Cyient Limited — Annual Report 2019

Apr 25, 2019

CYIC:NT

25 April 2019

The BSE Ltd PJ Towers 25th Floor, Dalal Street Mumbai-400 001 Scrip Code: 532175

The National Stock Exchange of India Ltd Exchange Plaza, Bandra-Kurla Complex Bandra (E) Mumbai - 400 051 Scrip Code: CYIENT

•

Dear Sir,

Sub. Corrigendum - Note 4(b) of Audited Financial Results for the Q arter and year ended 31 March 2019.

Note 4(b) should be read as follows

'(b) The Board of Directors at their meeting held on April 25, 2019 recommended final dividend of ~ 9 per share on face value of ~ 5 each, aggregating t 1,193 Mn including dividend distribution tax'.

This is for your information and records.

Thanking you

Yours faithfully, For Cyient Limited

NJC~P--- N. Ravi Kumar

Dy. Company Secretary

Cyient Ltd. 4th Floor, A W,ing, 11 Software Units Layout, Madhapur Hyderabad -500 081 India

CIN:L72200 G1991PLC013134 www .cyien .. corn Company.sf:cretary@cyient.com T +9140 67641000 F +91 40 2 11 0352

CYIENT LIMITED (CIN No.: L72200TG1991PLC013134)

Regd office: 4th Floor, "A" Wing, Plot No. 11, Software Units Layout, Infocity, Madhapur, Hyderabad - 500 081, India

Statement of Consolidated and Standalone Audited Financial Results for the Quarter and Year Ended March 31, 2019

											(7 in Millions)
			Quarter Ended	Consolidated results	Year Ended			Quarter Ended	Standalone results		Year Ended
SI. No	Particulars	$31-Mar-19$	31-Dec-18	$31-Mar-18$	$31-Mar-19$	$31$ -Mar-18	31-Mar-19	31-Dec-18	$31$ -Mar-18	$31 - Mar - 19$	$31$ -Mar-18
		Audited		Audited			Audited		Audited
		(refer note 16)	Unaudited	(refer note 16)	Audited	Audited	(refer note 16)	Unaudited	(refer note 16)	Audited	Audited
1	Income
	[a] Revenue from operations	11,629	11,877	10,618	46,175	39,175	4,104	4,130	3,783	16,149	14,397
	(b) Other income (refer note 8)	789	(187)	439	1,340	1,519	548	(171)	325	1,621	1,923
	Total income	12,418	11,690	11,057	47,515	40,694	4,652	3,959	4,108	17,770	16,320
$\mathbf{z}$	Expenses
	(a) Employee benefits expense	6,411	6,482	5.725	25.374	21,877	1.915	1,903	1.698	7,546	6,758
	(b) Cost of materials consumed	619	1,088	1.102	3,936	3,272	22	TY.
	(c) Purchases of stock-in-trade	B 2	21		108			12	÷.	s.
	(d) Changes in inventories of finished goods, stock-in-trade and work-in-progress.	265	(8)	(39)	141	(201)		$\sim$	m.	$\sim$
	(e) Excise duty (refer note 12)	F		$\tilde{\mathcal{M}}$	G.	36	FE.	53.	$\pm$ )	To 1	$\sim$
	(f) Finance costs	83	85	-57	326	204		$\overline{2}$	-3	11	6
	(g) Depreciation and amortisation expense	261	280	257	1,114	1,052	129	122	123	509	508
	(h) Other expenses.	2,581	4,552	2.410	10,288	8,837	999	1.040	975	4,292	1,891
	Total expenses	10,307	10,500	9,512	41,287	35,077	3,046	3,067	2,799	12,358	11,163
$\overline{\mathbf{3}}$	Profit before share of profit/(loss) from associate & joint venture, exceptional item and tax (1-2)	2,111	1,190	1,545	6,228	5,617	1,606	892	1,309	5,412	5,157
	Share of profit/(loss) from associate & joint venture (refer note 7)	$\mathbb{Z}$		$\mathbb{Z}$	$\mathcal{S}$	(156)
5		2,113	1,191	1,547	6,233	5.461	1,606	892	1.309	5,412	5,157
	Profit before exceptional item and tax (3+4)Exceptional item (refer note 6)	35			35						(103)
6						50
$\overline{z}$	Profit before tax (5-6)	2,078	1,191	1,547	6,198	5,411	1,606	892	1,309	5,412	5,260
8	Tax expense
	(a) Current tax	373	292	303	1,512	1,493	348	195	323	1,179	1,285
	(b) Deferred tax	(55)	(26)	32	(85)	(113)	(105)	(40)	(12)	(174)	(43)
	Total tax expense	318	266	335	1,427	1,380	243	155	311	1,005	1,242
9	Net Profit for the period (7-8)	1,760	925	1,212	4,771	4,031	1,363	737	998	4,407	4,018
	Attributable to:
	Shareholders of the Company	1,766	923	1,184	4,785	4.054	1,363	737	998	4,407	4,018
	Non-Controlling interest	(6)	坚	28	(14)	(23)
10	Other comprehensive income
	Items that will not be reclassified subsequently to statement of profit and loss
	(a) Remeasurements of the net defined benefit liability	(24)	(35)	(7)	(70)	(7)	(20)	(38)	(1)	(65)	(1)
	(b) Equity instruments through other comprehensive income (refer note 11)	з	(6)	4	14	166				$\overline{2}$
	(c) Income tax relating to items that will not be reclassified to statement of profit and loss	5	10	$\mathcal{X}$	14	(48)	$\overline{5}$	9		16
	Items that will be reclassified subsequently to statement of profit and loss
	(a) Exchange differences in translating the financial statements of foreign operations	(73)	(236)	183	67	326.
	(b) Effective portion of gain/(loss) on designated portion of hedging instruments
	In a cash flow hedge	197	640	(179)	467	(543)	198	641	(181)	468	(545)
	(c) Income tax relating to items that will be reclassified to statement of profit and loss	(70)	[224]	61	(164)	187	[70]	[224]	63	(164)	189
		38	147	63	328	81	113	388	(119)	257	(357)
	Attributable to:
	Shareholders of the Company	38	147	64	329	82	113	388	(119)	257	(357)
	Non-controlling interests			(1)	(1)	(1)
11	Total comprehensive income (9+10)	1,798	1,072	1,275	5,099	4,112	1,476	1,125	879	4,664	3,661
	Attributable to:
	Shareholders of the Company	1,804	1,070	1,248	5,114	4,136	1,476	1,125	879	4,664	3,661
	Non-controlling interests	(6)		27	(15)	(24)					$\alpha$
12	Paid up equity share capital [Face Value of & per state Meser note 5]				552	563				552	563
13	Other equity				25,089	22,876				21,813	20,051
14
	Earnings Per Share [Face Value of ₹ 5 per shareCHARTERED$\omega$(a) Basic (in ₹)	15.72			42.43		12.13	6.52	8.86	39.07	35.69
	$\circ$ACCOUNTANTS(b) Diluted (in ₹)	15.70	8.16	10.51		36.0035.85	12.11	6.51	8.83	39.01	35.54
	$\sim$EDS for the american receiving a not around car		8.14	10,46	42:36						$(D$ aga $t$ of $5$ )

Parameter a

$-$

Balance Sheet:	Consolidated			(₹ in Millions)
	As at		StandaloneAs at
Particulars	$31-Mar-19$	$31$ -Mar-18	31-Mar-19	31-Mar-18
	Audited	Audited	Audited	Audited
ASSETS
Non-current assets
Property, plant and equipment	3,530	3,220	2,460	2,252
Capital work-in-progress	300	213	287	213
Goodwill	5,257	3,549	$\overline{\phantom{a}}$
Intangible assets	993	1,206	204	292
Intangible assets under development	740	302	468	251
Financial assets
(a) Investments	267	298	5,101	4,639
$(b)$ Loans			491	127
(c) Other financial assets	316	270	197	193
Deferred tax assets (net)	294	321	194	167
Income tax assets (net)	716	755	320	392
Other non-current assets	626	736	462	507
Total non-current assets	13,039	10,870	10,184	9,033
Current assets			影
InventoriesFinancial assets	1,833	1,312
(a) investments	278	1,130	278	1,130
(b) Trade receivables(c) Cash and cash equivalents	8,137	6,913	5,079	4,151
	9,072	9,603	6,998	7,200
(d) Other bank balances	633	204	129	66
$(e)$ Loans			320	267
(f) Other financial assetsOther current assets	4,226	3,384	1,805	1,628
Total current assets	1,674	910	1,008	536
	25,853	23,456	15,617	14,978
Total assets	38,892	34,326	25,801	24,011
EQUITY AND LIABILITIES
Equity
Equity share capital	552	563	552	563
Other equity	25,089	22,876	21,813	20,051
Equity attributable to Shareholders of the Company	25,641	23,439	22,365	20,614
Non-controlling interests	(19)	$\mathbf{3}$
Total Equity	25,622	23,442	22,365	20,614
Non-current liabilities
Financial Liabilities
(a) Borrowings	1,116	630	é.
(b) Other financial liabilities	697	353	W.
Provisions	1,137	878	863	701
Deferred tax habilities [net]	405	356
Income tax liabilities (net)	20	20	ž)
Other non-current liabilities		26	ž
Total Non-current liabilities	3,375	2,263	863	701
Current liabilities
Financial liabilities
(a) Borrowings	2,137	1,780
(b) Trade payables
(i) total outstanding dues of micro enterprises and small enterprises	-13	1	1	$\mathbf{1}$
(ii) total outstanding dues of creditors other than micro enterprises and small enterprises	3,699	3,812	1,962	1,932
(c) Other financial liabilities	874	1,256	137	173
ncome tax liabilities (net)	424	316	48	44
HASKINProvisions	289	229	97	71
Other current liabilitiesQ,	2,459	1,227	328	475
Total current liabilities	9,895	8,621	2,573	2,696
CHARTERED$\omega$
$\circ$Total liabilitiesACCOUNTANTS ITTTotal equity and liabilities	13,270	10,884	3,436	3,397
	38,892	34,326	25,801	24,011$(D_{2000} 2 \rho F5)$

(Page 2 of 5)

NOTES :

• 1. The above consolidated and standalone audited financial results of Cyient Limited ("the Company") were reviewed and recommended by the Audit Committee at their meeting held 011 Apnl 2'1.2019 and approved by the Board of Directors at their meeting held on Apnl 25, 2019. The Statutory Auditors have expressed an unmodified audit opinion on the consolidated and standalone financial results.
• 1. The consolidated and standalone financial results of the Company have been prepared in accordance with the Indian Accounung Standards ('IND AS') prescribed under Secnon 133 of the Companies Act. 2013 ("the Act") read with relevant rules issued thereunder, other accounting principles generally accepted in India and guidelines issued by the Securities and Exchange Board of India ("SEBI").
• 1. The consolidated financial results include the results of the following group companies

IName of the Comoanv	Countrv of lncornoration	Nature ofrelationship	% Holdinl!
Cyient Inc. (refer note 10 (g))	USA	Subsidiary	100%
Cyient Canada Inc.	Canada	Step down subsidiary	100%
Cyient Defense Services Inc.	USA	SLep down subsidiary	100%
B&F Design Inc. (refer note 10 (al)	USA	Step down subsidiary	100%
New Technology Precision Machmmg Co Inc.	USA	Step down subsidiary	100%1
Certon Software Inc. (refer note 10 [g))	USA	Step down subsidiary	100%
Certon Instruments Inc. (refer note l O (g)l	USA	Step down subsidiary	100%
Cy1enl In1ght Private Limited [1elei nob! JU (c)J	India	~ubs1d1ary	100'10
Cy1e11t Insights LLC (refer note 10 (c))	USA	Step down subsidiary	100%
Cyient Europe Limited	UK	Subsidiary	100%
Cyicnt Benelux BV	Netherlands	SLep down subsidiary	100%
Cyient Schweiz GmbH	Switzerland	Step down subsidiary	100%
Cyient SRO	Czech Republic	Step down subsidiary	100%
'AnSem NV (refer note 10 (b)l	Belgium	Step down subsidiary	100%
AnSem B.V. (refer note 10 [b)l	Netherlands	Step down subsidiar)	100%
Cy1entGmbM	Germany	Subsidiary	100%
Cyient AB	Sweden	Step down subsidiar}	100%
Cyient KK (refer note 10 (f)l	Japan	Subsidiary	100°,t
Cyient DLM Private Limited (refer note 10 (h))	India	Subsidiary	100'*
Cy1ent Singapore Private Limited	Singapore	Subsidiary	100%
Cy1ent Au~traha Ply L11111ted (refer note 10 (I))	Australia	Subs1d1ary	100",(
Cy1ent Israel India Limited (refer note 10 (d))	Israel	Subsidiary	100'¼
CyienL Solutions and Systems Private Limited (refer note 10 (c))	India	Subsidiary	51%
Infotech HAL Limited	India	Joint Ve n__tll_IL_	SO%

1. (a) The Board of Directors at their meeting held on October 17, 2018 declared an interim dividend of 16 per share on face value or 1'. S each. aggregating '{ 818 Mn including dividend distnbuuon tax (b) The Board of Directors at their meeting held on April 25, 2019 recommended fi11al dividend of ~ 9 per share on face value of ~ 5 each, aggregating t 1,193 Mn including dividend distribution tax.

2. T:,. Be,, ·a cJI Dircur .,s, a', its ''lcd,nb !,' r, Ju'} !11. 20 I<) r11r• ,v,•c\ B·iyhat ,r rlir r:001p~ny' r, illy 1i<'-11r equitv ~har('S r fa,·e •"iue of f i; •'ach from the elir,iblr quitv sharholders of the Companv other than promoters, promoter group and persons who are in control of the company, al a price not exceeding'{ 700 per equity share (Maximum Buyback price), for an aggregate amount not exceeding '{ 2,000 Mn (Maximum Buyback s1ze), payable 111 cash from the open market route through the stock exchange mechanism under the Buyback Regulations and the Companies Act The fluyback shall not exceed 2,000 Mn (Maximum Buyback size) excluding the transaction charges. The Maximum Buyback Size represents 9.79% of aggregate of the Company's paid up equity capital and free reserves based on Lhe audited financial staLements of the Company as at March 31, 2018, which is in compliance with the maximum penmssible limit of 10% of the total paid up equity share capital and free reserves in accordance w1tl1 Section 68(2) of Companies Act, 2013.

As of March 31, 2019, the scheme of Buyback was open, the Company bought back 2,570,518 equity shares as or that date. resulting in total cash consideration of~ 1,695 Mn (including t 27 Mn towards transaction costs of Buyback). Out of 2,570,518 equity shares bought back, the Company extinguished 1,930,102 shares as at March 31, 2019 and the remammg were extinguished rn the month of Apnl 2019 as per the records of the depositories. In line with Uic requirement of Companies Act, 2013, an amount oft I,6B2 Mn have been utilised from the securities premium accounL for the Buyback. Further, capital redemption reserve off 13 Mn, representing the nominal value of shares bought back, has been created in accordance with Section 69 of the Companies Act, 2013.

1. (a) On Febrnary 15. 2019, Cy1em Insights LLC. wholly owned subsidiary of Cyient Insights Private Limited was dissolved and the resultant net impact on 35 Mn was re · din the consobdated financia' results a.s an 'exceptional item'. ~ \ l / A

(b) Dunng the previous year, the Company divested its entire 49% sharehod111 " iate company. lnfotech Aerospace Services Inc .. ("IASI"), Puerto Rico. ~ y sultant loss of~ SO Mn in the consolidated financial results and gain oH 103 Mn in the standalone fill' ·iM'. disclosed as an 'exceptional item'. l :: rO p··_x vv·-·7:.:_ 'II ( Page 3 of s:

• 1. During the previous year, the Company recognised a loss oft 160 Mn as 'share of loss from associate' incurred up to the date of divestment in lnforech Aerospace Services Inc., ("!MW) due to hurricane m Puerto Rico.
• 1. Other income:

(a) Other income forming part of the consolidated financial results for the qua11er and year ended March 31, 2019 includes foreign exchange gain (net) oft 105 Mn (quarter ended December 31, 2018 loss (net) oft 352 Mn) a nd loss (net) oft 94 Mn respect:ve ly, (foreign exchange gain (net) oft J 09 Mn and t 664 Mn for the quarter and year ended March 31, 2018 respectively).

(b) Other income form mg part of the standalone financial results for the quarter and year ended March 31, 2019 includes foreign exchange gain (net) oft 50 Mn (quarter ended December 31, 2018 loss (net) of t 344 Mn) and loss (net) oft 88 Mn respectively, (foreign exchange gain (net) oft 78 Mn and t 639 Mn for the quarter and year ended March 31, 2018 respectwely).

(c) During the quarter ended September 30, 2018, the Company received a dividend oft 457 Mn from Cyient Australia Pty Limited, its wholly owned subsidiary and the same is recognised as 'other income' in the standalone financial results.

(d) During the previous year, the Company received t 589 Mn from lnfotech Aerospace Services Inc. towards dividend, which is recognised as 'other income' in the standalone financial results.

• 1. During the quarter and year ended March 31, 2019, the Company allotted Nil and 448,689 equity shares (7,025 and 29,662 equity shares for the quarter and year ended March 31, 2018) oft 5/- ead1 respectively. consequent to the exercise of the stock options and restncted stock units by the associates of the Company under the Associate Stock Option Plan and Restricted Stock Unit Scheme.
• 1. The consolidated financial results for the year ended March 31. 2019 and year e nded March 31, 2018 are not comparable for the reasons stated in notes lO(a) to IO(h):

(aJ Ly1tmt Derense Service~ Im .. , a step uown SJhsailary ol the ..Ompany, had a,qu1red 100% equity 111 B&r J>es1gn In~ .• on january 24, 2011:1 anu ,011soli1latcd the sam~ with cllcct II om february 01, 201b.

(b) The Company through its wholly owned subsidiary, Cyient Europe Limited, acquired 100% of equity shares of AnSem NV (and its wholly owned subsidiary AnSem 8.V.) on April 26, 2018 and consolidated the same with effect from May 01, 2018 as the transacnons between the period April 26, 2018 and April 30, 2018 were not material.

(c) Cyient Insights Private Limited became a wholly owned subsidiary of the Company. consequent to acquisition of the balance 49% of shareholding on May 14, 2018. Cyient: Insights LLC, wholly owned subsidiary of Cyient Insights Private Limited has been dissolved on February J 5, 2019.

(d) The Company 111corporated wholly owned subsidiaries. Cyient Israel India Limited in Israel on July 18, 2016 and Cyient Engineering (Beijing) Limited in China on March 25, 2016. During the previous year, Cy1ent Israel India Limited had commenced commercial operations.

(e) On March 26, 2018, the Company acquired the balance 51% share capital in Cyient Solutions and Systems Private Limited ("CSSPL"J and accordingly consolidated it with effect from tha t date as a wholly owned subs1d1ary. On April 11, 2018, CSSPL entered 111to a share purchase agreement with Bluebird Aero Systems Limited ("Bluebird"), wherein Bluebird acquired 49% shareholding in CSSPI.. The Compan) cont111ues to consolidate CSSPL as a subsidiary.

(fl During the quarter ended September 30 2018, Cyient KK increased its paid-up capital from t 5 Mn to '{ 39 Mn. The additional capital was infused by Cytent Australia Pty Limited Consequently. CyientAustralia Pty Limited holds 86% of shareholding in Cyient KK. Japan and Cyient Limited holds the remaining 14% shareholding.

(g) Effective November 01, 2018, Certon Software Inc. has been merged with its holding company, Cy1ent lnc .. Certon Instruments Inc., a wholly owned subsidiary of Certon Software Inc., was dissolved during the period, prior to the said merger.

(h) The Company acquired the remaining 26% shareholding in its subsidiary, Cyient OLM Private Limited on January 22, 2019 for a consideration oft 425 Mn in accordance with the investment agreement dated January 02, 2015 and amendments thereon. Difference in the value of gross obligation liability as on March 31, 2018 and the date of settlement amounted to'{ 135 Mn and is recognised as 'other mcome' in the consolidated financial results. ·

• 1. During FY 2016-17, Cyient Inc. had invested an amount oft 84 Mn in VIOS Medical lnc. ("VJOS"). In the previous year, the entire shareholdmg of VIOS was acquired by Murata Manufaeturing Co. Lnnited ("Murata"), Japan as part of a plan of merger. Cyient Inc. received 28,093 shares of Murata on October 13, 2017 as consideration in lieu of its shares held in VIOS. During the year, Cyient Inc., sold 24,375 shares for a consideration oft 236 Mn and the consequent gain oft 109 Mn, net of tax oft 45 Mn, has been transferred from 'other comprehensive income' to 'retained earnings'.
• 1. Effective July 01, 2017, revenue from operaLions is presented net of Laxes and duties, on implementation of Goods and Services Tax Act. Hence. the results of the year ended March 31, 2019 and March 31, 2018 are not comparable.
• 1. On October 10, 2018, Cy1ent Urban Micro Skill Centre Foundation, has been incorporated under Section 8 of the Companies Act, 2013, wholly owned by the Company, to further the CSR activities of the Company. The Company is yet to infuse share capital.
• 1. Effective Apnl O 1, 2018, the Company has adopted Ind AS 115 'Revenue from Contracts with Customers'. The application of Ind AS 115 did not have any material impact on the standalone and consolidated financial results of the Company and the Group respectively. .~ ~~\ LI 1J

(Page 4 of 5:

1. SEGMENT REPORTING:

$(7 in Millions)$

31-Mar-1931-Dec-18$31-Mar-18$31-Mar-19$31$ -Mar-18ParticularsAuditedAuditedUnauditedAuditedAudited(refer note 16)(refer note 16)Segment revenueUtilities, Geospatial and Communications (UGC)4,0844,1993,90116,26314,594Manufacturing and Industrial (MI)6,2636,1995,30024,32920,599Design Led Manufacturing (DLM)1,2911,4791,4175.5923,982Total11,63811,87710,61846,18439,175Less : Inter segment revenue11,62911,87710,61846,17539,175Utilities, Geospatial and Communications (UGC)5837066692,3362,514Manufacturing and Industrial (MI)1,0819856943,8472,886Design Led Manufacturing (DLM)10589718360Total1,6741,7491,4606,3665,460Less:Depreciation and amortisation expense2612802571,1141,052838557204326Other unallocable income (net of unallocable expenditure)746(194)3991,2671,363Share of profit / (loss) from associate & joint venture(156)2,0781,1911,5476,1985,411As at31-Mar-1931-Dec-1831-Mar-18AuditedUnauditedAuditedSegment assetsDesign Led Manufacturing (DLM)7,6205,9147,476Utilities, Geospatial and Communications (UGC) and Manufacturing and Industrial (MI)21,87021,49919,256Unallocable9,40211,0359,156Total Segment Assets38,89234,32640,010Segment liabilitiesDesign Led Manufacturing (DLM)2,7592,1463,413Utilities, Geospatial and Communications (UGC) and Manufacturing and Industrial (MI)5,9476,3645,196Unallocable4,5644,7493,542		Quarter Ended	Year Ended
	Revenue from operations
	Segment results
	Finance costs
	Add:
	Profit before tax
	Capital employed (Segment assets - Segment liabilities) (See notes below)
	Total Segment Liabilities		13,270	14.526	10,884

Notes:

i. Segment information is presented for the "consolidated financial results" as permitted under the Ind AS 108 - 'Operating Segments'.

ii. Utilities, Geospatial and Communications comprise as separate business units within the UGC segment. Aerospace & Defense, Transportation, Semiconductor, Medical & Healthcare and Industrial & Energy and Natural Resources comprise as separate business units within the MI segment.

iii. Assets used in the Company's business or liabilities contracted have not been identified to its UGC and MI segments separately, as the assets and support services are used interchangeably between these segments. The identifiable assets and liabilities pertaining to the DLM segment have been disclosed separately.

1. The figures for the current quarter and quarter ended March 31, 2018 are the balancing figures between the audited figures in respect of the full financial year ended March 31, 2019 and March 31, 2018, respectively and the published year to date figures up to third quarter ended December 31, 2018 and December 31, 2017, respectively.

Place: Hyderabad Date: April 25, 2019

CRIENT LIMITED KRISHNA BODANAPU Managing Director and CEO