beyond 270 days. The ECL allowance (or reversal) during the year is recognised in the statement of profit and loss.

(D) Rights, preferences and restrictions attached to equity shares:

The Company has only one class of equity shares having a par value of ? 5 per share. Each holder of equity shares is entitled to one vote per share. The dividend proposed by the Board of Directors is subject to approval of the shareholders in the ensuing Annual General Meeting, except in case of interim dividend. In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the Company in proportion to their shareholding.

(E) Buyback of Equity shares:

Aggregate number of equity shares bought back during the period of previous five years : 3,123,963 (March 31, 2022: 3,123,963).

(F) Purchase of Treasury shares:

The Company has constituted a ''Cyient Associate Stock Option Plan 2021 Trust (''Trust’), to grant, offer and issue options to the employees of the Company and its subsidiaries. During the year 2021-22, the Trust has acquired 1,079,000 equity shares from the secondary market amounting to ? 950 based on the loan received from the Company. The Company has treated the Trust as its direct extension, such that the assets and liabilities of the Trust are included in the standalone financial statements and the shares acquired/held by the Trust are classified as "Treasury Shares".

(G) Details of shares allotted under Associate Stock Option Plans:

(i) 1,162,068 (March 31, 2022: 1,151,208) equity shares of ? 5 each fully paid-up was allotted to associates of the Company pursuant to the Associate Stock Option Plan - 2008 (ASOP - 2008)

(ii) 333,442 (March 31, 2022: 184,265) equity shares of ? 5 each fully paid-up was allotted to associates of the Company pursuant to the Associate Stock Option Plan - 2015 (ASOP - 2015)

(iii) 149,093 (March 31, 2022: 51,540) equity shares of ? 5 each fully paid-up was allotted to associates of the Company pursuant to the Associate Stock Option Plan - 2020 (ASOP - 2020)

(H) Details of shares reserved for issue:

(i) Shares aggregating 25,000 and 35,860 as at March 31, 2023 and March 31, 2022 respectively, reserved for issue under ASOP 2008 scheme.

(ii) Shares aggregating 491,481 and 679,898 as at March 31, 2023 and March 31, 2022 respectively, reserved for issue under ASOP 2015 scheme.

(iii) Shares aggregating 97,143 and 164,646 as at March 31, 2023 and March 31, 2022 reserved for issue under RSU scheme 2020.

(iv) Shares aggregating 1,009,100 and 1,026,500 as at March 31, 2023 and March 31, 2022 reserved for issue under ASOP scheme 2021.

(I) i. Associate Stock Option Plans

Associate Stock Option Plan - 2008 (ASOP 2008):

The Company instituted ASOP 2008 in July 2008 and earmarked 1,000,000 equity shares of ? 5 each for issue to the employees under ASOP. The Company modified ASOP 2008 and adjusted the number of options and exercise price on account of bonus issue 1:1 during financial year 2010-11. Under ASOP 2008, options will be issued to employees at an exercise price, which shall not be less than the market price on the date of grant. These options vest over a period ranging from one to three years from the date of grant, starting with 10% at the end of first year, 15% at the end of one and half years, 20% after two years, 25% at the end of two and half years and 30% at the end of third year.

Out of the total outstanding options 20,000 (March 31, 2022: 20,000) options pertain to options granted to the associates of subsidiary companies.

As at March 31, 2023, 1,162,068 (March 31, 2022: 1,151,208) equity shares of ? 5 each have been allotted to the associates under ASOP 2008 plan. Accordingly, options (net of cancellations) for a total number of 25,000 (March 31, 2022: 35,860) are outstanding as at March 31, 2023.

Associate Stock Option Plan - 2015 (ASOP 2015):

The Company instituted ASOP 2015 in July 2015 and earmarked 1,200,000 equity shares of ? 5 each for issue to the employees under ASOP. Under ASOP 2015, options will be issued to employees at an exercise price, which shall not be less than the market price on the date of grant. These options vest over a period ranging from one to three years from the date of grant, starting with 10% at the end of first year, 15% at the end of one and half years, 20% after two years, 25% at the end of two and half years and 30% at the end of third year.

Associate Restricted Stock Units Scheme 2020 (ARSU 2020):

The Company has instituted the ARSU’s 2020 plan earmarking 1,050,000 shares of ? 5 each which provided for grant of RSUs to eligible associates of the Company and its subsidiaries. The Board of Directors recommended the establishment of the plan on January 16, 2020 and the shareholders approved the recommendation of Board of Directors on March 5, 2020 through a postal ballot. The RSUs will vest over a period of three years from the date of grant.

Out of the total outstanding options 15,980 (March 31, 2022: 14,840) options pertain to options granted to the associates of subsidiary companies.

As at March 31, 2023, 149,093 (March 31,2022: 51,540) equity shares of ? 5 each have been allotted to the associates under ASRSU 2020 plan. Accordingly, options (net of cancellations) for a total number of 97,143 (March 31, 2022: 164,646) are outstanding as at March 31, 2023.

ASOP 2021

The Company has instituted the ASOP 2021 scheme and also incorporated ''Cyient Associate Stock Option Scheme 2021 Trust’ (Trust), whereunder shares were purchased from the stock exchanges through the Trust. KP Corporate Solutions Limited, Corporate Trustee, has been appointed as trustee for this Trust. Shareholders of the Company have approved the Scheme and the formation of Trust through postal ballot on February 23, 2021. During the year ended March 31, 2022, Trust purchased 1,079,000 shares.

*During the previous year, Company has intimated the grant of performance based stock incentive in the form of Stock options (SO’s) to certain eligible employees, which could eventually result in the issue of 1,026,500 shares against such options, subject to the fulfilment of vesting conditions. During the year Company has granted 422,600 (March 31, 2022: Nil) options to the employees.

Out of the total outstanding options 403,640 (March 31, 2022: 394,000) options pertain to options granted to the associates of subsidiary companies.

ii. Fair value of stock options granted during the year:

The weighted average fair value of the share options during the year is ? 61.69 - ?791.85 (2021-22: ? 61.69 - ?713.88). Options and RSUs were priced using Black Scholes pricing model. Where relevant, the expected life used in the model has been adjusted based on management''s best estimate for the effects of non-transferability, exercise restrictions, and behavioural considerations. Expected volatility is based on the historical share price volatility over the past years.

Nature of reserves:(a) Capital redemption reserve

Represents the nominal value of equity shares bought back pursuant to Buyback in accordance with Section 69 of the Companies Act, 2013.

(b) Securities premium

Amounts received on issue of shares in excess of the par value has been classified as securities premium. The reserve is utilised in accordance with the provisions of the Companies Act, 2013.

(c) General reserve

This represents appropriation of profit by the Company. General reserve is appropriated for the creation of capital redemption reserve up on Buyback of equity shares pursuant to section 69 of the Companies Act, 2013.

(d) Share based payments reserve

The Share based payments reserve is used to record the value of equity-settled share based payment transactions with employees. The amounts recorded in this account are transferred to securities premium upon exercise of stock options by employees.

(e) Cash flow hedge reserve

Represents effective portion of gains and loss on designated portion of hedging instruments in a cash flow hedge, net of tax.

(f) Special Economic Zone (''SEZ'') re-investment reserve

Represents amount transferred to the SEZ reinvestment reserve The reserve has been created out of the profits of eligible SEZ units in terms of the provisions of Section 10AA(1)(ii) of the Income-tax Act, 1961 and shall be utilized by the Company for acquiring new plant and machinery for the purpose of its business in the terms of Section 10AA(2) of the Income-tax Act, 1961.

(g) Retained earnings

(i) Retained earnings comprises of prior years’ undistributed earnings after taxes along with current year profit, net of dividends declared and dividend distribution tax thereon.

(ii) Remeasurement gains and losses arising from experience adjustments and changes in actuarial assumptions are recognised in the year in which they occur, directly in other comprehensive income. These are presented within retained earnings.

(h) Treasury shares

The Company has constituted a ''Cyient Associate Stock Option Plan 2021 Trust (''Trust’), to grant, offer and issue options to the employees of the Company and its subsidiaries. During the year 2021-22, the Trust has acquired 1,079,000 equity shares from the secondary market amounting to ? 950 based on the loan received from the Company. The Company has treated the Trust as its direct extension, such that the assets and liabilities of the Trust are included in the standalone financial statements and the shares acquired/held by the Trust are classified as "Treasury Shares".

(i) Equity instruments through OCI

Represents the cumulative gains and loss arising from fair valuation of the equity instruments measured at the fair value through OCI, net of amounts reclassified to retained earnings when the investments have been disposed off.

(j) Share application money pending for allotment

Represents amount received from associates on exercise of stock options, pending allotment.

i. Defined Benefit Plans - Gratuity

In accordance with the ''Payment of Gratuity Act, 1972’ of India, the Company provides for gratuity, a defined retirement benefit plan (the ''Gratuity Plan’) covering eligible employees. Liabilities with regard to such gratuity plan are determined by an independent actuarial valuation and are charged to the Statement of Profit and Loss in the year determined. The gratuity plan is administered by the Company’s own trust which has subscribed to the "Group Gratuity Scheme" of Life Insurance Corporation of India.

The present value of the defined benefit obligation (DBO), and the related current service cost and past service cost, were measured using the projected unit credit method.

The average rate of increase in compensation levels is determined by the Company, considering factors such as, the Company’s past compensation revision trends and management’s estimate of future salary increases. The discount rate is based on the prevailing market yields of Government of India securities as at the Balance Sheet date for the estimated term of the obligation.

Sensitivity analysis:

Reasonably possible changes at the reporting date to one of the relevant actuarial assumptions, holding other assumptions constant, would have affected the defined benefit obligation by the amounts shown below:

Composition of plan assets:

Plan assets comprise of100% insurer managed funds. Fund is managed by Life Insurance Corporation as per Insurance Regulatory and Development Authority of India (IRDA) guidelines, category wise composition of the plan assets is not available.

The accrual for unutilised leave is determined for the entire available leave balance standing to the credit of the employees at year-end as per Company’s policy. The value of such leave balance eligible for carry forward, is determined by an independent actuarial valuation and charged to statement of profit and loss in the year determined.

The average rate of increase in compensation levels is determined by the Company, considering factors such as, the Company’s past compensation revision trends and management’s estimate of future salary increases. The discount rate is based on the prevailing market yields of Government of India securities as at the Balance Sheet date for the estimated term of the obligation.

c) Long Service Leave - Australia:

The regulations of long service leave are applicable to the associates of the Company employed at its Australia Branch. The accrual of long service leave is in addition to the compensated absences to which the associates are entitled to. These long service leaves are dependent on the tenure of the employee with the same employer and are regulated by respective state laws.

The difference between the tax rate enacted in India and the effective tax rate of the Company is primarily on account of the benefit availed on the profits of the undertakings situated in Special Economic Zones (SEZ). The SEZ units of the Company which began to provide the services on or after April 1, 2005 are eligible for 100% deduction of profits and gains derived from export of services for a period of first five years from the year of commencement of provision of services. For the next five years, they are eligible for deduction of 50% of profits and gains derived from export of services.

Fixed price:

Fixed price arrangements with customers have defined delivery milestones with agreed scope of work and pricing for each milestone. Revenue from fixed-price contracts, where the performance obligations are satisfied over time and when there is no uncertainty as to measurement or collectability of consideration, is recognised as per the ''percentage-of-completion'' method. When there is uncertainty as to measurement or ultimate collectability, revenue recognition is postponed until such uncertainty is resolved. Percentage of completion is determined based on the project costs incurred to date as a percentage of total estimated project costs required to complete the project. The input method has been used to measure the progress towards completion

as there is direct relationship between input and productivity. In certain projects, a fixed quantum of service or output units is agreed at a fixed price for a fixed term. In such contracts, revenue is recognised with respect to the actual output achieved till date as a percentage of total contractual output. Any residual service unutilised by the customer is recognised as revenue on completion of the term.

Time and material:

Revenue from time and material contracts are recognised as and when services are rendered to the customer. These are based on the efforts spent and rates agreed with the customer. Revenue from the end of the last invoicing to the reporting date is recognised as unbilled revenue.

Product sale:

Revenue from sale of products is recognised at the point in time when control of the asset is transferred to the customer, generally on delivery of the products.

Sales volume discounts are reduced from the contract price to recognise the revenue and does not have material impact on revenue recognised.

The Company classifies the right to consideration in exchange for deliverables as either a receivable or as unbilled revenue. A receivable is a right to consideration that is unconditional upon passage of time. Revenue in excess of invoicing are classified as contract assets (unbilled revenue) while invoicing in excess of revenue are classified as contract liabilities (unearned revenues).

Contract assets:

During the year ended March 31, 2023, ? 1,112 of contract assets as at March 31, 2022 has been reclassified to receivables on completion of performance obligation. During the year ended March 31, 2022, ? 776 of contract assets as at March 31, 2021 has been reclassified to receivables on completion of performance obligation.

Contract liabilities:

a) . Unearned revenue: During the year ended March 31, 2023 the Company has recognized revenue of ? 148 arising from

contract liabilities as at March 31, 2022. During the year ended March 31, 2022, the Company recognized revenue of? 185 arising from opening unearned revenue as at March 31, 2021.

b) . Advance from customers: During the year ended March 31, 2023 the Company recognised revenue of ? 56 arising from

advance from customers as at March 31, 2022. During the year ended March 31, 2022 the Company recognised revenue of ? 843 arising from advance from customers as at March 31, 2021.

The Company has applied practical expedient and has not disclosed information about remaining performance obligations in contracts, where the original contract duration is one year or less or where the entity has the right to consideration that corresponds directly with the value of entity’s performance completed to date. Consequently, disclosure related to transaction price allocated to remaining performance obligation is not material.

i. Contribution to provident fund and other funds Provident fund:

The Company makes provident fund contributions which are defined contribution plans for qualifying employees. Under the scheme, the Company is required to contribute a specified percentage of the payroll costs to fund the benefits. These contributions are made to the Fund administered and managed by the Government of India. The Company’s monthly contributions are charged to the statement of profit and loss in the year they are incurred. Total expense recognised during the year aggregated ? 520 (2021-22: ? 392).

Gratuity (funded):

Amount recognised in statement of profit and loss in respect of gratuity: ? 171 (2021-22: ? 160). [refer note 12 (i)].

National Pension Scheme:

Amount recognised in statement of profit and loss in respect of national pension scheme ? 19 (2021-22: ? 14) Superannuation fund - India:

The employees receive benefit under a Superannuation scheme which is a defined contribution scheme wherein the employee has an option to choose the percentage of contribution between 5% to 15% of the basic salary of the covered employee. These contributions are made to a fund administrated by Life Insurance Corporation of India. The Company’s monthly contributions are charged to the statement of profit and loss in the year they are incurred. Total expense recognised during the year aggregated ? 24 (2021-22: ? 21).

Employees'' State Insurance Scheme:

Amount recognised in the statement of profit and loss in respect of Company’s contribution to employees’ state insurance scheme ? 22 (2021-22: ? 28).

ii. Superannuation fund - Australia

The employees at the Australia branch of the Company are also covered under a superannuation scheme. The Company contributes 9.5% of the basic salary of the employee. The Company’s monthly contributions are charged to the statement of profit and loss in the year they are incurred. Total expense recognised during the year aggregated ? 4 (2021-22: ? 4).

(i) Expenditure for Corporate Social Responsibility:

The Company contributes towards Corporate Social Responsibility (CSR) activities through Cyient Foundation and Cyient Urban Micro Skill Centre Foundation (refer note 24). The Company has formed CSR committee as per Section 135 of the Companies Act, 2013 to formulate and recommend to the Board, a Corporate Social Responsibility Policy which shall indicate the activities to be undertaken by the company as specified by law. The areas for CSR activities are promoting education, adoption of schools, facilitating skill development, medical and other social projects. Expenses incurred on CSR activities through Cyient Foundation and contributions towards other charitable institutions are charged to the statement of profit and loss under ''Other Expenses’: ? 81 (2021-22 - ? 94).

Nature of CSR activities:

Quality Education, IT / Digital Literacy, Skill Development and Employment, Women Empowerment and Sustainable Livelihood, Community Development and Environmental Protection, Preventive Healthcare and Innovation and Entrepreneurship.

ii. Expected credit loss:

Provision for expected credit loss allowance includes allowance on other financial assets ? 112 ( 2021-22: ? Nil) .

23. Contingent liabilities and commitments

Particulars

As at

March 31, 2023

As at

March 31, 2022

(A) Contingent liabilities:

(a). Claims against the Company not acknowledged as debt

519

553

(refer note (i) to (v) below)

(b). Guarantees (refer note (vi) below)

17,241

10,573

17,760

11,126

(B) Commitments:

Contracts remaining to be executed on capital account and not provided for (net of capital advances)

105

159

105

159

Total

17,865

11,285

Notes:

(i) The Company disputed various demands raised by income tax authorities for the assessment years 2017-18 and 201819 (March 31, 2022: 2002-03, 2003-04, 2013-14, 2014-15, 2016-17, 2017-18 & 2018-19) which are pending at various stages of appeals. The aggregate amount of disputed tax not provided for is ? 6 (March 31, 2022 - ? 40). The Company is confident that these appeals will be decided in its favour.

(ii) The Company disputed various demands raised by the sales tax authorities for the financial years 2004-05 to 2009-10 and 2015-16 to 2017-18 (till June 2017) (March 31, 2022 - 2004-05 to 2009-10 and 2015-16 to 2017-18 (till June 2017)). The Company filed appeals, which are pending with the appropriate authorities. The aggregate amount of disputed tax not provided for is ? 21 (March 31, 2022 - ? 21). The Company is confident that these appeals will be decided in its favour. The above does not include show cause notices received by the Company.

(iii) The Company disputed various demands raised by the service tax authorities for the financial years 2006-07 to 2009-10 and 2013-14 to 2017-18 (till June 2017) (March 31, 2022: 2006-07 to 2009-10 and 2013-14 to 2017-18 (till June 2017)). The Company filed appeals, which are pending with the appropriate authorities. The aggregate amount of disputed tax not provided for is ? 371 (March 31, 2022 - ? 371). The Company is confident that these appeals will be decided in its favour. The above does not include show cause notices received by the Company.

(iv) The Company is contesting certain pending service tax refunds amounting to ? 29 (March 31, 2022 : ? 29) at various appellate authorities. The Company is confident that these appeals will be decided in its favour.

(v) During the financial year 2015-16, the Government of India notified an amendment to the Payment of Bonus Act, 1961 whereby the applicable slabs as well as coverage limit was enhanced. The said amendment was made effective April 1, 2014. The Company is contesting the retrospective applicability of the amendment for the financial year 2014-15 in the High Court of Judicature at Hyderabad for the states of Telangana and Andhra Pradesh. The aggregate amount of liability pertaining to the financial year 2014-15, not provided for, is ? 92 (March 31, 2022 - ? 92).

(vi) Corporate guarantee has been extended to subsidiaries / step down subsidiaries for availing loans from respective banks / fellow subsidiaries and the Company charges commission from subsidiaries, wherever applicable. (refer note 24 (B))

(C) The Company has certain outstanding export obligations/commitments as at March 31, 2022 and March 31, 2023. Further, the Company has certain commitments to bankers relating to receivable factoring arrangements entered with them in respect of receivables from few customers. These factoring arrangements are without recourse to the Company and in the normal course of business. The Company is confident of meeting these commitments arising from such arrangements.

(i) The Board of Directors of the Company at their meeting held on October 14, 2021 approved the closure of its wholly owned subsidiary, Cyient Israel India Limited (CIIL) in line with its strategy and simplification of legal entity structure. CIIL did not have any operations and the financial results of CIIL are not material to the Group. This has no impact on business as the same is serviced by the existing legal entities.

(ii) Acquired 100% of equity shares of Citec Engineering India Limited on September 01, 2022.

(i) Cyient Europe Limited, acquired 100% of equity shares of Celfinet - Consultoria em Telecomunicacoes, S.A.(and its wholly owned subsidiaries Metemesonip, Unipessoal Lda; Celfinet UK Telecommunications Consulting Services Ltd; Celfinet Espana

- Consultoria en Telecomunicaciones, SL; Celfinet (Brasil) - Consultoria em Telecomunicacoes, Ltda.; Celfinet Mozambique

- Consultoria em Telecomunicacoes, Limitada and Celfinet Mexico - Consultoria de Telecomunicaciones AS) on June 30, 2022.

(ii) Cyient Europe Limited, acquired 100% of equity shares of Sentiec Oyj (and its wholly owned subsidiaries Citec Group Oy Ab; Citec Oy Ab; Citec Engineering France Sarl; Citec AB; Citec Information & Engineering GmbH; Citec Group France SAS; Akilea Overseas Ltd and Citec Norway AS) on September 1, 2022.

1. During the year 2020-21, the Company has impaired the carrying value of its investment in joint venture company, Infotech HAL Limited, India of ? 20, based on the long term outlook of the business.

2. During the FY 2019-20, Company’s subsidiary, Cyient Solutions and Systems Private Limited (''CSS’) has recognised one-time charge of ? 222 relating to costs incurred on development of UAV systems in view of the potential delays in materialization of orders. Accordingly, a corresponding provision for impairment of the loan given to CSS of ? 311 has been recognised in the Statement of Profit and Loss for FY 20.

During the previous year, CSS has recovered ? 35 against aforesaid impairment of non-current assets.

3. Foreign exchange restatements have not been disclosed as transactions during the year.

27. Financial Instruments 27.1 Capital management

The Company manages its capital to ensure that it maximises the return to stakeholders through the optimisation of the capital structure. The Company monitors the return on capital as well as the level of dividends on its equity shares. The Company is predominantly equity financed which is evident from the capital structure. Further the Company has always been positive on its net cash position with cash and bank balances along with other treasury investments.

The management assessed that fair value of cash & cash equivalents and other bank balances, trade receivables, other financial assets, loans , trade payables , lease liabilities and other financial liabilities approximate their carrying amounts largely due to the short-term maturities of these instruments, and hence these are carried at amortised cost.

The fair value of the financial assets and liabilities is included at the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale.

Investment in unquoted equity shares are measured at fair value through initial designation in accordance with Ind-AS 109. Investments in mutual funds and derivative assets/ (liabilities) are mandatorily measured at fair value.

27.3 Fair value hierarchy Valuation technique and key inputs

Level 1 - Quoted prices (unadjusted) in an 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).

The following methods and assumptions were used to estimate the fair values:

* The fair values of the unquoted equity shares and CCPS have been estimated using a DCF model. The valuation requires management to make certain assumptions about the model inputs, including forecast cash flows, earnings growth, discount rate, and probabilities of the various estimates within the range used in management''s estimate of fair value for these unquoted equity investments.

** The Company enters into derivative financial instruments with various counterparties, principally financial institutions with investment grade credit ratings. Foreign exchange forward contracts are valued using valuation techniques, which employs the use of market observable inputs. The most frequently applied valuation techniques include forward pricing using present value calculations. The models incorporate various inputs including the credit quality of counterparties, foreign exchange spot and forward rates, yield curves of the respective currencies, etc. As at March 31, 2023 the marked-to-market value of derivative asset positions is net of a credit valuation adjustment attributable to derivative counterparty default risk. The changes in counterparty credit risk had insignificant impact on the hedge effectiveness assessment for derivatives designated in hedge relationships.

27.4 Financial risk management Financial risk factors

The Company’s activities expose it to a variety of financial risks: market risk, credit risk, liquidity risk and other price risk. The Company’s primary focus is to foresee the unpredictability of financial markets and seek to minimize potential adverse effects on its financial performance. The primary market risk to the Company is foreign exchange risk. The Company uses derivative financial instruments to mitigate foreign exchange related risk exposures. The Company’s exposure to credit risk is influenced mainly by the individual characteristic of each customer and the concentration of risk from the top few customers. The liquidity risk is measured by the Company’s inability to meet its financial obligations as they become due.

Foreign exchange risk

The Company operates internationally and a major portion of the business is dominated in foreign currency predominantly US Dollar, Pound Sterling, Australian Dollar and Euro currencies. Consequently the Company is exposed to foreign exchange risk through its services and purchases / import of services from overseas suppliers in various foreign currencies. The Company holds derivative financial instruments such as foreign exchange forward contracts to mitigate the risk of changes in exchange rates on foreign currency exposures. The exchange rate between the rupee and foreign currencies has changed substantially in recent years and may fluctuate substantially in the future. Consequently, the results of the Company’s operations are affected as the rupee appreciates/ depreciates against these currencies.

The Company monitors and manages its financial risks by analysing its foreign exchange exposures.

The Company, in accordance with its Board approved risk management policies and procedures, enters into foreign exchange forward contracts to manage its exposure in foreign exchange rates.

The Company has applied the hedge accounting principles set out in Indian Accounting Standard - 109 "Financial Instruments" (Ind AS - 109) in respect of such derivative contracts, designated in a hedging relationship, used to hedge its risks associated with foreign currency fluctuations relating to certain highly probable forecast transactions. Accordingly, in respect of all such outstanding contracts as at March 31, 2023 that were designated as effective hedges of highly probable forecast transactions, (loss)/ gain, net of tax aggregating ? (81) (March 31, 2022: ? 128) have been recognised under the cash flow hedge reserve.

Sensitivity analysis:

In respect of the Company’s forward exchange contracts, a 5% increase/decrease in the respective exchange rates of each of the currencies underlying such contracts would have resulted in:

* an approximately ? (669)/ 669 (decrease)/increase in the Company’s other comprehensive income as at March 31, 2023.

* an approximately ? (577)/ 577 (decrease)/increase in the Company’s other comprehensive income as at March 31, 2022.

Foreign currency exposure unhedged

The Company’s exposure to the risk of changes in foreign exchange rates relates primarily to the volatility of the Company’s net financial assets (viz. which includes cash and cash equivalents, trade receivables, other financial assets, trade payables, other financial liabilities), which are denominated in various foreign currencies (USD, Euro, UK pound sterling, Aus $, SGD, CAD, Yen etc.)

Sensitivity analysis:

For the year ended March 31,2023 and March 31,2022 , every 5% increase / decrease ofthe respective foreign currencies compared to functional currency of the Company would impact profit before tax by ? 258 / (? 258) and ? 110 / (? 110) respectively.

Credit risk

Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and arises principally from the Company’s receivables from customers and investment securities. Financial instruments that are subject to concentrations of credit risk principally consist of trade receivables, investments, derivative financial instruments, cash and cash equivalents, bank deposits and other financial assets. None of the financial instruments of the Company result in material concentration of credit risk, except for trade receivables Credit risk is managed through credit approvals, establishing credit limits and continuously monitoring the creditworthiness of customers to which the Company grants credit terms in the normal course of business. The Company establishes an allowance for doubtful debts and impairment that represents its estimate of expected losses in respect of trade and other receivables and investments.

In addition, the Company is exposed, to credit risk in relation to financial guarantees given to subsidiary’s banks. The Company’s exposure in this respect is limited to the maximum amount the Company could have to pay if the guarantee is called on (refer note 23 (A))

Investments:

The Company limits its exposure to credit risk by generally investing in liquid securities and only with counterparties that have a good credit rating. The Company does not expect any losses from non-performance by these counter-parties, and does not have any significant concentration of exposures to specific industry sectors or specific country risks.

Liquidity risk

The Company’s principal sources of liquidity are cash & bank balances, investments in mutual funds and cash generated from operations. The Company believes that working capital is sufficient to meet its current requirements. Accordingly, no liquidity risk is perceived.

As of March 31, 2023 and March 31, 2022, the Company had unutilized credit limits from banks of ? 2,874 and ? 2,669, respectively.

The table below provides details regarding the contractual maturities of significant financial liabilities (excluding lease liabilities) as at March 31, 2023:

Other price risks:

The Company is exposed to equity price risks arising from equity investments. Certain of the Company’s equity investments are held for strategic rather than trading purposes.

The disclosures in respect of the amounts payable to such enterprises as at March 31, 2023 and March 31, 2022 has been made in the financial statements based on information received and available with the Company. Further in view of the Management, the impact of interest, if any, that may be payable in accordance with the provisions of the Act is not expected to be material. The Company has not received any claim for interest from any supplier as at the balance sheet date.

(vii) The Company has not received any fund from any person(s) or entity(ies), including foreign entities (Funding Party) with the understanding (whether recorded in writing or otherwise) that the Company shall:

(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (Ultimate Beneficiaries) or

(b) provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries

(viii) The Company has not any such transaction which is not recorded in the books of accounts that has been surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961 (such as, search or survey or any other relevant provisions of the Income Tax Act, 1961.

34. The code of Social Security, 2020 (''Code'') relating to employee benefits during employment and post-employment received Presidential assent in September 2020 and its effective date is yet to be notified. The Company will assess and record the impact of the Code, once it is effective.

35. Previous year figures have been regrouped / reclassified, where necessary, to conform to the current years'' classification.


Mar 31, 2022

The Company does not face a significant liquidity risk with regard to its lease liabilities, as the current assets are sufficient to meet the obligations related to lease liabilities as and when they fall due.

The aggregate depreciation on ROU assets has been included under depreciation and amortisation expense in the statement of profit and loss.

Rental expense for low value assets and short-term leases was ? 35 (March 31, 2021 - ? 58) included under other expenses in the statement of profit and loss (refer note 22).

(a) The Company entered into an agreement with a third party, wherein it was granted technology license to develop (namely Software Design Radio), test and commercially utilise the benefits from such testing and development activity. Accordingly, the initial amount and subsequent development costs aggregating to ? 791 (March 31, 2021: ? 734) had been classified under ''intangible assets under development’.

On December 22, 2021, the Board of Directors authorized the Company to hive off the Software Design Radio (SDR) division to Innovation Communications Systems Limited (ICS), a company in the business of wireless communication systems. The transfer was undertaken through a Business Transfer Agreement between Cyient and ICS dated December 31, 2021 for ? 791.

In exchange for the SDR division and an additional cash investment of ? 100 by the Company in ICS aggregating to ? 891, the Company received a 15% stake in the paid up share capital of ICS (on a fully diluted basis). The said transfer was recorded in the books at fair value and did not result in any material profit / loss on disposal (refer note 5(a)).

Expected credit loss (ECL):

The Company’s exposure to credit risk is influenced mainly by the individual characteristics of each customer. Credit risk is managed through credit approvals, establishing credit limits and continuously monitoring the creditworthiness of customers to which the Company grants credit terms in the normal course of business. The average credit period is between 60- 90 days. Before accepting any new customer, the Company uses an internal credit scoring system to assess the potential customer’s credit quality and defines credit limits for each customer. Limits and scoring attributed to customers are reviewed once a year.

As a practical expedient, the Company uses a provision matrix to determine impairment loss of its trade receivables. The provision matrix is based on its historically observed default rates over the expected life of the trade receivable and is adjusted for forward looking estimates. The ECL allowance (or reversal) during the year is recognised in the statement of profit and loss.

(D) Rights, preferences and restrictions attached to equity shares:

The Company has only one class of equity shares having a par value of ? 5 per share. Each holder of equity shares is entitled to one vote per share. The dividend proposed by the Board of Directors is subject to approval of the shareholders in the ensuing Annual General Meeting, except in case of interim dividend. In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the Company in proportion to their shareholding.

(E) Buyback of Equity shares:

Aggregate number of equity shares bought back during the period of previous five years : 3,123,963 (March 31, 2021: 3,123,963).

(F) Purchase of Treasury shares:

The Company has constituted a ''Cyient Associate Stock Option Plan 2021 Trust (''Trust’), to grant, offer and issue options to the employees of the Company and its subsidiaries. During the year, the Trust has acquired 1,079,000 equity shares from the secondary market amounting to ? 950 based on the loan received from the Company. The Company has treated the Trust as its direct extension, such that the assets and liabilities of the Trust are included in the standalone and consolidated financial statements and the shares acquired/held by the Trust are classified as "Treasury Shares".

(G) Details of shares allotted under Associate Stock Option Plans:

(i) 1,151,208 (March 31, 2021: 1,078,568) equity shares of ? 5 each fully paid-up was allotted to associates of the Company pursuant to the Associate Stock Option Plan - 2008 (ASOP - 2008)

(ii) 184,265 (March 31, 2021: 20,841) equity shares of ? 5 each fully paid-up was allotted to associates of the Company pursuant to the Associate Stock Option Plan - 2015 (ASOP - 2015)

(iii) 51,540 (March 31, 2021: Nil) equity shares of ? 5 each fully paid-up was allotted to associates of the Company pursuant to the Associate Stock Option Plan - 2020 (ASOP - 2020)

(H) Details of shares reserved for issue:

(i) Shares aggregating 35,860 and 121,000 as at March 31, 2022 and March 31, 2021 respectively, reserved for issue under ASOP 2008 scheme.

(ii) Shares aggregating 679,898 and 855,468 as at March 31, 2022 and March 31, 2021 respectively, reserved for issue under ASOP 2015 scheme.

(iii) Shares aggregating 164,646 and 186,200 as at March 31, 2022 and March 31, 2021 respectively, reserved for issue under RSU scheme 2020.

(iv) Shares aggregating 1,026,500 and Nil as at March 31, 2022 and March 31, 2021 respectively, reserved for issue under ASOP scheme 2021.

(I) i. Associate Stock Option Plans

Associate Stock Option Plan - 2008 (ASOP 2008):

The Company instituted ASOP 2008 in July 2008 and earmarked 1,000,000 equity shares of ? 5 each for issue to the employees under ASOP. The Company modified ASOP 2008 and adjusted the number of options and exercise price on account of bonus issue 1:1 during financial year 2010-11. Under ASOP 2008, options will be issued to employees at an exercise price, which shall not be less than the market price on the date of grant. These options vest over a period ranging from one to three years from the date of grant, starting with 10% at the end of first year, 15% at the end of one and half years, 20% after two years, 25% at the end of two and half years and 30% at the end of third year.

Out of the total outstanding options, 20,000 (March 31, 2021: 47,503) options pertain to options granted to the associates of subsidiary companies.

As at March 31, 2022, 1,151,208 (March 31, 2021: 1,078,568) equity shares of ? 5 each have been allotted to the associates under ASOP 2008 plan. Accordingly, options (net of cancellations) for a total number of 35,860 (March 31, 2021: 121,000) are outstanding as at March 31, 2022.

Associate Stock Option Plan - 2015 (ASOP 2015):

The Company instituted ASOP 2015 in July 2015 and earmarked 1,200,000 equity shares of ? 5 each for issue to the employees under ASOP. Under ASOP 2015, options will be issued to employees at an exercise price, which shall not be less than the market price on the date of grant. These options vest over a period ranging from one to three years from the date of grant, starting with 10% at the end of first year, 15% at the end of one and half years, 20% after two years, 25% at the end of two and half years and 30% at the end of third year.

Out of the total outstanding options 316,177 (March 31, 2021: 365,080) options pertain to options granted to the associates of subsidiary companies.

As at March 31, 2022, 184,265 (March 31, 2021: 20,841) equity shares of ? 5 each have been allotted to the associates under ASOP 2015 plan. Accordingly, options (net of cancellations) for a total number of 679,898 (March 31, 2021: 855,468) are outstanding as at March 31, 2022.

Associate Restricted Stock Units Scheme 2020 (ARSU 2020):

The Company has instituted the ARSU’s 2020 plan earmarking 1,050,000 shares of ? 5 each which provided for grant of RSUs to eligible associates of the Company and its subsidiaries. The Board of Directors recommended the establishment of the plan on January 16, 2020 and the shareholders approved the recommendation of Board of Directors on March 5, 2020 through a postal ballot. The RSUs will vest over a period of three years from the date of grant.

Out of the total outstanding options 14,840 (March 31, 2021: 13,210) options pertain to options granted to the associates of subsidiary companies.

As at March 31, 2022, 51,540 (March 31, 2021: Nil) equity shares of ? 5 each have been allotted to the associates under ASRSU 2020 plan. Accordingly, Options (net of cancellations) for a total number of 164,646 (March 31, 2021: 186,200) are outstanding as at March 31, 2022.

ASOP 2021

The Company has instituted the ASOP 2021 scheme and also incorporated ''Cyient Associate Stock Option Scheme 2021 Trust’ (ASOP Trust), whereunder shares were purchased from the stock exchanges through the ASOP Trust. KP Corporate Solutions Limited, Corporate Trustee, has been appointed as trustee for this ASOP Trust. Shareholders of the Company have approved the Scheme and the formation of ASOP Trust through postal ballot on 23rd February 2021.

*During the current year, Company has intimated the grant of performance based stock incentive in the form of Stock options (SO’s) to certain eligible employees, which could eventually result in the issue of 1,026,500 shares against such options, Subject to the fulfilment of vesting conditions.

Out of the total outstanding options 394,000 (March 31, 2021: Nil) options pertain to options granted to the associates of subsidiary companies.

ii. Fair value of stock options granted during the year:

The weighted average fair value of the share options during the year is ? 61.69 - ?713.88 (2020-21: ? 61.69 - ? 256.08). Options and RSUs were priced using Black Scholes pricing model. Where relevant, the expected life used in the model has been adjusted based on management''s best estimate for the effects of non-transferability, exercise restrictions, and behavioural considerations. Expected volatility is based on the historical share price volatility over the past years.

Nature of reserves:(a) Capital redemption reserve

Represents the nominal value of equity shares bought back pursuant to Buyback in accordance with Section 69 of the Companies Act, 2013.

(b) Securities premium

Amounts received on issue of shares in excess of the par value has been classified as securities premium. The reserve is utilised in accordance with the provisions of the Companies Act, 2013.

(c) General reserve

This represents appropriation of profit by the Company. General reserve is appropriated for the creation of capital redemption reserve up on Buyback of equity shares pursuant to section 69 of the Companies Act, 2013.

(d) Share based payments reserve

The Share based payments reserve is used to record the value of equity-settled share based payment transactions with employees. The amounts recorded in this account are transferred to securities premium upon exercise of stock options by employees.

(e) Cash flow hedge reserve

Represents effective portion of gains and loss on designated portion of hedging instruments in a cash flow hedge, net of tax.

(f) Special Economic Zone (''SEZ'') re-investment reserve

The Special Economic Zone (SEZ) re-investment reserve is created out of the profit of eligible SEZ units in terms of the provisions of section 10AA(1)(ii) of the Income-tax Act, 1961. The reserve will be utilised by the Company for acquiring new assets for the purpose of its business as per the terms of section 10AA(2) of Income-tax Act, 1961.

(g) Retained earnings

(a) Retained earnings comprises of prior years’ undistributed earnings after taxes along with current year profit, net of dividends declared and dividend distribution tax thereon.

(b) Remeasurement gains and losses arising from experience adjustments and changes in actuarial assumptions are recognised in the year in which they occur, directly in other comprehensive income. These are presented within retained earnings.

(h) Treasury shares

The Company has constituted a ''Cyient Associate Stock Option Plan 2021 Trust (''Trust’), to grant, offer and issue options to the employees of the Company and its subsidiaries. During the year, the Trust has acquired 1,079,000 equity shares from the secondary market amounting to ? 950 based on the loan received from the Company. The Company has treated the Trust as its direct extension, such that the assets and liabilities of the Trust are included in the standalone and consolidated financial statements and the shares acquired/held by the Trust are classified as "Treasury Shares".

(i) Equity instruments through OCI

Represents the cumulative gains and loss arising from fair valuation of the equity instruments measured at the fair value through OCI, net of amounts reclassified to retained earnings when the investments have been disposed off.

(j) Share application money pending for allotment

Represents amount received from associates on exercise of stock options, pending allotment.

i. Defined Benefit Plans - Gratuity

In accordance with the ''Payment of Gratuity Act, 1972’ of India, the Company provides for gratuity, a defined retirement benefit plan (the ''Gratuity Plan’) covering eligible employees. Liabilities with regard to such gratuity plan are determined by an independent actuarial valuation and are charged to the Statement of Profit and Loss in the year determined. The gratuity plan is administered by the Company’s own trust which has subscribed to the "Group Gratuity Scheme" of Life Insurance Corporation of India.

The present value of the defined benefit obligation (DBO), and the related current service cost and past service cost, were measured using the projected unit credit method.

The average rate of increase in compensation levels is determined by the Company, considering factors such as, the Company’s past compensation revision trends and management’s estimate of future salary increases. The discount rate is based on the prevailing market yields of Government of India securities as at the Balance Sheet date for the estimated term of the obligation.

Composition of plan assets:

Plan assets comprise of100% insurer managed funds. Fund is managed by Life Insurance Corporation as per Insurance Regulatory and Development Authority of India (IRDA) guidelines, category wise composition of the plan assets is not available.

The accrual for unutilised leave is determined for the entire available leave balance standing to the credit of the employees at year-end as per Company’s policy. The value of such leave balance eligible for carry forward, is determined by an independent actuarial valuation and charged to statement of profit and loss in the year determined.

The average rate of increase in compensation levels is determined by the Company, considering factors such as, the Company’s past compensation revision trends and management’s estimate of future salary increases. The discount rate is based on the prevailing market yields of Government of India securities as at the Balance Sheet date for the estimated term of the obligation.

c) Long Service Leave - Australia:

The regulations of long service leave are applicable to the associates of the Company employed at its Australia Branch. The accrual of long service leave is in addition to the compensated absences to which the associates are entitled to. These long service leaves are dependent on the tenure of the employee with the same employer and are regulated by respective state laws.

The difference between the tax rate enacted in India and the effective tax rate of the Company is primarily on account of the benefit availed on the profits of the undertakings situated in Special Economic Zones (SEZ). The SEZ units of the Company which began to provide the services on or after April 1, 2005 are eligible for 100% deduction of profits and gains derived from export of services for a period of first five years from the year of commencement of provision of services. For the next five years, they are eligible for deduction of 50% of profits and gains derived from export of services.

Fixed price:

Fixed price arrangements with customers have defined delivery milestones with agreed scope of work and pricing for each milestone. Revenue from fixed-price contracts, where the performance obligations are satisfied over time and when there is no uncertainty as to measurement or collectability of consideration, is recognised as per the ''percentage-of-completion'' method. When there is uncertainty as to measurement or ultimate collectability, revenue recognition is postponed until such uncertainty is resolved. Percentage of completion is determined based on the project costs incurred to date as a percentage of total estimated project costs required to complete the project. The input method has been used to measure the progress towards completion as there is direct relationship between input and productivity. In certain projects, a fixed quantum of service or output units is agreed at a fixed price for a fixed term. In such contracts, revenue is recognised with respect to the actual output achieved till date as a percentage of total contractual output. Any residual service unutilised by the customer is recognised as revenue on completion of the term.

Time and material:

Revenue from time and material contracts are recognised as and when services are rendered to the customer. These are based on the efforts spent and rates agreed with the customer. Revenue from the end of the last invoicing to the reporting date is recognised as unbilled revenue.

Product sale:

Revenue from sale of products is recognised at the point in time when control of the asset is transferred to the customer, generally on delivery of the products.

Sales volume discounts are reduced from the contract price to recognise the revenue and does not have material impact on revenue recognised.

The Company classifies the right to consideration in exchange for deliverables as either a receivable or as unbilled revenue. A receivable is a right to consideration that is unconditional upon passage of time. Revenue in excess of invoicing are classified as contract assets (unbilled revenue) while invoicing in excess of revenue are classified as contract liabilities (unearned revenues).

Contract assets:

During the year ended March 31, 2022, ? 776 of contract assets as at March 31, 2021 has been reclassified to receivables on completion of performance obligation. During the year ended March 31, 2021, ? 1,136 of contract assets as at March 31, 2020 has been reclassified to receivables on completion of performance obligation.

Contract liabilities:

During the year ended March 31, 2022 the Company has recognized revenue of ? 185 arising from contract liabilities as at March 31, 2021. During the year ended March 31, 2021, the Company recognized revenue of ? 105 arising from opening unearned revenue as at March 31, 2020."

The Company has applied practical expedient and has not disclosed information about remaining performance obligations in contracts, where the original contract duration is one year or less or where the entity has the right to consideration that corresponds directly with the value of entity’s performance completed to date. Consequently, disclosure related to transaction price allocated to remaining performance obligation is not material.

(i) During the year ended March 31, 2022, the Company received a dividend of ? 1,711 from Cyient Inc, its wholly owned subsidiary.

(ii) During the year, the Company has recognised export incentives of ? 42 (2020-21: ? 519) aggregating under schemes defined by the Government of India, as other income upon satisfying the conditions specified in the applicable scheme and monetized ? 42 (2020-21: ? 519).

i. Contribution to provident fund and other funds Provident fund:

The Company makes provident fund contributions which are defined contribution plans for qualifying employees. Under the scheme, the Company is required to contribute a specified percentage of the payroll costs to fund the benefits. These contributions are made to the Fund administered and managed by the Government of India. The Company’s monthly contributions are charged to the statement of profit and loss in the year they are incurred. Total expense recognised during the year aggregated ? 392 (2020-21: ? 323).

Gratuity (funded):

Amount recognised in statement of profit and loss in respect of gratuity: ? 160 (2020-21: ? 158). [refer note 12 (i)].

National Pension Scheme:

Amount recognised in statement of profit and loss in respect of national pension scheme - ? 14 (2020-21 - ? 12) Superannuation fund - India:

The employees receive benefit under a Superannuation scheme which is a defined contribution scheme wherein the employee has an option to choose the percentage of contribution between 5% to 15% of the basic salary of the covered employee. These contributions are made to a fund administrated by Life Insurance Corporation of India. The Company’s monthly contributions are charged to the statement of profit and loss in the year they are incurred. Total expense recognised during the year aggregated ? 21 (2020-21 - ? 24).

Employees'' State Insurance Scheme:

Amount recognised in the statement of profit and loss in respect of Company’s contribution to employees’ state insurance scheme ? 28 (2020-21 - ? 20).

ii. Superannuation fund - Australia

The employees at the Australia branch of the Company are also covered under a superannuation scheme. The Company contributes 9.5% of the basic salary of the employee. The Company’s monthly contributions are charged to the statement of profit and loss in the year they are incurred. Total expense recognised during the year aggregated ? 4 (2020-21 - ? 4).

(i) Expenditure for Corporate Social Responsibility:

The Company contributes towards Corporate Social Responsibility (CSR) activities through Cyient Foundation and Cyient Urban Micro Skill Centre Foundation (refer note 24). The Company has formed CSR committee as per Section 135 of the Companies Act, 2013 to formulate and recommend to the Board, a Corporate Social Responsibility Policy which shall indicate the activities to be undertaken by the company as specified by law. The areas for CSR activities are promoting education, adoption of schools, facilitating skill development, medical and other social projects. Expenses incurred on CSR activities through Cyient Foundation and contributions towards other charitable institutions are charged to the statement of profit and loss under ''Other Expenses’: ? 94 (2020-21 - ? 102).

Nature of CSR activities:

Promoting education and skill development initiatives, community development initiatives, covid-19 relief and rehabilitation, national heritage and development programs and other social and research/ development projects.

(ii) Expected credit loss:

Bad debts written off during the year ended March 31, 2022 was ? 16 (2020-21- ? 57) and reversal of provision for doubtful debts was ? 74 (2020-21: ?71). Provision for ECL allowance made for the year ended March 31, 2022 was ? 84 (2020-21: ? 53).

(i) The Company disputed various demands raised by income tax authorities for the assessment years 2002-03, 2004-05, 2013-14, 2014-15, 2016-17, 2017-18 and 2018-19 (March 31, 2021: 2002-03, 2004-05, 2013-14, 2014-15, 2016-17, 2017-18 and 2018-19) which are pending at various stages of appeals. The aggregate amount of disputed tax not provided for is ? 40 (March 31, 2021 - ? 40). The Company is confident that these appeals will be decided in its favour.

(ii) The Company disputed various demands raised by the sales tax authorities for the financial years 2004-05 to 2009-10 and 2015-16 to 2017-18 (till June 2017) (March 31, 2021 - 2004-05 to 2009-10 and 2015-16 to 2017-18 (till June 2017)). The Company filed appeals, which are pending with the appropriate authorities. The aggregate amount of disputed tax not provided for is ? 21 (March 31, 2021 - ? 21). The Company is confident that these appeals will be decided in its favour. The above does not include show cause notices received by the Company.

(iii) The Company disputed various demands raised by the service tax authorities for the financial years 2006-07 to 2009-10 and 2013-14 to 2017-18 (till June 2017) (March 31, 2021: 2006-07 to 2009-10 and 2013-14 to 2017-18 (till June 2017)). The Company filed appeals, which are pending with the appropriate authorities. The aggregate amount of disputed tax not provided for is ? 371 (March 31, 2021 - ? 371). The Company is confident that these appeals will be decided in its favour. The above does not include show cause notices received by the Company.

(iv) The Company is contesting certain pending service tax refunds amounting to ? 29 (March 31, 2021 : ? 34) at various appellate authorities. The Company is confident that these appeals will be decided in its favour.

(v) During the financial year 2015-16, the Government of India notified an amendment to the Payment of Bonus Act, 1961 whereby the applicable slabs as well as coverage limit was enhanced. The said amendment was made effective April 1, 2014. The Company is contesting the retrospective applicability of the amendment for the financial year 2014-15 in the High Court of Judicature at Hyderabad for the states of Telangana and Andhra Pradesh. The aggregate amount of liability pertaining to the financial year 2014-15, not provided for, is ? 92 (March 31, 2021 - ? 92).

(vi) Corporate guarantee has been extended to subsidiaries/ step down subsidiaries for availing loans from respective banks/ fellow subsidiaries and the Company charges commission from subsidiaries, wherever applicable. (refer note 24 (B)

(C) The Company has certain outstanding export obligations/commitments as at March 31, 2021 and March 31, 2022. Further, the Company has certain commitments to bankers relating to receivable factoring arrangements entered with them in respect of receivables from few customers. These factoring arrangements are without recourse to the Company and in the normal course of business. The Company is confident of meeting these commitments arising from such arrangements.

(i) Effective December 01, 2020 Cyient Engineering (Beijing) Limited, China has been deregistered.

(ii) The Board of Directors of the Company at their meeting held on October 14, 2021 approved the closure of its wholly owned subsidiary, Cyient Israel India Limited (CIIL) in line with its strategy and simplification of legal entity structure. CIIL did not have any operations and the financial results of CIIL are not material to the Group. This has no impact on business as the same is serviced by the existing legal entities.

(i) Cyient Australia Pty Limited, Australia, acquired 100% of equity shares of Integrated Global Partners Pty Limited, Australia (and its wholly owned subsidiaries Integrated Global Partners Pte. Limited, Singapore; Integrated Global Partners SpA, Chile and IG Partners South Africa (Pty) Ltd, South Africa) on November 06, 2020.

(ii) Cyient Australia Pty Limited, Australia, acquired 100% of equity shares of Workforce Delta Pty Limited (''WFD''), Australia on August 05, 2021.

* Includes ? 50 accrued in the previous year as a part of overall incentive provision and paid during the year for Executive Officers

#1 Executive officers includes Ajay Aggarwal (Executive Director and Chief Financial Officer), Sudheendhra Putty (Company Secretary), Karthikeyan Natarajan (Executive Director and Chief Operating Officer) and B. Ashok Reddy (Relative of Non-executive and Non-independent Director, Managing Director & CEO).

#2 The above figures do not include provisions for encashable leave, gratuity and premium paid for group health insurance, as separate actuarial valuation / premium paid are not available.

1. During the previous year, the Company has impaired the carrying value of its investment in joint venture company, Infotech HAL Limited, India of ? 20, based on the long term outlook of the business.

2. During the previous year, the Company has impaired the carrying value of investment in its subsidiary company, Cyient Singapore Private Limited by ? 94, based on the business forecasts and long term outlook of the business.

3. During the FY 2019-20, Company’s subsidiary, Cyient Solutions and Systems Private Limited (''CSS’) has recognised one-time charge of ? 222 relating to costs incurred on development of UAV systems in view of the potential delays in materialization of orders. Accordingly, a corresponding provision for impairment of the loan given to CSS of ? 311 has been recognised in the Statement of Profit and Loss for FY 20.

During the previous year, CSS has recovered ? 35 against aforesaid impairment of non-current assets.

4. Foreign exchange restatements have not been disclosed as transactions during the year.

27. Financial Instruments 27.1 Capital management

The Company manages its capital to ensure that it maximises the return to stakeholders through the optimisation of the capital structure. The Company monitors the return on capital as well as the level of dividends on its equity shares. The Company is predominantly equity financed which is evident from the capital structure. Further the Company has always been positive on its net cash position with cash and bank balances along with investments in liquid and short term mutual funds.

The management assessed that fair value of cash & cash equivalents and other bank balances, trade receivables, other financial assets, loans, trade payables, lease liability and other financial liabilities approximate their carrying amounts largely due to the short-term maturities of these instruments, and hence these are carried at amortised cost.

The fair value of the financial assets and liabilities is included at the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale.

Investment in unquoted equity shares are measured at fair value through initial designation in accordance with Ind-AS 109. Investments in mutual funds and derivative assets/ (liabilities) are mandatorily measured at fair value.

27.3 Fair value hierarchy Valuation technique and key inputs

Level 1 - Quoted prices (unadjusted) in an 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).

The following methods and assumptions were used to estimate the fair values:

* The fair values of the unquoted equity shares and CCPS have been estimated using a DCF model. The valuation requires management to make certain assumptions about the model inputs, including forecast cash flows, earnings growth, discount rate, and probabilities of the various estimates within the range used in management''s estimate of fair value for these unquoted equity investments.

** The Company enters into derivative financial instruments with various counterparties, principally financial institutions with investment grade credit ratings. Foreign exchange forward contracts are valued using valuation techniques, which employs the use of market observable inputs. The most frequently applied valuation techniques include forward pricing using present value calculations. The models incorporate various inputs including the credit quality of counterparties, foreign exchange spot and forward rates, yield curves ofthe respective currencies, etc. As at March31,2022 the marked-to-marketvalue ofderivative asset positions is net ofa credit valuation adjustment attributable to derivative counterparty default risk. The changes in counterparty credit risk had insignificant impact on the hedge effectiveness assessment for derivatives designated in hedge relationships.

27.4 Financial risk management Financial risk factors

The Company’s activities expose it to a variety of financial risks: market risk, credit risk, liquidity risk and other price risk. The Company’s primary focus is to foresee the unpredictability of financial markets and seek to minimize potential adverse effects on its financial performance. The primary market risk to the Company is foreign exchange risk.

Foreign exchange risk

The Company operates internationally and a major portion of the business is dominated in foreign currency predominantly US Dollar, Pound Sterling and Euro currencies. Consequently the Company is exposed to foreign exchange risk through its services and purchases / import of services from overseas suppliers in various foreign currencies. The Company holds derivative financial instruments such as foreign exchange forward contracts to mitigate the risk of changes in exchange rates on foreign currency exposures. The exchange rate between the rupee and foreign currencies has changed substantially in recent years and may fluctuate substantially in the future. Consequently, the results of the Company’s operations are affected as the rupee appreciates/ depreciates against these currencies.

The Company monitors and manages its financial risks by analysing its foreign exchange exposures.

The Company, in accordance with its Board approved risk management policies and procedures, enters into foreign exchange forward contracts to manage its exposure in foreign exchange rates.

The Company has applied the hedge accounting principles set out in Indian Accounting Standard - 109 "Financial Instruments" (Ind AS - 109) in respect of such derivative contracts, designated in a hedging relationship, used to hedge its risks associated with foreign currency fluctuations relating to certain highly probable forecast transactions. Accordingly, in respect of all such outstanding contracts as at March 31, 2022 that were designated as effective hedges of highly probable forecast transactions, (loss)/ gain aggregating ? 128 (net of tax ? 69) (March 31, 2021: ? 124 (net of tax ? 67)) have been recognised under the cash flow hedge reserve.

In respect of the Company’s forward exchange contracts, a 5% increase/decrease in the respective exchange rates of each of the currencies underlying such contracts would have resulted in:

* an approximately ? (577)/ 577 (decrease)/increase in the Company’s other comprehensive income as at March 31, 2022.

* an approximately ? (528)/ 528 (decrease)/increase in the Company’s other comprehensive income as at March 31, 2021.

Foreign currency exposure unhedged

The Company’s exposure to the risk of changes in foreign exchange rates relates primarily to the volatility of the Company’s net financial assets (viz. which includes cash and cash equivalents, trade receivables, other financial assets, trade payables, other financial liabilities), which are denominated in various foreign currencies (USD, Euro, UK pound sterling, Aus $, SGD, CAD, Yen etc.)

For the year ended March 31,2022 and March 31,2021 , every 5% increase / decrease ofthe respective foreign currencies compared to functional currency of the Company would impact profit before tax by ? 110 / ( ? 110) and ? 113 / (? 113) respectively.

Credit risk

Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and arises principally from the Company’s receivables from customers and investment securities. Financial instruments that are subject to concentrations of credit risk principally consist of trade receivables, investments, derivative financial instruments, cash and cash equivalents, bank deposits and other financial assets. None of the financial instruments of the Company result in material concentration of credit risk, except for trade receivables Credit risk is managed through credit approvals, establishing credit limits and continuously monitoring the creditworthiness of customers to which the Company grants credit terms in the normal course of business. The Company establishes an allowance for doubtful debts and impairment that represents its estimate of expected losses in respect of trade and other receivables and investments.

In addition, the Company is exposed, to credit risk in relation to financial guarantees given to subsidiary’s banks. The Company’s exposure in this respect is limited to the maximum amount the Company could have to pay if the guarantee is called on (refer note 23 (A))

Investments:

The Company limits its exposure to credit risk by generally investing in liquid securities and only with counterparties that have a good credit rating. The Company does not expect any losses from non-performance by these counter-parties, and does not have any significant concentration of exposures to specific industry sectors or specific country risks.

Liquidity risk

The Company’s principal sources of liquidity are cash & bank balances, investments in mutual funds and cash generated from operations. The Company believes that working capital is sufficient to meet its current requirements. Accordingly, no liquidity risk is perceived.

As of March 31, 2022 and March 31, 2021, the Company had unutilized credit limits from banks of ? 2,669 and ? 2,643, respectively. The returns/ statements filed by the Company with such banks are in agreement with the books of accounts of the Company.

As of March 31, 2022, the Company had working capital of ? 13,575, (March 31, 2021: ? 14,151) including cash and bank balances of ? 8,749 (March 31, 2021: ? 11,543)

The table below provides details regarding the contractual maturities of significant financial liabilities (excluding lease liabilities) as at March 31, 2022:

Other price risks

The Company is exposed to equity price risks arising from equity investments. Certain of the Company’s equity investments are held for strategic rather than trading purposes.

28. Segment information

Segment information has been presented in the Consolidated Financial Statements in accordance with Ind AS 108 notified under the Companies (Indian Accounting Standards) Rules, 2015.

The disclosures in respect of the amounts payable to such enterprises as at March 31, 2022 and March 31, 2021 has been made in the financial statements based on information received and available with the Group. Further in view of the Management, the impact of interest, if any, that may be payable in accordance with the provisions of the Act is not expected to be material. The Group has not received any claim for interest from any supplier as at the balance sheet date.

Proposed dividends on equity shares are subject to approval at the annual general meeting and are not recognised as a liability as at March 31, 2022.

With effect from April 1, 2020, the Dividend Distribution Tax (''DDT'') payable by the company under section 115O of Income Tax Act was abolished and a withholding tax was introduced on the payment of dividend. As a result, dividend is now taxable in the hands of the recipient.

The dividend declared/proposed and paid is in accordance with Section 123 of The Companies Act, 2013.

33. Other statutory information

(i) The Company does not have any Benami property, where any proceeding has been initiated or pending against the Group for holding any Benami property.

(ii) The Company does not have any transactions with companies struck off.

(iii) The Company does not have any charges or satisfaction which is yet to be registered with ROC beyond the statutory period,

(iv) The Company has not traded or invested in Crypto currency or Virtual Currency during the financial year.

(v) The Company has not been declared wilful defaulter by any bank or financial institution or government or any government authority.

(vi) The Company has not advanced or loaned or invested funds to any other person(s) or entity(ies), including foreign entities (Intermediaries) with the understanding that the Intermediary shall:

(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the company (Ultimate Beneficiaries) or

(b) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries

(vii) The Company has not received any fund from any person(s) or entity(ies), including foreign entities (Funding Party) with the understanding (whether recorded in writing or otherwise) that the Group shall:

(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (Ultimate Beneficiaries) or

(b) provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries,

(viii) The Company has not any such transaction which is not recorded in the books of accounts that has been surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961 (such as, search or survey or any other relevant provisions of the Income Tax Act, 1961

34. The code of Social Security, 2020 (''Code'') relating to employee benefits during employment and post-employment received Presidential assent in September 2020 and its effective date is yet to be notified. The Company will assess and record the impact of the Code, once it is effective.

35. Previous year figures have been regrouped / reclassified, where necessary, to confirm to the current years'' classification.


Mar 31, 2018

1. Corporate Information

(Refer to Note 1 of the standalone financial statements)

Cyient Limited (‘Cyient’ or ‘the Company’) is engaged in providing global technology services and solutions specialising in geospatial, engineering design and IT solutions. The Company is a public limited Company incorporated in India and has its headquarters and development facilities in India and serves a global customer base through its subsidiaries in the United States of America (USA), United Kingdom (UK), Germany, Japan, Australia, Singapore and India. Cyient’s range of services include digitisation of drawings and maps, photogrammetry, computer aided design/engineering (CAD/CAE), design and modelling, repair development engineering, reverse engineering application software development, software products development, consulting, analytics and implementation. Cyient specialises in software services and solutions for the manufacturing, utilities, telecommunications, transportation & logistics, local government and financial services markets.

The Company’s shares are listed on the BSE Limited and National Stock Exchange of India Limited.

Complete Balance Sheet, Statement of Profit and Loss, Statement of Changes in Equity and Statement of Cash flows and other statements and notes thereto prepared as per the requirements of Division II to the Schedule III to the Companies Act, 2013 are available at the Company’s website.

Copy of the financial statement is also available for inspection at the registered office of the Company during the working hours for a period of 21 days before the date of AGM.

2. Related Party Transactions

(Refer to Note 22 of the standalone financial statements)

The list of related parties of the Company is given below:

Notes:

(i) On July 18, 2016, the Company incorporated a wholly owned subsidiary, Cyient Israel India Limited, in Israel. During the year the subsidiary has commenced its commercial operations and the Company has infused the capital.

(ii) On March 25, 2016, the Company incorporated a wholly owned subsidiary, Cyient Engineering (Beijing) Limited, in China. There is no investment in the subsidiary till March 31, 2018 and the subsidiary is yet to commence commercial operations.

(iii) During August 2017, the Company subscribed to 49% share capital in Cyient Solutions and Systems Private Limited (“CSSPL”). The Companyacquired51% share capital in March 2018, increasing the shareholding to 100%.

* The Company’s wholly-owned subsidiary, Cyient Inc., USA, incorporated a wholly-owned step down subsidiary, Cyient Defense Services Inc., in USA, on September 23, 2016.

** The Company, through its wholly-owned subsidiary Cyient Inc., acquired 100% stake of Certon Software Inc., USA (and its wholly owned subsidiary Certon Instruments Inc., USA) on February 8, 2017.

***The Company, through its wholly-owned subsidiary Cyient Inc., acquired 100% stake of B&F Design Inc., USA on January 24,2018.

* The Company’s wholly-owned subsidiary, Cyient Europe Limited, UK, acquired 100% stake of Blom Aerofilms Limited, UK, on November 30, 2016. Effective from April 01, 2017, Blom Aerofilms Limited was merged in to Cyient Europe Limited.

# Effective April 01,2017, Techno Tools Precision Engineering Private Limited has been merged with its holding company, Cyient DLM Private Limited, pursuantto the orderdatedApril 02, 2018from National Company LawTribunal.

3. Segment information

(Refer to Note 27 of the standalone financial statements)

Segment information has been presented in the Consolidated Financial Statements in accordance with Ind AS 108 notified under the Companies (Indian Accounting Standards) Rules, 2015.

4. Exceptional item:

(Refer to Note 25 of the standalone financial statements)

(a) During September 2017, the Company entered into a definitive agreement to divest its entire 49% shareholding in its associate company, Infotech Aerospace Services Inc., (“IASI”) Puerto Rico for a consideration of Rs. 114 (USD 1,768,916). The closing conditions for the divestment were concluded on December 08, 2017. Upon divestment, the resultant gain of Rs.103 is disclosed as ‘exceptional item’ in these financial statements. Further, the Company has also received Rs.589 (USD 9,131,064) from IASI towards dividend, which is recognised under’other income’ in the standalone financial statements.

b) During the previous year, the Company granted Restricted Stock Units (RSU) to eligible employees on March 31, 2017 on the occasion of its Silver Jubilee Anniversary Celebrations. Exceptional item for the year ended March 31, 2017 relates to stock option expense aggregating Rs.201 towards these RSUs with the employees in March, 2018.

5. Contingent liabilities and commitments

(Refer to Note 21 of the standalone financial statements)

Notes:

(a) The Company has disputed various demands raised by Income Tax authorities for the assessment years 1999-2000 to 2002-03 & 2005-06 (March 31, 2017 - 1997-98 to 2014-15) which are pending at various stages of appeals. The aggregate amount of disputed tax not provided for is Rs.138 (March 31, 2017 -Rs.189). The Company is confident that these appeals will be decided in its favour.

(b) The Company has disputed various demands raised by the Sales Tax authorities for the financial years 2004-05 to 2009-10 and 2012 - 13 and 2015-16. The Company has filed appeals, which are pending with the appropriate authorities. The aggregate amount of disputed tax not provided for is Rs.20 (March 31, 2017 - Rs.20). The Company is confident that these appeals will be decided in its favour. The above does not include show cause notices received by the Company.

(c) The Company has disputed various demands raised by the Service Tax authorities for the financial years 2006-07 to 2015-16 (March 31, 2017 - 2006-07 to 2015-16). The Company has filed appeals, which are pending with the appropriate authorities. The aggregate amount of disputed tax not provided for is Rs.141 (March 31, 2017 - Rs.141). The Company is confident that these appeals will be decided in its favour. The above does not include show cause notices received by the Company.

(d) The Company is contesting certain pending service tax refunds amounting to Rs.73 (March 31, 2017 : Rs.100) at various appellate authorities. The Company is confident that these appeals will be decided in its favour.

(e) During the financial year 2014-15, the Company received an order from Provident Fund (PF) authorities regarding PF payment on certain allowances given by the Company to its employees for the years 2010-11 to 2012-13. The Company appealed against the order and is pending before Provident Fund Appellate Tribunal. The Company paid Rs.5 (March 31, 2017 - Rs.5) under protest, being 20% of the total demand of Rs.26 (March 31, 2017 -Rs.26).

(f) During the financial year 2015-16, the Government of India notified an amendment to the Payment of Bonus Act, 1961 whereby the applicable slabs as well as coverage limit was enhanced. The said amendment was made effective April 1, 2014. The Company has contested the retrospective applicability of the amendment for the financial year 2014-15 in the High Court of Judicature at Hyderabad for the states of Telangana and Andhra Pradesh. The aggregate amount of Iiabilitypertainingtothefinancialyear2014-15,notprovided for,is Rs.92 (March 31, 2017 - Rs.92).

(g) During the financial year 2014-15, the Company acquired 74% of the share capital of Cyient DLM Private Limited on February 4, 2015. According to conditions stipulated in the Investment Agreement, the Company has an option to acquire the balance 26% of the share capital, on or before seven years from the date of the acquisition. These balance shares are currently placed in an Escrow account with a registered escrow agent as the custodian.

(h) Corporate guarantee given to subsidiary’s bankers to obtain line of credit Rs.8,964 (March 31, 2017 - Rs.6,488).

(C) The Company has certain outstanding export obligations/commitments as at March 31,2018 and March 31,2017 and is confident of meeting these obligations/commitments within the stipulated period of time or obtain extensions as required.

6. Cash and Bank Balances

(Refer to Note 10 of the standalone financial statements)

6A. Cash and cash equivalents

6B. Other bank balances

7. Employee benefits expense

(Refer to Note 18 of the standalone financial statements)

11. These financial statements were approved by the Company’s Board of Directors on April 19,2018.


Mar 31, 2017

1. Corporate Information

(Refer to Note 1A of the standalone financial statements)

Cyient Limited (‘Cyient’ or ‘the Company’) is engaged in providing global technology services and solutions specialising in geospatial, engineering design and IT solutions. The Company is a public limited company incorporated in India and has its headquarters and development facilities in India and serves a global customer base through its subsidiaries in the United States of America (USA), United Kingdom (UK), Germany, Japan, Australia, Singapore and India. Cyient’s range of services include digitisation of drawings and maps, photogrammetry, computer aided design/engineering (CAD/ CAE), design and modelling, repair development engineering, reverse engineering application software development, software products development, consulting, analytics and implementation. Cyient specialises in software services and solutions for the manufacturing, utilities, telecommunications, transportation & logistics, local government and financial services markets.

The Company’s shares are listed on the Bombay Stock Exchange and National Stock Exchange of India.

2. Related Party Transactions

(Refer to Note 23 of the standalone financial statements)

The list of related parties of the Company is given below:

3. Segment information

(Refer to Note 29 of the standalone financial statements)

Segment information has been presented in the Consolidated Financial Statements by in accordance with Ind AS 108 notified under the Companies (Indian Accounting Standards) Rules, 2015.

4. Amalgmation of Infotech Geospatial (India) Private Limited:

(Refer to Note 25 of the standalone financial statements)

The Company amalgamated with itself Infotech Geospatial (India) Private Limited, a wholly owned subsidiary, w.e.f. April 01, 2015 (“Appointed Date”) pursuant to Scheme of Amalgamation approved by the Hon’ble High Court of Judicature, Andhra Pradesh & Telangana vide its order dated March 02, 2016 and filed with Registrar of Companies on March 31, 2016. Consequently, all the Assets, Liabilities and Reserves stand transferred and vested in the Company retrospectively from April 01, 2015.

As Infotech Geospatial (India) Private Limited was a wholly owned subsidiary of the Company, no additional shares were issued to effect the amalgamation.

Notes:

(a) The Company has disputed various demands raised by Income Tax authorities for the assessment years 1997-98 to 2014-15, which are pending at various stages of appeals. The aggregate amount of disputed tax not provided for is Rs.189 (March 31, 2016 - Rs.156, April 01, 2015 - Rs.138). The Company is confident that these appeals will be decided in its favour.

(b) The Company has disputed various demands raised by the Sales Tax authorities for the financial years 2004-05 to 2009-10 and 2012 - 13. The Company has filed appeals, which are pending with the appropriate authorities. The aggregate amount of disputed tax not provided for is Rs.20 (March 31, 2016 - Rs.20, April 01, 2015 - Rs.20). The Company is confident that these appeals will be decided in its favour. The above does not include show cause notices received by the Company.

(c) The Company has disputed various demands raised by the Service Tax authorities for the financial years 2006-07 to 2015-16 (March 31, 2016-2006-07 to 2013-14) (April 01, 2015-2006-07 to 2012-13). The Company has filed appeals, which are pending with the appropriate authorities. The aggregate amount of disputed tax not provided for is Rs.141 (March 31, 2016 - Rs.140, April 01, 2015 - Rs.172). The Company is confident that these appeals will be decided in its favour. The above does not include show cause notices received by the Company.

(d) During the financial year 2014 - 15, the Company received an order from Provident Fund (PF) authorities regarding PF payment on certain allowances given by the Company to its employees for the years 2010-11 to 2012-13. The Company appealed against the order and is pending before Provident Fund Appellate Tribunal. The Company paid Rs.5 (March 31, 2016 - Rs.5, April 1, 2015 - Rs.5) under protest, being 20% of the total demand of Rs.26 (March 31, 2016 - Rs.26, April 1, 2015 - Rs.26).

(e) During the previous year, the Government of India notified an amendment to the Payment of Bonus Act, 1961 whereby the applicable slabs as well as coverage limit was enhanced. The said amendment was made effective April 1, 2014. The Company has contested the retrospective applicability of the amendment for the financial year 201415 in the High Court of Judicature at Hyderabad for the states of Telangana and Andhra Pradesh. The aggregate amount of liability pertaining to the financial year 2014-15, not provided for, is Rs.92 (March 31, 2016 - Rs.92, April 01, 2015- Rs.NIL).

(f) Corporate guarantee given to subsidiary’s bankers to obtain line of credit Rs.6,488 (March 31, 2016 - Rs.5,797, April 01, 2015 - Rs.1,505).

(g) During the financial year 2014 - 15, the Company acquired 74% of the share capital of Cyient DLM Private Limited (formerly Rangsons Electronics Private Limited) on February 4, 2015. According to conditions stipulated in the Investment Agreement, the Company has an option to acquire the balance 26% of the share capital, on or before seven years from the date of the acquisition. These balance shares are currently placed in an Escrow account with a registered escrow agent as the custodian.

(C) The Company has certain outstanding export obligations/commitments as at March 31, 2017, March 31, 2016 and April 1, 2015 and is confident of meeting these obligations/commitments within the stipulated period of time or obtain extensions as required.

5. Cash and Bank Balances

(Refer to Note 10 of the standalone financial statements)

5A. Cash and cash equivalents

5B. Other bank balances

5C. In accordance with the MCA notification GSR 308 (E) dated March 30, 2017, details of Specified Bank Notes (SBN) and Other Denomination notes (ODN) held and transacted during the period form November 8, 2016 to December 30, 2016, is given below:

(Refer to Note 31 of the standalone financial statements)

6. Employee benefits expense

(Refer to Note 18 of the standalone financial statements)

7. Exceptional item:

(Refer to Note 28 of the standalone financial statements)

a) The Company granted Restricted Stock Units (RSU) to eligible employees on March 31, 2017 on the occasion of its silver jubilee anniversary celebrations. Exceptional item for the year ended March 31, 2017 relates to stock expense aggregating Rs.201 towards these RSUs which shall vest with the employees in March, 2018

b) During the previous year the Company had made a provision towards bonus payable for the period of April to December 2015 of Rs.72 consequent to the amendment to the Payment of Bonus Act, 1965 (i.e the Payment of Bonus (Amendment) Act, 2015). The liability for the year 2014 - 15 has been disclosed as contingent liability.

8. Expenditure for Corporate social responsibility

(Refer to Note 20 of the standalone financial statements)

The Company contributes towards Corporate Social Responsibility (CSR) activities through its trust, Cyient Foundation. As per Section 135 of the Companies Act, 2013, CSR committee has been formed by the Company. The areas for CSR activities are promoting education, adoption of schools, medical and other social projects. Expenses incurred on CSR activities through its Cyient Foundation and contributions towards other charitable institutions are charged to the Statement of Profit and Loss under ‘Other expenses’ Rs.62 (2015-16 Rs.48)

9. Disposal of Investment in Infotech Enterprises Information Technology Services Private Limited

(Refer to Note 17 of the standalone financial statements)

During the previous year, the Company disinvested its 100% stake in Infotech Enterprises Information Technology Services Private Limited, India, and its wholly-owned subsidiary, Infotech Enterprises Information Technology Services GmbH, Germany. An amount of Rs.98, being excess of sale consideration over the investment, was recognised as gain on disposal of subsidiary, in ‘other income’

10 (A). Transition to Ind AS

(Refer to Note 2A of the standalone financial statements)

The Company’s financial statements for the year ended March 31, 2017 are prepared in accordance with Indian Accounting Standards (Ind AS) notified under the Companies (Indian Accounting Standards) Rules, 2015. The adoption of Ind AS was carried out in accordance with Ind AS 101, First-time adoption of Indian Accounting Standards, using April 01, 2015 as the transition date. Ind AS 101 requires that all Ind AS standards and interpretations that are effective for the year ended March 31, 2017, be applied consistently and retrospectively for all financials years presented.

All applicable Ind AS have been applied consistently and retrospectively wherever required. The resulting difference between the carrying amounts of the assets and liabilities in the financial statements under Ind AS and previous GAAP as at the transition date have been recognised directly in equity at the transition date.

In preparing these financial statements, the Company has availed itself of certain exceptions and exemptions in accordance with Ind-AS 101, as explained below

a. Exceptions from full retrospective application:

i. Estimates exception: Upon an assessment of the estimates made under Previous GAAP, the Company has concluded that there was no necessity to revise such estimates under Ind AS.

b. Exemptions from retrospective application:

i. Business combination: As per Ind AS 101, the Company is allowed to elect not to apply Ind AS 103 retrospectively to the past business combinations that occurred before the date of transition to Ind AS (April 01, 2015). The Company has elected to avail this exemption and the amounts reported under Previous GAAP for the past business combinations that occurred before the date of transition to Ind AS had been carried forward as opening balances under Ind AS, subject to recognition and derecognition criteria of Financial assets and Liabilities under Ind AS 109 as at the date of transition.

ii. Share-based payment: The Company has availed exemption available under Ind AS 101 on application of Ind AS 102 “Share Based Payment”, to equity instruments that vested before the date of transition to Ind AS. Accordingly, fair value has been done only for unvested options as at April 01,2015.

iii. Investment in subsidiaries, joint ventures and associates: The Company has elected to continue with the carrying value of all its investments in subsidiaries, joint venture and associate recognised as at April 01, 2015 measured as per the previous GAAP and use that carrying value as its deemed cost as at the transition date.

10 (B) First-time Ind AS adoption reconciliations:

(Refer to Note 2B of the standalone financial statements)

The following reconciliations provide a quantification of the effect of significant differences arising from the transition from Previous GAAP to Ind AS in accordance with Ind AS 101:

iv. There were no material adjustments between the cash flows prepared under Ind AS and those reported under previous

GAAP.

v. Notes to the reconciliations

a) Under previous GAAP, a liability is recognised in the period to which the dividend relates, even though the dividend may be approved by the shareholders subsequent to the reporting date. Under Ind AS, liability for dividend is recognised in the period in which the obligation to pay is established, ie, when declared by the members in a General Meeting. The effects of this change is an increase in total equity as at March 31, 2016 of Rs.NIL (Rs.677 as at April 01, 2015), but does not affect profit before tax and total profit for the year ended March 31, 2016.

b) Under previous GAAP, actuarial gains and losses were recognised in the statement of profit and loss. Under Ind AS, the actuarial gains and losses that form part of remeasurement of the net defined benefit liability / asset which is recognised in other comprehensive income. Consequently, the tax effect of the same has also been recognised in other comprehensive income. The actuarial gain for the year ended March 31, 2016 were Rs.7 and the tax effect thereon Rs.2. This change does not effect total equity as at March 31, 2016 and April 01, 2015, but there is an increase in profit before tax of Rs.7 and in total profit of Rs.5 for the year ended March 31, 2016.

Under previous GAAP, compensated absences of the foreign branches of the Company were discounted considering the Company’s discount rate, whereas Ind AS requires to consider the discount rate specific to the foreign branches for the valuation of the compensated absences liability. The effect of this change is a increase in total equity as at March 31, 2016 of Rs.6 (Rs.10 as at April 01, 2015) and increase in profit before tax as well as total profit for the year ended March 31, 2016 of Rs.6.

c) Under previous GAAP, the cost of equity-settled employee share-based payments was recognised using the intrinsic value method. Under Ind AS, the cost of equity-settled employee share-based payments is recognised based on the fair value of the options as on the grant date and has been recharged to subsidiaries relating to options granted to associates employed by them. The effect of this change is an increase in total equity as at March 31, 2016 of Rs.7 (Rs.3 as at April 01, 2015) and decrease in profit before tax as well as total profit for the year ended March 31, 2016 of Rs.7.

d) Under previous GAAP, cash flow hedge reserve was recognised as a part of reserves & surplus. Under Ind AS, the effective portion of a cash flow hedge is recognised in other comprehensive income, net of the relevant tax effects. The consequent impact of income tax is a decrease in total equity as at March 31, 2016 of Rs.47 (Rs.159 as at April 01, 2015). However, there is no impact on profit before tax and total profit for the year ended March 31, 2016

e) Under the previous GAAP, the land leases classified as operating leases were presented as a part of property, plant and equipment as leasehold land. Under Ind AS, such leases of land classified as operating leases are presented as a part of other assets (current and non-current) and amortised over the lease term. With this change, there is no impact on total equity as at March 31, 2016 and April 01, 2015, profit before tax and total profit for the year ended March 31, 2016. However, there is reclassification of depreciation expense to other expenses for the year ended March 31, 2016 of Rs.4. Also, property, plant and equipment (PPE) has reduced by Rs.109 as at March 31, 2016 (Rs.113 as at April 01, 2015) and corresponding increase in other current assets Rs.4 as at March 31, 2016 (Rs.4 as at April 01, 2015) and other non-current assets Rs.105 as at March 31, 2016 (Rs.109 as at April 01, 2015).

f) Under previous GAAP, minimum alternate tax (MAT) credit was disclosed as a part of loans and advances. Under Ind AS, the same was regrouped under deferred tax assets, net. With this change, there is no impact on total equity as at March 31, 2016 and April 01, 2015, profit before tax and total profit for the year ended March 31, 2016. However, there is reclassification from income tax assets, net to deferred tax assets, net of Rs.32 as at March 31, 2016 (Rs.2 as at April 01, 2015).

g) Under previous GAAP, there was no concept of other comprehensive income. Under Ind AS, specified items of income, expense, gains, or losses are required to be presented in other comprehensive income.

h) Under previous GAAP, current investments were measured at lower of cost or fair value. Under Ind AS, these financial assets are measured at fair value and classified as FVTPL. This change does not effect total equity as at March 31, 2016 and April 01, 2015, profit before tax as well as total profit for the year ended March 31, 2016.

i) Under previous GAAP, deferred tax was computed under the profit and loss approach, whereas under Ind AS, deferred tax was computed under the balance sheet approach.


Mar 31, 2016

Not available


Mar 31, 2014

Note (i)

a. The Company has disputed various demands (including draft notice of demand) raised by Income Tax authorities for the assessment years 1997-98 to 2009-10. The orders are pending at various stages of appeals. The aggregate amount of disputed tax not provided for is Rs. 204,461,783 (March 31, 2013 - Rs. 404,555,682). The Company is confident that these appeals will be decided in its favour, based on professional advice.

b. The Company has disputed various demands raised by the Sales Tax authorities for the financial years 2004-05 to 2009-10. The Company has filed appeals, which are pending with the appropriate authorities. The aggregate amount of disputed tax not provided for is Rs. 20,096,061 (March 31, 2013 - Rs. 20,096,061). The Company is confident that these appeals will be decided in its favour, based on professional advice.

The above does not include show cause notices received by the Company.

c. The Company has disputed various demands raised by the Service Tax authorities for the financial years 2006-07 to 2012-13. The Company has filed appeals, which are pending with the appropriate authorities. The aggregate amount of disputed tax not provided for is Rs. 172,263,324 (March 31, 2013 - Rs. 207,375,480). The Company is confident that these appeals will be decided in its favour, based on professional advice. The above does not include show cause notices received by the Company.

Note (ii)

Corporate guarantee given to subsidiary''s bankers to obtain line of credit Rs. 1,043,841,250 (March 31, 2013 – Rs. 443,662,000). The amount outstanding against such guarantee is Rs. Nil (March 31, 2013 - Rs. 397,774)

Note: (i) Balance with banks include deposits amounting to Rs. 54,176,286 (March 31, 2013 – Rs. 238,749,999) and margin monies amounting to Rs. 630,250 (March 31, 2013 – Rs. 630,250) which have an original maturity of more than 12 months.

Balance with banks include margin monies amounting to Rs. 630,250 (March 31, 2013 – Rs. 276,250) which have a maturity of more than 12 months from the Balance Sheet Date.

(ii) Includes deposits placed in lien for credit facilities availed by a wholly owned subsidiary, Infotech Geospatial (India) Private Limited aggregating Rs. 18,531,010 (March 31, 2013 - Rs. 17,026,561) and margin monies amounting Rs. 601,250 (March 31, 2013 - Rs. 601,250).

2. The Board of Directors has recommended the change of name of the Company from Infotech Enterprises Limited to Cyient Limited, which is subject to shareholder approval and other regulatory clearances.

3. Regrouping/Reclassification

(Refer to note No. 40 of the standalone financial statements)

Previous year''s figures have been regrouped/reclassified wherever necessary to correspond with the current year''s classification/disclosures.


Mar 31, 2013

1. Corporate Information

(Refer to Note No. 1 of the annual standalone financial statements)

Infotech Enterprises Limited (''Infotech'' or ''the Company'') is engaged in providing global technology services and solutions specialising in geospatial, engineering design and IT solutions. The Company has its headquarters and development facilities in India and serves a global customer base through its subsidiaries in United States of America (USA), United Kingdom (UK), Germany, Japan and India. Infotech''s range of services include digitisation of drawings and maps, photogrammetry, computer aided design/engineering (CAD/CAE), design and modelling, repair development engineering, reverse engineering application software development, software products development, consulting and implementation. Infotech specialises in software services and solutions for the manufacturing, utilities, telecommunications, transportation & logistics, local government and financial services markets.

Complete Balance Sheet, Statement of Profit and Loss, other statements and notes thereto prepared as per the requirements of Schedule VI to the Companies Act, 1956 are available at the Company''s website at link http://www.infotech-enterprises.com/corporate/investors

2. Segment Information

(Refer to Note No. 31 of the annual standalone financial statements)

Segment information has been presented in the Consolidated Financial Statements as permitted by Accounting Standard (AS 17) on Segment Reporting as notified under the Companies (Accounting Standards) Rules, 2006.

3. Associate Stock Option Plans

(Refer to Note No. 38 of the annual standalone financial statements)

Infotech Employee Stock Offer Scheme 1999 (ESOP Plan)

In 1998-99, the Company set up ESOP plan and allotted 80,900 equity shares of Rs. 10 each at a premium of Rs. 100 per share to the Infotech ESOP trust. The trust on recommendation of management and upon receipt of full consideration transfers the equity shares in the name of the selected employees. The Company modified the ESOP Plan and adjusted the number of options and exercise price on account of bonus issue and stock split cum bonus issue during 2002-03, 2006-07 and 2010-11 respectively.

Associate Stock Option Plans (ASOP Plan)

The company has four ASOP plans - ASOP 2001, ASOP 2002, ASOP 2004 and ASOP 2008. Under each of these schemes, options will be issued to employees at an exercise price which shall not be less than the market price on the date of the grant. These options vest over a period ranging from one to three years from the date of grant, starting with 10% at the end of the first year, 15% at the end of one and half years, 20% after two years, 25% at the end of two and half years and 30% at the end of the third year.

4. Contingent Liabilities and Commitments

(Refer to Note No. 23 of the annual standalone financial statements)

Contingent liabilities (Amount in Rs.)

As at As at Particuiars March 31, 2013 March 31, 2012

Claims against the Company not acknowledged as debt (Refer Note (i) below) 632,027,223 593,743,144

Guarantees (Refer Note (ii) below) 443,662,000 426,680,000

Notes:

i. a. The Company has disputed various demands (including draft notice of demand) raised by Income Tax authorities for the assessment years 1997-98 to 2009-10. The orders are pending at various stages of appeals. The aggregate amount of disputed tax not provided for is Rs. 404,555,682 (March 31, 2012 - Rs. 409,671,422). The Company is confident that these appeals will be decided in its favour, based on professional advice.

b. The Company has disputed various demands raised by the Sales Tax authorities for the financial years 2004-05 to 2009-10. The Company has filed appeals, which are pending with the appropriate authorities. The aggregate amount of disputed tax not provided for is Rs. 20,096,061 (March 31, 2012 - Rs. 20,096,061). The Company is confident that these appeals will be decided in its favour, based on professional advice. The above does not include show cause notices received by the Company.

c. The Company has disputed various demands raised by the Service Tax authorities for the financial years 2006-07 to 2011-12. The Company has filed appeals, which are pending with the appropriate authorities. The aggregate amount of disputed tax not provided for is Rs. 207,375,480 (March 31, 2012 - Rs. 163,975,661). The Company is confident that these appeals will be decided in its favour, based on professional advice. The above does not include show cause notices received by the Company.

ii. Corporate guarantee given to subsidiary''s bankers to obtain line of credit Rs. 443,662,000 (March 31, 2012 - Rs. 426,680,000). The amount outstanding against such guarantee is Rs. 397,774 (March 31, 2012 - Rs. 3,759,677).

5. Amalgamation:

(Refer to Note No. 29 of the annual standalone financial statements)

During the year ended March 31, 2011, TTM Institute of Information Technology Private Limited, a wholly owned subsidiary of Infotech Enterprises Limited ("the Company") was amalgamated with the Company w.e.f. April 1, 2011 pursuant to Scheme of Amalgamation approved by the Honourable High Court of Judicature, Andhra Pradesh vide its order dated March 21, 2011 and filed with the Registrar of Companies on May 12, 2011. Consequently all the Assets, Liabilities and Reserves stand taken over by the Company retrospectively from April 1, 2011 and accounted under "Pooling of Interest" method as per the Accounting Standard-14 "Accounting for Amalgamation". As TTM Institute of Information Technology Private Limited was a wholly owned subsidiary of the Company, no additional shares were issued to effect the Amalgamation.

6. Regrouping/Reclassification

(Refer to note No. 41 of the annual standalone financial statements)

Previous year''s figures have been regrouped/reclassified wherever necessary to correspond with the current year''s classification/ disclosures.


Mar 31, 2012

1. Contingent Liabilities and Commitments

(Refer to Note No. 24 of the annual standalone financial statements)

1.1 Contingent liabilities (Amount in Rs.)

As at As at Particulars March 31, 2011 March 31,2011

Claims against the Company not acknowledged as debt (Refer Note (i) below) 593,743,144 338,007,858

Guarantees (Refer Note (ii) below) 426,680,000 141,184,000

Other money for which the Company is contingently liable (Refer Note (iii) below) 20,000,000 10,000,000

(i) a. The Company has disputed various demands raised by Income Tax authorities for the assessment years 1997-98 to 2008-09. The orders are pending at various stages of appeals. The aggregate amount of disputed tax not provided for is Rs. 409,671,422 (March 31, 2011 - Rs. 178,022,384). The Company is confident that these appeals will be decided in its favour, based on professional advice.

b. The Company has disputed various demands raised by the Sales Tax authorities for the financial years 2004-05 to 2009-10. The Company has filed appeals, which are pending with the appropriate authorities. The aggregate amount of disputed tax not provided for is Rs. 20,096,061 (March 31, 2011 - Rs. 20,221,861). The Company is confident that these appeals will be decided in its favour, based on professional advice.

The above does not include show cause notices received by the Company.

c. The Company has disputed various demands raised by the Service Tax authorities for the financial years 2006-07 to 2009- 10. The Company has filed appeals, which are pending with the appropriate authorities. The aggregate amount of disputed tax not provided for is Rs. 163,975,661 (March 31, 2011 - Rs. 139,763,613). The Company is confident that these appeals will be decided in its favour, based on professional advice.

The above does not include show cause notices received by the Company.

(ii) Corporate guarantee given to subsidiary’ bankers to obtain line of credit Rs. 426,680,000 (March 31, 2011 - Rs. 141,184,000)

(iii) a. The Company has offered a Fixed Deposit of Rs. 14,081,214 with Oriental Bank of Commerce as lien for the overdraft facility of Rs. 10,000,000 (March 31, 2011- Rs. 10,000,000) availed by its wholly owned subsidiary, Infotech Geospatial (India) Limited.

b. The Company has offered a Fixed Deposit of Rs. 15,648,109 with Corporation Bank as lien for the Cash Credit Facility of Rs. 10,000,000 (March 31, 2011- Rs. Nil) availed by its wholly owned subsidiary, Infotech Geospatial (India) Limited.

2. Amalgamation:

(Refer to Note No. 30 of the annual standalone financial statements)

During the previous year, TTM Institute of Information Technology Private Limited, a wholly owned subsidiary of Infotech Enterprise Limited ("the Company") was amalgamated with the Company w.e.f. April 1, 2011 pursuant to Scheme of Amalgamation approved by the Honourable High Court of Judicature, Andhra Pradesh vide its order dated March 21, 2011 and filed with Registrar of Companies on May 12, 2011. Consequently all the Assets, Liabilities and Reserves stand taken over by the Company retrospectively from April 1, 2011 and accounted under "Pooling of Interest" method as per the Accounting Standard-14 "Accounting for Amalgamations". As TTM Institute of Information Technology Private Limited was a wholly owned subsidiary of the Company, no additional shares were issued to effect the Amalgamation.

Note:

(i) Balances with banks include deposits amounting to Rs. 88,417,869 (March 31, 2011 - Rs. 200,469,258) and margin monies amounting to Rs. 379,000 (March 31, 2011 - Rs. 379,000) which have an original maturity of more than 12 months. Balances with banks include deposits amounting to Rs. Nil (March 31, 2011- Rs. 3,095,569) and margin monies amounting to Rs. 379,000 (March 31, 2011- Rs. 379,000) which have a maturity of more than 12 months from the Balance Sheet Date

3. Regrouping/Reclassification

The Revised Schedule VI has become effective from April 1, 2011 for the preparation of financial statements. This has significantly impacted the disclosure and presentation made in the financial statements. The abridged financial statements are prepared based on the financial statements prepared as per the revised schedule VI. Previous year’ figures have been regrouped / reclassified wherever necessary to correspond with the current year’ classification / disclosure.


Mar 31, 2011

Related Party Transactions

(Refer to Note No. 12 of Schedule 15 of the annual standalone financial statements.)

List of related parties on which the Company is able to exercise the control.

a) Subsidiaries

Name of the Subsidiary Companies

Infotech Enterprises Europe Limited, UK. (IEEL)

Infotech Enterprises Benelux B.V Netherlands - A subsidiary of IEEL

Mapcentric Consulting Limited, UK - A subsidiary of IEEL

Dataview Solutions Limited, UK - A subsidiary of IEEL

Infotech Enterprises America Inc., USA (IEAI)

Infotech Software Solutions Canada Inc., Canada - A subsidiary of IEAI

Infotech Enterprises Electronic Design services Inc., - A subsidiary of IEAI

Daxcon Engineering Services Inc., USA - A subsidiary of IEAI *

Wellsco Inc., USA - A Subsidiary of IEAI (w.e.f. August 9, 2010)

Infotech Enterprises GmbH, Germany (IEG)

Infotech Enterprises AB, Sweden - A subsidiary of IEG (w.e.f April 8, 2010)

Infotech Geospatial (India) Limited, India

TTM Institute of Information Technology Private Limited, India

Infotech Enterprises Japan KK, Japan

Infotech Enterprises Information Technology Services Private Limited, India

*Merged with IEAI w.e.f 1st January, 2011

b) Associate

Name of the Associate Company

Infotech Aerospace Services Inc. , Puerto Rico, USA

c) Joint Venture

Name of the Joint Venture Company

Infotech HAL Limited, India

d) Key Management Personnel

Name Designation

B.V.R. Mohan Reddy Chairman and Managing Director

B. Sucharitha Whole Time Director

S.A. Lakshminarayanan Chief Operating Officer - N&CE

K. Ashok Kumar Chief Technology Officer

Sundar Viswanathan Chief Financial Officer (w.e.f. April 5, 2010)

Bhanu Cherukuri Chief Strategy Officer

A. Ramaswami Chief Information Officer (w.e.f. October 21, 2010)



e) Relative of Chairman & Managing Director and Whole Time Director

Name of Relative Designation

Krishna Bodanapu President - Engineering B. Ashok Reddy President - Global Human Resources & Corporate Affairs

5. Quantitative details

(Refer to Note No. 17 of Schedule 15 of the annual standalone financial statements)

The Company is engaged in the development of Computer Software and Services. The production and sale of such software and services cannot be expressed in any generic unit. Hence, it is not possible to give the quantitative details of sales and the information as required under Paragraphs 3 and 4C of Part II of Schedule VI to the Companies Act, 1956.

6. Segmental Information

(Refer to Note No.11 of Schedule 15 of the annual standalone financial statements)

Segment information has been presented in the Consolidated Financial Statements as permitted by Accounting Standard (AS 17) on Segment Reporting as notified under the Companies (Accounting Standards) Rules, 2006.

7. Stock Option Plans

(Refer to Note No.2 of Schedule 15 of the annual standalone financial statements)

Infotech Employee Stock Offer Scheme 1999 (ESOP Plan)

In 1998-99, the Company set up ESOP plan and allotted 80,900 equity shares of Rs 10 each at a premium of ` 100 per share to the Infotech ESOP trust. The trust on recommendation of management and upon receipt of full consideration transfers the equity shares in the name of the selected employees. The Company modified the ESOP Plan and adjusted the number of options and exercise price on account of bonus issue and stock split cum bonus issue during 2002-03 and 2006-07 respectively.

As this scheme is established prior to the SEBI Guidelines on the stock options, there is no cost relating to the grant of options under this scheme.

Associate Stock Option Plans (ASOP Plan)

The company currently has three ASOP plans - ASOP 2002, ASOP 2004 and ASOP 2008. Under each of these schemes, options will be issued to employees at an exercise price which shall not be less than the market price on the date of the grant. These options vest over a period ranging from one to three years from the date of grant, starting with 10% at the end of the first year, 15% at the end of one and half years, 20% after two years, 25% at the end of two and half years and 30% at the end of the third year.

8. Contingent Liabilities and Commitments

(Refer to Note No. 18 of Schedule 15 of the annual standalone financial statements.)

a. Estimated amount of contracts remaining to be executed on capital accounts not provided for, net of advances Rs 140,645,654 (31.03.2010 - Rs 45,325,045).

b. The Company has outstanding counter guarantees of Rs 78,030,894 as on March 31, 2011, to banks, in respect of guarantees given by the said banks in favour of various agencies (31.03.2010 - Rs 70,043,183).

c. Corporate guarantee given to subsidiary's bankers to obtain line of credit Rs 141,184,000 (31.03.2010 - Rs 376,842,480)

d. The Company has disputed various demands raised by Income Tax authorities for the assessment years 1997-98 to 2007-08. The orders are pending at various stages of appeals. The aggregate amount of disputed tax not provided for is Rs 178,022,384 (31.03.2010 - Rs 161,954,153). The Company is confident that these appeals will be decided in its favour, based on professional advice.

e. The Company has disputed various demands raised by the Sales Tax authorities for the financial years 2004-05 to 2009-10. The Company has filed appeals, which are pending with the appropriate authorities. The aggregate amount of disputed tax not provided for is Rs 20,221,861 (31.03.2010 - Rs 16,344,575). The Company is confident that these appeals will be decided in its favour, based on professional advice.

f. The Company has disputed various demands raised by the Service Tax authorities for the financial years 2005-06 to 2009-10. The Company has filed appeals, which are pending with the appropriate authorities. The aggregate amount of disputed tax not provided for is Rs 139,763,613 (31.03.2010 - Rs Nil). The Company is confident that these appeals will be decided in its favour, based on professional advice.

g. The company has offered the Fixed Deposits of Rs 13,130,423 with Oriental Bank of Commerce as lien for the overdraft facility of Rs 10,000,000 availed by its subsidiary, Infotech Geospatial (India) Limited.

2. Regrouping/Reclassification

The figures for previous year have been regrouped /reclassified wherever necessary, to conform to the current year figures.


Mar 31, 2010

1. Description of Business

Infotech Enterprises Limited (Infotech or the Company) is a global technology services and solutions Company specialising in geospatial, engineering design and IT solutions. Its range of services include digitizsation of drawings and maps, photogrammetry, computer aided design/engineering (CAD/CAE), design and modelling, repair development engineering, reverse engineering application software development, software products development, consulting and implementation. The Company specializes in software services and solutions for the manufacturing, utilities, telecommunications, transportation & logistics, local government and financial services markets. The Company has its headquarters in Hyderabad, India and development facilities in India at Hyderabad, Bangalore, Noida, Kakinada and overseas branches at Australia, Canada, Dubai, New Zealand, Norway, Malaysia and Singapore, and serves a global customer base through its subsidiaries in India, United States of America (USA), United Kingdom (UK), Japan and Germany.

2. Associate Stock Option Plans

Scheme established prior to SEBI (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines 1999, (SEBI guidelines on Stock Options)

Infotech Employee Stock Offer Scheme 1999 (ESOP Plan)

In 1998-99, the Company set up Infotech Employee Stock Offer Scheme (ESOP Plan) and allotted 80,900 equity shares of Rs.10 each at a premium of Rs.100 per share to the "Infotech ESOP Trust" ("Trust"). The Trust, on the recommendation of the management and upon the receipt of full payment upfront transfers the equity shares in the name of selected employees. The Company modified the ESOP Plan and adjusted the number of options and exercise price on account of bonus issue and stock split cum bonus issue during 2002-03 and 2006-07 respectively. These equity shares are under lock-in period (i.e., the date of transfer of the shares from the Trust to the employee) and it differs from offer to offer. When the employee leaves the Company before the expiry of the lock-in- period the options allocated to such employee stands transferred to Trust at a predetermined price. Hence, the lock-in-period has been considered as vesting period.

However, the Trust and the Company have a discretionary power to waive the restriction on selling such stock to the Trust.

As this scheme is established prior to the SEBI Guidelines on the stock options, there is no cost relating to the grant of options under this scheme.

Scheme established after SEBI Guidelines on Stock Options

Securities Exchange Board of India (SEBI) issued the Employee Stock Option Scheme and Employee Stock Purchase Scheme Guidelines 1999, which is applicable for all Stock Option Schemes established after June 19, 1999.

Associate Stock Option Plan - 2001 (ASOP 2001)

The Company instituted ASOP 2001 in April 2001 and earmarked 225,000 equity shares of Rs.10 each for issue to the employees under ASOP. The Company modified ASOP 2001 and adjusted the number of options and exercise price on account of bonus issue and stock split cum bonus issue during 2002-03 and 2006-07 respectively.

Associate Stock Option Plan - 2002 (ASOP 2002)

The Company instituted ASOP 2002 in October 2002 and earmarked 575,000 equity shares of Rs.10 each for issue to the employees under ASOP. The Company modified ASOP 2002 and adjusted the number of options and exercise price on account of stock split cum bonus issue during 2006-07. Under ASOP 2002, options will be issued to employees at an exercise price, which shall not be less than the market price on the date of grant. These options vest over a period ranging from one to three years from the date of grant, starting with 10% at the end of first year, 15% at the end of one and half years, 20% after two years, 25% at the end of two and half years and 30% at the end of third year.

Associate Stock Option Plan - 2004 (ASOP 2004)

The Company instituted ASOP 2004 in October 2004 and earmarked 1,150,000 equity shares of Rs.10 each for issue to the employees under ASOP. The Company modified ASOP 2004 and adjusted the number of options and exercise price on account of stock split cum bonus issue during 2006-07. Under ASOP 2004, options will be issued to employees at an exercise price, which shall not be less than the market price on the date of grant. These options vest over a period ranging from one to three years from the date of grant, starting with 10% at the end of first year, 15% at the end of one and half years, 20% after two years, 25% at the end of two and half years and 30% at the end of third year. As the options were granted to the employees at the market price on the date of grant there is no cost relating to grant of options during the year.

Out of the total outstanding options, 112,880 options pertain to options granted to the associates of subsidiary companies.

During the year 2006-07, the Company completed two corporate actions, viz., (i) Sub-Division of Rs.10 shares into 2 shares of Rs.5 each and (ii) Issue of Bonus shares of Rs.5/- each in the ratio of 1:2. All original grants that remained un-exercised have been suitably adjusted so as to have the effect of above corporate actions.

Associate Stock Option Plan - 2008 (ASOP 2008)

The Company instituted ASOP 2008 vide the resolution passed by the members of the Company at their meeting held on 23 July 2008, Company has got the in principles from the stock exchanges and there are no grants under this Plan.

Proforma EPS

In accordance with Securities Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999, had the compensation cost for Stock Option plans been recognised based on the fair value at the date of grant in accordance with Binomial Lattice model, the pro forma amounts of the Companys net profit and earnings per share would have been as follows:

3. The Company had issued 2,724,000 Compulsorily Convertible Preference Shares ("CCPS") with a face value of Rs. 360 on July 6, 2007 to M/s. GA Global Investments Limited ("GA" or "the Allottee"). The terms and conditions of the issue of these CCPS including the right to convert the CCPS into Equity Shares are subject to the provisions of the Agreement entered into between the Allottee and the Company, dated June 28, 2007, the guidelines issued by SEBI, RBI etc., and the Special Resolution passed in the Extraordinary General Meeting of members of the Company held on June 23, 2007. The CCPS were to be converted into equal number of equity shares within a period of 18 months from the date of allotment at the option of the Allottee and if no option is exercised, the same shall be automatically converted into equity shares at the end of 18 months.

GA Global investments have exercised the option to convert the CCPS and in pursuance of this exercise the Company has allotted 2,724,000 equity shares of Rs.5/- each, at a premium of Rs. 355 each on December 9, 2008. As such, there are no preference shares in the Company post the above conversion.

The Company has entered into certain foreign currency option contracts that mature over the next 7 months in respect of which a provision towards unrealised loss of Rs. 63,964,134 (31.03.2009 Rs. 514,793,735) on a mark to market basis has been recorded in the accounts. These losses are not realised losses and have a potential to reverse or increase over the maturity period.

The Company has also entered into certain foreign currency forward contracts that mature over the next 9 months in respect of which an unrealised gain of Rs. 90,481,526 (31.03.2009 Rs. Nil) has been recorded in the accounts. These gains are not realised gains and have a potential to reverse or decrease over the maturity period.

The foreign exchange forward and option contracts held by the Company to hedge its risk to foreign currency exposures as at March 31, 2010 included:

- Foreign currency forward contracts of USD 8,000,000 (31.03.2009: USD 6,000,000).

- Foreign currency forward contracts of GBP 5,040,000 (31.03.2009: GBP Nil).

- Foreign currency forward contracts of EURO 9,450,000 (31.3.2009: EURO Nil)

- Foreign currency option contracts to sell a maximum of USD 13,000,000 (31.03.2009: USD 44,500,000).

Amalgamation :

TTM (India) Private Limited, a wholly owned subsidiary of Infotech Enterprise Limited ("the Company") has been amalgamated with the Company w.e.f. April 1, 2009 pursuant to Scheme of Amalgamation approved by the Honourable High Court of Judicature, Andhra Pradesh vide its order dated July 27, 2009 and filed with Registrar of Companies on September 29, 2009. Consequently all the Assets, Liabilities and Reserves stand taken over by the Company retrospectively from April 1, 2009 and accounted under "Pooling of Interest" method as per the Accounting Standard-14 "Accounting for Amalgamations". As TTM (India) Private Limited was a wholly owned subsidiary of the Company, no additional shares were issued to effect the Amalgamation.

A. Defined Contribution Plans

i. Provident Fund:

The Company makes Provident Fund Contribution to defined contribution retirement benefit plans for qualifying employees. Under the Scheme, the Company is required to contribute a specified percentage of the payroll costs to fund the benefits. These contributions are made to the Fund administered and managed by the Government of India. The Companys monthly contributions are charged to the Profit and Loss Account in the period they are incurred. Total expenditure recognised during the year aggregated to Rs. 120,009,039. (2008-09 Rs.102,206,821).

ii. Superannuation Fund

The qualifying employees receive benefit under Superannuation scheme which is a defined contribution wherein the Company contributes 15% of the annual salary of the covered employee. These contributions are made to a fund administrated by LIC of India. The Companys monthly contributions are charged to profit and loss account in the period they are incurred. Total expense recognised during the year aggregated to Rs. 33,153,439. (2008-09 Rs.31,374,105)

B. Defined Gratuity Plans

i. Gratuity:

In accordance with the payment of Gratuity under Payment of Gratuity Act, 1972 of India, the Company provides for gratuity, a defined retirement benefit plan (the Gratuity Plan) covering eligible employees. Liabilities with regard to such Gratuity Plan is determined by an independent actuarial valuation and is charged to the Profit and Loss Account in the period determined. The Gratuity Plan is administered by Companys own Trust which has subscribed to "Group Gratuity Scheme" of Life Insurance Corporation of India.

ii. Provision for Unutilised Leave:

The accrual for unutilised leave is determined for the entire available leave balance standing to the credit of the employees at period-end. The value of such Leave balance eligible for carry forward, is determined by an independent actuarial valuation and charged to Profit and Loss Account in the period determined.

4.Segmental Information

Management evaluates the company’s performance and allocates resources based on an analysis of various performance indicators by business verticals and geographical segmentation of customers.

The Company classifies its operations into two vertically oriented business segments: Utilities, Telecom, Government (UTG) and Engineering, Manufacturing, Industrial Products (EMI). Both businesses cater to the specific requirements of customers in their respective user segments.

Geographic segments of the Company are North America, Europe and Rest of the world.

The Company has identified business segments as its primary segment and geographic segments as its secondary segment.

I. Utilities, Telecom, Government (UTG)

UTG vertical services customers in industries such as power, gas, telecom, transportation and local government. The Company service offerings to the UTG vertical include data conversion, data maintenance, photogrammetry and IT services.

II. Engineering, Manufacturing, Industrial Products (EMI)

EMI vertical services customers in industries such as aerospace, automotive, off-highway transportation and industrial and commercial products, engineering design, embedded software, IT Solutions, manufacturing support, technical publications and other strategic customers.

Revenue in relation to these verticals is categorised based on items that are individually identifiable to that vertical.

Fixed assets used in the Company are not identified to any of the reportable segments and management believes that it is currently not practicable to provide segment disclosures relating to total assets and liabilities since a meaningful segregation of the available data is onerous.

5. Contingent Liabilities and Commitments

a. Estimated amount of contracts remaining to be executed on capital accounts not provided for, net of advances Rs. 45,325,045 (31.03.2009 - Rs. 81,465,424).

b. The Company has outstanding counter guarantees of Rs. 70,043,183 as on March 31, 2010, to banks, in respect of guarantees given by the said banks in favour of various agencies (31.03.2009 - Rs. 76,160,447).

c. Corporate guarantee given to subsidiarys bankers to obtain line of credit Rs. 376,842,480 (31.03.2009 - Rs. 334,902,600)

d. The Company has disputed various demands raised by Income Tax authorities for the assessment years 1997-98 to 2006-07. The orders are pending at various stages of appeals. The aggregate amount of disputed tax not provided for is Rs. 161,954,153 (31.03.2009 Rs.166,143,227). The Company is confident that these appeals will be decided in its favour, based on professional advice.

e. The Company has disputed various demands raised by the sales tax authorities for the financial years 2004-05 to 2009-10. The Company has filed appeals, which are pending with the appropriate authorities. The aggregate amount of disputed tax not provided for is Rs.16,344,575 (31.03.2009: Rs. Nil). The Company is confident that these appeals will be decided in its favour, based on professional advice.

6. Contingency Reserve

The Company is contesting the Income Tax Appellate Tribunals (ITAT) order for the denial of certain export benefits under the Income Tax Act, 1961 on the grounds of the date of establishment of the Export Oriented Unit. The petition contesting the ITATs Order has been admitted by the Honourable High Court of Judicature, Andhra Pradesh and the case has not yet come up for hearing during the year.

Further, the Company is contesting certain other disallowances made by the Deputy Commissioner of Income-tax for the assessment years 2002-03 to 2006-07. The matters have been taken up with the appropriate authorities and the Company is hopeful of the favourable resolution, based on professional advice. As a matter of abundant precaution, the Company has set aside an amount of Rs. 161,000,000 (31.03.2009 Rs. 161,000,000) as Contingency Reserve to meet any future eventuality.

7. Research and Development Expenses

Revenue expenditure pertaining to Research and Development charged to Profit and Loss Account Rs. 12,631,002 (2008-09 - Rs. 2,021,504). Capital expenditure on Research and Development Rs. NIL (31.03.2009 - Rs. NIL) is shown in the respective fixed assets.

8. Except for the dues to micro enterprises and small enterprises, as disclosed in Schedule 10 Liabilities, the Company has not received any memorandum (as required to be filed by the suppliers with the notified authority under the MSMED Act, 2006) claiming their status as micro or small enterprises. In respect of the dues disclosed, there are no principal amounts overdue and no interest has been claimed based on the information available with the Company.

9. During the year, Company entered into an agreement with the Government of Karnataka, represented by the Commissioner Survey Settlement and Land Records to under take the Urban Property Ownership Records project. The project would operate on a PPP model i.e. Public Private Partnership. Company undertakes to build, develop, construct, commission, operate and maintain the IT solutions for the Urban Property Ownership Records project for a period of 6 years and 270 days. The investment made in the project till March 31, 2010 is Rs. 26,833,543 towards hardware/software and other operating costs. As the project in progress as at the year end the amount invested is included with in Capital Work in Progress.

10. Other Income for the year includes Rs.450,829,601 towards reversal of provision for MTM losses on derivative contracts, Rs.187,073,883 towards loss on settlement of derivative contracts and Rs.90,481,526 towards restatement gain on derivative contracts taken during the year.

11. Regrouping/Reclassification

The figures for previous year have been regrouped/reclassified wherever necessary, to conform to the current year figures.

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