Nucleus Software Exports Ltd - Proxy Solicitation & Information Statement 2019

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Date: 07[th] June 2019

To,

The Listing Department The National Stock Exchange of India Ltd. Exchange Plaza, Bandra-Kurla Complex Bandra (E) Mumbai-400 051. Fax Nos. 022-26598236/237/238	The Listing Department Bombay Stock Exchange Limited Phiroze Jeejeebhoy Towers, 25thFloor, Dalal Street Mumbai-400 001 Fax No. 022-22722061/41/39

Sub : Submission under Regulation 30 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015.

Dear Sirs,

We are enclosing herewith the following with regard to the meeting of the Equity Shareholders of Nucleus Software Exports Limited, as directed by the National Company Law Tribunal, Principal Bench at New Delhi by an order dated 12[th] April 2019 (as amended by order dated 01[st] May 2019) under Sections 230 to 232 of the Companies Act, 2013, which shall be held on Monday, 08[th] July 2019 at 02:00 PM at PHD Chambers of Commerce and Industry, PHD House, 4/2, August Kranti Marg, Siri Institutional Area, Block A, NIPCCD Campus, Hauz Khas, New Delhi- 110016:

a. Copy of the Notice, Explanatory Statement and Scheme of Amalgamation for the merger of its wholly owned subsidiaries, Virstra I-Technology Services Limited (“ Transferor Company-1 ”) and Avon Mobility Solutions Private Limited (“ Transferor Company-2 ”) (hereinafter together referred to as “ Transferor Companies ”), into and with Nucleus Software Exports Limited (“ Transferee Company ”) and their respective shareholders and creditors;
b. Copy of the Postal Ballot form with instructions.

Corporate Office Registered Office Nucleus Software Exports Ltd. 33-35 Thyagraj Nagar Mkt, New Delhi - 110003 A-39, Sector 62, Noida - 201307 CIN : L74899DL1989PLC034594

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The aforesaid documents have been sent to all eligible shareholders and are also available on the website of the Company at www.nucleussoftware.com.

This is for your information and records.

Thank You.

Yours Sincerely,

For Nucleus Software Exports Limited

poonam bhasin Digitally signed by poonam bhasin DN: c=IN, o=Personal, cn=poonam bhasin, serialNumber=0fbaf9965dbdfd085307e567831654d401dced3f8cd68e04f046b39b2b532bba, postalCode=250002, 2.5.4.20=8d7ff276f293d8a3217e284a42f6e71bbc29c9254e2e9a20dbc2dae71c7eceb3, st=Uttar pradesh Date: 2019.06.07 17:29:54 +05'30'

Poonam Bhasin Company Secretary

Encl :

As above.

Corporate Office Nucleus Software Exports Ltd. A-39, Sector 62, Noida - 201307

Registered Office 33-35 Thyagraj Nagar Mkt, New Delhi - 110003 CIN : L74899DL1989PLC034594

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NUCLEUS SOFTWARE EXPORTS LIMITED

CIN – L74899DL1989PLC034594

Registered office: 33-35, Thyagraj Nagar Market, New Delhi- 110003 Phone: +91-120-4031400 | Fax: +91-120-4031672 E-mail: [email protected] | Website: www.nucleussoftware.com

NOTICE OF THE MEETING OF THE EQUITY SHAREHOLDERS OF NUCLEUS SOFTWARE EXPORTS LIMITED

(Convened pursuant to order dated April 12, 2019 (as amended by order dated May 1, 2019) by the Hon’ble National Company Law Tribunal, Principal Bench at New Delhi (“ NCLT ”)

DETAILS OF NCLT CONVENED MEETING OF EQUITY SHAREHOLDERS

Day	Monday
Date	July 8, 2019
Time	2.00 PM onwards
Venue	PHD Chambers of Commerce, PHD House, 4/2, August Krant Marg, Siri Insttutonal Area, Block A, NIPCCD Campus, Hauz Khas, New Delhi- 110016.

POSTAL BALLOT AND REMOTE E-VOTING PERIOD FOR NCLT CONVENED MEETING OF EQUITY SHAREHOLDERS

Postal Ballot / REMotE E-voting	Postal Ballot / REMotE E-voting
Commencing on	Saturday, June 8, 2019, at 9:00 AM
Ending on	Sunday, July 7, 2019 at 5:00 PM

INDEX

VOLUME 1

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S. Particulars Page. No.
No.
1. 4
Notice of meeting of the equity shareholders in Form No. CAA. 2 of Nucleus Software
Exports Limited to be convened as per the directions of the Hon’ble National
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S. No.	Partculars	Page. No.
1.	Notce of meetng of the equity shareholders in Form No. CAA. 2 of Nucleus Sofware Exports Limited to be convened as per the directons of the Hon’ble Natonal	4
	Company Law Tribunal, Principal Bench at New Delhi
2.	Explanatory Statement under Secton 230 to 232 read with Rule 6(3) of the Companies (Compromises, Arrangements and Amalgamatons) Rules, 2016 and other applicable provisions, if any, of the Companies Act, 2013	9
3.	Atendance Slip	19
4.	ProxyForm	20
5.	Route Map to the venue of the meetng (Refer the last Page)
6.	Postal Ballot Form and postage-prepaid self-addressed Business Reply Envelope	In loose leaf form

VOLUME 2

S. No.	Partculars	Page. No.
1.	Scheme of Amalgamaton amongst (i) Virstra I-Technology Services Limited; (ii) Avon Mobility Solutons Private Limited; and (iii) Nucleus Sofware Exports Limited and their respectve shareholders and creditors	23
2.	Report adopted by the Board of Directors of Nucleus Sofware Exports Limited pursuant to theprovisions of Secton 232(2)(c)of the Companies Act, 2013	40
3.	Audited fnancial statements of Nucleus Sofware Exports Limited dated December 31, 2018	42
4.	Audited fnancial statements of Virstra I-Technology Services Limited dated March 31, 2018	86
5.	Unaudited fnancial statements of Virstra I-Technology Services Limited dated December 31, 2018	118
6.	Audited fnancial statements of Avon Mobility Solutons Private Limited dated March 31, 2018	136
7.	Unaudited fnancial statements of Avon Mobility Solutons Private Limited dated December 31, 2018	164
8.	Leter dated March 01, 2019 sent by Nucleus Sofware Exports Limited intmatng Bombay Stock Exchange and Natonal Stock Exchange of India Ltd. regarding the proposed Scheme	172
9.	Certfcate from Chartered Accountant dated March 20, 2019 regarding no requirement of a valuaton report, pursuant to Paragraph 7 of the Circular bearing no. CFD/DIL3/CIR/2017/21 dated March 10, 2017 issued by Securites and Exchange Board of India	175
10.	Certfcate(s) from the Statutory Auditors confrming the accountng standards as prescribed under Secton 133 of the Companies Act, 2013	179
11.	Confrmaton regarding fling of draf Scheme of Amalgamaton with the Registrar of Companies, NCT of Delhi and Haryana onMay 10,2019vide Challan No. H58915968 and copyof Form GNL-1 evidencingsuch fling	183

VOLUME - 1

Notice

FORM CAA. 2

BEFORE THE NATIONAL COMPANY LAW TRIBUNAL PRINCIPAL BENCH, NEW DELHI COMPANY APPLICATION (CAA) NO. 56/PB/2019

in tHE MattER oF:

The Companies Act, 2013.

anD in tHE MattER oF:

Application under Sections 230 to 232 of the Companies Act, 2013.

anD in tHE MattER oF:

VIRSTRA I-TECHNOLOGY SERVICES LIMITED , a company incorporated under the Companies Act, 1956 having its registered office at 33-35 Thyagraj Nagar Market, New Delhi – 110003, India within the aforesaid jurisdiction.

…… applicant transferor Company-1

anD in tHE MattER oF:

AVON MOBILITY SOLUTIONS PRIVATE LIMITED , a company incorporated under the Companies Act, 1956 having its registered office at 33-35 Thyagraj Nagar Market, New Delhi – 110003, India within the aforesaid jurisdiction.

…… applicant transferor Company-2

anD in tHE MattER oF:

NUCLEUS SOFTWARE EXPORTS LIMITED , a company incorporated under the Companies Act, 1956 having its registered office at 33-35 Thyagraj Nagar Market, New Delhi – 110003, India within the aforesaid jurisdiction.

….. applicant transferee Company

NOTICE CONVENING THE MEETING OF EQUITY SHAREHOLDERS OF NUCLEUS SOFTWARE EXPORTS LIMITED PURSUANT TO THE ORDER DATED 12[TH] aPRil 2019 (as aMEnDED BY oRDER DatED 01[ST] MaY 2019) PassED BY tHE Hon’BlE national CoMPanY laW tRiBUnal, PRINCIPAL BENCH AT NEW DELHI

To

The Equity Shareholders of Nucleus Software Exports Limited (“ transferee Company ”)

NOTICE is hereby given that by an order dated April 12, 2019 (as amended by order dated May 01, 2019) (the “ Order ”) in the abovementioned Company Application (CAA) No. 56/PB/2019, the Hon’ble National Company Law Tribunal, Principal Bench at New Delhi (“ NCLT ”) has directed a meeting to be held of the Equity Shareholders of the Transferee Company (“ nClt Convened Meeting ”), for the purpose of considering, and if thought fit, approving with or without modification(s), the Scheme of Amalgamation (“ Scheme ”) of wholly owned subsidiaries- Virstra I-Technology Services Limited (“ transferor Company-1 ”) and Avon Mobility Solutions Private Limited (“ transferor Company-2 ”) into and with the parent company- Nucleus Software Exports Limited (“ transferee Company ”) and their respective Shareholders and Creditors.

In pursuance of the said Order and as directed therein, further notice is hereby given that a meeting of the Equity Shareholders of the Transferee Company will be held to transact the special business on 08[th] day of July, 2019 at 02.00 PM at PHD Chambers of Commerce, PHD House, 4/2, August Kranti Marg, Siri Institutional Area, Block A, NIPCCD Campus, Hauz Khas, New Delhi- 110016. The said Equity Shareholders are requested to attend, to consider and if thought fit, approve with or without modification(s), the resolution set out below in this Notice under Sections 230 to 232 and other applicable provisions, if any of the Companies Act, 2013 (“ Companies Act ”) read with rules framed thereunder (including any statutory modification(s) or re- enactment(s) thereof for the time being in force).

The Board of Directors of the Transferee Company, at its meeting held on March 1, 2019 approved the above-mentioned Scheme of Amalgamation, subject to approval of the Shareholders and Unsecured Creditors of the Transferee Company, as may be required, and subject to the sanction of the Hon’ble NCLT and of such other authorities as may be necessary.

Further, Equity Shareholders are requested pursuant to Sections 108 and 110 and other applicable provisions, if any, of the Companies Act read with Companies (Compromises, Arrangements and Amalgamations) Rules, 2016 (“ CAA Rules ”) (including any statutory modification(s) or reenactment(s) thereof for the time being in force), and Regulation 44 of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (“ listing Regulations ”) read with Circular No. CFD/DIL3/CIR/2017/21 dated March 10, 2017 (“ sEBi Circular ”) read with other applicable notifications and circulars issued by Securities and Exchange Board of India (“ SEBI ”), any other applicable regulations thereto, to consider, and if thought fit, approve the arrangement proposed and embodied in the Scheme and to pass the resolution set out below in this notice through NCLT Convened Meeting or Postal Ballot or Remote E-voting.

“ RESOLVED THAT pursuant to the provisions of Section 230 to Section 232 of the Companies Act, 2013 read with the Companies (Compromises, Arrangements and Amalgamations) Rules, 2016 (including any statutory modification(s) or re-enactment thereof for the time being in force), and other applicable provisions, if any, of the Companies Act, 2013 and the provisions of the Memorandum and Articles of Association of the Company and subject to the approval of the National Company Law Tribunal, Principal Bench at New Delhi (“ NCLT ”) and subject to such other approvals, permissions and sanctions of regulatory and other authorities as may be necessary and subject to such conditions and modifications as may be prescribed or imposed by the NCLT or by any regulatory or other authorities, while granting such consents, approvals and permissions, which may be agreed to by the Board of Directors of the Company (hereinafter referred to as the “ Board ”, which term shall be deemed to mean and include one or more Committee(s) constituted/ to be constituted by the Board or any other person authorized by it to exercise its powers including the powers conferred by this Resolution), approval of equity shareholders of

Nucleus Software Exports Limited (“ Transferee Company ”) be and is hereby accorded to the Scheme of Amalgamation (“ Scheme ”) amongst (i) Virstra I-Technology Services Limited; (ii) Avon Mobility Solutions Private Limited (“ Transferor Companies ”) into and with the Transferee Company and their respective shareholders and creditors.

RESOLVED FURTHER THAT the Board be and is hereby authorized to do all such acts, deeds, matters and things, as it may, in its absolute discretion deem requisite, desirable, appropriate or necessary to give effect to this resolution and effectively implement the arrangement embodied in the Scheme and to accept such modifications, amendments, limitations and/or conditions, if any, which may be required and/ or imposed by the NCLT while sanctioning the Scheme or by any authorities under law, or as may be required for the purpose of resolving any doubts or difficulties that may arise in giving effect to the Scheme, as the Board may deem fit and proper .”

In compliance with the provisions of (i) Section 230(4) read with Sections 108 and Section 110 of the Companies Act; (ii) the CAA Rules; (iii) Rule 20, Rule 25 and other applicable provisions of the Companies (Management and Administration) Rules, 2014; (iv) Regulation 44 and other applicable provisions of the Listing Regulations; (v) SEBI Circular and (vi) Secretarial Standards on General Meetings, the Transferee Company has provided the facility to cast votes either by way of Postal Ballot or by Remote E-voting facility offered by Karvy Fintech Pvt. Ltd. The facility for voting through electronic means (Insta Poll) shall be made available at the venue of the meeting and the members attending the meeting, who have not cast their vote by Postal Ballot or Remote E-voting shall be able to vote at the meeting through “Insta Poll”. Accordingly, equity shareholders of the Transferee Company can vote either by way of (i) Postal Ballot or (ii) Remote E-voting system or (iii) Insta poll at the venue of the meeting. The shareholders may refer to Notes to this Notice for further details on Postal Ballot and Remote E-voting.

The equity shareholders who have cast their vote by Remote E-voting or through Postal Ballot prior to the meeting may also attend the meeting but shall not be entitled to cast their vote again.

Explanatory Statement pertaining to the said resolution setting out the material facts and reasons thereof under Sections 230 and 232, Section 102 of the Companies Act read with Rule 6 of the CAA Rules along with copy of the Scheme, form of proxy and other documents as indicated in the index are enclosed herewith and form part of the notice. Copies of the same can also be obtained free of cost from the registered office of the Company situated at 33-35 Thyagraj Nagar Market, New Delhi – 110003.

The Hon’ble NCLT has appointed Mr. Rajesh Gupta, Chartered Accountant as the Chairperson and Mr. Chaman Goyal, Chartered Accountant, as the Alternate Chairperson of the said meeting.

Further, as directed by the Hon’ble NCLT, Mr. Prince Chadha has been appointed as a Scrutinizer for the said meeting of the Equity Shareholders for conducting the Postal Ballot, Remote E-voting and voting by Insta-poll at the venue of the meeting in a fair and transparent manner.

The above-mentioned Scheme of Amalgamation, if approved by the Equity Shareholders at the meeting, will be subject to the subsequent approval by the Hon’ble NCLT.

Dated this 16 day of May 2019 Chandigarh

For nucleus software Exports limited

Sd/-

Name: Rajesh Gupta

(Chairperson appointed for the meeting of equity shareholders of transferee Company) Registered office of nucleus software Exports limited: 33-35 Thyagraj Nagar Market, New Delhi – 110003.

NOTES:

AN EQUITY SHAREHOLDER ENTITLED TO ATTEND AND VOTE AT THE MEETING IS ENTITLED TO APPOINT A PROXY / PROXIES TO ATTEND AND VOTE INSTEAD OF HIMSELF / HERSELF AND SUCH A PROXY / PROXIES SO APPOINTED NEED NOT BE AN EQUITY SHAREHOLDER OF THE TRANFERREE COMPANY. THE FORM OF PROXY DULY COMPLETED SHOULD, HOWEVER, BE DEPOSITED AT THE REGISTERED OFFICE OF THE TRANFERREE COMPANY SITUATED AT 33-35 THYAGRAJ NAGAR MARKET, NEW DELHI – 110003 NOT LESS THAN 48 HOURS BEFORE THE TIME FIXED FOR THE AFORESAID MEETING.
Explanatory Statement of material facts for the proposed resolution pursuant to Section 102 of the Companies Act, 2013, along with applicable rules thereunder and provisions of Sections 230 and 232 of the Companies Act, 2013 setting out material facts forms part of this Notice.
As per Section 105 of the Companies Act and rules made thereunder, a person can act as proxy on behalf of equity shareholders not exceeding 50 and holding in aggregate not more than 10% of the total share capital of the Company carrying voting rights. Further, an equity shareholder holding more than 10% of the total share capital of the Transferee Company carrying voting rights may appoint a single person as proxy and such person shall not act as proxy for any other person or shareholder.
All alterations made in the Form of Proxy should be signed/ initialed. Incomplete, unsigned, improperly or incorrectly completed proxy form may be rejected by the Scrutinizer.
Form of proxy is annexed to this Notice and can also be obtained from the registered office of the Transferee Company.

Shareholders who hold shares in dematerialized form are requested to bring their Client ID and DP ID for easy identification of attendance at the Meeting.
Shareholders are informed that in case of joint holders attending the Meeting, only such joint holder whose name stands first in the register of members of the Company / list of beneficial owners as received from National Securities Depository Limited (NSDL) / Central Depository Services (India) Limited (CDSL) (“ Depositories ”) in respect of such joint holding will be entitled to vote.
The Notice of this NCLT convened meeting is being sent to all the Equity Shareholders, by Registered /Speed Post or by courier service or by email (as may be applicable), whose names appear in the Register of Members as on May 24, 2019 i.e. cut-off date. The shareholders who have registered their e-mail IDs for receipt of documents in electronic mode will be sent the notice by e-mail only. A person who is not an equity shareholder as on cut-off date shall not be eligible to vote through any mode and treat this notice for information purposes only. The Notice shall be communicated to BSE Limited, National Stock Exchange of India Limited and shall also be displayed on the website of the Company i.e. www.nucleussofware.com.
The authorized representative of companies, trusts, societies, institutions etc., which is a registered Equity Shareholder of the Company may attend and vote at the NCLT convened meeting of Equity Shareholders’ of the Transferee Company provided a certified true copy of the resolution of the Board of Directors authorizing such representative to attend and vote at the NCLT Convened meeting of Equity Shareholders is deposited at the registered office of the Transferee Company at least 48 hours before the commencement of the meeting.
Equity Shareholders are requested to bring and hand over the enclosed Attendance Slip, duly filled and signed in accordance with their specimen signature(s) registered with the Transferee Company for admission to the meeting hall.
The voting by the Shareholders through the Postal Ballot and Remote E-voting shall commence on Saturday, June 8, 2019 at 9.00 AM (IST) and ends on Sunday, July 7, 2019 at 5.00 PM (IST) (inclusive of both the days).
An equity shareholder desiring to exercise his vote by Postal Ballot Form is requested to carefully read the instructions printed in the Postal Ballot Form. Duly completed and signed in the enclosed Postage Pre-paid Self-addressed Business envelope should reach to the Scrutinizer (Mr. Prince Chadha) on or before 05.00 PM on July 7, 2019 at #48/ Sector 41A, Chandigarh- 160036.

Any Postal Ballot Form received after such period shall be treated as if the reply from the equity shareholder has not been received.

Incomplete, unsigned, improperly or incorrectly tick marked Postal Ballot Form will be rejected.
Members who have received the notice by e-mail and who wish to vote through Postal Ballot, can download the Postal Ballot Form from the company’s website www.nucleussofware.com. In case a Member is desirous of obtaining a printed duplicate Postal Ballot Form, he or she may send an e-mail to [email protected] / [email protected]. The RTA shall forward the same along with postage prepaid addressed business reply envelope to the Member.
The vote on postal ballot cannot be exercised through proxy.
Route map and details of prominent land-mark of the venue of the meeting is provided and forms part of the Notice.
During the period beginning 24 (twenty four) hours before the time fixed for the commencement of the meeting and ending with the conclusion of the meeting, an equity shareholder would be entitled to inspect the proxies lodged at any time during the business hours of the Company, provided that not less than 3 (three) days of notice in writing is given to the Transferee Company.
As directed by the NCLT, the quorum of the Meeting of the Equity Shareholders of the Transferee Company shall be 2,500 in number. In case the quorum is not present in the Meeting at the scheduled time, then the Meeting shall be adjourned by half an hour, and thereafter, the persons present at the Meeting shall be deemed to constitute the quorum.
As directed by the NCLT, Mr. Prince Chadha, Practicing Company Secretary, has been appointed as scrutinizer for the said NCLT convened meeting of the Equity Shareholders for conducting the Postal Ballot, Remote E-voting and voting through “Insta-Poll” at the venue of the meeting in a fair and transparent manner. The Scrutinizer will after the conclusion of meeting submit its report to the NCLT appointed Chairperson of the meeting after completion of scrutiny of the Postal Ballot(s), Remote E-voting and “Insta-Poll”. Thereafter, as per Order of NCLT, the Chairperson shall report the result of the meeting to the Hon’ble Tribunal within 2 weeks from the date of holding of the above said meeting.
The documents referred to in the accompanying notice and Explanatory Statement and pursuant to applicable provisions, shall be open for inspection, without any fee, by the Equity Shareholders of Transferee Company at its registered office between 10.00 am to 5.00 pm on all working days, except Saturdays, Sundays and Public Holidays, up to 1 (one) day prior to the date of the NCLT convened meeting.
The Notice convening the aforesaid NCLT convened meeting will be published through advertisement in (i) Business Standard, in English language and (ii) Jansatta, in Hindi language.
Equity Shareholders can opt for only one mode of voting i.e. either through Remote E-voting or Postal Ballot or Insta-Poll at the venue at NCLT Convened Meeting of Equity Shareholders. In case Equity Shareholders cast their vote through postal ballot as well as Remote E-voting, then voting by means of Remote E-voting shall be considered valid and applicable for the NCLT Convened Meeting, all other means of voting shall be disregarded.
Voting rights shall be reckoned on the paid-up value of equity shares registered in the name of members as on May 24, 2019 i.e. the cut-off date.

It is clarified that voting by Postal Ballot or Remote E-Voting does not disentitle an equity shareholder as on the Cut-off date from attending the NCLT convened meeting of Equity Shareholders. It is further clarified that the Proxies can only vote on Poll at the NCLT convened meeting of Equity Shareholders and not through any other mode.

25. INSTRUCTIONS FOR E-VOTING

Voting through electronic means

In compliance with provisions of Section 108 and 110 of the Companies Act, 2013 and Rule 20 of the Companies (Management and Administration) Rules, 2014, as amended by the Companies (Management and Administration) Amendment Rules, 2015 and Regulation 44 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 the Company is pleased to provide members facility to exercise their right to vote at the meeting of the equity shareholders (“ Meeting ”), by electronic means and the business may be transacted through such voting. The facility of casting the votes by the Members using an electronic voting system from a place other than venue of the Meeting (“ Remote E-voting ”) will be provided by Karvy Fintech Pvt. Ltd.
The instructions for Remote E-Voting are as under:
I. To use the following URL for Remote E-voting:
- a) From Karvy website: htp://evotng.karvy.com
II. Shareholders of the Company holding shares either in physical form or in dematerialized form, as on the cut-off date i.e. closing hours of May 24, 2019 may cast their vote electronically.
III. Enter the login credentials [i.e., user id and password mentioned in the email]. Your Folio No/DP ID/Client ID will be your user ID.
IV. After entering the details appropriately, click on LOGIN.
V. You will reach the Password change menu wherein you are required to mandatorily change your password. The new password shall comprise of minimum 8 characters with at least one upper case (A-Z), one lower case (a-z), one numeric value (0-9) and a special character. The system will prompt you to change your password and update any contact details like mobile, email etc on first login. You may also enter the secret question and answer of your choice to retrieve your password in case you forget it. It is strongly recommended not to share your password with any other person and take utmost care to keep your password confidential.
VI. You need to login again with the new credentials.

VII. On successful login, the system will prompt you to select the EVENT i.e., Nucleus Software Exports Limited.

VIII. On the voting page, enter the number of shares as on the cut-off date under FOR/AGAINST or alternately you may enter partially any number in FOR and partially in AGAINST but the total number in FOR/AGAINST taken together should not exceed the total shareholding. You may also choose the option ABSTAIN.
IX. Shareholders holding multiple folios/demat account shall choose the voting process separately for each folios/demat account.
X. Cast your vote by selecting an appropriate option and click on SUBMIT. A confirmation box will be displayed. Click OK to confirm else CANCEL to modify. Once you confirm, you will not be allowed to modify your vote. During the voting period, shareholders can login any number of times till they have voted on the resolution.
XI. Once the vote on the resolution is cast by the shareholder, he shall not be allowed to change it subsequently.
XII Corporate/ institutional members (i.e. other than individuals, HUF, NRI, etc.) are also required to send scanned certified true copy (PDF Format) of the Board Resolution / Authority Letter, etc., together with attested specimen signature(S) of the duly authorized representative(S), to the Scrutinizer at e-mail ID: [email protected]. They may also upload the same in the E-voting module in their login. The scanned image of the above-mentioned documents should be in the naming format “Corporate Name_EVENT NO”.
XIII. In case a Member receives physical copy of Notice by post (for members whose email Ids are not registered with the Company/ Depository Participant(s).
a. User ID and initial password are provided on overleaf.
b. Please follow all steps from Sr. No.(I) to (XII) as mentioned above, to cast your vote.

XIV. The Portal will remain open for voting from: 9:00 A.M. on June 8, 2019 to 5:00 P.M. on July 7, 2019.

XV In case of any queries, you may refer the Frequently Asked Questions (FAQs) for shareholders and Remote E-voting User Manual for shareholders available at the download section of htps://evotng.karvy.com or contact Karvy Fintech Pvt Ltd at Tel No. 1800 345 4001 (toll free).

XVI. The voting rights of shareholders shall be in proportion to their shares of the paid-up equity share capital of the Company as on the cut-off date of closing hours of May 24, 2019.

A person, whose name is recorded in the register of members or in the register of beneficial owners maintained by the depositories as on the closing hours May 24, 2019 shall be entitled to avail the facility of Remote E-voting/ “Insta Poll”.
Any person who becomes member of the Company after dispatch of the Notice of the meeting and holding shares as on the cut-off date i.e. May 24, 2019 may obtain the User Id and password by sending a request at [email protected]. However, if you are already registered with Karvy for Remote E-voting, you can use your existing User ID and password for casting your vote.
The facility for voting through electronic means (“Insta Poll”) shall be made available at the Meeting and the members attending the Meeting, who have not cast their vote by Remote E-voting shall be able to vote at the Meeting through “Insta Poll”.
The members who have cast their vote by Remote E-voting may also attend the Meeting but shall not be entitled to cast their vote again.
Mr. Prince Chadha, Company Secretary has been appointed as the Scrutinizer to scrutinize the Remote E-Voting process in a fair and transparent manner.
The Scrutinizer, as appointed by NCLT, shall immediately after the conclusion of the meeting, unblock the votes cast by Remote E-voting and “Insta-Poll” and within a period not exceeding 36 (Thirty Six) hours thereafter, in the presence of at least two witnesses not in the employment of the Company, make a consolidated Srutinizer’s report of the votes cast in favour or against. The Scrutinizer shall submit the consolidated Scrutinizer’s report to the Chairperson of the meeting or a person authorized by him in writing who shall countersign the same and declare the result.
The Results declared alongwith the Scrutinizer’s Report shall be placed on the Company’s website www.nucleussoftware.com and on the website of Karvy Fintech and submitted to BSE Limited and National Stock Exchange of India Ltd., within 48 (Forty Eight) hours of of the conclusion of the meeting.

EXPLANATORY STATEMENT

BEFORE THE NATIONAL COMPANY LAW TRIBUNAL PRINCIPAL BENCH, NEW DELHI COMPANY APPLICATION (CAA) NO. 56/PB/2019

In tHE MattER oF:

The Companies Act, 2013.

anD in tHE MattER oF:

Application under Sections 230 to 232 of the Companies Act, 2013.

anD in tHE MattER oF:

…… applicant transferor Company-1

anD in tHE MattER oF:

…… applicant transferor Company-2

anD in tHE MattER oF:

….. applicant transferee Company

EXPLANATORY STATEMENT UNDER SECTIONS 230 TO 232 READ WITH RULE 6(3) OF THE COMPANIES (COMPROMISES, ARRANGEMENTS AND AMALGAMATIONS) RULES, 2016 AND OTHER APPLICABLE PROVISIONS, IF ANY, OF THE COMPANIES ACT, 2013 FOR THE MEETING OF EQUITY SHAREHOLDERS OF NUCLEUS SOFTWARE EXPORTS LIMITED, CONVENED AS PER THE DIRECTIONS OF THE NATIONAL COMPANY LAW TRIBUNAL, PRINCIPAL BENCH AT NEW DELHI.

1. This explanatory statement is being furnished pursuant to Sections 230 to 232 of the Companies Act, 2013 (“ Companies Act ”) read with Rule 6 (3) of the Companies (Compromises, Arrangements and Amalgamations) Rules, 2016 (“ Caa Rules ”).

2. Pursuant to an Order dated April 12, 2019 (as amended by order dated May 1, 2019) (“ Order ”), of the Hon’ble National Company Law Tribunal, Principal Bench at New Delhi (“ Hon’ble tribunal ” or “ NCLT ”) in the Company Application (CAA) no. 56/PB/2019, a meeting of the Equity Shareholders of Nucleus Software Exports Limited (“ transferee Company ”) is being convened on July 8, 2019, at 02.00 PM at PHD Chambers of Commerce and Industry, PHD House, 4/2, August Kranti Marg, Siri Institutional Area, Block A, NIPCCD Campus, Hauz Khas, New Delhi- 110016 for the purpose of considering and, if thought fit, approving with or without modification(s), the Scheme of Amalgamation (“ Scheme ”) of wholly owned subsidiaries - Virstra I-Technology Services Limited (“ transferor Company-1 ”) and Avon Mobility Solutions Private Limited (“ transferor Company-2 ”) into and with the parent company - Nucleus Software Exports Limited (“ transferee Company ”) and their respective shareholders and creditors.

3. Notice of the said meeting together with the copy of the Scheme of Amalgamation is sent herewith. The statement explaining the terms of the Scheme of Amalgamation is being furnished as required under Sec 230, 232 and other applicable provisions, if any of the Companies Act 2013 and Rule 6 of the Companies (Compromises, Arrangements and Amalgamations) Rules 2016 of the Companies Act, 2013.

A copy of the Scheme setting out in detail the terms and conditions of the amalgamation, is attached to this explanatory statement and forms part of this statement. The definitions contained in the Scheme will apply to this explanatory statement also.

4. Details of nucleus software Exports limited (transferee Company)

4.1. General information

nucleus sofware Exports limited(“transferee Company”)	nucleus sofware Exports limited(“transferee Company”)
Corporate identfcaton number (Cin)	L74899DL1989PLC034594
Permanent account number (Pan)	AAACN5382P
incorporaton Date	January 9, 1989
type of the company	Listed Public Limited Company
Registered ofce address	33-35 Thyagraj Nagar Market, New Delhi – 110003
E-mail address	[email protected]
stock Exchange(s) where securites of the transferee Company are listed	BSE Limited (“BSE”) and The Natonal Stock Exchange of India Limited (“NSE”)

4.2. The main objects of Transferee Company as provided in Clause III (A) of its Memorandum of Association are as under

“To carry on the business of consultants, trading, manufacturing, importing, exporting, agents and distributors of systems study, analysis, design, development and implementation of technologies, software systems/applications based on wireless, mobile or any other technology, for usage in all kinds of businesses, management systems, mobile system, e-commerce and/or associated logistics including for any other purpose(s) or business(es) whatsoever, communication systems or combination of the computer and communication systems, hardware equipments for any system, product or technology and providing consultancy related to commercial and non-commercial usage, engineering goods, electronics equipments and instruments electrical goods and equipment and computers supply of manpower for supporting software supplied to various commercial and non commercial users.
To carry on the business as manufacturers of, fabricators, assemblers, processors and dealers of all kinds of computers, accounting and business, machines, transistors, transformers, receivers, conductors, magnetic materials, microwave components, videogames tapes, discs, fittings switches and all hardware, software and peripherals thereto.
To own or otherwise establish set up, manage, run and operate through partnership, joint venture or any other mode, training; data processing and information centers and/ or educational Institutions for imparting education, coaching and training in information Technology, Software Solutions, networking, data processing, telecommunication and other allied activities in the fields of computer software, hardware, marketing, management and business related, in India and abroad either through education centers and/or through postal means or through electronic i.e. e-learning services or other media including but not limited to publishing books, magazines, hosting websites for services of content development and support, animation, learning support, learning management systems and knowledge services and other related activities and to carry on the business of data digitalization by digitizing physical and manual records such as text images, videos and audio to carry on the business in India and abroad for commercial as well as non-commercial users.
To carry on the business of providing outsourcing services for all processors, sub processors, transactions, activities and all other work performed in various industries within India and across the world including but not limited to those process or sub processes that are enabled by information technology data, voice or video collection and processing, call centre services including in bound and out bound calling services of all kinds, technical support, managed data centre, managed technical centre, training centre, web support back office, business or financial analysis, scientific analysis, research work and analysis, storage, disaster recovery, accounting, pay roll, inventory management, customer relationship management, enterprises resources planning and to render computer services for commercial users and to develop software and supply information technology solutions including turnkey solutions, end-to-end solutions, systems integration and development of software, computer hardware, peripherals, networking.
To operate technology data processing centre or providing management information, analysis, development accounting and business information, and providing data to Corporate, Institutions, individuals in India and abroad to carry on the business of gathering compiling, processing analyzing, distributing, selling, publishing data and information and services and providing access to information regarding financial operations and management of financial services, investment services, business and commercial operations, financial status, credit worthiness and rating consumer responses and management of business of all kinds and descriptions and to provide other services through either computer aided or telephone or any other mode in India or anywhere in world and to carry on the business of providing infrastructure Management services and Application Service provider (ASP) services or commercial usage to Corporates, institutions, individuals, or other legal entity whether in India and abroad.
To carry on in India or abroad whether independently or in partnership with any other person, the business to provide, promote, develop, design, establish, setup, maintain, organize, undertake, manage, operate, run, market, purchase, sell, distribute, resell, import, export and carry on the business of all types/kinds of electronic and/or virtual payment systems services including integrated software and applications, e-wallets, mobile-wallets, cash card, stored value instruments, payment gateways services, prepaid and/or postpaid payment instruments payment systems including open/ closed/semi-closed systems payment instruments, including all kinds of payment services in any manner whatsoever through offline transaction, internet payment transactions or e-commerce payment transactions in banking, credit card payments, debit card payments, smart card payments, prepaid card payments, electronic cash card payments, electronic cashless payment systems, e-wallet payment systems, mobile payment systems, merchant payment transactions, utility payment transactions, digital COD(Cash on Delivery) payments, remittance transactions, credit reporting services and online search engine services, transaction switching and monitoring and transaction analytics of online financial and non-financial transactions through ATM, POS, Mobile Channels or any other channel available in future, internet, e-commerce, m-Commerce or such other system, mechanism, medium or technology as may be available invented, created from time to time in India or elsewhere, to scale up and to allow seamless integration across multiple business entities spread across various geographical locations to ensure a safe, secure and efficient electronic payment system and to act as marketing agents, consultants, financers, advisors, technicians far promoting and servicing of different types of payment systems such as closed, semi-closed and open systems relating to Payments and Settlement Services and to take over or give franchises of the same.
To provide services, management and consultancy in the field of prepaid and/or postpaid payment instruments services, electronic and virtual payment systems, transaction processing, and to act as dealers, distributors, agents, representative of Indian and foreign concerns/persons operating in the line of prepaid, postpaid and other payment system services, and allied activities related thereto” .
4.3 Main business carried on by the Transferee Company: Subsequent to its incorporation in January 1989, the Transferee Company commenced its business and is presently engaged inter alia, in the business of software product development and marketing and providing support services mainly for corporate business entities in the banking and financial services sector.

4.4. Details of change of name, registered ofce and objects of the Transferee Company during the last fve years: There has been no change in the name, registered office of the Transferee Company during the last five years. There was alteration of the object clause of the Memorandum of Association of the Transferee Company, approved by the members of the Company vide Postal Ballot in August 2016.
4.5. The authorized, issued, subscribed and paid-up share capital of the Transferee Company as on date of issue of this notce are as follows:-

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Particulars Amount (in INR)
authorized share Capital
4,00,00,000 Equity Shares of INR 10/- each 40,00,00,000
issued, subscribed and Paid-up share Capital
2,90,40,724 Equity Shares of INR 10/- each 29,04,07,240
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4.6. The details of the Directors of the Transferee Company along with their addresses are mentoned herein below:

DIRECTORS	DIRECTORS	DIRECTORS	DIRECTORS
S. No.	name of Director	Designaton	address of the Director
1.	Mr. S. M. Acharya	Non-Executve Chairman and Independent Director	No. 256, 2nd Main Road, HIG Dollar Colony, RMV 2nd Stage, Bangalore - 560094, Karnataka
2.	Mr. Vishnu R Dusad	Managing Director	D-123, Sector 40, Noida - 201301, Utar Pradesh
3.	Mr. Ravi Pratap Singh	CEO and Executve Director	1044, Sector 37, Arun Vihar, Noida - 201301, Utar Pradesh
4.	Ms. Ritka Dusad	Non-Executve Director	D-123, Sector 40, Noida - 201301, Utar Pradesh
5.	Mr. Prithvi Haldea	Independent Director	C-101, Rishi Apartments, Alaknanda, New Delhi - 110019
6.	Mrs. Elaine Mathias	Independent Director	A-802, Nagarjuna Meadows, Yelahanka Doddaballapur Main Road, Bangalore – 560064, Karnataka
7.	Prof. Trilochan Sastry	Independent Director	No. 201, Indian Insttute of Management, Bannerghata Road, Bangalore – 560076, Karnataka
PROMOTERS AND PROMOTER GROUP
S. No.	name of Promoter	Category	address of the Promoter
1.	Mr. Vishnu R Dusad	Promoter	D-123, Sector 40, Noida- 201301, Utar Pradesh
2.	Mrs. Madhu Dusad	Person Actng in Concert	D-123, Sector 40, Noida- 201301, Utar Pradesh
3.	Ms. Ritka Dusad	Person Actng in Concert	D-123, Sector 40, Noida- 201301, Utar Pradesh
4.	Ms. Kritka Dusad	Person Actng in Concert	D-123, Sector 40, Noida- 201301, Utar Pradesh
5.	Karmayogi Holdings Pvt. Ltd.	Person Actng in Concert	33-35, Thyagraj Nagar Market, New Delhi-110003

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S. name of Promoter Category address of the Promoter
No.
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S. No.	name of Promoter	Category	address of the Promoter

6.	Mr. Yogesh Andlay	Promoter	J&K 51 Laxmi Nagar, New Delhi-110092
7.	Ms. Suman Mathur	Person Actng in Concert	234/ B, Shipra Suncity, Indirapuram, Ghaziabad-201010
8.	Mr. Naveen Kumar	Person Actng in Concert	C 97, Sector 23, Noida-201301
9.	Nucleus Sofware Engineers (P) Ltd.	Person Actng in Concert	3322A, IInd foor, Bank Street, Karol Bagh, New Delhi-110005
10.	Nucleus Sofware Workshop Pvt. Ltd.	Person Actng in Concert	35, Thyagaraj Nagar Near Lodhi Colony New Delhi-110003
11.	Card Systems Pvt. Ltd.	Person Actng in Concert	35, Thyagaraj Nagar Market Near Lodhi Colony New Delhi-110003

4.7. The date of the Meetng at which the Scheme was approved by the Board of Directors of the Transferee Company, including the name of the Directors who voted in favour of the resoluton, who voted against the resoluton and who did not vote or partcipate on such resoluton

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Date of Board Meeting approving the scheme March 1, 2019
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Date of Board Meetng approving the scheme	March 1, 2019

names of the Directors who voted in favour of the resoluton	1. Mr. S M Acharya 2. Mr. Vishnu R Dusad 3. Mr. Ravi Pratap Singh 4. Mr. Prithvi Haldea 5. Mrs. Elaine Mathias
names of the Directors who voted against the resoluton	None
names of the Director who did not vote or partcipate on the resoluton	1. Mr. N Subramaniam# 2. Prof. Trilochan Sastry 3. Ms. Ritka Dusad

* Note: These Directors did not attend the Board meeting and were granted leave of absence.

# Note: Mr. N. Subramaniam ceased to be Director of Company w.e.f. April 1, 2019

4.8. The amount due to secured creditors of the Transferee Company as on March 14, 2019 is NIL as there are no secured creditors of the Transferee Company.
4.9. The amount due to unsecured creditors of the Transferee Company as on March 14, 2019 is INR 70,74,385/- (Rupees Seventy Lakh Seventy Four Thousand Three Hundred Eighty Five only).

5. Details of virstra i-technology services limited (transferor Company-1)

5.1. General informaton

virstra i-technology services limited(“transferor Company-1”)	virstra i-technology services limited(“transferor Company-1”)	virstra i-technology services limited(“transferor Company-1”)
Corporate identfcaton number (Cin)		U72200DL2004PLC126213
Permanent account number (Pan)		AABCV8600M
incorporaton Date		May 6, 2004
type of the Company		Unlisted Public Limited Company
Registered ofce address		33-35 Thyagraj Nagar Market, New Delhi – 110003
E-mail address		[email protected]

5.2. The main objects of Transferor Company-1 as provided in Clause III (A) of its Memorandum of Associaton are as under

“To provide software services, consultancy, data processing, business process management in the field of software maintenance, application, design, development, internet application, integration and other software services.
To design, develop, maintain, programme, buy, import, export, purchase, license, Market, implement, rent, hire, acquire, subcontract and deal in all kind of computer software development, software related system and hardware of computer software development, software related system and hardware of software systems, communication system, programmed products, provide consultancy, data processing services, system study, software documentation and related components and complete software or computer based solutions
To carry on the business of analyzing, maintaining, compiling, coding, converting, programming and advising on all matter related to purchase, design, development and implementation of all kind of computer hardware and software system, communication systems, electronic systems, management information systems, data- processing system and data communication systems and in this regard conduct surveys, compile, feed, process, covert any test any kind of data for both analog and digital including CAD/ CAM, make reports, specifications, estimates, studies and feasibility reports and provide services including digitization services for any individual, company, industry or other authority .
To provide consultancy services to all industries in the area of information technology.
To provide training to professionals in information technology.”
5.3. Main business carried on by Transferor Company-1: Subsequent to its incorporation in May 2004, the Applicant Transferor Company-1 commenced its business which, inter alia , consists of offshore and onsite software support and other related services.
5.4. Details of change of name, registered ofce and objects of the Transferor Company-1 during the last fve years: There has been no change in the name, registered office and objects of Transferor Company-1 during the last five years.

5.5. The authorized, issued, subscribed and paid-up share capital of Transferor Company-1 as on date of issue of this notce are as follows:-

Partculars	Amount (in INR)
authorized share Capital
10,00,000 Equity Shares of INR 10/- each	1,00,00,000
issued, subscribed and Paid-up share Capital
10,00,000 Equity Shares of Rs. 10/-	1,00,00,000

5.6. Names of the Directors and Promoters of Transferor Company-1 along with their addresses are mentoned herein below:-

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DIRECTORS
S. No. name of Director Designation address of the Director
1. Mr. Vishnu R Dusad Non-Executive Director D-123, Sector 40,
NOIDA - 201301, Uttar Pradesh
2. Mr. Prithvi Haldea Non-Executive Director C-101, Rishi Apartments,
Alaknanda, New Delhi - 110019
3. Mr. Ravi Pratap Singh Non-Executive Director 1044, Sector 37, Arun Vihar,
Noida – 201303, Uttar Pradesh
PROMOTERS
S. No. name of Promoter Category address of the Promoter
1. Nucleus Software Exports Ltd. Company 33-35 Thyagraj Nagar Market,
New Delhi – 110003
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5.7. The date of the Meetng at which the Scheme was approved by the Board of Directors of Transferor Company-1, including the name of the directors who voted in favour of the resoluton, who voted against the resoluton and who did not vote or partcipate on such resoluton

resoluton
Date of Board Meetng approving the scheme	February 28, 2019
names of the Directors who voted in favour of the resoluton	1. Mr. Ravi Pratap Singh 2. Mr. Vishnu R Dusad
names of the Directors who voted against the resoluton	None
names of the Director who did not vote or partcipate on the resoluton	Mr. Prithvi Haldea*

Note: Mr. Prithvi Haldea did not attend the Board meeting and was granted leave of absence.

5.8. The amount due to secured or unsecured creditors of Transferor Company-1 as on March 14, 2019 is NIL as there are no secured or unsecured creditors.

6. Details of avon Mobility solutons Private limited (transferor Company-2)

6.1. General informaton

avon Mobility solutons Private limited (“transferor Company-2”)	avon Mobility solutons Private limited (“transferor Company-2”)
Corporate Identfcaton Number (CIN)	U72900DL2007PTC341409
Permanent Account Number (PAN)	AAGCA5271N
Incorporaton Date	May15, 2007
Type of the Company	Private Limited Company
Registered Ofce address	33-35 ThyagrajNagar Market, New Delhi – 110003
E-mail address	[email protected]

6.2. The main objects of Transferor Company-2 as provided in Clause III (A) of its Memorandum of Associaton are as under

1. “To establish, develop, maintain, and improve, up-grade of software for Wireless Mobile Technologies and Applications.

2. To carry on the business of trading, distribution, import and export of software, software products and hardware equipments for Wireless Mobile Technologies and other Applications.

3. To provide consultancy for software development, system development, networking, E-commerce and associated logistics for Wireless Technologies and other Applications”.

6.3. Main business carried on by Transferor Company-2: Subsequent to its incorporation in May 2007, the Applicant Transferor Company-2 commenced its business. The Company presently offers logistic solutions, such as proof of delivery automation, integrated parcel logistics, and courier operations solutions. It also offers consultancy and software development services.
6.4. Details of change of name, registered ofce and objects of the Transferor Company-2 during the last fve years: The registered office of Transferor Company-2 was previously located at No. 7, M V Naidu Street, Ground and First Floor, Chetpet, Chennai – 600031 which was shifted to 33-35 Thyagraj Nagar Market, New Delhi – 110003 vide order dated 28[th] September 2018 passed by the Regional Director, Registrar of Companies (“ RoC ”), Chennai and filed with the Ministry of Corporate Affairs on 31[st] October 2018. There has been no change in the name and objects of Transferor Company-2 during the last five years.

6.5. The authorized, issued, subscribed and paid-up share capital of Transferor Company-2 as on date of issue of this notce are as follows:-

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Particulars Amount (in INR)
authorized share Capital
1,00,000 Equity Shares of INR 10/- each 10,00,000
40,00,000 11% Redeemable Non-Cumulative Preference 4,00,00,000
Shares of INR 10/- each
Issued, Subscribed and Paid-up Share Capital
11,110 Equity Shares of Rs. 10/- each 1,11,100
40,00,000 11% Redeemable Non-Cumulative Preference 4,00,00,000
Shares of Rs. 10/- each
6.6. Names of the Directors and Promoters of Transferor Company-2 along with their addresses are mentoned herein below:--2 along with their addresses are mentoned herein below:-2 along with their addresses are mentoned herein below:-oned herein below:--
DIRECTORS
S. No. name of Director Designation address of the Director
1. Mr. Thomas Zachariah Managing Director Carolina (H), Manganam, PO Vijayapuram, Village Manganam,
Kottayam – 686018, Kerala
2. Mr. Vishnu R. Dusad Non-Executive Director D-123, Sector 40, NOIDA - 201301, Uttar Pradesh
3. Mr. Kalyanasundaram Non-Executive Director No. 8, Lakshmi Illam, Pondicherry Road, Kottur, Chennai –
Krishna Kumar 600085, Tamil Nadu
PROMOTERS
S. No. Name of Promoter Category Address of the Promoter
1. Nucleus Software Company 33-35 Thyagraj Nagar Market,
Exports Ltd. New Delhi – 110003
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6.6. Names of the Directors and Promoters of Transferor Company-2 along with their addresses are mentoned herein below:--2 along with their addresses are mentoned herein below:-2 along with their addresses are mentoned herein below:-oned herein below:--

6.7. The date of the Meetng at which the Scheme was approved by the Board of Directors of Transferor Company-2, including the name of the directors who voted in favour of the resoluton, who voted against the resoluton and who did not vote or partcipate on such resoluton

resoluton
Date of Board Meetng approving the Scheme	February 28, 2019
Names of the Directors who voted in favour of the resoluton	1. Mr. Thomas Zachariah 2. Mr. Kalyanasundaram Krishna Kumar 3. Mr. Vishnu R Dusad (through teleconference)
Names of the Directors who voted against the resoluton	None
Names of the Director who did not vote or partcipate on the resoluton	Mr. N. Subramaniam*

*Note: 1) Mr. N. Subramaniam did not attend the Board meeting and was granted leave of absence.

2) Mr. N. Subramaniam ceased to be Director of Company w.e.f. April 1, 2019.

6.8. The amount due to secured and unsecured creditors of Transferor Company-2 as on March 14, 2019 is NIL as there are no secured or unsecured creditors.

7. Relatonship between Partes, Ratonale and salient Features of the scheme

7.1. Relatonship between the Transferee Company and the Transferor Companies. The Transferor Companies are wholly owned subsidiaries of the Transferee Company.

7.2. Objects and Ratonale of the Scheme

The proposed scheme being undertaken with an objective to consolidate the business at one place for effective and efficient management. Pursuant to the amalgamation, there will be no change in the control or management of the Transferor Companies. Therefore, the Proposed Scheme would, inter-alia , have the following benefits:

a. Prevent cost duplication and bring in financial efficiencies of a holding structure. The resultant operations are expected to be substantially cost-efficient which would result in maximizing overall shareholder value and will improve the competitive position of the combined entity.
b. Eliminate layered structures and reduce managerial overlap;
c. Contribute in furthering and fulfilling the objectives and business strategies of all the companies thereby accelerating growth, expansion, greater access to different market segments and development of the respective businesses currently, being carried through the Transferee Company;
d. Bring concentrated management focus, integration, streamlining of the management structure, seamless implementation of policy changes and shall also help enhance the efficiency and control;
e. Greater efficiency in cash management of the Transferee Company, an unfettered access to cash flow generated by the combined business which can be deployed more efficiently to fund organic and inorganic growth opportunities, to maximize shareholder value;
f. The Scheme is not opposed to public policy and shall not have any adverse effect on either the shareholders or employees or creditors of the Transferor Companies or the Transferee Company.

7.3. Salient Features of the Scheme

The salient features of the Scheme are as follows:

a. “ Appointed Date ” means the date from which the provisions of this Scheme shall become operational i.e. opening of business hours on April 1, 2019 or such other date as may be assented to and approved by the Board of Directors of the Companies and approved by the Tribunal;
b. “ Efectve Date ” shall mean the last of the dates on which the conditions set out in Clause 16 of the Scheme are satisfied or waived in accordance with this Scheme. Any reference in this Scheme to the words “ upon the Scheme becoming effective ” or “ date of coming into effect of the Scheme ” or “ Scheme coming into effect ” shall mean the Effective Date.
c. Since, the Transferor Companies are wholly owned subsidiary companies of the Transferee Company i.e. the entire paid up share capital of the Transferor Companies is being beneficially held by the Transferee Company, no new equity shares of the Transferee Company shall be issued and allotted in respect of shares held by the Transferee Company in the Transferor Companies. Upon the Scheme becoming effective, the entire paid up share capital of the Transferor Companies shall be cancelled and extinguished without any further act, deed or instrument as an integral part of this Scheme.
d. Valuation Report and Fairness Opinion is not applicable, since, Transferor Companies are wholly owned subsidiaries of the Transferee Company, the entire share capital of Transferor Companies shall stand cancelled and hence no new equity shares will be allotted by Transferee Company post-sanction of the proposed Scheme of Amalgamation. In view of the above, there would be no share exchange ratio in connection with the proposed Scheme of Amalgamation.
[ notE: THE FEATURES SET OUT ABOVE BEING ONLY THE SALIENT FEATURES OF THE SCHEME OF AMALGAMATION, YOU ARE REQUESTED TO READ THE ENTIRE TEXT OF THE SCHEME OF AMALGAMATION (ENCLOSED) TO GET YOURSELF FULLY ACQUAINTED WITH THE PROVISIONS THEREOF.]

8. submissions, approvals and other informaton

a. The Proposed Scheme was placed before the Board of Directors of the Transferor Companies respectively on February 28, 2019 and Transferee Company on March 1, 2019 and was approved.
b. Pursuant to the SEBI Circular no. CFD/DIL3/CIR/2017/21 dated March 10, 2017 read with Regulation 37 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, the Transferee Company has filed the draft scheme with BSE and NSE on March 1, 2019 and specific approval of the stock exchanges is not required in case of merger of wholly-owned subsidiary with its parent company.
c. On the Scheme being approved by the requisite majority of the Shareholders, the Transferee Company and Transferor Companies shall file a petition with the Hon’ble NCLT for sanction of the Scheme under Sections 230 to 232 of the Companies Act read with the CAA Rules and other relevant rules as framed thereunder.

9. Disclosures

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Disclosure about effect of the amalgamation on
S. No. Particulars transferee Company transferor Companies
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Disclosure about efect of the amalgamaton on	Disclosure about efect of the amalgamaton on	Disclosure about efect of the amalgamaton on	Disclosure about efect of the amalgamaton on
S. No.	Partculars	transferee Company	transferor Companies

a.	Key Managerial Personnel (‘KMP’)	No efect	The Transferor Companies shall cease to exist and thus the queston of any change in the KMP of the Transferor Companies does not arise. Apart from the above, the Scheme does not afect the material interests of any of the KMP.
b.	Directors	No efect	The Transferor Companies shall cease to exist and thus the queston of any change in the Directors of the Transferor Companies does not arise. Apart from the above, the Scheme does not afect the material interests of any of the Directors.
c.	Promoters	No efect	The entre share capital of Transferor Companies shall stand cancelled and hence no new equity shares will be alloted by Transferee Company to the shareholders of Transferor Companies post-sancton of the proposed Scheme of Amalgamaton.
d.	Non-promoter members	No efect	Not Applicable
e.	Depositors	Not Applicable	Not Applicable
f.	Creditors	No efect	No efect
g.	Debenture holders	Not Applicable	Not Applicable
h.	Deposit trustee and debenture trustee	Not Applicable	Not Applicable
i.	Employees of the company	No efect	Employees of the Transferor Companies, with efect from the Appointed Date will become employees of the Transferee Company, without any break in their service. All employee benefts pertaining to such employees shall contnue on the same terms and conditons.

10. Directors, Promoters and Key Managerial Personnel

a. The directors of the Transferor Companies and the Transferee Company and their relatives may be deemed to be concerned and / or interested in the Scheme only to the extent of their shareholding directly in the respective companies that are the subject of the Scheme, or to the extent the said persons are interested or involved in any of the companies that are the subject of the Scheme or any entity that directly holds shares in any of the companies.
b. Key Managerial Personnel (“ KMPs ”) other than Directors and their relatives may be deemed to be concerned and/ or interested in the Scheme only to the extent of their shareholding directly in the respective companies that are the subject of the Scheme.
c. Save as aforesaid, none of the Directors and KMPs of the Transferor Companies and the Transferee Company and their relatives have any material concern or interest, financial and / or otherwise in the Scheme. Further the Companies have not issued any debentures as on date and have not appointed any debenture trustee.
d. The details of the present Directors and their relatives and KMPs of Transferee Company and Transferor Companies and their relatives and respective shareholdings in Transferee Company and Transferor Companies are as follows:

Extent of shareholding of directors and KMPs of Transferee Company and their respectve shareholding in the Transferee Company and the Transferor Companies as on March 31, 2019 are as follows:

S.No	Name	Designaton	Equity shares in transferee Company	Equity shares held in transferor Company-1	Equity shares held in transferor Company-2	Preference Shares held in transferor Company-2
1.	Mr. Vishnu R Dusad	Managing Director	16,03,492	1*	1*	Nil
2.	Mr. Ravi Pratap Singh	CEO and Executve Director	1,51,977	1*	1*	Nil
3.	Ms. Poonam Bhasin	AVP and Company Secretary	10	1*	1*	Nil

* The shares held in the Transferor Companies are held in the capacity of a Nominee Shareholder of Transferee Company.

11. Pre and Post scheme shareholding patern of the transferor Companies and transferee Company

11.1.Pre-Scheme Shareholding Patern of Transferor Company-1

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S. No. Description Pre-scheme shareholding pattern
(As on March 31, 2019)
number of % of
Equity shares Held Equity share Capital
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S. No.	Descripton	Pre-scheme shareholding patern (As on March 31, 2019)	Pre-scheme shareholding patern (As on March 31, 2019)
		number of Equity shares Held	% of Equity share Capital

1.	Nucleus Sofware Exports Limited	9,99,994	99.9994
2.	Mr. Vishnu R Dusad	1*	0.0001
3.	Mr. Ravi Pratap Singh	1*	0.0001
4.	Mr. Prakash Purushotam Pai	1*	0.0001
5.	Ms. Poonam Bhasin	1*	0.0001
6.	Mr. Anurag Bhata	1*	0.0001
7.	Mr. Anil Kumar	1*	0.0001
	total	10,00,000	100.00

*Nominee of Nucleus Software Exports and the beneficial interest in the share is held by Nucleus Software Exports Limited.

11.2 Pre-Scheme Shareholding Patern of Transferor Company-2

S. No.	Descripton	Pre-scheme shareholding patern (as on March 31, 2019)	Pre-scheme shareholding patern (as on March 31, 2019)	Pre-scheme shareholding patern (as on March 31, 2019	Pre-scheme shareholding patern (as on March 31, 2019
		number of Equity shares held	% of Equity Share Capital	number of Preference shares Held	% of Preference share Capital
1.	Nucleus Sofware Exports Limited	11,104	99.946	40,00,000	100.00
2.	Mr. Vishnu R Dusad	1*	0.009	Nil	Nil
3.	Mr. Ravi Pratap Singh	1*	0.009	Nil	Nil
4.	Mr. Prakash Purushotam Pai	1*	0.009	Nil	Nil
5.	Ms. Poonam Bhasin	1*	0.009	Nil	Nil
6.	Mr. Anurag Bhata	1*	0.009	Nil	Nil
7.	Mr. Anil Kumar	1*	0.009	Nil	Nil
	total	11,110	100.00	40,00,000	100.00

*Nominee of Nucleus Software Exports and the beneficial interest in the share is held by Nucleus Software Exports Limited.

11.3 Pre and Post Scheme Shareholding Patern of Transferee Company

S. No.	Descripton	Pre-scheme shareholding patern (as on March 31, 2019)	Pre-scheme shareholding patern (as on March 31, 2019)	Post Scheme shareholding patern	Post Scheme shareholding patern
		number of shares Held	% of share Capital	number of shares Held	% of share Capital
1.	Promoter & Promoter Group	1,96,27,866	67.59	1,96,27,866	67.59
2.	Public	94,12,858	32.41	94,12,858	32.41
3.	Shares Underlying DRs	Nil	Nil	Nil	Nil
4.	Shares held by Employee Trusts	Nil	Nil	Nil	Nil
	total	2,90,40,724	100.00	2,90,40,724	100.00

12. investgaton or proceedings pending against the transferor Companies and/ or the transferee Company under the Companies act There are no investigations or proceedings pending against the Transferor Companies and/ or the Transferee Company under Sections 235 to 251 of the erstwhile Companies Act, 1956 or under Sections 210 to 227 of the Companies Act 2013.

13. general

a. The proposed Scheme does not affect in any manner nor vary the rights in any manner of the KMPs (as defined under the Companies Act) or directors of the Transferor Companies or the Transferee Company. The Scheme also does not propose any capital or debt restructuring or any compromise or arrangement with the creditors of the Transferor Companies or the Transferee Company.
b. It is confirmed that the copy of the Scheme, as approved by Board, has been filed with the concerned ROC.
c. In compliance with the requirement of Section 230(5) of the Companies Act and Rule 8 of the CAA Rules, notice in the prescribed form and seeking approvals, sanctions or no-objections shall be served to the concerned regulatory and government authorities for the purpose of the proposed Scheme.

14. the scheme is conditonal upon and subject to the following:

a. Such other sanctions and approvals including sanctions of any Governmental Authority or regulatory authority as may be required by law or contract in respect of the Scheme being obtained; and
b. the certified copies of the orders of the NCLT referred to in this Scheme being filed with the relevant RoC by the Transferee Company and each of the Transferor Companies, as may be applicable. The Scheme shall become effective on last of the dates on which Transferee Company and each of the Transferor Companies, as may be applicable, file a certified copy of the order of the NCLT sanctioning the Scheme with the relevant RoC.

15. Copy of the NCLT convened meeting Notice, the Scheme of Amalgamation and Explanatory Statement under Sections 230 to 232 of the Companies Act have been placed on the website of the Company at www.nucleussoftware.com

16. The following documents will be open for inspection at its registered office between 10.00 am to 5.00 pm on all working days, except Saturdays, Sundays and Public Holidays, up to 1 (one) day prior to the date of the NCLT convened meeting:

a. Copy of the Order dated April 12, 2019 (as amended by order dated May 1, 2019) passed by the Hon’ble National Company Law Tribunal, Principal Bench at New Delhi passed in the above Company Application;
b. Copy of the Company Application (CAA) no. 56/PB/2019;
c. Copy of Scheme of Amalgamation;
d. Copy of the Memorandum and Articles of Association of the Transferor Companies and the Transferee Company;
e. Latest audited Financial Statement of the Transferee Company as on December 31, 2018 and Transferor Companies as on March 31, 2018;
f. Copy of the Unaudited Annual Accounts of the Transferor Companies as on December 31, 2018;
g. Certificate issued by the auditor of the Transferee Company to the effect that the accounting treatment, if any proposed in the Scheme is in conformity with the Accounting Standards prescribed under Section 133 of Companies Act;
h. Certificate issued by the auditor of the Transferor Companies to the effect that the accounting treatment, if any proposed in the Scheme is in conformity with the Accounting Standards prescribed under Section 133 of Companies Act.

Dated this 16 day of May 2019. Chandigarh

For nucleus software Exports limited

Sd/-

Name: Rajesh Gupta

(Chairperson appointed for the meeting of equity shareholders of transferee Company) Registered office:

33-35 Thyagraj Nagar Market, New Delhi – 110003.

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NUCLEUS SOFTWARE EXPORTS LIMITED

CIN – L74899DL1989PLC034594

Registered office: 33-35, Thyagraj Nagar Market, New Delhi- 110003 Phone: +91-120-4031400 Fax: +91-120-4031672 E-mail: [email protected]; Website: www.nucleussoftware.com

ATTENDANCE SLIP

[Hon’BlE national CoMPanY laW tRiBUnal (nClt) ConvEnED MEEting oF EQUitY sHaREHolDERs

Venue of the Meetng: PHD Chambers of Commerce, PHD House, 4/2, August Kranti Marg, Siri Institutional Area, Block A, NIPCCD Campus, Hauz Khas, New Delhi- 110016

Day, Date & Time: Monday, July 8, 2019 at 02:00 PM

PLEASE FILL ATTENDANCE SLIP AND HAND IT OVER AT THE ENTRANCE OF THE MEETING VENUE

Name of the member(s):

Registered address:

E-mail ID:

Folio No :

Client ID /DP ID*:

No. of Shares held:

Applicable for investors holding shares in Electronic form.

I certify that I am a member / proxy for the member of the Company.

I/We hereby record my presence at the Meeting of the Members of the Company convened pursuant to the order of the Hon’ble National Company Law Tribunal, Principal Bench, New Delhi, at PHD chambers of commerce, PHD House, 4/2, August Kranti Marg, Siri Institutional Area, Block A, NIPCCD Campus, Hauz Khas, New Delhi- 110016., on Monday July 8, 2019 at 2.00 PM.

	………………….....................……………… Name of the Shareholder / Proxy / Authorised Representative (In Block Letters)	………………….....................………… Signature of the Shareholder / Proxy / Authorised Representative

Note: Shareholder/Authorised Representative/Proxy holder wishing to attend the meeting must bring the Attendance Slip to the meeting and handover at the entrance of the venue duly filled and signed.

BEFoRE tHE Hon’BlE national CoMPanY laW tRiBUnal

PRINCIPAL BENCH, NEW DELHI

C.A. (CAA) NO. 56 / PB / 2019

IN THE MATTER OF SECTIONS 230 TO 232 READ WITH OTHER

APPLICABLE PROVISIONS OF THE COMPANIES ACT, 2013 READ WITH RULES MADE THEREUNDER

AND

IN THE MATTER OF SCHEME OF AMALGAMATION

AMONGST

VIRSTRA I-TECHNOLOGY SERVICES LIMITED

(TRANSFEROR COMPANY-1)

AND AVON MOBILITY SOLUTIONS PRIVATE LIMITED

(TRANSFEROR COMPANY-2)

AND

NUCLEUS SOFTWARE EXPORTS LIMITED

(TRANSFEREE COMPANY)

FORM NO. MGT-11

PROXY FORM

[Pursuant to section 105(6) of the Companies Act, 2013 and rule 19(3) of the Companies (Management and Administration) Rules, 2014]

CIN: L74899DL1989PLC034594

Name of the company: nucleus software Exports limited

Registered ofce: 33-35 thyagraj nagar Market, new Delhi – 110003, india

Name of the member(s): Registered address: E-mail ID: Folio No/ DP ID/ Client ID*:

Applicable for investors holding shares in Electronic form.

I/We, being the equity shareholder(s) of Nucleus Software Exports Limited holding _______ shares of the above named Company, hereby appoint

Name: ______________ Address: _____________ E-mail Id: _______________

Signature: ______________ or failing him 2. Name: _____________ Address: ____________ E-mail Id: _______________

Signature: __________________ or failing him

Name:

Address:

E-mail Id:

Signature:

as my/our proxy to attend and vote (on a poll through ballot paper or electronic mode) for me/us and on my/our behalf at the meeting of Equity Shareholders of the Company convened pursuant to the Order of Hon’ble NCLT, to be held on the 08[th] day of July 2019 at 02.00 PM at PHD Chambers of Commerce, PHD House, 4/2, August Kranti Marg, Siri Institutional Area, Block A, NIPCCD Campus, Hauz Khas, New Delhi- 110016 and at any adjournment thereof in respect of the resolution as indicated below:

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----- Start of picture text -----

Resolution no. Resolution For Against
----- End of picture text -----

Resoluton no.	Resoluton	For	Against

1.	Scheme of Amalgamaton (“Scheme”) of wholly owned subsidiaries- Virstra I-Technology Services Limited (“transferor Company-1”) and Avon Mobility Solutons Private Limited (“transferor Company-2”) into and with the parent company- Nucleus Sofware Exports Limited (“transferee Company”) and their respectve Shareholders and Creditors.

Please put a tick mark (√) in the appropriate column against the resolution indicated in the box. This is optional. If the shareholder leaves the “For” or “Against” column blank against the Resolution, the proxy will be entitled to vote in the manner he/she thinks appropriate. If the shareholder wishes to abstain from voting on the resolution, he/she should write “Abstain” across the boxes against the Resolution.

Signed this *_ day of* __ 2019
	Afx
____	Revenue
Signature of Shareholder	Stamp

Signature of Proxy holder(s)

Note:

1. This form, in order to be effective, should be duly stamped, completed, signed and deposited at the Registered Office of the Company, not less than 48 hours before the meeting.

2. A person can act as proxy on behalf of shareholders not exceeding fifty (50) and holding in the aggregate not more than ten percent of the total share capital of the Company. A shareholder holding more than ten percent of the total share capital of the Company may appoint a single person as a proxy and such person cannot act as a proxy for any other person or shareholder.

3. For the resolution, explanatory statements and notes please refer to the Notice of NCLT Convened Meeting.

4. Please affix revenue stamp.

5. Those shareholders who have multiple folios with different joint holders may use copies of this Proxy Form.

6. In case of multiple proxies, the proxy received later in time shall be accepted.

7. Alterations, if any, made in the Form of Proxy should be initialed.

VOLUME - 2

SCHEME OF AMALGAMATION

AMONGST

VIRSTRA I-TECHNOLOGY SERVICES LIMITED

(TRANSFEROR COMPANY-1)

AND

AVON MOBILITY SOLUTIONS PRIVATE LIMITED

(TRANSFEROR COMPANY-2)

AND

NUCLEUS SOFTWARE EXPORTS LIMITED

(TRANSFEREE COMPANY)

AND

THEIR RESPECTIVE SHAREHOLDERS AND CREDITORS

(UNDER SECTIONS 230 TO 232 AND OTHER APPLICABLE PROVISIONS OF THE COMPANIES ACT, 2013)

PREAMBLE

A. overview of the scheme of amalgamation
B. Description of Companies
C. objects and Rationale for the Proposed scheme
D. Parts of the scheme

PaRt-i: DEFinitions, intERPREtation anD sHaRE CaPital

1. Definitions

2. interpretation

3. Date of taking Effect and operative Date

4. share Capital

5. Compliance with tax laws

PaRt-ii: aMalgaMation, tRansFER anD vEsting

6. transfer and vesting

7. Conduct of Business by the transferor Companies

8. Consideration

9. Combination and Reclassification of the authorized share Capital and amendment of Memorandum of association of transferee Company

10. accounting treatment

11. saving of Concluded transactions

12. Dissolution of transferor Companies

PaRt-iii: gEnERal tERMs anD ConDitions

13. Provisions applicable to the scheme

14. application to tribunal

15. listing agreement and sEBi Compliances

16. Conditionality of the scheme

17. Modification or amendments to the scheme

18. Revocation or Withdrawal of the scheme

19. severability

20. Costs, Charges and Expenses

21. Miscellaneous

PREAMBLE

A. overview of the scheme of amalgamation

i. This Scheme of Amalgamation (hereinafter referred to as the “ Scheme ”) provides for the merger and amalgamation of Virstra I-Technology Services Limited (“ transferor Company-1 ”) and Avon Mobility Solutions Private Limited (“ transferor Company-2 ”) (Transferor Company-1 and Transferor Company-2 shall collectively be referred to as “ transferor Companies ”) into and with Nucleus Software Exports Limited (“ transferee Company ”), pursuant to the provisions of Sections 230 to 232 and other applicable provisions of the Act read with Rule 18 and other applicable provisions of the Rules and Section 2(1B) of the Income Tax Act as applicable for the amalgamation.
ii. The Transferor Companies and the Transferee Company are companies within the same group and the Transferor Companies are the wholly owned subsidiaries of the Transferee Company since the Transferee Company along with its nominees holds the entire share capital of each of the Transferor Companies. The Transferee Company shall not issue any shares under the Scheme. The existing shareholding of the Transferee Company in each of the Transferor Companies shall get cancelled and extinguished, pursuant to this Scheme.
iii. Additionally, this Scheme also provides for various other matters consequential or otherwise integrally connected herewith.

B. Description of Companies

i. Virstra I-Technology Services Limited or Transferor Company-1 is an unlisted public limited company bearing CIN - U72200DL2004PLC126213 and incorporated on 06[th] May 2004 under the provisions of the Companies Act, 1956. Currently, its registered office is situated at 33-35 Thyagraj Nagar Market, New Delhi – 110003. The Transferor Company-1 is a wholly owned subsidiary of the Transferee Company. The Permanent Account Number of Transferor Company-1 is AABCV8600M.

The main objects of Transferor Company-1 as provided in Clause III (A) of its Memorandum of Association are as under:

“To provide software services, consultancy, data processing, business process management in the field of software maintenance, application, design, development, internet application, integration and other software services.
To design, develop, maintain, programme, buy, import, export, purchase, license, Market, implement, rent, hire, acquire, sub-contract and deal in all kind of computer software development, software related system and hardware of computer software development, software related system and hardware of software systems, communication system, programmed products, provide consultancy, data processing services, system study, software documentation and related components and complete software or computer based solutions
To carry on the business of analyzing, maintaining, compiling, coding, converting, programming and advising on all matter related to purchase, design, development and implementation of all kind of computer hardware and software system, communication systems, electronic systems, management information systems, data- processing system and data communication systems and in this regard conduct surveys, compile, feed, process, covert any test any kind of data for both analog and digital including CAD/CAM, make reports, specifications, estimates, studies and feasibility reports and provide services including digitization services for any individual, company, industry or other authority .
To provide consultancy services to all industries in the area of information technology.
To provide training to professionals in information technology.”
ii. Avon Mobility Solutions Private Limited or Transferor Company-2 is a private limited company bearing CIN - U72900DL2007PTC341409 and incorporated on 15[th] May 2007 under the provisions of the Companies Act, 1956. Currently its registered office is situated at 33-35 Thyagraj Nagar Market, New Delhi – 110003. The registered office of Transferor Company-2 was previously located at No. 7, M V Naidu Street, Ground and First Floor, Chetpet, Chennai – 600031 which was shifted to 33-35 Thyagraj Nagar Market, New Delhi – 110003 vide order dated 28[th] September 2018 passed by the Regional Director, Registrar of Companies (‘RoC’), Chennai. The Transferor Company-2 is a wholly owned subsidiary of the Transferee Company. The Permanent Account Number of Transferor Company-2 is AAGCA5271N.

The main objects of Transferor Company-2 as provided in Clause III (A) of its Memorandum of Association are as under:

“To establish, develop, maintain, and improve, up-grade of software for Wireless Mobile Technologies and Applications.
To carry on the business of trading, distribution, import and export of software, software products and hardware equipments for Wireless Mobile Technologies and other Applications.
To provide consultancy for software development, system development, networking, E-commerce and associated logistics for Wireless Technologies and other Applications”.
iii. Nucleus Software Exports Limited or Transferee Company is a listed public company bearing CIN - L74899DL1989PLC034594 and incorporated on January 9, 1989 under the provisions of the Companies Act, 1956. The shares of the Transferee Company are listed on the Bombay Stock Exchange and National Stock Exchange. The Transferee Company was previously incorporated as a

private limited company under the name of ‘Nucleus Software Exports Private Limited’ as per the provisions of Companies Act, 1956, however with the effect from October 10,1994 the name of Transferee Company was changed to ‘Nucleus Software Exports Limited’ vide certification from ROC, NCT of Delhi and Haryana. The Transferee Company currently has its registered office at 3335 Thyagraj Nagar Market, New Delhi – 110003. The Permanent Account Number of Transferee Company is AAACN5382P.

The main objects of Transferee Company as provided in Clause III (A) of its Memorandum of Association are as under:

“To carry on the business of consultants, trading, manufacturing, importing, exporting, agents and distributors of systems study, analysis, design, development and implementation of technologies, software systems/applications based on wireless, mobile or any other technology, for usage in all kinds of businesses, management systems, mobile system, e-commerce and/ or associated logistics including for any other purpose(s) or business(es) whatsoever, communication systems or combination of the computer and communication systems, hardware equipments for any system, product or technology and providing consultancy related to commercial and non-commercial usage, engineering goods, electronics equipments and instruments electrical goods and equipment and computers supply of manpower for supporting software supplied to various commercial and non commercial users.
To carry on the business as manufacturers of, fabricators, assemblers, processors and dealers of all kinds of computers, accounting and business, machines, transistors, transformers, receivers, conductors, magnetic materials, microwave components, videogames tapes, discs, fittings switches and all hardware, software and peripherals thereto.
To own or otherwise establish set up, manage, run and operate through partnership, joint venture or any other mode, training; data processing and information centers and/ or educational Institutions for imparting education, coaching and training in information Technology, Software Solutions, networking, data processing, telecommunication and other allied activities in the fields of computer software, hardware, marketing, management and business related, in India and abroad either through education centers and/or through postal means or through electronic i.e. e-learning services or other media including but not limited to publishing books, magazines, hosting websites for services of content development and support, animation, learning support, learning management systems and knowledge services and other related activities and to carry on the business of data digitalization by digitizing physical and manual records such as text images, videos and audio to carry on the business in India and abroad for commercial as well as non-commercial users.
To carry on the business of providing outsourcing services for all processors, sub processors, transactions, activities and all other work performed in various industries within India and across the world including but not limited to those process or sub processes that are enabled by information technology data, voice or video collection and processing, call centre services including in bound and out bound calling services of all kinds, technical support, managed data centre, managed technical centre, training centre, web support back office, business or financial analysis, scientific analysis, research work and analysis, storage, disaster recovery, accounting, pay roll, inventory management, customer relationship management, enterprises resources planning and to render computer services for commercial users and to develop software and supply information technology solutions including turnkey solutions, end-to-end solutions, systems integration and development of software, computer hardware, peripherals, networking.
To operate technology data processing centre or providing management information, analysis, development accounting and business information, and providing data to Corporate, Institutions, individuals in India and abroad to carry on the business of gathering compiling, processing analyzing, distributing, selling, publishing data and information and services and providing access to information regarding financial operations and management of financial services, investment services, business and commercial operations, financial status, credit worthiness and rating consumer responses and management of business of all kinds and descriptions and to provide other services through either computer aided or telephone or any other mode in India or anywhere in world and to carry on the business of providing infrastructure Management services and Application Service provider (ASP) services or commercial usage to Corporates, institutions, individuals, or other legal entity whether in India and abroad.
To carry on in India or abroad whether independently or in partnership with any other person, the business to provide, promote, develop, design, establish, setup, maintain, organize, undertake, manage, operate, run, market, purchase, sell, distribute, resell, import, export and carry on the business of all types/kinds of electronic and/or virtual payment systems services including integrated software and applications, e-wallets, mobile-wallets, cash card, stored value instruments, payment gateways services, prepaid and/or postpaid payment instruments payment systems including open/ closed/semiclosed systems payment instruments, including all kinds of payment services in any manner whatsoever through offline transaction, internet payment transactions or e-commerce payment transactions in banking, credit card payments, debit card payments, smart card payments, prepaid card payments, electronic cash card payments, electronic cashless payment systems, e-wallet payment systems, mobile payment systems, merchant payment transactions, utility payment transactions, digital COD(Cash on Delivery) payments, remittance transactions, credit reporting services and online search engine services, transaction switching and monitoring and transaction analytics of online financial and non-financial transactions through ATM, POS, Mobile Channels or any other channel available in future, internet, e-commerce, m-Commerce or such other system, mechanism, medium or technology as may be available invented, created from time to time in India or elsewhere, to scale up and to allow seamless integration across multiple business entities spread across various geographical locations to ensure a safe, secure and efficient electronic payment system and to act as marketing agents, consultants, financers, advisors, technicians far promoting and servicing of different types of payment systems such as closed, semi-closed and open systems relating to Payments and Settlement Services and to take over or give franchises of the same.

To provide services, management and consultancy in the field of prepaid and/or postpaid payment instruments services, electronic and virtual payment systems, transaction processing, and to act as dealers, distributors, agents, representative of Indian and foreign concerns/persons operating in the line of prepaid, postpaid and other payment system services, and allied activities related thereto” .

C. objects and Rationale for the Proposed scheme

i. Pursuant to and under the provisions of Sections 230 to 232 and other applicable provisions of the Act, the entire Business and Undertaking of each of the Transferor Companies will be merged and amalgamated into and with the Transferee Company.
ii. The Transferor Company-1 and Transferor Company-2 are wholly owned subsidiaries of the Transferee Company and are engaged in similar nature of business. The proposed scheme being undertaken with an objective to consolidate the business at one place for effective and efficient management. Pursuant to the amalgamation, there will be no change in the control or management of the Transferor Companies. Therefore, the Proposed Scheme would, inter-alia , have the following benefits:
a. Prevent cost duplication and bring in financial efficiencies of a holding structure. The resultant operations are expected to be substantially cost-efficient which would result in maximizing overall shareholder value, and will improve the competitive position of the combined entity.
b. Eliminate layered structures and reduce managerial overlap;
c. Contribute in furthering and fulfilling the objectives and business strategies of all the companies thereby accelerating growth, expansion, greater access to different market segments and development of the respective businesses currently, being carried through the Transferee Company;
d. Bring concentrated management focus, integration, streamlining of the management structure, seamless implementation of policy changes and shall also help enhance the efficiency and control;
e. Greater efficiency in cash management of the Transferee Company, an unfettered access to cash flow generated by the combined business which can be deployed more efficiently to fund organic and inorganic growth opportunities, to maximize shareholder value;
f. The Scheme is not opposed to public policy and shall not have any adverse effect on either the shareholders or employees or creditors of the Transferor Companies or the Transferee Company.
i. The Scheme has been approved by the Audit committee of Transferee Company and the respective Board of Directors of each of the Transferor Companies and the Transferee Company. Accordingly, it has been decided to make the requisite applications/ petitions before the Tribunal for the sanction of this Scheme.
ii. The amalgamation of both the Transferor Companies with the Transferee Company pursuant to and in accordance with this Scheme shall take place with effect from the Appointed Date and shall be in accordance with Section 2(1B) of the Incometax Act, 1961.

D. Parts of the scheme

The Scheme is divided in the following parts:

i. Part-I provides for Definitions, Interpretation and Share Capital details of the Companies which are common to all Parts. Specific definitions (if any) have been provided in the other Parts therein;
ii. Part-II provides for specific provisions governing the merger and amalgamation of each of the Transferor Companies into and with the Transferee Company;
iii. PaRt-iii deals with certain general terms and conditions applicable to one or more Parts of this Scheme.

PART-I: DEFINITIONS, INTERPRETATION AND SHARE CAPITAL

1. Definitions

In this Scheme, unless inconsistent / repugnant with the subject, context or meaning thereof, the following initially and/ or fully capitalized words or expressions shall have the meaning as set out herein below:

1.1. “ Act ” means the Companies Act, 2013 including any applicable rules and regulations made thereunder, and includes any statutory re-enactments, modifications and / or amendments thereof from time to time and to the extent in force;
1.2. “applicable laws ” means any statute, notification, bye laws, rules, regulations, guidelines, rule of common law, policy, code, directives, ordinance, orders or instructions having the force of law enacted or issued by any Appropriate Authority including any statutory modification or re-enactment thereof for the time being in force;

1.3. “ Appointed Date ” means the date from which the provisions of this Scheme shall become operational i.e. opening of business hours on 01 April 2019 or such other date as may be assented to and approved by the Board of Directors of the Companies and approved by the Tribunal;
1.4. “ Appropriate Authority ” means and includes any governmental, statutory, departmental or public body or authority, including Registrar of Companies, Stock Exchanges and the Tribunal;
1.5. “ Board of Directors ” in relation to the each of the Transferor Companies and the Transferee Company, as the case may be, means its respective board of directors, and unless it be repugnant to the context or otherwise, shall be deemed to include every committee (including a committee of directors) or any person authorized by the board of directors or such committee of directors duly constituted and authorized, inter alia , for the purposes of the amalgamation, the Scheme and/ or any other matter relating thereto;
1.6. “ BSE ” means BSE Limited;
1.7. “ Business and Undertaking ” shall mean whole of the undertaking and entire business of each of the Transferor Company-1 and Transferor Company-2 as a going concern on the Appointed Date and shall include inter alia the following:
a. all rights, titles, interests, covenants, undertakings and liabilities including rights, titles and interests continuing in connection with the immovable properties, and buildings, whether freehold, leasehold or otherwise;
b. all property, real or personal, in possession or reversion, corporeal or incorporeal, tangible or intangible, present or contingent, including all movable assets, fixed assets, plant and machinery, office equipment, computers, computer software products, data processing and communication equipment and facilities, lines and links, switches and routers, servers, telephones, telexes, facsimile connections, equipment, apparatus, installations, utilities, generators and air conditioners, electricity, water and other service connections, furniture and fixtures, all resources, utilities and facilities, vehicles, workin-progress including capital work in progress, whether owned, leased or otherwise;
c. all the current assets, loans and advances including inter alia inventories of raw materials, components and parts, work-in progress, finished goods and goods-in-transit, account receivables, cash and bank balances, deposits including accrued interest, share application monies, other current assets, actionable claims and debts appertaining to the moveable assets;
d. all earnest monies and/or security deposits, payment against warrants or other entitlements in connection with or relating to the Transferor Companies, including deposits and rent advance paid to lessors or licensors of office premises, warehousing facilities or residential premises;
e. all investments in government securities, shares, debentures and other securities, application money for subscription of shares, debentures, and other securities, made or held by the Transferor Companies, as well as all benefits accrued thereon;
f. all permits, quotas, rights, entitlements, allotments, approvals, consents, concessions, benefits arising out of exports of goods and services, exemptions, liberties, advantages, no-objection certificates, certifications, registrations, easements, goodwill, licenses, tenancies, offices and depots, Intellectual Property Rights including trade name and trademarks, service marks, patents, copyrights, moral rights, domain names, applications for copyrights, patents, privileges and benefits of all contracts, agreements and all other rights including lease rights, licenses, hire purchase arrangements, powers and facilities of every kind and description whatsoever appertaining to the Transferor Companies;
g. right to claim tax holidays, if applicable, under the provisions of the Income Tax Act;
h. Right to any claim, whether preferred or not, made by Transferor Companies, in respect of any refund of tax, duty, cess or other charge, including any erroneous or excess payment thereof made by the Transferor Companies and any interest thereon, with regard to any relevant law, act or rule;
i. all the secured and unsecured loans, debts, current liabilities and provisions, and other liabilities, duties and obligations, whether present of future and whether recorded or unrecorded, of the Transferor Companies, as at the Appointed Date (hereinafter collectively referred to as the “ liabilities ”);
j. all contracts, agreements, licenses, leases, memoranda of undertakings, memoranda of agreements, memoranda of agreed points, letters of agreed points, arrangements, undertakings, whether written or otherwise, deeds, bonds, schemes, arrangements, sales orders, purchase orders or other instruments of whatsoever nature to which Transferor Company-1 or Transferor Company-2 is a party, relating to their respective business, activities and operations;
k. all such permanent employees of Transferor Company-1 or Transferor Company-2, employees/personnel engaged on contract basis and contract labourers and secondees/interns/trainees, at its respective offices, branches or otherwise, and any other employees/personnel and contract labourers and interns/trainees hired by Transferor Company-1 or Transferor Company-2 after the date hereof, relating to their respective business, activities and operations; and
l. all books, record files, papers, computer programs along with engineering and process information, manuals, data, catalogues, quotations, websites, sales and advertising material, list of present and former customers, customer credit

information, customer pricing information, and other records whether in physical form or electronic form in connection with or relating to the respective business, activities and operations of the Transferor Companies.

m. all unabsorbed tax losses, unabsorbed tax depreciation, advance taxes, tax deducted at source, tax collected at source, Minimum Alternate tax credit, Service tax input credit balances, all state value added tax input credit balances and input tax under Goods & Services legislation.
1.8 “ Effective Date ” shall mean the last of the dates on which the conditions set out in Clause 16 of the Scheme are satisfied or waived in accordance with this Scheme. Any reference in this Scheme to the words “ upon the scheme becoming effective ” or “ date of coming into effect of the scheme ” or “ scheme coming into effect ” shall mean the Effective Date;
1.9. “ Government Authority ” means any applicable Central or State Government or local body, Legislative body, regulatory or administrative authority, agency or commission or any court, tribunal, board, bureau or instrumentality thereof or arbitration or arbitral body having jurisdiction on behalf of the Republic of India or any state or other subdivision thereof or any municipality, district or other subdivision thereof;
1.10. “ income tax act ” means the Income Tax Act, 1961, and shall include any statutory modifications, re-enactment or amendment thereof and to the extent in force;
1.11. “input tax Credit” means CENVAT Credit as defined under the CENVAT Credit Rules, 2004 and any other tax credits under any indirect tax law for the time being in force including Goods & Service Tax;
1.12. “ intellectual Property Rights ” means (a) copyright, patents, brands, manufacturing process, database rights and rights in trademarks, designs, know-how and confidential information (whether registered or unregistered); (b) applications for registration, and rights to apply for registration, of any of the foregoing rights; and (c) all other intellectual property rights and equivalent or similar forms of protection existing anywhere in the world;
1.13. “ listing Regulations ” means Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 and shall include any statutory modifications, re-enactment or amendment thereof and to the extent in force;
1.14. “ official liquidator ” or “ OL ” means the Official Liquidator having jurisdiction over the Transferor Companies and the Transferee Company;
1.15. “ NSE ” means National Stock Exchange of India Limited;
1.16. “ Registrar of Companies ” means the Registrar of Companies at NCT of Delhi and Haryana at New Delhi;
1.17. “ Rules ” means the Companies (Compromises, Arrangements and Amalgamations) Rules, 2016 and shall include any statutory modifications, re-enactment or amendment thereof and to the extent in force;
1.18. “ Scheme ” means this Scheme of Amalgamation of Transferor Company-1 and Transferor Company-2 and Transferee Company and their respective shareholders, in its present form (along with any annexures, schedules, etc. attached hereto), as submitted to the Tribunal or this Scheme with such modification(s), if any, as may be made by the members and/ or the creditors of the Companies or such modification(s) as may be imposed by any competent authority and/ or directed to be made by the Tribunal while sanctioning the Scheme and as accepted by the respective Board of Directors of the Companies;
1.19. “ SEBI ” means the Securities and Exchange Board of India established under Section 3 of the Securities and Exchange Board of India Act, 1992;
1.20. “shareholders” with respect to each of the Transferor Company-1 and Transferor Company-2 and the Transferee Company, means respectively, the persons registered from time to time, as the holders of the equity and preference shares of the company concerned;
1.21. “ stock Exchanges ” means BSE and/ or NSE;
1.22. “ transferee Company ” means Nucleus Software Exports Limited, bearing CIN L74899DL1989PLC034594, incorporated on January 9, 1989 under the provisions of the Companies Act, 1956 and having its registered office at 33-35 Thyagraj Nagar Market, New Delhi – 110003;
1.23. “ transferor Company-1 ” means Virstra I-Technology Services Limited bearing CIN U72200DL2004PLC126213, incorporated on 06[th] May 2004 under the provisions of the Companies Act, 1956 and having its registered office at 33-35 Thyagraj Nagar Market, New Delhi – 110003;
1.24. “ transferor Company-2 ” means Avon Mobility Solutions Private Limited bearing CIN - U72900DL2007PTC341409, incorporated on 15[th] May 2007 under the provisions of the Companies Act, 1956 and having its registered office at 33-35 Thyagraj Nagar Market, New Delhi – 110003;
1.25. “ tribunal” means the Hon’ble National Company Law Tribunal at New Delhi as constituted under the provisions of the Act having jurisdiction over the Transferor Companies and Transferee Company.

All terms and words not defined in this Scheme shall, unless repugnant or contrary to the context or meaning thereof, have the same meaning as ascribed to them under the Act and other Applicable Laws, as the case may be or any statutory modification or re-enactment thereof from time to time to the extent in force.

2. interpretation

2.1. References to statutory provisions shall be construed as references to the statutory provisions under Applicable Laws of India unless otherwise specified, and in any event to those provisions as respectively amended, superseded or re-enacted or as their application is modified by any other provisions (whether made before or after the date of this Scheme) from time to time, to the extent in force;
2.2. References to Clauses are to the Clauses of this Scheme and references to sub-clauses are to the sub-clauses of the Clause of this Scheme in which the reference appears;
2.3. The headings and sub-headings are for information only and shall not affect the construction or interpretation of this Scheme;
2.4. The singular shall include the plural and vice versa; and reference to one gender shall include all genders;
2.5. Any phrase introduced by the terms “including”, “include” or any similar expression shall be construed as illustrative and shall not limit the sense or scope of the word(s) preceding those terms.

3. Date of taking Effect and operative Date

3.1. The Scheme set out herein in its present form submitted to the Tribunal or this Scheme with such modification(s), if any, as may be made by the members and/ or the creditors of the Companies or such modification(s) as may be imposed by any competent authority and/or directed to be made by the Tribunal while sanctioning the Scheme and as accepted by the respective Board of Directors of the Companies shall be operative from the Appointed Date but shall be effective from the Effective Date.

4. share Capital

The authorized, share capital of the Transferor Companies and the Transferee Company as on 31[st] December 2018 is as follows:

4.1. Transferor Company-1

Partculars	Amount (in INR)
Authorized Capital
10,00,000 Equity Shares of INR 10/- each	1,00,00,000

4.2. Transferor Company-2

Partculars	Amount (in INR)
Authorized Capital
1,00,000 Equity Shares of INR 10/- each	10,00,000
40,00,000 11% Redeemable Non-Cumulatve Preference Shares of INR 10/- each	4,00,00,000

4.3. Transferee Company

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Particulars Amount (in INR)
authorized Capital
4,00,00,000 Equity Shares of INR 10/- each 40,00,00,000
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It is provided that till the Scheme becomes effective, the Transferor Companies and the Transferee Company are free to alter their authorized, issued, subscribed or paid up share capital as required by respective business requirements (including issue of shares on account of capital infusion in to the relevant company), subject to the necessary permissions and approvals of the concerned Government Authority and their respective Board of Directors and members, if required.

5. Compliance with tax laws

5.1. This Scheme complies with the conditions relating to “amalgamation” as defined under Section 2(1B) and other relevant sections and provisions of the Income Tax Act. If any terms or provisions of this Scheme are found to be or interpreted to be inconsistent with any of the said provisions at a later date whether as a result of a new enactment or any amendment or coming into force

of any provision of the Income Tax Act or any other Applicable Law or any judicial or executive interpretation or for any other reason whatsoever, the aforesaid provisions of the tax laws shall prevail and this Scheme may be modified accordingly with consent of the Transferor Companies and the Transferee Company (acting through the powers vested with their respective Board of Directors, which power can be exercised at any time and shall be exercised in the best interests of the companies and their shareholders).

PART-II: AMALGAMATION, TRANSFER AND VESTING

6. transfer and vesting

6.1. On occurrence of the Effective Date and with effect from the Appointed Date, the entire Business and Undertaking of the each of the Transferor Company-1 and Transferor Company-2 shall, in terms of Sections 230 to 232 and other applicable provisions of the Act and other provisions of Applicable Law, as may be relevant, pursuant to the sanctioning of the Scheme by the Tribunal, without any further act, instrument, deed, matter or thing, stand transferred and vested in and/ or deemed to be transferred to and vested in the Transferee Company as a going concern, in the following manner:
6.1.1. Transfer of Assets
a. The entire Business and Undertaking of the Transferor Companies shall stand transferred to and be vested in the Transferee Company without any further act or deed, together with all its properties, assets, rights, benefits and interest therein, subject to existing charges thereon, if any, in favour of banks and financial institutions and other secured lenders, as the case may be;
b. All the assets of the Transferor Companies as are movable in nature or incorporeal property or are otherwise capable of transfer by physical delivery or by endorsement and delivery or transfer by vesting and recording pursuant to this Scheme, shall stand vested in the Transferee Company, with effect from the Appointed Date, and shall become the assets and an integral part of the Transferee Company;
c. All movable property of the Transferor Companies, other than those specified in Paragraph 6.1.1.b above, including sundry debtors, cash in hand or in bank, outstanding loans and advances, actionable claims, guarantees, acceptances, if any, recoverable in cash or in kind or for value to be received, bank balances and deposits, if any, with Government, QuasiGovernment, local and other authorities and bodies, customers and other persons shall without any notice, intimation, act, instrument or deed become the property and integral part of the Transferee Company;
d. All the licenses, permits, quotas, contracts (together with all non-compete covenants), approvals, permissions, registrations, incentives, tax deferrals and benefits, subsidies, concessions, grants, rights, claims, leases, tenancy rights, liberties, special status and other benefits or privileges enjoyed or conferred upon or held or availed of by the Transferor Companies and all rights and benefits that have accrued or which may accrue to the Transferor Companies, whether before or after the Appointed Date, shall, under the provisions of Sections 230 to 232 of the Act and all other applicable provisions, if any, without any further act, instrument or deed, cost or charge be and stand transferred to and vest in or be deemed to be transferred to and vested in and be available to the Transferee Company, the licenses, permits, quotas, contracts (together with all non-compete covenants), approvals, permissions, registrations, incentives, tax deferrals and benefits, subsidies, concessions, grants, rights, claims, leases, tenancy rights, liberties, special status and other benefits or privileges of the Transferee Company and shall remain valid, effective and enforceable on the same terms and condition and shall be appropriately registered by the relevant statutory authorities in favor of the Transferee Company pursuant to this Scheme, in order to facilitate the continuation of operations of the Transferor Companies in the Transferee Company without any hindrance, on and from the Appointed Date.
e. In so far as various incentives, subsidies, special status and other benefits or privileges (including but not limited to right to claim credit in respect of all unabsorbed tax losses, unabsorbed tax depreciation, advance taxes, tax deducted at source, tax collected at source, minimum alternate tax credit, service tax input credit balances, all state value added tax input credit balances and input tax under goods & services legislation, all other rights including sales tax deferrals and exemptions and other benefits) granted by any Government body, local authority or by any other person and availed of by the Transferor Companies are concerned, the same shall vest with and be available to the Transferee Company on the same terms and conditions.
f. Upon the transfer of each of the permissions, approvals, consents, sanctions, remissions, special reservations, sales tax remissions, tax exemptions and benefits, incentives, concessions and other or similar authorizations of the Transferor Companies to the Transferee Company and pursuant to the order of the Tribunal, the Transferee Company shall file the relevant notifications and communications, if any, for the record of the appropriate authorities which shall take them on record.
g. All cheques and other negotiable instruments, payment orders received or presented for encashment which are in the name of the Transferor Companies after the Effective Date shall be accepted by the bankers of the Transferee Company and credited to the account of the Transferee Company, if presented by the Transferee Company. Similarly, the bankers of the Transferee Company shall honour all cheques issued by the Transferor Companies for payment after the Effective Date. If

required, the Transferor Companies shall allow maintaining of bank accounts in the name of Transferor Companies by the Transferee Company for such time as may be determined to be necessary by the Transferor Companies and the Transferee Company for presentation and deposition of cheques and pay orders that have been issued in the name of the Transferor Companies. It is hereby expressly clarified that any legal proceedings by or against the Transferor Companies in relation to cheques and other negotiable instruments, payment orders received or presented for encashment which are in the name of the Transferor Companies shall be instituted, or as the case may be, continued, by or against, the Transferee Company after the coming into effect of the Scheme.

6.1.2. Transfer of Liabilites

a. Upon the coming into effect of this Scheme and with effect from the Appointed Date all liabilities including but not limited to all secured and unsecured debts (whether in Indian rupees or foreign currency), sundry creditors, liabilities (including contingent liabilities), duties and obligations and undertaking of the Transferor Companies, all other obligations (including any guarantees, letter of credit or any other instrument or arrangement which may give rise to a contingent liability in whatever form) whether relating to and comprised in any of the Undertaking or otherwise, of every kind, nature and description whatsoever and howsoever arising, raised or incurred or utilized for its business activities and operations (herein referred to as the Liabilities), shall, pursuant to the sanction of this Scheme by the Tribunal and under the provisions of Sections 230 to 232 and other applicable provisions, if any, of the Act, without any further act, instrument, deed, matter or thing, be transferred to and vested in or be deemed to have been transferred to and vested in the Transferee Company, along with any charge, encumbrance, lien or security thereon, and the same shall be assumed by the Transferee Company to the extent they are outstanding on the Effective Date so as to become as and from the Appointed Date the liabilities of the Transferee Company on the same terms and conditions as were applicable to the Transferor Companies, and the Transferee Company shall meet, discharge and satisfy the same and further it shall not be necessary to obtain the consent of any third party or other person who is a party to any contract or arrangement by virtue of which such liabilities have arisen in order to give effect to the provisions of this Clause.
b. Without prejudice to the generality of the provisions contained herein, all loans raised, and liabilities incurred by either of the Transferor Companies after the Appointed Date but before the Effective Date for their operations, shall be deemed to be that of the Transferee Company;
c. Where any such debts, loans raised, liabilities, duties and obligations of the Transferor Companies as on the Appointed Date have been discharged or satisfied by the Transferor Companies after the Appointed Date and prior to the Effective Date, such discharge or satisfaction shall be deemed to be for and on account of the Transferee Company.
d. The transfer and vesting of the entire Business and Undertaking of the Transferor Companies, as aforesaid, shall be subject to the existing securities, charges and mortgages, if any, subsisting, over or in respect of the property and assets or any part thereof of the respective Transferor Companies, as the case may be;

Provided however that, any reference in any of the security documents or arrangements (to which either of the Transferor Company is a party) to the assets of any of the Transferor Companies, offered or agreed to be offered as security for any financial assistance or obligations, shall be construed as reference only to the assets pertaining to any of the Transferor Companies, as are vested in the Transferee Company by virtue of this Scheme, to the end and intent that such security, charge and mortgage shall not extend or be deemed to extend, to any of the other assets of the Transferee Company;

6.1.3. Encumbrances

a. The transfer and vesting of the properties, assets, liabilities and Undertaking of the Transferor Companies to and in the Transferee Company under this Scheme shall be subject to the mortgages and charges, if any, affecting the same, as and to the extent hereinafter provided.
b. All the existing securities, mortgages, charges, encumbrances or liens (the Encumbrances), if any, as on the Appointed Date and created by the Transferor Companies after the Appointed Date, over the properties, assets, Undertaking or any part thereof transferred to the Transferee Company by virtue of this Scheme and in so far as such encumbrances secure or relate to Liabilities of the Transferor Companies, the same shall, after the Effective Date, continue to relate and attach to such assets or any part thereof to which they are related or attached prior to the Effective Date and as are transferred to the Transferee Company, and such encumbrances shall not relate or attach to any of the other assets of the Transferee Company, provided however that no encumbrances shall have been created by the Transferor Companies over its assets after the date of filing of the Scheme without the prior written consent of the Board of Directors of the Transferee Company.
c. The existing encumbrances over the assets and properties of the Transferee Company or any part thereof which relate to the liabilities and obligations of the Transferee Company prior to the Effective Date shall continue to relate only to such assets and properties and shall not extend or attach to any of the assets and properties of the Transferor Companies transferred to and vested in the Transferee Company by virtue of this Scheme.
d. Any reference in any security documents or arrangements (to which the Transferor Companies is a party) to the Transferee Company and its assets and properties, shall be construed as a reference to the Transferee Company and the assets and properties of the Transferor Companies transferred to the Transferee Company by virtue of this Scheme. Without prejudice

to the foregoing provisions, the Transferor Companies and the Transferee Company may execute any instruments or documents or do all the acts and deeds as may be considered appropriate, including the filing of necessary particulars and/ or modification(s) of charge(s), with the RoC to give formal effect to the above provisions, if required.

e. Upon the coming into effect of this Scheme, the Transferee Company alone shall be liable to perform all obligations in respect of the Liabilities, which have been transferred to it in terms of the Scheme.
f. It is expressly provided that no other terms or conditions of the liabilities transferred to the Transferee Company is modified by virtue of this Scheme except to the extent that such amendment is required statutorily or by necessary implication.
g. The provisions of this Clause 6.1.3 shall operate in accordance with the terms of the Scheme, notwithstanding anything to the contrary contained in any instrument, deed or writing or the terms of sanction or issue or any security document; all of which instruments, deeds or writings shall be deemed to stand modified and/or superseded by the foregoing provisions.

6.1.4. Contracts, Agreements, Deeds, Licenses, Permits etc.

a. All contracts, deeds, bonds, share-purchase agreements, memoranda of understanding, letters of intent, undertakings, whether written or otherwise, agreements, schemes, arrangements and other instruments of whatsoever nature in relation to the Transferor Companies, or to the benefit of the Transferor Companies, and which are subsisting or having effect immediately before the Effective Date, shall remain in full force and effect against or in favour of the Transferee Company and may be enforced as fully and effectually as if, instead of the concerned Transferor Company-1 or Transferor Company-2, the Transferee Company had been a party or beneficiary or obligee thereto. Any contingent liabilities arising out of or in connection with the assignment of any tax/ levy deferrals by the Transferor Companies to any third party between the Appointed Date and the Effective Date shall be deemed to be that of the Transferee Company. All insurance benefits (including ‘no claim bonuses’) arising from the insurance policies so taken by either of the Transferor Companies in relation thereto or in connection therewith, stand transferred to and vested in the Transferee Company, as if the Transferee Company is a party thereto, and the Transferee Company shall be entitled to exercise all rights and privileges and shall be liable to perform all obligations thereunder;
b. All the leases, tenancies, leave and license agreements, lease agreements or other like agreements entered into by either of the Transferor Companies for taking on lease or rent or license basis, office premises or residential premises and all agreements entered into in relation thereto or in connection therewith, shall stand transferred to and vested in the Transferee Company, as if the Transferee Company is a party thereto, and the Transferee Company shall be entitled to exercise all rights and privileges and shall be liable to perform all obligations thereunder;
c. All permits, quotas, rights, certificates, entitlements, licenses including those relating to the trade names and trademarks, patents, copy rights and all other Intellectual Property Rights, tenancies, privileges, powers, facilities of every kind and description of whatsoever nature in relation to the Transferor Companies to which any of the Transferor Companies is a party, or to the benefits of which either of the Transferor Companies may be eligible, and which are subsisting or having effect immediately before the Effective Date, shall be enforceable fully and effectually as if, instead of the respective Transferor Companies, the Transferee Company had been a party or beneficiary or obligee thereto or therein;
d. All statutory licenses, no-objection certificates, permissions or approvals or consents required to carry on operations of the Transferor Companies, or granted to Transferor Companies, or under any other scheme of the Government of India or any of the State Governments as well as the necessary licenses and permits, shall stand vested in or transferred to the Transferee Company without further act or deed, and shall be appropriately transferred or assigned by the statutory authorities concerned therewith in favour of the Transferee Company upon the vesting of the Transferor Companies including their respective Business and Undertaking to the Transferee Company, pursuant to this Scheme. The benefit of all statutory and regulatory permissions, approvals or consents required to carry on the operations of Transferor Companies, shall vest in and become available to the Transferee Company, which shall send the relevant intimations for record of the same with the concerned statutory or any other authority, pursuant to this Scheme;
e. The Transferee Company will, at any time after this Scheme comes into effect, if so required under any Applicable Law or otherwise considered expedient by the Transferee Company, execute deeds of confirmation or other writings or arrangements with any party to any contract or arrangement in relation to Transferor Companies, or to which either of Transferor Company is a party, in order to give effect to the above provisions;

6.1.5. Legal Proceedings

a. All suits, claims, actions and proceedings of whatsoever nature by or against Transferor Company-1 and/ or Transferor Company-2 pending or instituted on or before the Effective Date shall neither abate nor shall in any way be prejudicially affected by reason of the said Businesses and Undertakings, having finally stood transferred to or vested in the Transferee Company as envisaged in this Scheme but shall be continued and be enforced by or against the Transferee Company as effectually as if the same has been pending and/or arising against and/ or instituted by or against the Transferee Company.

6.1.6. Employee Maters

Upon the coming into effect of this Scheme:

a. All the employees, staff, workmen or other labour of Transferor Company-1 and Transferor Company-2 shall become employees, staff, workmen or other labour of the Transferee Company, without any break or interruption in service and on

the same terms and conditions on which they are engaged by the Transferor Companies, up to the Effective Date. Services of all such employees, staff, workmen or other labour with the Transferor Companies up to the Effective Date shall be taken into account for the purpose of retirement benefits to which they may be eligible in the Transferee Company, on or after the Effective Date. Such past services with the Transferor Companies shall be taken into account by the Transferee Company, for the purpose of any retrenchment compensation, should the Transferee Company introduce any such scheme in future. The services of such employees, staff, workmen or other labour shall not be treated as having been broken or interrupted for the purpose of provident fund or gratuity or superannuation or other statutory purposes and for all purposes will be reckoned from the date of commencement of their services with the Transferor Companies;

b. As regards the provident fund, gratuity fund, superannuation fund, or any other special fund, if any, created or established by or existing as of the Effective Date, for the benefit of staff, workers, labour or employees of the Transferor Companies (hereinafter collectively referred to as the “ Employee Benefit Funds ”), upon this Scheme becoming effective, the Transferee Company shall stand substituted for the Transferor Companies, for all intents and purposes whatsoever, related to the operation or administration of such Employee Benefit Funds, and in relation to the obligation to make contribution to such Employee Benefit Funds, in accordance with the provisions of such Employee Benefit Funds;
c. It is the aim and intent of this Scheme that all the rights, powers, duties and obligations respectively of the Transferor Companies in relation to such Employee Benefit Funds shall become those of the Transferee Company, as if the Transferee Company is a party thereto in place of the Transferor Companies. The services of staff, workmen and other employees shall be treated as having been continuous for the purpose of such Employee Benefit Funds. Subject to substitution of the Transferee Company for the respective Transferor Companies as aforesaid, the Transferee Company may, at its discretion, either maintain separate employee benefit funds established by the Transferor Companies for the employees, who are transferred from the Transferor Companies to the Transferee Company or combine those funds with the funds established by the Transferee Company. In case either of the Transferor Companies have not established a separate fund or trust for providing provident fund benefits to its employees, but makes contributions to the regional provident fund authorities, the Transferee Company may, at its discretion, either continue such arrangement or establish a separate fund for the purpose or admit such employees to the funds established by the Transferee Company, and accordingly take steps for transfer of the accumulated balances standing to the credit of such employees.

6.1.7. Treatment of Taxes - Tax related provisions

a. Notwithstanding anything to the contrary contained in the provisions of this Scheme, Transferee Company shall be entitled to carry forward, avail of, or set-off any unabsorbed tax losses, unabsorbed tax depreciation, Credit of minimum alternative tax and input tax credits of Transferor Companies that remain unutilized as on Appointed Date. Further, any tax incentives, advantages, privileges, exemptions, credits, holidays, remissions, reductions as would have been available to Transferor Companies on or before Appointed Date shall be available to Transferee Company as per Applicable Laws;
b. Upon this Scheme becoming effective, Transferee Company shall be entitled to claim refunds or credits, including Input Tax Credits, with respect to taxes paid by, for, or on behalf of, Transferor Companies under Applicable Laws, including but not limited to income tax, goods and service tax, sales tax, value added tax, service tax, excise duty laws, CENVAT credit or any other taxes/duties/levies, whether or not arising due to any inter se transaction, even if the prescribed time limits for claiming such refunds or credits have lapsed. For the avoidance of doubt, Input Tax Credits already availed of or utilised by Transferor Companies and Transferee Company in respect of inter se transactions shall not be adversely impacted by the cancellation of inter se transactions pursuant to this Scheme;
c. Upon this Scheme becoming effective, any advance tax, self-assessment tax, minimum alternate tax and unexpired credit thereof or TDS credit available or vested with Transferor Companies, including any taxes paid and taxes deducted at source and deposited by Transferor Companies on inter se transactions during the period between Appointed Date and the Effective Date shall be treated as tax paid by Transferee Company and shall be available to Transferee Company for set-off against its liability under the Income Tax Act and any excess tax so paid shall be eligible for refund together with interest. Further, TDS deposited, TDS certificates issued, or TDS returns filed by Transferor Companies on transactions shall continue to hold good as if such TDS amounts were deposited, TDS certificates were issued and TDS returns were filed by Transferee Company. Any TDS deducted by, or on behalf of, Transferor Companies on inter se transactions will be treated as tax deposited by Transferee Company;
d. Upon this Scheme becoming effective, any goods and service tax (GST), service tax or any other tax charged by, for, or on behalf of, Transferor Companies on inter se transactions and in respect of which CENVAT credit or any Input Tax Credit is not available or has not been claimed by Transferee Company, shall be treated as goods and service tax (GST), service tax or any other tax (as the case may be) paid in cash by Transferor Companies, without any further action on the part of the relevant Transferor Companies and Transferee Company;
e. Transferee Company is expressly permitted to file or revise its corporate income tax, TDS, goods and services tax, wealth tax, service tax, excise, VAT, entry tax, professional tax or any other statutory returns, statements or documents in order to avail credit for advance tax paid, depreciation, tax deducted at source, claim for sum prescribed under Section 43B of the Income Tax Act on payment basis, deduction for provisions written back previously disallowed, by / relating to Transferor Companies under the Income Tax Act, credit of tax paid (including Credit of minimum alternative tax, under Section 115JB read with Section 115JAA of the Income Tax Act, available to Transferor Companies as on the Appointed Date), credit of foreign taxes paid / withheld etc., if any, pertaining to Transferor Companies upon this Scheme becoming effective, and

where necessary to give effect to this Scheme, even if the prescribed time limits for filing or revising such returns have lapsed without incurring any liability on account of interest, penalty or any other sum. Transferee Company is expressly permitted to amend, if required, its TDS or other statutory certificates and shall have the right to claim refunds, tax credits, set-offs and, or, adjustments relating to its income or transactions entered into by it with effect from Appointed Date.

f. The taxes or duties paid by, for, or on behalf of, Transferor Companies relating to the period on or after Appointed Date (regardless of the period they relate to, shall be deemed to be the taxes or duties paid by Transferee Company, as effectively as if the Transferee Company had paid the same and Transferee Company shall be entitled to claim credit or refund for such taxes or duties;
g. In accordance with the Cenvat Credit Rules, 2004 framed under Central Excise Act, 1944, state value added tax and Goods & Services tax as are prevalent on the Effective Date, the unutilized credits relating to excise duties, state value added tax, Goods & Services tax and service tax paid on inputs / capital goods / input services lying in the accounts of the Undertaking of the Transferor Companies shall be permitted to be transferred to the credit of the Transferee Company, (including in electronic form / registration), as if all such unutilized credits were lying to the account of the Transferee Company. The Transferee Company shall accordingly be entitled to set off all such unutilized credits against the excise duty / service tax/ Goods & Services tax payable by it.

Without prejudice to the generality of the above, all benefits, incentives, losses, credits (including, but without limitation to income tax, tax deducted at source, wealth tax, service tax, excise duty, central sales tax, applicable state value added tax, Goods & Services tax etc.) to which the Transferor Companies is entitled to in terms of applicable laws, shall be available to and vest in the Transferee Company, (including in electronic form / registration), upon this Scheme coming into effect.

h. As and from the Effective Date, all tax proceedings shall be continued and enforced by or against the Transferee Company in the same manner and to the same extent as would or might have been continued and enforced by or against the Transferor Companies. All tax liabilities of the Transferor Companies determined prior to Effective Date as well as tax liabilities pertaining to past periods determined after the Effective Date shall be transferred and enforced against the Transferee Company in the same manner and to the same extent as would or might have been enforced against the Transferor Companies.

Further, all tax proceedings shall not abate or be discontinued nor be in any way prejudicially affected by reason of the amalgamation of the Transferor Companies with the Transferee Company or anything contained in the Scheme.

6.1.8. Inter-se Transactons:

Without prejudice to the provisions of this Scheme, with effect from the Appointed Date, any loans, advances, obligations and any other transactions (including any billings, guarantees, letters of credit, letters of comfort or any other instruments or arrangements) between the Transferor Companies and the Transferee Company shall, ipso facto, stand cancelled and discharged and there shall be no rights, liabilities or obligations outstanding as between the relevant Companies and appropriate effect shall be given to such cancellation and discharge in the books of accounts and records of the Transferee Company. For the avoidance of doubt, it is hereby clarified that with effect from the Appointed Date, there will be no accrual of interest or other charges in respect of any loans, advances and other obligations as between any of the Transferor Companies and the Transferee Company. In so far as any shares, securities, debentures or notes issued by the Transferor Companies, and held by the Transferee Company and vice versa are concerned, the same shall, stand cancelled without any further act or deed as on the Effective Date, and shall have no effect and the Transferor Companies or the Transferee Company, as the case may be, shall have no further obligation outstanding in that behalf.

6.1.9. Declaraton of Dividend:

a. During the period between the Appointed Date and up to and including the Effective Date, the Transferor Companies shall not declare any dividend without the prior written consent of the Board of Directors of the Transferee Company.
b. For the avoidance of doubt, it is hereby declared that nothing in the Scheme shall prevent the Transferee Company from declaring and paying dividends, whether interim or final, to its equity shareholders as on the Record Date for the purpose of dividend and the shareholders of the Transferor Companies shall not be entitled to dividend, if any, declared by the Transferee Company prior to the Effective Date.

6.1.10. Miscellaneous

a. Insofar as any securities (including equity shares), debentures or notes issued by the any of the Transferor Companies and held by the Transferee Company and vice versa are concerned, the same shall, unless sold or transferred by holder of such securities, at any time prior to the Effective Date, stand cancelled and shall have no further effect.
b. The Transferee Company shall be entitled to take all steps as may be necessary to ensure that vacant, lawful, peaceful and unencumbered possession, right, title, interest of Transferor Companies’ immovable property or the properties occupied or used or enjoyed by the Transferor Companies is received by the Transferee Company;
c. All motor vehicles of any description whatsoever of any of the Transferor Companies shall stand transferred to and be vested in the Transferee Company with effect from the Appointed Date, and the Transferee Company shall take steps, on or after the Effective Date, for substitution of the name of the Transferee Company in place of the respective Transferor Company,

in the certificates of registration and other documents relating to motor vehicles and the appropriate Governmental and Registration Authorities shall accordingly substitute the name of the Transferee Company in place of the respective Transferor Company.

7. Conduct of Business by the transferor Companies

7.1. With effect from the Appointed Date and until the Effective Date:
a. The Transferor Companies shall carry on and shall be deemed to have carried on all their businesses and activities as hitherto for and on account or, and for the benefit of and in trust for, Transferee Company and shall stand possessed of their businesses, including all the assets and properties, on account of, and for the benefit of, and in trust for, the Transferee Company;
b. All the income and profits accruing to the Transferor Companies and expenditure and losses arising or incurred (including the effect of taxes, if any, thereon) by the Transferor Companies, shall, for all purposes, be treated and be deemed to be and accrue as the incomes and profits or expenditure or losses or taxes of the Transferee Company, as the case may be.
c. The Transferor Companies shall carry on its business with reasonable diligence and in the same manner as it has been doing hitherto, and the Transferor Companies shall not, save for anything done in the ordinary course of business, alter or substantially expand their business except with the written concurrence of the Transferee Company;
d. The Transferor Companies shall not, without the written concurrence of the Transferee Company, alienate, charge or encumber any of their assets and properties, except in the ordinary course of business or pursuant to any pre-existing obligation undertaken prior to the date of approval of the Scheme by the Board of Directors of the Transferor Companies;
e. The Transferor Companies shall not vary or alter, except in the ordinary course of its business or pursuant to any pre-existing obligation undertaken prior to the date of approval of the Scheme by the Board of Directors of the Transferor Companies, the terms and conditions of employment of any of their employees, nor shall they conclude settlement with any union or its employees except with the written concurrence of the Transferee Company;
f. Upon the Scheme becoming effective, with effect from the Appointed Date, all debts, liabilities, duties and obligations of the Transferor Companies as on the close of business on the date preceding the Appointed Date, whether or not provided in its books, and all liabilities which arise or accrue on or after the Appointed Date shall be deemed to be the debts, liabilities, duties and obligations of the Transferee Company;
g. Any of the rights, powers, authorities and privileges attached or related or pertaining to and exercised by or available to the Transferor Companies shall be deemed to have been exercised by the Transferor Companies for and on behalf of and as agent for the Transferee Company. Similarly, any of the obligations, duties and commitments attached, related or pertaining to the Undertaking that have been undertaken or discharged by the Transferor Companies shall be deemed to have been undertaken or discharged for and on behalf of and as agent for the Transferee Company.
7.2. For the purpose of giving effect to the vesting of the Business and Undertaking of the Transferor Companies, pursuant to Orders passed by the Tribunal, the Transferee Company shall, at any time, be entitled to get the recording of the change in the legal right(s), in accordance with the provisions of Sections 230 to 232 of the Act and in terms of directions, if any, given by the Tribunal. Further the Transferee Company shall be authorised to execute any pleadings, applications, forms, deeds, documents or other writings, as are required to remove any difficulties, seek modifications to the Scheme and carry out any formalities or compliances as are necessary for the implementation of this Scheme.
7.3. Pending sanction of the Scheme, the Transferee Company shall be entitled to apply to the Central and the State Governments, all other applicable authorities, agencies and/or organizations, for such consents, approvals, permissions and sanctions as may be required to own and operate the Business and Undertaking of each of the Transferor Companies, and the Transferor Companies will provide such reasonable assistance as may be required by the Transferee Company in this regard.

8. Consideration

8.1. For the purposes of this Scheme, it is hereby clarified that as the Transferor Companies are wholly owned subsidiaries of the Transferee Company and there would be no issue of shares by the Transferee Company in consideration of the amalgamation. Consequently, upon the Scheme coming into effect, the investments in the equity and/ or preference share capital of Transferor Company-1 and Transferor Company-2 appearing in the books of accounts of the Transferee Company will stand extinguished and cancelled.
8.2. Upon the Scheme becoming effective, the entire paid up share capital in the Transferor Companies fully held by the Transferee Company and/or its nominee(s) on the Effective Date shall stand extinguished and all such shares certificates representing the shares in the Transferor Companies shall be deemed to be cancelled on the Effective Date without any further application, act or deed.

9. Combination and Reclassification of the authorized share Capital and amendment of Memorandum of association of transferee Company

9.1. With effect from the Appointed Date and upon the Scheme becoming effective, pursuant to Sections 230 and 232 read with Sections 13 and 61 and other applicable provisions of the Act, and Clause V of the Memorandum of Association of Transferee Company, the authorized share capital of Transferee Company shall stand reclassified and increased from the present authorized share capital consisting of 4,00,00,000 (Four Crore) equity shares of INR 10/- (Rupees Ten only) each aggregating to INR 40,00,00,000/- (Rupees Forty Crore only) to 4,11,00,000 (Four Crore Eleven Lakh) equity shares of INR 10/- (Rupees Ten only) each and 40,00,000 (Forty Lakh) preference shares of INR 10/- (Rupees Ten only) collectively aggregating to INR 45,10,00,000/(Rupees Forty Five Crore Ten Lakh only). The fees/duty already paid by Transferor Companies for their authorized share capital shall be deemed to have been paid by Transferee Company. The amended Clause V of the Memorandum of Association of the Transferee Company shall without any further act, deed or instrument be substituted as follows:

“The Authorised Share Capital of the Company is Rs. 45,10,00,000/- (Rupees Forty Five Crore Ten Lakh) divided into 4,11,00,000 (Four Crore Eleven Lakh) equity shares of INR 10/- (Rupees Ten) each and 40,00,000 (Forty Lakh) preference shares of INR 10/(Rupees Ten) each.”

9.2. With effect from the Appointed Date and upon the Scheme becoming effective, the main objects of the Transferor Company-1 and Transferor Company-2 as covered in Paragraph B(i) and B(ii) respectively of this Scheme shall be added to the existing main objects of the Transferee Company in sub clause A of Clause III of its Memorandum of Association. The amended Clause III(A) of the Memorandum of Association of the Transferee Company shall without any further act, deed or instrument be substituted as follows:
“To carry on the business of consultants, trading, manufacturing, importing, exporting, agents and distributors of systems study, analysis, design, development, coding, programme and implementation of technologies, software systems/ applications based on wireless, mobile, internet application or any other technology, for usage in all kinds of businesses, management systems, programmed products, mobile system, e-commerce and/or associated logistics including for any other purpose(s) or business(es) whatsoever, communication systems or combination of the computer and communication systems, hardware equipments for any system, product or technology and providing consultancy related to commercial and non-commercial usage, engineering goods, electronics equipments and instruments electrical goods and equipment and computers supply of manpower for supporting software supplied to various commercial and non commercial users.
To carry on the business as manufacturers of, fabricators, assemblers, processors and dealers of all kinds of computers, accounting and business, machines, transistors, transformers, receivers, conductors, magnetic materials, microwave components, videogames tapes, discs, fittings switches and all hardware, software and peripherals thereto.
To own or otherwise establish set up, manage, run and operate through partnership, joint venture or any other mode, training; data processing and information centers and/ or educational Institutions for imparting education, coaching and training in information Technology, Software Solutions, networking, data processing, telecommunication and other allied activities in the fields of computer software, hardware, marketing, management and business related, in India and abroad either through education centers and/or through postal means or through electronic i.e. e-learning services or other media including but not limited to publishing books, magazines, hosting websites for services of content development and support, animation, learning support, learning management systems and knowledge services and other related activities and to carry on the business of data digitalization by digitizing physical and manual records such as text images, videos and audio to carry on the business in India and abroad for commercial as well as non-commercial users.
To carry on the business of providing outsourcing services for all processors, sub processors, transactions, activities and all other work performed in various industries within India and across the world including but not limited to those process or sub processes that are enabled by information technology data, voice or video collection and processing, call centre services including in bound and out bound calling services of all kinds, technical support, managed data centre, managed technical centre, training centre, web support back office, business or financial analysis, scientific analysis, research work and analysis, conduct surveys, compile, feed, process, covert any test any kind of data for both analog and digital including CAD/CAM, make reports, specifications, estimates, studies and feasibility reports, storage, disaster recovery, accounting, pay roll, inventory management, customer relationship management, enterprises resources planning and to render computer services for commercial users and to develop software and supply information technology solutions including turnkey solutions, end-toend solutions, systems integration, programme and development of software, computer hardware, peripherals, networking.
To operate technology data processing centre or providing management information, analysis, development accounting and business information, and providing data to Corporate, Institutions, individuals in India and abroad to carry on the business of gathering compiling, processing analyzing, distributing, selling, publishing data and information and services and providing access to information regarding financial operations and management of financial services, investment services, business and commercial operations, financial status, credit worthiness and rating consumer responses and management of business of all kinds and descriptions and to provide other services through either computer aided or telephone or any other mode in India or anywhere in world and to carry on the business of providing infrastructure Management services and Application Service provider (ASP) services or commercial usage to Corporates, institutions, individuals, or other legal entity whether in India and abroad.
To carry on in India or abroad whether independently or in partnership with any other person, the business to provide, promote, develop, design, establish, setup, maintain, organize, undertake, manage, operate, run, market, purchase, sell, distribute, resell, import, export and carry on the business of all types/kinds of electronic and/or virtual payment systems services including integrated software and applications, e-wallets, mobile-wallets, cash card, stored value instruments, payment gateways services, prepaid and/or postpaid payment instruments payment systems including open/ closed/semi-

closed systems payment instruments, including all kinds of payment services in any manner whatsoever through offline transaction, internet payment transactions or e-commerce payment transactions in banking, credit card payments, debit card payments, smart card payments, prepaid card payments, electronic cash card payments, electronic cashless payment systems, e-wallet payment systems, mobile payment systems, merchant payment transactions, utility payment transactions, digital COD(Cash on Delivery) payments, remittance transactions, credit reporting services and online search engine services, transaction switching and monitoring and transaction analytics of online financial and non-financial transactions through ATM, POS, Mobile Channels or any other channel available in future, internet, e-commerce, m-Commerce or such other system, mechanism, medium or technology as may be available invented, created from time to time in India or elsewhere, to scale up and to allow seamless integration across multiple business entities spread across various geographical locations to ensure a safe, secure and efficient electronic payment system and to act as marketing agents, consultants, financers, advisors, technicians far promoting and servicing of different types of payment systems such as closed, semi-closed and open systems relating to Payments and Settlement Services and to take over or give franchises of the same.

To provide services, management and consultancy in the field of prepaid and/or postpaid payment instruments services, electronic and virtual payment systems, transaction processing, and to act as dealers, distributors, agents, representative of Indian and foreign concerns/persons operating in the line of prepaid, postpaid and other payment system services, and allied activities related thereto .”
9.3. Pursuant immediately to the increase of authorized share capital and the addition of main objects as envisaged above, the Memorandum of Association of Transferee Company shall automatically stand amended and altered accordingly.
9.4. Transferee Company shall file the amended copy of its Memorandum of Association and Articles of Association with the Appropriate Authority within a period of 30 days (or within such time as prescribed under Applicable Law) from the Effective Date and the Appropriate Authority shall take the same on record.
9.5. It is hereby clarified that the consent of the shareholders of Transferee Company to the Scheme shall be deemed to be sufficient for the purposes of effecting this amendment, and no further resolution(s) under Section 13, Section 14, Section 61, Section 64 or any other applicable provisions of the Act, would be required to be separately passed.

10. accounting treatment

Upon the Scheme becoming effective, the amalgamation of the Transferor Companies with the Transferee Companies Company will be accounted for in the following manner:

10.1. The amalgamation shall be accounted for an “Amalgamation in the nature of Business Combination of entities under common control”. Thereby the accounting treatment, as applicable, shall be in accordance with Appendix C of IND AS 103.
10.2. The accounting treatment will be as under:
a. upon coming into effect of this Scheme, for the purpose of accounting for and dealing with the value of the assets, liabilities, reserves, etc., as dealt with herein below in the books of account of Transferee Company, unaudited financial statements of Transferor Companies as on the close of business of the date immediately preceding the Appointed Date shall be prepared;
b. all the assets, liabilities and reserves of Transferor Companies as recorded in their respective financial statements referred to in sub-clause (a) above shall be recorded in the books of accounts of Transferee Company as such, subject to suitable adjustments being made to ensure uniformity of accounting policies, if any; which shall be in compliance with the accounting standards prescribed in this regard;
c. the amount of any inter-company balances between Transferor Companies and Transferee Company, appearing in the books of account of Transferee Company or Transferor Companies, as the case may be, as on Appointed Date, shall stand cancelled without any further act or deed. For the avoidance of doubt, it is hereby clarified that with effect from Appointed Date, there will be no accrual of interest or other charges in respect of any such loans, advances and other obligations.
10.3. The amount recorded in books of Transferee Company as investments in Transferor Companies shall stand cancelled. Surplus or deficit, if any, arising as a result of amalgamation, shall be transferred to capital reserve on amalgamation. The treatment accorded shall be in compliance with Appendix C of IND AS 103.
10.4. The identity of the reserves of Transferor Companies, if any, and to the extent deemed appropriate by the Board of Directors of Transferee Company, shall be preserved and they shall appear in the financial statements of Transferee Company in the same form and manner, in which they appeared in the financial statements of the Transferor Companies, as on the date immediately preceding the Appointed Date. Accordingly, if prior to this Scheme becoming effective there is any reserve in the financial statements of an Transferor Companies, which are available for distribution to shareholders, whether as bonus shares or dividend or otherwise, the same would continue to remain available for such distribution by Transferee Company, subsequent to this Scheme becoming effective.
10.5. The amount lying in the balance of the “profit and loss account” in the books of account of the Transferor Companies shall be added to or set-off from, as the case may be, the corresponding balance appearing in the financial statements of Transferee Company.

10.6. Transferee Company shall make suitable entries in its books to give effect to all transactions of Transferor Companies in respect of assets, liabilities, reserves, income and expenses, from the Appointed Date to the Effective Date.
10.7. In case of any differences in accounting policies followed by Transferor Companies from that of Transferee Company, suitable adjustments ought to be made, to the extent material and practicable, so as to ensure that the financial statements of Transferee Company reflect the financial position on the basis of consistent accounting policies.
10.8. Notwithstanding the above, the Board of Directors of Transferee Company, in consultation with its statutory auditors, is authorized to account any of the balances in any other manner, if such accounting treatment is considered more appropriate. The same shall be in compliance with IND AS 103 notified by the Ministry of Corporate Affairs.

11. saving of Concluded transactions

11.1. The transfer of Business and Undertaking of the Transferor Companies as envisaged above shall not affect any transaction or proceedings already concluded by the Transferee Company on or before the Appointed Date and after the Appointed Date till the Effective Date, to the end and intent that the Transferor Companies accept and adopts all acts, deeds and things done and executed by the Transferee Company in respect thereto as done and executed by Transferee Company on behalf of itself.

12. Dissolution of transferor Companies

12.1. Upon this Scheme becoming effective, Transferor Companies shall without any further act or deed, stand dissolved without being wound up without any further act or deed by the parties. The name of Transferor Companies shall be dissolved and removed by the Registrar of Companies. Transferee Company shall make necessary filings in this regard.

PART-III: GENERAL TERMS AND CONDITIONS

13. Provisions applicable to the scheme

13.1. Upon the sanction of this Scheme and upon this Scheme becoming effective, the following shall be deemed to have occurred on the Appointed Date and become effective and operative in the order mentioned hereunder:
a. amalgamation of Transferor Companies into and with the Transferee Company in accordance with Part II of the Scheme;
b. combination of the authorised share capital of the Transferor Companies and the Transferee Company and reclassification of the authorised share capital of the Transferee Company as provided in Paragraph 9.2 of Part II of this Scheme; and
c. amendment of the main objects of the Transferee Company as provided in Paragraph 9.2 of Part II of this Scheme;
d. Dissolution of the Transferor Companies as provided in Paragraph 12.1 of Part- II of this Scheme.

14. application to tribunal

14.1. The Transferor Companies and the Transferee Company shall make all applications/ petitions under sections 230 and 232 and other applicable provisions of the Act to the Tribunal for sanctioning of this Scheme and obtain all approvals as may be required under Applicable Law.

15. listing agreement and sEBi Compliances

15.1. Since the Transferee Company is a listed company, this Scheme is subject to the compliances of all the requirements under the Listing Regulations and all statutory directives of SEBI insofar as they relate to sanction and implementation of the Scheme.
15.2. Per the Regulation 37(6) of the Listing Regulations relaxation has been provided in relation to the requirement of obtaining prior approval or no objection/ observation letter of the Stock Exchanges and SEBI in case of merger of wholly owned subsidiary with its holding company. The draft Scheme shall be filed with the Stock Exchanges for disclosure purposes in compliance with the above Regulation.

16. Conditionality of the scheme

Subject to the provisions of this Scheme, this Scheme shall become effective on the last of the following dates (“ Effective Date ”):

16.1. The Scheme as sanctioned by the Tribunal under Sections 230 to 232 of the Act and certified copies of such Orders of the Tribunal sanctioning the Scheme being filed with the Registrar of Companies by the Transferee Company and the Transferor Companies, as may be applicable.
16.2. The receipt of the requisite, consent, approval or permission of any Government, statutory or regulatory authority which under Applicable Law may be necessary for the implementation of this Scheme.

17. Modification or amendments to the scheme

17.1. Transferor Companies and the Transferee Company, through their respective Board of Directors (which shall include any committee or person authorized by the said Boards in this regard) may assent from time to time, on behalf of all persons concerned, to any extension, modifications which either the Board of Directors of Transferor Companies and the Transferee Company, deem fit and/ or approved/ imposed by the creditors/ members or any other authority, amendments to the Scheme (including modification in the Appointed Date) or to any conditions or limitations that the Tribunal, and /or any other authority may deem fit to direct or impose or which may otherwise be considered necessary, desirable or appropriate by them. Transferor Companies and the Transferee Company, acting through their respective authorized representatives, be and are hereby authorized to take all such steps as may be necessary, desirable or proper to resolve any doubts, difficulties or questions whether by reason of any directive or orders of any other authorities or otherwise howsoever arising out of or under or by virtue of the Scheme and/or any matter concerned or connected therewith.
17.2. For the purpose of giving effect to this Scheme or modifications or amendments thereof or additions thereto, the Board of Directors of Transferor Companies and the Transferee Company, including any person(s) or committee as may be authorized by the respective Board of Directors on their behalf may give and are hereby authorized to determine and give all such directions as are necessary and such determination or directions, as the case may be, shall be binding on all the parties in the manner as if the same were specifically incorporated in this Scheme.

18. Revocation or Withdrawal of the scheme

18.1. Subject to the order of the Tribunal, the Board of Directors of the Companies shall be entitled to revoke, cancel, withdraw and declare this Scheme to be of no effect at any stage if: (i) this Scheme is not being sanctioned by the Tribunal or if any of the consents, approvals, permissions, resolutions, agreements, sanctions and conditions required for giving effect to this Scheme are not obtained or for any other reason; (ii) in case any condition or alteration imposed by the Tribunal, shareholders/ creditors of the Companies or any other authority is not acceptable to the Board of Directors of the Companies; (iii) the Board of Directors of the Companies are of the view that the coming into effect of this Scheme in terms of the provisions of this Scheme or filing of the drawn up order with any Governmental Authority could have adverse implication on all or any of Transferor Companies and the Transferee Company; (iv) any change in Applicable Law; (v) owing to reasons as otherwise deemed fit by the Board of Transferor Companies and the Transferee Company. On revocation, withdrawal, or cancellation, this Scheme shall stand revoked, withdrawn, cancelled and be of no effect and in that event, no rights and liabilities whatsoever shall accrue to or be incurred inter se between the companies or their respective shareholders or creditors or employees or any other person, save and except in respect of any act or deed done prior thereto as is contemplated hereunder or as to any right, liability or obligation which has arisen or accrued pursuant thereto and which shall be governed and be preserved or worked out in accordance with the Applicable Law and in such case, each party shall bear its own costs unless otherwise mutually agreed.
18.2. In the event of any inconsistency between any of the terms and conditions of any earlier arrangement between the Companies, and/or their respective shareholders and/or creditors, and the terms and conditions of the Scheme, the latter shall prevail.

19. severability

19.1. If any part of this Scheme is determined to be invalid, illegal or unenforceable by the Tribunal or any Court(s) of competent jurisdiction or is otherwise found to be unworkable for any reason whatsoever, then it is the intention of the parties that such part shall be severable from the remainder of this Scheme, and the remainder of the Scheme shall remain in full force and effect as if such provision (or part thereof) had not originally been contained in the Scheme. Further, if deletion of such part of the Scheme shall cause this Scheme to become materially adverse to the Transferor Companies and/ or Transferee Company, then in such case the Companies shall attempt to bring about a modification in this Scheme, that will best preserve for the Companies the benefits and obligations of this Scheme, including but not limited to such part.

20. Costs, Charges and Expenses

20.1. All costs, charges, taxes including duties, levies and all other expenses, if any (save as expressly otherwise agreed) arising out of or incurred in connection with the Scheme and matters incidental thereto, shall be on account of and borne by Transferee Company.

21. Miscellaneous

21.1. Any doubt or difference or issue between the parties hereto or any of their shareholders, creditors, employees and/or persons entitled to or claiming any right to any equity shares in the Transferee Company or any equity shares in the Transferor Companies, as to the construction thereof or as to any account, valuation to be taken or made of any asset or liability transferred to the Transferee Company or as to anything else contained in or relating to or arising out of this Scheme, shall be decided jointly by the Boards of the Transferor Companies and the Transferee Company, whose decision shall be final and binding on all concerned.
21.2. In the event of this Scheme not becoming effective, this Scheme shall become null and void and no rights or liabilities whatsoever shall accrue to, or be incurred inter-se by, the parties or their respective shareholders or creditors or employees or any other person.

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NUCLEUS SOFTWARE EXPORTS LIMITED

CIN – L74899DL1989PLC034594

Registered Office: 33-35, Thyagraj Nagar Market, New Delhi- 110003 Phone: +91-120-4031400 Fax: +91-120-4031672

E-mail: [email protected]; Website: www.nucleussoftware.com

REPORT ADOPTED BY THE BOARD OF DIRECTORS OF NUCLEUS SOFTWARE EXPORTS LIMITED EXPLAINING EFFECT OF THE SCHEME ON THE EQUITY SHAREHOLDERS, KEY MANAGERIAL PERSONNEL, PROMOTERS AND NON-PROMOTER SHAREHOLDERS

PREAMBLE

A. The proposed scheme of amalgamation (“ Scheme ”) envisages the amalgamation of the entire business and undertaking of its wholly owned subsidiaries - Virstra I-Technology Services Limited (“ transferor Company-1 ”) and Avon Mobility Solutions Private Limited (“ transferor Company-2 ”) (hereinafter together referred to as “ transferor Companies ”) into and with Nucleus Software Exports Limited (“ transferee Company ”) pursuant to Sections 230 to 232 of the Companies Act, 2013 (the “ Act ”);
B. As per Section 232(2)(c) of the Act, it is required that the Board of Directors adopt a report explaining the effect of the Scheme on Shareholders, Key Managerial Personnel (“ KMP ”), Promoters and Non-Promoter Shareholders, laying out in particular the share exchange ratio and specifying any special valuation difficulties. The said report is required to be circulated to the shareholders and creditors along with the notice convening the meeting of members/ creditors, if any, ordered by the National Company Law Tribunal (“ NCLT ”);
C. Having regard to the aforesaid provision, the Board took into consideration, inter alia , the rationale of the Scheme, its impact on the Company’s shareholders, the financial position of the Transferor Companies and other documents placed before it to enable them to adopt the report under Section 232(2)(c) of the Act;

Report adopted by the Board of Directors of the Company under section 232(2)(c) of the act is given below:

After considering the abovementioned background and recommendations of the Audit Committee, the Board approved the Scheme and noted the following:

1. objects and Ratonale of the scheme

1.1. The Board noted that pursuant to amalgamation, the entire Business and Undertaking of each of the Transferor Companies will be merged and amalgamated into and with the Transferee Company.
1.2. The Transferor Company-1 and Transferor Company-2 are wholly owned subsidiaries of the Transferee Company and are engaged in similar nature of business. The proposed scheme being undertaken with an objective to consolidate the business at one place for effective and efficient management. Pursuant to the amalgamation, there will be no change in the control or management of the Transferor Companies. Therefore, the Proposed Scheme would, inter-alia, have the following benefits:
a. Prevent cost duplication and bring in financial efficiencies of a holding structure. The resultant operations are expected to be substantially cost-efficient which would result in maximizing overall shareholder value, and will improve the competitive position of the combined entity.
b. Eliminate layered structures and reduce managerial overlap;
c. Contribute in furthering and fulfilling the objectives and business strategies of all the companies thereby accelerating growth, expansion, greater access to different market segments and development of the respective businesses currently, being carried through the Transferee Company;
d. Bring concentrated management focus, integration, streamlining of the management structure, seamless implementation of policy changes and shall also help enhance the efficiency and control;
e. Greater efficiency in cash management of the Transferee Company, an unfettered access to cash flow generated by the combined business which can be deployed more efficiently to fund organic and inorganic growth opportunities, to maximize shareholder value;
f. The Scheme is not opposed to public policy and shall not have any adverse effect on either the shareholders or employees or creditors of the Transferor Companies or the Transferee Company.

2. Re. valuaton Report

2.1. The Board noted that there is no requirement for any share entitlement ratio since the Transferor Companies are wholly owned subsidiaries of the Transferee Company. The Board also observed that since there is no change in the shareholding pattern of the Transferee Company pursuant to the Scheme, there is no requirement to obtain a valuation report.

3. Re. no objecton from securites and Exchange Board of india (“ SEBI ”)

3.1. The Scheme solely provides for merger and amalgamation of the entire business and undertaking of each of Virstra I-Technology Services Limited and Avon Mobility Solutions Private Limited, which are wholly owned subsidiaries, into and with Nucleus Software Exports Limited, its parent holding company.
3.2. Therefore, pursuant to Paragraph 7 of the Circular bearing no. CFD/DIL3/CIR/2017/21 dated March 10, 2017 (“ Circular ”) issued by SEBI read with regulation 37(6) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, there is no requirement to obtain a no-objection letter from stock exchanges, valuation report from an independent chartered accountant, audit committee report, fairness opinion by a SEBI registered Merchant Banker, report on complaints, etc. The Scheme shall be filed with the stock exchanges for disclosure purposes only.

4. Efect of scheme on the shareholders of the Company

4.1. The Board noted that in relation to the equity shareholders of the Transferee Company, there will be no dilution in their shareholding in the Transferee Company as there will be no fresh issue and allotment of shares by the Transferee Company pursuant to the proposed Scheme.
4.2. The Board further noted that upon the Scheme becoming effective, the entire paid up share capital in the Transferor Companies, fully held by the Transferee Company, shall stand extinguished and cancelled.

5. Efect of scheme on the KMPs of the Company

5.1. The Board noted there will be no change in the KMPs of the Transferee Company pursuant to the Scheme.

6. Efect of scheme on the Promoter/ non-Promoter group of the Company

6.1. The Board noted that there will be no change in position of promoters as a result of implementation of the proposed Scheme. This is because the Transferor Companies are the wholly owned subsidiaries of the Transferee Company and the proposed Scheme envisages the extinguishment and cancellation of the shares held by the Transferee Company in the Transferor Companies.
6.2. The proposed Scheme does not entitle the promoter/ non-promoter group, related parties/ associates/ subsidiaries of the promoter/ non-promoter group of the Transferee Company to any additional shares. There will be no change in the shareholding of promoter/ non-promoter group of the Transferee Company as a result of implementation of the proposed Scheme.

Pursuant to the above discussions, the Board to conclude that the Transferee Company will carry on the businesses of Transferor Companies alongwith its own business with reasonable care, diligence and prudence to ensure that the interests of the stakeholders of Transferor Companies are not jeopardised. The Scheme will be beneficial to the Transferee Company and all its stakeholders and the terms thereof are fair and reasonable.

For and on behalf of NUCLEUS SOFTWARE EXPORTS LIMITED

Sd/Sd/- R P Singh Vishnu R Dusad CEO & Executive Director Managing Director

Place: Noida Date: 01.03.2019

NUCLEUS SOFTWARE EXPORTS LIMITED BALANCE SHEET AS AT 31 DECEMBER 2018

(Amount in Rupees Lacs unless otherwise stated) As at As at 31 December 2018 31 March 2018

BALANCE SHEET AS	(Amount in Rupees Lacs unless otherwise stated) As at As at AT 31 DECEMBER 2018
Particulars Note	31 December 2018 31 March 2018
ASSETS Non-current assets Property, plant and equipment 2.1 Intangible assets 2.1 Intangible assets under development Financial assets Investments 2.2 Trade receivables 2.3 Loans 2.4 Others 2.5 Deferred tax assets (net) 2.6 Income tax asset (net) 2.7 Other non-current assets 2.8 Total non-current assets Current assets Financial assets Investments 2.9 Trade receivables 2.10 Cash and cash equivalents 2.11 Other bank balances 2.12 Loans 2.13 Others 2.14 Other current assets 2.15 Total current assets Total assets EQUITY AND LIABILITIES EQUITY Equity share capital 2.16 Other equity 2.17 Total equity LIABILITIES Non-current liabilities Financial liabilities Other financial liabilities 2.18 Provisions 2.19 Total non-current liabilities Current liabilities Financial liabilities Trade payables 2.20 Other financial liabilities 2.21 Provisions 2.22 Income tax liabilities (net) 2.23 Other current liabilities 2.24 Total current liabilities	3,121 2,932 159 124 4 - 26,767 26,173 - 272 6 9 433 982 853 969 1,636 1,340 70 52 33,049 32,853 14,530 13,196 6,728 6,807 1,438 1,861 3,542 2,719 26 29 155 29 1,454 1,641 27,873 26,282 60,922 59,135 2,904 2,904 42,526 39,080 45,430 41,984 103 91 741 490 844 581 1,396 5,104 2,817 25 232 171 95 - 10,108 11,270 14,648 16,570

BALANCE SHEET AS

(Amount in Rupees Lacs unless otherwise stated)
As at
As at
AT 31 DECEMBER 2018

Particulars
Note

31 December 2018
31 March 2018

ASSETS
Non-current assets
Property, plant and equipment
2.1
Intangible assets
2.1
Intangible assets under development
Financial assets
Investments
2.2
Trade receivables
2.3
Loans
2.4
Others
2.5
Deferred tax assets (net)
2.6
Income tax asset (net)
2.7
Other non-current assets
2.8
Total non-current assets
Current assets
Financial assets
Investments
2.9
Trade receivables
2.10
Cash and cash equivalents
2.11
Other bank balances
2.12
Loans
2.13
Others
2.14
Other current assets
2.15
Total current assets
Total assets
EQUITY AND LIABILITIES
EQUITY
Equity share capital
2.16
Other equity
2.17
Total equity
LIABILITIES
Non-current liabilities
Financial liabilities
Other financial liabilities
2.18
Provisions
2.19
Total non-current liabilities
Current liabilities
Financial liabilities
Trade payables
2.20
Other financial liabilities
2.21
Provisions
2.22
Income tax liabilities (net)
2.23
Other current liabilities
2.24
Total current liabilities

3,121
2,932
159
124
4
-
26,767
26,173
-
272
6
9
433
982
853
969
1,636
1,340
70
52
33,049
32,853
14,530
13,196
6,728
6,807
1,438
1,861
3,542
2,719
26
29
155
29
1,454
1,641
27,873 26,282
60,922 59,135
2,904
2,904
42,526
39,080
45,430 41,984
103
91
741
490
844 581
1,396
5,104
2,817
25
232
171
95
-
10,108
11,270
14,648 16,570

Total equity and liabilities

60,922 59,135

See accompanying notes forming part of the financial statements 1 & 2

In terms of our report attached

For B S R & ASSOCIATES LLP

For and on behalf of the Board of Directors

Chartered Accountants

Firm Registration Number : 116231W/W-100024

Sd/-

KANIKA KOHLI

Partner

Membership number : 511565

Sd/ -

Sd/Sd/-

SIDDHARTHA MAHAVIR ACHARYA VISHNU R DUSAD RAVI PRATAP SINGH Chairman Managing Director CEO & Whole-time Director Sd/Sd/ASHISH NANDA POONAM BHASIN Chief Financial Officer AVP (Secretarial) & Company Secretary

Sd/ASHISH NANDA Chief Financial Officer

Place : Gurugram Place : Chennai Date : 28 January 2019 Date : 28 January 2019

NUCLEUS SOFTWARE EXPORTS LIMITED

STATEMENT OF PROFIT AND LOSS FOR THE QUARTER AND NINE MONTHS ENDED 31 DECEMBER 2018

			(Amount in Rupees Lac	s unless otherwise stated)
1. REVENUE FROM OPERATIONS Income from software product and services 2. OTHER INCOME 3. TOTAL INCOME (1+2) 4. EXPENSES a. Employee benefit expenses b. Operating and other expenses c. Finance cost d. Depreciation and amortisation expense TOTAL EXPENSES 5. PROFIT BEFORE TAX (3-4) 6. INCOME TAX EXPENSE a. Net current tax expense b. Deferred tax (credit) /charge NET TAX EXPENSE 7. PROFIT FOR THE PERIOD (5-6) 8. OTHER COMPREHENSIVE INCOME / (LOSS) (A) (i) Items that will not be reclassified to profit or loss a) Remeasurements of the defined benefit plans b) Equity instruments through other comprehensive income (ii) Tax relating to Items that will not be reclassified to profit or loss (B) (i) Items that will be reclassified subsequently to profit or loss a) Effective portion of gains and loss on hedging instruments in a cash flow hedge Tax (expense) / income relating to Items that will be reclassified subsequently to profit or loss TOTAL OTHER COMPREHENSIVE INCOME / (LOSS) 9. TOTAL COMPREHENSIVE INCOME (7+8) Profit attributable to: Owners of the Company Other comprehensive income attributable to: Owners of the Company Total comprehensive income attributable to: Owners of the Company 10. EARNINGS PER EQUITY SHARE Equity shares of Rupees 10 each a. Basic (Rs) b. Diluted (Rs) Number of shares used in computing earnings per share a. Basic b. Diluted See accompanying notes forming part of the financial statements	Notes Ref. 2.25 2.26 2.27 2.28 2.29 2.1 2.6 1 & 2	Quarter ended 31 December 2018	Quarter ended 31 December 2017 ` 8,770 537 9,307 5,275 2,109 7 167 7,558 1,749 339 0 339 1,410 (16) 177 2 68 (10) 221 1,631 1,410 221 1,631 4.85 4.85 29,040,724 29,040,724	For the nine months ended 31 December 2018 For the nine months ended 31 December 2017
		10,026 746		29,197 24,541 3,441 3,470
		10,772 6,026 2,621 7 181		32,638 28,011 17,704 15,301 6,984 6,131 23 26 525 487
		8,835		25,236 21,945
		1,937 208 (6)		7,402 6,066 1,382 1,063 (70) 3
		202		1,312 1,066
		1,735		6,090 5,000
		(14) 74 15 278 (69)		(43) (48) (171) (87) 15 8 108 (77) (38) (20)
		284		(129) (224)

		2,019		5,961 4,776
		1,735 284 2,019 5.97 5.97 29,040,724 29,040,724		6,090 5,000 (129) (224) 5,961 4,776 20.97 16.10 20.97 16.10 29,040,724 31,058,680 29,040,724 31,058,680

See accompanying notes forming part of the financial statements

1 & 2

In terms of our report attached

For B S R & ASSOCIATES LLP Chartered Accountants Firm Registration Number : 116231W/W-100024

For and on behalf of the Board of Directors

Sd/-

KANIKA KOHLI Partner Membership number : 511565

Sd/-

SIDDHARTHA MAHAVIR ACHARYA Chairman

Sd/-

Sd/Sd/VISHNU R DUSAD RAVI PRATAP SINGH Managing Director CEO & Whole-time Director

Sd/-

ASHISH NANDA Chief Financial Officer

POONAM BHASIN AVP (Secretarial) & Company Secretary

Place : Gurugram Place : Chennai Date : 28 January 2019 Date : 28 January 2019

NUCLEUS SOFTWARE EXPORTS LIMITED

CASH FLOW STATEMENT FOR THE NINE MONTHS ENDED 31 DECEMBER 2018

	(Amount in Rupees Lacs unless otherwise stated)
A. Cash flow from operating activities Net profit before tax *Adjustment for:* Depreciation and amortisation expense Unrealised exchange gain / loss on translation of foreign currency accounts (net) Dividend received from current, non trade investments Dividend received from non-current, non trade investment Dividend received from subsidiary companies Interest income on financial assets- carried at amortised cost MTM (gain) / loss on mutual funds Net gain / (loss) on sale of investments Profit on sale of fixed assets (net) Provision for doubtful debts/advances/other current assets Loss on impairment of preference shares of subsidiary Provision for impairment of investment Operating profit before working capital changes Adjustment for (increase) / decrease in operating assets Trade receivables Loans Other assets Adjustment for increase / (decrease) in operating liabilities Trade payables Provisions Other liabilities Income taxes paid (net) Net cash from operating activities (A) B. Cash flow from investing activities Acquisition of property, plant and equipment, intangible assets including intangible intangible assets under development Proceeds from sale of property, plant and equipment Payments to acquire mutual funds, tax free bonds and preference shares Proceeds from sale of mutual funds, tax free bonds and preference shares Investment in subsidiary Bank balance not considered as cash and cash equivalents - placed Bank balance not considered as cash and cash equivalents - matured Interest on fixed deposits and others received Dividend received from non trade investments Dividend on long term trade investment Dividend from subsidiary company Net cash from investing activities (B) C. Cash flow from financing activities Dividend paid (including corporate dividend tax) Buyback of equity shares Net cash used in financing activities (C) Net decrease in cash and cash equivalents (A+B+C) Opening cash and cash equivalents Exchange difference on translation of foreign currency bank accounts Closing cash and cash equivalents Supplementary information Restricted cash	For the nine months ended For nine months ended 31 December 2018 31 December, 2017 7,402 6,066 525 488 263 (53) (479) (591) (47) (119) (1,400) (1,389) (1,284) (1,268) (227) (6) (9) - (27) (4) 16 4 250 - 451 - 5,434 3,128 356 (884) 7 (1) (225) (262) (3,687) 1,185 312 89 1,445 2,821 3,642 6,076 (1,397) (1,105) 2,245 4,971 (715) (524) 29 - (23,999) (30,134) - 22,145 38,250 (183) (30) (750) (782) 690 - 654 572 479 591 47 119 1,400 1,389 (203) 9,451 (2,516) (1,669) - (11,701) (2,516) (13,370) (474) 1,052 1,861 1,094 51 (43) 1,438 2,103 42 41

(Amount in Rupees Lacs unless otherwise stated)

A. Cash flow from operating activities
Net profit before tax
Adjustment for:
Depreciation and amortisation expense
Unrealised exchange gain / loss on translation of foreign currency accounts (net)
Dividend received from current, non trade investments
Dividend received from non-current, non trade investment
Dividend received from subsidiary companies
Interest income on financial assets- carried at amortised cost
MTM (gain) / loss on mutual funds
Net gain / (loss) on sale of investments
Profit on sale of fixed assets (net)
Provision for doubtful debts/advances/other current assets
Loss on impairment of preference shares of subsidiary
Provision for impairment of investment
Operating profit before working capital changes
Adjustment for (increase) / decrease in operating assets
Trade receivables
Loans
Other assets
Adjustment for increase / (decrease) in operating liabilities
Trade payables
Provisions
Other liabilities
Income taxes paid (net)
Net cash from operating activities (A)
B. Cash flow from investing activities
Acquisition of property, plant and equipment, intangible assets including
intangible intangible assets under development
Proceeds from sale of property, plant and equipment
Payments to acquire mutual funds, tax free bonds and preference shares
Proceeds from sale of mutual funds, tax free bonds and preference shares
Investment in subsidiary
Bank balance not considered as cash and cash equivalents - placed
Bank balance not considered as cash and cash equivalents - matured
Interest on fixed deposits and others received
Dividend received from non trade investments
Dividend on long term trade investment
Dividend from subsidiary company
Net cash from investing activities (B)
C. Cash flow from financing activities
Dividend paid (including corporate dividend tax)
Buyback of equity shares
Net cash used in financing activities (C)
Net decrease in cash and cash equivalents (A+B+C)
Opening cash and cash equivalents
Exchange difference on translation of foreign currency bank accounts
Closing cash and cash equivalents
Supplementary information
Restricted cash

For the nine months ended
For nine months ended
31 December 2018
31 December, 2017
7,402
6,066
525
488
263 (53)
(479)
(591)
(47)
(119)
(1,400)
(1,389)
(1,284)
(1,268)
(227)
(6)
(9)
-
(27)
(4)
16
4
250
-
451
-
5,434 3,128
356
(884)
7
(1)
(225)
(262)
(3,687)
1,185
312
89
1,445
2,821
3,642 6,076
(1,397)
(1,105)
2,245 4,971
(715) (524)
29
-
(23,999)
(30,134)
-
22,145
38,250
(183)
(30)
(750)
(782)
690
-
654
572
479
591
47
119
1,400
1,389
(203)
9,451
(2,516)
(1,669)
-
(11,701)
(2,516) (13,370)
(474)
1,052
1,861
1,094
51
(43)
1,438 2,103
42
41

Notes:

i. Figures in brackets indicate cash outflow.

See accompanying notes forming part of the financial statements In terms of our report attached

For B S R & ASSOCIATES LLP

1 & 2

For and on behalf of the Board of Directors

Chartered Accountants Firm Registration Number : 116231W/W-100024

Sd/-

KANIKA KOHLI Partner Membership number : 511565

Sd/Sd/Sd/SIDDHARTHA MAHAVIR ACHARYA VISHNU R DUSAD RAVI PRATAP SINGH Chairman Managing Director CEO & Whole-time Director Sd/Sd/ASHISH NANDA POONAM BHASIN Chief Financial Officer AVP (Secretarial) & Company Secretary

Place : Gurugram Place : Chennai Date : 28 January 2019 Date : 28 January 2019

					Capital reserve Capital Redemption reserve Retained earnings Hedging reserve Equity instrument through other comprehensive income Remeasurements of the defined benefit plans Balance as of 1 January 2018 89 334 36,267 39 948 (98) 37,579 Profit for the period - - 1,560 - - - 1,560 Effective gain/(loss) on hedging instruments (net of tax) - - - (37) - - (37) Equity Instruments through Other Comprehensive Income - - - - (109) - (109) Remeasurements of the defined benefit plans (net of tax) - - - - - 87 87 Balance as on 31 March 2018 89 334 37,827 2 839 (11) 39,080	Capital reserve Capital Redemption reserve Retained earnings Hedging reserve Equity instrument through other comprehensive income Remeasurements of the defined benefit plans Balance as of 1 January 2018 89 334 36,267 39 948 (98) 37,579 Profit for the period - - 1,560 - - - 1,560 Effective gain/(loss) on hedging instruments (net of tax) - - - (37) - - (37) Equity Instruments through Other Comprehensive Income - - - - (109) - (109) Remeasurements of the defined benefit plans (net of tax) - - - - - 87 87 Balance as on 31 March 2018 89 334 37,827 2 839 (11) 39,080	Capital reserve Capital Redemption reserve Retained earnings Hedging reserve Equity instrument through other comprehensive income Remeasurements of the defined benefit plans Balance as of 1 January 2018 89 334 36,267 39 948 (98) 37,579 Profit for the period - - 1,560 - - - 1,560 Effective gain/(loss) on hedging instruments (net of tax) - - - (37) - - (37) Equity Instruments through Other Comprehensive Income - - - - (109) - (109) Remeasurements of the defined benefit plans (net of tax) - - - - - 87 87 Balance as on 31 March 2018 89 334 37,827 2 839 (11) 39,080	Total		45,837 5,000 (1,619) (49) (97) (87) (40) 334 (11,700)	37,579
								Items of OCI	Remeasurements of the defined benefit plans	(58) - - - - - (40) - -	(98)
Total		39,080 6,090 (2,323) (192) 70 (171) (28)	42,526	Total		37,579 1,560 (37) (109) 87	39,080		Equity instrument through other comprehensive income	1,035 - - - - (87) - - -	948
Items of OCI	Remeasurements of the defined benefit plans	(11) - - - - - (28)	(39)	Items of OCI	Remeasurements of the defined benefit plans	(98) - - - 87	(11)		Hedging reserve	136 - - - (97) - - - -	39
	Equity instrument through other comprehensive income	839 - - - - (171) -	668		Equity instrument through other comprehensive income	948 - - (109) -	839	Reserves and Surlus	Retained earnings	36,189 5,000 (1,619) (49) - - - - (3,254)	36,267
	Hedging reserve	2 - - - 70 - -	72		Hedging reserve	39 - (37) - -	2		General reserve	8,227 - - - - - - - (8,227)	(0)
Reserves and Surplus	Retained earnings	37,827 6,090 (2,323) (192) - - -	41,402	Reserves and Surplus	Retained earnings	36,267 1,560 - - -	37,827		Capital Redemption reserve p	- - - - - - - 334 -	334
	Capital Redemption reserve	334 - - - - - -	334		Capital Redemption reserve	334 - - - -	334		Securities premium	219 - - - - - - - (219)	-
	Capital reserve	89 - - - - - -	89		Capital reserve	89 - - - -	89		Capital reserve	89 - - - - - - - -	89
		Balance as of 1 April 2018 Profit for the period Dividend on equity shares Corporate dividend tax Effective gain/(loss) on hedging instruments (net of tax) Equity Instruments through Other Comprehensive Income Remeasurements of the defined benefit plans (net of tax)	Balance as of 31 December 2018			Balance as of 1 January 2018 Profit for the period Effective gain/(loss) on hedging instruments (net of tax) Equity Instruments through Other Comprehensive Income Remeasurements of the defined benefit plans (net of tax)	Balance as on 31 March 2018			Balance as of 1 April 2017 Profit for the period Dividend on equity shares Corporate dividend tax Effective gain/(loss) on hedging instruments (net of tax) Equity Instruments through Other Comprehensive Income Remeasurements of the defined benefit plans (net of tax) Addition for buy-back of equity shares (see note 2.16 vi) Ùtilised for buy back of equity shares (see note 2.16 vi)	Balance as of 31 December 2017

NUCLEUS SOFTWARE EXPORTS LIMITED NOTES FORMING PART OF THE FINANCIAL STATEMENTS

Note 1:

1.1 Company overview

Nucleus Software Exports Limited (‘Nucleus’ or ‘the Company’) was incorporated on 9 January, 1989 in India as a private limited company. It was subsequently converted into a public limited company on 10 October, 1994. The Company made an initial public offer in August 1995. As at 31 December 2018 the Company is listed on two stock exchanges in India namely National Stock Exchange and Bombay Stock Exchange.

The Company has wholly owned subsidiaries in Singapore, USA, Japan, Netherlands, South Africa and Australia. The Company has wholly owned subsidiaries in India. The Company’s business consists of software product development and marketing and providing support services mainly for corporate business entities in the banking and financial services sector.

1.2. Significant accounting policies

i. Basis of preparation of financial statements

a) Statement of compliance

The financial statements of the Company have been prepared in accordance with the Indian Accounting Standards (Ind AS) as per the Companies (Indian Accounting Standards) Rules, 2015 and Companies (Indian Accounting Standards) Amendment Rules, 2016 notified under Section 133 of the Companies Act, 2013 (the ‘Act’) and other relevant provisions of the Act.

The Financial statements were approved for issue by the Board of Directors on 28 January 2019.

b) Functional and presentation currency

The financial statements are presented in Indian Rupees (INR), which is also the Company`s functional currency. All amounts have been rounded-off to the nearest lacs unless otherwise indicated. Further, amounts below INR 50,000 have been rounded off to ‘-‘ in the financial statements while rounding off to the nearest lacs unless otherwise indicated.

c) Current and non-current classification

All assets and liabilities are classified into current and non-current.

Assets

An asset is classified as current when it satisfies any of the following criteria: · It is expected to be realized in, or is intended for sale or consumption in, the company’s normal operating cycle;
It is held primarily for the purpose of being traded;
It is expected to be realized within 12 months after the reporting date; or
It is cash or cash equivalent unless it is restricted from being exchanged or used to settle a liability for at least 12 months after the reporting date.
Current assets include current portion of the non-current financial assets.

All other assets are classified as non-current.

NUCLEUS SOFTWARE EXPORTS LIMITED NOTES FORMING PART OF THE FINANCIAL STATEMENTS

Liabilities

A liability is classified as current when it satisfies any of the following criteria:

It is expected to be settled in the company’s normal operating cycle;
It is held primarily for the purpose of being traded;
It is due to be settled within 12 months after the reporting date; or
The company does not have an unconditional right to defer settlement of the liability for at least 12 months after the reporting date. Terms of a liability that could, at the option of the counterparty, result in its settlement by the issue of equity instruments do not affect its classification.
Current liabilities include current portion of the non-current financial liabilities. All other liabilities are classified as non-current.

Deferred tax assets and liabilities (if any) are classified as non-current assets and liabilities.

Operating cycle

Operating cycle is the time between the acquisition of assets for processing and their realisation in cash or cash equivalents. The Company has ascertained its operating cycle, being a period within 12 months for the purpose of classification of assets and liabilities as current and non-current.

d) Basis of measurement

The financial statements have been prepared on the historical basis except for the following items:

following items:
Items	Measurement Basis
Certain financial assets and liabilities (including	Fair Value
derivative instruments)
Net defined benefit(asset)/liability	Fair value of plan assets less
	present value of defined benefit
	obligations

e) Use of estimates and judgements

In preparing these financial statements, management has made judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual result may differ from these estimates.

Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised prospectively.

Judgements

Information about judgments made in applying accounting policies that have the most significant effect on the amounts recognised in the financial statements is included in the following notes:

Lease classification – Note 2.30
Estimates of expected contract costs to be incurred to complete contracts- Note 2.24

NUCLEUS SOFTWARE EXPORTS LIMITED NOTES FORMING PART OF THE FINANCIAL STATEMENTS

Assumptions and estimation uncertainties

Information about assumptions and estimation uncertainties that have a significant risk of resulting in a material adjustment in the subsequent period financial statements is included in the following notes:

Estimation of current tax expense and payable – Note 2.7
Estimated useful life of property, plant and equipment
and Intangible assets Note 1.2 (iv) and (v)
Estimation of defined benefit obligations-– Note 2.37
Impairment of trade receivables- Note 2.3 and Note 2.10
Impairment loss on preference shares carried at amortised cost.
Estimation of fair value of preference shares in subsidiary

f) Measurement of fair values

The Company`s accounting policies and disclosures require the measurement of fair values, for both financial and non-financial assets and liabilities.

The Company has an established control framework with respect to the measurement of fair values. This includes a treasury team that has overall responsibility for overseeing all significant fair value measurements, including Level 3 fair values, and reports directly to the chief financial officer.

The treasury team regularly reviews significant unobservable inputs and valuation adjustments. If third party information, such as broker quotes or pricing services, is used to measure fair values, then the valuation team assesses the evidence obtained from the third parties to support the conclusion that these valuations meet the requirements of Ind AS, including the level in the fair value hierarchy in which the valuations should be classified.

Fair values are categorised into different levels in a fair value hierarchy based on the inputs used in the valuation techniques as follows.

Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2: inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).
Level 3: inputs for the asset or liability that are not based on observable market data
(unobservable inputs).

When measuring the fair value of an asset or a liability, the Company uses observable market data as far as possible. If the inputs used to measure the fair value of an asset or a liability fall into different levels of the fair value hierarchy, then the fair value measurement is categorised in its entirety in the same level of the fair value hierarchy as the lowest level input that is significant to the entire measurement.

The Company recognises transfers between levels of the fair value hierarchy at the end of the reporting period during which the change has occurred.

NUCLEUS SOFTWARE EXPORTS LIMITED NOTES FORMING PART OF THE FINANCIAL STATEMENTS

ii. Revenue recognition

The Company earns revenue primarily from software product development and providing support services mainly for corporate business entities in the banking and financial services sector.

Effective 1 April, 2018, the Company has applied Ind AS 115 which establishes a comprehensive framework for determining whether, how much and when revenue is to be recognised. Ind AS 115 replaces Ind AS 18 Revenue and Ind AS 11 Construction Contracts. The Company has adopted Ind AS 115 using the cumulative effect method. The effect of initially applying this standard is recognised at the date of initial application (i.e. 1 April 2018). The adoption of the standard did not have any material impact to the financial statements of the Company.
Revenue from fixed price contracts and sale of license and related customisation and implementation is recognised in accordance with the percentage completion method calculated based on output method. Provision for estimated losses, if any, on uncompleted contracts are recorded in the year in which such losses become certain based on the current estimates. The contract cost used in computing the revenues include cost of fulfilling warranty obligations, if any.
Revenue from sale of licenses, where no customisation is required, is recognised upon delivery of these licenses which constitute transfer of all risks and rewards.
Revenue from time and material contracts is recognised as the services are rendered.
Revenue from annual technical service contracts is recognised on a pro rata basis over the period in which such services are rendered.
The solutions offered by the Company may include supply of third-party equipment or software. In such cases, revenue for supply of such third party products are recorded at gross basis as the Company is acting as the principal.
Out of pocket reimbursable expenses e.g.travel etc. if incurred in relation to performance obligation under the contract is recognised as revenue.

NUCLEUS SOFTWARE EXPORTS LIMITED NOTES FORMING PART OF THE FINANCIAL STATEMENTS

Revenue is measured based on the transaction price, which is the consideration, adjusted for volume discounts, service level credits, price concessions and incentives, if any, as specified in the contract with the customer. Revenue also excludes taxes collected from customers.

Contract assets are recognised when there is excess of revenue earned over billings on contracts. Contract assets are classified as Service income accrued but not due. (only act of invoicing is pending in accordance with terms of the contract).

Advances from customers/ Advance billing and Deferred revenue (“contract liability”) is recognised when there is billing in excess of revenues.

Contracts are subject to modification to account for changes in contract specification and requirements. The Company reviews modification to contract in conjunction with the original contract, basis which the transaction price could be allocated to a new performance obligation, or transaction price of an existing obligation could undergo a change. In the event transaction price is revised for existing obligation a cumulative adjustment is accounted for.

iii.

Other income

Profit on sale of investments is determined as the difference between the sales price and the carrying value of the investment upon disposal of investments.

Dividend income is recognised in profit or loss on the date on which the Company`s right to receive payment is established.

Interest income or expense is recognised using the effective interest method.

The ‘effective interest rate’ is the rate that exactly discounts estimated future cash payments or receipts through the expected life of the financial instrument to:

the gross carrying amount of the financial asset ; or
the amortised cost of the financial liability

In calculating interest income and expense, the effective interest rate is applied to the gross carrying amount of the asset (when the asset is not credit-impaired) or to the amortised cost of the liability. However, for financial assets that have become credit- impaired subsequent to initial recognition, interest income is calculated by applying the effective interest rate to the amortised cost of the financial asset. If the asset is no longer credit-impaired, then the calculation of interest income reverts to the gross basis.

iv.

Property, plant and equipment

Property, plant and equipment are carried at cost less accumulated depreciation and impairment losses, if any. Cost of an item of property, plant and equipment includes its purchase price, any directly attributable expenditure on making the asset ready for its intended use. Property, plant and equipment under construction and cost of assets not ready to use before the year end, are disclosed as capital work-in-progress.

Depreciation on property, plant and equipment, except leasehold land and leasehold improvements, is provided on the straight-line method based on useful lives of respective assets as estimated by the management taking into account nature of the asset, the estimated usage of the asset and the operating conditions of the asset. Leasehold land is amortised over

NUCLEUS SOFTWARE EXPORTS LIMITED NOTES FORMING PART OF THE FINANCIAL STATEMENTS

the period of lease. The leasehold improvements are amortised over the remaining period of lease or the useful lives of assets, whichever is shorter. Depreciation is charged on a pro-rata basis for assets purchased / sold during the year.

If significant parts of an item of property, plant and equipment have different useful lives, then they are accounted for as separate items (major components) of property, plant and equipment.

Any gain or loss on disposal of an item of property, plant and equipment is recognised in profit or loss.

Subsequent expenditure is capitalized only if it is probable that the future economic benefits associated with the expenditure will flow to the Company.

The management’s estimates of the useful lives of the various property, plant and equipment are as follows:

Asset category	Management	Useful life as
	estimate of useful	per Schedule
	life (in years)	II(in years)
Tangible asset
Building	30	30
Plant and machinery (including	5	15
office equipment)*
Computers- end user devices such	3	3
laptops, desktops etc.
Computers- servers and networking	4	6
equipment*
Vehicles*	5	10
Furniture and fixtures*	5	10
Temporary wooden structures	3	3
(included in Building)

*Based on technical evaluation, the useful lives as given above represent the period over which the management believes to use these assets; hence these lives are different from the useful lives prescribed under Part C of schedule II of the Companies Act, 2013.

v. Intangible assets

Intangible assets are carried at cost less accumulated amortisation and impairment losses, if any. The cost of an intangible asset comprises its purchase price, including any import duties and other taxes (other than those subsequently recoverable from the tax authorities), and any directly attributable expenditure on making the asset ready for its intended use and net of any trade discounts and rebates.

NUCLEUS SOFTWARE EXPORTS LIMITED NOTES FORMING PART OF THE FINANCIAL STATEMENTS

Subsequent expenditure on an intangible asset after its purchase / completion is recognised as an expense when incurred unless it is probable that such expenditure will enable the asset to generate future economic benefits in excess of its originally assessed standards of performance and such expenditure can be measured and attributed to the asset reliably, in which case such expenditure is added to the cost of the asset.

The management’s estimates of the useful lives of the software are 3 years.

vi. Financial instruments

a) Recognition and initial measurement

Trade receivables issued are initially recognised when they are originated. All other financial assets and financial liabilities are initially recognised when the Company becomes a party to the contractual provision of the instrument.

A financial asset or financial liability is initially measured at fair value plus, for an item not at fair value through profit and loss (FVTPL), transaction costs that are directly attributable to its acquisition or issue.

b) Classification and subsequent measurement

Financial assets

On initial recognition, a financial asset is classified as measured at

amortised cost;
Fair value through other comprehensive income (FVOCI)-equity investment; or
Fair value through profit and loss (FVTPL)

Financial assets are not reclassified subsequent to their initial recognition, except if and in the period the Company changes its business model for managing financial assets.

A financial asset is measured at amortised cost if it meets both of the following conditions and is not designated as at FVTPL:

the asset is held within a business model whose objective is to hold assets to collect contractual cash flows; and
the contractual terms of the financial asset give rise on specified dates to cash flows that are solely for payments of principal and interest on the principal amount outstanding.

On initial recognition of an equity investment that is not held for trading, the Company may irrevocably elect to present subsequent changes in the investment`s fair value in OCI (designated as FVOCI-equity investment). This election is made on an investment-byinvestment basis.

All financial assets not classified as measured at amortised cost or FVOCI as described above are measured at FVTPL. This includes all derivatives financial assets. On initial recognition, the Company may irrevocably designate a financial asset that otherwise meets the requirement to be measured at amortised cost or at FVOCI as at FVTPL if doing so eliminates or significantly reduces an accounting mismatch that would otherwise arise.

NUCLEUS SOFTWARE EXPORTS LIMITED NOTES FORMING PART OF THE FINANCIAL STATEMENTS

Financial assets: Business model assessment

The Company makes an assessment of the objective of the business model in which a financial asset is held at a portfolio level because this best reflects the way the business is managed and information is provided to management. The information considered includes:

the stated policies and objectives for the portfolio and the operation of those policies in practice. These include whether management’s strategy focuses on earning contractual interest income, maintaining a particular interest rate profile, matching the duration of the financial assets to the duration of any related liabilities or expected cash outflows or realising cash flows through the sale of the assets;
how the performance of the portfolio is evaluated and reported to the Company’s management;
the risks that affect the performance of the business model (and the financial assets held within that business model) and how those risks are managed;
–
how managers of the business are compensated e.g. whether compensation is based on the fair value of the assets managed or the contractual cash flows collected; and
the frequency, volume and timing of sales of financial assets in prior periods, the reasons for such sales and expectations about future sales activity.

Financial assets: Assessment whether contractual cash flows are solely payments of principal and interest

For the purposes of this assessment, ‘principal’ is defined as the fair value of the financial asset on initial recognition. ‘Interest’ is defined as consideration for the time value of money and for the credit risk associated with the principal amount outstanding during a particular period of time and for other basic lending risks and costs (e.g. liquidity risk and administrative costs), as well as a profit margin.

In assessing whether the contractual cash flows are solely payments of principal and interest, the Company considers the contractual terms of the instrument. This includes assessing whether the financial asset contains a contractual term that could change the timing or amount of contractual cash flows such that it would not meet this condition. In making this assessment, the Company considers:

contingent events that would change the amount or timing of cash flows;
terms that may adjust the contractual coupon rate, including variable interest rate features; − prepayment and extension features; and
terms that limit the Company’s claim to cash flows from specified assets (e.g. non- recourse features).

A prepayment feature is consistent with the solely payments of principal and interest criterion if the prepayment amount substantially represents unpaid amounts of principal and interest on the principal amount outstanding, which may include reasonable additional compensation for early termination of the contract. Additionally, for a financial asset acquired at a significant discount or premium to its contractual par amount, a feature that permits or requires prepayment at an amount that substantially represents the contractual par amount plus accrued (but unpaid) contractual interest (which may also include reasonable additional compensation for early termination) is treated as consistent with this criterion if the fair value of the prepayment feature is insignificant at initial recognition.

NUCLEUS SOFTWARE EXPORTS LIMITED NOTES FORMING PART OF THE FINANCIAL STATEMENTS

Financial assets: Subsequent measurement and gains and losses

Financial assets at FVTPL	These assets are subsequently measured at fair value. Net gains and losses, including any interest or dividend income, are recognised in profit or loss. However, see Note 1.2(vi)(e) for derivatives designated as hedging instruments.
Financial assets at amortised cost	These assets are subsequently measured at amortised cost using the effective interest method. The amortised cost is reduced by impairment losses. Interest income, foreign exchange gains and losses and impairment are recognised in profit or loss. Any gain or loss on derecognition is recognised in profit or loss.
Equity investments at FVOCI	These assets are subsequently measured at fair value. Dividends are recognised as income in profit or loss unless the dividend clearly represents a recovery of part of the cost of the investment. Other net gains and losses are recognised in OCI and are not reclassified toprofit or loss.

Financial liabilities: Classification, subsequent measurement and gains and losses

Financial liabilities are classified as measured at amortised cost or FVTPL. A financial liability is classified as at FVTPL if it is classified as held- for- trading, or it is a derivative or it is designated as such on initial recognition. Financial liabilities at FVTPL are measured at fair value and net gains and losses, including any interest expense, are recognised in profit or loss. Other financial liabilities are subsequently measured at amortised cost using the effective interest method. Interest expense and foreign exchange gains and losses are recognised in profit or loss.

c) Derecognition

Financial assets

The Company derecognises a financial asset when the contractual rights to the cash flows from the financial asset expire, or it transfers the rights to receive the contractual cash flows in a transaction in which substantially all of the risks and rewards of ownership of the financial asset are transferred or in which the Company neither transfers nor retains substantially all of the risks and rewards of ownership and does not retain control of the financial asset.

If the Company enters into transactions whereby it transfers assets recognised on its balance sheet, but retains either all or substantially all of the risks and rewards of the transferred assets, the transferred assets are not derecognized.

Financial liabilities

The Company derecognises a financial liability when its contractual obligations are discharged or cancelled, or expire.

The Company also derecognises a financial liability when its terms are modified and the cash flows under the modified terms are substantially different. In this case, a new financial liability based on the modified terms is recognised at fair value. The difference between the carrying amount of the financial liability extinguished and the new financial liability with modified terms is recognised in profit or loss.

NUCLEUS SOFTWARE EXPORTS LIMITED NOTES FORMING PART OF THE FINANCIAL STATEMENTS

d) Offsetting

Financial assets and financial liabilities are offset and the net amount presented in the balance sheet when, and only when, the Company currently has a legally enforceable right to set off the amounts and it intends either to settle them on a net basis or to realise the asset and settle the liability simultaneously.

e) Derivative financial instruments and hedge accounting

The Company holds derivative financial instruments such as foreign exchange forward contracts to mitigate the risk of changes in exchange rates on foreign currency exposures. The counterparty for these contracts is generally a bank. Embedded derivatives are separated from the host contract and accounted for separately if the host contract is not a financial asset and certain criteria are met.

Derivatives are initially measured at fair value. Subsequent to initial recognition, derivatives are measured at fair value, and changes therein are generally recognised in profit or loss.

The Company designates certain derivatives as hedging instruments to hedge the variability in cash flows associated with highly probable forecast transactions arising from changes in foreign exchange rates.

At inception of designated hedging relationships, the Company documents the risk management objective and strategy for undertaking the hedge. The Company also documents the economic relationship between the hedged item and the hedging instrument, including whether the changes in cash flows of the hedged item and hedging instrument are expected to offset each other.

Cash flow hedges

The Company recognizes derivative instruments and hedging activities as either assets or liabilities in its balance sheet and measures them at fair value. Gains and losses resulting from changes in fair value are accounted for depending on the use of the derivative and whether it is designated and qualifies for hedge accounting. Changes in the fair values of the derivatives designated as cash flow hedges are deferred and recorded as a component of other comprehensive income (loss) reported under accumulated other comprehensive income (loss) until the hedge transaction occurs and are then recognized in the statements of income along with underline hedge items and disclosed as part of total net revenues. Changes in the fair value of the derivatives not designated as hedging instruments and the ineffective portion of the derivatives designated as cash flows hedges are recognized in statement of income and are included in foreign exchange gains (losses), net, and other income (expense), net, respectively.

When a derivative is designated as a cash flow hedging instrument, the effective portion of changes in the fair value of the derivative is recognized in OCI and accumulated in the other equity under ‘effective portion of cash flow hedges’. The effective portion of changes in the fair value of the derivative that is recognized in OCI is limited to the cumulative change in fair value of the hedged item, determined on a present value basis, from inception of the hedge. Any ineffective portion of changes in the fair value of the derivative is recognized immediately in profit or loss.

The Company designates only the change in fair value of the spot element of forward exchange contracts as the hedging instrument in cash flow hedging relationships. The change in fair value of the forward element of forward exchange contracts (‘forward points’) is separately accounted for as a cost of hedging and recognised separately within equity.

NUCLEUS SOFTWARE EXPORTS LIMITED NOTES FORMING PART OF THE FINANCIAL STATEMENTS

The amount accumulated in other equity is reclassified to profit or loss in the same period or periods during which the hedged expected future cash flows affect profit or loss.

If a hedge no longer meets the criteria for hedge accounting or the hedging instrument is sold, expires, is terminated or is exercised, then hedge accounting is discontinued prospectively. When hedge accounting for cash flow hedges is discontinued, the amount that has been accumulated in other equity remains there until, for a hedge of a transaction resulting in recognition of a non-financial item, it is included in the non-financial item’s cost on its initial recognition or, for other cash flow hedges, it is reclassified to profit or loss in the same period or periods as the hedged expected future cash flows affect profit or loss.

If the hedged future cash flows are no longer expected to occur, then the amounts that have been accumulated in other equity are immediately reclassified to profit or loss.

vii. Impairment

a) Impairment of financial instruments

The Company recognises loss allowances for expected credit losses on:
- financial assets measured at amortised cost;

At each reporting date, the Company assesses whether financial assets are carried at amortised cost. A financial asset is ‘credit- impaired’ when one or more events that have a detrimental impact on the estimated future cash flows of the financial asset have occurred.

The Company measures loss allowances at an amount equal to lifetime expected credit losses, except for the following, which are measured as 12 month expected credit losses:

debt securities that are determined to have low credit risk at the reporting date; and
other debt securities and bank balances for which credit risk (i.e. the risk of default occurring over the expected life of the financial instrument) has not increased significantly since initial recognition.

Loss allowances for trade receivables are always measured at an amount equal to lifetime expected credit losses.

12-month expected credit losses are the portion of expected credit losses that result from default events that are possible within 12 months after the reporting date (or a shorter period if the expected life of the instrument is less than 12 months).

When determining whether the credit risk of a financial asset has increased significantly since initial recognition and when estimating expected credit losses, the Company considers reasonable and supportable information that is relevant and available without undue cost or effort. This includes both quantitative and qualitative information and analysis, based on the Company’s historical experience and informed credit assessment and including forward- looking information.

Measurement of expected credit losses

Expected credit losses are a probability-weighted estimate of credit losses. Credit losses are measured as the present value of all cash shortfalls (i.e. the difference between the cash flows due to the Company in accordance with the contract and the cash flows that the Company expects to receive).

NUCLEUS SOFTWARE EXPORTS LIMITED NOTES FORMING PART OF THE FINANCIAL STATEMENTS

Presentation of allowance for expected credit losses in the balance sheet

Loss allowances for financial assets measured at amortised cost are deducted from the gross carrying amount of the assets.

Write-off

The gross carrying amount of a financial asset is written off (either partially or in full) to the extent that there is no realistic prospect of recovery. This is generally the case when the Company determines that the debtor does not have assets or sources of income that could generate sufficient cash flows to repay the amounts subject to the write-off.

b) Impairment of non-financial assets

The Company’s non-financial assets, other than inventories and deferred tax assets, are reviewed at each reporting date to determine whether there is any indication of impairment. If any such indication exists, then the asset’s recoverable amount is estimated.

For impairment testing, assets that do not generate independent cash inflows are grouped together into cash-generating units (CGUs). Each CGU represents the smallest group of assets that generates cash inflows that are largely independent of the cash inflows of other assets or CGUs.

The recoverable amount of a CGU (or an individual asset) is the higher of its value in use and its fair value less costs to sell. Value in use is based on the estimated future cash flows, discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the CGU (or the asset).

An impairment loss is recognised if the carrying amount of an asset or CGU exceeds its estimated recoverable amount. Impairment losses are recognised in the statement of profit and loss. Impairment loss recognised in respect of a CGU is allocated first to reduce the carrying amount of any goodwill allocated to the CGU, and then to reduce the carrying amounts of the other assets of the CGU (or group of CGUs) on a pro rata basis.

viii. Provisions (other than for employee benefits)

A provision is recognized if, as a result of a past event, the Company has a present legal or constructive obligation that can be estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation. Provisions are determined by discounting the expected future cash flows (representing the best estimate of the expenditure required to settle the present obligation at the balance sheet date) at a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the liability. The unwinding of the discount is recognized as finance cost. Expected future operating losses are not provided for.

Post sales client support and warranties

The Company provides its clients with fixed period warranty for correction of errors and support on its fixed price product orders. Revenue for such warranty period is allocated based on the estimated effort required during warranty period.

NUCLEUS SOFTWARE EXPORTS LIMITED NOTES FORMING PART OF THE FINANCIAL STATEMENTS

Onerous contracts

A contract is considered to be onerous when the expected economic benefits to be derived by the Company from the contract are lower than the unavoidable cost of meeting its obligations under the contract. The provision for an onerous contract is measured at the present value of the lower of the expected cost of terminating the contract and the expected net cost of continuing with the contract. Before such a provision is made, the Company recognises any impairment loss on the assets associated with that contract.

ix. Foreign currency

a) Foreign currency transactions

Transactions in foreign currencies are translated in to INR, the functional currency of the Company at the exchange rates at the dates of the transactions or an average rate if the average rate approximates the actual rate at the date of the transaction.

Monetary assets and liabilities denominated in foreign currencies are translated into the functional currency at the exchange rate at the reporting date. Non-monetary assets and liabilities that are measured at fair value in a foreign currency are translated into the functional currency at the exchange rate when the fair value was determined. Non-monetary assets and liabilities that are measured based on historical cost in a foreign currency are translated at the exchange rate at the date of the transaction. Exchange differences are recognised in profit or loss, except exchange differences arising from the translation of the following items which are recognised in OCI:

- qualifying cash flow hedges to the extent that the hedges are effective.

During the quarter ended 31 December 2018, the company has adopted Appendix B to Ind AS 21- Foreign Currency Transactions and Advance Consideration which clarifies the date of transaction for the purpose of determining the exchange rate to use on initial recognition of the related asset, expense or income when an entity has received or paid advance consideration in a foreign currency. The effect on account of adoption of this amendment was insignificant.

b) Foreign operations

The assets and liabilities of foreign branches are translated into INR, the functional currency of the Company, at the exchange rates at the reporting date. The income and expenses of foreign operations are translated into INR at the exchange rates at the dates of the transactions or an average rate if the average rate approximates the actual rate at the date of the transaction.

x. Earnings per share

Basic earnings per share is computed using the weighted average number of equity shares outstanding during the year. Diluted earnings per share is computed using the weighted average number of equity and dilutive equity equivalent shares outstanding during the yearend, except where the results would be anti-dilutive.

NUCLEUS SOFTWARE EXPORTS LIMITED NOTES FORMING PART OF THE FINANCIAL STATEMENTS

xi. Taxation

Income tax comprises current and deferred tax. It is recognised in profit or loss except to the extent that it relates to a business combination or to an item recognised directly in equity or in other comprehensive income .

a) Current tax

Current tax assets and current tax liabilities are offset only if there is a legally enforceable right to set off the recognised amounts, and it is intended to realise the asset and settle the liability on a net basis or simultaneously.

b) Deferred tax

Deferred tax is recognized in respect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the corresponding amounts used for taxation purposes. Deferred tax is also recognized in respect of carried forward tax losses and tax credits. Deferred tax is not recognized for:

temporary differences arising on the initial recognition of assets or liabilities in a transaction that is not a business combination and that affects neither accounting nor taxable profit or loss at the time of the transaction;
temporary differences related to investments in subsidiaries to the extent that the Company is able to control the timing of the reversal of the temporary differences and it is probable that they will not reverse in the foreseeable future; and
taxable temporary differences arising on the initial recognition of goodwill.

Deferred tax assets are recognized to the extent that it is probable that future taxable profits will be available against which they can be used. The existence of unused tax losses is strong evidence that future taxable profit may not be available. Therefore, in case of a history of recent losses, the Company recognizes a deferred tax asset only to the extent that it has sufficient taxable temporary differences or there is convincing other evidence that sufficient taxable profit will be available against which such deferred tax asset can be realized. Deferred tax assets – unrecognized or recognized, are reviewed at each reporting date and are recognized/ reduced to the extent that it is probable/ no longer probable respectively that the related tax benefit will be realized.

Deferred tax is measured at the tax rates that are expected to apply to the period when the asset is realized or the liability is settled, based on the laws that have been enacted or substantively enacted by the reporting date.

The measurement of deferred tax reflects the tax consequences that would follow from the manner in which the Company expects, at the reporting date, to recover or settle the carrying amount of its assets and liabilities.

NUCLEUS SOFTWARE EXPORTS LIMITED NOTES FORMING PART OF THE FINANCIAL STATEMENTS

Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax liabilities and assets, and they relate to income taxes levied by the same tax authority on the same taxable entity, or on different tax entities, but they intend to settle current tax liabilities and assets on a net basis or their tax assets and liabilities will be realized simultaneously.

Minimum Alternative Tax (‘MAT’) expense under the provisions of the Income-tax Act, 1961 is recognised as an asset when it is probable that future economic benefit associated with it in the form of adjustment of future income tax liability, will flow to the Company and the asset can be measured reliably. MAT credit entitlement is set off to the extent allowed in the year in which the Company becomes liable to pay income taxes at the enacted tax rates. MAT credit entitlement is reviewed at each reporting date and is written down to reflect the amount that is reasonably certain to be set off in future years against the future income tax liability. MAT Credit Entitlement has been presented as Deferred Tax in Balance Sheet.

xii. Employee benefits

Defined contribution plans

The Company's contribution to provident fund is considered as defined contribution plans and is charged as an expense as they fall due based on the amount of contribution required to be made.

Defined benefit plans

For defined benefit plans in the form of gratuity fund, the cost of providing benefits is determined using the Projected Unit Credit method, with actuarial valuations being carried out at each year end. When the calculation results in a potential asset for the Company, the recognized asset is limited to the present value of economic benefits available in the form of any future refunds from the plan or reductions in future contributions to the plan (‘the asset ceiling’). In order to calculate the present value of economic benefits, consideration is given to any minimum funding requirements.

Remeasurements of the net defined benefit liability, which comprise actuarial gains and losses, the return on plan assets (excluding interest) and the effect of the asset ceiling (if any, excluding interest), are recognized in OCI. The Company determines the net interest expense (income) on the net defined benefit liability (asset) for the period by applying the discount rate used to measure the defined benefit obligation at the beginning of the annual period to the then-net defined benefit liability (asset), taking into account any changes in the net defined benefit liability (asset) during the period as a result of contributions and benefit payments. Net interest expense and other expenses related to defined benefit plans are recognized in profit or loss.

The retirement benefit obligation recognized in the Balance Sheet represents the present value of the defined benefit obligation as adjusted for unrecognized past service cost, as reduced by the fair value of scheme assets.

Short-term employee benefits

NUCLEUS SOFTWARE EXPORTS LIMITED NOTES FORMING PART OF THE FINANCIAL STATEMENTS

are expected to occur within twelve months after the end of the year in which the employee renders the related service. The cost of such compensated absences is accounted as under:

(a) in case of accumulated compensated absences, when employees render the services that increase their entitlement of future compensated absences; and
(b) in case of non-accumulating compensated absences, when the absences occur.

Long-term employee benefits

Compensated absences which are not expected to occur within twelve months after the end of the year in which the employee renders the related service are recognized as a liability at the present value of the defined benefit obligation as at the Balance Sheet date.

Employee stock option based compensation

The grant date fair value of equity settled share-based payment awards granted to employees is recognized as an employee expense, with a corresponding increase in equity, over the period that the employees unconditionally become entitled to the awards. The amount recognized as expense is based on the estimate of the number of awards for which the related service and non-market vesting conditions are expected to be met, such that the amount ultimately recognized as an expense is based on the number of awards that do meet the related service and non-market vesting conditions at the vesting date.

For share-based payment awards with non-vesting conditions, the grant date fair value of the share-based payment is measured to reflect such conditions and there is no true-up for differences between expected and actual outcomes.

xiii.

Cash Flow Statement

Cash flows are reported using the indirect method, whereby profit for the period is adjusted for the effects of transactions of a non –cash nature, any deferrals or accruals of past or future operating cash receipts or payments and item of income or expenses associated with investing or financing cash flows. The cash flows from operating, investing and financing activities of the Company are segregated.

xiv.

Leases

a. Determining whether an arrangement contains a lease

At inception of an arrangement, it is determined whether the arrangement is or contains a lease.

At inception or on reassessment of the arrangement that contains a lease, the payments and other consideration required by such an arrangement are separated into those for the lease and those for other elements on the basis of their relative fair values. If it is concluded for a finance lease that it is impracticable to separate the payments reliably, then an asset and a liability are recognised at an amount equal to the fair value of the underlying asset. The liability is reduced as payments are made and an imputed finance cost on the liability is recognised using the incremental borrowing rate.

NUCLEUS SOFTWARE EXPORTS LIMITED NOTES FORMING PART OF THE FINANCIAL STATEMENTS

b. Lease payments

Lease payments under operating lease are recognised as an expense in the Statement of Profit and Loss on a straight-line basis over the lease term unless such payments are structured to increase in line with expected general inflation to compensate for the lessor`s expected inflation increases.

xv.

Research and development

Revenue expenditure pertaining to research is charged to the Statement of Profit and Loss. Development costs of products are also charged to the Statement of Profit and Loss unless a product’s technical feasibility has been established, in which case such expenditure is capitalized. The amount capitalized comprises expenditure that can be directly attributed or allocated on a reasonable and consistent basis to creating, producing and making the asset ready for its intended use. Property, Plant and equipment utilized for research and development are capitalized and depreciated in accordance with the policies stated for property plant and equipment.

NET CARRYING AMOUNT	As at 31 March 2018	34 (34) 544 (552) 1,450 (1,516) 49 (47) 46 (49) 567 (439) 162 (159) 80 (2)	2932	, (2,798) 124 (182)	3,056	(2,980)
	As at 31 December 2018	34 (34) 538 (544) 1,404 (1,450) 43 (49) 55 (46) 699 (567) 206 (162) 142 (80)	3121	, (2,932) 159 (124)	3,280	(3,056)
ACCUMULATED DEPRECIATION	As at 31 December 2018	- - 22 (16) 250 (177) 153 (140) 41 (29) 923 (675) 121 (85) 36 (12)	1546	, (1,134) 614 (514)	2,160	(1,648)
	Deductions / adjustments	- - - - - - - - - - 2 - 12 (25) 0 -	14	(25) - -	14	(25)
	Depreciation for the period	- - 6 (8) 73 (91) 13 (24) 12 (16) 250 (304) 48 (57) 24 (10)	426	(510) 99 (137)	525	(647)
	As at 1 April 2018	- - 16 (8) 177 (86) 140 (116) 29 (13) 675 (371) 85 (53) 12 (2)	1134	, (649) 514 (377)	1,648	(1,026)
GROSS CARRYING AMOUNT	As at 31 December 2018	34 (34) 560 (560) 1,654 (1,627) 196 (189) 96 (75) 1,622 (1,242) 327 (247) 178 (92)	4667	, (4,066) 773 (638)	5,440	(4,704)
	Deductions / adjustments	- - - - - - - - - - 3 - 13 (49) - -	16	(49) - -	16	(49)
	Additions	- - - - 27 (25) 7 (27) 21 (13) 383 (432) 93 (84) 86 (88)	617	(669) 135 (79)	752	(748)
	As at 1 April 2018	34 (34) 560 (560) 1,627 (1,602) 189 (162) 75 (62) 1,242 (810) 247 (212) 92 (4)	4066	, (3,446) 638 (559)	4,704	(4,005)
PARTICULARS		Tangible assets Freehold land Leasehold land Buildings Plant and equipment Office equipment Computer equipment Vehicles Furniture and fixtures Intangible assets Software			Total

NUCLEUS SOFTWARE EXPORTS LIMITED

NOTES FORMING PART OF THE FINANCIAL STATEMENTS

2 2.2 A. Inv Equ a. b. c. d. e. f. g. h. i. Inv Equ Inv Pre Inv Pre a. b. c. d. e. f. Inv Pre a. b. Inv Bon a. b. c. d. e. f. g. h. i. j. k. l. m. n. o. p. q. r. s. t. u. Inv Fix a. b. c. d. e. f. g. h. i. j. k. Inv Mut a. b. c. d. e. f. g. h. Agg Agg Agg Agg Agg Agg 3,6 Avo NO 250	NON-CURRENT INVESTMENTS (Amo TES FORMING PART OF THE FINANCIAL STATEMENTS FOR THE QUARTER AND NINE MONTHS ENDED 31 DECEMBER 2018	unt in Rupees Lacs unless otherwise stated)
	Particulars	As at As at 31 December 2018 31 March 2018
	estments in equity shares of subsidiaries (unquoted) ity shares at cost estment in equity instruments (Quoted) ity shares at FVOCI estments in preference shares of subsidiaries (unquoted) ference shares at Fair value through profit or loss (FVTPL) estment in Preference Shares (quoted) ference shares at Amortised cost 8.15% L&T Finance Holding Ltd.(Preference Shares - 2020) 16.46% Infrastructure Leasing & Financial Services Ltd. (Preference Shares - 2022) Less: Provision for diminution in value of investment 17.38% IL&FS Financial Services Ltd. ( Preference Shares - 2021) Less: Provision for diminution in value of investment 8.33% Tata Capital Ltd (Preference Shares - 2022) 7.50% Tata Capital (Preference Shares - 2020) 8.33% Tata Capital (Preference Shares - 2021) estment in Preference Shares (unquoted) ference shares at Fair value through profit or loss (FVTPL) 8.20% Tata Motors Finance Ltd (CCPS - 2020) 10% Tata Motors Finance Ltd (CCPS - 2025) estment in bonds (quoted) ds securities at Amortised cost 7.18% Indian Railway Finance Corporation Limited Tax free bonds 2023 8.23% Indian Railway Finance Corporation Limited Tax free bonds 2024 8.09% Power Finance Corporation Tax Free Bonds 2021 7.51% Power Finance Corporation Tax Free Bonds 2021 8.00% Indian Railway Finance Corporation Limited Tax free bonds 2022 8.01% India Infrastructure Finance Company Limited Tax Free Bonds 2023 7.11% Power Finance Corporation Tax Free Bonds 2025 7.21% India Infrastructure Finance Company Limited Tax Free Bonds 2022 7.55% Indian Railway Finance Corporation Limited Tax Free Bonds 2021 8.20% Power Finance Corporation Tax Free Bonds 2022 7.28% Indian Railway Finance Corporation Limited Tax free bonds 2030 7.49% Indian Renewable Energy Development Agency Limited (IREDA) Tax Free Bonds 2031 7.39% Housing and Urban Development Corporation Limited (HUDCO) Tax Free Bonds2031 8.50% National Highways Authority of India (NHAI) Tax Free Bonds 2029 7.39% National Highways Authority of India (NHAI) Tax Free Bonds 2031 7.39% Housing and Urban Development Corporation Limited (HUDCO) Tax free bonds 2031 7.21% Power Finance Corporation (PFC) Tax Free Bonds 2022 7.35% Indian Railway Finance Corporation Tax Free Bonds 2031 7.35% National Bank for Agriculture and Rural Development (NABARD) Tax Free Bonds 2031 8.35% National Highways Authority of India (NHAI) Tax Free Bonds 2023 8.51 Housing and Urban Development Corporation Limited (HUDCO) Tax Free Bonds2024 estment in mutual funds (quoted) ed maturity plan at Amortised cost HDFC FMP 1169D February 2017 (1) HDFC FMP 1150D February 2017 (1) Aditya Birla Sun Life Fixed Term Plan-Series OT (1117 days) ICICI Prudential Fixed Maturity Plan - Series 81 - 1163 Days Plan Q ICICI Prudential FMP - Series 82 - 1225 Days Plan B UTI Fixed Term Income Fund Series XXVIII - IV (1204 Days) Reliance Fixed Horizon Fund XXXV (1227 days) -series 12 Aditya Birla Sun Life Fixed Term Plan-Series OY (1218 days) ICICI Prudential FMP - Series 82 - 1203 Days Plan K Reliance Fixed Horizon Fund XXXVI - Series 6 UTI Fixed Term Income Fund Series XXVIII -XIV (1147 days) estment in mutual funds (Unquoted) ual funds at Fair value through profit or loss (FVTPL) Axis ST Direct- Weekly Dividend UTI ST Income-IP-Monthly Dividend HDFC Corporate Bond Fund - Growth-Direct DSP BlackRock Banking & PSU Debt Fund - Growth- Direct ICICI Prudential Income Opportunities Fund - Growth- Direct IDFC Corporate Bond Fund - Growth- Direct L&T Short Term Opportunities Fund - Growth- Direct Reliance FRF - ST - Growth- Direct regate amount of non-current investments regate book value of quoted investments regate market value of quoted investments (*) regate value of unquoted investments regate amount of impairment in value of quoted investments regate amount of impairment in value of unquoted investments 50,000 (2,650,000) 11% Preference shares of Rs. 10 each fully paid up in n Mobility Solutions Private Limited. 11,110 (10,666) equity shares of Rs 10 each, fully paid up in Avon Mobility Solutions Private Limited 7,500 (7,500) equity shares of Euro 100 each, fully paid up, in Nucleus Software Netherlands B.V., Netherlands Less: Provision for diminution in value of investment in Nucleus Software Netherlands B.V., Netherlands 10,000,000 (10,000,000) equity shares of Rs. 10 each, fully paid up, in Nucleus Software Limited, India [Of the above, 6 (6) equity shares are held by nominees on behalf of the Company] 100,000 (100,000) equity shares 1 AUD each, fully paid in Nucleus Software Australia Pty. Ltd., Australia 10 (10) equity shares of ZAR 61,200 each fully paid up, in Nucleus Software South Africa (Pty.) Limited, South Africa 625,000 (625,000) equity shares of Singapore Dollar 1 each, fully paid up, in Nucleus Software Solutions Pte. Ltd., 1,000,000 (1,000,000) equity shares of US Dollar 0.35 each, fully paid up, in Nucleus Software Inc., USA Less: Provision for diminution in value of investment in Nucleus Software Inc., USA 200 (200) equity shares of Japanese Yen 50,000 each, fully paid up, in Nucleus Software Japan Kabushiki Kaisha ,000 (250,000) equity shares of Rs. 10 each, fully paid up, in Ujjivan Financial Services Limited 1,000,000 (1,000,000) equity shares of Rs 10 each, fully paid up, in VirStra i-Technology Services Limited, India [Of the above, 6 (6) equity shares are held by nominees on behalf of the Company]	163 163 163 163 (163) (163) 41 41 100 100 489 489 (489) (489) 1,194 1,194 55 55 32 32 350 192
		1,935 1,777 693 864 115 265 1,478 1,395 501 541 (376) - 100 100 (75) 123 116 1,585 1,500 - 504 546 534 2,089 - 958 965 529 540 469 480 510 519 2,078 2,126 1,010 1,031 52 53 - 516 304 310 63 64 46 47 128 121 149 142 115 109 157 160 128 131 504 515 119 122 212 201 587 562 591 - 569 541 341 324 551 524 1,101 1,046 537 509 536 509 531 504 536 509 533 504 531 503 529 501 - 656 - 314 256 248 532 507 525 506 671 641 535 509 530 508
		24,024 23,267
		26,767 26,173
		19,485 19,708 19,360 20,055 7,734 6,465 451 - 652 652

(*) Market value of preference shares includes premium.

B. Equity shares designated as at fair value through other comprehensive income

As at 1 April 2016, the Company designated the investments shown below as equity shares at FVOCI because these equity shares represent investments that company intends to hold for longterm for strategic purpose

Investment in Ujjivan Financial Services Limited	Fair value as at Dividend income Dividend income Fair value as at recognised during recognised during 31 December 2018 Quarter ended 31 December 2018 period ended 31 December 2018 31 March 2018
	693 - 1 864

No strategic investments were disposed off during quarter and nine months ended 31 December 2018 as well in previous year 17-18 and there were no transfers of any cumulative gain or loss within equity relating to these investments.

NUCLEUS SOFTWARE EXPORTS LIMITED

NOTES FORMING PART OF THE FINANCIAL STATEMENTS

2.3 NO (Un 2.4 LO (Un a. b. 2.5 OT (Un	(Amo	unt in Rupees Lacs unless otherwise stated)
	Particulars	As at As at 31 December 2018 31 March 2018
	N - CURRENT TRADE RECEIVABLES secured) - Considered good NG-TERM LOANS secured considered good unless otherwise stated) Loans and advances to employees - Staff Loans Loan to subsidiary (considered doubtful) Less: Loss allowance for loan to subsidiary HER NON-CURRENT FINANCIAL ASSETS secured considered good unless otherwise stated) Security deposits Long-term bank deposits Note:	- 272
		- 272
		6 9 732 732
		738 741 (732) (732)
		6 9
		201 132 232 850
		433 982

[Long term bank deposits include deposits held with bank for maturity more than 12 months from balance sheet date Rs 18 Lacs (31 March 2018 Rs 17 lacs ) under lien with banks and are restricted from being settled for more than 12 months from the balance sheet date.]

2.6	DEFERRED TAX ASSETS (NET)
	A. Amounts recognised in profit or loss

A. Amounts recognised in profit or loss
	(Amo	unt in Rupees Lacs unless otherwise stated)
Particulars		For the nine months ended 31 December 2018 For the nine months ended 31 December 2017
Current tax Deferred tax Net tax expense B. Income tax recognised in other comprehensive income Remeasurements of net defined benefit plans Effective portion of gain/ (loss) on hedging instruments of effective cash flow hedges(net of tax) Income tax recognised in other comprehensive income	Before tax (43) 108	1,382 1,063 (70) 3
		1,312 1,066
		Tax expense / (benefit) Net of tax (15) (28) 38 70
	65	23 42

2.6 DEFERRED TAX ASSETS (NET) (CONT'D)

C. Reconciliation of effective tax rate

A reconciliation of the income tax provision to the amount computed by applying the statutory income tax rate to the income before taxes is summarised below:

Particulars		Percentage	For the nine months ended 31 December 2018	Percentage	For the nine month ended 31 December 2017
Profit before tax			7,402		6,066
Domestic tax rate Effect of exempt non-operating income and deduction Effect of non- deductible expenses Additional deduction on research and development expenses Taxes on income at different rates Tax pertaining to prior years and Branch tax and others Effective tax		35% -8% 2% -5% -3% -2% 18%	2,587 (623) 128 (371) (225) (184) 1,312	35% -11% 1% -4% -3% 1% 18%	2,099 (685) 58 (269) (194) 57 1,066
Movement in temporary differences	(Amo			unt in Rupees Lacs unless otherwise stated)
Particulars	Balance as at 1 April 2018	Recognised [(Credited)/ Charge] in profit or loss during the nine month ended 31 December 2018	Recognised [(Credited)/ Charge] in OCI during the nine month ended 31 December 2018	Other adjustment *	Balance as at 31 December 2018
Deferred tax assets Provisions- compensated absences, gratuity and other employee benefits Provision for doubtful trade receivables / Loans and service income accrued but not due MAT credit entitlement Trade receivables, security deposit and loans at amortised cost Investment in preference shares Deferred tax liabilities Property, plant and equipment Forward contracts Investments	384 409 305 48 1,146 93 1 83	(11) (3) 7 14 (105) (98) (4) - 32	(15) - - (15) - 38 -	- - (163) (163) - - -	410 412 135 34 105 1,096 89 39 115
) Net deferred tax asset Rs. 163 lacs MAT credit utilised during the period. OME TAX ASSETS (NET) HER NON- CURRENT ASSETS* secured considered good unless otherwise stated) Employee advances Capital advances Less : Provision for doubtful advances Prepaid expenses Deferred rent - Advance income tax [net of provision of Rs. 2,109 lacs (previous year Rs.	177 28 38			- 243
	969 (70) 23			(163) 853
	2,933 lacs )]			1,636 1,340
				1,636 1,340
				38 38 - 21 - (14)
				- 7 0 1 32 6
				70 52

NUCLEUS SOFTWARE EXPORTS LIMITED NOTES FORMING PART OF THE FINANCIAL STATEMENTS

2.9 Current investments

Investment in mutual funds

Investment in mutual funds	Investment in mutual funds
(Amount in Rupees Lacs unless otherwise stated)
Name	As at 31 December 2018 As at 31 March 2018
-Investment in Mutual Funds (Unquoted) Mutual funds at Fair value through profit or loss (FVTPL) Axis Liquid Fund- Direct Plan- Daily Dividend Reinvestment Baroda Pioneer Treasury Advantage Fund - Plan B Daily Dividend- Re-investment Aditya Birla Sunlife Arbitrage Fund -Dividend-Direct Plan-Reinvestment Aditya Birla Sunlife Floating Rate-Long Term-Daily Dividend-Direct Plan-Reinvestment Aditya Birla Sunlife Saving Fund -Daily Dividend-Direct-Reinvestment Aditya Birla Sun Life Liquid Fund -Daily Dividend Reinvestment HDFC Arbitrage Fund - Wholesale Plan-Normal-Dividend-Direct Plan HDFC Floating Rate Income Fund - Short term Plan- Wholesale Option - Direct-DDR ICICI Prudential Equity Arbitrage Fund- Direct Plan- Monthly Dividend-Reinvestment option ICICI Prudential Flexible Income Plan - Direct Plan-DDR IDFC Arbitrage Fund Direct Plan- Monthly DR- Direct Invesco India Liquid Fund - DDR-Direct Kotak Equity Arbitrage Fund- Fortnightly DR- Direct L&T Ultra Short Direct Plan-Daily Dividend-Reinvestment Option L&T Liquid Fund Direct Plan -DDR Plan Reliance Arbitrage Fund-Direct Monthly Dividend Plan Reliance Medium Term Fund-Direct Plan Daily Dividend Plan SBI Liquid Fund - DDR - Direct HDFC Liquid Fund - Direct Daily Dividend Plan Tata Liquid Fund Direct Plan - Daily Dividend DSP Liquidity Fund Direct Plan-DDR ICICI Prudential Liquid Fund - DP Daily Dividend UTI Liquid Cash Plan - Direct Daily Dividend Plan -Fixed Maturity Plans/Interval Plans (quoted) Fixed maturity plan at Amortised cost HDFC FMP 1128D March 2015(1) Direct Growth ICICI Prudential FMP Series 76-1108 Days Plan V-Direct-Growth Investment in Preference Shares (quoted) Preference shares at Amortised cost 9% L&T Finance Holdings Limited -Preference Shares 2018 Aggregate amount of investment Aggregate book value of quoted investments Aggregate market value of quoted investments Aggregate value of unquoted investments	828 540 - 1,672 868 832 - 84 507 129 725 611 1,732 1,027 - 363 259 28 - 36 701 670 - 169 3,232 3,095 - - 615 562 1,147 1,095 - 1 877 - 449 - 776 - 599 - 471 - 744 - - 637 - 636 - 1,009
	14,530 13,196
	- 2,282 - 2,277 14,530 10,914

NUCLEUS SOFTWARE EXPORTS LIMITED

NOTES FORMING PART OF THE FINANCIAL STATEMENTS

(Amount in Rupees Lacs unless otherwise stated) As at As at 31 December 2018 31 March 2018

		As at As at
2.10 2.11 2.12 2.13 2.14 2.15	Particulars	31 December 2018 31 March 2018
	CURRENT TRADE RECEIVABLES (Unsecured) Trade receivables - Considered good - Considered doubtful Less: Allowances for doubtful debts-trade receivables Due from subsidiaries - considered good (see note 2.35 ) Total - CASH AND CASH EQUIVALENTS a. Cash on hand b. Remittance in transit c. Balances with scheduled banks: - in current accounts - in EEFC accounts d. Balance with non scheduled banks in current accounts: - Citibank, United Kingdom - Citibank, United Arab Emirates - Citibank, USA e. Balances with scheduled banks in deposit accounts with original maturity of less than 3 months Total OTHER BANK BALANCES a. Balances with scheduled banks in earmarked accounts: - unclaimed dividend accounts b. Balances with scheduled banks in deposit accounts - Maturity with in 12 months 3,734 Total Note: SHORT-TERM LOANS (Unsecured considered good unless otherwise stated) Loans and advances to employees - Staff Loans OTHER CURRENT FINANCIAL ASSETS (Unsecured considered good unless otherwise stated) a. Security deposit b. Mark-to-market gain on forward contracts c. Expenses recoverable from customers OTHER CURRENT ASSETS (Unsecured considered good unless otherwise stated) a. Service income accrued but not due - Considered good - Considered doubtful Less : Provision for service income accrued but not due [Balance with scheduled banks in deposit accounts include Rs 42 lacs (31 March 2018 Rs 42 lacs ) which are under lien and restricted from bein sheet date.]	6,529 6,613 226 228
		6,755 6,841 (226) (228) 6,529 6,613
		199 194
		6,728 6,807
		- 1 - 86 58 50 1,052 1,291 11 16 22 17 25 30 270 370
		1,438 1,861
		40 24 3,502 2,695
		3,542 2,719
		26 29 g settled with in 12 months from the balance
		26 29
		3 - 111 3 41 26
		155 29

		848 922 223 214
		1,071 1,136 (223) (214)
		848 922 57 37 316 340 84 - 65 33 43 - 40 306 1 3
		1,454 1,641

848	922
223	214
1,071	1,136
(223)	(214)
848	922
57	37
316	340
84	-
65	33
43	-
40	306
1	3
1,454	1,641

b. Employee advances c. Prepaid expenses d. Contract cost e. Balances with government authorities -GST/ VAT credit receivable - Interest on income tax refund
f. Others - Supplier advances - Considered good
g. Deferred employee benefits

NUCLEUS SOFTWARE EXPORTS LIMITED

NOTES FORMING PART OF THE FINANCIAL STATEMENTS

	(Amount in Rupees Lacs unless	otherwise stated)
	As at	As at
Particulars	31 December 2018	31 March 2018

Particulars

2.16 SHARE CAPITAL
a. Authorised

Equity shares 40,000,000 (40,000,000) equity shares of Rs. 10 each 4,000 4,000

b. Issued, Subscribed and Paid-Up

Issued

32,386,524 (32,386,524) equity shares of Rs. 10 each

Subscribed and Paid-Up

Subscribed and Paid-Up
29,040,724 (29,040,724) equity shares of Rs. 10 each, fully paid up (Includes: 2,800 (2,800) forfeited equity shares pending reissue (see note (iv) below)	2,904 2,904
	2,904 2,904

(Includes: 2,800 (2,800) forfeited equity shares pending reissue (see note (iv) below)

Refer notes (i) to (vi) below :-

(i) Reconciliation of the number of shares and amount outstanding at the beginning and at the end of the reporting period :-

Particulars	Opening balance	Allotted under Employee Stock Option Plans / Extinguishment of shares under buy back ( see note 2.16 vi)	Closing balance
a. For the period ended 31 December 2018 - Number of shares - Amount (In Rupees)	29,040,724 290,407,240	- -	29,040,724 290,407,240
b. For the year ended 31 March 2018 - Number of shares - Amount (In Rupees)	32,383,724 323,837,240	(3,343,000) (33,430,000)	29,040,724 290,407,240

(ii) The Company has one class of equity shares having a par value of Rs. 10 each. Each shareholder is eligible for one vote per share held. The dividend is paid on the approval of the shareholders in the Annual General Meeting. 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.

(iii) Number of shares held by shareholders holding more than 5% of the aggregate shares in the Company :-

(iii)	Number of shares held by shareholders holding more than 5% of the aggregate shares i	n the Company :-	n the Company :-
(iv)	Particulars	As at 31 December 2018		As at 31 March 2018
	Karmayogi Holdings Private Limited Nucleus Software Engineers Private Limited Madhu Dusad Vishnu R Dusad	(Number)	(Percentage)	(Number)	(Percentage)
		9,000,000 2,385,882 3,066,248 1,603,492	30.99% 8.22% 10.56% 5.52%	9,000,000 2,385,882 3,066,248 1,603,492	30.99% 8.22% 10.56% 5.52%
	Details of forfeited shares
	Particulars Equity shares with voting rights	As at 31 December 2018		As at 31 March 2018
		(Number)	(Rupees)	(Number)	(Rupees)
		2,800	15,000	2,800	15,000

(v) Employees Stock Option Plan (“ESOP”)

a. Employee Stock Option Scheme and SEBI (Share Based Employee Benefits) Regulations, 2014, is effective for regulation of all schemes by the Company for the benefits for its employees dealing in shares, directly or indirectly from October 28, 2014. In accordance with these Guidelines, the excess of the market price of the underlying equity shares as of the date of grant of options over the exercise price of the option, including up-front payments, if any, is to be recognized and amortised on graded vesting basis over the vesting period of the options.

b. The Company currently has one ESOP scheme- ESOP Scheme - 2015 (instituted in 2015) which was duly approved by the Board of Directors and Shareholders. The ESOP Scheme 2015 provides for 500,000 options to eligible employees. As per ESOP scheme 2015, equity shares would be transferred to eligible employees on exercise of options through Nucleus Software Employee Welfare Trust. The scheme is administered by the Compensation Committee comprising three members, the majority of whom are independent directors.

c. There are no options granted, forfeited and exercised during the period under ESOP Scheme 2015.

(vi) The Board of Directors of the Company, at its meeting held on April 25, 2017 had approved a proposal to buy-back not exceeding Rs 11,779 lacs at maximum price of Rs. 350 per equity share.

The Shareholders of the Company approved the scheme of Buyback of 33,43,000 (Thirty Three Lakhs Forty Three Thousand) equity shares of the face value of Rs.10/- each fully paid up at a price of Rs. 350/- (Rupees Three Hundred and Fifty Only) (the “Buyback Price”) payable in cash aggregating upto Rs. 11,701/-lacs (Rupees Eleven thousands Seven Hundred One lacs) through Postal Ballot on June 15, 2017 . The Company made the Public Announcement of the same which was published on June 19, 2017.

Further pursuant to Shareholders’ approval vide Postal Ballot in June 2017, the Buy Back Committee of Board of Directors on 16th June 2017 approved the Buyback of 33,43,000 of fully paid up Equity Shares of face value of Rs. 10/ each of the Company at price of Rs. 350/- per Equity share, payable in cash for an aggregate consideration not exceeding Rs. 11,701 lacs . The settlement of the Buyback was done on 8th September, 2017 and 33,43,000 Equity shares bought back were extinguished on 14th September, 2017.

Capital Redemption Reserve was created to the extent of share capital extinguished Rs 334 lacs. An amount of Rs 3,254 lacs from Retained Earnings was used to offset the excess of buy-back cost of Rs 11,701 lacs over par value of shares after adjusting the balance lying in Security Premium of Rs 219 lacs and General Reserve of Rs 8,227 lacs.

NUCLEUS SOFTWARE EXPORTS LIMITED

NOTES FORMING PART OF THE FINANCIAL STATEMENTS

2.17	(Amo	unt in Rupees Lacs unless otherwise stated)
	Particulars	As at As at 31 December 2018 31 March 2018
	OTHER EQUITY a. Capital reserve b. Securities premium account c. Capital redemption reserve d. Retained earnings e. Other comprehensive income Total 0.51 42,527 (Amo	89 89 - - 334 334 41,402 37,827 701 830
		42,526 39,080
		unt in Rupees Lacs unless otherwise stated)
	Particulars	For the period ended 31 December 2018 Year ended 31 March 2018
	a. Capital reserve Opening balance Closing balance b. Securities premium account Opening balance Ùtilised for buy back of equity shares (see note 2.16 vi) Closing balance c. Capital Redemption reserve Opening Balance Addition during the period Closing balance (see note 2.16 vi) d. Retained Earnings Opening balance (1,418) (39,245) Utilised for buy back of equity shares (see note 2.16 vi) Add: Profit for the period - Final dividend on equity shares [see note (i) below] -Corporate Dividend tax Closing balance (3,485,654,056) e. Other comprehensive income Equity instrument through other comprehensive income Opening balance (149) 827 (976) Addition / (Deletion) Closing balance Hedging reserve, net [see note 2.30] Opening balance Addition / (Deletion) Closing balance Remeasurement of net defined benefit plans, net Opening balance Addition / (Deletion) Closing balance (66,707,149) (3,552,361,205) (3,552,358,880)	89 89
		89 89
		- 219 - (219)
		- -
		334 - - 334
		334 334
		37,827 36,189 - (3,254) 6,090 6,560 (2,323) (1,619) (192) (49)
		41,402 37,827
		839 1,035 (171) (196)
		668 839 2 136 70 (134)
		72 2 (11) (58) (28) 47
		(39) (11)
		701 830

		42,526 39,080

Note :

(i) The Board of Directors on May 3, 2018 have recommended a payment of Final Dividend of Rs. 8 per share (on equity share of par value of Rs. 10 each) for the year ended March 31, 2018. The payment was approved in the Annual General Meeting held on 2 July, 2018.

Nature and purpose of other reserves

Capital reserve

The company had transferred forfeited ESOP application money to Capital reserve in accordance with the provision of the Companies Act, 1956.The reserve will be utilised in accordance with the provisions of the Companies Act, 2013.

Securities premium reserve

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

Hedging reserve

This comprises as the effective portion of the cumulative net change in the fair value of cash flow hedging instruments related to hedged transactions that have not yet occurred.

Equity instrument through other comprehensive income

The Company has designated its investments in certain equity instruments at fair value through other comprehensive income. These changes are accumulated within the FVOCI equity investments within the equity. The group transfers amounts therefrom to retained earnings when the relevant equity securities are derecognised.

Remeasurement of net defined benefit plans

Remeasurement of net defined benefit plans (asset) comprises actuarial gain and losses and return on plan assets (excluding interest income)

NUCLEUS SOFTWARE EXPORTS LIMITED

NOTES FORMING PART OF THE FINANCIAL STATEMENTS

2.18 OT 2.19 NO Pro - P - P 2.20 TR a. b. 2.21 OT a. b. c. d. 2.22 CU Pro - P 2.23 IN 2.24 OT a. b. c. d.	(Amo	unt in Rupees Lacs unless otherwise stated)
	Particulars	As at As at 31 December 2018 31 March 2018
	HER NON- CURRENT FINANCIAL LIABILITIES Annual incentive payable N-CURRENT PROVISIONS vision for employee benefits rovision for compensated absences rovision for gratuity (see note 2.39) ADE PAYABLES Trade payables (see note below) Due to subsidiaries (see note 2.35) 40,449,034 HER CURRENT FINANCIAL LIABILITIES Unpaid dividends Payable for purchase of Property, plant and equipment and Intangible assets Other payable Employee payable RRENT PROVISIONS vision for employee benefits rovision for compensated absences COME TAX LIABILITIES Provision for tax [net of advance tax of Rs. 1,540 lacs (previous year Rs. Nil)] HER CURRENT LIABILITIES Advance from customers / Advance billings Deferred revenue Other payables - statutory liabilities Payable to gratuity trust (see note 2.39) The Company has no amounts payable to Micro and Small Enterprises as defined in section 7(1) of the Micro, Small and Medium Enterprises De have been identified on the basis of information collected by the Management. This has been relied upon by the auditors.	103 91
		103 91
		598 490 143 -
		741 490
		923 4,700 473 404
		1,396 5,104
		40 24 42 1 75 - 2,660 velopment Act, 2006, to the extent such parties
		2,817 25
		232 171
		232 171
		95 -
		95 -
		5,247 6,045 4,370 4,354 491 499 - 372
		10,108 11,270

NUCLEUS SOFTWARE EXPORTS LIMITED

NOTES FORMING PART OF THE FINANCIAL STATEMENTS

2.25 2.26 2.27 2.28 2.29		(Amount in Rupees Lacs unless otherwise stated)
	Particulars	Quarter ended 31 December 2018 Quarter ended 31 December 2017 For nine months ended 31 December 2018 For nine months ended 31 December 2017
	INCOME FROM SOFTWARE PRODUCTS AND SERVICES a. Software products and services (see note 2.38) - Domestic - Overseas OTHER INCOME a. Interest income on financial assets- carried at amortised cost : - Deposits with banks - Tax free bonds - Debentures - Non- current trade receivable - Fixed maturity plan - Preference shares - Others b. Interest income on income tax refund c. Dividend income from - Current, non trade investments - Non-current, non trade investment - Subsidiary companies(see note 2.30) c. Net gain / (loss) on sale of investments - Non-current, non trade investment d. MTM gain or (loss) on - Current, non trade investments - Non-current, non trade investment e. - Gain / (Loss) on exchange fluctuation f. Other non-operating income - Net profit on sale of fixed assets/discarded assets - Rental income - subsidiary - Miscellaneous income (74,561,926) EMPLOYEE BENEFIT EXPENSE a. Salaries and wages b. Contribution to provident and other funds c. Gratuity expense(see note 2.33) d. Staff welfare expenses OPERATING AND OTHER EXPENSES a. Outsourced technical service expense b. Cost of software purchased for delivery to clients c. Power and fuel d. Rent (see note 2.31) e. Repair and maintenance - Buildings - Others f. Insurance g. Rates and taxes h. Travel expenses - Foreign - Domestic i. Advertisement, business development and promotion j. Legal and professional (see note 2.33) k. Directors remuneration l. Conveyance m. Communication n. Training and recruitment o. Net loss on sale of fixed assets/discarded assets p. Conference, exhibition and seminar q. Information technology expenses r. Provision for doubtful debts/advances/other current assets s. Impairment loss on preference shares carried at amortised cost t. Fair value change of preference shares of subsidiary at FVTPL u. Commission to channel partners v. Expenditure on corporate social responsibility (see note 2.42) w. Sales and marketing fee x. Miscellaneous expenses Directors Remuneration includes : Non Executive Directors a. Commission b. Sitting fees FINANCE COST Bank Charges	3,385 3,306 10,835 9,097 6,641 5,464 18,362 15,444
		10,026 8,770 29,197 24,541
		72 68 193 238 170 163 490 465 - 10 - 30 12 10 41 51 109 67 325 223 60 109 227 312 3 0 8 4 43 - 43 62 178 124 479 591 6 13 47 119 - - 1,400 1,389 9 (2) 9 (2) 5 6 5 10 128 216 (52) (35) (93) (30) - - 27 4 2 - 5 - 1 5 14 8
		746 537 3,441 3,470
		5,459 4,864 16,160 14,112 291 255 857 734 76 58 228 174 200 98 459 281
		6,026 5,275 17,704 15,301
		226 229 682 745 40 50 141 146 86 93 324 331 119 72 269 219 11 15 39 27 97 73 265 210 9 10 29 32 4 5 14 93 329 256 919 778 129 92 333 267 61 46 148 101 92 95 287 341 31 30 100 91 44 48 134 139 40 46 134 129 82 87 209 265 - 10 - 10 46 47 161 124 193 205 576 531 12 19 16 4 150 - 451 - 250 - 250 56 72 123 118 27 29 81 82 362 320 990 992 125 160 309 356
		2,621 2,109 6,984 6,131
		22 17 75 57 9 13 25 34
		31 30 100 91
		7 7 23 26
		7 7 23 26

2.30 Financial Instruments

a) Financial Instruments by category

The carrying value and fair value of financial instruments by categories as at 31 December 2018 are as follows:

	(Amount in Rupees Lacs unless otherwise stated)
Particulars	Amortised cost Financial assets/liabilities at fair value through profit or loss Financial assets/liabilities at fair value through OCI Total carrying value Total fair value Level 1 Level 2 Level 3
Assets: Cash and cash equivalents (2.11) Other bank balances (2.12) Investments (2.2 and 2.9) Equity Instruments (Other than subsidiaries) Tax free bonds Mutual funds (other than FMPs) Fixed maturity plans (FMPs) Preference shares Trade receivables (2.3 and 2.10) Loans (2.4 and 2.13) Other financial assets (2.5 and 2.14) Liabilities: Trade payables (2.20) Other financial liabilities (2.18 and 2.21) () Market value of preference shares includes The carrying value and fair value of financial in	1,438 - - 1,438 1,438 3,542 - - 3,542 3,542 - - 693 693 693 693 8,708 - - 8,708 9,026 9,026 - 17,578 - 17,578 17,578 17,578 6,296 - - 6,296 6,233 6,233 3,337 2,750 - 6,087 6,170 3,408 2,647 115 6,728 - - 6,728 6,728 32 - - 32 32 477 - 111 588 588 30,558 20,328 804 51,690 52,028 1,396- - 1,396 1,396 2,920 - - 2,920 2,920 4,316 - - - - - 4,316 4,316 premium. struments by categories of 31 March 2018 were as follows: (Amount in Rupees Lacs unless otherwise stated)
Particulars	Amortised cos Financial assets/liabilities at fair value through profit or loss Financial assets/liabilities at fair value through OCI Total carrying value Total fair value Level 1 Level 2 Level 3
Assets: Cash and cash equivalents (2.11) Other bank balances (2.12) Investments (2.2 and 2.9) Equity Instruments (Other than subsidiaries) Tax free bonds Mutual funds (other than FMPs) Fixed maturity plans (FMPs) Preference shares Trade receivables (2.3 and 2.10) Loans (2.4 and 2.13) Other financial assets (2.5 and 2.14) Liabilities: Trade payables (2.20) Other financial liabilities (2.18 and 2.21)	1,861 - - 1,861 1,861 2,719 - - 2,719 2,719 - - 864 864 864 864 8,713 - - 8,713 9,094 9,094 - 14,803 - 14,803 14,803 14,803 7,248 - - 7,248 7,231 7,231 5,699 265 5,964 5,948 5,683 265 7,080 - - 7,080 7,080 38 - - 38 38 1,010 - - 1,010 1,010 34,368 15,068 864 50,300 50,648 5,104 - - 5,104 5,104 116 - - 116 116 5,220 - - - - - 5,220 5,220

The carrying amount of current trade receivables, short term loan, current security deposit, trade payables, current financial liabilities and cash and cash equivalent are considered to be same as their fair values, due to their short-term nature.

The fair value of non-current trade receivables, long term loan , non -current security deposit and non-current financial liabilities were calculated based on cashflows discounted using a transition date lending rate as there is no material change in the lending rate. They are classified as level 3 fair values in the fair value hierarchy due to the inclusions of unobservable inputs including counterparty credit risk.

Fair value hierarchy

Level 1 - Quoted prices (unadjusted) in active markets for identical assets or liabilities.

Level 2 – Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices). Level 3 - Inputs for the assets or liabilities that are not based on observable market data (unobservable inputs).

Valuation technique used to determine fair value

Specific valuation techniques used to value financial instruments include:

a) the use of quoted market prices or dealer quotes for similar instruments.

b) for forward exchange contracts, the fair value is determined using quoted forward exchange rates at the reporting date.

c) the fair value of remaining financial instruments is determined using discounted cash flows method.

NUCLEUS SOFTWARE EXPORTS LIMITED NOTES FORMING PART OF THE FINANCIAL STATEMENTS

2.30 Financial Instruments (Cont'd)

b) Financial risk management

The Company's activities expose it to a variety of financial risks arising from financial instruments

- Market risk,

- Credit risk and

- Liquidity risk

Risk Management Committee (RMC) is responsible for identification and review of risks and mitigation plans. The Committee meets on a quarterly basis for identification and prioritization of risks. RMC conducts risk survey with the senior and middle level management of the Company to identify risks and rate them appropriately. Top risks are identified and remaining are categorized as other risks. The RMC then places updates to the Board on a quarterly basis, on key risks facing the Company, along with their mitigation plans.

i) Market risk

a) Currency risk

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

The Company’s risk management policy is to hedge 40% to 55% of its estimated foreign currency exposure in respect of forecast collection over the following 6 months at any point in time. The Company uses forward exchange contracts to hedge its currency risk, most with a maturity of less than one year from the reporting date. Such contracts are generally designated as cash flow hedges.

The Company determines the existence of an economic relationship between the hedging instrument and hedged item based on the currency, amount and timing of their respective cash flows.

The year end foreign currency exposures that have not been hedged by a derivative instrument or otherwise are given below :

Currency	31 December 2018		As at 31 March 2018
	Amount in	Amount in	Amount in	Amount in
	foreign currency in lacs	Rupees in lacs	foreign currency in lacs	Rupees in lacs
Receivable
USD	46	3,214	53	3,433
EURO	1	88	1	78
MYR	10	163	11	182
SGD	0	14	-	16
JPY	186	118	184	113
ZAR	5	20	19	102
AED	9	176	6	105
CHF	0	4	-	4
GBP	9	770	5	438
AUD	0	0	-	22
Payable
USD	73	5,119	93	6,044
EUR	1	83	2	132
MYR	4	60	9	156
GBP	1	77	1	104
SGD	4	180	4	187
CHF	-	4	-	7
AED	23	437	2	41
ZAR	14	67	63	349
JPY	139	88	159	98
AUD	10	482	7	358
PHP	3	3	-	-
NGN	2	-	-	-
SAR	-	1	-	4

For the period ended 31 December 2018 and 31 March 2018 10% depreciation / appreciation in the exchange rate between the Indian rupee and Foreign currencies, would have affected the Company's incremental profit by Rs. 204 lacs and Rs. 299 lacs respectively.

Sensitivity analysis is computed based on the changes in the income and expenses in foreign currency upon conversion into functional currency, due to exchange rate fluctuations between the previous reporting period and the current reporting period.

b) Price risk

(i) Exposure

The Company’s exposure to equity securities and mutual funds 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.

(ii) Sensitivity

The sensitivity of profit or loss in respect of investments in mutual funds and equity instruments (other than subsidiaries) at the end of the reporting period for +/- 2% change in price and net asset value is presented below:

	Impact on profit before tax	Impact on profit before tax	Impact on other components of equity	Impact on other components of equity
	31 December 2018	31 March 2018	31 December 2018	31 March 2018
Increase 2% Mutual funds Equity instruments (other than subsidiaries) Decrease 2% Mutual funds Equity instruments (other than subsidiaries)	352 - (352)	296 - (296) -	14 - (14)	- 17 - (17)

Derivative financial instruments

The Company holds derivative financial instruments such as foreign currency forward contracts to mitigate the risk of changes in exchange rates on foreign currency exposures. The counterparty for these contracts is generally a bank or a financial institution. These derivative financial instruments are valued based on quoted prices for similar assets and liabilities in active markets or inputs that are directly or indirectly observable in the marketplace.

The following table gives details in respect of outstanding foreign exchange forward contracts:

For Par Not Lat Lat The dat	ward contracts
	Forward contract outstanding Buy/Sell	As at Equivalent amount in Rupees in lacs As at Equivalent amount in Rupees in lacs 31 December 2018 31 December 2018 31 March 2018 31 March 2018
	In USD ( Amount in USD lacs) Sell ticulars later than one month er than one month and not later than three months er than three months and not later than one year foreign exchange forward contracts mature within six months. The e	59 4,117 65 4,204 table below analyzes the derivative financial instruments into relevant maturity groupings based on the remaining period as of the Balance sheet
		As at Equivalent amount in Rupees in lacs As at Equivalent amount in Rupees in lacs 31 December 2018 31 December 2018 31 March 2018 31 March 2018
		10 698 14 913 14 977 21 1,336 35 2,442 30 1,955

Hedge effectiveness is determined at the inception of the hedge relationship, and through periodic prospective effectiveness assessments to ensure that an economic relationship exists between the hedged item and hedging instrument, including whether the hedging instrument is expected to offset changes in cash flows of hedged items.

The following table provides the reconciliation of cash flow hedge reserve for the period ended : Particulars

Balance at the beginning of the period Gain / (Loss) recognised in other comprehensive income during the period, net of taxes Balance at the end of the period	31 December 2018 31 March 2018
	2 136 70 (134) 72 2

The Company offsets a financial asset and a financial liability when it currently has a legally enforceable right to set off the recognized amounts and the company intends either to settle on a net basis, or to realise the asset and settle the liability simultaneously.

Effects of hedge accounting on financial perfromance

Cash flow hedge- Foreign exchange risk

	Nine month ended	Nine month ended	Quarter ended	Quarter ended
	31 December 2018	31 December 2017	31 December 2018	31 December 2017
Changes in the value of the hedging instrument recognised in other	108	(77)	278	68
comprehensive income profit or (loss),net
Hedge ineffectiveness recognised in profit or (loss)	-	-	-	-
Amount reclassified from cash flow hedging reserve to profit or	(235)	232	(50)	(38)
(loss)

NUCLEUS SOFTWARE EXPORTS LIMITED NOTES FORMING PART OF THE FINANCIAL STATEMENTS

The following table provides quantitative information about offsetting of derivative financial assets

Particulars As at 31 December 2018 As at 31 March 2018 Gross amount of recognized financial asset/ (financial liabilities) 111 3 Net amount presented in balance sheet 111 3

ii) Credit risk

The Company considers the probability of default upon initial recognition of asset and whether there has been a significant increase in credit risk on an ongoing basis throughout each reporting period. To assess whether there is a significant increase in credit risk the Company compares the risk of a default occurring on the asset as at the reporting date with the risk of default as at the date of initial recognition. It considers available reasonable and supportive forwarding-looking information.

In general, it is presumed that credit risk has significantly increased since initial recognition if the payments are more than 30 days past due.

A default on a financial asset is when the counter party fails to make contractual payments within 90 days of when they fall due. This definition of default is determined by considering the business environment in which entity operates and other macro-economic factors.

Credit risk refers to the risk of default on its obligation by the counterparty resulting in a financial loss. The maximum exposure to the credit risk at the reporting date is primarily from trade receivables amounting to Rs. 6,728 lacs and Rs. 7,079 lacs as of 31 December 2018 and 31 March 2018 respectively and unbilled revenue amounting to Rs. 848 lacs and Rs. 922 lacs as of 31 December 2018 and 31 March 2018, respectively. Credit risk has always been managed by the Company through credit approvals, establishing credit limits and continuously monitoring the creditworthiness of customers to which the Company grants credit terms in the normal course of business. On account of adoption of Ind AS 109, the Company uses expected credit loss model to assess the impairment loss or gain. The Company uses a provision matrix to compute the expected credit loss allowance for trade receivables and unbilled revenues. The provision matrix takes into account available external and internal credit risk factors such as Company's historical experience for customers.

The following table gives details in respect of percentage of revenues generated from top customer and top five customers:

	Nine month ended 31 December	Year ended 31 March
Particulars	2018	2018
	(in %)	(in %)
Revenue from top customer	12.63%	12.67
Revenue from top five customers	29.47%	29.54

Credit risk exposure

The lifetime expected credit loss on customer balances and service income accrued but not due for the period ended 31 December 2018 is Rs. 1 lacs and reversal for the year ended 31 March 2018 was Rs. 37 lacs.

	Nine month ended 31 December	Year ended 31	March
	2018	2018
Balance at the beginning	228		343
Impairment loss recognised/(rever	1		(37)
Amounts written off	(3)		(78)
Balance at the end	226		228

Credit risk on cash and cash equivalents is limited as we generally invest in deposits with banks and financial institutions with high credit ratings assigned by international and domestic credit rating agencies. Investments primarily include investment in mutual fund units, quoted bonds issued by government , preference shares and non convertible debentures.

a) Expected credit loss for loans, security deposits and Investments

As at 31 December 2018

As at 31 December 2018
		(Amount in Rupees Lacs unless otherwise stated)
	Particulars	Asset group	Estimated gross carrying amount at default	Expected probability of default	Expected credit loss	Carrying amount net of impairment provision
Loss allowance measured at 12 month expected credit loss	Financial assets for which credit risk has not increased significantly since initial recognition	Investment at amortised cost Loans to employee Security deposits	18,191 6 201	0% 0% 0%	- - -	18,191 6 201
Loss allowance measured at life-time expected credit loss	Financial assets for which credit risk has increased significantly and not credit -impaired	NA	NA	NA	NA	NA
	Financial assets for which credit risk has increased significantly and credit -impaired	Loans to subsidiaries	732	100%	(732)	-
		Investment at amortised cost	601	75%	(451)	150

As at 31 March 2018

As at 31 March 2018
	Particulars	Asset group	Estimated gross carrying amount at default	Expected probability of default	Expected credit loss	Carrying amount net of impairment provision
Loss allowance measured at 12 month expected credit loss	Financial assets for which credit risk has not increased significantly since initial recognition	Investment at amortised cost Loans to employee Security deposits	19,378 9 132	0% 0% 0%	- - -	19,378 9 132
Loss allowance measured at life-time expected credit loss	Financial assets for which credit risk has increased significantly and not credit -impaired	NA	NA	NA	NA	NA
	Financial assets for which credit risk has increased significantly and credit -impaired	Loans to subsidiaries	732	100%	(732)	-

b) Expected credit loss for trade receivables under simplified approach

As at 31 December 2018

Ageing	Not due	0-90 days past due	90-180 days past dues	180-270 days past dues	270-360 days past dues	More than 360 days past dues	Total
Gross carrying amount Expected credit losses (Loss allowance provision) Carrying amount of trade receivables (net of impairment)	3,816 - 3,816	1,985 - 1,985	449 - 449	117 9 108	142 6 135	446 211 235	6,954 226 6,728
As at 31 March 2018
Ageing	Not due	0-90 days past due	90-180 days past dues	180-270 days past dues	270-360 days past dues	More than 360 days past dues	Total
Gross carrying amount Expected credit losses (Loss allowance provision) Carrying amount of trade receivables (net of impairment)	4,651 4,651	1,440 1,440	380 380	129 129	276 27 249	431 201 230	7,307 228 7,079

NUCLEUS SOFTWARE EXPORTS LIMITED NOTES FORMING PART OF THE FINANCIAL STATEMENTS

iii) Liquidity risk

The Company's principal sources of liquidity are cash and cash equivalents and the cash flow that is generated from operations. The company has no outstanding bank borrowings. The company believes that the working capital is sufficient to meet its current requirements. Accordingly, no liquidity risk is perceived.

As of 31 December 2018, the Company had a working capital of Rs. 13,225 lacs including cash and cash equivalent of Rs. 1,438 lacs and current investment of Rs. 14,530 lacs (31 March 2018 Rs. 9,712 lacs including cash and cash equivalents of Rs 1,861 lacs and current investments of Rs. 13,196 lacs).

The table below provides details regarding the contractual maturities of significant financial liabilities as of 31 December 2018:

Particulars	Less than 1 year	1-2 years	Total
Trade payables Other financial liabilities	1,396 2,817	- 103	1,396 2,920
The table below provides details regarding the contractual maturities of significant financial liabilities as of 31 March 2018:
Particulars	Less than 1 year	1-2 years	Total
Trade payables Other financial liabilities	5,104 25	- 91	5,104 116

c) Capital Management

The Company’s objectives when managing capital are to:

-safeguard its ability to continue as a going concern, so that it can continue to provide returns for shareholders and benefits for other stakeholders and

maintain an appropriate capital structure

The Board of Directors has the primary responsibility to maintain a strong capital base and reduce the cost of capital through prudent management in deployment of funds and sourcing by leveraging opportunities in domestic and international financial markets so as to maintain investors, creditors & markets' confidence and to sustain future development of the business. The Board of Directors monitors the return on capital, which the Company defines as result from operating activities divided by total shareholders’ equity.

The Company monitors capital, using a medium term view of three to five years, on the basis of a number of financial ratios generally used by industry and by the rating agencies. The Company is not subject to externally imposed capital requirements.

The Company monitors capital using gearing ratio which is adjusted net debt divided by total equity. Adjusted net debt comprises of long term and short term liabilities less cash and cash equivalent. Equity includes equity share capital and reserves that are managed as capital. The gearing ratio at the end of the reporting periods was as follows:

	As at 31 December	As at 31 March
	2018	2018
Total Liabilities	15,492	17,151
Less: Cash and cash equivalents	1,438	1,861
Adjusted debt	14,054	15,290
Total equity	45,430	41,984
Adjusted net debt to equity ratio	0.31	0.36

(i) Risk management For the purpose of the Companys capital management, capital includes issued equity capital, share premium and all other equity reserves attributable to the equity holders of the Company. The primary objective of the Companys capital management is to maximise the shareholder value. The Company manages it capital structure and makes adjustments in light of changes in economic conditions. To maintain or adjust the capital structure, the Company may adjust the dividend payment to shareholders, return capital to shareholders, raise debts or issue new shares. (ii) Dividends

The Company manages it capital structure and makes adjustments in light of changes in economic conditions. To maintain or adjust the capital structure, the Company may adjust the dividend payment to shareholders, return capital to shareholders, raise debts or issue new shares.

(ii) Dividends
Particulars	31 December 2018	31 March 2018
(i) Equity Shares Final dividend for the year ended 31 March 2018 of Rs. 8 Per share fully paid up (31 March 2017 of Rs. 5 Per share fully paid up) (ii) Dividends not recognised at the end of reporting period The Board of Directors on May 3, 2018 have recommended a payment of Final Dividend of Rs. 8 per share (on equity share of par value of Rs. 10 each) for the year ended March 31, 2018. The payment was approved in the Annual General Meeting held on 2 July, 2018. This dividend was paid on 07 July, 2018.	2,323 -	1,619 2,323

OPERATING LEASE	Obligations on long-term, non-cancellable operating leases	The Company has acquired office premises under cancellable and non-cancellable operating lease. Operating lease rentals paid during the quarter and nine months ended 31 December 2018 are Rs. 119 lacs (previous period Rs.	72.19 lacs) and Rs 269 Lacs (previous period Rs 219 Lacs) respectively. The future minimum lease payments in respect of non-cancellable lease is as follows:	As at 31 December As at 31 December Particulars	2018 2017	Lease Obligations Payable	a Not later than 1 year 148 -	b Later than 1 year but not later 365 -	than 5 years	c More than 5 year - -	513 -	Contingent liabilities and Commitments (to the extent not provided for)	(Amount in Rupees Lacs unless otherwise stated)	As at As at Particulars	31 December 2018 31 March 2018	a. Contingent liabilities	- 69 Claims against the Company not acknowledged as debts	b. Capital Commitments	84 30 Estimated amount of contracts remaining to be executed on capital account and not provided for	in the books of account (net of advances).	in the books of account (net of advances).	in the books of account (net of advances).	c. Other Commitments	The Company is committed to provide financial support to its subsidiary companies, as and when required.	The Company is committed to provide financial support to its subsidiary companies, as and when required.	a. The Company does not have any pending litigation which would impact its financial position.	b. The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses.
2.31												2.32

NUCLEUS SOFTWARE EXPORTS LIMITED

NOTES FORMING PART OF THE FINANCIAL STATEMENTS

Pa 2.33 2.34 2.35 2.35		(Amount in Rupees Lacs unless otherwise stated)
	rticulars	Quarter ended 31 December 2018 Quarter ended 31 December 2017 For nine months ended 31 December 2018 For nine months ended 31 December 2017
	Auditors remuneration (excluding taxes) a. As auditors - statutory audit, including quarterly audits b. For other services c. Reimbursement of expenses Earnings per share	13 12 39 32 4 3 11 5 1 1 5 3
		18 16 55 40
		(Amount in Rupees Lacs unless otherwise stated)
	Particulars	Quarter ended 31 December 2018 Quarter ended 31 December 2017 For the nine months ended 31 December 2018 For the nine months ended 31 December 2017
	a. Profit after taxation available to equity shareholders (Rupees) b. Weighted average number of equity shares used in calculating basic earnings per share (Numbers) c. Effect of dilutive issue of shares d. Weighted average number of equity shares used in calculating diluted earnings per share (Numbers) e. Basic earnings per share (Rupees) f. Diluted earnings per share (Rupees) RELATED PARTY TRANSACTIONS List of related parties – where control exists a. Subsidiary Companies - Nucleus Software Solutions Pte Ltd, Singapore - Nucleus Software Japan Kabushiki Kaisha, Japan - Nucleus Software Inc., USA - Nucleus Software Netherlands B.V., Netherlands - VirStra i-Technology Services Limited, India - Nucleus Software Limited, India - Nucleus Software Australia Pty. Ltd., Australia - Nucleus Software South Africa Pty. Limited, South Africa - Avon Mobility Solutions Private Limited b. Other related parties: Key managerial personnel: - Vishnu R Dusad (Managing Director ) - Ravi Pratap Singh (Whole time Director) - Ashish Nanda (Chief Financial officer) - Poonam Bhasin (Company Secretary) - Nucleus Software Foundation (see note 2.42) - Avon Solutions & Logistics Pvt Ltd RELATED PARTY TRANSACTIONS Transactions with related parties	1,735 1,410 6,090 5,000 29,040,724 29,040,724 29,040,724 31,058,680 - - - - 29,040,724 29,040,724 29,040,724 31,058,680 5.97 4.85 20.97 16.10 5.97 4.85 20.97 16.10 (Amount in Rupees Lacs unless otherwise stated)
	Particulars	Quarter ended 31 December 2018 Quarter ended 31 December 2017 For nine months ended 31 December 2018 For nine months ended 31 December 2017
	a. Software development services and products - Nucleus Software Japan Kabushiki Kaisha, Japan - Nucleus Software Solutions Pte Ltd, Singapore - Nucleus Software Inc., USA - Nucleus Software Netherlands B.V., Netherlands b. Other income Dividend income - VirStra i -Technology Services Limited, India - Nucleus Software Japan Kabushiki Kaisha, Japan - Nucleus Software Solutions Pte Ltd, Singapore - Nucleus Software Inc., USA c. Other income Rental Income - Avon Mobility Solutions Private Limited, India	72 154 298 410 256 230 707 726 - - - 14 - - - 1
		328 384 1,005 1,151 - - 400 500 - - 369 - - - 631 437 - - - 452
		- - 1,400 1,389 2 - 5 -

NUCLEUS SOFTWARE EXPORTS LIMITED

NOTES FORMING PART OF THE FINANCIAL STATEMENTS

2.35 RELATED PARTY TRANSACTIONS (CONT'D) Transactions with related parties

			(Amount in Rupees Lacs unless otherwise stated)
Par	ticulars	Quarter ended 31 December 2018 Quarter ended 31 December 2017	For nine months ended 31 December 2018 For nine months ended 31 December 2017
a. b. c. d. e. f. g. h. i. j. k. Ou a. b. c. d. e. f. g.	Salary and other benefits to Key managerial personnel Short-term employee benefits Contribution to provident and other funds Cost of software purchased for delivery to clients - Nucleus Software Solutions Pte Ltd, Singapore Outsourced technical service expense - VirStra i-Technology Services Limited, India - Nucleus Software Australia Pty Ltd. Expenditure on Corporate Social Responsibility Nucleus Software Foundation (see note 2.41) Lease rent paid - Nucleus Software Limited, India Reimbursement of expenses from - Nucleus Software Solutions Pte Ltd, Singapore - Nucleus Software Japan Kabushiki Kaisha, Japan - Nucleus Software Inc., USA - Nucleus Software Netherlands B.V., Netherlands - VirStra i-Technology Services Limited, India - Avon Mobility Solutions Private Limited, India - Nucleus Software Australia Pty Ltd., Australia Reimbursement of expenses to - Nucleus Software Japan Kabushiki Kaisha, Japan Sales & marketing fee - Nucleus Software Japan Kabushiki Kaisha, Japan - Nucleus Software Solutions Pte Ltd, Singapore - Nucleus Software Inc., USA - Nucleus Software Australia Pty Ltd. - Nucleus Software South Africa Pty Ltd Communication Expenses - Avon Solutions & Logistics Pvt Ltd Investment in Preference Shares - Avon Mobility Solutions Private Limited Salary to Ms Kritika Dusad (Relative of Key Managerial personnel) tstanding balances as at year end	82 75 6 5	411 295 17 15
		88 80 7 7 5 - 93 81	428 310 21 20 28 - 272 246
		98 81 27 29 55 27 5 4 138 131 - - - - - - - - -	300 246 81 82 82 82 15 18 436 388 3 2 1 1 1 - 2 - - 3
		143 135	458 412
		- 1	- 2
		9 1	9 2
		85 78 194 210 37 45 38 (6)	245 294 491 511 116 - 137 98 - 89
		361 320	989 992
		6 7 50 - - 11	17 17 100 - 11 11 (Amount in Rupees Lacs unless otherwise stated)
	Particulars		As at As at 31 December 2018 31 March 2018
	Trade receivables - Nucleus Software Solutions Pte Ltd, Singapore - Nucleus Software Japan Kabushiki Kaisha, Japan Trade payables - Nucleus Software Solutions Pte Ltd, Singapore - VirStra i -Technology Services Limited, India - Nucleus Software Japan Kabushiki Kaisha, Japan - Nucleus Software Australia Pty Ltd., Australia - Nucleus Software Limited, India - Nucleus Software Inc., USA Expenses Payable to Subsidiaries - Nucleus Software Solutions Pte Ltd, Singapore - VirStra i -Technology Services Limited, India Loans to subsidiaries - Nucleus Software Limited, India Provision for doubtful loan - Nucleus Software Limited, India Investments in subsidiary companies (net of provision) (see note 2.2) Investments in preference shares of subsidiary companies - Avon Mobility Solutions Private Limited		81 81 118 113
			199 194 57 179 8 - 88 98 148 119 9 8 38 -
			348 404 123 - 2 -
			125 - 732 732 732 732 1,935 1777 115 265

2.36	Research and development expenditure (Amount in Rupees Lacs unless otherwise stated)
	Particulars Quarter ended 31 December 2018 Quarter ended 31 December 2017 For nine months ended 31 December 2018 For nine months ended 31 December 2017
	Expenditure on research and development as per Ind AS 38 Revenue Expenditure 452 864 2,357 2,104

The Company had been accorded initial recognition for the in-house Research and Development (R&D) unit by the Department of Scientific and Industrial Research (DSIR) for its R&D center at Noida effective 31 December, 2012 which was valid till 31 March, 2015. The Company further received renewal of recognition for its R&D center for three years starting from 1 April 2015 till 31 March 2018 and subsiquently from 1 April 2108 till 31 March 2021.

NUCLEUS SOFTWARE EXPORTS LIMITED NOTES FORMING PART OF THE FINANCIAL STATEMENTS

2.37 Segment reporting – Basis of preparation

a. Segment accounting policies

The Segment reporting policy complies with the accounting policies adopted for preparation and presentation of financial statements of the Company and is in conformity with Ind AS 108. The segmentation is based on the geographies of Company's customers and internal reporting systems. Based on the "management approach" as defined in Ind AS 108, the Chief Operating Decision Maker (CODM) evaluates the company`s performance and allocates resources based on an analysis of various performance indicators by geographical segments.

b. Composition of reportable segments

The Company operates in seven main geographical segments: India, Far East, South East Asia, Europe, Middle East, Africa and Australia which represent the reportable segments. These segments are based on location of customers of the Company.

Income and direct expenses in relation to segments are categorised based on items that are individually identifiable to that segment, while the remainder of the costs are categorised in relation to the associated turnover and/or man months. Certain expenses such as depreciation, which form a significant component of total expenses, are not specifically allocable to specific segments as the underlying services are used interchangeably across geographies. The Company believes that it is not practicable to provide segment disclosures relating to those costs and expenses, and accordingly these expenses are separately disclosed as “unallocated” and directly charged against total income.

Segment assets and liabilities represent the net assets and liabilities of that segment. All the fixed assets of the Company are located in India. These have not been identified to any of the reportable segments, as these are used interchangeably between geographical segments . Other items which are not directly attributable to any particular segment and which cannot be reasonably allocated to various segments are consolidated under “Unallocated” head.

Information in respect of reportable segments being geographies

The profit and loss is set out below:

For the quarter ended 31 Dece	mber 2018 (Amount in Rupees Lacs un	less otherwise stated)
Description	India Far East South East Asia Europe Middle East Africa Australia Others	Total
Revenue from operations Expenses Segment result Unallocated corporate expenditure Operating profit before taxation Other income Profit before taxation Tax Expense Net current tax expense Net deferred tax credit Profit for the quarter For the quarter ended 31 Dece	3,385 750 1,593 1,373 2,142 530 253 - 1,747 312 1,619 776 1,149 209 172 43	10,026 6,027
	1,638 438 (26) 597 993 321 81 (43)	3,999 2,808
	mber 2017 (Amount in Rupees Lacs un
		1,191 746
		1,937 208 (6) 202
		1,735
		less otherwise stated)
Description	India Far East South East Asia Europe Middle East Africa Australia Others	Total
Revenue from operations Expenses Segment result Unallocated corporate expenditure Operating profit before taxation Other income Profit before taxation Tax Expense Net current tax expense Net deferred tax credit Profit for the quarter ) Revenue from a top customer, For the quarter ended 31 Dece	3,306 777 1,252 969 1,757 383 264 62 1,604 287 1,299 743 1,051 211 166 83	8,770 5,444
	1,702 490 (47) 226 706 172 98 (21) who is contributing more than 10% of total revenue, is presented segment wise as follows: mber 2018 (Amount in Rupees Lacs unl	3,326 2,114
		1,212 537
		1,749 339 - 339
		1,410
		ess otherwise stated)
Description	India Far East South East Asia Europe Middle East Africa Australia Others	Total
Revenue from operations For the quarter ended 31 Dece Revenue from operations For the nine months ended 31	- - - 1,365 - - - -	1,365
	mber 2017 - - - 939 - - - 42	981
	December 2018	(Amount in Rupees)
Description	India Far East South East Asia Europe Middle East Africa Australia Others	Total
Revenue from operations Expenses Segment result Unallocated corporate expenditure Operating profit before taxation Other income Profit before taxation Tax Expense Net current tax expense Net deferred tax credit Profit for the period For the nine months ended 31	10,836 2,024 4,784 3,711 5,711 1,347 754 30 5,088 861 4,658 2,374 3,518 570 502 253	29,197 17,824
	5,748 1,163 126 1,337 2,193 777 252 (223 December 2017	) 11,373 7,412
		3,961 3,441
		7,402 1,382 (70) 1,312
		6,090
		(Amount in Rupees)
Description	India Far East South East Asia Europe Middle East Africa Australia Others	Total
Revenue from operations Expenses Segment result Unallocated corporate expenditure Operating profit before taxation Other income Profit before taxation Tax Expense Net current tax expense Net deferred tax credit Profit for the period ) Revenue from a top customer, For the nine months ended 31	9,097 2,140 3,419 3,100 4,717 811 795 462 4,570 960 3,737 2,386 2,812 356 518 247	24,541 15,585
	4,527 1,180 (318) 714 1,905 455 277 215	8,956 6,360
	who is contributing more than 10% of total revenue, is presented segment wise as follows: December 2018 (Amount in Rupees Lacs unl
		2,596 3,470 -
		6,066 1,063 3 1,066
		5,000
		ess otherwise stated)
Description	India Far East South East Asia Europe Middle East Africa Australia Others	Total
Revenue from operations For the nine months ended 31 Revenue from operations	- - - 3,688 - - - -	3,688
	December 2017 - - - 2,902 - - - 296	3,198

NUCLEUS SOFTWARE EXPORTS LIMITED NOTES FORMING PART OF THE FINANCIAL STATEMENTS

Assets and liabilities of reportable segments being geographies are as follows:

a. b.	As at 31 December 2018 (Amount in Rupees Lacs un	less otherwise stated)
	Description India Far East South East Asia Europe Middle East Africa Australia Others	Total
	Segment assets 3,704 294 1,183 879 1,445 708 - 36 Unallocated corporate assets Total assets Segment liabilities 5,591 477 3,267 730 2,431 1,678 529 38 Unallocated corporate liabilities Total liabilities As at 31 March 2018 (Amount in Rupees Lacs un	8,249 52,673
		60,922 14,741 751
		15,492
		45,430
		less otherwise stated)
	Description India Far East South East Asia Europe Middle East Africa Australia Others	Total
	Segment assets 4,148 553 1,123 527 1,242 881 22 70 Unallocated corporate assets Total assets Segment liabilities 5,999 541 4,413 951 2,676 1,270 414 22 Unallocated corporate liabilities Total liabilities Capital employed	8,566 50,569
		59,135 16,286 865
		17,151
		41,984

A listing of capital expenditure, depreciation and other non-cash expenditure of the geographical segment are set out below:

For the quarter ended 31 Dece	mber 2018 (Amount in Rupees Lacs un	less otherwise stated)
Description	India Far East South East Asia Europe Middle East Africa Australia Others	Total
Capital expenditure (Unallocated) Total capital expenditure Depreciation expenditure (Unallocated) Total depreciation Segment non-cash expense other than depreciation Total non cash expenditure For the quarter ended 31 Dece	14 - (3) 1 - -	103
		103 181
		181 12
	14 0 (3) 0 1 0 - -	12
	mber 2017
Description	India Far East South East Asia Europe Middle East Africa Australia Others	Total
Capital expenditure Total capital expenditure Depreciation expenditure Total depreciation Segment non-cash expense other than depreciation Total non cash expenditure For the nine months ended 31 Decem	15 - - 4 - -	120
		120 167
		167 19
	15 - - - 4 - - -	19
	ber 2018 (Amount in Rupees Lacs un	less otherwise stated)
Description	India Far East South East Asia Europe Middle East Africa Australia Others	Total
Capital expenditure (Unallocated) Total capital expenditure Depreciation expenditure (Unallocated) Total depreciation Segment non-cash expense other than depreciation Total non cash expenditure other than depreciation For the nine months ended 31 Decem	27 - (4) - (7) - - -	756
		756 525
		525 16
	27 - (4) - (7) - - -	16
	ber 2017
Description	India Far East South East Asia Europe Middle East Africa Australia Others	Total
Capital expenditure Total capital expenditure Depreciation expenditure Total depreciation Segment non-cash expense other than depreciation Total non cash expenditure other than depreciation	11 - 1 17 (25) -	532
		532 487
		487 4
	11 - 1 - 17 (25) - -	4

Disaggregation of revenue	The table below presents disaggregated revenues from contracts with customers by geography and products and services . The Company believe that this disaggregation best depicts how the nature, amount,	timing and uncertainty of our revenues and cash flows are affected by industry, market and other economic factors.	Revenues by geography*	Revenues by geography*	a (i) For the quarter ended 31 December 2018	(Amount in Rupees Lacs unless otherwise stated)	Description India Far East South East Asia Europe Middle East Africa Australia Others Total	Revenue from operations 3,385 750 1,593 1,373 2,142 530 253 - 10,026	a (ii) For the quarter ended 31 December 2017	(Amount in Rupees Lacs unless otherwise stated)	Description India Far East South East Asia Europe Middle East Africa Australia Others Total	Revenue from operations 3,306 777 1,252 969 1,757 383 264 62 8,770	b (i) For the nine months ended 31 December 2018	(Amount in Rupees)	(Amount in Rupees)	Description India Far East South East Asia Europe Middle East Africa Australia Others Total	Revenue from operations 10,836 2,024 4,784 3,711 5,711 1,347 754 30 29,197	b (ii) For the nine months ended 31 December 2017	(Amount in Rupees)	(Amount in Rupees)	Description India Far East South East Asia Europe Middle East Africa Australia Others Total	Revenue from operations 9,097 2,140 3,419 3,100 4,717 811 795 462 24,541	* Disclosure relating to revenues by geography has been made with respect to location of customers.	Revenues in products and services *	(Amount in Rupees Lacs unless otherwise stated)	Description Products Other services Total	a. For the quarter ended 31 December 2018	Revenue 9,447 579 10,026	b. For the quarter ended 31 December 2017	Revenue 8,258 512 8,770	c. For the nine months ended 31 December 2018	Revenue 27,568 1,629 29,197	d. For the nine months ended 31 December 2017	Revenue 22,939 1,602 24,541	Revenue from product comprises of revenue generated from company’s own developed software and from third party software supplied along with own software. It also includes services such as enhancements to the	product, maintenance of the product and any other related service on the product. Revenue other than the above is categorized under revenue from other services.
2.38			(A)																					(B)											*

NOTES FORMING PART OF THE FINANCIAL STATEMENTS

NUCLEUS SOFTWARE EXPORTS LIMITED

2.39 Employee Benefit Obligations

Defined contribution plans

An amount of Rs 518 lacs for the helf year ended 30 September 2018 (Year ended 31 March 2018 Rs 917 lacs), have been recognized as an expense in respect of Company’s contribution for Provident Fund and Rs. 3 lacs (Year ended 31 March 2018 Rs. 6 lacs) for Employee State Insurance Fund deposited with the government authorities and has been shown under employee benefit expenses in the Statement of Profit and Loss.

Defined benefit plans

The Gratuity scheme provides for lump sum payment to vested employees at retirement, death while in employment or on termination of employment of an amount equivalent to 15 days basic salary payable for each completed year of service or part thereof in excess of 6 months subject to a maximum limit of Rs. 20 lacs in terms of the provisions of the Payment of Gratuity Act, 1972. Vesting occurs upon completion of 5 years of service.

Provision in respect of gratuity and compensated absence has been determined using the Projected Unit Credit method, with actuarial valuations being carried out at the balance sheet date.

The Company had made contributions to Nucleus Software Export Limited Employees Group Gratuity Assurance Scheme, which has made further contributions to Employees Group Gratuity Scheme of Life Insurance Corporation of India.

Reconciliation of opening and closing balances of the present value of the defined benefit obligation as on 30 September 2018 :

a. b. c. d.		(Amount in Rupees Lacs unless otherwise stated)
	Particulars	As at 30 September 2018 As at 31 March 2018
	Obligation at beginning of the year Current service cost Past service cost Interest on defined benefit obligation Remeasurement due to: Benefits paid Obligation at year end Change in plan assets Plan Assets at year beginning, at fair value Expected return on asset plan Contributions by employer Remeasurement due to : Benefits paid Plan assets at year end, at fair value Present value of defined benefit obligation Fair value of plan assets Funded status- Surplus/ (Deficit) Unrecognised past service costs Net liability recognised in the Balance Sheet Expected employer's contribution next year Actuarial loss/(gain)arising from change in financial assumptions Actuarial loss/(gain)arising from change in demographic assumptions Actuarial loss/(gain)arising on account of experience changes Actuarial return on plan assets less interest on plan assets Change in defined benefit obligations (DBO) Net asset / (liability) recognised in the Balance Sheet	2,155 1,655 142 227 - 274 72 103 - - (89) (52) - - 120 29 (38) (81)
		2,362 2,155
		1,783 1,444 62 96 - 311 - - 2 13 (38) (81)
		1,809 1,783
		2,362 2,155 1,809 1,783
		553 372 - -
		553 372
		200 200

e.	Expense recognised in Profit or Loss	(Amount in Rupees Lacs unless otherwise stated)
	Particulars	Year ended 30 Sepember 2018 Year ended 31 March 2018
	Current service cost Past service cost Interest cost Net gratuity cost	142 227 - 274 10 13
		152 514

NUCLEUS SOFTWARE EXPORTS LIMITED NOTES FORMING PART OF THE FINANCIAL STATEMENTS

f. Remeasurements income recognised in other comprehensive income:

f.	Remeasurements income recognised in other comprehensive income:
		(Amount in Rupees Lacs unless otherwise stated)
	Particulars	For the half year ended 30 September 2018 Year ended 31 March 2018
	Return on plan assets excluding interest income Actuarial (gain) / loss on defined benefit obligation	31 (23) (2) (13)
		29 (36)

g. Economic assumptions :

Economic assumptions :
	Actuarial assumptions for gratuity and long-term compensated absences
	As at 30 September 2018 As at 31 March 2018
Discount rate Salary escalation rate	8.20% 7.40% 8.00% 8.00%

Discount rate:

The discount rate is based on the prevailing market yields of Indian government securities as at the balance sheet date for the estimated term of the obligations.

Salary escalation rate:

The estimates of future salary increases considered takes into account the inflation, seniority, promotion and other relevant factors.

Expected return on plan assets:

The expected rate of return on plan assets is determined after considering several applicable factors such as the composition of the plan assets, investment strategy, market scenario, etc.

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h. Demographic assumptions
Retirement age 58 years 58 years
Mortality table IALM Mortality (2006-08) IALM Mortality (2006-08)
Assumptions regarding future mortality have been based on published statistics and mortality table.
i. Withdrawal rates Ages - Withdrawal Rate
21-50 years - 20%
51-54 years - 2%
55-57 years - 1%
j. Category of asset
Insurer Managed Funds 1,809 1,783
The company does not invest directly in any property occupied by the company nor in financial security issued by the company.
----- End of picture text -----

k Sensitivity analysis

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

Particulars : Increase/(Decrease) in obligation with 0.5% movement in discount rate Increase/(Decrease) in obligation with 0.5% movement in future rate of increase in compensation levels	Year ended Year ended 30 September 2018 31 March 2018
	Increase Decrease Increase Decrease (53) 55 (50) 53 42 (42) 42 (41)

Actuarial valuation of the Company’s liability on account of gratuity as at 30 September 2018 was carried out by an independent actuary. The Company has a policy of getting the actuarial valuation done on a half yearly basis. Accordingly, the actuarial valuation has not been carried out for the quarter and nine months ended 31 December, 2018. Accordingly, disclosures required under Ind-AS19 have been made for the half year ended 30 September 2018.

NUCLEUS SOFTWARE EXPORTS LIMITED NOTES FORMING PART OF THE FINANCIAL STATEMENTS

2.40 FU	NCTION WISE CLASSIFICATION OF STATEMENT OF PR	OFIT AND LOSS (Amount in Rupees Lacs unless otherwise stated)
	Particulars	Quarter ended 31 December 2018 Quarter ended 31 December 2017 For the nine months ended 31 December 2018 For Nine months ended 31 December 2017
	Income from software services and products Software development expenses Gross Profit Selling and marketing expenses General and administration expenses Operating profit before depreciation Depreciation and amortisation expense Operating profit after depreciation Other income Profit before tax Tax expense: Net current tax expense Deferred tax (credit) /charge Profit for the period	(Rupees) (Rupees) (Rupees) (Rupees) 10,026 8,770 29,197 24,541 6,366 5,624 18,788 16,278
		3,660 3,146 10,409 8,263 1,029 950 2,720 2,662 1,259 817 3,203 2,518
		1,372 1,379 4,486 3,083 181 167 525 487
		1,191 1,212 3,961 2,596 746 537 3,441 3,470
		1,937 1,749 7,402 6,066 208 339 1,382 1,063 (6) 0 (70) 3
		202 339 1,312 1,066
		1,735 1,410 6,090 5,000

2.41 TRANSFER PRICING

The Company has established a comprehensive system of maintenance of information and documents as required by transfer pricing legislation under section 92D for its international transactions and specified domestic transactions. The Company will further update above information and records and expects these to be in existence latest by due date of the filing of return, as required under law. The management is of the opinion that all above transactions are at arm's length so that aforesaid legislation will not have any impact on the financial statements, particularly on the amount of tax expense and that of provision for taxation.

2.42 EXPENDITURE ON CORPORATE SOCIAL RESPONSIBILITY


ENDITURE ON CORPORATE SOCIAL RESPONSIBILITY	(Amount in Rupees	Lacs unless otherwise stated)
Particulars	For nine months ended	For nine months ended
	31 December 2018	31 December 2017
Gross amount required to be spent by Company during the year ended	108	111
31 March 2019 / 31 March 2018 :
Amount spent during the period on purposes other than Construction/acquisition of any asset	81	82

Details of related party transactions: Nucleus Software Foundation (See note 2.35) 81 82

2.43 On March 17, 2016, the Company has acquired 96% stake in Avon Mobility Solutions Private Limited ('Avon'), a Mobile Technology Solutions provider for a purchase consideration of Rs 192 lacs. The Company has also taken over Avon's net liabilities aggregating to Rs. 125 lacs. Further, the Company had an option to acquire the remaining 4% shares of Avon as per terms and conditions of share purchase agreement executed with the shareholders of Avon. The Company has further subscribed during the nine months ended 31 December 2018, 1,000,000 (previous year 31 March 2018, 300,000) 11% redeemable preference shares of face value of Rs. 10 per share, for a minimum tenor of 5 years and maximum tenor of 20 years. Further, during the nine months ended 31 December 2018, the Company vide share purchase agreement dated 10 July 2018 exercised the call option and acquired remaining 444 shares in Avon, thereby, now it has become wholly owned subsidiary of the Company.

For B S R & ASSOCIATES LLP

For and on behalf of the Board of Directors

Chartered Accountants Firm Registration Number : 116231W/W-100024

Sd/-

KANIKA KOHLI

Partner Membership number : 511565

Sd/Sd/SIDDHARTHA MAHAVIR ACHARYA VISHNU R DUSAD Chairman Managing Director Sd/Sd/ASHISH NANDA POONAM BHASIN Chief Financial Officer

Sd/POONAM BHASIN AVP (Secretarial) & Company Secretary

Sd/RAVI PRATAP SINGH CEO & Whole-time Director

Place : Gurugram Place : Chennai Date : 28 January 2019 Date : 28 January 2019

VIRSTRA I-TECHNOLOGY SERVICES LIMITED BALANCE SHEET AS AT 31 MARCH 2018

Particulars Notes Ref.	As at 31 March 2018 As at 31 March 2017 As at 1 April 2016
ASSETS Non-current assets Property, plant and equipment 2.1 Intangible assets 2.1 Financial assets Other financial assets 2.2 Deferred tax asset 2.3 Income tax asset (net) 2.4 Other non-current assets 2.5 Current Assets Financial assets Investments 2.6 Trade receivables 2.7 Cash and cash equivalents 2.8 Other bank balances 2.9 Loans 2.10 Other financial assets 2.11 Other current assets 2.12 Total Assets EQUITY & LIABILITIES EQUITY Equity Share capital 2.14 Other equity LIABILITIES Non-current liabilities Provisions 2.15 Current liabilities Financial liabilities Trade payables 2.16 Other financial liabilities 2.17 Provisions 2.18 Other current liabilities 2.19 TOTAL EQUITY AND LIABILITIES	(Rupees) (Rupees) (Rupees) 679,996 523,468 554,624 91,999 288,403 964,808 5,084,111 6,036,045 5,929,025 20,308,437 24,486,471 32,225,000 1,244,278 2,346,973 2,209,734 67,399 - -
	27,476,220 33,681,360 41,883,191 105,634,687 116,811,987 57,648,879 15,425,189 11,174,222 15,500,176 3,655,031 3,069,338 8,750,709 - 890 890 652,941 927,183 114,427 32,370 1,963,729 888,769 4,829,374 4,455,073 1,729,568
	130,229,592 138,402,422 84,633,418
	157,705,812 172,083,782 126,516,609
	10,000,000 10,000,000 10,000,000 130,110,546 145,466,841 103,227,574
	140,110,546 155,466,841 113,227,574 3,395,789 3,412,376 3,054,166
	3,395,789 3,412,376 3,054,166 6,846,449 6,576,753 6,391,294 - 111,718 890 1,137,003 1,065,550 1,065,619 6,216,025 5,450,544 2,777,066
	14,199,477 13,204,565 10,234,869
	157,705,812 172,083,782 126,516,609

See accompanying notes forming part of the 1 & 2 financial statements

In terms of our report attached

For B S R & ASSOCIATES LLP

For and on behalf of the Board of Directors

Chartered Accountants

Firm Registration Number : 116231W/W-100024

Sd/-

RAKESH DEWAN

Partner Membership number : 092212

Sd/-

VISHNU R DUSAD Director

Sd/-

RAVI PRATAP SINGH Director

Place : Gurugram Place : Noida Date : May 03, 2018 Date : May 03, 2018

VIRSTRA I-TECHNOLOGY SERVICES LIMITED STATEMENT OF PROFIT AND LOSS FOR THE YEAR ENDED 31 MARCH 2018

Notes Ref. 1. REVENUE FROM OPERATIONS Income from software services 2.20 2. OTHER INCOME 2.21 3. TOTAL REVENUE (1+2) 4. EXPENSES a. Employee benefits expense 2.22 b. Operating and other expenses 2.23 c. Finance cost/Bank charges 2.24 d. Depreciation and amortisation expense 2.1 TOTAL EXPENSES 5. PROFIT BEFORE TAX (3-4) 6. TAX EXPENSE a. Current tax expense b. Deferred tax (credit) / charge 2.3 NET TAX EXPENSE 7. PROFIT FOR THE PERIOD (5-6) 8. OTHER COMPREHENSIVE INCOME (A) (i) Items that will not be reclassified to profit or loss Remeasurements of the defined benefit plans,net (B) (i) Items that will be reclassified subsequently to profit or loss Effective portion of gain/ (loss) on hedging instruments of effective cash flow hedges(net of tax) TOTAL OTHER COMPREHENSIVE INCOME/ (L0SS) 9. TOTAL COMPREHENSIVE INCOME (7+8)	Notes Ref.	Year ended Year ended 31 March 2018 31 March 2017
		(Rupees) (Rupees) 154,383,568 152,496,149 6,410,021 6,959,298
		160,793,589 159,455,447 76,277,766 76,820,139 21,670,819 20,237,498 296,959 466,553 587,211 1,091,834
		98,832,755 98,616,024
		61,960,834 60,839,423 11,885,126 19,978,232 4,036,651 (697,317)
		15,921,777 19,280,915
		46,039,057 41,558,508
		724,042 (380,582) (1,940,394) 1,061,341
		(1,216,352) 680,759

		44,822,705 42,239,267

VIRSTRA I-TECHNOLOGY SERVICES LIMITED

STATEMENT OF PROFIT AND LOSS FOR THE YEAR ENDED 31 MARCH 2018

Notes Ref. 10. EARNINGS PER EQUITY SHARE Equity shares of Rupees 10 each a. Basic b. Diluted Number of shares used in computing earnings per share a. Basic b. Diluted 1 & 2 See accompanying notes forming part of the financial statements	Notes Ref. 10. EARNINGS PER EQUITY SHARE Equity shares of Rupees 10 each a. Basic b. Diluted Number of shares used in computing earnings per share a. Basic b. Diluted 1 & 2 See accompanying notes forming part of the financial statements	Year ended Year ended 31 March 2018 31 March 2017
	1 & 2	(Rupees) (Rupees)
		46.04 41.56 46.04 41.56 1,000,000 1,000,000 1,000,000 1,000,000

In terms of our report attached

For B S R & ASSOCIATES LLP

For and on behalf of the Board of Directors

Chartered Accountants Firm Registration Number : 116231W/W-100024

Sd/-

RAKESH DEWAN

Partner Membership number : 092212

Sd/-

VISHNU R DUSAD RAVI PRATAP SINGH Director Director

Place : Gurugram Date : May 03, 2018

Place : Noida Date : May 03, 2018

STATEMENT OF CHANGES IN EQUITY

A. Equity Share Capital

A. Equity Share Capital	A. Equity Share Capital	A. Equity Share Capital	A. Equity Share Capital	A. Equity Share Capital	A. Equity Share Capital
(Amount in Rupees)
Balance as of 1 April 2017	Changes in equity share capital during the year		Balance as on 31 March 2018
10,000,000	-		10,000,000

Balance as of 1 April 2016	Changes in equity share capital during the year		Balance as on 31 March 2017
10,000,000	-		10,000,000
(Amount in Rupees) B. Other Equity
	Reserves and Surplus		Items of OCI		Total
	General reserve	Retained earnings	Hedging reserve	Remeasurements of the defined benefit plans
Balance as of 1 April 2017 Profit for the year Interim dividend on equity shares Corporate dividend tax Effective gain/(loss) on hedging instruments Remeasurements ofthe defined benefit plans	66,067,678 - - - -	77,816,016 46,039,057 (50,000,000) (10,179,000) -	1,963,729 - - - (1,940,394)	(380,582) - - - - 724,042	145,466,841 46,039,057 (50,000,000) (10,179,000) (1,940,394) 724,042
Balance as of 31 March 2018	66,067,678	63,676,073	23,335	343,460	130,110,546
(Amount in Rupees)
			Items of OCI		Total
	General reserve	Retained earnings	Hedging reserve	Remeasurements of the defined benefit plans
Balance as of 1 April 2016 Profit for the year Effective gain on hedging instruments Remeasurements ofthe defined benefit plans	66,067,678 - - -	36,257,508 41,558,508 - -	902,388 - 1,061,341 -	- - - (380,582)	103,227,574 41,558,508 1,061,341 (380,582)
Balance as of 31 March 2017	66,067,678	77,816,016	1,963,729	(380,582)	145,466,841

See accompanying notes forming part of the financial statements

In terms of our report attached

For B S R & ASSOCIATES LLP Chartered Accountants

For and on behalf of the Board of Directors

Firm Registration Number : 116231W/W-100024

Sd/-

RAKESH DEWAN

Partner Membership number : 092212

Place : Gurugram Date : May 03, 2018

Sd/-

VISHNU R DUSAD Director

Place : Noida Date : May 03, 2018

Sd/RAVI PRATAP SINGH Director

VIRSTRA I-TECHNOLOGY SERVICES LIMITED

CASH FLOW STATEMENT FOR THE YEAR ENDED 31 MARCH 2018

A. Cash flow from operating activities Net profit before tax Adjustment for: Depreciation and amortisation expense Exchange difference on translation of foreign currency accounts Dividend received from non trade investments Profit on sale of fixed assets MTM gain or (loss) on mutual funds Interest income on fixed deposits with banks Operating profit before working capital changes Adjustment for (increase)/decrease in operating assets Trade receivable Other financial assets Other assets Adjustment for Increase/ (decrease) in operating liabilities Provisions Trade payables Other financial liabilities Other liabilities Income tax paid (net) Net cash flow from operating activities (A) B. Cash flow from investing activities Purchase of fixed assets/capital work in progress Proceeds from sale of fixed assets Purchase of current investments Proceeds on sale of current investments Interest income Dividend received from investments Net cash flow from /(used in) investing activities (B) C. Cash flow from financing activities Interim dividend paid Corporate dividend tax paid Net cash flow from /(used in) financing activities (C) Net (decrease) / increase in cash and cash equivalents (A+B+C) Cash and cash equivalents at the beginning of the year Exchange difference on translation of foreign currency bank accounts Cash and cash equivalents at the end of the year	Notes Ref.	Year ended Year ended 31 March 2018 31 March 2017 (Rupees) (Rupees) 61,960,834 60,839,423 587,211 1,091,834 (433,724) (359,711) (4,423,885) (4,180,154) - (215,174) 251,216 (582,953) (24,456) (29,206) 57,917,196 56,564,059 (3,886,878) 4,325,954 1,251,522 (812,756) (434,925) (2,816,939) 911,286 (22,441) 251,111 205,143 (111,718) - 765,481 2,673,477 56,663,075 60,116,497 (10,782,451) (11,679,626) 45,880,624 48,436,871 (547,344) (273,445) - 215,174 (128,623,918) (184,185,972) 139,550,000 125,605,772 - - 4,423,885 4,180,154 14,802,623 (54,458,317) (50,000,000) - (10,179,000) - (60,179,000) - 504,247 (6,021,446) 3,069,338 8,750,709 81,446 340,075 3,655,031 3,069,338
	2.8 2.8

See accompanying notes forming part of the financial statements

1 & 2

In terms of our report attached

For B S R & ASSOCIATES LLP

For and on behalf of the Board of Directors

Chartered Accountants

Firm Registration Number : 116231W/W-100024

Sd/-

RAKESH DEWAN

Partner Membership number : 092212

VISHNU R DUSAD Director

RAVI PRATAP SINGH

Director

Place : Gurugram Date : May 03, 2018

Place : Noida Date : May 03, 2018

VIRSTRA I - TECHNOLOGY SERVICES LIMITED NOTES FORMING PART OF THE FINANCIAL STATEMENTS

Note 1:

1.1 Company Overview

VirStra i- Technology Services Limited (‘Virstra’ or ‘the Company’) was incorporated in May 2004 in India. Virstra is a wholly owned subsidiary company of Nucleus Software Exports Ltd. The Company’s business broadly consists of offshore and onsite software support services to other group companies.

The Financial statements were approved for issue by the Board of Directors on May 03, 2018.

1.2. Significant accounting policies

i. Basis of preparation of financial statements

a) Statement of compliance

The financial statements of the Company have been prepared in accordance with the Indian Accounting Standards (Ind AS) as per the Companies (Indian Accounting Standards) Rules, 2006 notified under Section 133 of the Companies Act, 2013 (the ‘Act’) and other relevant provisions of the Act.

The financial statements up to and for the year ended 31 March 2017 were prepared in accordance with the Companies (Accounting Standards) Rules, 2015, notified under section 133 of the Act and other relevant provisions of the Act.

As these are the Company`s first financial statements prepared in accordance with Indian Accounting Standards (Ind AS), Ind AS 101, First time Adoption of Indian Accounting Standards has been applied. An explanation of how the transition to Ind AS has affected the previously reported financial position, financial performance and cash flows of the Company is provided in Note no. 2.32 and 2.33.

b) Functional and Presentation currency

The financial statements are presented in Indian Rupees (Rupees), which is also the Company`s functional currency.

c) Basis of measurement

The financial statements have been prepared on the historical basis except for the following items:

Items	Measurement Basis
Certain financial assets and liabilities (including	Fair Value
derivative instruments)
Net defined benefit(asset)/liability	Fair value of plan assets less present
	value of defined benefit obligations

d) Use of estimates and judgements

Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised prospectively.

Judgments

Information about judgments made in applying accounting policies that have the most significant effect on the amounts recognised in the financial statements is included in the following notes:

Lease classification – Note 2.27

Assumptions and estimation uncertainties

Estimation of current tax expense and payable – Note 2.4
Estimated useful life of property, plant and equipment – Note 1.2 (iv) and (v)
Estimation of defined benefit obligation-– Note 2.29

VIRSTRA I - TECHNOLOGY SERVICES LIMITED NOTES FORMING PART OF THE FINANCIAL STATEMENTS

Impairment of trade receivables- Note 2.7

e) Measurement of fair values

The Company`s accounting policies and disclosures require the measurement of fair values, for both financial and non-financial assets and liabilities.

Fair values are categorised into different levels in a fair value hierarchy based on the inputs used in the valuation techniques as follows.

Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2: inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).
Level 3: inputs for the asset or liability that are not based on observable market data
(unobservable inputs).

The Company recognises transfers between levels of the fair value hierarchy at the end of the reporting period during which the change has occurred.

ii. Revenue Recognition

Revenue from software services comprises income from time and material contracts, which is recognised as the services are rendered.

iii. Other income

Profit on sale of investments is determined as the difference between the sales price and the carrying value of the investment upon disposal of investments.

Dividend income is recognised in profit or loss on the date on which the Company`s right to receive payment is established.

Interest income or expense is recognised using the effective interest method.

The ‘effective interest rate’ is the rate that exactly discounts estimated future cash payments or receipts through the expected life of the financial instrument to:

the gross carrying amount of the financial asset ; or
the amortised cost of the financial liability

iv.

Property, Plant and equipment

VIRSTRA I - TECHNOLOGY SERVICES LIMITED NOTES FORMING PART OF THE FINANCIAL STATEMENTS

equipment under construction and cost of assets not ready to use before the year end, are disclosed as capital work-in-progress.

Depreciation on property, Plant and equipment is provided on the straight-line method based on useful lives of respective assets as estimated by the management taking into account nature of the asset, the estimated usage of the asset and the operating conditions of the asset. Depreciation is charged on a pro-rata basis for assets purchased / sold during the year.

If significant parts of an item of property, plant and equipment have different useful lives, then they are accounted for as separate items (major components) of property, plant and equipment.

Any gain or loss on disposal of an item of property, plant and equipment is recognised in profit or loss.

Subsequent expenditure is capitalized only if it is probable that the future economic benefits associated with the expenditure will flow the Company.

The management’s estimates of the useful lives of the various property, plant and equipment are as follows:

Asset category			Mangement	Useful life as
			estimate of useful	per Schedule
			life (in years)	II(in years)
Tangible asset
Plant and machinery	(including office		5	15
equipment)*
Computers- end user devices such			3	3
laptops, desktops etc.
Computers- servers	and	networking	4	6
equipment*
Vehicles*			5	10
Furniture and fixtures*			5	10

Transition to Ind AS

On transition to Ind AS, the company has elected to continue with the carrying value of all of its property, plant and equipment recognised as at 1 April 2016, measured as per the previous GAAP, and use that carrying value as the deemed cost of such property, plant and equipment. Refer Note 2.32

v.

Intangible assets

The management’s estimates of the useful lives of the Software are 3 years.

Transition to Ind AS

On transition to Ind AS, the company has elected to continue with the carrying value of all of its Intangible assets recognised as at 1 April 2016, measured as per the previous GAAP, and use that carrying value as the deemed cost of such intangible assets- Refer Note 2.32.

VIRSTRA I - TECHNOLOGY SERVICES LIMITED NOTES FORMING PART OF THE FINANCIAL STATEMENTS

vi. Financial instruments

a) Recognition and initial measurement

b) Classification and subsequent measurement

Financial assets

On initial recognition, a financial asset is classified as measured at

amortised cost;
Fair value through other comprehensive income (FVOCI)-equity investment; or
FVTPL

Financial asset are not reclassified subsequent to their initial recognition, except if and in the period the Company changes its business model for managing financial assets.

A financial asset is measured at amortised cost if it meets both of the following conditions and is not designated as at FVTPL:

the asset is held within a business model whose objective is to hold assets to collect contractual cash flows; and
the contractual terms of the financial asset give rise on specified dates to cash flows that are solely for payments of principal and interest on the principal amount outstanding.

Financial assets: Business model assessment

the stated policies and objectives for the portfolio and the operation of those policies in practice. These include whether management’s strategy focuses on earning contractual interest income, maintaining a particular interest rate profile, matching the duration of the financial assets to the duration of any related liabilities or expected cash outflows or realising cash flows through the sale of the assets;
how the performance of the portfolio is evaluated and reported to the Company’s management;
the risks that affect the performance of the business model (and the financial assets held within that business model) and how those risks are managed;
how managers of the business are compensated – e.g. whether compensation is based on the fair value of the assets managed or the contractual cash flows collected; and
the frequency, volume and timing of sales of financial assets in prior periods, the reasons for such sales and expectations about future sales activity.

Financial assets: Assessment whether contractual cash flows are solely payments of principal and interest

VIRSTRA I - TECHNOLOGY SERVICES LIMITED NOTES FORMING PART OF THE FINANCIAL STATEMENTS

contingent events that would change the amount or timing of cash flows;
terms that may adjust the contractual coupon rate, including variable interest rate features;
prepayment and extension features; and
terms that limit the Company’s claim to cash flows from specified assets (e.g. non- recourse features).

Financial assets: Subsequent measurement and gains and losses

Financial assets at FVTPL	These assets are subsequently measured at fair value. Net gains and losses, including any interest or dividend income, are recognised in profit or loss. However, see Note 1.2(vi)(e) for derivatives designated as hedging instruments.
Financial assets at amortised cost	These assets are subsequently measured at amortised cost using the effective interest method. The amortised cost is reduced by impairment losses. Interest income, foreign exchange gains and losses and impairment are recognised in profit or loss. Any gain or loss on derecognition is recognised in profit or loss.
Equity investments at FVOCI	These assets are subsequently measured at fair value. Dividends are recognised as income in profit or loss unless the dividend clearly represents a recovery of part of the cost of the investment. Other net gains and losses are recognised in OCI and are not reclassified to profit or loss.

Financial liabilities: Classification, subsequent measurement and gains and losses

c) Derecognition

Financial assets

Financial liabilities

The Company derecognises a financial liability when its contractual obligations are discharged or cancelled, or expire.

VIRSTRA I - TECHNOLOGY SERVICES LIMITED NOTES FORMING PART OF THE FINANCIAL STATEMENTS

d) Offsetting

e) Derivative financial instruments and hedge accounting

The company holds derivative financial instruments such as foreign exchange forward contracts to mitigate the risk of changes in exchange rates on foreign currency exposures. The counterparty for these contracts is generally a bank. Embedded derivatives are separated from the host contract and accounted for separately if the host contract is not a financial asset and certain criteria are met.

Derivatives are initially measured at fair value. Subsequent to initial recognition, derivatives are measured at fair value, and changes therein are generally recognised in profit or loss.

Cash flow hedges

The amount accumulated in other equity is reclassified to profit or loss in the same period or periods during which the hedged expected future cash flows affect profit or loss.

If the hedged future cash flows are no longer expected to occur, then the amounts that have been accumulated in other equity are immediately reclassified to profit or loss.

vii. Impairment

a) Impairment of financial instruments

The Company recognises loss allowances for expected credit losses on:
- financial assets measured at amortised cost;

At each reporting date, the Company assesses whether financial assets carried at amortised cost A financial asset is ‘credit- impaired’ when one or more events that have a detrimental impact on the estimated future cash flows of the financial asset have occurred.

The Company measures loss allowances at an amount equal to lifetime expected credit losses, except for the following, which are measured as 12 month expected credit losses:

debt securities that are determined to have low credit risk at the reporting date; and

VIRSTRA I - TECHNOLOGY SERVICES LIMITED NOTES FORMING PART OF THE FINANCIAL STATEMENTS

other debt securities and bank balances for which credit risk (i.e. the risk of default occurring over the expected life of the financial instrument) has not increased significantly since initial recognition.

Loss allowances for trade receivables are always measured at an amount equal to lifetime expected credit losses.

Measurement of expected credit losses

Presentation of allowance for expected credit losses in the balance sheet

Loss allowances for financial assets measured at amortised cost are deducted from the gross carrying amount of the assets.

Write-off

b) Impairment of non-financial assets

viii. Provisions (other than for employee benefits)

Post Sales client support and warranties

VIRSTRA I - TECHNOLOGY SERVICES LIMITED NOTES FORMING PART OF THE FINANCIAL STATEMENTS

Onerous contracts

ix. Foreign Currency

a) Foreign currency transactions

Transactions in foreign currencies are translated at the exchange rates at the dates of the transactions or an average rate if the average rate approximates the actual rate at the date of the transaction.

- qualifying cash flow hedges to the extent that the hedges are effective.

x. Earnings per share

Basic earnings per share is computed using the weighted average number of equity shares outstanding during the year. Diluted earnings per share is computed using the weighted average number of equity and dilutive equity equivalent shares outstanding during the year-end, except where the results would be anti-dilutive.

xi. Taxation

a) Current tax

Current tax comprises the expected tax payable or receivable on the taxable income or loss for the year and any adjustment to the tax payable or receivable in respect of previous years. The amount of current tax reflects the best estimate of the tax amount expected to be paid or received after considering the uncertainty, if any, related to income taxes. It is measured using tax rates (and tax laws) enacted or substantively enacted by the reporting date. Current tax assets and current tax liabilities are offset only if there is a legally enforceable right to set off the recognised amounts, and it is intended to realise the asset and settle the liability on a net basis or simultaneously.

b) Deferred tax

VIRSTRA I - TECHNOLOGY SERVICES LIMITED NOTES FORMING PART OF THE FINANCIAL STATEMENTS

xii. Employee benefits

Defined contribution plans

The Company's contribution to provident fund is considered as defined contribution plans and is charged as an expense as they fall due based on the amount of contribution required to be made.

Defined benefit plans

Short-term employee benefits

The undiscounted amount of short-term employee benefits expected to be paid in exchange for the services rendered by employees are recognized during the year when the employees render the service. These benefits include performance incentive and compensated absences which are expected to occur within twelve months after the end of the year in which the employee renders the related service. The cost of such compensated absences is accounted as under:

(a) in case of accumulated compensated absences, when employees render the services that increase their entitlement of future compensated absences; and
(b) in case of non-accumulating compensated absences, when the absences occur.

Long-term employee benefits

VIRSTRA I - TECHNOLOGY SERVICES LIMITED NOTES FORMING PART OF THE FINANCIAL STATEMENTS

xiii. Cash Flow Statement

xiv. Operating leases

xv. Recent accounting pronouncements

Appendix B to Ind AS 21, Foreign currency transactions and advance consideration :

On March 28, 2018, Ministry of Corporate Affairs ("MCA") has notified the Companies (Indian Accounting Standards) Amendment Rules, 2018 containing Appendix B to Ind AS 21, Foreign currency transactions and advance consideration which clarifies the date of the transaction for the purpose of determining the exchange rate to use on initial recognition of the related asset, expense or income, when an entity has received or paid advance consideration in a foreign currency. The amendment will come into force from April 1, 2018. The Company has evaluated the effect of this on the financial statements and the impact is not material.

Ind AS 115- Revenue from Contract with Customers:

On March 28, 2018, Ministry of Corporate Affairs ("MCA") has notified the Ind AS 115, Revenue from Contract with Customers. The core principle of the new standard is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. Further the new standard requires enhanced disclosures about the nature, amount, timing and uncertainty of revenue and cash flows arising from the entity’s contracts with customers. Under Ind AS 115, an entity recognises revenue when (or as) a performance obligation is satisfied, i.e. when ‘control’ of the goods or services underlying the particular performance obligation is transferred to the customer.

The standard permits two possible methods of transition:

• Retrospective approach - Under this approach the standard will be applied retrospectively to each prior reporting period presented in accordance with Ind AS 8 - Accounting Policies, Changes in Accounting Estimates and Errors

• Retrospectively with cumulative effect of initially applying the standard recognized at the date of initial application (Cumulative catch - up approach)

The effective date for adoption of Ind AS 115 is financial periods beginning on or after April 1, 2018.

The Company will adopt the standard on April 1, 2018 by using the cumulative catch-up transition method and accordingly comparatives for the year ending or ended March 31, 2018 will not be retrospectively adjusted. The Company does not expect the impact of the adoption of the new standard to be material on its retained earnings and to its net income on an ongoing basis

100

NET CARRYING AMOUNT	As at 31 March 2017	302,337 (469,608) 221,131 (85,016) - -	523,468	(554,624) 288,403 (964,808)	811,871	(1,519,432)
	As at 31 March 2018	514,634 (302,337) 165,362 (221,131) - -	679,996	(523,468) 91,999 (288,403)	771,995	(811,871)
ACCUMULATED DEPRECIATION	As at 31 March 2018	590,087 (373,933) 97,265 (41,496) - -	687,352	(415,429) 991,692 (676,405)	1,679,044	(1,091,834)
	Deductions / adjustments	- - - -	-	- - -	-	-
	Depreciation for the year	216,154 (373,933) 55,769 (41,496) - - -	271,924	(415,429) 315,287 (676,405)	587,211	(1,091,834)
	As at 1 April 2017	373,933 - 41,496 -	415,429	- 676,405 -	1,091,834	-
GROSS CARRYING AMOUNT	As at 31 March 2018	1,104,721 (676,270) 262,627 (262,627) - -	1,367,348	(938,897) 1,083,691 (964,808)	2,451,039	(1,903,705)
	Deductions / adjustments	- - - -	-	- - -	-	-	Deemed Cost as on 1 April 2016	469,608 85,016 -	554,624 964,808
	Additions	428,451 (206,662) - (177,611)	428,451	(384,273) 118,883 -	547,334	(384,273)	Accumulated depreciation as on 31 March 2016	25,810,258 13,439,950 713,380	39,963,588 2,999,116
	As at 1 April 2017	676,270 (469,608) 262,627 (85,016) -	938,897	(554,624) 964,808 (964,808)	1,903,705	(1,519,432)	Gross Block as on 31 March 2016	26,279,866 13,524,966 713,380	40,518,212 3,963,924
PARTICULARS		Tangible assets - Computers - Office equipment - Furniture and fixtures Intangible assets - Softwares			Total		Tangible assets	Computer equipment Office equipment Furniture and fixtures Intangible assets Software

101

VIRSTRA I-TECHNOLOGY SERVICES LIMITED NOTES FORMING PART OF THE FINANCIAL STATEMENTS

2.2 2.3	Particulars	As at As at As at 31 March 2018 31 March 2017 1 April 2016
	OTHER NON-CURRENT FINANCIAL ASSETS (Unsecured considered good unless otherwise stated) a. Security deposits b. Long-term bank deposits DEFERRED TAX ASSETS (NET)	(Rupees) (Rupees) (Rupees) 4,651,877 5,579,420 5,501,606 432,234 456,625 427,419
		5,084,111 6,036,045 5,929,025

A. Amounts recognised in profit or loss

Particulars		Year ended Year ended 31 March 2018 31 March 2017
Current tax Deferred tax Net tax expense Income tax recognised in other comprehensive income Remeasurements of net defined benefit plans Income tax recognised in other comprehensive income Effective portion of gain/ (loss) on hedging instruments of effective cash flow hedges(net of tax)	(Rupees) (Rupees) 11,885,126 19,978,232 4,036,651 (697,317) 15,921,777 19,280,915 Before tax Tax expense / (benefit) Net of tax 856,420 132,378 724,042 (1,931,389) 9,005 (1,940,394)	(Rupees) (Rupees) 11,885,126 19,978,232 4,036,651 (697,317)
		15,921,777 19,280,915
	(1,074,969) 141,383 (1,216,352)

B. Income tax recognised in other comprehensive income

C. Reconciliation of effective tax rate

A reconciliation of the income tax provision to the amount computed by applying the statutory income tax rate to the income before taxes is summarised below:

Particulars	Percentage	Year ended 31 March 2018	Percentage	Year ended 31 March 2017
Profit before tax Domestic tax rate Tax exempt income Tax disallowances Prior period taxes Effective tax	28% -2% 0% 0% 26%	61,960,834 17,071,759 (1,218,891) 169,709 (100,800) 15,921,777	33% -2% 1% 0% 32%	60,839,423 20,115,338 (1,382,084) 547,661 - 19,280,915

D.	Movement in temporary differences
	Particulars	Balance as at 1 April 2017 Balance as at 1 April 2016 Recognised [(Credited)/ Charge] in profit or loss during the year Recognised [(Credited)/ Charge] in OCI during the year Balance as at 31 March 2018
	Provision for compensated absences and gratuity MAT credit entitlement Property, plant and equipment Forward contracts	1,775,342 402,400 (132,378) 2,045,364 1,512,341 773,681 (49,646) - 724,035 884,711 545,346 (545,346) (9,005) (9,005) - 21,392,102 (3,844,059) - 17,548,043 29,827,948
		24,486,471 (4,036,651) (141,383) 20,308,437 32,225,000

2.4 2.5	INCOME TAX ASSETS (NET)
	Particulars	As at As at As at 31 March 2018 31 March 2017 1 April 2016
	OTHER NON- CURRENT ASSETS (Unsecured considered good unless otherwise stated) Deferred rent Advance tax (net of provision for tax Rs 49,954,240 ( 31 March 2017 : Rs. 82,861,937 , 1 April 2016 : Rs.62,883,705)]	(Rupees) (Rupees) (Rupees) 1,244,278 2,346,973 2,209,734
		1,244,278 2,346,973 2,209,734
		67,399 - -
		67,399 - -

102

Particulars As at As at As at 31 March 2018 31 March 2017 1 April 2016

2.6 CURRENT INVESTMENTS

Investment in Mutual Funds (Unquoted)

Mutual funds at fair value through profit or loss (FVTPL)

Total Aggregate amount of unquoted investment 2.7 CURRENT TRADE RECEIVABLES (Unsecured) Trade receivables - Considered good 2.8 CASH AND CASH EQUIVALENTS a. Cash on hand b. Balances with scheduled banks: - in current accounts - in EEFC accounts 2.9 OTHER BANK BALANCES a. Balances with scheduled banks in earmarked accounts: - unclaimed dividend accounts 2.10 SHORT-TERM LOANS (Unsecured considered good unless otherwise stated) Loans and advances to employees (considered good) - Staff loans - Employee advances 2.11 OTHER CURRENT FINANCIAL ASSETS (Unsecured considered good unless otherwise stated) Mark-to-market gain on forward contracts (see note 2.26) 2.12 OTHER CURRENT ASSETS (Unsecured considered good unless otherwise stated) a. Prepaid expenses b. Supplier advance c. Employee advances d. Other advances e. Balances with government authorities f. Deferred rent 335,685.30 units (31 March 2017 :141,410.53 units, 1 April 2016 : 576,094.17) of ICICI Prudential Liquid Direct Plan Daily Dividend 137,081.48 units ( 31 March 2017 : 6,504.58 units, 1 April 2016 : Nil) ICICI Prudential Flexible Income Plan - DDR - Direct 2,293,126.49 units (31 March 2017: 6,215,454.31 units , 1 April 2016 : Nil) ICICI Prudential Ultra Short Term Plan- Direct Plan- Daily Dividend-Reinvestment option 1,960,829.53 units( 31 March 2017: 1,824,464.38 units 1 April 2016: Nil) ICICI Prudential Equity Arbitrage Fund- Direct Plan- Monthly Dividend-Reinvestment option 286,674.84 Units (31 March 2017: 1,236,756.74 units, 1 April 2016: Nil) IDFC Money Manager- Direct Plan- Daily Dividend-Reinvestment option 305,668.95 units (31 March 2017: Nil , 1 April 2016: Nil) IDFC Ultra Short term plan- Daily Dividend-Reinvestment option	33,624,624 14,149,733 57,648,879 14,502,522 687,767 - 23,187,636 62,815,867 - 28,318,104 26,614,073 - 2,909,348 12,544,547 - 3,092,453 - -
	105,634,687 116,811,987 57,648,879
	105,634,687 116,811,987 57,648,879 15,425,189 11,174,222 15,500,176
	15,425,189 11,174,222 15,500,176
	1,689 15,796 5,877 818,547 371,678 8,091,652 2,834,795 2,681,864 653,180
	3,655,031 3,069,338 8,750,709
	- 890 890
	- 890 890
	41,669 27,500 27,000 611,272 899,683 87,427
	652,941 927,183 114,427
	32,370 1,963,729 888,769
	32,370 1,963,729 888,769
	211,923 137,019 220,262 1,263,328 1,292,641 1,074,416 95,798 478,275 366,267 676,972 676,972 - 2,171,215 1,870,166 - 410,138 - 68,623
	4,829,374 4,455,073 1,729,568

103

2.13 SHARE CAPITAL

Particulars	As at As at As at 31 March 2018 31 March 2017 1 April 2016
a. Authorised Equity shares 1,000,000 (Previous year : 1,000,000) equity shares of Rs. 10 each b. Issued, subscribed and fully paid-Up 1,000,000 (Previous year : 1,000,000) equity shares of Rs. 10 each Refer notes (i) to (iii) below (i) Reconciliation of number of shares and amount outstanding at the beginning and at the end As at the beginning of the year - Number of Shares - Amount Shares issues/ (bought back) during the year - Number of Shares - Amount As at the end of the year - Number of Shares - Amount	10,000,000 10,000,000 10,000,000
	10,000,000 10,000,000 10,000,000
	of the year : 1,000,000 1,000,000 1,000,000 10,000,000 10,000,000 10,000,000 - - - - - - 1,000,000 1,000,000 1,000,000 10,000,000 10,000,000 10,000,000

(ii) Rights, preferences and restrictions attached to shares

The Company has one class of equity shares having a par value of Rs. 10 each. 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. 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.

(iii) Details of shares held by Nucleus Software Exports Limited, the Holding Company

- Number of Shares (see note below)	1,000,000	1,000,000	1,000,000
- Percentage	100%	100%	100%
- Amount	10,000,000	10,000,000	10,000,000

Note : Out of the above, 6 (Previous year 6) equity shares of Rs. 10 each are held by nominees on behalf of the Holding Company.

2.14	OTHER EQUITY
	Particulars	As at As at As at 31 March 2018 31 March 2017 1 April 2016
	a. General reserve b. Retained Earnings c. Other comprehensive Income	(Rupees) (Rupees) (Rupees) 66,067,678 66,067,678 66,067,678 63,676,073 77,816,016 36,257,508 366,795 1,583,147 902,388
		130,110,546 145,466,841 103,227,574

	Particulars	Year ended Year ended 31 March 2018 31 March 2017
	a. General reserve Opening balance Add: Transferred from surplus in Statement of Profit and Loss Closing balance b. Retained Earnings Opening balance Add: Profit for the year Less : Appropriations - Interim Dividend [see note (i) below] - Tax on Interim Dividend c. Other comprehensive Income Remeasurement of net defined benefit plans Opening balance Add: Movement during the year Closing balance Hedging reserve(see note 2.26) Opening balance Add: Movement during the year Closing balance Closing balance	(Rupees) (Rupees) 66,067,678 66,067,678 - 66,067,678 66,067,678 77,816,016 36,257,508 46,039,057 41,558,508 (50,000,000) - (10,179,000) - 63,676,073 77,816,016 (380,582) - 724,042 (380,582) 343,460 (380,582) 1,963,729 902,388 (1,940,394) 1,061,341 23,335 1,963,729 366,795 1,583,147 130,110,546 145,466,841

Note:

(i) The Board of Directors of the Company, at their meeting held on 27 June 2017, had declared an interim dividend of Rs. 50/- per equity share. The interim dividend was paid to the shareholders before 31 March 2018.

(ii) The Board of Directors of the Company recommended a payment of Final Dividend of Rs.40/- per equity share ( on equity share of par value of Rs. 10 each) for the year ended 31 March 2018. The payment is subject to approval of shareholders at the ensuing Annual General Meeting. The final dividend declared in the previous was Rs. Nil per equity share.

Nature and purpose of other reserves

General reserve

The Company transferred certain percentage of retained earnings to general reserve as per the provisions for dividend distribution under the Companies Act, 2013.

Remeasurement of net defined benefit plans

Remeasurement of net defined benefit plans (asset) comprises actuarial gain and losses and return on plan assets (excluding interest income)

Hedging reserve

104

Particulars As at As at As at	31 March 2018 31 March 2017 1 April 2016	(Rupees) (Rupees) (Rupees)	2.15 LONG-TERM PROVISIONS	Provision for employee benefits	-Provision for compensated absences 3,395,789 3,412,376 3,054,166	3,395,789 3,412,376 3,054,166	2.16 TRADE PAYABLES	Trade payables	- Micro and Small Enterprises (see note below) - - -	- Others 6,846,449 6,576,753 6,391,294	6,846,449 6,576,753 6,391,294	The Company has no amounts payable to Micro and Small Enterprises as defined in section 7(1) of the Micro, Small and Medium Enterprises Development Act, 2006, to the	extent such parties have been identified on the basis of information collected by the Management. This has been relied upon by the auditors.	2.17 OTHER CURRENT FINANCIAL LIABILITIES	a. Unclaimed dividend - 890 890	b. Payable for purchase of fixed assets - 110,828 -	- 111,718 890	2.18 SHORT-TERM PROVISIONS	Provision for employee benefits	-Provision for compensated absences 1,137,003 1,065,550 1,065,619	1,137,003 1,065,550 1,065,619	2.19 OTHER CURRENT LIABILITIES	a. Other payables - statutory liabilities 2,802,671 2,539,400 1,983,539	b. Payable to Holding Company - - 339,193	c. Payable to Fellow subsidiary Company - 635,366 -	d. Payable to gratuity trust 2,819,342 1,965,563 454,334	e. Book overdraft 75,067 310,215 -	f. Deferred revenue 518,945 - -	6,216,025 5,450,544 2,777,066	This comprises as the effective portion of the cumulative net change in the fair value of cash flow hedging instruments related to hedged transactions that have not yet	occurred.

105

VIRSTRA I-TECHNOLOGY SERVICES LIMITED NOTES FORMING PART OF THE FINANCIAL STATEMENTS

2.20 2.21 2.22 2.23 2.24 2.25	Particulars	Year ended 31 March 2018 Year ended 31 March 2017
	INCOME FROM SOFTWARE SERVICES a. Income from software services OTHER INCOME a. Interest income on financial assets- carried at amortised cost : - Deposits with banks - Income tax refund - Security deposit b. Dividend income from - Current, non trade investments c. Gain / (Loss) on exchange fluctuation d. MTM gain or (loss) on mutual funds e. Other non-operating income - Net profit on sale of fixed assets/discarded assets - Miscellaneous income EMPLOYEE BENEFITS EXPENSE a. Salaries and wages b. Contribution to provident and other funds c. Gratuity expense (see note 2.29) d. Staff welfare expenses OPERATING AND OTHER EXPENSES a. Rent and hire charges b. Repair and maintenance - Buildings - Others c. Insurance d. Rates & taxes e. Travelling - Foreign - Domestic f. Legal and professional (see note 2.25) g. Conveyance h. Communication l. Training and recruitment j. Power and fuel k. Director sitting fee l. Miscellaneous expenses FINANCE COST Bank charges Legal and professional include : a. As auditors - statutory audit*	(Rupees) (Rupees) 154,383,568 152,496,149
		154,383,568 152,496,149
		24,456 29,206 279,819 - 710,381 9,191 4,423,885 4,180,154 599,577 (405,946) (251,216) 582,953 - 215,174 623,119 2,348,566
		6,410,021 6,959,298
		67,725,065 70,057,926 3,740,860 3,879,452 3,227,416 1,319,978 1,584,425 1,562,783
		76,277,766 76,820,139
		6,156,290 5,329,962 808,887 748,810 634,612 727,551 94,508 217,050 11,745 154,665 3,042,946 2,588,280 829,440 815,667 2,050,060 1,881,659 1,501,279 1,474,211 1,157,784 1,273,289 191,091 425,854 3,469,196 3,043,196 200,400 160,800 1,522,581 1,396,504
		21,670,819 20,237,498
		296,959 466,553 350,000 350,000
		350,000 350,000

excluding taxes

106

Particulars Amortised cost Financial assets/liabilities at fair value through profit or loss Financial assets/liabilities at fair value through OCI Total carrying value Total fair value	Assets: Cash and cash equivalents (2.8) 3,655,031 - - 3,655,031 3,655,031 Investments (2.6) Mutual funds - 105,634,687 - 105,634,687 105,634,687 Trade receivables (2.7) 15,425,189 -- 15,425,189 15,425,189 Loans (2.10) 652,941 -- 652,941 652,941 Other financial assets (2.2 and 2.11) 5,116,481 -- 5,116,481 5,116,481 24,849,642 105,634,687 - 130,484,329 130,484,329 Liabilities: Trade payables (2.16) 6,846,449- - 6,846,449 6,846,449 Other financial liabilities (2.17) -- - - - 6,846,449 - - 6,846,449 6,846,449 The carrying value and fair value of financial instruments by categories of 31 March 2017 were as follows:	Particulars Amortised cost Financial assets/liabilities at fair value through profit or loss Financial assets/liabilities at fair value through OCI Total carrying value Total fair value	Assets: Cash and cash equivalents (2.8) 3,069,338 - - 3,069,338 3,069,338 Other bank balances (2.9) 890 - - 890 890 Investments (2.6) Mutual funds - 116,811,987 - 116,811,987 116,811,987 Trade receivables (2.7) 11,174,222 -- 11,174,222 11,174,222 Loans (2.10) 927,183 -- 927,183 927,183 Other financial assets (2.2 and 2.11) 7,999,774 -- 7,999,774 7,999,774 23,171,407 116,811,987 - 139,983,394 139,983,394 Liabilities: Trade payables (2.16) 6,576,753- - 6,576,753 6,576,753 Other financial liabilities (2.17) 111,718- - 111,718 111,718 6,688,471 - - 6,688,471 6,688,471 The carrying value and fair value of financial instruments by categories of April 1, 2016 were as follows:	Particulars Amortised cost Financial assets/liabilities at fair value through profit or loss Financial assets/liabilities at fair value through OCI Total carrying value Total fair value

107

b) Price risk

(a) Exposure

The Company’s exposure to Mutual funds price risk arises from investments held by the Company and classified in the balance sheet at fair value through profit or loss.

(b) Sensitivity

The sensitivity of profit or loss in respect of investments in mutual funds at the end of the reporting period for +/- 2% change in price and net asset value is presented below:

	Impact on profit before tax	Impact on profit before tax	Impact on profit before tax
	31 March 2018	31 March 2017	1 April 2016
Increase 2% Mutual funds Decrease 2% Mutual funds	2,112,694 (2,112,694)	2,336,240 (2,336,240)	1,152,978 (1,152,978)

Derivative financial instruments

The Company holds derivative financial instruments such as foreign currency forward and option contracts to mitigate the risk of changes in exchange rates on foreign currency exposures. The counterparty for these contracts is generally a bank or a financial institution. These derivative financial instruments are valued based on quoted prices for similar assets and liabilities in active markets or inputs that are directly or indirectly observable in the marketplace.

The following table gives details in respect of outstanding foreign exchange forward and option contracts:

Forward contracts

Par Not Late Late The	Forward contract outstanding Buy/Sell	As at Equivalent amount in Rupees As at Equivalent amount in Rupees As at Equivalent amount in Rupees 31 March 2018 31 March 2018 31 March 2017 31 March 2017 1 April 2016 1 April 2016
	In USD Sell ticulars later than one month r than one month and not later than three months r than three months and not later than one year foreign exchange forward contracts mature within six months. The table below analyzes the derivative fi	600,000 39,108,000 600,000 38,910,000 600,000 39,756,000 nancial instruments into relevant maturity groupings based on the remaining period as of the
		As at Equivalent amount in Rupees As at Equivalent amount in Rupees As at Equivalent amount in Rupees 31 March 2018 31 March 2018 31 March 2017 31 March 2017 1 April 2016 1 April 2016
		100,000 6,518,000 100,000 6,485,000 100,000 6,485,000 200,000 13,036,000 200,000 12,970,000 200,000 12,970,000 300,000 19,554,000 300,000 19,455,000 300,000 19,455,000

Particulars

Particulars
Balance at the beginning of the period Gain / (Loss) recognised in other comprehensive income during the period, net of taxes Balance at the end of the period	Year ended Year ended
	31 March 2018 31 March 2017
	1,963,729 888,769 (1,931,359) 1,074,960 32,370 1,963,729

The company offsets a financial asset and a financial liability when it currently has a legally enforceable right to set off the recognized amounts and the company intends either to settle on a net basis, or to realise the asset and settle the liability simultaneously.

The following table provides quantitative information about offsetting of derivative financial assets

Particulars Gross amount of recognized financial asset Amount set off Net amount presented in balance sheet	As at 31 March 2017 As at 1 April 2016 32,370 1,963,729 888,769 - - - As at 31 March 2018
	32,370 1,963,729 888,769

ii) Credit risk

In general, it is presumed that credit risk has significantly increased since initial recognition if the payments are more than 30 days past due.

Credit risk refers to the risk of default on its obligation by the counterparty resulting in a financial loss. The maximum exposure to the credit risk at the reporting date is primarily from trade receivables amounting to Rs. 15,425,189 Rs. 11,174,222 and Rs. 15,500,176 as of March 31, 2018, March 31, 2017 and April 1, 2016. The Company has least credit risk as entire revenue is from fellow subsidiaries and which has positive net worth. On account of adoption of Ind AS 109, the Company uses expected credit loss model to assess the impairment loss or gain. The Company uses a provision matrix to compute the expected credit loss allowance for trade receivables. The Company has nil expected credit loss allowance.

The company's principal sources of liquidity are cash and cash equivalents and the cash flow that is generated from operations. The company has no outstanding bank borrowings. The company believes that the working capital is sufficient to meet its current requirements. Accordingly, no liquidity risk is perceived.

As of March 31, 2018, the Company had a working capital of Rs. 11,6030,116 including cash and cash equivalent of Rs. 3,655,031 and current investment of Rs. 105,634,687 (31 March 2017 Rs. 125,197,858 including cash and cash equivalents of Rs 3,069,338 and current investments of Rs. 116,811,987).

The table below provides details regarding the contractual maturities of significant financial liabilities as of March 31, 2018:

Particulars	Less than 1year	1-2years	Total
Trade payables Other financial liabilities	6,846,449 -	- -	6,846,449 -

108

b) Fair value hierarchy

Level 1 - Quoted prices (unadjusted) in active markets for identical assets or liabilities.

Level 2 – Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).

Level 3 - Inputs for the assets or liabilities that are not based on observable market data (unobservable inputs).

Valuation technique used to determine fair value

Specific valuation techniques used to value financial instruments include:

a) the use of quoted market prices or dealer quotes for similar instruments.

b) for forward exchange contracts, the fair value is determined using quoted forward exchange rates at the reporting date.

c) the fair value of remaining financial instruments is determined using discounted cash flows method.

The following table presents fair value hierarchy of assets and liabilities measured at fair value on a recurring basis as of 31 March 2018:

c)	Particulars As at 31 March 2018 Level 1 Level 2 Level 3
	Financial assets Mutual fund units (2.6) 105,634,687 105,634,687 - - Mark-to-market gain on forward contracts (see note 2.11) 32,370 - 32,370 - Non - Current Financial Assets- Security deposits (2.2) 4,651,877 - - 4,651,877 The following table presents fair value hierarchy of assets and liabilities measured at fair value on a recurring basis as of 31 March 2017:
	Particulars As at 31 March 2017 Level 1 Level 2 Level 3
	Financial assets Mutual fund units (2.6) 116,811,987 116,811,987 - - Mark-to-market gain on forward contracts (see note 2.11) 1,963,729 - 1,963,729 - Non - Current Financial Assets- Security deposits (2.2) 5,579,420 - - 5,579,420 The following table presents fair value hierarchy of assets and liabilities measured at fair value on a recurring basis as of 1 April , 2016:
	Particulars As at 1 April 2016 Level 1 Level 2 Level 3
	Financial assets Mutual fund units (2.6) 57,648,879 57,648,879 - - Mark-to-market gain on forward contracts (see note 2.11) 888,769 - 888,769 - Non - Current Financial Assets- Security deposits (2.2) 5,501,606 - - 5,501,606 Financial risk management The Company's activities expose it to a variety of financial risks arising from financial instruments

- Market risk,

- Credit risk and

Liquidity risk

Risk Management Committee (RMC) is responsible for identification and review of risks and mitigation plans. The Committee meets on a quarterly basis for identification and prioritization of risks. RMC conducts risk survey with the senior and middle level management of the parent Company to identify risks and rate them appropriately. Top risks are identified and remaining are categorized as other risks. The RMC then places updates to the Board on a quarterly basis, on key risks facing the Company, along with their mitigation plans.

i) Market risk

a) Hedge accounting

The Company's focus is to foresee the unpredictability of financial markets and seek to minimize potential adverse effects on its financial performance. The primary market risk to the Company is foreign exchange risk.The Company's exposure to credit risk is influenced mainly by the individual characteristic of each customer and the concentration of risk from the top few customers.

The
var
and
The
wit
The
The

Currency
Amount in
foreign currency
Amount in
Rupees
Amount in
foreign currency
Amount in
Rupees
Amount in
foreign currency
Amount in
Rupees
Receivable
JPY
7,847,376
4,826,921
2,158,917
1,252,127
8,966,791
5,289,510
Note 1-Forward contract outstanding USD 600,000/-, Rs. 39,108,000/- ( previous year 31 March 2017 USD 600,000/-, Rs 38,910,000/-,previous year 1 April 2016 USD 600,000 Rs 39,756,000) against receivables )
Company operates
internationally and a major portion
of the business
is transacted in several currencies
and consequently the Company is exposed to foreign
exchange risk through
its sales and services and purchases
from overseas suppliers
in
ious foreign currencies. The Company holds derivative financial instruments such as foreign exchange forward and option contracts to mitigate the risk of changes in exchange rates on foreign currency exposures. The exchange rate between the rupee
foreign currencies has changed substantially in recent years and may fluctuate substantially in the future.
Company’s risk management policy is to hedge 40 to 55% of its estimated foreign currency exposure in respect of forecast sales over the following 12 months at any point in time. The Company uses forward exchange contracts to hedge its currency risk, most
h a maturity of less than one year from the reporting date. Such contracts are generally designated as cash flow hedges.
Company determines the existence of an economic relationship between the hedging instrument and hedged item based on the currency, amount and timing of their respective cash flows.
year end foreign currency exposures that have not been hedged by a derivative instrument or otherwise are given below :
As at 31 March 2018
As at 31 March 2017
As at 1 April 2016

For the period ended March 31, 2018 March 31, 2017 and March 31, 2016, 10% depreciation / appreciation in the exchange rate between the Indian rupee and Foreign currencies, would have affected the Company's incremental profit by Rs. 482,692 Rs. 125,213 and Rs. 528,951

109

Less than 1 year 1-2 years Total Trade payables 6,576,753 - 6,576,753 Other financial liabilities 111,718 - 111,718 The table below provides details regarding the contractual maturities of significant financial liabilities as of April 1, 2016: Particulars	Less than 1 year 1-2 years Total Trade payables 6,391,294 - 6,391,294 Other financial liabilities 890 - 890 d) Capital Management The Company’s objectives when managing capital are to: -safeguard its ability to continue as a going concern, so that it can continue to provide returns for shareholders and benefits for other stakeholders and - maintain an appropriate capital structure As at 31 March, 2018 As at 31 March, 2017 As at 1 April, 2016 Total Liabilities 17,595,266 16,616,941 13,289,035 Less: Cash and cash equivalnets 3,655,031 3,069,338 8,750,709 Adjusted debt 13,940,236 13,547,603 4,538,326 Total equity 140,110,546 155,466,841 113,227,574 Adjusted net debt to equity ratio 0.10 0.09 0.04 (i) Risk management (ii) Dividends The Company monitors capital, using a medium term view of three to five years, on the basis of a number of financial ratios generally used by industry and by the rating agencies. The Company is not subject to externally imposed capital requirements. The Company monitors capital using gearing ratio which is adjusted net debt divided by total equity. Adjusted net debt comprises of long term and short term liabilities less cash and cash equivalent. Equity includes equity share capital and reserves that are managed as capital. The gearing ratio at the end of the reporting periods was as follows: For the purpose of the Company`s capital management, capital includes issued equity capital and all other equity reserves attributable to the equity holders of the Company. The primary objective of the Company`s capital management is to maximise the shareholder value. The Company manages it capital structure and makes adjustments in light of changes in economic conditions. To maintain or adjust the capital structure, the Company may adjust the dividend payment to shareholders, return capital to shareholders, raise debts or issue new shares. The Board of Directors has the primary responsibility to maintain a strong capital base and reduce the cost of capital through prudent management in deployment of funds so as to maintain investors, creditors & markets' confidence and to sustain future development of the business. The Board of Directors monitors the return on capital, which the Company defines as result from operating activities divided by total shareholders’ equity. Particulars	Adjusted debt 13,940,236 13,547,603 4,538,326	Total equity 140,110,546 155,466,841 113,227,574	Adjusted net debt to equity ratio 0.10 0.09 0.04	(i) Risk management (ii) Dividends For the purpose of the Company`s capital management, capital includes issued equity capital and all other equity reserves attributable to the equity holders of the Company. The primary objective of the Company`s capital management is to maximise the shareholder value. The Company manages it capital structure and makes adjustments in light of changes in economic conditions. To maintain or adjust the capital structure, the Company may adjust the dividend payment to shareholders, return capital to shareholders, raise debts or issue new shares.	1 April 2016	85,000,000	OPERATING LEASE Obligations on long-term, non-cancellable operating leases The company leases office space and other assets under operating lease. The Lease rental expense recognised in the statement of profit and loss for the year in respect of such lease is Rs. 6,156,290 (previous year Rs. 5,329,962). The future minimum lease payment in respect of such lease is as follows:	Particulars As at As at As at 31 March 2018 31 March 2017 1 April 2016
						31 March 2017	-
						31 March 2018	50,000,000 40,000,000
						Particulars	(i) Equity Shares Interim dividend for the year ended 31 March 2018 of Rs. 50 (1 April 2016 of Rs. 85) Per fully paid up (ii) Dividends not recognised at the end of reporting period The Board of Directors of the Company recommended a payment of Final Dividend of Rs.40/- per equity share ( on equity share of par value of Rs. 10 each) for the year ended 31 March 2018. The payment is subject to approval of shareholders at the ensuing Annual General Meeting. The final dividend declared in the previous was Rs. Nil per equity share.

110

VIRSTRA I-TECHNOLOGY SERVICES LIMITED NOTES FORMING PART OF THE FINANCIAL STATEMENTS

2.28 RELATED PARTY TRANSACTIONS

List of related parties

a. Holding Company - where control exists

Nucleus Software Exports Limited
b. Fellow Subsidiary:
Nucleus Software Solution Pte. Ltd., Singapore
Nucleus Software Japan Kabushiki Kaisha, Japan

Particulars	Particulars	Year ended	Year ended	Year ended
		31 March 2018	31 March 2017	1 April 2016
		( Rupees)	( Rupees)	( Rupees)
Transactions with related parties
i.	Sale of services
	- Nucleus Software Solution Pte. Ltd., Singapore	116,537,722	124,498,409	170,627,410
	- Nucleus Software Japan Kabushiki Kaisha, Japan	37,845,846	25,561,240	-
ii.	Reimbursement of expenses
	From related parties
	- Nucleus Software Solution Pte. Ltd., Singapore	-	-	289,711
	- Nucleus Software Japan Kabushiki Kaisha, Japan	44,770,122	37,676,296	-
	To related parties
	- Nucleus Software Exports Limited	82,192.00	212,215	-
	- Nucleus Software Solution Pte. Ltd., Singapore		-	794,853
				-
iii.	Dividend paid
	- Nucleus Software Exports Limited	50,000,000	-	84,999,830
Outstanding balances as at year end
Particulars		As at	As at	As at
		31 March 2018	31 March 2017	1 April 2016
		(Rupees)	(Rupees)	(Rupees)
i	Trade receivables
	- Nucleus Software Solution Pte. Ltd., Singapore	10,598,268	9,922,050	15,500,176
	- Nucleus Software Japan Kabushiki Kaisha, Japan	4,826,921	1,252,172	-
ii	Other current liabilities
	- Nucleus Software Exports Limited	-	-	339,193
	- Nucleus Software Japan Kabushiki Kaisha, Japan	-	635,366	-

2.29 Employee benefit obligations

Defined contribution plans

An amount of Rs. 3,740,860 (previous year Rs. 3,879,452) has been recognized as an expense in respect of Company’s contribution for Provident Fund deposited with the government authorities.

111

VIRSTRA I-TECHNOLOGY SERVICES LIMITED NOTES FORMING PART OF THE FINANCIAL STATEMENTS

Defined benefit plans

The Gratuity scheme provides for lump sum payment to vested employees at retirement, death while in employment or on termination of employment of an amount equivalent to 15 days basic salary payable for each completed year of service or part thereof in excess of 6 months subject to a maximum limit of Rs 2,000,000 in terms of the provisions of the Payment of Gratuity Act, 1972. Vesting occurs upon completion of 5 years of service.

Provision in respect of gratuity and leave encashment has been determined using the Projected Unit Credit method, with actuarial valuations being carried out at the balance sheet date.

During the year, the Company has made contributions to Nucleus Software Export Limited Employees Group Gratuity Assurance Scheme, which has made further contributions to Employees Group Gratuity Scheme of Life Insurance Corporation of India.

Reconciliation of opening and closing balances of the present value of the defined benefit obligation as on 31 March, 2018 :

Particulars	As at As at 31 March 2018 31 March 2017 (Rupees) (Rupees) 12,012,831 10,801,497 1,420,069 1,367,483 1,662,166 - 749,425 735,752 (373,947) 373,212 - - (266,716) (44,529) (740,779) (1,220,584) 14,463,049 12,012,831 10,047,269 10,347,163 648,301 739,200 1,517,217 189,332 171,700 (7,842) (740,779) (1,220,584) 11,643,708 10,047,269 14,463,049 12,012,831 11,643,708 10,047,269 2,819,341 1,965,562 2,819,341 1,965,562 1,000,000 1,000,000 Year ended Year ended 31 March 2018 31 March 2017 (Rupees) (Rupees) 1,420,069 1,367,483 1,662,166 - 145,181 (47,505) 3,227,416 1,319,978 Year ended Year ended 31 March 2018 31 March 2017 (Rupees) (Rupees) (684,720) 372,740 (171,700) 7,842 (856,420) 380,582
a. Change in defined benefit obligations (DBO) Obligation at beginning of the year Current service cost Past service cost Interest on defined benefit obligation Remeasurement due to: Benefits paid Obligation at year end b. Change in fair value of plan assets during the year Plan assets at year beginning, at fair value Expected return on asset plan Contributions by employer Remeasurement due to : Benefits paid Plan assets at year end, at fair value c. Net asset / (liability) recognised in the Balance Sheet Present value of defined benefit obligation Fair value of plan assets Funded status -Deficit Net liability recognised in the Balance Sheet d. Expected employer's contribution next year e. Gratuity cost for the year: Actuarial loss/(gain)arising from change in financial assumptions Actuarial loss/(gain)arising from change in demographic assumptions Actuarial loss/(gain)arising on account of experience changes Actuarial return on plan assets less interest on plan assets
Particulars
Current service cost Past service cost Interest cost Net gratuity cost f. Remeasurements income recognised in other comprehensive income:
Particulars
Actuarial (gain) loss on defined benefit obligation Return on plan assets excluding interest income

112

VIRSTRA I-TECHNOLOGY SERVICES LIMITED NOTES FORMING PART OF THE FINANCIAL STATEMENTS

Particulars	Particulars	Year ended	Year ended
		31 March 2018	31 March 2017
		(Rupees)	(Rupees)
g.	Assumptions :-
	Economic assumptions
	Discount rate	7.40%	6.90%
	Salary escalation rate	8.00%	8.00%

Discount rate:

The discount rate is based on the prevailing market yields of Indian government securities as at the balance sheet date for the estimated term of the obligations.

Salary escalation rate:

The estimates of future salary increases considered takes into account the inflation, seniority, promotion and other relevant factors.

Expected rate of return on plan assets:

This is based on our expectation of the average long term rate of return expected on investments of the Fund during the estimated term of the obligations.

h. Demographic assumptions

Demographic assumptions
Retirement age	58 years	58 years
Mortality table	Indian Assured Lives	Indian Assured
	Mortality (2006-08)	Lives Mortality

Withdrawal rates

		Ages Withdrawal	Ages Withdrawal
		Rate %	Rate %
		21-50 years - 20%	21-50 years - 20%
		51-54 years - 2%	51-54 years - 2%
		55-57 years -1%	55-57 years -1%
i.	Category of assets
	Insurer managed funds	11,643,708	10,047,269

J. Sensitivity analysis

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

Particulars	Year ended 31	March 2018	Year ended 31	March 2017
	Increase	Decrease	Increase	Decrease
Discount rate (0.5% movement)	(358,684)	374,593	(289,509)	301,522
Salary escalation rate (0.5% movement)	283,476	(284,922)	206,621	(203,017)

2.30 Segment reporting

Based on the guiding principles stated in indAS 108 on “Segment Reporting” with the accounting standards specified under section 133 of the Act, as applicable, the Company has identified its business of providing software development services as one reportable business segment only. Accordingly, no additional disclosure for segment reporting have been made in the financial statements.

2.31 Contingent liabilities and Commitments (to the extent not provided for)

Particulars	As at 31 March 2018	As at 31 March 2017 (Rupees) - 108,520 108,520	As at 1 April 2016
a. Contingent Liabilities b. Capital Commitments Estimated amount of contracts remaining to be executed on capital account and not provided for in the books of account (net of advances).	(Rupees) - - -		(Rupees) - -
			-

113

2.32 First-time adoption of Ind-AS

These financial statements of Virstra I Technology Limited for the year ended March 31, 2018 have been prepared in accordance with Ind AS. For the purposes of transition to Ind AS, the Company has followed the guidance prescribed in Ind AS 101 - First Time adoption of Indian Accounting Standard , with April 1, 2016 as the transition date and IGAAP as the previous GAAP.

The transition to Ind AS has resulted in changes in the presentation of the financial statements, disclosures in the notes thereto and accounting policies and principles. The accounting policies set out in Note 1 have been applied in preparing the financial statements for the year ended March 31, 2018. An explanation of how the transition from previous GAAP to Ind AS has affected the Company’s Balance Sheet , Statement of Profit and Loss, is set out in note 2.33.

Exemptions availed and exceptions applied on first time adoption of Ind-AS 101

In preparing these financial statements, the Company has applied the below mentioned optional exemptions and mandatory exceptions:

A Optional exemptions availed

1 Property plant and equipment and intangible assets

As permitted by Ind AS 101, the Company has elected to continue with the carrying values under previous GAAP as deemed cost for all the items of property, plant and equipment and Intangible assets. The carrying values of property, plant and equipment as aforesaid are after making adjustments relating to decommissioning liabilities.

B Mandatory exceptions

1 Estimates

As per Ind AS 101, an entity’s estimates in accordance with Ind AS at the date of transition to Ind AS at the end of the comparative period presented in the entity’s first Ind AS financial statements,as the case may be, should be consistent with estimates made for the same date in accordance with the previous GAAP unless there is objective evidence that those estimates were in error.However, the estimates should be adjusted to reflect any differences in accounting policies.

As per Ind AS 101, where application of Ind AS requires an entity to make certain estimates that were not required under previous GAAP, those estimates should be made to reflect conditions that existed at the date of transition (for preparing opening Ind AS balance sheet) or at the end of the comparative period (for presenting comparative information as per Ind AS).

The Company’s estimates under Ind AS are consistent with the above requirement. Key estimates considered in preparation of the financial statements that were not required under the previous GAAP are listed below:

fair valuation of financial instruments carried at FVTPL and/ or FVOCI.
Impairment of financial assets based on the expected credit loss model.
Determination of the discounted value for financial instruments carried at amortised cost.
Discounted value of liability for decommissioning costs.

2 Classification and measurement of financial assets

Ind AS 101 requires an entity to assess classification of financial assets on the basis of facts and circumstances existing as on the date of transition. Further, the standard permits measurement of financial assets accounted at amortised cost based on facts and circumstances existing at the date of transition if retrospective application is impracticable.

Accordingly, the Company has determined the classification of financial assets based on facts and circumstances that exist on the date of transition. Measurement of the financial assets accounted at amortised cost has been done retrospectively except where the same is impracticable.

3 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.

114

2.33 Reconciliations

a) Reconciliation of Total Equity

a) Reconciliation of Total Equity
Particulars	Note	As at 31 March, 2017	As at 1 April 2016
Equity as reported under Previous GAAP (A) Impact of Ind AS opening adjustment (B) Investments in Mutual funds at Fair value through PL Movement in deposits at amortised cost (C) Equity in accordance with Ind AS (A+B+C) Total equity after tax adjustment in accordance with Ind AS Movement in equity	1.1 1.2	154,802,638 (2,282) 657,294 9,191	113,229,856 - 6,910 (9,192)
		666,485	(2,282)
		155,466,841	113,227,574

		155,466,841	113,227,574
		664,203	(2,282)
b) Reconciliation of total comprehensive income
Particulars	For the year ended 31 March, 2017
Profit as per Previous GAAP Adjustments Investments in Mutual funds at Fair value through PL Movement in deposits at amortised cost Actuarial gain or loss reclassified to OCI Profit in accordance with Ind AS Tax effects of adjustments Profit for the year after tax adjustment in accordance with Ind AS Other Comprehensive Income (OCI) Add: Effective portion of gain (loss) on hedging instruments of effective cash flow hedges,net Less: Actuarial gain or loss reclassified from OCI OCI Total Comprehensive Income as per Ind AS	40,511,441 657,294 9,191 380,582
	1,047,067
	41,558,508
	-
	41,558,508
	1,061,341
	1,061,341 380,582
	680,759
	42,239,267

115

As at March 31, 2017	Reclassified IGAAP Effect of transition to Ind -AS Ind AS	523,468 - 523,468 288,403 - 288,403 6,036,045 - 6,036,045 24,486,471 - 24,486,471 2,346,973 - 2,346,973 116,147,783 664,204 116,811,987 11,174,222 - 11,174,222 3,069,338 - 3,069,338 890 - 890 927,183 - 927,183 1,963,729 - 1,963,729 4,455,075 - 4,455,073	171,419,580 664,204 172,083,782	10,000,000 - 10,000,000 144,802,637 664,204 145,466,841 3,412,377 - 3,412,376 6,576,753 - 6,576,753 111,718 - 111,718 1,065,550 - 1,065,550 5,450,545 - 5,450,544	172,083,782
					664,204
					171,419,580
Opening Balance Sheet as at April 1, 2016	Reclassified IGAAP Effect of transition to Ind -AS Ind AS*	554,624 - 554,624 964,808 - 964,808 6,006,839 (77,814) 5,929,025 32,225,000 - 32,225,000 2,209,734 - 2,209,734 57,641,970 6,910 57,648,879 15,500,176 - 15,500,176 8,750,709 - 8,750,709 890 - 890 114,427 - 114,427 888,769 - 888,769 1,660,946 68,622 1,729,568	126,518,891 (2,282) 126,516,609	10,000,000 - 10,000,000 103,229,856 (2,282) 103,227,574 3,054,166 - 3,054,166 6,391,294 - 6,391,294 890 - 890 1,065,619 - 1,065,619 2,777,066 - 2,777,066	126,518,891 (2,282) 126,516,609
	Note	1.2 1.1 1.2 1.3
Particulars		ASSETS Non-current assets Property, plant and equipment Intangible assets Financial assets Other financial assets Deferred tax asset (net) Income tax asset Current Assets Financial assets Investments Trade receivables Cash and cash equivalents Other bank balances Loans Other financial assets Other current assets Total Assets EQUITY & LIABILITIES EQUITY Equity Share capital Other equity LIABILITIES Non-current liabilities Provisions Current liabilities Financial liabilities Trade payables Other financial liabilities Provisions Other current liabilities TOTAL EQUITY AND LIABILITIES

116

2.34
2.35
EXPENDITURE ON CORPORATE SOCIAL RESPONSIBILITY
Particulars
Year ended
Year ended
31 March 2018
31 March 2017
(Rupees)
(Rupees)
1,086,173
1,091,993
-
-
2.36
The Company has established a comprehensive system of maintenance of information and documents as required by the transfer pricing legislation under sections 92-
92F of the Income Tax Act, 1961. Since the law requires existence of such information and documentation to be contemporaneous in nature, the Company is in the
process of updating the documentation for the international transactions entered into with associated enterprises during the period/year and expects such records to
be in existence latest by the due date of filing of the return of income, as required under law. The management is of the opinion that its international transactions are
at arm’s length so that the aforesaid legislation will not have any impact on the financial statements, particularly on the amount of tax expense and that of provision
for taxation.
Gross amount required to be spent by Company during
the year ended 31 March, 2018 - 31 March, 2016 :
Amount spent during the period on purposes other than
Construction/acquisition of any asset
Details of Specified Bank Notes (SBN) held and transacted during the period 8 November 2016 to 30 December 2016 as provided in the table below:

Information pursuant to G.S.R. 308(E) dated
30 March 2017
Specified Bank
notes
Other
denomination
notes
Total
Closing cash in hand as on 08.11.2016
2,500
15,068
17,568
(+) Permitted receipts
-
17,500
17,500
(-) Permitted payments
-
12,897
12,897
(-) Amount deposited in Banks
2,500
-
2,500
Closing cash in hand as on 30.12.2016
-
19,671
19,671
2.37
ForB S R & ASSOCIATES LLP
For and on behalf of the Board of Directors
Chartered Accountants
Firm Registration Number : 116231W/W-100024
RAKESH DEWAN
VISHNU R DUSAD
RAVI PRATAP SINGH
Partner
Director
Director
Membership number : 092212
Place : Gurugram
Place : Noida
Date : May 03, 2018
Date : May 03, 2018
Previous year's figures have been regrouped/ reclassified wherever necessary to make them comparable with the current year figures.
(Under permitted receipts of Rs, 17,500 (Rs 15,000 are for withdrawal from bank and Rs 2,500 for exchange from SBNs)
Note: For the purpose of this disclosure, the term "Specified Bank Notes" shall have the same meaning provided in the notification of the Government of India, in
the Ministry of Finance, Department of Economic Affairs number S.O. 3407(E) dated 8 November 2016
Sd/-
Sd/-
Sd/-

117

VIRSTRA I-TECHNOLOGY SERVICES LIMITED BALANCE SHEET AS AT 31 DECEMBER 2018

Particulars Notes Ref.	As at 31 December 2018 As at 31 March 2018
ASSETS Non-current assets Property, plant and equipment 2.1 Other Intangible assets 2.1 Financial assets Other financial assets 2.2 Deferred tax asset 2.3 Income tax asset (net) 2.4 Other non-current assets 2.5 Current Assets Financial assets Investments 2.6 Trade receivables 2.7 Cash and cash equivalents 2.8 Other bank balances 2.9 Loans 2.10 Other financial assets 2.11 Other current assets 2.12 Total Assets EQUITY & LIABILITIES EQUITY Equity Share capital 2.13 Other equity 2.14 LIABILITIES Non-current liabilities Financial liabilities Provisions 2.15 Current liabilities Financial liabilities Borrowings Trade payables 2.16 Provisions 2.17 Other current liabilities 2.18 TOTAL EQUITY AND LIABILITIES	(Rupees) (Rupees) 996,975 679,996 59,583 91,999 4,983,263 5,084,111 17,681,266 20,308,437 2,987,303 1,244,278 - 67,399
	26,708,390 27,476,220 78,878,548 105,634,687 17,491,292 15,425,189 4,038,888 3,655,031 441,799 - - 652,941 1,316,973 32,370 4,232,559 4,829,374
	106,400,059 130,229,592
	133,108,449 157,705,812
	10,000,000 10,000,000 104,111,881 130,110,546
	114,111,881 140,110,546 8,242,219 3,395,789
	8,242,219 3,395,789 6,509,051 6,846,449 1,160,778 1,137,003 3,084,520 6,216,025
	10,754,349 14,199,477
	133,108,449 157,705,812

For and on behalf of the Board of Directors

Sd/-

Sd/-

RAVI PRATAP SINGH Director

VISHNU R DUSAD Director

118

VIRSTRA I-TECHNOLOGY SERVICES LIMITED STATEMENT OF PROFIT AND LOSS FOR THE NINE MONTHS ENDED 31 DECEMBER 2018

1. REVENUE FROM OPERATIONS Income from software services 2. OTHER INCOME 3. TOTAL REVENUE (1+2) 4. EXPENSES a. Employee benefits expense b. Operating and other expenses c. Finance cost/Bank charges d. Depreciation and amortisation expense TOTAL EXPENSES 5. PROFIT BEFORE TAX (3-4) 6. TAX EXPENSE a. Current tax expense b. Deferred tax (credit) / charge c. Tax expenses relating to prior years NET TAX EXPENSE 7. PROFIT FOR THE PERIOD (5-6) 8. OTHER COMPREHENSIVE INCOME (A) (i) Items that will not be reclassified to profit or loss Remeasurements of the defined benefit plans,net (B) (i) Items that will be reclassified subsequently to profit or loss Effective portion of gain/ (loss) on hedging instruments of effective cash flow hedges(net of tax) TOTAL OTHER COMPREHENSIVE INCOME 9. TOTAL COMPREHENSIVE INCOME (7+8) For and on behalf of the Board of Directors	Notes Ref.	Nine Months ended Year ended December 2018 31 March 2018
	2.19 2.20 2.21 2.22 2.23 2.1 2.3	(Rupees) (Rupees) 101,719,146 154,383,568 4,834,961 6,410,021
		106,554,107 160,793,589 62,174,498 76,277,766 15,583,211 21,670,819 216,178 296,959 288,713 587,211
		78,262,600 98,832,755
		28,291,507 61,960,834 7,926,735 11,885,126 (221,756) 4,036,651 - -
		7,704,979 15,921,777
		20,586,528 46,039,057
		556,681 724,042 1,080,277 (1,940,394)
		1,636,958 (1,216,352)
		22,223,486 44,822,705

Sd/-

VISHNU R DUSAD Director

Sd/-

RAVI PRATAP SINGH Director

119

VIRSTRA I - TECHNOLOGY SERVICES LIMITED NOTES FORMING PART OF THE FINANCIAL STATEMENTS

Note 1:

1.1 Company Overview

The Financial statements were approved for issue by the Board of Directors on May 03, 2018.

1.2. Significant accounting policies

i. Basis of preparation of financial statements

a) Statement of compliance

The financial statements of the Company have been prepared in accordance with the Indian Accounting Standards (Ind AS) as per the Companies (Indian Accounting Standards) Rules, 2006 notified under Section 133 of the Companies Act, 2013 (the ‘Act’) and other relevant provisions of the Act.

b) Functional and Presentation currency

The financial statements are presented in Indian Rupees (Rupees), which is also the Company`s functional currency.

c) Basis of measurement

The financial statements have been prepared on the historical basis except for the following items:

Items	Measurement Basis
Certain financial assets and liabilities (including	Fair Value
derivative instruments)
Net defined benefit(asset)/liability	Fair value of plan assets less present
	value of defined benefit obligations
d) Use of estimates and judgements

Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised prospectively.

Judgments

Information about judgments made in applying accounting policies that have the most significant effect on the amounts recognised in the financial statements is included in the following notes:

Lease classification – Note 2.27

Assumptions and estimation uncertainties

Estimation of current tax expense and payable – Note 2.4
Estimated useful life of property, plant and equipment – Note 1.2 (iv) and (v)
Estimation of defined benefit obligation-– Note 2.29

120

VIRSTRA I - TECHNOLOGY SERVICES LIMITED NOTES FORMING PART OF THE FINANCIAL STATEMENTS

Impairment of trade receivables- Note 2.7

e) Measurement of fair values

The Company`s accounting policies and disclosures require the measurement of fair values, for both financial and non-financial assets and liabilities.

Fair values are categorised into different levels in a fair value hierarchy based on the inputs used in the valuation techniques as follows.

Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2: inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).
Level 3: inputs for the asset or liability that are not based on observable market data
(unobservable inputs).

The Company recognises transfers between levels of the fair value hierarchy at the end of the reporting period during which the change has occurred.

ii. Revenue Recognition

Revenue from software services comprises income from time and material contracts, which is recognised as the services are rendered.

iii. Other income

Profit on sale of investments is determined as the difference between the sales price and the carrying value of the investment upon disposal of investments.

Dividend income is recognised in profit or loss on the date on which the Company`s right to receive payment is established.

Interest income or expense is recognised using the effective interest method.

The ‘effective interest rate’ is the rate that exactly discounts estimated future cash payments or receipts through the expected life of the financial instrument to:

the gross carrying amount of the financial asset ; or
the amortised cost of the financial liability

iv. Property, Plant and equipment

121

VIRSTRA I - TECHNOLOGY SERVICES LIMITED NOTES FORMING PART OF THE FINANCIAL STATEMENTS

equipment under construction and cost of assets not ready to use before the year end, are disclosed as capital work-in-progress.

If significant parts of an item of property, plant and equipment have different useful lives, then they are accounted for as separate items (major components) of property, plant and equipment.

Any gain or loss on disposal of an item of property, plant and equipment is recognised in profit or loss.

Subsequent expenditure is capitalized only if it is probable that the future economic benefits associated with the expenditure will flow the Company.

The management’s estimates of the useful lives of the various property, plant and equipment are as follows:

s follows:
Asset category			Mangement	Useful life as
			estimate of useful	per Schedule
			life (in years)	II(in years)
Tangible asset
Plant and machinery	(including office		5	15
equipment)*
Computers- end user devices such			3	3
laptops, desktops etc.
Computers- servers	and	networking	4	6
equipment*
Vehicles*			5	10
Furniture and fixtures*			5	10

Transition to Ind AS

v.

Intangible assets

The management’s estimates of the useful lives of the Software are 3 years.

Transition to Ind AS

122

VIRSTRA I - TECHNOLOGY SERVICES LIMITED NOTES FORMING PART OF THE FINANCIAL STATEMENTS

vi. Financial instruments

a) Recognition and initial measurement

b) Classification and subsequent measurement

Financial assets

On initial recognition, a financial asset is classified as measured at

amortised cost;
Fair value through other comprehensive income (FVOCI)-equity investment; or
- FVTPL

Financial asset are not reclassified subsequent to their initial recognition, except if and in the period the Company changes its business model for managing financial assets.

A financial asset is measured at amortised cost if it meets both of the following conditions and is not designated as at FVTPL:

the asset is held within a business model whose objective is to hold assets to collect contractual cash flows; and
the contractual terms of the financial asset give rise on specified dates to cash flows that are solely for payments of principal and interest on the principal amount outstanding.

Financial assets: Business model assessment

the stated policies and objectives for the portfolio and the operation of those policies in practice. These include whether management’s strategy focuses on earning contractual interest income, maintaining a particular interest rate profile, matching the duration of the financial assets to the duration of any related liabilities or expected cash outflows or realising cash flows through the sale of the assets;
how the performance of the portfolio is evaluated and reported to the Company’s management;
- the risks that affect the performance of the business model (and the financial assets held within that business model) and how those risks are managed;
how managers of the business are compensated – e.g. whether compensation is based on the fair value of the assets managed or the contractual cash flows collected; and
the frequency, volume and timing of sales of financial assets in prior periods, the reasons for such sales and expectations about future sales activity.

Financial assets: Assessment whether contractual cash flows are solely payments of principal and interest

123

VIRSTRA I - TECHNOLOGY SERVICES LIMITED NOTES FORMING PART OF THE FINANCIAL STATEMENTS

contingent events that would change the amount or timing of cash flows;
terms that may adjust the contractual coupon rate, including variable interest rate features;
prepayment and extension features; and
terms that limit the Company’s claim to cash flows from specified assets (e.g. non- recourse features).

Financial assets: Subsequent measurement and gains and losses

Financial assets at FVTPL	These assets are subsequently measured at fair value. Net gains and losses, including any interest or dividend income, are recognised in profit or loss. However, see Note 1.2(vi)(e) for derivatives designated as hedging instruments.
Financial assets at amortised cost	These assets are subsequently measured at amortised cost using the effective interest method. The amortised cost is reduced by impairment losses. Interest income, foreign exchange gains and losses and impairment are recognised in profit or loss. Any gain or loss on derecognition is recognised in profit or loss.
Equity investments at FVOCI	These assets are subsequently measured at fair value. Dividends are recognised as income in profit or loss unless the dividend clearly represents a recovery of part of the cost of the investment. Other net gains and losses are recognised in OCI and are not reclassified to profit or loss.

Financial liabilities: Classification, subsequent measurement and gains and losses

c) Derecognition

Financial assets

Financial liabilities

The Company derecognises a financial liability when its contractual obligations are discharged or cancelled, or expire.

124

VIRSTRA I - TECHNOLOGY SERVICES LIMITED NOTES FORMING PART OF THE FINANCIAL STATEMENTS

d) Offsetting

e) Derivative financial instruments and hedge accounting

Derivatives are initially measured at fair value. Subsequent to initial recognition, derivatives are measured at fair value, and changes therein are generally recognised in profit or loss.

Cash flow hedges

The amount accumulated in other equity is reclassified to profit or loss in the same period or periods during which the hedged expected future cash flows affect profit or loss.

If the hedged future cash flows are no longer expected to occur, then the amounts that have been accumulated in other equity are immediately reclassified to profit or loss.

vii. Impairment

a) Impairment of financial instruments

The Company recognises loss allowances for expected credit losses on:
- financial assets measured at amortised cost;

The Company measures loss allowances at an amount equal to lifetime expected credit losses, except for the following, which are measured as 12 month expected credit losses:

debt securities that are determined to have low credit risk at the reporting date; and

125

VIRSTRA I - TECHNOLOGY SERVICES LIMITED NOTES FORMING PART OF THE FINANCIAL STATEMENTS

other debt securities and bank balances for which credit risk (i.e. the risk of default occurring over the expected life of the financial instrument) has not increased significantly since initial recognition.

Loss allowances for trade receivables are always measured at an amount equal to lifetime expected credit losses.

Measurement of expected credit losses

Presentation of allowance for expected credit losses in the balance sheet

Loss allowances for financial assets measured at amortised cost are deducted from the gross carrying amount of the assets.

Write-off

b) Impairment of non-financial assets

viii. Provisions (other than for employee benefits)

Post Sales client support and warranties

126

VIRSTRA I - TECHNOLOGY SERVICES LIMITED NOTES FORMING PART OF THE FINANCIAL STATEMENTS

Onerous contracts

ix. Foreign Currency

a) Foreign currency transactions

- qualifying cash flow hedges to the extent that the hedges are effective.

x. Earnings per share

Basic earnings per share is computed using the weighted average number of equity shares outstanding during the year. Diluted earnings per share is computed using the weighted average number of equity and dilutive equity equivalent shares outstanding during the year-end, except where the results would be anti-dilutive.

xi. Taxation

a) Current tax

b) Deferred tax

127

VIRSTRA I - TECHNOLOGY SERVICES LIMITED NOTES FORMING PART OF THE FINANCIAL STATEMENTS

xii. Employee benefits

Defined contribution plans

The Company's contribution to provident fund is considered as defined contribution plans and is charged as an expense as they fall due based on the amount of contribution required to be made.

Defined benefit plans

Short-term employee benefits

(a) in case of accumulated compensated absences, when employees render the services that increase their entitlement of future compensated absences; and

(b) in case of non-accumulating compensated absences, when the absences occur.

Long-term employee benefits

128

VIRSTRA I - TECHNOLOGY SERVICES LIMITED NOTES FORMING PART OF THE FINANCIAL STATEMENTS

xiii. Cash Flow Statement

xiv. Operating leases

xv. Recent accounting pronouncements

Appendix B to Ind AS 21, Foreign currency transactions and advance consideration :

Ind AS 115- Revenue from Contract with Customers:

Under Ind AS 115, an entity recognises revenue when (or as) a performance obligation is satisfied, i.e. when ‘control’ of the goods or services underlying the particular performance obligation is transferred to the customer.

The standard permits two possible methods of transition:

• Retrospectively with cumulative effect of initially applying the standard recognized at the date of initial application (Cumulative catch - up approach)

The effective date for adoption of Ind AS 115 is financial periods beginning on or after April 1, 2018.

129

NET CARRYING AMOUNT	As at 31 March 2018	514,634 165,362 -	679,996	91,999	771,995	-
	As at 31 December 2018	743,101 253,874 -	996,975	59,583	1,056,558	-
ACCUMULATED DEPRECIATION	As at 31 December 2018	784,190 153,373 -	937,563	1,030,194	1,967,757	-
	Deductions / adjustments	- - -	-	-	-	-
	Depreciation for the year	194,103 56,108	250,211	38,502	288,713	-
	As at 1 April 2018	590,087 97,265	687,352	991,692	1,679,044	-
GROSS CARRYING AMOUNT	As at 31 December 2018	1,527,291 407,247 -	1,934,538	1,089,778	3,024,316	-
	Deductions / adjustments		-		-	-
	Additions	422,570 144,620	567,190	6,087	573,277	-
	As at 1 April 2018	1,104,721 262,627 -	1,367,348	1,083,691	2,451,039	-
	PARTICULARS	Tangible assets - Computers - Office equipment - Furniture and fixtures Intangible assets - Softwares			Total

130

Particulars As at As at 31 December 2018 31 March 2018	(Rupees) (Rupees) OTHER NON-CURRENT FINANCIAL ASSETS (Unsecured considered good unless otherwise stated) a. Security deposits 4,983,263 4,651,877 b. Long-term bank deposits - 432,234 4,983,263 5,084,111 DEFERRED TAX ASSETS (NET) Movement in temporary differences	4,983,263 5,084,111		Balance as at 31 December 2018 Recognised [(Credited)/ Charge] in OCI/ MAT Adjustment during the year	149,864 2,200,466 - 640,825 204,357 (213,362) (2,494,707) 15,053,336	2,848,927 17,681,266		As at As at 31 December 2018 31 March 2018	(Rupees) (Rupees) 2,987,303 1,244,278	2,987,303 1,244,278	- 67,399	- 67,399
				Particulars Balance as at 1 April 2018 Recognised [(Credited)/ Charge] in profit or loss during the year	Provision for compensated absences and gratuity 2,045,364 (304,966) 724,035 83,210 (9,005) MAT credit entitlement 17,548,043 - 20,308,437 (221,756) utilisation during the period INCOME TAX ASSETS (NET) Property, plant and equipment Forward contracts			Particulars

131

==> picture [522 x 577] intentionally omitted <==

----- Start of picture text -----

-
As at 43,691,959 33,624,624 28,318,104 15,425,189 15,425,189 3,655,031 41,669 611,272 652,941 32,370
(Rupees) 105,634,687
31 March 2018
- - - -
As at 49,290,959 29,587,589 78,878,548 17,491,292 17,491,292 4,038,888 441,799 1,316,973
(Rupees)
31 December 2018 5,918 1,689 1,638,269 818,547 2,394,701 2,834,795 441,799 - 1,316,973 32,370
Investment In Liquid Plus Funds Investment In Liquid Funds Investment In Arbitrage Funds Cash on hand Balances with scheduled banks: - in current accounts - in EEFC accounts Balances with scheduled banks in earmarked accounts: -Long-term bank deposits
a. b. a.
Particulars CURRENT INVESTMENTS Investment in Mutual Funds (Unquoted) Mutual funds at fair value through profit or loss (FVTPL) CURRENT TRADE RECEIVABLES (Unsecured) Trade receivables - Considered good CASH AND CASH EQUIVALENTS OTHER BANK BALANCES SHORT-TERM LOANS (Unsecured considered good unless otherwise stated) Loans and advances to employees (considered good) - Staff loans - Employee advances OTHER CURRENT FINANCIAL ASSETS (Unsecured considered good unless otherwise stated) Mark-to-market gain on forward contracts
2.6 2.7 2.8 2.9 2.10 2.11
----- End of picture text -----

132

2.12	Particulars	As at As at 31 December 2018 31 March 2018
	OTHER CURRENT ASSETS (Unsecured considered good unless otherwise stated) a. Prepaid expenses b. Supplier advance c. Employee advances d. Other advances e. Balances with government authorities f. Deferred rent g. Service income accrued but not due	(Rupees) (Rupees) 397,482 211,923 94,282 1,263,328 5,000 95,798 676,972 676,972 2,889,385 2,171,215 169,438 410,138 - -
		4,232,559 4,829,374

2.13
SHARE CAPITAL
a.
Authorised
Equity shares
1,000,000 (Previous year : 1,000,000) equity shares of
Rs. 10 each
b.
Issued, subscribed and fully paid-Up
1,000,000 (Previous year : 1,000,000) equity shares of
Rs. 10 each
Refer notes (i) to (iii) below
(i) Reconciliation of number of shares and amount outstanding at the beginning and at
As at the beginning of the year
- Number of Shares
- Amount
Shares issues/ (bought back) during the year
- Number of Shares
- Amount
As at the end of the year
- Number of Shares
- Amount

10,000,000
10,000,000

the end of the year :
1,000,000
1,000,000
10,000,000
10,000,000
- -
- -
1,000,000
1,000,000
10,000,000
10,000,000

(ii) Rights, preferences and restrictions attached to shares

(iii) Details of shares held by Nucleus Software Exports Limited, the Holding Company

- Number of Shares (see note below)	1,000,000	1,000,000
- Percentage	100%	100%
- Amount	10,000,000	10,000,000

Note : Out of the above, 6 (Previous year 6) equity shares of Rs. 10 each are held by nominees on behalf of the Holding Company.

133

Particulars

2,14 2.15 2.16 2.17 2.18	Particulars	As at As at 31 December 2018 31 March 2018
	OTHER EQUITY a. General reserve Opening balance Closing balance c. Surplus in the Statement of Profit and Loss Opening balance Add: Profit for the year Less : Appropriations - Interim Dividend - Tax on Interim Dividend d. Other comprehensive Income Remeasurement of net defined benefit plans Opening balance Add: Movement during the year Closing balance Hedging reserve Opening balance Add: Movement during the year Closing balance Closing balance LONG-TERM PROVISIONS Provision for employee benefits -Provision for compensated absences Payable to gratuity trust TRADE PAYABLES Trade payables - Micro and Small Enterprises (see note below) - Others SHORT-TERM PROVISIONS Provision for employee benefits -Provision for compensated absences OTHER CURRENT LIABILITIES a. Other payables - statutory liabilities b. Payable to gratuity trust c. Book overdraft d. Deferred revenue	(Rupees) (Rupees) 66,067,678 66,067,678
		66,067,678 66,067,678 63,676,073 77,816,016 20,586,528 46,039,057 (40,000,000) (50,000,000) (8,222,120) (10,179,000)
		36,040,481 63,676,073 343,460 (380,582) 556,681 724,042
		900,141 343,460 23,335 1,963,729 1,080,277(1,940,394)
		1,103,611 23,335
		2,003,722 366,795
		104,111,881 130,110,546
		3,466,799 3,395,789 4,775,420
		~~8,242,219~~ ~~3,395,789~~
		- - 6,509,051 6,846,449
		6,509,051 6,846,449
		1,160,778 1,137,003
		1,160,778 1,137,003
		1,613,179 2,802,672 - 2,819,342 - 75,067 1,471,341 518,945
		3,084,520 6,216,025

134

VIRSTRA I-TECHNOLOGY SERVICES LIMITED

NOTES FORMING PART OF THE FINANCIAL STATEMENTS

Particulars 2.19 INCOME FROM SOFTWARE PRODUCTS AND SERVICES a. Income from software services 2.20 OTHER INCOME a. Interest income on financial assets- carried at amortised cost : - Deposits with banks - Income tax refund - Security deposit b. Dividend income from - Current, non trade investments c. Gain / (Loss) on exchange fluctuation d. MTM gain or (loss) on mutual funds e. Other non-operating income - Net profit on sale of fixed assets/discarded assets - Miscellaneous income 2.21 EMPLOYEE BENEFITS EXPENSE a. Salaries and wages b. Contribution to provident and other funds c. Gratuity expense d. Staff welfare expenses 2.22 OPERATING AND OTHER EXPENSES a. Rent and hire charges b. Repair and maintenance - Buildings - Others c. Insurance d. Rates & taxes e. Travelling - Foreign - Domestic f. Legal and professional g. Conveyance h. Communication l. Training and recruitment j. Power and fuel k. Director sitting fee l. Miscellaneous expenses 2.23 FINANCE COST Bank charges	Nine Months ended December 2018 Year ended 31 March 2018
	101,719,146 154,383,568
	101,719,146 154,383,568
	17,207 24,456 - 279,819 331,386 710,381 - - 2,754,731 4,423,885 - 1,796,580 599,577 - (90,706) (251,216) - - - - 25,763 623,119
	4,834,961 6,410,021
	54,781,798 67,725,065 3,335,874 3,740,860 2,662,623 3,227,416 1,394,203 1,584,425
	62,174,498 76,277,766
	4,357,479 6,156,290 - 606,849 808,887 465,482 634,612 73,888 94,508 4,323 11,745 - 2,403,916 3,042,946 327,347 829,440 885,724 2,050,060 1,094,271 1,501,279 719,801 1,157,784 125,563 191,091 2,817,437 3,469,196 120,000 200,400 1,581,131 1,522,581
	15,583,211 21,670,819
	216,178 296,959

135

AVON MOBILITY SOLUTIONS PRIVATE LIMITED BALANCE SHEET AS AT 31 MARCH 2018

Particulars Notes Ref. ASSETS Non-current assets Property, plant and equipment 2.1 Intangible assets 2.1 Financial assets Other financial assets 2.2 Deferred tax assets 2.3 Income tax asset (net) 2.4 Current Assets Financial assets Trade receivables 2.5 Cash and cash equivalents 2.6 Other bank balances 2.7 Other current assets 2.8 TOTAL ASSETS EQUITY & LIABILITIES EQUITY Equity Share capital 2.9 Other equity Reserve and Surplus 2.10 (a) Other Comprehensive Income 2.10 (b) Equity Component of Compound financial instruments 2.11 LIABILITIES Non-current liabilities Financial liabilities Borrowings 2.11 Provisions 2.12 Current liabilities Financial liabilities Trade payables 2.13 Borrowings 2.14 Provisions 2.15 Other current liabilities 2.16 TOTAL EQUITY AND LIABILITIES	Notes Ref.	As at 31 March 2018 As at 31 March 2017 As at 1 April 2016
		(Rupees) (Rupees) (Rupees) 233,719 179,471 485,591 228,964 16,686 - 751,651 751,651 747,120 - 556,909 234,362 1,089,501 482,132 210,030
		2,303,835 1,986,849 1,677,103 542,019 2,586,462 359,869 919,874 12,412 458,290 34,963 55,939 51,489 415,386 580,439 -
		1,912,242 3,235,252 869,648
		4,216,077 5,222,101 2,546,751
		111,100 111,100 111,100 (28,956,124) (22,013,426) (13,059,395) (158,497) - - 10,773,540 9,553,894 -
		(18,229,981) (12,348,432) (12,948,295) 18,828,059 15,227,404 - 1,580,453 1,046,909 -
		20,408,512 16,274,313 - 810,176 608,220 1,958,261 - - 13,349,738 431,253 311,530 - 796,117 376,470 187,047
		2,037,546 1,296,220 15,495,046
		4,216,077 5,222,101 2,546,751

See accompanying notes forming part of the 1 & 2 financial statements

In terms of our report attached

For B S R & ASSOCIATES LLP

For and on behalf of the Board of Directors

Chartered Accountants Firm Registration Number : 116231W/W-100024

Sd/-

RAKESH DEWAN

Partner Membership number : 092212 Place : Gurugram Date : 01 May 2018

Sd/-

THOMAS ZACHARIAH Managing Director

Place : Chennai Date : 01 May 2018

Sd/-

VISHNU R DUSAD Director

Place : Noida Date : 01 May 2018

136

AVON MOBILITY SOLUTIONS PRIVATE LIMITED STATEMENT OF PROFIT AND LOSS FOR THE YEAR ENDED 31 MARCH 2018

Notes Ref. 1. REVENUE FROM OPERATIONS Sale of services 2.17 2. OTHER INCOME 2.18 3. TOTAL REVENUE (1+2) 4. EXPENSES a. Employee benefits expense 2.19 b. Operating and other expenses 2.20 c. Finance cost 2.21 d. Depreciation and amortisation expense 2.1 TOTAL EXPENSES 5. PROFIT BEFORE TAX (3-4) 6. TAX EXPENSE a. Current tax expense 2.3 b. Deferred tax (credit) / charge 2.3 NET TAX EXPENSE 7. LOSS FOR THE YEAR (5-6) 8. OTHER COMPREHENSIVE INCOME (A) (i) Items that will not be reclassified to profit or loss a) Remeasurements of the defined benefit plans,net TOTAL OTHER COMPREHENSIVE INCOME 9. TOTAL COMPREHENSIVE INCOME (7+8) 10. EARNINGS PER EQUITY SHARE Equity share of Rs. 10 each a) Basic Number of shares used in computing earnings per share a) Basic 1 & 2 See accompanying notes forming part of the financial statements	Notes Ref.	Year Ended Year Ended 31 March 2018 31 March 2017
		(Rupees) (Rupees) 12,147,057 8,809,144 29,744 184,882
		12,176,801 8,994,026 10,852,632 10,204,216 5,625,090 6,327,076 1,844,552 1,367,896 240,316 470,728
		18,562,590 18,369,916
		(6,385,789) (9,375,890) - (99,311) 556,909 (322,547)
		556,909 (421,858)
		(6,942,698) (8,954,031)
		(158,497) -
		(158,497) -
		(7,101,195) (8,954,031)
		(625) (806) 11,110 11,110

In terms of our report attached

For B S R & ASSOCIATES LLP

For and on behalf of the Board of Directors

Chartered Accountants

Firm Registration Number : 116231W/W-100024

Sd/-

RAKESH DEWAN

Partner Membership number : 092212

Place : Gurugram Date : 01 May 2018

Sd/-

THOMAS ZACHARIAH VISHNU R DUSAD Managing Director Director Place : Chennai Place : Noida Date : 01 May 2018 Date : 01 May 2018

137

AVON MOBILITY SOLUTIONS PRIVATE LIMITED

CASH FLOW STATEMENT FOR THE YEAR ENDED 31 MARCH 2018

A. Cash flow from operating activities Loss before tax Adjustment for: Depreciation and amortisation expense Interest on fixed deposits and others Interest on compound financial instrument Interest on loan Provisions for doubtful debts / advances written back Operating loss before working capital changes Adjustment for (increase) / decrease in operating assets - Trade receivables - Other financial assets - Other current and non current assets Adjustment for increase / (decrease) in operating liabilities - Trade payables - Other current liabilities - Short-term provisions - Long-term provisions Net income tax (paid)/refund Cash flow from / (used in) operating activities (A) B. Cash flow from investing activities Purchase of fixed assets Fixed deposits placed Fixed deposit matured Interest on fixed deposits and others (net) Net cash from / (used in) investing activities (B) C. Cash flow from financing activities (Repayment) of loans/loans taken Interest paid Proceeds from issue of preference shares Net cash flow from / (used in) financing activities (C) Net increase / (decrease) in cash and cash equivalents (A+B+C) Opening cash and cash equivalents Exchange difference on translation of foreign currency bank accounts Closing cash and cash equivalents	Year ended 31 March 2018 (Rupees) (6,385,789) 240,316 24,981 1,820,301 - 92,457 (4,207,734) 1,951,986 - 165,053 201,956 419,647 119,723 375,047 (974,322) (607,368) (1,581,690) (506,843) (34,890) 55,594 (24,709) (510,848) - - 3,000,000 3,000,000 907,462 12,412 919,874	Year ended 31 March 2017
		(Rupees) (9,375,890) 470,728 (63,021) 1,281,298 84,325 46,490
		(7,556,070) (2,273,083) (4,531) (580,439) (1,350,038) 189,423 311,530 1,046,909
		(10,216,299) (172,792)
		(10,389,091) (181,294) (55,594) 45,000 69,164
		(122,724) (12,901,288) (532,775) 23,500,000
		10,065,937 (445,878) 458,290
		12,412

See accompanying notes forming part of the financial Statements 1 & 2 In terms of our report attached

For BSR & ASSOCIATES LLP

For and on behalf of the Board of Directors

Chartered Accountants Firm Registration Number:116231W/W-100024

Sd/-

RAKESH DEWAN Partner Membership Number :092212

Sd/THOMAS ZACHARIAH Managing Director

Sd/-

VISHNU R DUSAD Director

Place : Gurugram Date : 01 May 2018

Place : Chennai Place : Noida Date : 01 May 2018 Date : 01 May 2018

138

STATEMENT OF CHANGES IN EQUITY

A. Equity Share Capital

A. Equity Share Capital	A. Equity Share Capital
		(Amount in Rupees)
Balance as at 1 April 2017	Changes in	equity share capital during the year		Balance as at 31 March 2018
111,100		-		111,100

Balance as at 1 April 2016	Changes in	equity share capital during the year		Balance as at 31 March 2017
111,100		-		111,100
B. Other Equity		(Amount in Rupees)
Particulars	Non convertible non- cumulative preference shares	Reserves and Surplus		Items of OCI	Total
		Securities premium	Retained earnings	Remeasurements of the defined benefit plans
Balance as of 1 April 2017 Loss for the year Equity component of Non convertible non- cumulative preference shares Remeasurements of the defined benefit plans,net	9,553,894 - 1,219,646	9,988,900	(32,002,326) (6,942,698)	- - (158,497.00)	(12,459,532) (6,942,698) 1,219,646 (158,497.00)
Balance as of 31 March 2018	10,773,540	9,988,900	(38,945,024)	(158,497)	(18,341,081)
		(Amount in Rupees)
Particulars	Non convertible non- cumulative preference shares	Reserves and Surplus		Items of OCI	Total
		Securities premium	Retained earnings	Remeasurements of the defined benefit plans
Balance as of 1 April 2016 Loss for the year Equity component of Non convertible non- cumulative preference shares Remeasurements of the defined benefit plans,net	- - 9,553,894 -	9,988,900 - - -	(23,048,295) (8,954,031) - -	- - - -	(13,059,395) (8,954,031) 9,553,894 -
Balance as of 31 March 2017	9,553,894	9,988,900	(32,002,326)	-	(12,459,532)

See accompanying notes forming part of the financial statements

In terms of our report attached

For B S R & ASSOCIATES LLP Chartered Accountants Firm Registration Number : 116231W/W-100024

For and on behalf of the Board of Directors

Sd/-

RAKESH DEWAN Partner Membership number : 092212 Place : Gurugram Date : 01 May 2018

Sd/-

Sd/-

THOMAS ZACHARIAH VISHNU R DUSAD Managing Director Director Place : Chennai Place : Noida Date : 01 May 2018 Date : 01 May 2018

139

AVON MOBILITY SOLUTIONS PRIVATE LIMITED NOTES FORMING PART OF THE FINANCIAL STATEMENTS

Note 1:

1.1 Company Overview

Avon Mobility Solutions Private Limited (‘Avon’ or ‘the Company’) was incorporated in May 2007 in India. Avon is a subsidiary company of Nucleus Software Exports Ltd. The Company’s business broadly consists of developing software and IT enabled services.

The Financial statements were approved for issue by the Board of Directors on May 01, 2018.

1.2. Significant accounting policies

i. Basis of preparation of financial statements

a) Statement of compliance

The financial statements of the Company have been prepared in accordance with the Indian Accounting Standards (Ind AS) as per the Companies (Indian Accounting Standards) Rules, 2006 notified under Section 133 of the Companies Act, 2013 (the ‘Act’) and other relevant provisions of the Act.

b) Functional and Presentation currency

The financial statements are presented in Indian Rupees (Rupees), which is also the Company`s functional currency.

c) Basis of measurement

The financial statements have been prepared on the historical basis except for the following items:

Items	Measurement Basis
Certain financial assets and liabilities (including	Fair Value
derivative instruments)
Net defined benefit(asset)/liability	Fair value of plan assets less present
	value of defined benefit obligations

d) Use of estimates and judgements

Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised prospectively.

Judgments

Information about judgments made in applying accounting policies that have the most significant effect on the amounts recognised in the financial statements is included in the following notes:

Lease classification – Note 2.24

Assumptions and estimation uncertainties

Estimation of current tax expense and payable – Note 2.3 and Note 2.4
Estimated useful life of property, plant and equipment and Intangibles – Note 1.2 (iv) and (v)

140

AVON MOBILITY SOLUTIONS PRIVATE LIMITED NOTES FORMING PART OF THE FINANCIAL STATEMENTS

Estimation of defined benefit obligation- Note 2.26
Impairment of trade receivable- Note 2.5

Measurement of fair values

The Company`s accounting policies and disclosures require the measurement of fair values, for both financial and non-financial assets and liabilities.

Fair values are categorised into different levels in a fair value hierarchy based on the inputs used in the valuation techniques as follows.

Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2: inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).
Level 3: inputs for the asset or liability that are not based on observable market data
(unobservable inputs).

The Company recognises transfers between levels of the fair value hierarchy at the end of the reporting period during which the change has occurred.

ii. Revenue Recognition

Revenue from sale of services is recognised over the period in which such services are rendered in accordance with the terms of contract.

iii. Other income

Interest income or expense is recognised using the effective interest method.

The ‘effective interest rate’ is the rate that exactly discounts estimated future cash payments or receipts through the expected life of the financial instrument to:

the gross carrying amount of the financial asset ; or
the amortised cost of the financial liability

iv.

Property, Plant and equipment

Property, Plant and equipment are carried at cost less accumulated depreciation and impairment losses, if any. Cost of an item of property, plant and equipment includes its purchase price, any directly attributable expenditure on making the asset ready for its intended use. Property, plant and equipment under construction and cost of assets not ready to use before the year end, are disclosed as capital work-in-progress.

Depreciation on property, Plant and equipment, is provided on the straight-line method based on useful lives of respective assets as estimated by the management taking into account nature of the

141

AVON MOBILITY SOLUTIONS PRIVATE LIMITED NOTES FORMING PART OF THE FINANCIAL STATEMENTS

asset, the estimated usage of the asset and the operating conditions of the asset. . Depreciation is charged on a pro-rata basis for assets purchased / sold during the year.

If significant parts of an item of property, plant and equipment have different useful lives, then they are accounted for as separate items (major components) of property, plant and equipment.

Any gain or loss on disposal of an item of property, plant and equipment is recognised in profit or loss.

Subsequent expenditure is capitalized only if it is probable that the future economic benefits associated with the expenditure will flow the Company.

The management’s estimates of the useful lives of the various property, plant and equipment are as follows:

Asset category	Mangement	Useful life as
	estimate of useful	per Schedule
	life (in years)	II(in years)
Tangible asset
Plant and machinery (including office	5	15
equipment)*
Computers- end user devices such	3	3
laptops, desktops etc.*
Computers- servers and networking	4	6
equipment*
Furniture and fixtures*	5	10

Transition to Ind AS

v.

Intangible assets

The management’s estimates of the useful lives of the Software are 3 years.

Transition to Ind AS

142

AVON MOBILITY SOLUTIONS PRIVATE LIMITED NOTES FORMING PART OF THE FINANCIAL STATEMENTS

vi. Financial instruments

a) Recognition and initial measurement

b) Classification and subsequent measurement

Financial assets

On initial recognition, a financial asset is classified as measured at

amortised cost;
Fair value through other comprehensive income (FVOCI)-equity investment; or
- FVTPL

Financial asset are not reclassified subsequent to their initial recognition, except if and in the period the Company changes its business model for managing financial assets.

A financial asset is measured at amortised cost if it meets both of the following conditions and is not designated as at FVTPL:

the asset is held within a business model whose objective is to hold assets to collect contractual cash flows; and
the contractual terms of the financial asset give rise on specified dates to cash flows that are solely for payments of principal and interest on the principal amount outstanding.

Financial assets: Business model assessment

the stated policies and objectives for the portfolio and the operation of those policies in practice. These include whether management’s strategy focuses on earning contractual interest income, maintaining a particular interest rate profile, matching the duration of the financial assets to the duration of any related liabilities or expected cash outflows or realising cash flows through the sale of the assets;
how the performance of the portfolio is evaluated and reported to the Company’s management;
- the risks that affect the performance of the business model (and the financial assets held within that business model) and how those risks are managed;
how managers of the business are compensated – e.g. whether compensation is based on the fair value of the assets managed or the contractual cash flows collected; and
the frequency, volume and timing of sales of financial assets in prior periods, the reasons for such sales and expectations about future sales activity.

Financial assets: Assessment whether contractual cash flows are solely payments of principal and interest

143

AVON MOBILITY SOLUTIONS PRIVATE LIMITED NOTES FORMING PART OF THE FINANCIAL STATEMENTS

contingent events that would change the amount or timing of cash flows;
terms that may adjust the contractual coupon rate, including variable interest rate features;
prepayment and extension features; and
terms that limit the Company’s claim to cash flows from specified assets (e.g. non- recourse features).

Financial assets: Subsequent measurement and gains and losses

Financial assets at FVTPL	These assets are subsequently measured at fair value. Net gains and losses, including any interest or dividend income, are recognised in profit or loss.
Financial assets at amortised cost	These assets are subsequently measured at amortised cost using the effective interest method. The amortised cost is reduced by impairment losses. Interest income, foreign exchange gains and losses and impairment are recognised in profit or loss. Any gain or loss on derecognition is recognised in profit or loss.
Equity investments at FVOCI	These assets are subsequently measured at fair value. Dividends are recognised as income in profit or loss unless the dividend clearly represents a recovery of part of the cost of the investment. Other net gains and losses are recognised in OCI and are not reclassified to profit or loss.

Financial liabilities: Classification, subsequent measurement and gains and losses

c) Derecognition

Financial assets

Financial liabilities

The Company derecognises a financial liability when its contractual obligations are discharged or cancelled, or expire.

144

AVON MOBILITY SOLUTIONS PRIVATE LIMITED NOTES FORMING PART OF THE FINANCIAL STATEMENTS

d) Offsetting

vii. Impairment

a) Impairment of financial instruments

The Company recognises loss allowances for expected credit losses on:

financial assets measured at amortised cost;

The Company measures loss allowances at an amount equal to lifetime expected credit losses, except for the following, which are measured as 12 month expected credit losses:

debt securities that are determined to have low credit risk at the reporting date; and
other debt securities and bank balances for which credit risk (i.e. the risk of default occurring over the expected life of the financial instrument) has not increased significantly since initial recognition.

Loss allowances for trade receivables are always measured at an amount equal to lifetime expected credit losses.

Measurement of expected credit losses

Presentation of allowance for expected credit losses in the balance sheet

Loss allowances for financial assets measured at amortised cost are deducted from the gross carrying amount of the assets.

Write-off

b) Impairment of non-financial assets

The Company’s non-financial assets, other than deferred tax assets, are reviewed at each reporting date to determine whether there is any indication of impairment. If any such indication exists, then the asset’s recoverable amount is estimated.

An impairment loss is recognised if the carrying amount of an asset or CGU exceeds its estimated recoverable amount. Impairment losses are recognised in the statement of profit and loss. Impairment

145

AVON MOBILITY SOLUTIONS PRIVATE LIMITED NOTES FORMING PART OF THE FINANCIAL STATEMENTS

loss recognised in respect of a CGU is allocated first to reduce the carrying amount of any goodwill allocated to the CGU, and then to reduce the carrying amounts of the other assets of the CGU (or group of CGUs) on a pro rata basis.

viii. Provisions (other than for employee benefits)

Post Sales client support and warranties

Onerous contracts

ix. Foreign Currency

a) Foreign currency transactions

x. Earnings per share

Basic earnings per share is computed using the weighted average number of equity shares outstanding during the year. Diluted earnings per share is computed using the weighted average number of equity and dilutive equity equivalent shares outstanding during the year-end, except where the results would be anti-dilutive.

xi. Taxation

a) Current tax

b) Deferred tax

146

AVON MOBILITY SOLUTIONS PRIVATE LIMITED NOTES FORMING PART OF THE FINANCIAL STATEMENTS

temporary differences arising on the initial recognition of assets or liabilities in a transaction that is not a business combination and that affects neither accounting nor taxable profit or loss at the time of the transaction;

xii. Employee benefits

Defined contribution plans

The Company's contribution to provident fund is considered as defined contribution plans and is charged as an expense as they fall due based on the amount of contribution required to be made.

Defined benefit plans

Short-term employee benefits

(a) in case of accumulated compensated absences, when employees render the services that increase their entitlement of future compensated absences; and
(b) in case of non-accumulating compensated absences, when the absences occur.

147

AVON MOBILITY SOLUTIONS PRIVATE LIMITED NOTES FORMING PART OF THE FINANCIAL STATEMENTS

Long-term employee benefits

xiii.

Cash Flow Statement

xiv.

Operating leases

xv.

Operating cycle

Based on the nature of products / activities of the Company and the normal time between acquisition of assets and their realisation in cash or cash equivalents, the Company has determined its operating cycle as 12 months for the purpose of classification of its assets and liabilities as current and noncurrent.

xvi. Recent accounting pronouncements

Appendix B to Ind AS 21, Foreign currency transactions and advance consideration :

Ind AS 115- Revenue from Contract with Customers:

The standard permits two possible methods of transition:

Retrospectively with cumulative effect of initially applying the standard recognized at the date of initial application (Cumulative catch - up approach)

The effective date for adoption of Ind AS 115 is financial periods beginning on or after April 1, 2018.

148

NET CARRYING AMOUNT	As at 31 March 2017	102,515 (9,242) 76,956 (87,650) - (388,699)	179,471	(485,591) 16,686 -	196,157	(485,591)
	As at 31 March 2018	156,099 (102,515) 77,620 (76,956) 0 (0)	233,719	(179,471) 228,964 (16,686)	462,683	(196,158)
ACCUMULATED DEPRECIATION	As at 31 March 2018	85,231 (18,985) 100,278 (56,862) 388,699 (388,699)	574,208	(464,546) 136,837 (6,182)	711,045	(470,728)
	Deductions / adjustments	- - -	-	- -	-	-
	Depreciation for the year	66,246 (18,985) 43,416 (56,862) - (388,699)	109,661	(464,546) 130,655 (6,182)	240,316	(470,728)
	As at 1 April 2017	18,985 - 56,862 - 388,699	464,546	- 6,182	470,728	-
GROSS CARRYING AMOUNT	As at 31 March 2018	241,330 (121,500) 177,898 (133,818) 388,699 (388,699)	807,927	(644,017) 365,801 (22,868)	1,173,728	(666,885)
	Deductions / adjustments	- (9,242) 9,242	-	-	-	-	Deemed Cost as on 1 April 2016	- 87,650 9,242 388,699 -
	Additions	119,830 (121,500) 44,080 (36,926)	163,910	(158,426) 342,933 (22,868)	506,843	(181,294)	Accumulated depreciation as on 31 March 2016	135,048 351,295 2,426,264 1,173,955 10,656,355
	As at 1 April 2017	121,500 (9,242) 133,818 (87,650) 388,699 (388,699)	644,017	(485,591) 22,868 -	666,885	(485,591)	Gross Block as on 31 March 2016	135,048 438,945 2,435,506 1,562,654 10,656,355
PARTICULARS		Tangible assets - Computers - Office equipment - Furniture and fixtures	Intangible assets - Softwares		Total		Tangible assets	Plant and equipment Office equipment Computer equipment Furniture and fixtures Intangible assets Software

149

AVON MOBILITY SOLUTIONS PRIVATE LIMITED NOTES FORMING PART OF THE FINANCIAL STATEMENTS

Particulars	As at 31 March 2018 As at 31 March 2017 As at 1 April 2016
2.2 OTHER NON-CURRENT FINANCIAL ASSETS Security deposits 2.3 DEFERRED TAX ASSETS (NET) A. Amounts recognised in profit or loss	(Rupees) (Rupees) (Rupees) 751,651 751,651 747,120
	751,651 751,651 747,120

Particulars

Particulars
	Year ended 31 March 2018 Year ended 31 March 2017
Current tax Deferred tax Net tax expense	(Rupees) (Rupees) - (99,311) 556,909 (322,547)
	556,909 (421,858)

b. Reconciliation of effective tax rate

A reconciliation of the income tax provision to the amount computed by applying the statutory income tax rate to the income before taxes is summarised below:

Particulars	Percentage	Year ended 31 March 2018	Percentage	Year ended 31 March 2017
Loss before tax Tax using the domestic tax rate Non deductible expenses Current year losses for which no deferred tax asset was recognised Reversal of previous year deferred tax assets Prior period taxes Effective tax	25.75% -7.34% -18.41% -8.72% - -8.72%	(6,385,789) (1,644,341) 468,728 1,175,613 556,909 - 556,909	25.75% -3.52% -18.79% 0.00% 1.06% 4.50%	(9,375,890) (2,414,292) 329,934 1,761,810 - (99,311) (421,858)

D. Movement in temporary differences

Particulars

Particulars
	As at 1 April 2017 (Credited)/charge during theyear As at 31 March 2018 As at 1 April 2016
Provision for compensated absences, gratuity and other employee benefits Provision for doubtful debts Property, plant and equipment and Intangible assets	349,799 349,799 - - 2,717 2,717 - 34,331 204,393 204,393 - 200,031
	556,909 556,909 - 234,362

Note :The company has not recognised deferred tax assets because it is not probable that future taxable profit will be available against such deferred tax assets can be realised.

2.4 INCOME TAX ASSETS (NET) Advance tax [Net of provision Rs. Nil (previous year : Rs. Nil)] 2.5 CURRENT TRADE RECEIVABLES (Unsecured, Considered good) 2.6 CASH AND CASH EQUIVALENTS A. Cash and cash equivalents a. Cash on hand b. Balances with scheduled banks: - in current accounts 2.7 OTHER BANK BALANCES Short term bank deposits Less: allowance for doubtful trade receivables Considered doubtful Considered good	1,089,501 482,132 210,030
	1,089,501 482,132 210,030
	542,019 2,586,462 359,869 103,010 10,553 111,103 (103,010) (10,553) (111,103) 542,019 2,586,462 359,869
	683 3,025 380 919,191 9,387 457,910
	919,874 12,412 458,290
	34,963 55,939 51,489
	34,963 55,939 51,489

150

AVON MOBILITY SOLUTIONS PRIVATE LIMITED NOTES FORMING PART OF THE FINANCIAL STATEMENTS

2.8 OTHER CURRENT ASSETS

2.8 OTHER CURRENT ASSETS
a. Supplier advance b. Service income accrued but not due	29,985 56,905 - 385,401 523,534 -
	415,386 580,439 -

Particulars	As at 31 March 2018 As at 31 March 2017 As at 1 April 2016
2.9 SHARE CAPITAL a. Authorised Equity shares 100,000 (100,000) equity shares of Rs. 10 each Preference shares 4,000,000 (4,000,000) preference share of Rs. 10 each b. Issued, subscribed and fully paid-Up 11,110 (11,110) equity shares of Rs. 10 each, fully paid up Refer notes (i) to (iii) below (i) Equity shares As at the beginning of the year - Number of Shares - Amount Shares issued during the year - Number of Shares - Amount As at the end of the year - Number of Shares - Amount 11% redeemable non cumulative preference shares As at the beginning of the year - Number of Shares - Amount Shares issued during the year - Number of Shares - Amount As at the end of the year - Number of Shares - Amount Reconciliation of number of shares and amount outstanding at the beginning and at the end	1,000,000 1,000,000 1,000,000 40,000,000 40,000,000 -
	111,100 111,100 111,100 111,100 111,100 111,100
	11,110 11,110 11,110 111,100 111,100 111,100 - - - - - - 11,110 11,110 11,110 111,100 111,100 111,100 2,350,000 - - 23,500,000 - - 300,000 2,350,000 - 3,000,000 23,500,000 - 2,650,000 2,350,000 - 26,500,000 23,500,000 - of the year :

(iii) Details of shares held by Nucleus Software Exports Limited, the Holding Company :- Equity shares

Equity shares
Particulars	As at 31 March, 2018
Nucleus Software Exports Limited	(Number)	(Percentage)
	10,666	96%

Particulars	As at 31 March, 2017
Nucleus Software Exports Limited	(Number)	(Percentage)
	10,666	96%

Particulars	As at 1 April, 2016
Nucleus Software Exports Limited	(Number)	(Percentage)
	10,666	96%

151

AVON MOBILITY SOLUTIONS PRIVATE LIMITED NOTES FORMING PART OF THE FINANCIAL STATEMENTS

Par	ticulars	As at 31 March 2018 As at 31 March 2017 As at 1 April 2016	As at 31 March 2018 As at 31 March 2017 As at 1 April 2016
2.10 OT (a)	HER EQUITY Reserves and Surplus Securities premium reserve Retained earnings	9,988,900 9,988,900 9,988,900 (38,945,024) (32,002,326) (23,048,295)
		~~(28,956,124)~~ ~~(22,013,426)~~ ~~(13,059,395)~~

Par	ticulars		Year ended 31 March 2018 Year ended 31 March 2017
(i) (ii)	Securities premium reserve At the commencement and end of the year Closing balance Retained earnings Opening balance Add: Loss for the year Closing balance		(Rupees) (Rupees) 9,988,900 9,988,900
			9,988,900 9,988,900 (32,002,326) (32,852,558) (6,942,698) (1,870,902)
			(38,945,024) (34,723,460)
Par	ticulars	As at 31 March 2018	As at 31 March 2017 As at 1 April 2016
(b)	Other comprehensive Income	(158,497) - -
		(158,497) - -

Par	ticulars		Year ended 31 March 2018 Year ended 31 March 2017
(i) 2.11 LON a. 2.12 LON Pro a. b. 2.13 TRA Tra - Ot 2.14 SH Loa 2.15 SH Pro a. b. 2.16 OT a. b. c. Not exte	Remeasurement of net defined benefit plans Opening balance - - Add: Movement during the year (158,497) - Closing balance (158,497) - (29,114,621) (22,013,426) (13,059,395) G TERM BORROWINGS Liability component of compound financial instruments 2,650,000 (31 March 2017: 2,350,000 , 31 March 2016: Nil) 11% redeemable non cumulative preference shares of Rs. 10 each 18,828,059 15,227,404 - 18,828,059 15,227,404 - 11% redeemable, non cumulative preference shares of Rs. 10 each were privately placed with Nucleus Software Exports limited , the holding company at par. The preference shares will be redeemed at face value of Rs. 10 each. The minimum tenure of redeemable preference shares ('RPS') will be 5 years and maximum tenure of RPS will be 20 years.		- - (158,497) -
			(158,497) -
		(29,114,621) (22,013,426) (13,059,395)
		18,828,059 15,227,404 -
		18,828,059 15,227,404 -
	Particulars	31 March 2018 31 March 2017
	Borrowings at the beginning of the year Face value of 11% redeemable non cumulative preference shares issued Equity component of 11% non-cumulative preference shares Movement due to non-cash transactions Interest expense Long Term borrowings G-TERM PROVISIONS vision for employee benefits Provision for compensated absences Provision for gratuity (refer note 2.26) DE PAYABLES de payables hers ORT TERM BORROWINGS n from Shareholder & Director (refer note 2.27) ORT-TERM PROVISIONS vision for employee benefits Provision for gratuity (refer note 2.26) Provision for compensated absences HER CURRENT LIABILITIES Statutory liabilities Advance from Customers (refer note 2.27) Employee dues e : The Company has no amounts payable to Micro and Small Enterprises as defined in section 7(1) of th nt such parties have been identified on the basis of information collected by the management. This has	15,227,404 - 3,000,000 23,500,000 (1,219,646) (9,553,894) 1,820,301 1,281,298 18,828,059 15,227,404 123,885 104,262 - 1,456,568 942,647 -
		1,580,453 1,046,909 -
		810,176 608,220 1,958,261
		810,176 608,220 1,958,261
		- - 13,349,738 e Micro, Small and Medium Enterprises Development Act, 2006, to the been relied upon by the auditors.
		- - 13,349,738
		389,769 276,252 - 41,484 35,278 -
		431,253 311,530 -
		227,629 213,195 170,768 568,488 163,275 - - - 16,279
		796,117 376,470 187,047

152

AVON MOBILITY SOLUTIONS PRIVATE LIMITED

NOTES FORMING PART OF THE FINANCIAL STATEMENTS

Particulars	Year ended 31 March 2018 Year ended 31 March 2017
2.17 INCOME FROM SOFTWARE PRODUCTS AND SERVICES a. Sale of services 2.18 OTHER INCOME a. Interest income on fixed deposits with banks b. Miscellaneous income 2.19 EMPLOYEE BENEFITS EXPENSE a. Salaries and wages b. Contribution to provident and other funds c. Gratuity expense (see note 2.26) d. Staff welfare expenses 2.20 OPERATING AND OTHER EXPENSES a. Rent and hire charges b. Repair and maintenance - Buildings - Others c. Insurance d. Rates & taxes e. Travelling - Foreign - Domestic f. Legal and professional (see note 2.22) g. Conveyance h. Communication i. Training and recruitment j. Power and fuel k. Advertisement and business promotion l. Printing and Stationery m. IT Expenses n. Outsourced technical service expenses o. Purchase for Trading p. Miscellaneous expenses 2.21 FINANCE COST Bank charges Interest expenses on borrowings 2.22 Legal and Professional expenses include: Audit fees (excluding tax) 2.23 EARNINGS PER SHARE Basic and Diluted a. Loss after tax b. Weighted average number of equity shares c. Earnings per share Interest expenses on compound financial instrument- preference shares	(Rupees) (Rupees) 12,147,057 8,809,144
	12,147,057 8,809,144
	24,981 80,600 4,763 104,282
	29,744 184,882
	9,755,421 8,485,808 585,377 440,930 468,941 1,218,899 42,893 58,579
	10,852,632 10,204,216
	975,455 926,695 17,860 - 34,556 165,969 4,150 11,418 65,195 641,144 216,933 54,799 163,642 220,878 2,741,239 3,127,200 30,531 19,338 68,747 93,659 8,894 6,694 173,225 169,402 - 18,675 8,040 13,267 27,892 22,823 144,180 102,480 496,952 576,197 447,598 156,438
	5,625,089 6,327,076
	24,251 2,187 - 84,411 1,820,301 1,281,298
	1,844,552 1,367,896
	100,000 100,000 (6,942,698) (8,954,031) 11,110 11,110 (625) (806)

2.24 OPERATING LEASE

Obligations on long-term, non-cancellable operating leases

The Company has acquired office premises under cancellable operating lease. Operating lease rentals paid during the year March 2018 Rs. 975,455/- (year ended 31 March, 2017 is Rs. 926,695/-).

153

2.25 Financial Instruments

a) Financial Instruments by category

The carrying value and fair value of financial instruments by categories of 31 March 2018 were as follows:

Particulars	Amortised cost Financial assets/liabilities at fair value through profit or loss Financial assets/liabilities at fair value through OCI Total carrying value Total fair value
Assets: Cash and cash equivalents (2.6) Other bank balances (2.7) Trade receivables (2.5) Other financial assets (2.2) Liabilities: Trade payables (2.13) Borrowings (2.11 & 2.14) The carrying value and fair value of financial instruments by categories of 31 March 2017 were as follows:	919,874 - - 919,874 919,874 34,963 - - 34,963 34,963 542,019 -- 542,019 542,019 751,651 -- 751,651 751,651
	2,248,507 - - 2,248,508 2,248,507
	810,176 - - 810,176 810,176 18,828,059- - 18,828,059 18,828,059
	19,638,235 - - 19,638,235 19,638,235

Particulars	Amortised cost Financial assets/liabilities at fair value through profit or loss Financial assets/liabilities at fair value through OCI Total carrying value Total fair value
Assets: Cash and cash equivalents (2.6) Other bank balances (2.7) Trade receivables (2.5) Other financial assets (2.2) Liabilities: Trade payables (2.13) Borrowings (2.11 & 2.14) The carrying value and fair value of financial instruments by categories of April 1, 2016 were as follows:	12,412 - - 12,412 12,412 55,939 - - 55,939 55,939 2,586,462 -- 2,586,462 2,586,462 751,651 -- 751,651 751,651
	3,406,464 - - 3,406,465 3,406,464
	608,220 - - 608,220 608,220 15,227,404- - 15,227,404 15,227,404
	15,835,624 - - 15,835,624 15,835,624

Particulars	Amortised cost Financial assets/liabilities at fair value through profit or loss Financial assets/liabilities at fair value through OCI Total carrying value Total fair value
Assets: Cash and cash equivalents (2.6) Other bank balances (2.7) Trade receivables (2.5) Other financial assets (2.2) Liabilities: Trade payables (2.13) Borrowings (2.11 & 2.14)	458,290 - - 458,290 458,290 51,489 - - 51,489 51,489 359,869 -- 359,869 359,869 747,120 -- 747,120 747,120
	1,616,768 - - 1,616,769 1,616,768
	1,958,261- - 1,958,261 1,958,261 13,349,738- - 13,349,738 13,349,738
	15,307,999 - - 15,307,999 15,307,999

The carrying amount of current trade receivables,Security deposit , trade payables, current financial liabilities and cash and cash equivalent are considered to be same as their fair values, due to their short-term nature.

The fair value of borrowings were calculated based on cashflows discounted using a transition date lending rate as there is no material change in the lending rate. They are classified as level 3 fair values in the fair value hierarchy due to the inclusions of unobservable inputs including counterparty credit risk.

b) Fair value hierarchy

Level 1 - Quoted prices (unadjusted) in active markets for identical assets or liabilities.

Valuation technique used to determine fair value

Specific valuation techniques used to value financial instruments include:

a) the use of quoted market prices or dealer quotes for similar instruments.

b) for forward exchange contracts, the fair value is determined using quoted forward exchange rates at the reporting date.

c) the fair value of remaining financial instruments is determined using discounted cash flows method.

The following table presents fair value hierarchy of assets and liabilities measured at fair value on a recurring basis as of 31 March 2018:

Particulars As at 31 Level 1 Level 2 Level 3 March 2018 Financial assets Non - Current Financial Assets- Security deposits (2.2) 751,651 - - 751,651 Borrowings (2.11) 18,828,059 - - 18,828,059

154

The following table presents fair value hierarchy of assets and liabilities measured at fair value on a recurring basis as of 31 March 2017:

Particulars As at 31 Level 1 Level 2 Level 3 March 2017 Financial assets Non - Current Financial Assets- Security deposits (2.2) 751,651 - - 751,651 Borrowings (2.11) 15,227,404 - - 15,227,404

The following table presents fair value hierarchy of assets and liabilities measured at fair value on a recurring basis as of 1 April , 2016:

Particulars	As at 1	Level 2 Level 3
	April 2016
Financial assets
Non - Current Financial Assets- Security deposits (2.2)	747,120	- - 747,120
Borrowings (2.11)	13,349,738	- - 13,349,738

c) Financial risk management

The Company's activities expose it to a variety of financial risks arising from financial instruments

- Market risk,

- Credit risk and

Liquidity risk

i) Market risk :

Price risk : The Company has no exposure to price risk as Company doesn’t hold any investment.

ii) Credit risk

In general, it is presumed that credit risk has significantly increased since initial recognition if the payments are more than 30 days past due.

Credit risk refers to the risk of default on its obligation by the counterparty resulting in a financial loss. The maximum exposure to the credit risk at the reporting date is primarily from trade receivables amounting to Rs. 542,019, Rs. 2,586,462 and Rs. 359,869 as of March 31, 2018, March 31, 2017 and April 1, 2016 respectively and unbilled revenue amounting to Rs 385,401 , Rs 523, 534 and Rs Nil as of March 31, 2018, March 31, 2017 and April 1, 2016 respectively . credit risk has always been managed by the company through credit approval, establishing credit limits and continuously monite3ring the credit worthiness of the customers to which the company grants credit terms in the normal course of business .On account of adoption of Ind AS 109, the Company uses expected credit loss model to assess the impairment loss or gain. The Company uses a provision matrix to compute the expected credit loss allowance for trade receivables. The Company has nil expected credit loss allowance.

The following table gives details in respect of percentage of revenues generated from top customer and top three customers:

	Year ended	Year ended	Year ended 31
Particulars	31 March 2018		March 2017
		(in %)	(in %)
Revenue from top customer		52.82	47.5
Revenue from top three customers		99.46	83
Credit risk exposure
The lifetime expected credit loss on customer balances for the year ended 31 March 2018		is Rs. 103,010 and for the year
	As at		As at
	31 March 2018		31 March 2017
Balance at the beginning		10,553	111,103
Impairment loss recognised/ reversed		92,456	10,553
Amounts written off		-	(111,103)
Balance at the end	103,010		10,553

The lifetime expected credit loss on customer balances for the year ended 31 March 2018 is Rs. 103,010 and for the year ended March 31, 2017 was Rs. 10,553.

a) Expected credit loss for loans, security deposits and Investments

xpected credit loss for loans, security deposits and Investments	xpected credit loss for loans, security deposits and Investments	xpected credit loss for loans, security deposits and Investments	xpected credit loss for loans, security deposits and Investments	xpected credit loss for loans, security deposits and Investments	xpected credit loss for loans, security deposits and Investments	xpected credit loss for loans, security deposits and Investments
As at 31 March 2018
Particulars		Asset group	Estimated gross carrying amount at default	Expected probability of default	Expected credit loss	Carrying amount net of impairment provision
Loss allowance measured at 12 month expected credit loss	Financial assets for which credit risk has not increased significantly since initial recogntion	Security deposits	751,651	0%	-	751,651
Loss allowance measured at life-time expected credit loss	Financial assets for which credit risk has increased significantly and not credit - impaired	NA	NA	NA	NA	NA
As at 31 March 2017
Particulars		Asset group	Estimated gross carrying amount at default	Expected probability of default	Expected credit loss	Carrying amount net of impairment provision
Loss allowance measured at 12 month expected credit loss	Financial assets for which credit risk has not increased significantly since initial recogntion	Security deposits	751,651	0%	-	751,651
Loss allowance measured at life-time expected credit loss	Financial assets for which credit risk has increased significantly and not credit - impaired	NA	NA	NA	NA	NA

155

	Ageing Not due 0-90 days past 90-180 days past 180-270 days past 270-360 days past More than 360 days Total	due dues dues dues past dues	Gross carrying amount - 475,334 17,440 18,495 120,750 13,220 645,239	Expected credit losses (Loss allowance provision) - - - - 90,000 13,220 103,220	carrying amount of trade receivables (net of impairment) - 475,334 17,440 18,495 30,750 - 542,019	As at 31 March 2017	Ageing 0-90 days past 90-180 days past 180-270 days past 270-360 days past More than 360 days Total	Not due	due dues dues dues past dues	Gross carrying amount 1,452,999 35,939 1,028,556 8,749 60,220 10,553 2,597,015	Expected credit losses (Loss allowance provision) - - - - - 10,553 10,553	carrying amount of trade receivables (net of impairment) 1,452,999 35,939 1,028,556 8,749 60,220 - 2,586,462	iii) Liquidity risk	The company's principal sources of liquidity are cash and cash equivalents and the cash flow that is generated from operations. The company has no outstanding bank borrowings. The company believes that the working capital is sufficient to meet its	current requirements. Accordingly, no liquidity risk is perceived.	The table below provides details regarding the contractual maturities of significant financial liabilities as of March 31, 2018:	Less than 1 year 1-2 years Total Particulars	Trade payables 810,176 - 810,176	The table below provides details regarding the contractual maturities of significant financial liabilities as of March 31, 2017:	Less than 1 year 1-2 years Total Particulars	Trade payables 608,220 - 608,220	The table below provides details regarding the contractual maturities of significant financial liabilities as of April 1, 2016:	Less than 1 year 1-2 years Total Particulars	Trade payables 1,958,261 - 1,958,261	Borrowing 13,349,738 13,349,738	Capital Management	The Company’s objectives when managing capital are to:	-safeguard its ability to continue as a going concern, so that it can continue to provide returns for shareholders and benefits for other stakeholders and	- maintain an appropriate capital structure	The Board of Directors has the primary responsibility to maintain a strong capital base and reduce the cost of capital through prudent management in deployment of funds so as to maintain investors, creditors & markets' confidence and to sustain	future development of the business. The Board of Directors monitors the return on capital, which the Company defines as result from operating activities divided by total shareholders’ equity.	The Company monitors capital, using a medium term view of three to five years, on the basis of a number of financial ratios generally used by industry and by the rating agencies. The Company is not subject to externally imposed capital	requirements.	(i) 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 of the Company. The primary objective of the Company`s capital management is to	maximise the shareholder value.	The Company manages it capital structure and makes adjustments in light of changes in economic conditions. To maintain or adjust the capital structure, the Company may adjust the dividend payment to shareholders, return capital to shareholders,	raise debts or issue new shares.

156

AVON MOBILITY SOLUTIONS PRIVATE LIMITED NOTES FORMING PART OF THE FINANCIAL STATEMENTS

2.26 Employee benefit obligations

Defined contribution plans

An amount of Rs. 551,408 for the year ended 31 March, 2018 (Year ended 31 March, 2017 Rs. 428,012), have been recognized as an expense in respect of Company’s contribution for Provident Fund and Rs. 33,969(Year ended 31 March, 2017 Rs. 12,918) for Employee State Insurance Fund deposited with the government authorities and has been shown under employee benefit expenses in the Statement of Profit and Loss.

Defined benefit plans

The Gratuity scheme provides for lump sum payment to vested employees at retirement, death while in employment or on termination of employment of an amount equivalent to 15 days basic salary payable for each completed year of service or part thereof in excess of 6 months subject to a maximum limit of Rs. 2,000,000 in terms of the provisions of the Payment of Gratuity Act, 1972. Vesting occurs upon completion of 5 years of service.

Provision in respect of gratuity and compensated absence has been determined using the Projected Unit Credit method, with acturial valuations being carried out at the balance sheet date.

Reconciliation of opening and closing balances of the present value of the defined benefit obligation as on 31 March, 2018 :

a. b. c. d. e.	Particulars	As at 31 March 2018 As at 31 March 2017
	Obligation at beginning of the year Current service cost Past Service Cost Interest on defined benefit obligation Remeasurement due to: Obligation at year end Present value of defined benefit obligation Fair value of plan assets Funded status- Surplus/ (Deficit) Net liability recognised in the Balance Sheet Expected employer's contribution next year Gratuity cost for the year: Change in defined benefit obligations (DBO) Net asset / (liability) recognised in the Balance Sheet Actuarial loss/(gain)arising from change in financial Actuarial loss/(gain)arising on account of experience	(Rupees) (Rupees) 1,218,899 - 103,555 1,218,899 290,813 74,573 - (48,831) 207,328
		1,846,337 1,218,899
		1,846,337 1,218,899 - -
		(1,846,337) (1,218,899)
		(1,846,337) (1,218,899)
		- 276,252
	Particulars	Year ended 31 March 2018 Year ended 31 March 2017
	Past service cost Current service cost Interest cost Net gratuity cost Remeasurements income recognised in other comprehensive Actuarial loss/(gain)arising on account of experience Actuarial loss/(gain)arising from change in financial	(Rupees) (Rupees) 290,813 103,555 1,218,899 74,573 -
		468,941 1,218,899
		(48,331) - 207,328 -
		158,997 -

f. Economic assumptions :

	Actuarial assumptions for gratuity and long-term compensated absences
	As at 31 March 2018 As at 31 March 2017
Discount rate Salary escalation rate	7.40% 6.90% 8.00% 8.00%

157

Salary escalation rate: g. Demographic assumptions Retirement age 58 years Mortality table IALM Mortality (2006-08) h. Withdrawal rates Ages - Withdrawal 21-50 years - 20% 51-54 years - 2% 55-57 years - 1% i. Sensitivity analysis The discount rate is based on the prevailing market yields of Indian government securities as at the balance sheet date for the estimated term of the obligations. The estimates of future salary increases considered takes into account the inflation, seniority, promotion and other relevant factors. 'Reasonably possible changes at the reporting date to one of the relevant actuarial assumptions, holding and other assumptions constant,would have affected the defined benefit obligation by the amount shown below:	Particulars Year ended 31 March 2017 Year ended 31 March 2018	Increase Decrease Increase Decrease Discount rate (0.5% movement) (46,712) 48,743 (28,035) 29,254 Salary escalation rate (0.5% movement) 47,266 (45,605) 14,749 (14,505)

158

AVON MOBILITY SOLUTIONS PRIVATE LIMITED NOTES FORMING PART OF THE FINANCIAL STATEMENTS

Particulars

Year ended Year ended 31 March 2018 31 March 2017 (Rupees) (Rupees)

		31 March 2018 31 March 2017 (Rupees) (Rupees)
2.27	Rela List	ted party transactions of related parties Holding Company– where control exists - Nucleus Software Exports Ltd Other related parties: Key managerial personnel: -Thomas Zachariah (Managing Director) Other Directors - Vishnu R Dusad - K Krishna Kumar -Narayanan Subramaniam Enterprise over which KMP or Directors are able to exercise significant influence Nucleus Software Solutions Pte Ltd Avon Solutions and Logistics Private Limited Pelican Legal Solutions Private Limited Transactions with related parties Revenue from Software development services Avon Solutions and Logistics Private Limited 163,275 1,917,479 Nucleus Software Solutions Pte Ltd 6,253,355 - Finance Cost Thomas Zachariah - 34,900 Vishnu R Dusad - 49,425 3,535,000 3,290,000 contribution to provident and oher funds 210,000 210,000 Communciation charges Avon Solutions and logistic Private Limited 3,993 4,850 Loan and advance repaid Thomas Zachariah - 7,011,350 K Krishna Kumar - 2,539,938 Narayanan Subramaniam - 3,350,000 Vishnu R Dusad - 4,000,000 Loan and Advance taken Vishnu R Dusad - 4,000,000 Preference share capital Nucleus Software Exports Limited 3,000,000 23,500,000 Legal and Professional Pelican Legal Solutions Private Limited 2,400,000 2,400,000 Salary and other benefits to Key managerial personnel Short term employee benefit
	a. b. a. b. c. d. e. f. g. h.
	Part	iculars As at 31 March 2018 As at 31 March 2017 As at 1 April 2016
	a. b. c. d.	(Rupees) (Rupees) (Rupees) Outstanding balances as at the year end Short-term borrowings Thomas zachariah - - 7,459,800 K Krishna Kumar - - 2,539,938 Narayanan Subramaniam - - 3,350,000 Trade receivables Avon Solutions and logistic P Ltd - 1,766,084 - Trade payables Pelican Legal Solutions Private Limited - 210,000 - Other Current Liabilities Advance from Customer 568,487 - -

159

2.28 First-time adoption of Ind-AS

These financial statements of Avon Mobility Solutions Private Limited for the year ended March 31, 2018 have been prepared in accordance with Ind AS. For the purposes of transition to Ind AS, the Company has followed the guidance prescribed in Ind AS 101 - First Time adoption of Indian Accounting Standard , with April 1, 2016 as the transition date and IGAAP as the previous GAAP.

Exemptions availed and exceptions applied on first time adoption of Ind-AS 101

In preparing these financial statements, the company has applied the below mentioned optional exemptions and mandatory exceptions:

A Optional exemptions availed

1 Property plant and equipment and intangible assets

B Mandatory exceptions

1 Estimates

fair valuation of financial instruments carried at FVTPL and/ or FVOCI.
Impairment of financial assets based on the expected credit loss model.
Determination of the discounted value for financial instruments carried at amortised cost.
Discounted value of liability for decommissioning costs.

2 Classification and measurement of financial assets

160

2.29 Reconciliations

a) Reconciliation of Total Equity

a) Reconciliation of Total Equity
Particulars	As at 31 March, 2017	As at 1 April 2016
Equity as reported under Previous GAAP (A) Impact of Ind AS opening adjustment (B) Liability component of compound financial instrument-Non cumulative preference share Interest expense on preference shares (C) Equity in accordance with Ind AS (A+B+C) Total equity after tax adjustment in accordance with Ind AS Movement in equity	2,878,971 -	(12,948,295) -
	(13,946,105) (1,281,298)	- -
	(15,227,403)	-
	(12,348,432)	(12,948,295)

	(12,348,432)	(12,948,295)
	(15,227,403)	-

b) Reconciliation of total comprehensive income

b) Reconciliation of total comprehensive income
Particulars	For the year ended 31 March, 2017
Loss as per Previous GAAP Adjustments Interest expense on preference shares Loss in accordance with Ind AS Other Comprehensive Income (OCI) Total Comprehensive Income as per Ind AS	(7,672,734) (1,281,297) - -
	(1,281,297)
	(8,954,031)
	- (8,954,031)

161

March 31, 2017	Reclassified IGAAP Effect of transition to Ind -AS Ind AS	179,471 - 179,471 16,686 - 16,686 751,651 - 751,651 556,909 - 556,909 482,132 - 482,132 2,586,462 - 2,586,462 12,412 - 12,412 55,939 - 55,939 580,439 - 580,439	5,222,101 - 5,222,101	23,611,100 (23,500,000) 111,100 - 9,553,894 9,553,894 (20,732,129) 20,732,129 - - 15,227,404 15,227,404 1,046,909 - 1,046,909 608,221 - 608,221 - - - 311,530 - 311,530 376,470 - 376,470	5,222,101 - 27,235,527
Opening Balance Sheet as at April 1, 2016	Reclassified IGAAP Effect of transition to Ind -AS Ind AS*	485,591 - 485,591 - - - 747,120 - 747,120 234,362 - 234,362 210,030 - 210,030 359,869 - 359,869 458,290 - 458,290 51,489 - 51,489 - - -	2,546,751 - 2,546,751	- 111,100 - 111,100 - - - - - - - - - - - - 1,958,261 - 1,958,261 13,349,738 - 13,349,738 - - - 187,047 - 187,047	15,606,146 - 15,606,146
	Note	1 1 1 1
Particulars		ASSETS Non-current assets Property, plant and equipment Intangible assets Financial assets Other financial assets Deferred tax assets (net) Income tax asset Current Assets Financial assets Trade receivables Cash and cash equivalents Other bank balances Other current assets Total Assets EQUITY & LIABILITIES EQUITY Equity Share capital Other equity Equity Component of Compound financial instrument Reserve and Surplus LIABILITIES Non-current liabilities Financial liabilities Borrowings Provisions Current liabilities Financial liabilities Trade payables Borrowing Provisions Other current liabilities TOTAL EQUITY AND LIABILITIES

162

AVON MOBILITY SOLUTIONS PRIVATE LIMITED NOTES FORMING PART OF THE FINANCIAL STATEMENTS

2.30 Segment reporting

2.31

Details of Specified Bank Notes (SBN) held and transacted during the period 8 November 2016 to 30 December 2016 as provided in the table below:

provided in the table below:
Information pursuant to G.S.R. 308(E) dated 30 March 2017	Specified Bank notes	Other denomination notes	Total
Closing cash in hand as on 08.11.2016 (+) Permitted receipts* (-) Permitted payments (-) Amount deposited in Banks Closing cash in hand as on30.12.2016	2,500 - - 2500 -	290 7,500 2,667 - 5,123	2,790 7,500 2,667 2,500 5,123

(Under permitted receipts of Rs, 7,500 (Rs 5,000 are for withdrawal from bank and Rs 2,500 for exchange from SBNs)

Note: For the purpose of this disclosure, the term "Specified Bank Notes" shall have the same meaning provided in the notification of the Government of India, in the Ministry of Finance, Department of Economic Affairs number S.O. 3407(E) dated 8 November 2016

2.32

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

For BSR & ASSOCIATES LLP

For and on behalf of the Board of Directors

Chartered Accountants

Firm Registration Number:116231W/W-100024

Sd/-

RAKESH DEWAN

Partner Membership Number :092212 Place : Gurugram Date : 01 May 2018

Sd/Sd/THOMAS ZACHARIAH VISHNU R DUSAD Managing Director Director

Place : Chennai Place : Noida Date : 01 May 2018 Date : 01 May 2018

163

AVON MOBILITY SOLUTIONS PRIVATE LIMITED BALANCE SHEET AS AT 31 DECEMBER 2018

Particulars ASSETS Non-current assets Property, plant and equipment Other Intangible assets Financial assets Other financial assets Income tax asset (net) Current Assets Financial assets Trade receivables Cash and cash equivalents Other bank balances Other current assets TOTAL ASSETS EQUITY & LIABILITIES EQUITY Equity Share capital Other equity Equity Component of Compound financial instrument Reserve & Surplus LIABILITIES Non-current liabilities Financial liabilities Borrowings Provisions Current liabilities Financial liabilities Trade payables Provisions Other current liabilities TOTAL EQUITY AND LIABILITIES For and on behalf of the Board of Directors	Notes Ref.	As at 31 December 2018 As at 31 March 2018
	2.1 2.1 2.2 2.3 2.4 2.5 2.6 2.7 2.8 2.10 2.9 2.10 2.11 2.12 2.13 2.14	(Rupees) (Rupees) 178,941 233,719 12,426 228,964 - 751,651 762,263 1,089,501
		953,630 2,303,835 431,261 542,019 3,510,304 919,874 36,602 34,963 350,580 415,386
		4,328,747 1,912,242
		5,282,377 4,216,077
		111,100 111,100 17,806,283 10,773,540 (39,675,745) (29,114,621)
		(21,758,362) (18,229,981) 23,616,203 18,828,059 2,089,718 1,580,453
		25,705,921 20,408,512 593,263 810,176 530,029 431,253 211,526 796,117
		1,334,818 2,037,546
		5,282,377 4,216,077

Sd/-

THOMAS ZACHARIAH Managing Director

Sd/-

VISHNU R DUSAD Director

164

STATEMENT OF PROFIT AND LOSS FOR THE NINE MONTH ENDED 31 DECEMBER 2018

AVON MOBILITY SOLUTIONS PRIVATE LIMITED

Notes Ref. 1. REVENUE FROM OPERATIONS Sale of services 2.15 2. OTHER INCOME 2.16 3. TOTAL REVENUE (1+2) 4. EXPENSES a. Employee benefits expense 2.17 b. Operating and other expenses 2.18 c. Finance cost 2.19 d. Depreciation and amortisation expense 2.1 TOTAL EXPENSES 5. LOSS BEFORE TAX (3-4) 6. TAX EXPENSE a. Deferred tax (credit) / charge NET TAX EXPENSE 7. LOSS FOR THE YEAR (5-6) 8. OTHER COMPREHENSIVE INCOME AND LOSS (i) Items that will not be reclassified to profit or loss a) Remeasurements of the defined benefit plans,net TOTAL OTHER COMPREHENSIVE INCOME/ (LOSS) 9. TOTAL COMPREHENSIVE LOSS (7+8)	Notes Ref.	Nine Months Ended December 2018 Year Ended 31 March 2018
		(Rupees) (Rupees) 4,960,543 12,147,057 177,543 29,744
		5,138,086 12,176,801 9,815,514 10,852,632 3,728,622 5,625,089 1,828,521 1,844,552 326,552 240,316
		15,699,209 18,562,589
		(10,561,123) (6,385,788) - 556,909
		- 556,909
		(10,561,123) (6,942,697)
		- (158,497)
		- (158,497)
		(10,561,123) (7,101,194)

For and on behalf of the Board of Directors

Sd/-

THOMAS ZACHARIAH Managing Director

VISHNU R DUSAD Director

165

NET CARRYING AMOUNT	As at 31 March 2018	156,099 77,620	233,719	228,964	462,683
	As at 31 December 2018	137,889 41,052	178,941	12,426	191,367
ACCUMULATED DEPRECIATION	As at 31 December 2018	161,868 79,984	241,852	347,193	589,045
	Deductions / adjustments	(22,176)	(22,176)	-	(22,176)
	Depreciation for the year	95,622 14,392 -	110,014	216,538	326,552
	As at 1 April 2018	66,246 43,416	109,662	130,655	240,317
GROSS CARRYING AMOUNT	As at 31 December 2018	299,757 121,036	420,793	359,619	780,412
	Deductions / adjustments		-		-
	Additions	77,412	77,412		77,412
	As at 1 April 2018	222,345 121,036	343,381	359,619	703,000
	PARTICULARS	Tangible assets - Computers - Office equipment	Intangible assets - Softwares		Total

166

AVON MOBILITY SOLUTIONS PRIVATE LIMITED NOTES FORMING PART OF THE FINANCIAL STATEMENTS

Particulars	As at 31 December 2018 As at 31 March 2018
2.2 OTHER NON-CURRENT FINANCIAL ASSETS Security deposits 2.3 INCOME TAX ASSETS (NET) Advance tax [Net of provision Rs. Nil (previous year : Rs. Nil)] 2.4 CURRENT TRADE RECEIVABLES (Unsecured, Considered good) 2.5 CASH AND CASH EQUIVALENTS A. Cash and cash equivalents a. Cash on hand b. Balances with scheduled banks: - in current accounts c. Balances with scheduled banks in deposti accouts with maturity of less than 3 months 2.6 OTHER BANK BALANCES Short term bank deposits 2.7 OTHER CURRENT ASSETS a. Prepaid expenses b. Supplier advance c. Service income accrued but not due Less: allowance for doubtful trade receivables Considered doubtful Considered good	(Rupees) (Rupees) - 751,651
	- 751,651
	762,263 1,089,501
	762,263 1,089,501
	431,261 542,019 13,990 103,010 (13,990) (103,010)
	431,261 542,019
	4,446 683 1,990,638 919,191 1,515,220
	3,510,304 919,874
	36,602 34,963
	36,602 34,963
	21,527 - 17,254 29,985 311,799 385,401
	350,580 415,386

167

AVON MOBILITY SOLUTIONS PRIVATE LIMITED NOTES FORMING PART OF THE FINANCIAL STATEMENTS

Particulars	As at 31 December 2018 As at 31 March 2018
2.8 SHARE CAPITAL a. Authorised Equity shares 100,000 (100,000) equity shares of Rs. 10 each Preference shares 4,000,000 (4,000,000) preference share of Rs. 10 each b. Issued, subscribed and fully paid-Up 11,110 (11,110) equity shares of Rs. 10 each, fully paid up Refer notes (i) to (iii) below (i) Equity shares As at the beginning of the year - Number of Shares - Amount Shares issued during the year - Number of Shares - Amount As at the end of the year - Number of Shares - Amount 11% redeemable non cumulative preference shares As at the beginning of the year - Number of Shares - Amount Shares issued during the year - Number of Shares - Amount As at the end of the year - Number of Shares - Amount Reconciliation of number of shares and amount outstanding at the beginning and a	(Rupees) (Rupees) 1,000,000 1,000,000 40,000,000 40,000,000
	111,100 111,100 111,100 111,100
	11,110 11,110 111,100 111,100 - - - - 11,110 11,110 111,100 111,100 2,650,000 2,350,000 26,500,000 23,500,000 1,000,000 300,000 10,000,000 3,000,000 3,650,000 2,650,000 36,500,000 26,500,000 t the end of the year :

(iii) Details of shares held by Nucleus Software Exports Limited, the Holding Company :-

Equity shares

Equity shares
Particulars	As at 31 December, 2018
Nucleus Software Exports Limited		(Number)
		10,666

Particulars	As at 31 March, 2018
Nucleus Software Exports Limited		(Number)
		10,666

168

AVON MOBILITY SOLUTIONS PRIVATE LIMITED NOTES FORMING PART OF THE FINANCIAL STATEMENTS

Particulars	As at 31 December 2018 As at 31 March 2018
2.9 OTHER EQUITY a. Securities premium account At the commencement and end of the year Closing balance b. Surplus in the Statement of Profit and Loss Opening balance Add: loss for the year Closing balance c. Other comprehensive Income Remeasurement of net defined benefit plans Opening balance Add: Movement during the year Closing balance 2.10 LONG TERM BORROWINGS a. Liability component of compound financial instruments 3,650,000 (31 March 2018: 2,650,000 , 31 March 2017: 2,350,000) 11% redeemable non cumulative preference shares of Rs. 10 each	(Rupees) (Rupees) 9,988,900 9,988,900
	9,988,900 9,988,900 (38,945,024) (32,002,326) (10,561,123) (6,942,698)
	(49,506,148) (38,945,024) (158,497) - - (158,497)
	(158,497) (158,497)
	(39,675,745) (29,114,621)
	23,616,203 18,828,059
	23,616,203 18,828,059

11% redeemable, non cumulative preference shares of Rs. 10 each were privately placed with Nucleus Software Exports limited , the holding company at par. The preference shares will be redeemed at face value of Rs. 10 each. The minimum tenure of redeemable preference shares ('RPS') will be 5 years and maximum tenure of RPS will be 20 years.

Particulars Borrowings at the beginning of the year Face value of 11% redeemable non cumulative preference shares issued Equity component of 11% non-cumulative preference shares (refer below) Movement due to non-cash transactions Interest expense Long Term borrowings Equity Component of Compound financial instrument Particulars Opening balance Movement during the period Closing balance 2.11 LONG-TERM PROVISIONS Provision for employee benefits a. Provision for compensated absences b. Provision for gratuity 2.12 TRADE PAYABLES Trade payables - Micro and Small Enterprises (see note below) - Others	Particulars	As at 31 December 2018 As at 31 March 2018
	Borrowings at the beginning of the year Face value of 11% redeemable non cumulative preference shares issued Equity component of 11% non-cumulative preference shares (refer below) Movement due to non-cash transactions Interest expense Long Term borrowings Equity Component of Compound financial instrument	Rupees Rupees 18,828,059 15,227,404 10,000,000 3,000,000 (7,032,743) (1,219,646) 1,820,887 1,820,301 23,616,203 18,828,059
	Particulars	As at 31 December 2018 As at 31 March 2018
		(Rupees) (Rupees) 10,773,540 9,553,894 7,032,743 1,219,646
		17,806,283 10,773,540
		209,169 123,885 1,880,549 1,456,568
		2,089,718 1,580,453
		- - 593,263 810,176
		593,263 810,176

Note : The Company has no amounts payable to Micro and Small Enterprises as defined in section 7(1) of the Micro, Small and Medium Enterprises Development Act, 2006, to the extent such parties have been identified on the basis of information collected by the management. This has been relied upon by the auditors.

169

Particulars As at 31 December 2018 As at 31 March 2018	(Rupees) (Rupees) 2.13 SHORT-TERM PROVISIONS Provision for employee benefits a. Provision for gratuity 483,423 389,769 b. Provision for compensated absences 46,606 41,484 530,029 431,253 2.14 OTHER CURRENT LIABILITIES a. Statutory liabilities 211,526 227,629 b. Advance from Customer - 568,488 211,526 796,117

170

AVON MOBILITY SOLUTIONS PRIVATE LIMITED NOTES FORMING PART OF THE FINANCIAL STATEMENTS

Particulars	Nine Months Ended December 2018 Year ened 31 March 2018
2.15 INCOME FROM SOFTWARE PRODUCTS AND SERVICES a. Sale of services 2.16 OTHER INCOME a. Interest income on fixed deposits with banks b. Net gain/(loss) on foreign currency transactions and translation c. Profit on sale of fixed assets d. Miscellaneous income 2.17 EMPLOYEE BENEFITS EXPENSE a. Salaries and wages b. Contribution to provident and other funds c. Gratuity expense d. Staff welfare expenses 2.18 OPERATING AND OTHER EXPENSES a. Rent and hire charges b. Repair and maintenance - Buildings - Others c. Insurance d. Rates & taxes e. Travelling - Foreign - Domestic f. Legal and professional g. Conveyance h. Communication i. Training and recruitment j. Power and fuel k. Advertisement and business promotion l. Printing and Stationery m. IT Expenses n. Outsourced technical service expenses o. Purchase Trading p. Miscellaneous expenses 2.19 FINANCE COST Bank charges Interest expenses on compound financial instrument-preference shares	(Rupees) (Rupees) 4,960,543 12,147,057
	4,960,543 12,147,057
	113,835 24,981 (71,702) - 126,892 - 8,518 4,763
	177,543 29,744
	8,674,598 9,755,421 531,817 585,377 517,635 468,941 91,464 42,893
	9,815,514 10,852,632
	739,185 975,455 - 17,860 7,919 34,556 5,768 4,150 74,910 65,195 - 216,933 112,112 163,642 2,148,800 2,741,239 21,814 30,531 18,565 68,747 118,954 8,894 36,906 173,225 7,436 - 11,030 8,040 574 27,892 108,000 144,180 246,298 496,952 70,351 447,598
	3,728,622 5,625,089
	7,634 24,251 1,820,887 1,820,301
	1,828,521 1,844,552

171

Date & Time of Download : 07/03/2019 13:09:53

BSE ACKNOWLEDGEMENT

	BSE ACKNOWLEDGEMENT
Acknowledgement Number	468127
Date and Time of Submission	3/1/2019 6:22:13 PM
Scripcode and Company Name	531209 - NUCLEUS SOFTWARE EXPORTS LTD.
Subject / Compliance Regulation	Corporate Action-Amalgamation/ Merger / Demerger
Submitted By	NUCLEUS SOFTWARE EXPORTS LIMITED
Designation	Designated Officer for Filing

Disclaimer : - Contents of filings has not been verified at the time of submission.

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Date of 07-Mar-2019

NSE Acknowledgement

Symbol:-	NUCLEUS
Name of the Company: -	Nucleus Software Exports Limited
Submission Type:-	Announcements
Short Description:-	Amalgamation/Merger
Date of Submission:-	01-Mar-2019 06:25:52 PM
NEAPS App. No:-	2019/Mar/182/184

Disclaimer : We hereby acknowledge receipt of your submission through NEAPS. Please note that the content and information provided is pending to be verified by NSEIL.

172

Date: 01.03.2019

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To,

	The Listing Department The National Stock Exchange of India Ltd. Exchange Plaza, Bandra-Kurla Complex Bandra (E) Mumbai-400051. Fax Nos. 022-26598236/237/238	The Listing Department Bombay Stock Exchange Limited Phiroze Jeejeebhoy Towers, 25th Floor, Dalal Street Mumbai-400001 Fax No. 022-22722061/41/39

Sub : Intimation under Regulation 30 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015.

Dear Sirs,

The Board of Directors of the Company, at its meeting held on 1[st] March 2019 considered and approved a scheme of amalgamation (“ Scheme ”) pursuant to sections 230 to 232 and other relevant provisions of the Companies Act, 2013, providing for the merger of its wholly owned subsidiaries, Virstra I-Technology Services Limited (“ Transferor Company-1 ”) and Avon Mobility Solutions Private Limited (“ Transferor Company-2 ”) (hereinafter together referred to as “ Transferor Companies ”), into and with Nucleus Software Exports Limited (“ Transferee Company ”).

Furthermore, it is also to be noted that the proposed Scheme at Paragraph 9 therein provides for the amendment of the Capital and Object Clauses of the Memorandum of Association of Transferee Company consequent to the merger and amalgamation of the Transferor Companies into and with the Transferee Company, with effect from the Appointed Date and upon the Scheme becoming effective.

173

The Scheme is subject to necessary statutory and regulatory approvals under applicable laws, including approval of the National Company Law Tribunal, Principal Bench, New Delhi.

Pursuant to Regulation 30 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 read with (i) Circular No. CIR/CFD/CMD/4/2015 dated 09[th] September 2015; and (ii) Circular No. CFD/DIL3/CIR/2017/21 dated 10[th] March 2017, please find enclosed the disclosure and a copy of the Draft Scheme, for your records.

Thank You.

Yours Sincerely,

For Nucleus Software Exports Limited

Sd/-

(POONAM BHASIN)

COMPANY SECRETARY

Encl :

Disclosure under Regulation 30 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015;
Copy of the Scheme of Amalgamation as approved by the Board of Directors of the Company.

174

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182

`MINISTRY OF CORPORATE AFFAIRS` RECEIPT

`G.A.R.7`

SRN : H58915968 Service Request Date : 10/05/2019 Payment made into : ICICI Bank Received From : Name : poonam bhasin Address : Nucleus Software Exports Ltd. A 39, Sector 62 Noida, Uttar Pradesh India - 201301 Entity on whose behalf money is paid CIN: L74899DL1989PLC034594 Name : NUCLEUS SOFTWARE EXPORTS LIMITED Address : 33-35, THYAGRAJ NAGAR MARKET NEW DELHI, Delhi India - 110003

Full Particulars of Remittance

Service Type: eFiling Service Description Type of Fee Amount(Rs.) Fee For Form GNL-1 Normal 20000.00 Total 20000.00 Mode of Payment: Credit Card- ICICI Bank Received Payment Rupees: Twenty Thousand Only

Note: The defects or incompleteness in any respect in this eForm as noticed shall be placed on the Ministry's website (www.mca.gov.in). In case the eForm is marked as RSUB or PUCL, please resubmit the eForm or file Form GNL-4(Addendum), respectively. Please track the status of your transaction at all times till it is finally disposed off. (Please refer Rule 10 of the Companies (Registration offices and Fees) Rules, 2014) It is compulsory to file Form GNL-4 (Addendum) electronically within the due date whenever the document is put under PUCL, failing which the system will treat the document as invalid and will not be taken on record in accordance with Rule 10(4) of the Companies (Registration offices and Fees) Rules, 2014

183

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NUCLEUS SOFTWARE EXPORTS LIMITED CIN – L74899DL1989PLC034594

Registered Office: 33-35, Thyagraj Nagar Market, New Delhi- 110003 Phone: +91-120-4031400 Fax: +91-120-4031672

E-mail: [email protected]; Website: www.nucleussoftware.com POSTAL BALLOT FORM Please read carefully the instructions printed overleaf before exercising the vote

Serial No.:

Name of the First Named Shareholder (in block letters)
Name (s) of Joint holder(s) if any

(in block letters)

Registered address 4. Registered folio No./ DP ID / Client ID _(Applicable to investors holding_

shares in dematerialized form)

No. of equity shares held The last date for receipt of Postal Ballot by the Scrutinizer is 7[th] day of July 2019, 05:00 PM.

cleus software exports limited Nucleus software exports limited Nucleus software exports limited Nucleus software exports limited Nucleus software exports limiteI/We hereby exercise my vote in respect of resolution enumerated below by recording my assent or dissent to the said resolution cleus software exports limited Nucleus software exports limited Nucleus software exports limited Nucleus software exports limited Nucleus software exports limitein the following manner:

cleus software exports limited Nucleus software exports limited Nucleus software exports limited Nucleus software exports limited Nucleus software exports limite S. No. Resolution For Against cleus software exports limited Nucleus software exports limited Nucleus software exports limited Nucleus software exports limited Nucleus software exports limitecleus software exports limited Nucleus software exports limited Nucleus software exports limited Nucleus software exports limited Nucleus software exports limite1. Scheme of Amalgamation (“ Scheme ”) of wholly owned subsidiaries- Virstra cleus software exports limited Nucleus software exports limited Nucleus software exports limited Nucleus software exports limited Nucleus software exports limiteI-Technology Services Limited (“ Transferor Company-1 ”) and Avon Mobility Solutions cleus software exports limited Nucleus software exports limited Nucleus software exports limited Nucleus software exports limited Nucleus software exports limite cleus software exports limited Nucleus software exports limited Nucleus software exports limited Nucleus software exports limited Nucleus software exports limitePrivate Limited (“ Transferor Company-2 ”) into and with the parent company- Nucleus cleus software exports limited Nucleus software exports limited Nucleus software exports limited Nucleus software exports limited Nucleus software exports limitecleus software exports limited Nucleus software exports limited Nucleus software exports limited Nucleus software exports limited Nucleus software exports limiteSoftware Exports Limited (“ Transferee Company ”) and their respective Shareholders cleus software exports limited Nucleus software exports limited Nucleus software exports limited Nucleus software exports limited Nucleus software exports limiteand Creditors. ~~ware exports limited Nucleus software exports limited Nucleus software exports limited Nucleus software exports limited Nucleus software ex~~ cleus software exports limited Nucleus software exports limited Nucleus software exports limited Nucleus software exports limited Nucleus software exports limitePlace: cleus software exports limited Nucleus software exports limited Nucleus software exports limited Nucleus software exports limited Nucleus software exports limite cleus software exports limited Nucleus software exports limited Nucleus software exports limited Nucleus software exports limited Nucleus software exports limiteDate:

____(Signature of shareholder)

ware exports limited Important Notes:

cleus software exports limited Nucleus software exports limited Nucleus software exports limited Nucleus software exports limited Nucleus software exports limite • Please complete and return this Postal Ballot Form to the Scrutinizer (Mr. Prince Chadha) at #48 / Sector 41A, cleus software exports limited Nucleus software exports limited Nucleus software exports limited Nucleus software exports limited Nucleus software exports limite -
~~ports limited Nucleus sof~~ Chandigarh 160036, tware exports limited Nucleus software exports limited Nucleus software exports limited Nucleus software exports limite by using the enclosed postage pre-paid self-addressed Business Reply Envelope.
cleus software exports limited Nucleus software exports limited Nucleus software exports limited Nucleus software exports limited Nucleus software exports limite cleus software exports limited Nucleus software exports limited Nucleus software exports limited Nucleus software exports limited Nucleus software exports limite • If the voting rights are exercised electronically, there is no need to use this from.

EVOTING PARTICULARS ~~ware exports limited Nucleus software exports limited Nucleus software exports limited Nucleus software exports limited Nucleus software ex~~ EVEN USER ID Password/ PIN (Electronic Voting Event Number)

The e-voting facility is available at the link https://evoting.karvy.com. The e-voting particulars are set out as follows:
cleus software exports limited Nucleus software exports limited Nucleus software exports limited Nucleus software exports limited Nucleus software exports limite1. Pursuant to the provisions of Section 110 of the Companies Act, 2013 read with Rule 22 of Companies (Management cleus software exports limited Nucleus software exports limited Nucleus software exports limited Nucleus software exports limited Nucleus software exports limitecleus software exports limited Nucleus software exports limited Nucleus software exports limited Nucleus software exports limited Nucleus software exports limiteand Administration) Rules, 2014 and as per Listing Regulations, assent or dissent of the shareholders in respect of the cleus software exports limited Nucleus software exports limited Nucleus software exports limited Nucleus software exports limited Nucleus software exports limiteresolution contained in the Notice is being taken through postal ballot / e-voting.
cleus software exports limited Nucleus software exports limited Nucleus software exports limited Nucleus software exports limited Nucleus software exports limite2. Hon’ble NCLT has appointed Mr. Prince Chadha, Company Secretary, as the Scrutinizer for conducting the postal ballot / cleus software exports limited Nucleus software exports limited Nucleus software exports limited Nucleus software exports limited Nucleus software exports limitee-voting process.
cleus software exports limited Nucleus software exports limited Nucleus software exports limited Nucleus software exports limited Nucleus software exports limite3. The notice of postal ballot / e-voting is being sent to the members, whose names appear in the register of members as on cleus software exports limited Nucleus software exports limited Nucleus software exports limited Nucleus software exports limited Nucleus software exports limite24[th] May, 2019 and Members holding equity shares shall have one vote per share as shown against their holding. The same cleus software exports limited Nucleus software exports limited Nucleus software exports limited Nucleus software exports limited Nucleus software exports limiteshall also be placed on the website of the Company viz. www.nucleussoftware.com.
cleus software exports limited Nucleus software exports limited Nucleus software exports limited Nucleus software exports limited Nucleus software exports limitecleus software exports limited Nucleus software exports limited Nucleus software exports limited Nucleus software exports limited Nucleus software exports limite4. The members can opt for only one mode of voting i.e. either through Postal Ballot or e-voting. If the shareholder decides to cleus software exports limited Nucleus software exports limited Nucleus software exports limited Nucleus software exports limited Nucleus software exports limitevote through Postal Ballot, they are advised not to vote through e-voting and vice versa. In case of voting through both the cleus software exports limited Nucleus software exports limited Nucleus software exports limited Nucleus software exports limited Nucleus software exports limitecleus software exports limited Nucleus software exports limited Nucleus software exports limited Nucleus software exports limited Nucleus software exports limitemodes, voting through e-voting will be considered and counted and voting through Postal ballot of such shareholder will be cleus software exports limited Nucleus software exports limited Nucleus software exports limited Nucleus software exports limited Nucleus software exports limitetreated as invalid.
cleus software exports limited Nucleus software exports limited Nucleus software exports limited Nucleus software exports limited Nucleus software exports limite5. There will be one Postal Ballot Form / e-voting for every folio / client ID irrespective of the number of joint holders. cleus software exports limited Nucleus software exports limited Nucleus software exports limited Nucleus software exports limited Nucleus software exports limite cleus software exports limited Nucleus software exports limited Nucleus software exports limited Nucleus software exports limited Nucleus software exports limite6. Incomplete, unsigned or incorrect Postal Ballot forms will be rejected. The Scrutinizer's decision on the validity of the Postal cleus software exports limited Nucleus software exports limited Nucleus software exports limited Nucleus software exports limited Nucleus software exports limiteBallot forms shall be final and binding.

PROCESS FOR MEMBERS OPTING FOR VOTING IN PHYSICAL FORM

A member desiring to exercise voting right by Postal Ballot may complete the Postal Ballot Form and send it in the attached self-addressed Business Reply Envelope, so as to reach the Scrutinizer on or before 05:00 PM on 7[th] July, 2019. The Postal Ballot Forms received after this date will be treated as if the reply from the member has not been received. Envelopes containing Postal Ballot Form, if sent by courier or by registered post or by speed post at the expense of the registered member will also be accepted. The Postal Ballot Form(s) may also be deposited personally.
The votes should be casted either in favour or against the resolution by putting the tick [√] mark in the column provided for assent or dissent. Postal Ballot Form bearing tick [√] mark in both the columns will render the Form invalid.
Please convey your assent / dissent in the Postal Ballot Form. The assent or dissent received in any other form shall not be considered valid.
The Postal Ballot Form should be completed and signed by the sole / first named shareholder. In the absence of the first named member in a joint holding the Form may be completed and signed by the next named shareholder. (However, where the Form is sent separately by the first named shareholder and the joint holder(s), the vote of the first named shareholder would be valid).
In case of shares held by companies, trusts, societies etc., the duly completed Postal Ballot Form should be accompanied by a certified true copy of the board resolution / authority letter, with signatures of authorised signatory(ies), duly attested.
The votes of a Member will be considered invalid on any of the following grounds:
(a) If a form other than the Postal Ballot Form issued by the Company is used;
(b) If the Postal Ballot Form has not been signed by or on behalf of the Member;
(c) If the Member's signature does not tally with the specimen signature with the Company;
(d) If the Member has marked his/her/its vote both for Assent' and also forDissent' to the Resolution' in such manner that the aggregate Equity Shares voted forAssent' and `Dissent' exceeded total number of Shares held;
(e) If the Member has made any amendment to the Resolution or imposed any condition while exercising his vote;
(f) If the Postal Ballot Form is received torn or defaced or mutilated or in a manner such that it is difficult for the Scrutinizer to identify either the Member or the number of votes, or whether the votes are for Assent' orDissent', or neither assent or dissent is mentioned or if the signature could not be verified, or one or more of the above grounds;
(g) Any competent authority has given directions in writing to the Company to freeze the voting rights of the Member;
(h) Incomplete, unsigned or incorrectly filled Postal Ballot Forms will be subject to rejection by the Scrutinizer.
Members are requested to fill the Postal Ballot Form in indelible ink and not in any erasable writing mode.
Members are requested not to send any other matter along with the Postal Ballot Form in the enclosed postage pre-paid self-addressed business reply envelope as all such envelopes will be sent to the Scrutinizer and if any extraneous paper is found in such envelope the same would not be considered and would be destroyed by the Scrutinizer.
A member may request for a duplicate Postal Ballot Form, if so required. A member seeking duplicate Postal Ballot Form or having any grievance pertaining to the Postal Ballot process can write to the Company's Registrars i.e. Karvy Fintech Private Limited, Karvy Selenium Tower, Plot number 31 & 32, Financial District, Nanakramguda, Serilingampally Mandal, Hyderabad – 500032, India or e-mail us at [email protected] or [email protected]. However, the duly completed duplicate Postal Ballot Form should reach the Scrutinizer not later than the date and time specified in Point No. 1 above.

PROCESS FOR MEMBERS OPTING FOR E-VOTING

The Company is pleased to provide e-voting as an alternative for the members of the Company to enable them to cast their votes electronically instead of voting through Postal Ballot Form. E-Voting is optional. In case a Member has voted through e-voting facility, he/she need not send a Postal Ballot Form. In case a member votes through e-voting facility and send his/her vote through Postal Ballot, votes cast through e-voting shall prevail and votes casted through Postal Ballot shall be considered invalid by the Scrutinizer. Members are requested to refer to the Notice and notes thereto, for detailed instructions with respect to e-voting.

AI assistant

Nucleus Software Exports Ltd — Proxy Solicitation & Information Statement 2019

59444_rns_2019-06-07_896ce569-a44b-45e1-a7b0-0caeab8bd4d6.pdf

NUCLEUS SOFTWARE EXPORTS LIMITED

CIN – L74899DL1989PLC034594

NOTICE OF THE MEETING OF THE EQUITY SHAREHOLDERS OF NUCLEUS SOFTWARE EXPORTS LIMITED

DETAILS OF NCLT CONVENED MEETING OF EQUITY SHAREHOLDERS

POSTAL BALLOT AND REMOTE E-VOTING PERIOD FOR NCLT CONVENED MEETING OF EQUITY SHAREHOLDERS

VOLUME 1

VOLUME 2

Notice

FORM CAA. 2

BEFORE THE NATIONAL COMPANY LAW TRIBUNAL PRINCIPAL BENCH, NEW DELHI COMPANY APPLICATION (CAA) NO. 56/PB/2019

in tHE MattER oF:

anD in tHE MattER oF:

anD in tHE MattER oF:

…… applicant transferor Company-1

anD in tHE MattER oF:

…… applicant transferor Company-2

anD in tHE MattER oF:

….. applicant transferee Company

NOTICE CONVENING THE MEETING OF EQUITY SHAREHOLDERS OF NUCLEUS SOFTWARE EXPORTS LIMITED PURSUANT TO THE ORDER DATED 12[TH] aPRil 2019 (as aMEnDED BY oRDER DatED 01[ST] MaY 2019) PassED BY tHE Hon’BlE national CoMPanY laW tRiBUnal, PRINCIPAL BENCH AT NEW DELHI

To

Dated this 16 day of May 2019 Chandigarh

Sd/-

Name: Rajesh Gupta

NOTES:

25. INSTRUCTIONS FOR E-VOTING

EXPLANATORY STATEMENT

BEFORE THE NATIONAL COMPANY LAW TRIBUNAL PRINCIPAL BENCH, NEW DELHI COMPANY APPLICATION (CAA) NO. 56/PB/2019

In tHE MattER oF:

anD in tHE MattER oF:

anD in tHE MattER oF:

…… applicant transferor Company-1

anD in tHE MattER oF:

…… applicant transferor Company-2

anD in tHE MattER oF:

….. applicant transferee Company

5. Details of virstra i-technology services limited (transferor Company-1)

5.1. General informaton

7. Relatonship between Partes, Ratonale and salient Features of the scheme

7.2. Objects and Ratonale of the Scheme

7.3. Salient Features of the Scheme

8. submissions, approvals and other informaton

9. Disclosures

10. Directors, Promoters and Key Managerial Personnel

13. general

14. the scheme is conditonal upon and subject to the following:

Dated this 16 day of May 2019. Chandigarh

NUCLEUS SOFTWARE EXPORTS LIMITED

CIN – L74899DL1989PLC034594

ATTENDANCE SLIP

[Hon’BlE national CoMPanY laW tRiBUnal (nClt) ConvEnED MEEting oF EQUitY sHaREHolDERs

BEFoRE tHE Hon’BlE national CoMPanY laW tRiBUnal

C.A. (CAA) NO. 56 / PB / 2019

FORM NO. MGT-11

PROXY FORM

CIN: L74899DL1989PLC034594

Note:

SCHEME OF AMALGAMATION

THEIR RESPECTIVE SHAREHOLDERS AND CREDITORS

TABLE OF CONTENTS

PREAMBLE

PaRt-i: DEFinitions, intERPREtation anD sHaRE CaPital

PaRt-ii: aMalgaMation, tRansFER anD vEsting

PaRt-iii: gEnERal tERMs anD ConDitions

A.

overview of the scheme of amalgamation

B.

Description of Companies

C.

objects and Rationale for the Proposed scheme

D. Parts of the scheme

PART-I: DEFINITIONS, INTERPRETATION AND SHARE CAPITAL

1.

Definitions

2.

interpretation

3.

Date of taking Effect and operative Date

Nucleus Software Exports Ltd Proxy Solicitation & Information Statement 2019