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Notes to Accounts of Datamatics Global Services Ltd.

Mar 31, 2023

(vi) Terms / rights attached to equity shares

The Company, at present, has one class of equity shares having a par value of Rs. 5 per share. Each shareholder is eligible for one vote per share held. The voting rights on Unclaimed Suspense Account shares are frozen till the rightful owner of such shares claims the shares. The Company declares and pays dividend in Indian Rupees. The remittance of dividends outside India is governed by Indian law on foreign exchange and is subject to applicable distribution taxes. The final dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting. In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company, after distribution of preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

Nature of reserves

(i) Securities Premium

Securities premium reserve is used to record the premium on issue of shares. The reserve is utilised in accordance with the provision of the Companies Act, 2013.

(ii) General Reserve

The General reserve is used from time to time to transfer profits from retained earnings for appropriation purposes. As the General reserve is created by a transfer from one component of equity to another and is not item of other comprehensive income, items included in the General reserve will not be reclassified subsequently to statement of profit and loss.

(iii) Capital Reserve

Capital reserve created on the merger of one of the subsidiaries with the company.

(iv) Capital Redemption Reserve

As per Companies Act, 2013, capital redemption reserve is created when company purchases its own shares out of free reserves or securities premium. A sum equal to the nominal value of the shares so purchased is transferred to capital redemption reserve.

(v) PSOP Reserve

PSOP reserve is created for issue of share capital under Performance Based Employee Stock Option Plan (''PSOP'') 2022.

(vi) OCI - Equity investments

The company recognises unrealised and realised gain on equity shares in FVOCI - Equity investments.

(vii) OCI - Cash Flow Hedging Reserve

The cash flow hedging reserve represents the cumulative effective portion of gains or losses arising on changes in fair value of designated portion of hedging instruments entered into for cash flow hedges. The cumulative gain or loss arising on changes in fair value of the designated portion of the hedging instruments that are recognised and accumulated under the heading of cash flow hedging reserve. Such gains or losses will be reclassified to statement of profit and loss in the period in which the hedged transaction occurs.

This section explains the judgements and estimates made in determining the fair values of the financial instruments that are (a) recognised and measured at fair value and (b) measured at amortised cost and for which fair values are disclosed in the financial statements.

Level 1: Level 1 hierarchy includes financial instruments measured using quoted prices. This includes listed equity instruments, mutual funds and forward contracts that have quoted price. The fair value of all equity instruments (including bonds) which are traded in the stock exchanges is valued using the closing price as at the reporting period. The mutual funds are valued using the closing NAV.

Level 2: The fair value of financial instruments that are not traded in an active market (for example, traded bonds, over-the counter derivatives) is determined using valuation techniques which maximise the use of observable market data and rely as little as possible on entity-specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included in level 2.

Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3. This is the case for unlisted equity securities, contingent consideration.

There are no transfers between levels 1 and 2 during the year.

ii) Valuation technique used to determine fair value

Specific valuation techniques used to value financial instruments include:

* the use of quoted market prices or dealer quotes for similar instruments

All of the resulting fair value estimates are included in level 3 except for unlisted equity securities, contingent consideration and indemnification asset, where the fair values have been determined based on present values and the discount rates used were adjusted for counterparty or own credit risk.

iii) Valuation processes

The carrying amounts of trade receivables, trade payables, capital creditors and cash and cash equivalents are considered to be the same as their fair values, due to their short-term nature.

For financial assets and liabilities that are measured at fair value, the carrying amounts are equal to the fair values.

Note 40: Financial risk management

The company’s activities expose it to market risk, liquidity risk and credit risk. In order to minimise any adverse effects on the financial performance of the company, derivative financial instruments, such as foreign exchange forward contracts are entered to hedge certain foreign currency risk exposures. Derivatives are used exclusively for hedging purposes and not as trading or speculative instruments.

The Board provides guiding principles for overall risk management, as well as policies covering specific areas such as credit risk, liquidity risk, and Foreign Exchange Risk effecting business operations. The company’s risk management is carried out by the management as per guidelines and policies approved by the Board of Directors.

A) Credit risk

Credit risk is the risk that counterparty will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. Credit risk encompasses the direct risk of default, risk of deterioration of creditworthiness as well as concentration risks. The Company is exposed to credit risk from its operating activities (primarily trade receivables), deposits with banks and loans given.

Credit risk management

The company''s credit risk mainly from trade receivables as these are typically unsecured. This credit risk has always been managed through credit approvals, establishing credit limits and continuous monitoring the creditworthiness of customers to whom credit is extended in the normal course of business. The Company estimates the expected credit loss based on past data, available information on public domain and experience. Expected credit losses of financial assets receivable are estimated

based on historical data of the Company. The company has provisioning policy for expected credit losses. There is no credit risk in bank deposits which are demand deposits. The credit risk is minimum in case of entity / person to whom loan has been given.

The maximum exposure to credit risk as at March 31, 2023 and March 31, 2022 is the carrying value of such trade receivables as shown in note 12 of the financials.

B) Liquidity risk

Prudent liquidity risk management implies maintaining sufficient cash and marketable securities and the availability of funding through an adequate amount of committed credit facilities to meet obligations when due and to close out market positions. Due to the dynamic nature of the underlying businesses, company treasury maintains flexibility in funding by maintaining availability under committed credit lines.

Management monitors rolling forecasts of the company’s liquidity position and cash and cash equivalents on the basis of expected cash flows. In addition, the company’s liquidity management policy involves projecting cash flows in major currencies and considering the level of liquid assets necessary to meet these, monitoring balance sheet liquidity ratios against internal and external regulatory requirements and maintaining debt financing plans.

C) Market risk

i) Foreign currency risk

The company operates internationally and is exposed to foreign exchange risk arising from foreign currency transactions, primarily with respect to the USD, EUR and GBP. Foreign exchange risk arises from future commercial transactions and recognised assets and liabilities denominated in a currency that is not the company’s functional currency (INR). The risk is measured through a forecast of highly probable foreign currency cash flows. The objective of the hedges is to minimise the volatility of the INR cash flows of highly probable forecast transactions.

The company’s risk management policy is to hedge around 50% to 70% of forecasted receivables for the subsequent 18 months. As per the risk management policy, foreign exchange forward contracts are taken to hedge round 50% to 70% of the forecasted receivables.

The company’s main interest rate risk arises from long-term borrowings with variable rates, which expose the company to cash flow interest rate risk. company policy is to maintain most of its borrowings at fixed rate using interest rate swaps to achieve this when necessary. During the year March 31, 2023, the Company''s borrowings at variable rate were denominated in INR.

The company’s fixed rate borrowings are carried at amortised cost. They are therefore not subject to interest rate risk as defined in Ind AS 107, since neither the carrying amount nor the future cash flows will fluctuate because of a change in market interest rates.

iii) Price risk a) Exposure

The company’s exposure to equity securities price risk arises from investments held by the company and classified in the balance sheet either as fair value through OCI or at fair value through profit or loss.

To manage its price risk arising from investments in equity securities, the company diversifies its portfolio. Diversification of the portfolio is done in accordance with the limits set by the company.

All of the company’s equity investments are publicly traded.

Note 41: Capital management a) Risk management

For the purpose of the Company’s capital management, capital includes issued equity capital and all other equity reserves attributable to the equity holders. The primary objective of the Company capital management is to maximise the shareholder value.

III. Leave Encashment

The Company has a policy on compensated absences which are both accumulating in nature. The expected cost of accumulating compensated absences is determined by actuarial valuation performed by an independent actuary at each Balance Sheet date. This is done using projected unit credit method on the additional amount expected to be paid / availed as a result of the unused entitlement that has accumulated at the Balance Sheet date. Expenses relating to the same are recognised in the statement of profit and loss.

IV. Performance Based Employee Stock Option Plan (''PSOP'') 2022

The Company has granted Stock Options under Performance Based Employee Stock Option Plan 2022 ("PSOP 2022"). The plan shall extend to present and future eligible employees of the Company or its Subsidiary/ies or its Group Company(ies) working exclusively for such company whether within or outside India and/or such other persons, as may be permitted from time to time, under Applicable Laws, rules and regulations and/or amendments thereto as eligible to participate in this PSOP 2022 who meet the eligibility criteria set out in the Grantee’s Option Agreement in accordance with this PSOP 2022 as determined by the Compensation Committee from time to time. Stock Options shall vest based upon satisfaction of the performance criteria. The continuation of employee in the services of the Company shall be the primary requirement of the vesting. Under the PSOP 2022, 815,879 options were granted at exercise price of Rs. 5 per share.

The Performance Based Employee Stock Option Plan (''ESOP'') -Granted by Datamatics Global Services Limited to its Eligible Employees has been determined by using the BlackScholes-Merton Formula.

The inputs to the model include the share price at date of grant, exercise price, expected volatility, expected dividends, expected term and the risk-free rate of interest. Expected volatility during the expected term of the options is based on historical volatility of the observed market prices of the Company''s publicly traded equity shares during a period equivalent to the expected term of the options.

Note 46: Contingent Liability and Commitments

Provision is made in the financial statements if it becomes probable that an outflow of resources embodying economic benefits will be required to settle the obligation. „ . „

a ('' in Crores)

Contingent Liabilities to the extent not provided for:

March 31, 2023

March 31, 2022

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

(i) Income Tax matters

-

1.77

(ii) Value added tax (VAT)

0.61

0.56

(b) Details of guarantees outstanding as at:

(i) Guarantees given by banks

43.18

52.05

(c) Capital and other commitments:

(i) Estimated amount of contracts on capital account remaining to be executed

and not provided for (net of advances)

-

0.90

The Company in accordance with its risk management policies and procedures, enters into foreign currency forward contracts to manage its exposure in foreign exchange rates. The counter party is generally a bank. The foreign exchange forward contracts mature within a period of one month and two years.

Net gain / (loss) on derivative instruments of Rs. (-) 1.48 crores (FY 2021-22 Rs. 3.57 crores) recognised in Hedging Reserve as of March 31, 2023, is expected to be reclassified to the Statement of Profit and Loss by October 31, 2024.

Note 48: Segment Information

The company publishes standalone financial statements of the company along with the consolidated financial statements. In accordance with Ind AS 108 - Operating segments, the company has disclosed the segment information in the consolidated financial statements.

As per Section 135 of the Companies Act, 2013, a company, meeting the applicability threshold, needs to spend at least 2% of its average net profit for the immediately preceding three financial years on corporate social responsibility (CSR) activities. The areas for CSR activities are eradication of hunger and malnutrition, promoting education, art and culture, healthcare, destitute care and rehabilitation, environment sustainability, disaster relief, COVID-19 relief and rural development projects. A CSR committee has been formed by the company as per the Act. The funds were primarily allocated to a corpus and utilized through the year on these activities which are specified in Schedule VII of the Companies Act, 2013:

No single customer represents 10% or more of the Company''s total revenue during the year ended March 31, 2023 and March 31, 2022.

While disclosing the aggregate amount of transaction price yet to be recognised as revenue towards unsatisfied (or partially satisfied) performance obligations, along with the broad time band for the expected time to recognise those revenues, the Company has applied the practical expedient in Ind AS 115. Accordingly, the Company has not disclosed the aggregate transaction price allocated to unsatisfied (or partially satisfied) performance obligations which pertain to contracts where revenue recognise corresponds to the value transferred to customer typically involving time and material, outcome based and event based contracts. Unsatisfied (or partially satisfied) performance obligations are subject to variability due to several factors such as terminations, changes in scope of contracts, periodic revalidations of estimates, economic factors (changes in currency rates, tax laws etc). This excludes transactions with subsidiaries of the Company.

Note 55: Merger of Delta Infosolutions Private Limited with company

The Board of Directors have, at their meeting held on March 4, 2022, subject to obtaining the requisite approvals/consents, approved the Scheme of Amalgamation under Section 232 read with Section 230 and other applicable provisions of the Companies Act, 2013 and the rules made thereunder ("Scheme”) between Delta Infosolutions Private Limited and Datamatics Global Services Limited and their respective shareholders.

The Company has received a letter dated 26 August 2022 from BSE and NSE stating that there were no-adverse observations to the Scheme. Thereafter, an application was filed with the National Company Law Tribunal, Mumbai Bench, to, inter alia, seek directions for convening meetings of shareholders of the Company, for convening meeting of secured and unsecured creditors, and for serving notices to regulatory authorities. Subsequent to the same, vide hearing on 30 March 2023, a meeting of shareholders of the Company is sought to be convened on July 7, 2023 through video conferencing or other audio-visual means, the meeting of the creditors has been dispensed with, and the Company would serve notices to regulatory authorities, as directed by the NCLT, and seek requisite approvals from such regulatory authorities, to the extent required.

The Management is of the opinion that its international transactions are at arm''s length as per the independent accountants certificate for the year ended March 31, 2023. The Management continues to believe that its international transactions during the current financial year are at arm''s length and that the transfer pricing legislation will not have any impact on these financial statements, particularly on amount of tax expense and that of provision for taxation.

Note 57: Events occuring after Balance Sheet date Dividend

Dividends declared by the Company are based on the profit available for distribution. On April 28, 2023, the Board of Directors of the Company have proposed total dividend of Rs. 5 per equity share (i.e 100%) of the face value of Rs. 5 each which includes Rs. 3.75 final dividend and Rs. 1.25 special dividend per share in respect of the year ended March 31, 2023 subject to the approval of shareholders at the Annual General Meeting.

Note 58: There is no income surrendered or disclosed as income during the current or previous year in the tax assessments under the Income Tax Act, 1961, that has not been recorded in the books of account.

Note 59: The Company has not traded or invested in crypto currency or virtual currency during the current or previous year.

Note 60: The Company has not revalued its property, plant and equipment (including right to use assets) or intangible assets or both during the current or previous year.

Note 61: The Company has not entered into any scheme of arrangement which has an accounting impact on current or previous financial year.

Note 62: Benami Property

No proceeding has been initiated or pending against the company for holding any benami property under the Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and rules made thereunder.

Note 63: Relationship with struck off Companies

The Company has no transaction with companies struck off under section 248 of the Companies Act, 2013 or section 560 of the Companies Act, 1956.

Note 64: Borrowings from Banks

The Company has borrowings from banks on the basis of security of current assets and quarterly returns or statements of current assets filed by the Company with banks are in agreement with the books of account.

Note 65: Previous year''s figures

Previous year figures are appropriately regrouped / reclassified and rearranged wherever necessary to conform to the current year''s presentation along with disclosure.


Mar 31, 2022

(vi) Terms / rights attached to equity shares

The Company, at present, has one class of equity shares having a par value of Rs. 5 per share. Each shareholder is eligible for one vote per share held. The voting rights on Unclaimed Suspense Account shares are frozen till the rightful owner of such shares claims the shares. The Company declares and pays dividend in Indian Rupees. The remittance of dividends outside India is governed by Indian law on foreign exchange and is subject to applicable distribution taxes. The final dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting. In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company, after distribution of preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

Nature of reserves

(i) Securities Premium

Securities premium reserve is used to record the premium on issue of shares. The reserve is utilised in accordance with the provision of the Companies Act, 2013.

(ii) General Reserve

The General reserve is used from time to time to transfer profits from retained earnings for appropriation purposes. As the General reserve is created by a transfer from one component of equity to another and is not item of other comprehensive income, items included in the General reserve will not be reclassified subsequently to statement of profit and loss.

(iii) Capital Reserve

Capital reserve created on the merger of one of the subsidiaries with the company.

(iv) Capital Redemption Reserve

As per Companies Act, 2013, capital redemption reserve is created when company purchases its own shares out of free reserves or securities premium. A sum equal to the nominal value of the shares so purchased is transferred to capital redemption reserve.

(v) OCI - Equity investments

The company recognises unrealised and realised gain on equity shares in FVOCI - Equity investments.

(vi) OCI - Cash Flow Hedging Reserve

The cash flow hedging reserve represents the cumulative effective portion of gains or losses arising on changes in fair value of designated portion of hedging instruments entered into for cash flow hedges. The cumulative gain or loss arising on changes in fair value of the designated portion of the hedging instruments that are recognised and accumulated under the heading of cash flow hedging reserve. Such gains or losses will be reclassified to statement of profit and loss in the period in which the hedged transaction occurs.

1. The company recorded the realised gain on fair value of financial assets of Rs. 235.78 million (Rs. 293.19 million) and Rs. Nil (Rs. 13.20 million) relating to redemption of preference shares of Datamatics Global Technologies Limited and Lumina Datamatics Limited respectively, subsidiaries.

2. The company performed the impairment assessment of Vista, a business segment of the group, and basis that goodwill amounting to Rs. Nil (Rs. 99.24 million) was impaired.

3. The company recorded the exchange gain of Rs. 25.60 million (Rs. Nil) relating to the buy back of equity shares of Datamatics Global Technologies Limited, a subsidiary.

4. The company recorded the exchange gain of Rs. 76.11 million (Rs. 121.54 million) relating to the redemption of preference shares of Datamatics Global Technologies Limited, a subsidiary.

This section explains the judgements and estimates made in determining the fair values of the financial instruments that are (a) recognised and measured at fair value and (b) measured at amortised cost and for which fair values are disclosed in the financial statements.

Level 1: Level 1 hierarchy includes financial instruments measured using quoted prices. This includes listed equity instruments, mutual funds and forward contracts that have quoted price. The fair value of all equity instruments (including bonds) which are traded in the stock exchanges is valued using the closing price as at the reporting period. The mutual funds are valued using the closing NAV.

Level 2: The fair value of financial instruments that are not traded in an active market (for example, traded bonds, over-the counter derivatives) is determined using valuation techniques which maximise the use of observable market data and rely as little as possible on entity-specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included in level 2.

Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3. This is the case for unlisted equity securities, contingent consideration.

There are no transfers between levels 1 and 2 during the year.

ii) Valuation technique used to determine fair value

Specific valuation techniques used to value financial instruments include:

* the use of quoted market prices or dealer quotes for similar instruments

All of the resulting fair value estimates are included in level 3 except for unlisted equity securities, contingent consideration and indemnification asset, where the fair values have been determined based on present values and the discount rates used were adjusted for counterparty or own credit risk.

iii) Valuation processes

The carrying amounts of trade receivables, trade payables, capital creditors and cash and cash equivalents are considered to be the same as their fair values, due to their short-term nature.

For financial assets and liabilities that are measured at fair value, the carrying amounts are equal to the fair values.

Note 39: Financial risk management

The company’s activities expose it to market risk, liquidity risk and credit risk. In order to minimise any adverse effects on the financial performance of the company, derivative financial instruments, such as foreign exchange forward contracts are entered to hedge certain foreign currency risk exposures. Derivatives are used exclusively for hedging purposes and not as trading or speculative instruments.

The Board provides guiding principles for overall risk management, as well as policies covering specific areas such as credit risk, liquidity risk, and Foreign Exchange Risk effecting business operations. The company’s risk management is carried out by the management as per guidelines and policies approved by the Board of Directors.

A) Credit risk

Credit risk is the risk that counterparty will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. Credit risk encompasses the direct risk of default, risk of deterioration of creditworthiness as well as concentration risks. The Company is exposed to credit risk from its operating activities (primarily trade receivables), deposits with banks and loans given.

Credit risk management

The company''s credit risk mainly from trade receivables as these are typically unsecured. This credit risk has always been managed through credit approvals, establishing credit limits and continuous monitoring the creditworthiness of customers to whom credit is extended in the normal course of business. The Company estimates the expected credit loss based on past data, available information on public domain and experience. Expected credit losses of financial assets receivable are estimated

based on historical data of the Company. The company has provisioning policy for expected credit losses. There is no credit risk in bank deposits which are demand deposits. The credit risk is minimum in case of entity / person to whom loan has been given.

The maximum exposure to credit risk as at March 31, 2022 and March 31, 2021 is the carrying value of such trade receivables as shown in note 12 of the financials.

B) Liquidity risk

Prudent liquidity risk management implies maintaining sufficient cash and marketable securities and the availability of funding through an adequate amount of committed credit facilities to meet obligations when due and to close out market positions. Due to the dynamic nature of the underlying businesses, company treasury maintains flexibility in funding by maintaining availability under committed credit lines.

Management monitors rolling forecasts of the company’s liquidity position and cash and cash equivalents on the basis of expected cash flows. In addition, the company’s liquidity management policy involves projecting cash flows in major currencies and considering the level of liquid assets necessary to meet these, monitoring balance sheet liquidity ratios against internal and external regulatory requirements and maintaining debt financing plans.

C) Market risk

i) Foreign currency risk

The company operates internationally and is exposed to foreign exchange risk arising from foreign currency transactions, primarily with respect to the USD, EUR and GBP. Foreign exchange risk arises from future commercial transactions and recognised assets and liabilities denominated in a currency that is not the company’s functional currency (INR). The risk is measured through a forecast of highly probable foreign currency cash flows. The objective of the hedges is to minimise the volatility of the INR cash flows of highly probable forecast transactions.

The company’s risk management policy is to hedge around 50% to 70% of forecasted receivables for the subsequent 18 months. As per the risk management policy, foreign exchange forward contracts are taken to hedge round 50% to 70% of the forecasted receivables.

The company’s main interest rate risk arises from long-term borrowings with variable rates, which expose the company to cash flow interest rate risk. company policy is to maintain most of its borrowings at fixed rate using interest rate swaps to achieve this when necessary. During the year March 31, 2022, the Company''s borrowings at variable rate were denominated in INR.

The company’s fixed rate borrowings are carried at amortised cost. They are therefore not subject to interest rate risk as defined in Ind AS 107, since neither the carrying amount nor the future cash flows will fluctuate because of a change in market interest rates.

iii) Price risk a) Exposure

The company’s exposure to equity securities price risk arises from investments held by the company and classified in the balance sheet either as fair value through OCI or at fair value through profit or loss.

To manage its price risk arising from investments in equity securities, the company diversifies its portfolio. Diversification of the portfolio is done in accordance with the limits set by the company.

All of the company’s equity investments are publicly traded.

Note 40: Capital management a) Risk management

For the purpose of the Company’s capital management, capital includes issued equity capital and all other equity reserves attributable to the equity holders. The primary objective of the Company capital management is to maximise the shareholder value.

The Company has an investment in the financial statements of Rs. 646.52 million (Previous year Rs. 646.52 million) in two of its wholly owned subsidiaries and has also extended advances of Rs. 0.05 million (Previous year Rs. 0.05 million) to these subsidiaries as on March 31, 2022. The net worth of these subsidiaries as on March 31, 2022 is Rs. 631.73 million (Previous year Rs. 509.11 million) which is lower than the amount of investment. The investment is for long term and of strategic nature. As the management is confident of turning around these subsidiaries in the near future and hence, no provision for diminution in the value of investment and advances has been considered necessary by the management.

The Company in accordance with its risk management policies and procedures, enters into foreign currency forward contracts to manage its exposure in foreign exchange rates. The counter party is generally a bank. The foreign exchange forward contracts mature within a period of one month and two years.

Note 48: Segment Information

The company publishes standalone financial statements of the company along with the consolidated financial statements. In accordance with Ind AS 108 - Operating segments, the company has disclosed the segment information in the consolidated financial statements.

No single customer represents 10% or more of the Company''s total revenue during the year ended March 31, 2022 and March 31, 2021.

While disclosing the aggregate amount of transaction price yet to be recognised as revenue towards unsatisfied (or partially satisfied) performance obligations, along with the broad time band for the expected time to recognise those revenues, the Company has applied the practical expedient in Ind AS 115. Accordingly, the Company has not disclosed the aggregate transaction price allocated to unsatisfied (or partially satisfied) performance obligations which pertain to contracts where revenue recognise corresponds to the value transferred to customer typically involving time and material, outcome based and event based contracts. Unsatisfied (or partially satisfied) performance obligations are subject to variability due to several factors such as terminations, changes in scope of contracts, periodic revalidations of estimates, economic factors (changes in currency rates, tax laws etc).

Note 55: Merger of Delta Infosolutions Private Limited with company

The Board of Directors have, at their meeting held on March 4, 2022, subject to obtaining the requisite approvals/consents, approved the Scheme of Amalgamation under Section 232 read with Section 230 and other applicable provisions of the Companies Act, 2013 and the rules made thereunder ("Scheme") between Delta Infosolutions Private Limited and Datamatics Global Services Limited and their respective shareholders. The appointed date for the scheme is 1st April, 2021.

The Company has submitted the Scheme with BSE Limited and National Stock Exchange of India Limited for seeking their observations/no observation letter under Regulation 37 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

As per Companies (Accounting Standards) Rules, 2013 issued by the Central Government, in consultation with National Advisory Committee on Accounting Standards (''NACAS'') and the relevant provisions of the Companies Act, 2013, to the extent applicable, the carrying value of the asset has been reviewed for impairment of assets and Rs. Nil (Previous Year: Rs. 99.24 millions with respect to Goodwill) has been provided during the year.

Note 57: Transfer pricing

The Management is of the opinion that its international transactions are at arm''s length as per the independent accountants certificate for the year ended March 31, 2022. The Management continues to believe that its international transactions during the current financial year are at arm''s length and that the transfer pricing legislation will not have any impact on these financial statements, particularly on amount of tax expense and that of provision for taxation.

Note 58: Events occuring after Balance Sheet date Dividend

Dividends declared by the Company are based on the profit available for distribution. On April 28, 2022, the Board of Directors of the Company have proposed a final dividend of Rs. 1.25 per share in respect of the year ended March 31, 2022 subject to the approval of shareholders at the Annual General Meeting.

Note 59: Benami Property

No proceeding has been initiated or pending against the company for holding any benami property under the Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and rules made thereunder.

Note 60: Relationship with struck off Companies

The Company has no transaction with companies struck off under section 248 of the Companies Act, 2013 or section 560 of the Companies Act, 1956.

Note 61: Borrowings from Banks

The Company has borrowings from banks on the basis of security of current asstes and quarterly returns or statements of current assets filed by the Company with banks are in agreement with the books of account.

Note 62: Code on Social Security, 2020

The Indian Parliament has approved the Code on Social Security, 2020 which would impact the contributions by the company towards Provident Fund and Gratuity. The Ministry of Labour and Employment has released draft rules for the Code on Social Security, 2020 on November 13, 2020, and has invited suggestions from stakeholders which are under active consideration by the Ministry. The Company will assess the impact and its evaluation once the subject rules are notified and will give appropriate impact in its financial statements in the period in which, the Code becomes effective and the related rules to determine the financial impact are published.

Note 63: Impact of COVID - 19 Pandemic

The company has assessed the possible effects that may result from the COVID-19 pandemic on the carrying amounts of receivables, unbilled revenues, goodwill, intangibles, investments and other assets / liabilities. Based on the current indicators of economic conditions, the company expects to recover the carrying amount of all its assets. The actual impact of the COVID-19 pandemic may be different from that estimated as at the date of approval of these standalone financial results and the company will continue to closely monitor any material changes to the economic conditions in the future.

Note 64: Previous year''s figures

Previous year figures have been appropriately regrouped / reclassified and rearranged wherever necessary to conform to the current year''s presentation.


Mar 31, 2021

ii) Valuation technique used to determine fair value

Specific valuation techniques used to value financial instruments include:

* the use of quoted market prices or dealer quotes for similar instruments

All of the resulting fair value estimates are included in level 3 except for unlisted equity securities, contingent consideration and indemnification asset, where the fair values have been determined based on present values and the discount rates used were adjusted for counterparty or own credit risk.

iii) Valuation processes

The carrying amounts of trade receivables, trade payables, capital creditors and cash and cash equivalents are considered to be the same as their fair values, due to their short-term nature.

For financial assets and liabilities that are measured at fair value, the carrying amounts are equal to the fair values.

A) Credit risk

Credit risk is the risk that counterparty will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. Credit risk encompasses the direct risk of default, risk of deterioration of creditworthiness as well as concentration risks. The Company is exposed to credit risk from its operating activities (primarily trade receivables), deposits with banks and loans given.

Credit risk management

The company''s credit risk mainly from trade receivables as these are typically unsecured. This credit risk has always been managed through credit approvals, establishing credit limits and continuous monitoring the creditworthiness of customers to whom credit is extended in the normal course of business. The Company estimates the expected credit loss based on past data, available information on public domain and experience. Expected credit losses of financial assets receivable are estimated based on historical data of the Company. The company has provisioning policy for expected credit losses. There is no credit risk in bank deposits which are demand deposits. The credit risk is minimum in case of entity / person to whom loan has been given.

The maximum exposure to credit risk as at March 31, 2021 and March 31, 2020 is the carrying value of such trade receivables as shown in note 11 of the financials.

B) Liquidity risk

Prudent liquidity risk management implies maintaining sufficient cash and marketable securities and the availability of funding through an adequate amount of committed credit facilities to meet obligations when due and to close out market positions. Due to the dynamic nature of the underlying businesses, company treasury maintains flexibility in funding by maintaining availability under committed credit lines.

Management monitors rolling forecasts of the company’s liquidity position and cash and cash equivalents on the basis of expected cash flows. In addition, the company’s liquidity management policy involves projecting cash flows in major currencies and considering the level of liquid assets necessary to meet these, monitoring balance sheet liquidity ratios against internal and external regulatory requirements and maintaining debt financing plans.

C) Market risk i) Foreign currency risk

The company operates internationally and is exposed to foreign exchange risk arising from foreign currency transactions, primarily with respect to the USD, EUR and GBP. Foreign exchange risk arises from future commercial transactions and recognised assets and liabilities denominated in a currency that is not the company’s functional currency (INR). The risk is measured through a forecast of highly probable foreign currency cash flows. The objective of the hedges is to minimise the volatility of the INR cash flows of highly probable forecast transactions.

The company’s risk management policy is to hedge around 50% to 70% of forecasted receivables for the subsequent 18 months. As per the risk management policy, foreign exchange forward contracts are taken to hedge round 50% to 70% of the forecasted receivables.

ii) Cash flow and fair value interest rate risk

The company’s main interest rate risk arises from long-term borrowings with variable rates, which expose the company to cash flow interest rate risk. company policy is to maintain most of its borrowings at fixed rate using interest rate swaps to achieve this when necessary.

The company’s fixed rate borrowings are carried at amortised cost. They are therefore not subject to interest rate risk as defined in Ind AS 107, since neither the carrying amount nor the future cash flows will fluctuate because of a change in market interest rates.

a) Exposure

The company’s exposure to equity securities price risk arises from investments held by the company and classified in the balance sheet either as fair value through OCI or at fair value through profit or loss.

To manage its price risk arising from investments in equity securities, the company diversifies its portfolio. Diversification of the portfolio is done in accordance with the limits set by the company.

All of the company’s equity investments are publicly traded.

Note 38: Capital management

a) Risk management

For the purpose of the Company’s capital management, capital includes issued equity capital and all other equity reserves attributable to the equity holders. The primary objective of the Company capital management is to maximise the shareholder value.

The Company manages its capital structure and makes adjustments in light of changes in economic conditions and the requirements of the financial covenants. The Company monitors capital using a debt equity ratio and is measured by borrowings divided by total equity. Borrowing includes current maturities of long term borrowings.

The Company has an investment in the financial statements of Rs. 646.52 million (Previous year Rs. 646.30 million) in two of its wholly owned subsidiaries and has also extended advances of Rs. 0.05 million (Previous year Rs. 13.14 million) to these subsidiaries as on March 31, 2021. The net worth of these subsidiaries as on March 31, 2021 is Rs. 509.11 million (Previous year Rs. 539.57 million) which is lower than the amount of investment. The investment is for long term and of strategic nature. As the management is confident of turning around these subsidiaries in the near future and hence, no provision for diminution in the value of investment and advances has been considered necessary by the management.

No single customer represents 10% or more of the Company''s total revenue during the year ended March 31, 2021 and March 31, 2020.

While disclosing the aggregate amount of transaction price yet to be recognised as revenue towards unsatisfied (or partially satisfied) performance obligations, along with the broad time band for the expected time to recognise those revenues, the Company has applied the practical expedient in Ind AS 115. Accordingly, the Company has not disclosed the aggregate transaction price allocated to unsatisfied (or partially satisfied) performance obligations which pertain to contracts where revenue recognise corresponds to the value transferred to customer typically involving time and material, outcome based and event based contracts. Unsatisfied (or partially satisfied) performance obligations are subject to variability due to several factors such as terminations, changes in scope of contracts, periodic revalidations of estimates, economic factors (changes in currency

The Company had earlier stake in Datamatics Digital Limited (formerly known as Techjini Solutions Private Limited) ("DDL") various tranches and owned 81.09% stake in DDL as on 1 April 2019. Thereafter, the Company had acquired the balance 18.91% stake on 14 May 2019, thereby making DDL a wholly owned subsidiary of the Company. Thereafter, vide Board Meeting dated 13 November 2019, the Company had approved the amalgamation of DDL with itself through a Scheme of Arrangement u/s 230-232 of the Companies Act, 2013 ("Scheme") with an Appointed Date of 1 June 2019.

Since DDL is a wholly owned subsidiary of the Company, no further shares would be required to be issued by the Company to the shareholders of DDL since the entire share capital of DDL is held by the Company. Further, since this Scheme provides for amalgamation of a wholly owned subsidiary with its 100% holding company, the requirement of obtaining a No Objection Letter from the stock exchanges and SEBI under SEBI Circular dated 10 March 2017 was not applicable. However, for the purposes of disclosure, the Company had filed a copy of the board resolution and draft Scheme with the stock exchanges.

Subsequent to the above, the Company had filed an application (C.A. (CAA) No. 3749 of 2019) with the National Company Law Tribunal, Mumbai Bench, ("NCLT") for seeking dispensation for convening meeting of shareholders and the creditors of the Company and DDL and also seeking directions to, inter alia, serve notices to various regulatory authorities viz., the concerned Income-tax Authority, the Regional Director, Western Region, Mumbai, the Registrar of Companies, Mumbai, the Official Liquidator, Mumbai (insofar as DDL is concerned) and SEBI and the stock exchanges (insofar as the Company is concerned). The NCLT was pleased to dispense with the meeting of the shareholders and the creditors of the Company and DDL and also direct the Company and DDL to, inter alia, serve notices as above, vide its order dated 20 February 2020.

DDL was partly acquired by DGSL from an unrelated party in FY 2018-19 and partly in FY 2019-20 such that DDL became a wholly owned subsidiary of DGSL on May 15, 2019 (i.e. prior to the Appointed Date, being 1 June 2019). In line with the earlier intention of DGSL, it was contemplated by DGSL to merge DDL with itself, immediately subsequent to the acquisition of 100% in DDL by DGSL. Therefore, the intermediate step of acquisition of shares along with the subsequent intention to merge DDL with DGSL is considered to be a single business combination. In the context of a composite arrangement of acquisition of shares of DDL from an unrelated party followed by a merger of DDL with DGSL, DGSL has applied "acquisition method" of accounting under Ind AS 103 to account for the said acquisition of DDL by DGSL so as to represent genuine substantive business combination of DDL (previous controlled by unrelated parties) with DGSL.

The Company and DDL have complied with all the requisite filings as per directions of the National Company Law Tribunal, Mumbai Bench ("NCLT"). The NCLT has approved the merger of DDL with the Company vide order no. CP (CAA) 970/30-232/MB/2020 dated November 06, 2020. In view thereof, since the merger of DDL with DGSL is effective from June 01, 2019 i.e. the appointed date, the accounting effect of the merger was given during the current year w.e.f. the appointed date. Consequently, all relevant figures of the previous year ended March 31, 2020 pertaining to the standalone financial statements have been restated.

The NCLT has passed the order of DGSL-DDL merger vide order no. CP (CAA) 970/30-232/MB/2020 dated November 06, 2020. Hence the books of DDL has been merged with DGSL w.e.f. June 1, 2019. Following is the calculation of goodwill arising out of transaction.

As per Companies (Accounting Standards) Rules, 2013 issued by the Central Government, in consultation with National Advisory Committee on Accounting Standards (''NACAS'') and the relevant provisions of the Companies Act, 2013, to the extent applicable, the carrying value of the asset has been reviewed for impairment of assets and there is no impairment of assets.

Note 53: Transfer pricing

The Management is of the opinion that its international transactions are at arm''s length as per the independent accountants certificate for the year ended March 31,2021. The Management continues to believe that its international transactions during the current financial year are at arm''s length and that the transfer pricing legislation will not have any impact on these financial statements, particularly on amount of tax expense and that of provision for taxation.

Note 54: Code on Social Security, 2020

The Indian Parliament has approved the Code on Social Security, 2020 which would impact the contributions by the company towards Provident Fund and Gratuity. The Ministry of Labour and Employment has released draft rules for the Code on Social Security, 2020 on November 13, 2020, and has invited suggestions from stakeholders which are under active consideration by the Ministry. The Company will assess the impact and its evaluation once the subject rules are notified and will give appropriate impact in its financial statements in the period in which, the Code becomes effective and the related rules to determine the financial impact are published.

Note 55: Impact of COVID - 19 Pandemic

The company has assessed the possible effects that may result from the COVID-19 pandemic on the carrying amounts of receivables, unbilled revenues, goodwill, intangibles, investments and other assets / liabilities. Based on the current indicators of economic conditions, the company expects to recover the carrying amount of all its assets. The actual impact of the COVID-19 pandemic may be different from that estimated as at the date of approval of these standalone financial statements and the company will continue to closely monitor any material changes to the economic conditions in the future.

Note 56: Previous year''s figures

Previous year figures have been appropriately regrouped / reclassified and rearranged wherever necessary to conform to the current year''s presentation.


Mar 31, 2018

a) Company Overview

Datamatics Global Services Limited (DGSL) having CIN L72200MH1987PLC045205 was incorporated on November 3, 1987 as Interface Software Resources Private Limited. The name of the Company was changed to Datamatics Technologies Private Limited on December 18, 1992. On December 27, 1999, the Company converted itself from a Private Limited Company into a Public Limited Company and the name of the Company was changed to Datamatics Technologies Limited on January 13, 2000. The name of the Company was changed from “Datamatics Technologies Limited” to “Datamatics Global Services Limited” (DGSL) with effect from January 17, 2009. The Company is incorporated in Maharashtra, India and is listed on Bombay Stock Exchange (BSE) and National Stock Exchange (NSE) in India.

DGSL, a trusted partner to several Fortune 500 Companies is a global provider of Information Technology (IT), Business Process Management (BPM) and Consulting services. The Company provides business aligned next-generation solutions to a wide range of industry verticals that help enterprises across the world overcome their business challenges and achieve operational efficiencies. These solutions leverage innovations in technology, knowledge of business processes and domain expertise to provide clients a competitive edge.

(i) Terms / rights attached to equity shares

The Company, at present, has one class of equity shares having a par value of Rs. 5 per share. Each shareholder is eligible for one vote per share held. The voting rights on Unclaimed Suspense Account shares are frozen till the rightful owner of such shares claims the shares. The Company declares and pays dividend in Indian Rupees. The remittance of dividends outside India is governed by Indian law on foreign exchange and is subject to applicable distribution taxes.The final dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting. In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company, after distribution of preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders. The Board of Directors, in their meeting held on May 29, 2018 proposed a Dividend of Rs. 0.25 per equity share. The proposal is subject to the approval of shareholders at the Annual General Meeting to be held on August 14, 2018. The total dividend declared for the year ended March 31, 2018 amounted to Rs. 44.21 million and corporate dividend tax of Rs. 9.05 million.

Nature of reserves

(i) Securities Premium

Securities premium reserve is used to record the premium on issue of shares. The reserve is utilised in accordance with the provision of the Companies Act, 2013.

(ii) General Reserve

The General reserve is used from time to time to transfer profits from retained earnings for appropriation purposes. As the General reserve is created by a transfer from one component of equity to another and is not item of other comprehensive income, items included in the General reserve will not be reclassified subsequently to statement of profit and loss.

(iii) Capital Reserve

Capital reserve created on the merger of one of the subsidiaries with the company.

(iv) Capital Redemption Reserve

As per Companies Act, 2013, capital redemption reserve is created when company purchases its own shares out of free reserves or securities premium. A sum equal to the nominal value of the shares so purchased is transferred to capital redemption reserve.

(v) OCI - Equity investments

The company recognises unrealised and realised gain on equity shares in FVOCI - Equity investments.

(vi) OCI - Cash Flow Hedging Reserve

The cash flow hedging reserve represents the cumulative effective portion of gains or losses arising on changes in fair value of designated portion of hedging instruments entered into for cash flow hedges. The cumulative gain or loss arising on changes in fair value of the designated portion of the hedging instruments that are recognised and accumulated under the heading of cash flow hedging reserve. Such gains or losses will be reclassified to statement of profit and loss in the period in which the hedged transaction occurs.

Term loan from Citicorp Finance (India) Limited (Bank) is secured by way of creation of mortgage and exclusive charge in favour of Bank in respect of its Immovable properties being all the piece and parcel of the land bearing Plot No. 58 in MIDC at Mumbai and 2nd Floor and 3rd Floor in Suyojit Commercial Complex, at Nashik. Term - 3 years

Repayment terms - 8 Equated Quarterly Instalments of principal (together with interest) after 15 months from the date of first draw down. Loan shall always be repayable on demand at the sole discretion of the bank hence considered as current borrowings.

i) Fair value hierarchy

This section explains the judgements and estimates made in determining the fair values of the financial instruments that are (a) recognised and measured at fair value and (b) measured at amortised cost and for which fair values are disclosed in the financial statements.

To provide an indication about the reliability of the inputs used in determining fair value, the company has classified its financial instruments into the three levels prescribed under the accounting standard. An explanation of each level follows underneath the table.

Level 1: Level 1 hierarchy includes financial instruments measured using quoted prices. This includes listed equity instruments, mutual funds and forward contracts that have quoted price. The fair value of all equity instruments (including bonds) which are traded in the stock exchanges is valued using the closing price as at the reporting period. The mutual funds are valued using the closing NAV

Level 2: The fair value of financial instruments that are not traded in an active market (for example, traded bonds, over-thecounter derivatives) is determined using valuation techniques which maximise the use of observable market data and rely as little as possible on entity-specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included in level 2.

Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3. This is the case for unlisted equity securities, contingent consideration.

There are no transfers between levels 1 and 2 during the year.

(ii) Valuation technique used to determine fair value

Specific valuation techniques used to value financial instruments include:

* the use of quoted market prices or dealer quotes for similar instruments

All of the resulting fair value estimates are included in level 3 except for unlisted equity securities, contingent consideration and indemnification asset, where the fair values have been determined based on present values and the discount rates used were adjusted for counterparty or own credit risk.

(iii) Valuation processes

The carrying amounts of trade receivables, trade payables, capital creditors and cash and cash equivalents are considered to be the same as their fair values, due to their short-term nature.

For financial assets and liabilities that are measured at fair value, the carrying amounts are equal to the fair values.

1. Financial risk management

The company’s activities expose it to market risk, liquidity risk and credit risk. In order to minimise any adverse effects on the financial performance of the company, derivative financial instruments, such as foreign exchange forward contracts are entered to hedge certain foreign currency risk exposures. Derivatives are used exclusively for hedging purposes and not as trading or speculative instruments.

This note explains the sources of risk which the entity is exposed to and how the entity manages the risk and the impact of hedge accounting in the financial statements

The Board provides guiding principles for overall risk management, as well as policies covering specific areas such as credit risk, liquidity risk, and Foreign Exchange Risk effecting business operations. The company’s risk management is carried out by the management as per guidelines and policies approved by the Board of Directors.

A) Credit risk

Credit risk is the risk that counterparty will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. Credit risk encompasses the direct risk of default, risk of deterioration of creditworthiness as well as concentration risks. The Company is exposed to credit risk from its operating activities (primarily trade receivables), deposits with banks and loans given.

Credit risk management

The company’s credit risk mainly from trade receivables as these are typically unsecured. This credit risk has always been managed through credit approvals, establishing credit limits and continuous monitoring the creditworthiness of customers to whom credit is extended in the normal course of business. The Company estimates the expected credit loss based on past data, available information on public domain and experience. Expected credit losses of financial assets receivable are estimated based on historical data of the Company. The company has provisioning policy for expected credit losses. There is no credit risk in bank deposits which are demand deposits. The credit risk is minimum in case of entity / person to whom loan has been given.

The maximum exposure to credit risk as at 31 March 2018, 31 March 2017 and 1 April 2016 is the carrying value of such trade receivables as shown in note 9 of the financials.

The company has a policy of providing for expected credit loss of trade receivable outstanding above 1 year.

B) Liquidity risk

Prudent liquidity risk management implies maintaining sufficient cash and marketable securities and the availability of funding through an adequate amount of committed credit facilities to meet obligations when due and to close out market positions. Due to the dynamic nature of the underlying businesses, company treasury maintains flexibility in funding by maintaining availability under committed credit lines.

Management monitors rolling forecasts of the company’s liquidity position and cash and cash equivalents on the basis of expected cash flows. In addition, the company’s liquidity management policy involves projecting cash flows in major currencies and considering the level of liquid assets necessary to meet these, monitoring balance sheet liquidity ratios against internal and external regulatory requirements and maintaining debt financing plans.

C) Market risk

i) Foreign currency risk

The company operates internationally and is exposed to foreign exchange risk arising from foreign currency transactions, primarily with respect to the USD, EUR and GBP. Foreign exchange risk arises from future commercial transactions and recognised assets and liabilities denominated in a currency that is not the company’s functional currency (INR). The risk is measured through a forecast of highly probable foreign currency cash flows. The objective of the hedges is to minimise the volatility of the INR cash flows of highly probable forecast transactions.

The company’s risk management policy is to hedge around 50% to 70% of forecasted receivables for the subsequent 18 months. As per the risk management policy, foreign exchange forward contracts are taken to hedge round 50% to 70% of the forecasted receivables.

a) Foreign currency risk exposure:

Details of foreign currency exposures not covered by derivative instruments as at March 31, 2018 and March 31, 2017 are given below :

Note :

The amount mentioned above included ECB Loan of USD 1.74 million is treated by the Company as natural hedge by assigning future export receivable against repayment of ECB loan and USD receivable till March 31, 2018 against repayment of ECB loan.

b) Sensitivity

The Company is mainly exposed to changes in USD, GBP, CHF, AUD and Euro. The sensitivity analysis demonstrate a reasonably possible change in USD, GBP, CHF, AUD and Euro exchange rates, with all other veriables held constant. 5% appreciation/depreciation of USD, GBP, CHF, AUD and Euro with respect to functional currency of the company will have impact of following (decrease)/increase in Profit & vice versa.

ii) Cash flow and fair value interest rate risk

The company’s main interest rate risk arises from long-term borrowings with variable rates, which expose the company to cash flow interest rate risk. company policy is to maintain most of its borrowings at fixed rate using interest rate swaps to achieve this when necessary. During 31 March 2018 and 31 March 2017, the company’s borrowings at variable rate were mainly denominated in INR and USD .

The company’s fixed rate borrowings are carried at amortised cost. They are therefore not subject to interest rate risk as defined in Ind AS 107, since neither the carrying amount nor the future cash flows will fluctuate because of a change in market interest rates.

a) Interest rate risk exposure

The exposure of the company’s borrowing to interest rate changes at the end of the reporting period are as follows:

b) Sensitivity

Profit or loss is sensitive to higher/lower interest expense from borrowings as a result of changes in interest rates. Other components of equity change as a result of an increase/decrease in the fair value of the cash flow hedges related to borrowings.

(iii) Price risk

a) Exposure

The company’s exposure to equity securities price risk arises from investments held by the company and classified in the balance sheet either as fair value through OCI or at fair value through profit or loss.

To manage its price risk arising from investments in equity securities, the company diversifies its portfolio. Diversification of the portfolio is done in accordance with the limits set by the company.

All of the company’s equity investments are publicly traded.

2. Capital management

a) Risk management

For the purpose of the Company’s capital management, capital includes issued equity capital and all other equity reserves attributable to the equity holders. The primary objective of the Company capital management is to maximise the shareholder value.

The Company manages its capital structure and makes adjustments in light of changes in economic conditions and the requirements of the financial covenants. The Company monitors capital using a debt equity ratio and is measured by borrowings divided by total equity. Borrowing includes current maturities of long term borrowings.

3. Related party transactions

A As required under Ind AS 24 - “Related Party Disclosures”, following are details of transactions during the year with the related parties of the Company as defined in Ind AS- 24.

(i) The Company has entered into transactions in ordinary course of business with related parties at arms length as per details given below:

(A) Subsidiary Companies

Datamatics Global Services Inc.

Datamatics Global Technologies Limited

Datamatics Global Technologies AG

Datamatics Infotech Limited

LD Publishing & eRetail Limited

Datamatics Global Services FZ LLC

Datamatics Global Services Pty Limited

Datamatics Global Technologies GmbH (Stepdown

Subsidiary)

Datamatics Robotics Software Inc (Stepdown Subsidiary) Datamatics Global Services Corp. (Stepdown Subsidiary) Cignex Datamatics Corporation (Stepdown Subsidiary) Cignex Datamatics Technologies Limited (Stepdown Subsidiary)

Cignex Datamatics Inc. (Stepdown Subsidiary)

Cignex Datamatics Pte. Limited (Stepdown Subsidiary) Cignex Datamatics GmbH (Stepdown Subsidiary)

Cignex Datamatics UK Limited (Stepdown Subsidiary) Duo Consulting, Inc. (Stepdown Subsidiary)

Attune Infocom Private Limited (Stepdown Subsidiary)

Scalsys Technologies Private Limited (stepdown Subsidiaries) (upto March 31, 2017)

Lumina Datamatics Limited

Lumina Datamatics Inc. (Stepdown Subsidiary)

Lumina Datamatics GmbH (Stepdown Subsidiary)

LDR eRetail Limited (Stepdown Subsidiary)*

Lumina Datamatics Assessment and Analytics, LLC (Stepdown Subsidiary)

Datamatics Digital Limited Techjini Inc (Stepdown Subsidiary)

(B) Joint Venture Companies

Cybercom Datamatics Information Solutions Limited Elevondata Labs Holdings Inc (upto March 15, 2018) Elevondata Labs Private Limited (upto March 15, 2018) Elevondata LLC (upto March 15, 2018)

(C) Key Managerial Personnel

Dr. Lalit S. Kanodia, Chairman Mr. Rahul L. Kanodia, Vice chairman & CEO Mr. Sameer L. Kanodia, Director Ms. Divya Kumat, Company Secretary Mr. Sandeep Mantri, Chief Financial Officer Mr. Siddharth Saboo, Chief Financial Officer (till May 31, 2016)

(D) Relatives of Key Managerial Personnel and Enterprise owned by Key Managerial Personnel

Mrs. Asha L. Kanodia

Mrs. Aneesha Dalmia

Mrs. Priyadarshini Kanodia

Datamatics Staffing Services Limited

Datamatics Business Solutions Limited

(E) Holding Company

Delta Infosolutions Private Limited

4. Leases

a) Non-cancellable operating leases

The Company’s significant leasing arrangements are mainly in respect of residential and office premises. The aggregate lease rentals payable on these leasing arrangements are charged as rent under “Other expenses” in Note 30. These leasing arrangements are for a period not exceeding five years and are in most cases renewable by mutual consent, on mutually agreeable terms.

Future lease rentals payable from the balance sheet date in respect of non cancellable residential and office premises:

5. The Company has Rs. 10.94 million (FY 2016-17 Rs. 9.52 million) as outstanding loans and advances (Refer note no. 45 below) and Rs. 646.30 million (FY 2016-17 Rs. 646.30 million) as investment in two of it’s 100% Subsidiaries at the year end. The net worth of these subsidiaries has declined. The Company has assured financial support. These investments are for long term and are of strategic nature. As the Management is confident of turning around the subsidiaries in the near future provision for dimuniton in the value, if at all required, is not made.

6. Employee benefits

The disclosure as required by Ind AS 19 on “Employee Benefits” are given below:

The present value of gratuity obligation is determined based on actuarial valuation using the Projected Unit Credit Method, which recognises each period of service as giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation. The obligation of leave benefits (unfunded) is also recognised using the projected unit credit method.

7. Contingent Liability and Commitments

Provision is made in the financial statements if it becomes probable that an outflow of resources embodying economic benefits will be required to settle the obligation.

8. Forward contracts in foreign currencies

The Company in accordance with its risk management policies and procedures, enters into foreign currency forward contracts to manage its exposure in foreign exchange rates. The counter party is generally a bank. The foreign exchange forward contracts mature within a period of one month and two years.

The Company uses forward exchange contracts to hedge its exposure in foreign currency on highly probable forecast transactions. The information on derivative instruments is given below. The table below analyzes the derivative financial instruments into relevant maturity groupings based on the remaining period as of the balance sheet date:

Net gain on derivative instruments of Rs. 4.85 million ( FY 2016-17 Rs. 85.50 million) recognised in Cash Flow Hedging Reserve as of March 31, 2018, is expected to be reclassified to the Statement of Profit and Loss by December 31, 2019.

9. Segment information

The company publishes standalone financial statements of the company along with the consolidated financial statements. In accordance with Ind AS 108 - Operating segments, the company has disclosed the segment information in the consolidated financial statements.

10. Information under Section 186 (4) of the Companies Act, 2013

a) Loans given

There are no loans / inter corporate deposits given during the year.

b) Investments made

There are no investments by Company other than those stated under Note 4 and Note 8 in the financial statements.

c) Guarantees given

d) Securities given

There are no securities given during the year.

11. Datamatics Global Services GmbH (DGSG), a subsidiary company has filed for voluntary winding up/liquidation/ de registration procedure in financial year 2015-16. During the previous year, the Company had provided for diminution to the extent of balance appearing in respective investment of Rs. 130.23 million under exceptional item. Datamatics Technologies UK Limited (DTUK), a subsidiary company in the UK had filed for voluntary winding up / liquidation and the same was liquidated during the year ended March 31, 2017. Accordingly during previous year, the Company had written off its investment in DTUK and an amount of Rs. 23.88 million has been shown as an exceptional item.

12. In terms of Section 22 of the Micro, Small and Medium Enterprises Development Act 2006, the outstanding to these enterprises are required to be disclosed. However, these enterprises are required to be registered under the Act. In the absence of the information about registration of the enterprises under the above Act, the required information could not be furnished.

13. As per Companies (Accounting Standards) Rules, 2013 issued by the Central Government, in consultation with National Advisory Committee on Accounting Standards (‘NACAS’) and the relevant provisions of the Companies Act, 2013, to the extent applicable, the carrying value of the asset has been reviewed for impairment of assets and there is no impairment of assets.

14. International and domestic transfer pricing

The Management is of the opinion that its international and domestic transactions are at arm’s length as per the independent accountants report for the year ended March 31, 2017. The Management continues to believe that its international transactions and the specified domestic transactions during the current financial year are at arm’s length and that the transfer pricing legislation will not have any impact on these financial statements, particularly on amount of tax expense and that of provision for taxation.

15. First-time adoption of Ind AS

Transition to Ind AS

These are the company’s first financial statements prepared in accordance with Ind AS.

The accounting policies set out in note 1 have been applied in preparing the financial statements for the year ended 31 March 2018, the comparative information presented in these financial statements for the year ended 31 March 2017 and in the preparation of an opening Ind AS balance sheet at 1 April 2016 (the company’s date of transition). In preparing its opening Ind AS balance sheet, the company has adjusted the amounts reported previously in financial statements prepared in accordance with the accounting standards notified under Companies (Accounting Standards) Rules, 2006 (as amended) and other relevant provisions of the Act (previous GAAP or Indian GAAP). An explanation of how the transition from previous GAAP to Ind AS has affected the company’s financial position, financial performance and cash flows is set out in the following tables and notes.

A. Exemptions and exceptions availed

Set out below are the applicable Ind AS 101 optional exemptions and mandatory exceptions applied in the transition from previous GAAP to Ind AS.

A.1 Ind AS optional exemptions

A.1.1 Deemed Cost - Property, Plant and Equipment, Capital work-in-progress and Intangible Assets

Ind AS 101 permits a first-time adopter to elect to continue with the carrying value for all of its property, plant and equipment as recognised in the financial statements as at the date of transition to Ind AS, measured as per the previous GAAP and use that as its deemed cost as at the date of transition. This exemption can also be used for intangible assets covered by Ind AS 38 Intangible Assets. Accordingly, the Company has elected to measure all of its property, plant and equipment, Capital work-in-progress and intangible assets at their previous GAAP carrying values.

A.1.2Designation of previously recognised financial instruments

Ind AS 101 allows an entity to designate investments in equity instruments at FVOCI on the basis of the facts and circumstances at the date of transition to Ind AS.

The company has elected to apply this exemption for its investment in equity investments.

A.2 Ind AS mandatory exceptions A.2.1 Hedge accounting

Hedge accounting can only be applied prospectively from the transition date to transactions that satisfy the hedge accounting criteria in Ind AS 109, at that date. Hedging relationships cannot be designated retrospectively, and the supporting documentation cannot be created retrospectively. As a result, only hedging relationships that satisfied the hedge accounting criteria as of 1 April 2016 are reflected as hedges in the company’s results under Ind AS.

The company had designated various hedging relationships as cash flow hedges under the previous GAAP. On date of transition to Ind AS, the entity had assessed that all the designated hedging relationship qualifies for hedge accounting as per Ind AS 109. Consequently, the company continues to apply hedge accounting on and after the date of transition to Ind AS.

A. 2.2 Estimates

An entity’s estimates in accordance with Ind ASs at the date of transition to Ind AS shall be consistent with estimates made for the same date in accordance with previous GAAP (after adjustments to reflect any difference in accounting policies), unless there is objective evidence that those estimates were in error.

Ind AS estimates as at 1 April 2016 are consistent with the estimates as at the same date made in conformity with previous GAAP. The company made estimates for following items in accordance with Ind AS at the date of transition as these were not required under previous GAAP:

* Investment in equity instruments carried at FVPL or FVOCI;

* Investment in debt instruments carried at FVPL; and

* Impairment of financial assets based on expected credit loss model.

A.2.4De-recognition of financial assets and liabilities

Ind AS 101 requires a first-time adopter to apply the de-recognition provisions of Ind AS 109 prospectively for transactions occurring on or after the date of transition to Ind AS. However, Ind AS 101 allows a first-time adopter to apply the de-recognition requirements in Ind AS 109 retrospectively from a date of the entity’s choosing, provided that the information needed to apply Ind AS 109 to financial assets and financial liabilities derecognised as a result of past transactions was obtained at the time of initially accounting for those transactions.

The company has elected to apply the de-recognition provisions of Ind AS 109 prospectively from the date of transition to Ind AS.

B. Reconciliations between previous GAAP and Ind AS

Ind AS 101 requires an entity to reconcile equity, total comprehensive income and cash flows for prior periods. The following tables represent the reconciliations from previous GAAP to Ind AS.

C. Notes to first-time adoption:

Note 1: Fair valuation of investments

Under the previous GAAP, investments in equity instruments and mutual funds were classified as long-term investments or current investments based on the intended holding period and readability. Long-term investments were carried at cost less provision for other than temporary decline in the value of such investments. Current investments were carried at lower of cost and fair value. Under Ind AS, these investments are required to be measured at fair value. The resulting fair value changes of these investments (other than equity instruments designated as at FVOCI) have been recognised in retained earnings as at the date of transition and subsequently in the profit or loss for the year ended 31 March 2017. This increased the retained earnings by Rs. 568.60 million as at 31 March 2017 (1 April 2016 - Rs. 581.60 million). This has resulted in an increase in profit for the year ended 31 March 2017 by Rs. 10.32 million.

Fair value changes with respect to investments in equity instruments designated as at FVOCI have been recognised in FVOCI - Equity investments reserve as at the date of transition and subsequently in the other comprehensive income for the year ended 31 March 2017. This increased other reserves by Rs. 2.68 million as at 31 March 2017 (1 April 2016 - Rs. 3.95 million).

Note 2: Proposed dividend

Under the previous GAAP, dividends proposed by the board of directors after the balance sheet date but before the approval of the financial statements were considered as adjusting events. Accordingly, provision for proposed dividend was recognised as a liability. Under Ind AS, such dividends are recognised when the same is approved by the shareholders in the general meeting. Accordingly, the liability for proposed dividend (including dividend distrubution tax Rs. 3 million) of Rs. 17.74 million as at 31 March 2017 included under provisions has been reversed with corresponding adjustment to retained earnings. Consequently, the total equity increased by an equivalent amount.

Note 3: Deferred tax

Deferred tax have been recognised on the adjustments made on transition to Ind AS. Minimum Alternate Tax (MAT) entitlement is classified as deferred tax assets. There is no impact on the total equity and total comprehensive income as at 31 March 2017 (1 April 2016).

Note 4: Trade receivables

As per Ind AS 109, the company is required to apply expected credit loss model for recognising the allowance for doubtful debts. As a result, the allowance for doubtful debts increased by Rs. 119.01 million as at 31 March 2017 (1 April 2016 - INR 119.01 million). Consequently, the total equity as at 31 March 2017 decreased by Rs. 119.01 million (1 April 2016 - Rs. 119.01 million).

Note 5: Borrowings

Ind AS 109 requires transaction costs incurred towards origination of borrowings to be deducted from the carrying amount of borrowings on initial recognition. These costs are recognised in the profit or loss over the tenure of the borrowing as part of the interest expense by applying the effective interest rate method.

Under previous GAAP, these transaction costs were charged to profit or loss as and when incurred. Accordingly, borrowings as at 31 March 2017 have been reduced by Rs. 1.66 million (1 April 2016 - Rs. 1.06 million) with a corresponding adjustment to retained earnings. The total equity increased by an equivalent amount. The profit for the year ended 31 March 2017 reduced by Rs. 0.46 million as a result of the additional interest expense.

Note 6: Remeasurements of post-employment benefit obligations

Under Ind AS, remeasurements i.e. actuarial gains and losses and the return on plan assets, excluding amounts included in the net interest expense on the net defined benefit liability are recognised in other comprehensive income instead of profit or loss. Under the previous GAAP, these remeasurements were forming part of the profit or loss for the year. As a result of this change, the profit for the year ended 31 March 2017 increased by Rs. 5.74 million (1 April 2016 Rs. Nil). There is no impact on the total equity as at 31 March 2017 (1 April 2016).

Note 7: Goodwill

Under previous GAAP, Goodwill created on merger were amortised over period of 5 years. Under Ind AS, Goodwill is tested for impairment and not amortised over a specified period. Hence, Goodwill reinstated as on 1 April 2016. As a result of this, Profit for the year ended 31 March 2017 increased by Rs. 24.81 million (1 April 2016 Rs. Nil). Accordingly, Retained earnings also increased by Rs. 24.81 million.

Note 8 : Property, Plant and equipment

Leasehold land is amortised over a period of lease. This has been resulted in decrease in retained earnings as at 31 March 2017 Rs. 34.25 million. ( 1 April 2016 - Rs. 34.25 million).

Note 9 : Fair valuation of corporate guarantee

Under previous GAAP, corporate guarantee were not accounted for and only disclosure was required. Under Ind AS, corporate guarantee needs to accounted for at fair value. Hence, fair value of corporate guarantee has been accounted as financial liability representating corresponding financial asset as recoverable from subsidiary as at 31 March 2017 - Rs. 19.88 million (1 April 2016 - Rs. 19.88 million).

Note 10: Retained earnings

Retained earnings as at April 1, 2016 has been adjusted consequent to the above Ind AS transition adjustments. Note 11: Other comprehensive income

Under Ind AS, all items of income and expense recognised in a period should be included in profit or loss for the period, unless a standard requires or permits otherwise. Items of income and expense that are not recognised in profit or loss but are shown in the statement of profit and loss as ‘other comprehensive income’ includes remeasurements of defined benefit plans, foreign exchange differences arising on translation of foreign operations, effective portion of gains and losses on cash flow hedging instruments and fair value gains or (losses) on FVOCI equity instruments. The concept of other comprehensive income did not exist under previous GAAP.

16. Events occuring after Balance Sheet date :

Dividend

Dividends paid during the year ended March 31, 2018 include an amount of Rs. 0.75 per equity share towards final dividend for the year ended March 31, 2017 and an amount of Rs. 0.50 per equity share towards interim dividend for the year ended March 31, 2018. Dividends declared by the Company are based on the profit available for distribution. Distribution of dividend out of general reserve and Retained earnings is subject to applicable dividend distribution tax. On May 29, 2018, the Board of Directors of the Company have proposed a final dividend of Rs. 0.25 per share in respect of the year ended March 31, 2018 subject to the approval of shareholders at the Annual General Meeting.

17. Previous year figures have been appropriately regrouped / reclassified and rearranged wherever necessary to conform to the current year’s presentation.


Mar 31, 2016

d) Rights, preferences and restrictions attached to shares

The Company, at present, has one class of equity shares having a par value of '' 5 per share. Each shareholder is eligible for one vote per share held. The voting rights on Unclaimed Suspense Account shares are frozen till the rightful owner of such shares claims the shares. The Company declares and pays dividend in Indian Rupees. The final dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting. In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company, after distribution of preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders. The Board of Directors, in their meeting held on May 27, 2016 proposed a Final Dividend of '' 0.25 per equity share. The proposal is subject to the approval of shareholders at the Annual General Meeting to be held on September 15, 2016. The total dividend appropriation for the year ended March 31, 2016 amounted to '' 44.21 million and corporate dividend tax of '' 6.39 million.

As per the records of the Company, including its register of shareholders / members and other declaration received from shareholders regarding beneficial interest, the above shareholding represents both legal and beneficial ownership of shares.

1 In the opinion of the Company, the Current Assets, Loans and Advances are approximately of the value stated, if realized in the ordinary course of business. The provision for all known liabilities and for depreciation is adequate and not in excess of the amount reasonably necessary.

2 The Company has received confirmations from few Trade receivables, Other receivables and for majority of loans and advances. Remaining Trade receivables, Other receivables, Trade payables and loans and advances are subject to confirmation and reconciliation and consequent impact if any will be adjusted as and when determined.

3 EMPLOYEE BENEFITS

As per Accounting Standard 15 “Employee Benefits”, the disclosures are as under :

The present value of gratuity obligation is determined based on actuarial valuation using the Projected Unit Credit Method, which recognizes each period of service as giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation. The obligation of leave benefits (unfunded) is also recognized using the projected unit credit method.

4 RELATED PARTY DISCLOSURES

(i) As per Accounting Standard 18, as notified by the rules the disclosures of Related Parties and transactions during the year as deemed in the Accounting Standard are given below:

(A) Subsidiary Companies

Datamatics Software Services Limited (Merged with DGSL w.e.f. April 1, 2015)

Datamatics Vista Info Systems Limited (Merged with DGSL w.e.f. April 1, 2015)

Cybercom Datamatics Information Solutions Limited Datamatics Global Services Inc.

Datamatics Global Services GmbH

Datamatics Technologies UK Limited

Datamatics Global Technologies Limited

Datamatics Global Technologies AG

Datamatics Infotech Limited

Datamatics Global Services Pty. Limited

Datamatics Global Technologies GmbH (Stepdown Subsidiary)

Cignex Datamatics Corporation (Stepdown Subsidiary)

Cignex Datamatics Technologies Limited (Stepdown Subsidiary)

Cignex Datamatics Inc. USA (Stepdown Subsidiary)

Cignex Datamatics Inc. Michigan (Stepdown Subsidiary)

Cignex Datamatics Pte. Limited (Stepdown Subsidiary)

Cignex Datamatics GmbH (Stepdown Subsidiary)

Datamatics Global Solutions GmbH (Stepdown Subsidiary)

Lumina Datamatics Limited

Datamatics Global Services FZ - LLC

Lumina Datamatics Inc. (Stepdown Subsidiary)

Lumina Datamatics GmbH (Stepdown Subsidiary)

LDR eRetail Limited (Stepdown Subsidiary)

Lumina Datamatics Assessment & Analytics LLC (Stepdown Subsidiary)

LD Publishing and eRetail Limited

Cignex Datamatics UK Limited (Stepdown Subsidiary)

Duo Design LLC (Stepdown Subsidiary)

(B) Key Managerial Personnel

Dr. Lalit S. Kanodia

Mr. Rahul L. Kanodia

Mr. Sameer L. Kanodia

Mr. Vidur V. Bhogilal (till September 21, 2015)

Ms. Divya Kumat

Mr. Siddharth B. Saboo (w.e.f. November 16, 2015)

(C) Relatives of Key Managerial Personnel and Enterprise owned by Key Managerial Personnel

Mrs. Asha L. Kanodia

Mrs. Aneesha Dalmia

Mrs. Priyadarshini Kanodia

Mr. Vidur V. Bhogilal (w.e.f. September 22, 2015)

Datamatics Staffing Services Limited Datamatics Employees Welfare Trust Datamatics Financial Services Limited Amon Technologies Private Limited Datamatics Mangagement Services LLP Anemone Management Consultancy Private Limited Latasha Consultancy Services Private Limited Datascan Services (Partnership Firm)

(D) Holding Company

Delta Infosolutions Private Limited

Note:

Related parties are identified by the Management and relied upon by the auditors.

5 The Company''s significant leasing arrangements are mainly in respect of residential and office premises. The aggregate lease rentals payable on these leasing arrangements are charged as rent under “Other Expenses” in Note 25. These leasing arrangements are for a period not exceeding five years and are in most cases renewable by mutual consent, on mutually agreeable terms.

Note:

(a) Future lease payments are determined on the basis of terms of the lease agreement.

(b) At the expiry of term of the agreement, the Company has an option either to return the leased asset or extend the term by giving a notice in writing.

6 EMPLOYEE STOCK OPTION SCHEME

The Datamatics Employees Welfare Trust (Trust) had purchased 1,753,261 shares of Company for granting stock options to the employees. The purchases are financed by loans from the Company. During the year Trust was liquidated and Rs, 48.59 million has been received and shown as extraordinary items. The amount includes Rs, 40.29 million towards profit on sale of investments and balance towards other income net of expenses over the years.

During the year, an amount of Rs, 2.65 million (Rs, 0.68 million) has been expensed out considering the proportionate vesting period, which has been included in Salaries, Wages, Bonus and Allowances and the balance has been disclosed under Reserves and Surplus as reduction from Employee Stock Option Outstanding.

7 The Company has Rs, 0.89 million (Rs, 3.33 million) as outstanding Loans and Advances (Refer note no. 41 below) and Rs, 670.18 million (Rs, 995.12 million) as investment in three of its 100% Subsidiaries at the year end. The net worth of these subsidiaries has declined. The Company has assured financial support. These investments are for long term and are of strategic nature. As the Management is confident of turning around the subsidiaries in the near future provision for dimuniton in the value, if at all required, is not made.

8 Pursuant to the Scheme of Amalgamation (The Scheme) u/s 391 to 394 of the Companies Act, 1956 read with section 78 and sections 100 to 104 and other applicable provisions of the Companies Act, 2013 for amalgamation of Datamatics Software Services Limited (DSSL) and Datamatics Vista Info Systems Limited (DVISTA) with the Company as sanctioned by Hon''ble High Court of Bombay on April 22, 2016 and the said order was filed with ROC on May 13, 2016 (effective date), all the assets and liabilities of DSSL and DVISTA were transferred to and vested in the Company, without any consideration and ongoing concern basis, with effect from April 1, 2015 (the appointed date). The Scheme has accordingly given effect to in these financial statements.

The amalgamation has been accounted for under the "Purchase Method" as prescribed under Accounting Standard 14

- "Accounting for Amalgamations" (AS 14) issued by the Institute of Chartered Accountants of India and as notified u/s 133 of the Companies Act 2013 read with Rule 7 of the Companies Accounts Rules 2014. Accordingly and giving effect in compliance of the Scheme all the assets and liabilities of DSSL and DVISTA, were recorded in the books of the Company at their fair value and the form as at appointed date in the books of DSSL and DVISTA.

DSSL and DVISTA being the wholly owned subsidiary and step down wholly owned subsidiary respectively of the Company neither any shares are required to be issued nor any consideration is paid. The Equity share capital, Preference share capital and the carrying value of investment in Equity shares and Preference shares in the books of the Company stands cancelled. Accordingly, the difference of '' 124.05 million in DVISTA being the deficit between (A) aggregate value of net assets acquired and (B) value of investments cancelled is debited to Goodwill Account and surplus of Rs, 32.08 million in DSSL between (A) aggregate value of net assets acquired and (B) value of investments cancelled is credited to Capital Reserve as under:

# Loan given to subsidiary gets knocked off as per the Scheme of Amalgamation. (Refer Note 40).

* Inter-Corporate Deposits are given as a part of treasury operations of the Company on following terms :

a) All loans are given to unrelated corporate entities.

b) All loans are short term in nature.

c) All the loans are provided for business purposes of respective entities, repayable on demand with prepayment option to the borrower.

9 During the year, Datamatics Global Services GmbH (DGSG), a subsidiary Company along with its subsidiary Datamatics Global Solutions GmbH (DGSOLG) have filed for voluntary winding up / liquidation / de registration procedure on June 15, 2015. This procedure generally takes at least a year. Considering this fact, DGSG along with its subsidiary viz. DGSOLG is currently carrying on its operations prior to closing as contractually / statutorily required. In view of that, appropriate provision for diminution in the value of investments of Rs, 65.66 million has been made which is Exceptional Item.

10 In terms of Section 22 of the Micro, Small and Medium Enterprises Development Act 2006, the outstanding to these enterprises are required to be disclosed. However, these enterprises are required to be registered under the Act. In the absence of the information about registration of the enterprises under the above Act, the required information could not be furnished.

11 As per Companies (Accounting Standards) Rules 2013 issued by the Central Government, in consultation with National Advisory Committee on Accounting Standards (''NACAS'') and the relevant provisions of the Companies Act, 2013, to the extent applicable, the carrying value of the asset has been reviewed for impairment of assets and there is no impairment of assets.

12 INTERNATIONAL AND DOMESTIC TRANSFER PRICING

The Management is of the opinion that its international and domestic transactions are at arm''s length as per the independent accountants report for the year ended March 31, 2015. The Management continues to believe that its international transactions and the specified domestic transactions during the current financial year are at arm''s length and that the transfer pricing legislation will not have any impact on these financial statements, particularly on amount of tax expense and that of provision for taxation.

13 CORPORATE SOCIAL RESPONSIBILITY

As per Section 135 of the Companies Act, 2013, a CSR committee has been formed by the Company. The Company is required to spend '' 6.59 million of which Rs, 1.85 million has been spent on activities specified in Schedule VII of the Companies Act, 2013. The entire amount has been paid during the year.

14 In the year ended March 31, 2015 pursuant to the notification of Schedule II to the Companies Act, 2013, with effect from April 1, 2014, the Company revised the estimated useful life of relevant assets to align the useful life with those specified in Schedule II. Pursuant to the transitional provisions prescribed in Schedule II to the Companies Act, 2013, the Company has fully depreciated the carrying value of the assets, net of residual value, where the remaining useful life of the asset was determined to be Nil as on April 1, 2014, and adjusted an amount of Rs, 27.40 million (net of deferred tax asset of Rs, 9.27 million) against the opening balance in the Statement of Profit and Loss under Reserves and Surplus.

Consequent to the change in the useful life of the assets, the depreciation expense in the Statement of Profit and Loss for the previous year is higher by Rs, 26.62 million and profit before tax for the year is lower by the like amount.

15 PRIOR PERIOD COMPARATIVE

Previous year figures have been appropriately regrouped / reclassified and rearranged wherever necessary to conform to the current year''s presentation. Previous year figures do not include the figures of erstwhile DSSL and DVISTA which are amalgamated with the Company with effect from April 1, 2015. Consequently, the comparative figures are not comparable with the figures for the year ended March 31, 2016.(Refer Note 40)

16 Figures in brackets pertains to previous year.


Mar 31, 2015

1 COMPANY OVERVIEW

Datamatics Global Services Limited (DGSL) was incorporated on November 3, 1987 as Interface Software Resources Private Limited. The name of the Company was changed to Datamatics Technologies Private Limited on December 18, 1992 . On December 27, 1999, the Company converted itself from a Private Limited Company into a Public Limited Company and the name of the Company was changed to Datamatics Technologies Limited on January 13, 2000. The name of the Company was changed from "Datamatics Technologies Limited" to "Datamatics Global Services Limited" (DGSL) with effect from January 17, 2009.

Datamatics, a trusted partner to several Fortune 500 Companies is a global provider of Information Technology (IT) and Business Process Outsourcing (BPO) and Consulting services. The Company provides business aligned next-generation solutions to a wide range of industry verticals that help enterprises across the world overcome their business challenges and achieve operational efficiencies. These solutions leverage innovations in technology, knowledge of business processes, and domain expertise to provide clients a competitive edge.

a) Rights, preferences and restrictions attached to shares

Equity Shares: The Company has one class of equity shares having a par value ofRs. 5 per share. Each shareholder is eligible for one vote per share held. The dividend proposed by the Board of Directors is subject to the 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 after distribution of all preferential amounts, in proportion to their shareholding. The Board of Directors, in their meeting held on May 27, 2015 proposed a Final Dividend of' 0.65 per equity share. The proposal is subject to the approval of shareholders at the Annual General Meeting to be held on August 28, 2015. The total dividend appropriation for the year ended March 31,2015 amounted to Rs. 58,949,337 and corporate dividend tax ofRs. 8,032,881.

2 Contingent Liability and Commitments:

Provision is made in the accounts if it becomes probable that an outflow of resources embodying economic benefits will be required to settle the obligation.

Contingent Liabilities to the extent not provided for:

March 31, 2015 March 31, 2015

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

(i) Income Taxmatters - 493,418

(ii) Sales Tax matters 5,074,525 5,074,525

(b) Details of guarantees and sureties outstanding as at:

(i) Guarantees given by Banks to Embassy Centre Premises Co-operative 425,930 425,930

Society Ltd.

(ii) Guarantees given by Banks to the Assistant Commissioner of Central 421,875 800,875

Excise and Customs department

(iii) Guarantees given by Banks to UNFCCC, BONN, Germany for Euro - 6,118,000 84,398.70

(iv) Guarantees given by Banks to Directorate of Information Technology 630,000 2,720,000

(v) Guarantees given by Banks to Chief Accounts Officer, Aurangabad 1,052,000 1,052,000

Municipal Corporation.

(vi) Guarantees given by Banks to Navi Mumbai Municipal Corporation - 330,000

(vii) Guarantees given by Banks to The Tender Manager, NICSI 500,000 500,000

(viii) Guarantees given by Banks to Senior Accounts Officer, Electricity - 785,840

Department Puducherry

(ix) Guarantees given by Banks to The Municipal Commissioner Greater - 2,103,379 Mumbai

(x) Corporate guarantees provided to Banks against credit facilities extended 191,750,000 262,752,500 to Subsidiaries

(xi) Guarantees given by Banks to United Nations 250,000 -

(c) Capital and other commitments:

(i) Estimated amount of contracts on capital account remaining to be executed - - and not provided for (net of advances)

3 The Company in accordance with its risk management policies and procedures, enters into foreign currency forward contracts to manage its exposure in foreign exchange rates. The counter party is generally a bank. The foreign exchange forward contracts mature within a period of one month and two years.

The table below analyzes the derivative financial instruments into relevant maturity groupings based on the remaining period as of the Balance Sheet date:

Net profit / (loss) on derivative instruments ofRs. 72,200,467 (P.Y. Rs. (5,365,654)) recognised in Hedging reserve as of March 31, 2015, is expected to be reclassified to the statement of profit and loss by March 31,2017. The foreign currency exposures that are not hedged by a derivative instrument or otherwise is Rs. Nil (P.Y. Rs. 703,495,380).

The Company has applied the principles of Cash Flow Hedge Accounting as per Accounting Standard (AS) - 30, Financial Instrument: Recognition and Measurement, along with limited revision to other accounting standards, issued by The Institute of Chartered Accountants of India. AS-30, along with limited revision to the other accounting standards, have not currently been notified by the National Advisory Council for Accounting Standard (NACAS) pursuant to the Companies(AS) rules, 2006 as persection 211(3C)ofthe Companies Act, 1956.

4 In the opinion of the Company, the Current Assets, Loans and Advances are approximately of the value stated, if realized in the ordinary course of business. The provision for all known Liabilities and for Depreciation is adequate and not in excess of the amount reasonably necessary.

5 The Company has received confirmations from few Trade receivables, Other receivables and for majority of loans and advances. Remaining Trade receivables, Other receivables, Trade payables and loans and advances are subject to confirmation and reconciliation, and consequent impact if any will be adjusted as and when determined.

Note:

Provision towards liability for Leave Encashment made on the basis of actuarial valuation as per Accounting Standard 15 (Revised). Actuarial value liability is Rs. 24,804,099 (P.Y. Rs. 21,679,738) based upon following assumptions:

6 The Management Information System of the Company identifies and operates in a single primary business segment. In the opinion of the management these activities are governed by the same set of risk and returns as perAS-17 dealing with segmental reporting. All the assets of the Company are located in India and hence secondary segmental reporting is on the basis of the geographical location of customers.

Performance of Business Segment is as follows:

Fixed assets in India used in the Company's business or liabilities contracted in India cannot be identified to any geographical segment as the fixed assets and services are used interchangeably between geographical segments and a meaningful segregation is not possible.

7 Related party disclosures:

(i) As per Accounting Standard 18, as notified by the rules the disclosures of Related Parties and transactions during the year as deemed in the Accounting Standard are given below:

(A) Subsidiary Companies Datamatics Global Services Inc.

Datamatics Global Services GmbH Datamatics Technologies UK Ltd.

Datamatics Software Services Ltd.

Datamatics Global Technologies Ltd.

Datamatics Global Technologies AG Datamatics Infotech Ltd.

Datamatics Global Services Pty. Ltd.

Datamatics Global Technologies GmbH (Stepdown Subsidiary)

Datamatics Global Holding Corp. (Stepdown Subsidiary) (Dissolved w.e.fMarch 23, 2015)

Cignex Datamatics Corporation (Stepdown Subsidiary)

Cignex Datamatics Technologies Ltd. (Stepdown Subsidiary)

Datamatics Vista Info Systems Ltd. (Stepdown Subsidiary)

Cybercom Datamatics Information Solutions Ltd.

Cignex Datamatics Inc. (USA) (Stepdown Subsidiary)

Cignex Datamatics Inc. (Michigan) (Stepdown Subsidiary) (Incorporated on December 30, 2014)

Cignex Datamatics Pte. Ltd. (Stepdown Subsidiary)

Cignex Datamatics GmbH (Stepdown Subsidiary) (Incorporated on April 4, 2014)

Cignex Technologies Ltd. (Stepdown Subsidiary) (Dissolved w.e.f July 30, 2013)

Datamatics Global Solutions GmbH (Stepdown Subsidiary)

Lumina Datamatics Ltd. (Formerly known as Lexicon Publishing Services Pvt. Ltd.)

Datamatics Global Services FZ-LLC

Lumina Datamatics Inc. (Formerly known as Premedia Global Inc.) (Stepdown Subsidiary)

Lumina Datamatics GmbH (Formerly known as Datamatics eRetail & Publishing GmbH) (Stepdown Subsidiary)

(B) Key Managerial Personnel

Dr. Lalit S. Kanodia Mr. Rahul L. Kanodia Mr. VidurV. Bhogilal Mr.Sameer L. Kanodia Ms. Divya Kumat

(C) Relatives of Key Managerial Personnel and Enterprise owned by Key Managerial Personnel

Mrs. Asha L. Kanodia

Mrs. Priyadarshini R. Kanodia

Datamatics Staffing Services Ltd.

Datamatics Employees Welfare Trust Datamatics Financial Services Ltd.

Amon Technologies Pvt. Ltd.

Anemone Management Consultancy Pvt. Ltd.

Datascan Services

(D) Holding Company

Delta Infosolutions Pvt. Ltd.

8 The Company's significant leasing arrangements are mainly in respect of residential and office premises. The aggregate lease rentals payable on these leasing arrangements are charged as rent under "Other Expenses" in Note 25. These leasing arrangements are for a period not exceeding five years and are in most cases renewable by mutual consent, on mutually agreeable terms.

Future lease rentals payable in respect of residential and office premises:

9 The Company has Outstanding Working Capital Loan / Advance of Rs. 257,720,363 (P.Y. Rs. 195,043,438) to its subsidiary Datamatics Software Services Limited at a interest rate of 8% p.a. as on March 31, 2015.

10 EMPLOYEE STOCK OPTION SCHEME:

The Datamatics Employees Welfare Trust (Trust) had purchased 1,753,261 shares of Company for granting stock options to the employees. The purchases are financed by loans from the Company. Amount recoverable from Trust (unsecured) as on March 31, 2015 is Rs. 62,687,467 (P.Y. Rs. 63,286,830).

a) Key Employee Stock Option Plan, 2006

Under the Key Employee Stock Option Plan, 2006, 116,000 options were granted at exercise price ofRs. 5 per option and the third vesting period falls during the current F.Y. 2014-15. During the year no options have been vested and exercised. Upon vesting and exercise of the stock options, equity shares will be granted to the employees from the shares held by the Trust. During the F.Y. 2012-13 6,440 shares have been vested and exercised and 70,000 stock options have lapsed.

b) Key Employee Stock Option Plan, 2007

Under the Key Employee Stock Option Plan, 2007, 300,000 options were granted at exercise price ofRs. 5 per option and the third vesting period falls during current F.Y. 2014-15. During the year 25,900 options have been vested and exercised. Upon vesting and exercise of the stock options, equity shares will be granted to the employees from the shares held by the Trust. During the year 103,240 stock options have lapsed.

During the year, an amount ofRs. 679,154 (P.Y. Rs. 1,901,093) has been expensed out considering the proportionate vesting period, which has been included in Salaries, Wages, Bonus & Allowances and the balance has been disclosed under Reserves and Surplus as reduction from Employee Stock Option Outstanding.

11 DURING THE YEAR:

(i) The Step-down Subsidiary Company Datamatics Global Holding Corp "DGHC" had filed on February 24,2015 for liquidation proceedings before the Registrar of Corporate Affairs, British Virgin Islands. "DGHC" was subsequently dissolved and the name has been struck off by the Certificate of Registrar of Corporate Affairs dated March 23, 2015.

(ii) Datamatics Global Technologies AG, Zug, Switzerland has applied forvoluntary liquidation and winding up proceedings.

12 The Company has Rs. 323,408,544 (P.Y. Rs. 197,108,961) as outstanding Loans and Advances (Refer note no. 43 below) and Rs. 995,976,964 (P.Y. Rs. 995,121,964) as investment in five of it's wholly owned Subsidiaries at the year end. The net worth of these subsidiaries has declined. The Company has assured Financial Support. These investments are for long term and are of strategic nature. As the management is confident of turning around the subsidiaries in the near future provision for dimuniton in the value, if at all required, is not made.

13 In terms of Section 22 of the Micro, Small and Medium Enterprises Development Act 2006, the outstanding to these enterprises are required to be disclosed. However, these enterprises are required to be registered under the Act. In the absence of the information about registration of the enterprises under the above Act, the required information could not be furnished.

14 As per Companies (Accounting Standards) Rules 2006 issued by the Central Government, in consultation with National Advisory Committee on Accounting Standards ('NACAS') and the relevant provisions of the Companies Act, 1956, to the extent applicable, the carrying value ofthe asset has been reviewed for impairment ofassets and there is no impairment ofassets.

15 During the year, pursuant to the notification of Schedule II to the Companies Act, 2013, with effect from April 1, 2014, the Company revised the estimated useful life of relevant assets to align the useful life with those specified in Schedule II. Pursuant to the transitional provisions prescribed in Schedule II to the Companies Act, 2013, the Company has fully depreciated the carrying value of the assets, net of residual value, where the remaining useful life of the asset was determined to be Nil as on April 1, 2014, and adjusted an amount of Rs. 27,400,180 (net of deferred tax asset of Rs. 9,269,148) against the opening balance in the Statement of Profit and Loss under Reserves and Surplus. Consequent to the change in the useful life of the assets, the depreciation expense in the Statement of Profit and Loss for the year is higher by Rs. 26,619,663 and profit before tax for the year is lower by the like amount.

16 PRIOR PERIOD COMPARATIVE:

Previous year figures have been appropriately regrouped / reclassified and rearranged wherever necessary to confirm to the current year's presentation.

17 Figures are rounded off to the nearest of rupee.


Mar 31, 2014

1 Company Overview

Datamatics Global Services Ltd. (DGSL) was incorporated on November 3, 1987 as Interface Software Resources Pvt. Ltd. The name of the Company was changed to Datamatics Technologies Pvt. Ltd. on December 18, 1992 . On December 27, 1999, the Company converted itself from a Pvt. Ltd. Company into a Public Ltd. Company and the name of the Company was changed to Datamatics Technologies Ltd. on January 13, 2000. The name of the Company was changed from "Datamatics Technologies Ltd." to "Datamatics Global Services Ltd." (DGSL) with effect from January 17, 2009.

Datamatics, a trusted partner to several Fortune 500 Companies is a global provider of Information Technology (IT) and Business Process Outsourcing (BPO) and Consulting services. The Company provides business aligned next-generation solutions to a wide range of industry verticals that help enterprises across the world overcome their business challenges and achieve operational efficiencies. These solutions leverage innovations in technology, knowledge of business processes, and domain expertise to provide clients a competitive edge.

2 Contingent Liability and Commitments:

Provision is made in the accounts if it becomes probable that an outflow of resources embodying economic benefits will be required to settle the obligation.

Contingent Liabilities to the extent not provided for:

March 31, 2014 March 31,2013

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

(i) Income Tax matters 493,418 18,562,821

(ii) Sales Tax matters 5,074,525 5,074,525

(b) Details of guarantees and sureties outstanding as at:

(i) Guarantees given by Banks to Embassy Centre Premises Co-operative 425,930 425,930 Society Ltd.

(ii) Guarantees given by Banks to the Assistant Commissioner of Central 800,875 849,875 Excise and Customs department

(iii) Guarantees given by Banks to UNFCCC, BONN, Germany for Euro 6,118,000 6,118,000 84,398.70

(iv) Guarantees given by Banks to Directorate of Information Technology 2,720,000 2,000,000

(v) Guarantees given by Banks to Mahanagar Gas Ltd. - 348,725

(vi) Guarantees given by Banks to Agility Logistics Pvt. Ltd. - 500,000

(vii) Guarantees given by Banks to Chief Accounts Officer, Aurangabad 1,052,000 1,052,000 Muncipal Corporation.

(viii) Guarantees given by Banks to Webel Mediatronics Ltd. - 615,302

(ix) Guarantees given by Banks to Navi Mumbai Muncipal Corporation 330,000 -

(x) Guarantees given by Banks to The Tender Manager, NICSI 500,000 -

(xi) Guarantees given by Banks to Senior Accounts Officer, Electricity 785,840 - Department Puducherry

(xii) Guarantees given by Banks to The Muncipal Commissioner Greater 2,103,379 - Mumbai

(xiii) Corporate guarantees provided to Banks against credit facilities extended 262,752,500 319,420,000 to Subsidiaries

3 The Company in accordance with its risk management policies and procedures, enters into foreign currency forward contracts to manage its exposure in foreign exchange rates. The counter party is generally a bank. The foreign exchange forward contracts mature within a period of one month and two years.

Net profit / (loss) on derivative instruments of Rs. (5,365,654) (P.Y. Rs. 4,903,578) recognised in Hedging reserve as of March 31, 2014, is expected to be reclassified to the statement of profit and loss by March 31, 2016. The foreign currency exposures that are not hedged by a derivative instrument or otherwise is Rs. 703,495,380 (P.Y. Rs. 102,067,083).

The Company has applied the principles of Cash Flow Hedge Accounting as per Accounting Standard (AS) - 30, Financial Instrument: Recognition and Measurement, along with limited revision to other accounting standards, issued by The Institute of Chartered Accountants of India. AS-30, along with limited revision to the other accounting standards, have not currently been notified by the National Advisory Council for Accounting Standard (NACAS) pursuant to the Companies(AS) rules, 2006 as per section 211(3C) of the Companies Act, 1956.

4 In the opinion of the Company, the Current Assets, Loans and Advances are approximately of the value stated, if realized in the ordinary course of business. The provision for all known Liabilities and for Depreciation is adequate and not in excess of the amount reasonably necessary.

5 The Company has received confirmations from few Trade receivables, Other receivables and for majority of loans and advances. Remaining Trade receivables, Other receivables, Trade payables and loans and advances are subject to confirmation and reconciliation, and consequent impact if any will be adjusted as and when determined.

6 The Management Information System of the Company identifies and operates in a single primary business segment. In the opinion of the management these activities are governed by the same set of risk and returns as per AS-17 dealing with segmental reporting. All the assets of the Company are located in India and hence secondary segmental reporting is on the basis of the geographical location of customers.

7 Related party disclosures:

(i) As per Accounting Standard 18, as notified by the rules the disclosures of Related Parties and transactions during the year as deemed in the Accounting Standard are given below:

(A) Subsidiary Companies

Datamatics Global Services Inc.

Datamatics Global Services GmbH

Datamatics Technologies UK Ltd.

Datamatics Software Services Ltd.

Datamatics Global Technologies Ltd.

Datamatics Global Technologies AG

Datamatics Infotech Ltd.

Datamatics Global Services Pty. Ltd.

Datamatics Global Technologies GmbH (Stepdown Subsidiary)

Datamatics Global Holding Corp. (Stepdown Subsidiary)

Cignex Datamatics Corp. (Stepdown Subsidiary)

Cignex Datamatics Technologies Ltd.

(Stepdown Subsidiary)

Datamatics Vista Info Systems Ltd.

(Stepdown Subsidiary)

Cybercom Datamatics Information Solutions Ltd.

Cignex Datamatics Inc. (Stepdown Subsidiary)

Cignex Datamatics Pte. Ltd. (Stepdown Subsidiary)

Cignex Technologies Ltd. (Stepdown Subsidiary) (Dissolved w.e.f 30th July, 2013)

Datamatics Global Solutions GmbH (Stepdown Subsidiary)

Lexicon Publishing Services Pvt. Ltd.

Datamatics Global Services FZ-LLC

Premedia Global Inc. (Stepdown Subsidiary)

Datamatics eRetail & Publishing GmbH (Stepdown Subsidiary)

(B) Key Managerial Personnel

Dr. L. S. Kanodia Mr. Rahul L. Kanodia Mr. Vidur V. Bhogilal Mr. Sameer L. Kanodia

(C) Relatives of Key Managerial Personnel and Enterprise owned by Key Managerial Personnel

Mrs. Asha Kanodia

Mrs. Priyadarshini Kanodia

Datamatics Staffing Services Ltd.

Datamatics Employees Welfare Trust

Datamatics Financial Services Ltd.

Amon Technologies Pvt. Ltd.

Anemone Management Consultancy Pvt. Ltd.

Datascan Services

(D) Holding Company

Delta Infosolutions Pvt. Ltd.

8 The Company''s significant leasing arrangements are mainly in respect of residential and office premises. The aggregate lease rentals payable on these leasing arrangements are charged as rent under "Other Expenses" in Note 25. These leasing arrangements are for a period not exceeding five years and are in most cases renewable by mutual consent, on mutually agreeable terms.

9 The Company has Outstanding Working Capital Loan/Advance of Rs. 195,043,438 (P.Y. Rs. 207,185,628) to its subsidiary Datamatics Software Services Limited at a interest rate of 8% p.a. as on March 31,2014.

10 Employee Stock Option Scheme:

The Datamatics Employees Welfare Trust (Trust) had purchased 1,753,261 shares of Company for granting stock options to the employees. The purchases are financed by loans from the Company. Amount recoverable from Trust (unsecured) as on March 31,2014 is Rs. 63,286,830 (P.Y. Rs. 64,952,691).

a) Key Employee Stock Option Plan, 2006

Under the Key Employee Stock Option Plan, 2006, 116,000 options were granted at exercise price of Rs. 5 per option and the second vesting period falls during the current F.Y. 2013-14. During the year no options have been vested and exercised. Upon vesting and exercise of the stock options, equity shares will be granted to the employees from the shares held by the Trust. During the F.Y. 2012-13 6,440 shares have been vested and exercised and 70,000 stock options have lapsed.

b) Key Employee Stock Option Plan, 2007

Under the Key Employee Stock Option Plan, 2007, 300,000 options were granted at exercise price of Rs. 5 per option and the second vesting period falls during current F.Y. 2013-14. During the year no options have been vested and exercised. Upon vesting and exercise of the stock options, equity shares will be granted to the employees from the shares held by the Trust. During the F.Y. 2012-13 20,960 shares have been vested and exercised and 68,000 stock options have lapsed.

During the year, an amount of Rs. 1,901,093 (P.Y. Rs. 1,999,080) has been expensed out considering the proportionate vesting period, which has been included in Salaries, Wages, Bonus & Allowances and the balance has been disclosed under Reserves and Surplus as reduction from Employee Stock Option Outstanding.

11 During the year, Company has invested:

(i) USD 9,300,000 in 9,300,000 fully paid Series III Convertible Non-Cumulative Redeemable 8% Preference Shares of USD 1 each of Datamatics Global Technologies Ltd., a Company incorporated in Mauritius.

(ii) AED 50,000 in 50 fully paid equity shares of AED 1,000 each of Datamatics Global Services FZ-LLC, a Company incorporated in Dubai.

(iii) Rs. 577,600,000 in 10,000,000 fully paid equity shares of Rs. 10 each of Datamatics eRetail and Publishing Limited. The Company has acquired controlling interest in Lexicon Publishing Services Private Limited (now known as Lumina Datamatics Limited ("LD")) on September 5, 2013. Thereafter, the Hon''ble High Court, Madras has passed an order sanctioning the Scheme of Arrangement/Amalgamation ["Scheme"] of Premedia Global Private Limited (wholly owned subsidiary of LD) and Datamatics eRetail and Publishing Limited (wholly owned subsidiary of the Company) with and into LD on March 17, 2014. The Appointed Date for the said Scheme was January 1, 2014 and the Effective Date was March 31,2014. Pursuant to the sanctioned Scheme, the Company holds 73.12% of equity share capital in LD.

12 Portfolio Management services are provided by the Portfolio Manager - Reliance Capital Asset Management Ltd (RCAML) registered with SEBI vide registration No.INP000000423 and Trust Investment Advisors Pvt. Ltd. (TIAPL) registered with SEBI vide registration No. INP000001843. The Portfolio Manager is engaged in investing funds in accordance with SEBI (Portfolio Managers) Regulations, 1993 of its client - Datamatics Global Services Ltd. in securities and providing portfolio management services.

RCAML and TIAPL have been appointed as the Portfolio Manager for managing the investments of its funds on a discretionary basis to avail of investment advisory and portfolio management services for the purpose of investment to be made in securities. RCAML also holds the Power of Attorney to hold investments in its name for investments made on behalf of Company. Investments made by RCAML under the Portfolio Management Services are made in a pool account and therefore are not held in the name of the Company.

13 The Company has Rs. 197,108,961 (PY. Rs. 208,204,849) as outstanding Loans and Advances (Refer note no. 44 below) and Rs. 995,121,964 (PY. Rs. 997,376,964) as investment in four of it''s 100% Subsidiaries at the year end. The net worth of these subsidiaries has declined. The Company has assured financial support. These investments are for long term and are of strategic nature. As the management is confident of turning around the subsidiaries in the near future provision for dimuniton in the value, if at all required, is not made.

14 In terms of Section 22 of the Micro, Small and Medium Enterprises Development Act 2006, the outstanding to these enterprises are required to be disclosed. However, these enterprises are required to be registered under the Act. In the absence of the information about registration of the enterprises under the above Act, the required information could not be furnished.

15 As per Companies (Accounting Standards) Rules 2006 issued by the Central Government, in consultation with National Advisory Committee on Accounting Standards (''NACAS'') and the relevant provisions of the Companies Act, 1956, to the extent applicable, the carrying value of the asset has been reviewed for impairment of assets and there is no impairment of assets.

16 Prior period comparative:

Previous year figures have been appropriately regrouped/reclassified and rearranged wherever necessary to confirm to the current year''s presentation.

17 Figures are rounded off to the nearest of rupee.


Mar 31, 2013

1 Company Overview:

Datamatics Global Services Ltd. (DGSL) was incorporated on November 3, 1987 as Interface Software Resources Pvt. Ltd. The name of the Company was changed to Datamatics Technologies Pvt. Ltd. on December 18, 1992. On December 27, 1999, the Company converted itself from a Pvt. Ltd. Company into a Public Ltd. Company and the name of the Company was changed to Datamatics Technologies Ltd. on January 13, 2000. The name of the Company was changed from "Datamatics Technologies Ltd." to "Datamatics Global Services Ltd." (DGSL) with effect from January 17, 2009.

Datamatics, a trusted partner to several Fortune 500 Companies is a global provider of Information Technology (IT) and Knowledge Process Outsourcing (KPO) and Consulting services. The Company provides business aligned next- generation solutions to a wide range of industry verticals that help enterprises across the world overcome their business challenges and achieve operational effi ciencies. These solutions leverage innovations in technology, knowledge of business processes, and domain expertise to provide clients a competitive edge.

2 Capital and other commitments:

Estimated amount of contracts on capital account remaining to be executed and not provided (net of advances) for Rs. 6,626,297 (P.Y. Rs. 106,199,180).

3 The Company in accordance with its risk management policies and procedures, enters into foreign currency forward contracts to manage its exposure in foreign exchange rates. The counter party is generally a bank. These contracts are for a period between one month and two years.

The following are outstanding foreign exchange forward contracts, which have been designated as Cash Flow Hedges, as at:

Net profi t / (loss) on derivative instruments of Rs. 4,903,578 (P.Y. Rs. (20,821,979)) recognised in Hedging reserve as of March 31, 2013, is expected to be reclassifi ed to the statement of profi t and loss by March 31, 2015. The foreign currency exposures that are not hedged by a derivative instrument or otherwise is Rs. 102,067,083 (P.Y. Rs. 252,186,237).

The Company has applied the principles of Cash Flow Hedge Accounting as per Accounting Standard (AS) - 30, Financial Instrument: Recognition and Measurement, along with limited revision to other accounting standards, issued by the Institute of Chartered Accountants of India. AS-30, along with limited revision to the other accounting standards, have not currently been notifi ed by the National Advisory Council for Accounting Standard (NACAS) pursuant to the Companies(AS) rules, 2006 as per section 211(3C) of the Companies Act, 1956.

4 In the opinion of the Company, the Current Assets, Loans and Advances are approximately of the value stated, if realized in the ordinary course of business. The provision for all known Liabilities and for Depreciation is adequate and not in excess of the amount reasonably necessary.

5 The Company has received confi rmations from few Trade receivables, Other receivables and for majority of loans and advances. Remaining Trade receivables, Other receivables, Trade payables and loans and advances are subject to confi rmation and reconciliation if any.

6 The Management information system of the Company identifi es and operates in a single primary business segment. In the opinion of the management these activities are governed by the same set of risk and returns as per AS17 dealing with segmental reporting. All the assets of the Company are located in India and hence secondary segmental reporting is on the basis of the geographical location of customers.

7 Related Party Disclosures:

(i) As per Accounting Standard 18, as notifi ed by the rules the disclosures of Related Parties and transactions during the year as deemed in the Accounting Standard are given below:

(A) Subsidiary Companies

Datamatics Global Services Inc.

Datamatics Global Services GmbH

Datamatics Technologies UK Ltd.

Datamatics Software Services Ltd.

Datamatics Global Technologies Ltd.

Datamatics Global Technologies AG

Datamatics Infotech Ltd.

Datamatics Global Services Pty. Ltd.

Datamatics Global Technologies GmbH

(Stepdown Subsidiary)

Datamatics Global Holding Corp. (Stepdown

Subsidiary)

Cignex Global Holding Corp. (Stepdown

Subsidiary)

Cignex Datamatics Technologies Pvt. Ltd.

(Stepdown Subsidiary)

Datamatics Vista Info Systems Pvt. Ltd.

(Stepdown Subsidiary)

Cybercom Datamatics Information Solutions

Ltd. (w.e.f. 27th August, 2012)

Cignex Datamatics Inc. (Stepdown Subsidiary)

Cignex Technologies Ltd. (Stepdown

Subsidiary)

Cignex Datamatics Pte. Ltd. (Stepdown

Subsidiary)

Datamatics Global Services Gmbh d.o.o.

(Stepdown Subsidiary)

(B) Associate Companies and Joint Ventures Datamatics Financial Services Ltd. Cybercom Datamatics Information Solutions Ltd. (upto 26th August, 2012)

Amon Technologies Pvt. Ltd.

Anemone Management Consultancy Pvt. Ltd.

Datascan Services

(C) Key Managerial Personnel Dr. L. S. Kanodia

Mr. Rahul L. Kanodia Mr. Vidur V. Bhogilal Mr. Sameer Kanodia

(D) Relatives of Key Managerial Personnel and Enterprise owned by Key Managerial Personnel Mrs. Asha Kanodia

Mrs. Priyadarshini Kanodia Datamatics Staffi ng Services Pvt. Ltd. Datamatics Employee Welfare Trust

(E) Holding Company

Delta Infosolutions Pvt. Ltd.

8 The Company''s signifi cant leasing arrangements are mainly in respect of residential and offi ce premises. The aggregate lease rentals payable on these leasing arrangements are charged as rent under "Other Expenses" in Note 24. These leasing arrangements are for a period not exceeding fi ve years and are in most cases renewable by mutual consent, on mutually agreeable terms.

9 The Company has Outstanding Working Capital Loan / Advance of Euro Nil (P.Y. Euro 100,000) given to its subsidiary Datamatics Global Services GmbH at a interest rate of 1% p.a. above the LIBOR rate; and of Rs. 207,185,628 (P.Y. Rs. 173,989,288) to its subsidiary Datamatics Software Services Limited at a interest rate of 8% p.a. as on March 31, 2013.

10 Employee Stock Option Scheme:

The Datamatics Employee Welfare Trust (Trust) had purchased 1,753,261 shares of Company for granting stock options to the employees. The purchases are fi nanced by loans from the Company. Amount recoverable from Trust (unsecured) as on March 31, 2013 is Rs. 64,952,691 (P.Y. Rs. 69,347,270).

a) Key Employee Stock Option Plan, 2006

Under the Key Employee Stock Option Plan, 2006, 116,000 options were granted at exercise price of Rs. 5 per option and the fi rst vesting period falls during the current F.Y. 2012-13. During the year 6,440 shares have been vested and exercised. Upon vesting and exercise of the stock options, equity shares have been granted to the employees from the shares held by the Trust. During the year 70,000 stock options have lapsed.

b) Key Employee Stock Option Plan, 2007

Under the Key Employee Stock Option Plan, 2007, 300,000 options were granted at exercise price of Rs. 5 per option and the fi rst vesting period falls during current FY. 2012-13. During the year 20,960 shares have been vested and exercised. Upon vesting and exercise of the stock options, equity shares have been granted to the employees from the shares held by the Trust. During the year 68,000 stock options have lapsed.

During the year, an amount of Rs. 1,999,080 (PY. Rs. 2,630,415) has been expensed out considering the proportionate vesting period, which has been included in Salaries, Wages, Bonus & Allowances and the balance has been disclosed under Reserves and Surplus as reduction from Employee Stock Option Outstanding.

11 During the year, Company has invested:

(i) EUR 1,000,000 in 1,000,000 fully paid equity shares of Datamatics Global Services GmbH, incorporated in Germany. (ii) Rs. 3,738,000 in 8,400 fully paid equity shares of Cybercom Datamatics Information Solutions Limited.

12 Portfolio Management services are provided by the Portfolio Manager - Reliance Capital Asset Management Ltd. (RCAML) registered with SEBI vide registration No.INP000000423 and Trust Investment Advisors Pvt. Ltd. (TIAPL) registered with SEBI vide registration No. INP000001843. The portfolio Manager is engaged in investing funds in accordance with SEBI (Portfolio Managers) Regulations, 1993 of its client - Datamatics Global Services Ltd. in securities and providing portfolio management services.

RCAML and TIAPL have been appointed as the Portfolio Manager for managing the investments of its funds on a discretionary basis to avail of investment advisory and portfolio management services for the purpose of investment to be made in securities. RCAML also holds the Power of Attorney to hold investments in its name for investments made on behalf of Company. Investments made by RCAML under the Portfolio Management Services are made in a pool account and therefore are not held in the name of the Company.

13 The Company has Rs. 208,204,849 (PY. Rs. 196,919,433) as outstanding Loans and Advances (Refer note 44 below) and Rs. 997,376,964 (PY Rs. 928,338,219) as investment in fi ve of it''s 100% Subsidiaries at the year end. The net worth of these subsidiaries has declined. The Company has assured Financial Support. These investments are for long term and are of strategic nature. As the management is confi dent of turning around the subsidiaries in the near future provision for dimuniton in the value, if at all required, is not made.

14 In terms of Section 22 of the Micro, Small and Medium Enterprises Development Act 2006, the outstanding to these enterprises are required to be disclosed. However, these enterprises are required to be registered under the Act. In the absence of the information about registration of the enterprises under the above Act, the required information could not be furnished.

15 As per Companies (Accounting Standards) Rules 2006 issued by the Central Government, in consultation with National Advisory Committee on Accounting Standards (‘NACAS'') and the relevant provisions of the Companies Act, 1956, to the extent applicable, the carrying value of the asset has been reviewed for impairment of assets and there is no impairment of assets.

16 Prior period comparative:

Previous year fi gures have been appropriately reclassifi ed / recast to confi rm to the current year''s presentation.

17 Figures are rounded off to the nearest of rupee.


Mar 31, 2012

1 Company Overview

Datamatics Global Services Limited (DGSL) was incorporated on November 3, 1987 as Interface Software Resources Private Limited. The name of the Company was changed to Datamatics Technologies Private Limited on December 18, 1992 . On December 27, 1999, the Company converted itself from a Private Limited Company into a Public Limited Company and the name of the Company was changed to Datamatics Technologies Limited on January 13, 2000. The name of the Company was changed from “Datamatics Technologies Limited” to “Datamatics Global Services Limited” (DGSL) with effect from January 17, 2009.

Datamatics, a trusted partner to several Fortune 500 Companies is a global provider of Information Technology (IT) and Knowledge Process Outsourcing (KPO) and Consulting services. The Company provides business aligned next-generation solutions to a wide range of industry verticals that help enterprises across the world overcome their business challenges and achieve operational efficiencies. These solutions leverage innovations in technology, knowledge of business processes, and domain expertise to provide clients a competitive edge.

2 Contingent Liability:

Provision is made in the accounts if it becomes probable that an outflow of resources embodying economic benefits will be required to settle the obligation.

31.03.2012 31.03.2011

Contingent Liabilities to the extent not provided for:

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

(i) Income Tax matters 6,730,563 15,604,689 (ii) Sales Tax matters 5,074,525 5,074,525

(b) Details of guarantees and sureties outstanding as at:

(i) Guarantees given by Banks to Embassy Centre Premises Co-operative Society Ltd. 425,930 405,295

(ii) Guarantees given by Banks to the Assistant Commissioner of Central Excise and Customs department 1,134,250 1,134,250

(iii) Guarantees given by Banks to UNFCCC, BONN, Germany for Euro 84,398.70 6,118,000 4,650,000

(iv) Guarantees given by Banks to Directorate of Information Technology 500,000 -

(v) Guarantees given by Banks to Mahanagar Gas Ltd. 285,275 -

(vi) Corporate guarantees provided to Banks and Financial Institutions against credit facilities extended to Subsidiary and Joint Venture Company 146,000,000 -

3 Capital and other commitments:

Estimated amount of contracts on capital account remaining to be executed and not provided (net of advances) for Rs. 106,199,180 (P.Y. Rs. 244,166,380).

4 The Company in accordance with its risk management policies and procedures, enters into foreign currency forward contracts to manage its exposure in foreign exchange rates. The counter party is generally a bank. These contracts are for a period between one month and two years.

Net loss on derivative instruments of Rs. 20,821,979 recognised in Hedging reserve as of March 31, 2012, is expected to be reclassified to the statement of profit and loss by March 31, 2014. The foreign currency exposures that are not hedged by a derivative instrument or otherwise is Rs. 252,186,237 (P.Y. Rs. 23,987,878).

The Company has adopted Accounting Standard (AS) - 30 Financial Instrument: Recognition and Measurement, along with limited revision to other accounting standard, issued by the Institute of Chartered Accountants of India. AS-30, alongwith limited revision to the other accounting standards, have not currently been notified by the National Advisory Concil for Accounting Standard (NACAS) pursuant to the Companies (AS) rules, 2006 as per section 211(3C) of the Companies Act, 1956. Had the Company not early adopted AS-30 and related limited revision, profit after taxation for the year ended 31st March, 2012 would have been lower by Rs. 14,313,678.

5 In the opinion of the Company, the Current Assets, Loans and Advances are approximately of the value stated, if realized in the ordinary course of business. The provision for all known Liabilities and for Depreciation is adequate and not in excess of the amount reasonably necessary.

6 The Company has received confirmations from few Trade receivables, Other receivables and for majority of loans and advances. Remaining Trade receivables, Other receivables, Trade payables and loans and advances are subject to confirmation and reconciliation if any.

34 The Management information system of the Company identifies and operates in a single primary business segment. In the opinion of the management these activities are governed by the same set of risk and returns as per AS17 dealing with segmental reporting. All the assets of the company are located in India and hence secondary segmental reporting is on the basis of the geographical location of customers.

7 Related party disclosures:

(i) As per Accounting Standard 18, as notified by the rules the disclosures of Related Parties and transactions during the year as deemed in the Accounting Standard are given below:

(A) Subsidiary Companies

Datamatics Global Services Inc.

Datamatics Global Services GmbH

Datamatics Technologies UK Ltd.

Datamatics Software Services Ltd.

Datamatics Global Technologies Ltd.

Datamatics Global Technologies AG

Datamatics Infotech Ltd.

Datamatics Global Services Pty. Ltd.

Datamatics Global Technologies GmbH (Step down Subsidiary)

Datamatics Global Holding Corp. (Step down Subsidiary)

Cignex Global Holding Corp. (Step down Subsidiary)

Cignex Datamatics Technologies Pvt. Ltd. (Step down Subsidiary)

Datamatics Vista Info Systems Pvt. Ltd. (Step down Subsidiary)

(B) Associate Companies and Joint Ventures Datamatics Financial Software Services Ltd. Cybercom Datamatics Information Solutions Ltd. Amon Technologies Pvt. Ltd.

Anemone Management Consultancy Pvt. Ltd. Datascan Services

(C) Key Managerial Personnel Dr. L. S. Kanodia

Mr. Rahul Kanodia Mr. Vidur Bhogilal Mr. Sameer Kanodia

(D) Relatives of Key Managerial Personnel and Enterprise owned by Key Managerial Personnel

Mrs. Asha Kanodia

Mrs. Priyadarshini Kanodia

Datamatics Staffing Services Pvt Ltd.

(E) Holding Company

Delta Infosolutions Pvt. Ltd.

8 The Company’s significant leasing arrangements are mainly in respect of residential and office premises. The aggregate lease rentals payable on these leasing arrangements are charged as rent under “Other Expenses” in Note 24. These leasing arrangements are for a period not exceeding five years and are in most cases renewable by mutual consent, on mutually agreeable terms.

9 The Company has Outstanding Working Capital Loan / Advance of Euro 100,000 (P.Y. Euro 100,000) from its subsidiary Datamatics Technologies GmbH at a interest rate of 1% p.a. above the LIBOR rate; and of Rs. 173,989,288 (P.Y. Rs. 81,843,468) to its subsidiary Datamatics Software Services Ltd. at a interest rate of 8% p.a. as on March 31, 2012.

39 Employee Stock Option Scheme:

The Datamatics Employee Welfare Trust (Trust) has purchased 1,753,261 (P.Y. 1,753,261) shares of Company for the granting stock options to the employees. The purchases are financed by loans from the Company amounting to Rs. 69,347,270 (P.Y. Rs. 69,347,270).

a) Key Employee Stock Option Plan, 2006

Under the Key Employee Stock Option Plan, 2006, 116,000 options were granted during the year at exercise price of Rs. 5 per option and the first vesting period falls during the F.Y. 2012-13. Upon vesting of the stock options, equity shares will be granted to the employees from the shares held by the Trust.

b) Key Employee Stock Option Plan, 2007

Under the Key Employee Stock Option Plan, 2007, 300,000 options were granted during the year at exercise price of Rs. 5 per option and the first vesting period falls during the F.Y. 2012-13. Upon vesting of the stock options, equity shares will be granted to the employees from the shares held by the Trust.

During the year, an amount of Rs. 2,630,415 (P.Y. Nil) has been expensed out considering the proportionate vesting period, which has been included in Salaries, Wages, Bonus & Allowances and the balance has been disclosed under Reserves and Surplus as reduction from Employee Stock Option Outstanding.

10 During the year, Company has invested:

(i) in 8% Optionally Convertible Non - Cumulative Redeemable Preference Shares of Rs. 129,200,000 in Datamatics Software Services Ltd. The said shares are redeemable at the option of the Company.

(ii) in 8% Series III Non - Cumulative Redeemable Preference Shares of USD 8,550,000 in Datamatics Global Technologies Ltd., incorporated in Mauritius. The said shares are redeemable at the option of the Company.

(iii) in equity shares of USD 950,000 in Datamatics Global Technologies Ltd., incorporated in Mauritius and EUR 1,000,000 in Datamatics Global Services GmbH., incorporated in Germany.

11 Portfolio Management services are provided by the Portfolio Manager – Reliance Capital Asset Management Ltd. (RCAML) registered with SEBI vide registration No.INP000000423 and Trust Investment Advisors Pvt. Ltd. (TIAPL) registered with SEBI vide registration No. INP000001843. The portfolio Manager is engaged in investing funds in accordance with SEBI (Portfolio Managers) Regulations, 1993 of its client – Datamatics Global Services Ltd. in securities and providing portfolio management services.

RCAML and TIAPL have been appointed as the Portfolio Manager for managing the investments of its funds on a discretionary basis to avail of investment advisory and portfolio management services for the purpose of investment to be made in securities. RCAML also holds the Power of Attorney to hold investments in its name for investments made on behalf of Company. Investments made by RCAML under the Portfolio Management Services are made in a pool account and therefore are not held in the name of the Company.

12 The Company has Rs. 196,919,433 (P.Y. Rs. 101,714,678) as outstanding Loans and Advances (Refer note 44 below) and Rs. 928,338,219 (P.Y. Rs. 812,412,594) as investment in six of it’s 100% wholly owned subsidiaries at the year end. The net worth of these subsidiaries has declined. The Company has assured Financial Support. These investments are for long term and are of strategic nature. As the management is confident of turning around the subsidiaries in the near future provision for dimuniton in the value, if at all required, is not made.

13 In terms of Section 22 of the Micro, Small and Medium Enterprises Development Act 2006, the outstanding to these enterprises are required to be disclosed. However, these enterprises are required to be registered under the Act. In the absence of the information about registration of the enterprises under the above Act, the required information could not be furnished.

14 Export of service includes gain of Rs. 21,908,275 (P.Y. Rs. 28,884,754) towards difference in the rate due to exchange fluctuation on realisation of export / revaluation of debtors at the end of the year.

15 Prior period comparative:

Previous year figures have been appropriately reclassified / recast to confirm to the current year’s presentations.

16 Figures are rounded off to the nearest of rupee.


Mar 31, 2011

1. Company Overview

Datamatics Global Services Limited (DGSL) was incorporated on November 3,1987 as Interface Software Resources Private Limited. The name of the Company was changed to Datamatics Technologies Private Limited on December 18, 1992. On December 27,1999, the Company converted itself from a Private Limited Company into a Public Limited Company and the name of the Company was changed to Datamatics Technologies Limited on January 13,2000. The name of the Company was changed from "Datamatics Technologies Limited" to "Datamatics Global Services Limited" (DGSL) with effect from January 17,2009.

Datamatics, a trusted partner to several Fortune 500 Companies is a global provider of Information Technology (IT) and Knowledge Process Outsourcing (KPO) and Consulting services. The Company provides business aligned next-generation solutions to a wide-range of industry verticals that help enterprises across the world overcome their business challenges and achieve operational efficiencies. These solutions leverage innovations in technology, knowledge of business processes, and domain expertise to provide clients a competitive edge.

2. Contingent Liability:

Provision is made in the accounts if it becomes probable that an outflow of resources embodying economic benefits will be required to settle the obligation.

Contingent Liabilities to the extent not provided for:

31.03.2011 31.03.2010 (3 ) (^)

(a) Details of guarantees and sureties outstanding as at:

(i) Guarantees given by Banks to Embassy Centre Premises Co-operative Society Ltd. 405,295 405,295

(ii) Guarantees given by Banks to the Assistant Commissioner of Central Excise and Customs department 1,134,250 1,134,250

(iii) Guarantees given by Banks to UNFCCC, BONN, Germany for Euro 84,398.70 4,650,000 4,650,000

(b) Disputed Income Tax Liability 15,604,689 6,030,769

(c) Sales Tax 5,074,525 229,000

(d) Others — 5,434,236

3. Capital and other commitments:

Estimated amount of contracts on capital account remaining to be executed and not provided (net of advances) for Rs 244.17 million (P.Y.Rs 69.53 million).

4. Forward and Options Contracts Outstanding as on 31.03.2011 is USD 7.9 million (P.Y. USD 6.5 million) (equivalent to Rs 374.9 million (P.Y. Rs 316 million)). The foreign currency exposures that are not hedged by a derivative instrument or otherwise is r 23.99 million (P.YRs 79.74 million).

5. In the opinion of the Company, the Current Assets, Loans and Advances are approximately of the value stated, if realized in the ordinary course of business. The provision for all known Liabilities and for Depreciation is adequate and not in excess of the amount reasonably necessary.

6. The Company has received confirmations from few debtors and for majority of loans and advances. Remaining debtors,creditors and loans and advances are subject to confirmation and reconciliation if any.

7. The Management information system of the Company identifies and operates in a single primary business segment. In the opinion of the management these activities are governed by the same set of risk and returns as per AS-17 dealing with segmental reporting. All the assets of the Company are located in India and hence secondary segmental reporting is on the basis of the geographical location of customers.

Fixed assets in India used in the company's business or liabilities contracted in India cannot be identified to any geographical segment as the fixed assets and services are used interchangeably between geographical segments and a meaningful segregation is not possible.

8. Related party disclosures:

(i) As per Accounting Standard 18, as notified by the rules the disclosures of Related Parties and transactions during the year as deemed in the Accounting Standard are given below:

(A) Subsidiary Companies:

Datamatics Global Services Inc. Datamatics Global Services GmbH Datamatics Technologies UK Ltd. Datamatics Software Services Ltd. Datamatics Global Technologies Ltd. Datamatics Global Technologies AG Datamatics Infotech Ltd. Datamatics Global Services Pty. Ltd. Datamatics Global Technologies GmbH

(Q Key Managerial Personnel Dr. L. S. Kanodia Mr. Rahul Kanodia Mr.Vidur Bhogilal Mr. Sameer Kanodia

(D) Relatives of Key Managerial Personnel Mrs. Asha Kanodia Mrs. Priyadarshini Kanodia Datamatics Staffing Services Pvt. Ltd.

(B) Associate Companies and Joint Ventures: Datamatics Financial Services Ltd. Cybercom Datamatics Information Solutions Ltd Datamatics Applied DSP Pvt. Ltd. Anemone Management Consultancy Pvt. Ltd. Datascan Services

(E) Holding Company

Delta Infosolutions Pvt. Ltd.

9. Deferred Tax:

(i) During the year ended 31st March, 2011, the Company has reversed deferred tax liability ofRs 2,816,204 in the Profit & Loss Account.

10. The Company has Outstanding Working Capital Loan/Advance of Euro 100,000 from its subsidiary Datamatics Technologies GmbH at a interest rate of 1% p.a. above the LIBOR rate, and ofRs 81,843,468 from its subsidiary Datamatics Software Services Limited at a interest rate of 8% p.a. as on March 31,2011.

11. Amount Recoverable from ESOP trust consists of Rs 69,347,270 paid to Datamatics Staff Welfare trust during the year for purchase of 1,753,261 Equity shares of the Company.

12. During the year, Company has invested in 8% Non-Cumulative Redeemable Preference Share capital of USD 500,000 in Datamatics Global Technologies Ltd., incorporated in Mauritius.The said shares are redeemable at the option of the Company.

* Since the employee wise break up of liabilities on account of retirement schemes based on actuarial valuation is not ascertainable, the amount relatable to Directors could not be included in above. ** The amount of commission payable includes Rs 525,000 (RY. Rs 650,000) payable to non-wholetime directors. *** Does not include monetary value of non-cash perquisites as per Income Tax Act,1961.

13. Portfolio Management services are provided by the Portfolio Manager - Reliance Capital Asset Management Ltd (RCAML) registered with SEBI vide registration No. INP000000423 and Trust Investment Advisors Pvt. Ltd. (TIAPL) registered with SEBI vide registration No. INP000001843. The portfolio Manager is engaged in investing funds in accordance with SEBI (Portfolio Managers) Regulations, 1993 of its client - Datamatics Global Services Ltd in securities and providing portfolio management services.

RCAML and TIAPL has been appointed as the Portfolio Manager for managing the investments of its funds on a discretionary basis to avail of investment advisory and portfolio management services for the purpose of investment to be made in securities. RCAML also holds the Power of Attorney to hold investments in its name for investments made on behalf of company. Investments made by RCAML under the Portfolio Management Services are made in a pool account and therefore are not held in the name of the Company.

14. The Company has Rs 101,714,678 (P.Y. Rs 139,592,553) as outstanding Loans and Advances (Refer note 21 below) and Rs 812,412,594 (P.Y. Rs 731,278,219) as investment in seven of it's 100% Subsidiaries at the year end. The net worth of these subsidiaries has declined. The Company has assured Financial Support. These investments are for long term and are of strategic nature. As the management is confident of turning around the subsidiaries in the near future provision for dimuniton in the value, if at all required, is not made.

15. In terms of Section 22 of the Micro, Small and Medium Enterprises Development Act, 2006, the outstanding to these enterprises are required to be disclosed. However, these enterprises are required to be registered under the Act. In the absence of the information about registration of the enterprise under the above Act, the required information could not be furnished.

16. Export of Service includes gain of Rs 28.88 million (P.Y. Nil) towards difference in the rate due to exchange fluctuation on realisation of export/revaluation of debtors at the end of the year.

17. Prior period comparative:

Previous year figures have been appropriately reclassified/recast to confirm to the current year's presentations.


Mar 31, 2010

1 Company Overview

Datamatics Global Services Limited (DGSL) was incorporated on November 3, 1987 as Interface Software Resources Private Limited. The name of the company was changed to Datamatics Technologies Private Limited on December 18, 1992. On December 27, 1999, the company converted itself from a Private Limited Company into a Public Limited Company and the name of the Company was changed to Datamatics Technologies Limited on January 13, 2000. The name of the Company was changed from "Datamatics Technologies Limited" to "Datamatics Global Services Limited" (DGSL) with effect from January 17, 2009.

Datamatics delivers smart, next-generation solutions that address the customers business challenges. Product innovation, IP-creation and technology collaboration form the core of the Companys positioning as a "one-stop-smart solution provider". Datamatics is geared to provide the solutions, support and enhancement that are based on smart technology platforms that deliver competitive advantage to customers.

1. Contingent Liability:

Provision is made in the accounts if it becomes probable that an outflow of resources embodying economic benefits will be required to settle the obligation.

Contingent Liabilities to the extent not provided for: 31.03.2010 31.03.2009

(Rs.) (Rs.)

(a) Details of guarantees and sureties outstanding as at

(i) Guarantees given by Banks to Embassy Centre 405,295 405,295

(ii) Guarantees given by Banks to the Customs Authority 1,134,250 989,250

(iii) Guarantees given by Banks to UNFCCC, BONN, Germany for Euro 84,398.70 4,650,000 4,650,000

(iv) Guarantees given by Banks to UNFCCC, BONN, Germany for Euro 50,000 - 3,234,000

(b) Disputed Income Tax Liability 6,030,769 12,545,357

(c) Sales Tax 229,000 229,000

(d) Others 5,434,236 5,549,736

2. Capital and other commitments:

Estimated amount of contracts on capital account remaining to be executed and not provided for Rs. 69.53 Million (P.Y. Rs. 20.50 Million).

3. Forward and Options Contracts Outstanding as on 31.03.2010 is USD 6.50 million (P.Y. USD 2.85 million) (equivalent to Rs. 316.01 million (P.Y. Rs. 129.55 million)). The foreign currency exposures that are not hedged by a derivative instrument or otherwise is Rs. 69.84 million (P.Y. Rs. 296.11 million).

4. Redemption of Preference Shares:

During the year, the Company redeemed all its redeemable non-cumulative preference shares as detailed below:

(a) 8% 1,400,000 Preference shares of Rs. 10/- each fully paid-up with fixed tenure;

(b) 8% 7,300,000 preference shares of Rs. 10/- each fully paid-up without fixed tenure; and

(c) 9% 11,950,000 preference shares of Rs. 10/- each fully paid-up without fixed tenure.

And accordingly Capital Redemption Reserve of Rs. 206,500,000 is created under section 80 of the Companies Act, 1956.

5. In the opinion of the Company, the Current Assets, Loans and Advances are approximately of the value stated, if realized in the ordinary course of business. The provision for all known Liabilities and for Depreciation is adequate and not in excess of the amount reasonably necessary.

6. The Company has received confirmations from few debtors and for majority of loans and advances. Remaining debtors, creditors and loans and advances are subject to confirmation and reconciliation if any.

7. Related party disclosures:

(i) As per Accounting Standard 18, as notified by the rules the disclosures of Related Parties and transactions during the year as deemed in the Accounting Standard are given below::

(A) Subsidiary Companies: Datamatics Global Services Inc.

Datamatics Global Services GmbH

Datamatics Technologies UK Limited

Datamatics Software Services Limited Datamatics Global Technologies Limited

Datamatics Global Technologies AG Datamatics Infotech Limited

Datamatics Global Services Pty. Limited Datamatics Global Technologies GmbH

(B) Associate Companies and Joint Ventures: Datamatics Financial Software Services Limited Cybercom Datamatics Information Solutions Limited

Acron Technologies Pvt. Ltd. (Formerly known as Datamatics Yash Technologies Private Limited)

Datamatics Applied DSP Private Limited

Anemone Management Consultancy Private Limited

Datascan Services

(C) Key Managerial Personnel Dr. L. S. Kanodia

Mr. Rahul Kanodia

Mr. Vidur Bhogilal

Mr. Sameer Kanodia

(D) Relatives of Key Managerial Personnel Mrs. Asha Kanodia

Mrs. Priyadarshini Kanodia

Datamatics Staffing Services

(E) Holding Company

Delta Infosolutions Private Limited

8. The Company had provided Working Capital Loan of Euro 100,000 to its subsidiary Datamatics Technologies GmbH at a interest rate of 1% p.a. above the LIBOR rate, and of Rs. 123,024,769 to its subsidiary Datamatics Software Services Limited at a interest rate of 8% p.a.

9. Employee Stock Option Scheme (ESOP):

The Company has two ESOP Schemes in operation. They are:

A) General Employees Stock Option Plan, 2005:

Under General Employee Stock Option Plan, 2005, 238,000 options were granted during the financial year 2006-07 and all vesting period were falling till 31.03.10. Originally granted shares were revised to 57,000 (P.Y. 116,800) shares due to conditions which restrict the entitlement to the employees. Out of the shares vested, Nil shares (P.Y. Nil) were exercised and allotted.

B) Key Employees Stock Option Plan, 2006:

Under the Key Employees Stock Option Plan, 2006, 180,000 options were granted during the financial year 2006-07 and all vesting period were falling till 31.03.10. Out of the shares vested, 35,000 shares (P.Y. 47,500) were exercised and allotted in the current year. The Scheme has ceased to be in opeartion in the current year.

Accordingly equity share capital is Rs. 294,746,685 (58,949,337 shares).

10. During the year, the company invested in 8% Non Cumulative Redeemable Preference Share capital of USD 1,200,000 in Datamatics Global Technologies Limited, incorporated in Mauritius. The said shares are redeemable at the option of the Company.

11. During the year, Datamatics Global Technologies AG [wholly owned subsidiary of the Company in Switzerland] acquired the BSS Accelerators Programs from Devoteam Danet GmbH, a German IT consulting and Services Company. The solution automates individual business processes for telecommunications operators and utility organizations such as integrated service delivery, billing and settlement, mediation and output management.

12. Companys two wholly owned subsidiaries in the US, namely Datamatics Infotech Inc and Datamatics America Inc merged with and into Datamatics Technologies Inc. [wholly owned subsidiary of the Company in the US] with effect from April 01, 2009. The name of Datamatics Technologies Inc. was subsequently changed to Datamatics Global Services Inc.

13. Portfolio Management services are provided by the Portfolio Manager – Reliance Capital Asset Management Ltd (RCAML) registered with SEBI vide registration No.INP000000423. The portfolio Manager is engaged in investing funds in accordance with SEBI (Portfolio Managers) Regulations, 1993 of its client – Datamatics Global Services Ltd. in Securities and providing portfolio management services to its clients.

RCAML has been appointed as the Portfolio Manager for managing the investments of its funds on a discreationary basis to avail of investment advisory and portfolio management services for the purpose of investment to be made in securities. RCAML also holds the Power of Attorney to hold investments in its name for investments made on behalf of company. Investments made by RCAML under the Portfolio Management Services are made in a pool account and therefore are not held in the name of the company.

14. The Company has Rs. 139,592,553 (P.Y. 123,521,020) as outstanding Loans and Advances (Refer note 24 below) and Rs. 731,278,219 (P.Y. 713,934,964) as investment in six of its 100% Subsidiaries at the year end. The net worth of these subsidiaries has declined. The Company has assured Financial Support. These investments are for long term and are of strategic nature. As the management is confident of turning around the subsidiaries in the near future provision for dimuniton in the value, if at all required, is not made.

15. The Company has not received any intimation from the suppliers regarding status under the Micro, Small and Medium Enterprises Development Act, 2006 and hence disclosure regarding:

a) Principal amount due and the interest due thereon outstanding to suppliers as at the end of the accounting year ;

b) Interest paid during the year;

c) Interest due and payable on delayed payments at the end of the accounting year;

d) Interest accrued and unpaid at the end of the accounting year, has not been provided.

16. Prior period comparative:

Previous year figures have been appropriately reclassifed/recast to confirm to the current years presentations.

17. Figures are rounded off to the nearest of rupee.

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