Persistent Systems Limited — Audit Report / Information 2021

Apr 29, 2021

NSE & BSE / 2021-22 / 18

April 29, 2021

The Manager, Corporate Services, National Stock Exchange of India Limited Exchange Plaza, Bandra Kurla Complex, Bandra (E), Mumbai 400 051

Ref: Symbol: PERSISTENT

The Manager, Corporate Services, Bombay Stock Exchange Limited 14th Floor, P J Towers, Dalal Street, Mumbai 400 001

Ref: Scrip Code: 533179

Dear Sir/Madam,

Sub: Audited Financial Statements for the quarter and year ended March 31, 2021

We wish to inform you that the Board of Directors at its meeting held on April 28, 2021, and continued on April 29, 2021 through tele-conferencing, has approved the Audited Financial Statements for the quarter and year ended March 31, 2021.

Accordingly, please find enclosed the following documents:

1. Audited Consolidated Financial Statements for the quarter and year ended March 31, 2021;

2. Audited Unconsolidated Financial Statements for the quarter and year ended March 31, 2021.

Please acknowledge the receipt.

Thanking you,

Yours Sincerely, For Persistent Systems Limited

Amit Atre Company Secretary ICSI Membership No.: A20507

Encl: As above

Walker Chandiok & Co LLP

11th Floor, Tower II, One International Center, S B Marg, Prabhadevi (W), Mumbai - 400013 Maharashtra, India T +91 22 6626 2699 F +91 22 6626 2601

To the Members of Persistent Systems Limited

Report on the Audit of the Consolidated Financial Statements

Opinion

• 1. We have audited the accompanying consolidated financial statements of Persistent Systems Limited Holding and its subsidiaries (the Holding Company and its subsidiaries together referred to as and its associate, as listed in Annexure 1, which comprise the Consolidated Balance Sheet as at 31 March 2021, the Consolidated Statement of Profit and Loss (including Other Comprehensive Income), the Consolidated Cash Flow Statement and the Consolidated Statement of Changes in Equity for the year then ended, and a summary of the significant accounting policies and other explanatory information.
• 1. In our opinion and to the best of our information and according to the explanations given to us and based on the consideration of the reports of the other auditors on separate financial statements and on the other financial information of the subsidiaries, the aforesaid consolidated financial statements give the information required by the Companies under Section 133 of the Act, of the consolidated state of affairs (consolidated financial position) of the Group and its associate as at 31 March 2021, and its consolidated profit (consolidated financial performance including other comprehensive income), its consolidated cash flows and the consolidated changes in equity for the year ended on that date.

Basis for Opinion

1. We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Our responsibilities under those standards are further described in the Audit of the Consolidated Financial Statements section of our report. We are independent of the Company in accordance with with the ethical requirements that are relevant to our audit of the financial statements under the provisions of the Act and the rules thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the Code of Ethics. We believe that the audit evidence we have obtained and the audit evidence obtained by the other auditors in terms of their reports referred to in paragraph 15 of the Other Matters section below is sufficient and appropriate to provide a basis for our opinion.

Key Audit Matters

1. Key audit matters are those matters that, in our professional judgment and based on the consideration of the reports of the other auditors on separate financial statements and on the other financial information of the subsidiaries, and its associate were of most significance in our audit of the consolidated financial statements of the current period. These matters were addressed in the context of our audit of the consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

Chartered Accountants

1. We have determined the matters described below to be the key audit matters to be communicated in our report.

Key audit matter	How our audit addressed the key audit matter
Accuracy of revenues and onerous obligations	Our audit work included but was not restricted to the
in respect of fixed-price contracts	following procedures:
Refer Notes 4 (j) (i) - notes forming part of the Consolidated Financial Statements. The Group has entered into various fixed-price software development contracts, for which revenue is recognized by the Group using the percentage of completion computed as per the Input method prescribed under Ind AS 115 Revenue from Contracts with Customers. The said revenue recognition accounting policy involves exercise of significant judgement by the management and the following factors requiring	Obtained an understanding of the systems, processes and controls implemented by management for recording and calculating revenue, and the associated unbilled revenue, unearned and deferred revenue balances, and onerous contract obligations. Tested the design and operating effectiveness of experts to assess key information technology (IT) controls over:
significant auditor attention: High inherent risk around accuracy of revenue, given the customised and complex nature of these contracts and significant involvement of IT systems.	IT environment in which the business systems operate, including access controls, segregation of duties, program change controls, program development controls and IT operation controls;
High estimation uncertainty relating to determination of the progress of each contract, costs incurred till date and additional costs required to complete the remaining	Testing the IT controls over the completeness and accuracy of cost/efforts and revenue reports generated by the system; and Testing the access and application controls
contract. Identification and determination of onerous contracts and related obligations. Determination of unbilled revenue receivables	pertaining to allocation of resources and budgeting systems which prevents the unauthorized changes to recording of efforts incurred and controls relating to the estimation of contract efforts required to complete the project.
and unearned revenue related to these contracts as at end of reporting period. Considering the materiality of the amounts involved, and significant degree of judgement and subjectivity involved in the estimates as mentioned above, we have identified revenue recognition for	Selected a sample of contracts and performed a retrospective review of efforts incurred with estimated efforts to identify significant variations and verify whether those variations have been considered in estimating the remaining efforts to complete the contract.
fixed price contracts and determination of onerous contracts and related provisions, as a key audit matter for the current year audit.	Reviewed a sample of contracts with unbilled revenues to identify possible delays in achieving milestones, which require change in estimated efforts to complete the remaining performance obligations.
	Performed analytical procedures for reasonableness of incurred and estimated efforts.
	contracts based on estimates tested as above.
	Evaluated the appropriateness of disclosures made in the financial statements with respect to revenue recognized during the year as required by applicable Indian Accounting Standards.

Chartered Accountants

Key audit matter	How our audit addressed the key audit matter
Unbilled revenue in respect of revenue sharing arrangements, i.e., Royalty income	Our audit work included but was not restricted to the following procedures:
Refer Note 4 (j) (i) notes forming part of the Consolidated Financial Statements. Royalty income from one of the main customers is accrued as a percentage of total onward sales made by the customer during the period. Recognition of royalty income for the period of three months before year end, involves estimations made by the Group based on prior trends and booked as an unbilled receivable, since sales for the period by the customer is determined subsequent to the period end. Considering the materiality of the amounts involved, and significant degree of judgement and subjectivity involved in the estimates of the unbilled revenue, we have identified unbilled receivable in respect of revenue sharing arrangements as a key audit matter for the current year audit.	Obtained an understanding of the systems, processes and controls implemented by management for estimating revenue and the associated unbilled revenue. Tested the design and operating effectiveness of the internal controls relating to estimation of share of revenue involved in recognition of royalty income. Evaluated basis of estimation of aforesaid unbilled receivable from the terms of the contract and past trends, and verified arithmetical accuracy of management computation. Assessed historical accuracy of the forecasts made by the management in earlier period/s. Performed analytical procedures for reasonableness of revenue and associated unbilled revenue recorded and disclosed as at year end. Evaluated the appropriateness of disclosures made in the financial statements with respect to unbilled revenue recognized during the year as required by applicable Indian Accounting Standards.

Key audit matter	How our audit addressed the key audit matter
Contingent liabilities relating to export	Our audit work included but was not restricted to the
incentive litigation	following procedures:
Refer Note 43 notes forming part of the Consolidated Financial Statements regarding dispute on export incentives scrips awarded to the Group.	and the underlying controls for identification and monitoring of the pending litigations and completeness of such litigations for financial reporting
The Group in previous years has deposited under protest 296.55 million with the Directorate General of Foreign Trade pursuant to the Summons received from the Directorate of corresponding application with the relevant authorities.	accounting policies relating to provisions and contingent liability disclosure, in accordance with the applicable Indian Accounting Standards Discussed developments during the year in the
Further in the current year, the Group has received that the Group is not eligible for the benefit under the scheme and if the Group has wrongfully claimed such benefits, it will be liable for the such consequential penalties.	export incentive matter with the management and Obtained the documents for various correspondences made between the Group and the respective departments
The management based their assessment and interpretation of various applicable rules, regulations, practices and precedents, and based on various documents filed with relevant authorities to avail these claims, believes that they have a strong case and the export incentives of 296.55 million deposited under protest are fully recoverable. Accordingly, the duty paid under protest, has been presented as receivable from government authority and has been correspondingly disclosed under contingent liability. In view of the amounts involved and uncertainty	underlying assumptions in estimating the export incentive benefits and the possible outcome of the matters. This involved assessing the probability of an unfavourable outcome of a given proceeding and the reliability of estimates of related amounts which involved consideration of legal precedence and other rulings and expert opinion obtained by the management. Assessed adequacy and appropriateness of the disclosure made in the financial statement to determine whether management has presented the facts and circumstances adequately.
pertaining to the final outcome of the matter requiring significant management judgement in determination of recoverability of the aforesaid balance with respect to the said litigation, this matter is considered as a key audit matter for the

Information other than the Consolidated

1. The Holding comprises the information included in the Annual Report, but does not include the consolidated financial eport is expected to be made available to us after the date of this auditor's report.

Our opinion on the consolidated financial statements does not cover the other information and we will not express any form of assurance conclusion thereon.

Chartered Accountants

In connection with our audit of the consolidated financial statements, our responsibility is to read the other information identified above when it becomes available and, in doing so, consider whether the other information is materially inconsistent with the consolidated financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated.

When we read the Annual Report, if we conclude that there is a material misstatement therein, we are required to communicate the matter to those charged with governance.

Responsibilities of Management and Those Charged with Governance for the Consolidated Financial Statements

• 1. of Directors. of the Act with respect to the preparation of these consolidated financial statements that give a true and fair view of the consolidated financial position, consolidated financial performance including other comprehensive income, consolidated changes in equity and consolidated cash flows of the Group including its associates in accordance with the accounting principles generally accepted in India, including the Ind AS specified under cy of records including financial information considered necessary for the preparation of consolidated Ind AS financial statements. Further, in terms of the provisions of the Act, the respective Board of Directors of the companies included in the Group, and its associate companies covered under the Act are responsible for maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error. These financial statements have been used for the purpose of preparation of the consolidated financial statements by the Directors of the Holding Company, as aforesaid
• 1. In preparing the consolidated financial statements, the respective Board of Directors of the companies included in the Group and its associate are responsible for assessing the ability of the Group and its associate to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Board of Directors either intends to liquidate the Group and its associate or to cease operations, or has no realistic alternative but to do so.
• 1. The Board of Directors are also responsible for overseeing the financial reporting process of the companies included in the Group and its associate.

Consolidated Financial Statements

• 1. Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with Standards on Auditing will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated financial statements.
• 1. As part of an audit in accordance with Standards on Auditing, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:
• Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

Chartered Accountants

• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under Section 143(3)(i) of the Act, we are also responsible for expressing our opinion on whether the holding company has adequate internal financial controls system in place and the operating effectiveness of such controls.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
• based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the ability of the Group and its associate to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to and its associate to cease to continue as a going concern.
• Evaluate the overall presentation, structure and content of the consolidated financial statements, including the disclosures, and whether the consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
• Obtain sufficient appropriate audit evidence regarding the financial information of the entities within the Group, and its associates, to express an opinion on the financial statements. We are responsible for the direction, supervision and performance of the audit of financial statements of such entities included in the financial statements, of which we are the independent auditors. For the other entities included in the financial statements, which have been audited by the other auditors, such other auditors remain responsible for the direction, supervision and performance of the audits carried out by them. We remain solely responsible for our audit opinion.
• 1. We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
• 1. We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.
• 1. From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the consolidated financial statements of the current period and are therefore the key audit matters. We public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

Other Matters

1. We did not audit the financial statements of twenty subsidiaries, whose financial statements reflect total assets 4,631.34 million 1,652.75 million as at 31 March 2021 5,140.16 million 7.87 million for the year ended on that date, as considered in the consolidated financial statements. These financial statements have been audited by other auditors whose reports have been furnished to us by the management and our opinion on the consolidated financial statements, in so far as it relates to the amounts and disclosures included in respect of these subsidiaries, and our report in terms of sub-section (3) of Section 143 of the Act, in so far as it relates to the aforesaid subsidiaries, is based solely on the reports of the other auditors.

Our opinion above on the consolidated financial statements, and our report on other legal and regulatory requirements below, are not modified in respect of the above matters with respect to our reliance on the work done by and the reports of the other auditors.

Chartered Accountants

Offices in Bengaluru, Chandigarh, Chennai, Gurugram, Hyderabad, Kochi, Kolkata, Mumbai, New Delhi, Noida and Pune

1. Nil for the year ended 31 March 2021, as considered in the consolidated financial statements, in respect of one associate, whose financial statements have not been audited by us. These financial statements are unaudited and have been furnished to us by the management and our opinion on the consolidated financial statements, in so far as it relates to the aforesaid associate is based solely on such unaudited financial statements. In our opinion and according to the information and explanations given to us by the management, these financial statements are not material to the Group and its associate.

Our opinion above on the consolidated financial statements, and our report on other legal and regulatory requirements below, are not modified in respect of the above matter with respect to our reliance on the financial statements certified by the management.

Report on Other Legal and Regulatory Requirements

• 1. As required by Section 197(16) of the Act, based on our audit we report that the Holding Company, covered under the Act paid remuneration to its directors during the year in accordance with the provisions of and limits laid down under Section 197 read with Schedule V to the Act. Further, we report that the provisions of Section 197 read with Schedule V to the Act are not applicable to twenty-one subsidiary companies and one associate company, since none of such companies are covered under the Act.
• 1. As required by Section 143 (3) of the Act, based on our audit and on the consideration of the reports of the other auditors on separate financial statements and other financial information of the subsidiaries, we report, to the extent applicable, that:
• a) we have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit of the aforesaid consolidated financial statements;
• b) In our opinion, proper books of account as required by law relating to preparation of the aforesaid consolidated financial statements have been kept so far as it appears from our examination of those books and the reports of the other auditors;
• c) the consolidated financial statements dealt with by this report are in agreement with the relevant books of account maintained for the purpose of preparation of the consolidated financial statements;
• d) in our opinion, the aforesaid consolidated financial statements comply with Ind AS specified under Section 133 of the Act;
• e) On the basis of the written representations received from the directors of the Holding Company and taken on record by the Board of Directors of the Holding Company and the report of the statutory auditors of its subsidiary companies covered under the Act, none of the directors of the Group companies and its associate, covered under the Act, are disqualified as on 31 March 2021 from being appointed as a director in terms of Section 164(2) of the Act.
• f) With respect to the adequacy of the internal financial controls over financial reporting of the Holding Company, and its subsidiary companies, associate company covered under the Act, and the operating A ;
• g) With respect to the other matters to be Companies (Audit and Auditors) Rules, 2014 (as amended), in our opinion and to the best of our information and according to the explanations given to us and based on the consideration of the report of the other auditors on separate financial statements as also the other financial information of the subsidiaries and associate:
  • i. The consolidated financial statements disclose the impact of pending litigations on the consolidated financial position of the Group and its associate, as detailed in Note 43 to the consolidated financial statements.

Chartered Accountants

Offices in Bengaluru, Chandigarh, Chennai, Gurugram, Hyderabad, Kochi, Kolkata, Mumbai, New Delhi, Noida and Pune

• ii. the Group and its associate did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses as at 31 March 2021;
• iii. there has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Holding Company, and its subsidiary companies and associate during the year ended 31 March 2021;
• iv. the disclosure requirements relating to holdings as well as dealings in specified bank notes were applicable for the period from 8 November 2016 to 30 December 2016, which are not relevant to these consolidated financial statements. Hence, reporting under this clause is not applicable.

For Walker Chandiok & Co LLP Chartered Accountants Firm Registration No:001076N/N500013

Shashi Tadwalkar Partner Membership No:101797

UDIN:21101797AAAAAQ4235

Place: Pune Date: 29 April 2021

Chartered Accountants

Annexure 1

List of entities included

Sr. No.	Name of Entity	Relationship
1	Persistent Systems Limited (PSL)	Holding Company
2	Persistent Systems, Inc. (PSI)	Wholly owned subsidiary of PSL
3	Persistent Systems Pte Ltd.	Wholly owned subsidiary of PSL
4	Persistent Systems France SAS	Wholly owned subsidiary of PSL
5	Persistent Systems Malaysia Sdn. Bhd.	Wholly owned subsidiary of PSL
6	Persistent Systems Germany GmbH (PSGG)	Wholly owned subsidiary of PSL
7	Persistent Telecom Solutions Inc.	Wholly owned subsidiary of PSI
8	Valista Limited (VL) (Dissolved w.e.f. 24 June 2020)	Wholly owned subsidiary of AGL
9	Aepona Group Limited (AGL)	Wholly owned subsidiary of PSI
10	Aepona Limited	Wholly owned subsidiary of AGL
11	Youperience GmbH (YGmbH)	Wholly owned subsidiary of PSGG
12	Youperience Limited	Wholly owned subsidiary of YGmbH
13	Persistent Systems Lanka (Private) Limited	Wholly owned subsidiary of AGL
14	Persistent Systems Mexico, S.A. de C.V.	Wholly owned subsidiary of PSI
15	Persistent Systems Israel Ltd	Wholly owned subsidiary of PSI
16	PARX Werk AG	Wholly owned subsidiary of PSGG
17	PARX Consulting GmbH	Wholly owned subsidiary of PARX Werk AG
18	Capiot Software Private Limited (Acquired w.e.f. October 29, 2020)	Wholly owned subsidiary of PSL
19	Capiot Software Inc. (Capiot US) (Acquired w.e.f. November 7, 2020)	Wholly owned subsidiary of PSI
20	Capiot Software Pty Limited (Acquired w.e.f. November 7, 2020)	Wholly owned subsidiary of Capiot US
21	Capiot Software Pte Limited (Acquired w.e.f. November 7, 2020)	Wholly owned subsidiary of Capiot US
22	Persistent Systems S.R.L. (incorporated on March 23, 2021)	Wholly owned subsidiary of PSI
23	Klisma e-Services Private Limited	Associate Company of PSL

Annexure A Persistent Systems Limited on the consolidated financial statements for the year ended 31 March 2021

Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 ( the Act

1. In conjunction with our audit of the consolidated financial statements of Persistent Systems Limited the Holding Company and its subsidiaries (the Holding Company and its subsidiaries together referred to as the Group and its associate, as at and for the year ended 31 March 2021, we have audited the internal financial controls with reference to financial statements of the Holding Company covered under the Act, as at that date.

Responsibilities of Management and Those Charged with Governance for Internal Financial Controls

1. The Board of Directors of the Holding Company, covered under the Act, are responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit Chartered Ac . These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of the business, including adherence to the s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Act.

Auditor s Responsibility for the Audit of the Internal Financial Controls

• 1. Our responsibility is to express an opinion on the internal financial controls with reference to financial statements of the Holding Company, as aforesaid, based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India ( ICAI ) prescribed under Section 143(10) of the Act, to the extent applicable to an audit of internal financial controls with reference to financial statements, and the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting ( the Guidance Note issued by the ICAI. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls with reference to financial statements were established and maintained and if such controls operated effectively in all material respects.
• 1. Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls with reference to financial statements and their operating effectiveness. Our audit of internal financial controls with reference to financial statements includes obtaining an understanding of internal financial controls with reference to financial statements, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The misstatement of the financial statements, whether due to fraud or error.
• 1. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the internal financial controls with reference to financial statements of the Holding Company, as aforesaid.

Meaning of Internal Financial Controls with Reference to Financial Statements

1. A company's internal financial controls with reference to financial statements is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company's internal financial controls with reference to financial statements include those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as

Chartered Accountants

Offices in Bengaluru, Chandigarh, Chennai, Gurugram, Hyderabad, Kochi, Kolkata, Mumbai, New Delhi, Noida and Pune

Annexure A

necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorisations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorised acquisition, use, or disposition of the company's assets that could have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls with Reference to Financial Statements

1. Because of the inherent limitations of internal financial controls with reference to financial statements, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls with reference to financial statements to future periods are subject to the risk that the internal financial controls with reference to financial statements may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Opinion

1. In our opinion, the Holding Company, has in all material respects, adequate internal financial controls over financial reporting and such controls were operating effectively as at 31 March 2021, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting .

For Walker Chandiok & Co LLP Chartered Accountants Firm Registration No:001076N/N500013

Shashi Tadwalkar Partner Membership No:101797

UDIN:21101797AAAAAQ4235

Place: Pune Date: 29 April 2021

CONSOLIDATED BALANCE SHEET AS AT MARCH 31, 2021

	Notes	As at	As at
		March 31, 2021	March 31, 2020
ASSETS
Non-current assets
Property, plant and equipment	6.1	2,401.40	2,224.60
Capital work-in-progress		121.81	166.18
Right of use assets	6.2	852.58	566.81
Goodwill	6.3	85.94	88.94
Other Intangible assets Intangible assets under development	6.4	1,229.50 -	1,434.93 137.20
		4,691.23	4,618.66
Financial assets
- Investments	7	3,621.27	4,620.97
- Loans	8	134.76	176.13
- Other non-current financial assets	9	25.76	358.93
Deferred tax assets (net)	10 11	1,037.57	960.08
Other non-current assets		441.52 9,952.11	331.31 11,066.08
Current assets
Financial assets
- Investments	12 13	6,374.95	5,164.77
- Trade receivables (net) - Cash and cash equivalents	14	5,708.97 2,419.30	5,921.96 1,899.99
- Other bank balances	15	7,389.70	2,672.19
- Loans	16	71.26	13.71
- Other current financial assets	17	2,467.23	2,068.54
Current tax assets (net)		188.00	163.93
Other current assets	18	2,083.72	1,950.52
		26,703.13	19,855.61
TOTAL		36,655.24	30,921.69
EQUITY AND LIABILITIES
EQUITY
Equity share capital	5	764.25	764.25
Other equity		27,192.41	23,093.30
		27,956.66	23,857.55
LIABILITIES
Non- current liabilities
Financial liabilities - Lease liabilities	20	716.17	353.36
- Borrowings	19	44.27	46.22
Provisions	21	240.94	182.79
		1,001.38	582.37
Current liabilities
Financial liabilities - Lease liabilities	20	222.00	309.06
	22	2,733.44	2,247.09
- Other financial liabilities	23	390.17	862.34
Other current liabilities	24	1,514.95	1,320.13
Provisions Current tax liabilities (net)	25	2,477.79 358.85	1,610.99 132.16
		7,697.20	6,481.77
TOTAL		36,655.24	30,921.69
		-	-
Summary of significant accounting policies	4

The accompanying notes are an integral part of the consolidated financial statements.

As per our report of even date

For Walker Chandiok & Co LLP For and on behalf of the Board of Directors of Chartered Accountants Persistent Systems Limited Firm Registration No.: 001076N/N500013

Shashi Tadwalkar Sandeep Kalra Praveen Kadle Partner Executive Director and Membership No. :- 101797 DIN: 00005721 DIN: 02506494 DIN: 00016814 Chairman and Managing Director Dr. Anand Deshpande

Date : April 29, 2021 Date : April 29, 2021 Date : April 29, 2021

Chief Executive Officer

Sunil Sapre

DIN: 06475949 Membership No. A20507 Executive Director and Chief Financial Officer

Amit Atre Company Secretary

Date : April 29, 2021 Date : April 29, 2021 Date : April 29, 2021

Independent Director

Place: Pune Place: New Jersey, USA Place: Mumbai

Place: Pune Place: Mumbai Place: Pune

CONSOLIDATED STATEMENT OF PROFIT AND LOSS FOR THE YEAR ENDED MARCH 31, 2021

	Notes	For the year ended
		March 31, 2021	March 31, 2020
Income
Revenue from operations (net)	26	41,878.88	35,658.08
Other income	27	1,077.72	1,323.77
Total income (A)		42,956.60	36,981.85
Expenses
Employee benefits expense	28.1	25,157.99	21,556.40
Cost of professionals	28.2	5,563.68	3,918.94
Finance costs (refer note 35)		57.94	63.32
Depreciation and amortization expense	6.5	1,755.50	1,659.62
Other expenses	29	4,327.06	5,260.15
Total expenses (B)		36,862.17	32,458.43
Profit before tax (A - B)		6,094.43	4,523.42
Tax expense
Current tax		1,774.01	1,354.70
Tax charge in respect of earlier years		10.58	52.55
Deferred tax credit		(196.93)	(286.72)
Total tax expense		1,587.66	1,120.53
Net profit for the year (C)		4,506.77	3,402.89
Other comprehensive income
Items that will not be reclassified to profit and loss (D)
- Remeasurements of the defined benefit liabilities / asset (net of tax)		10.25	(34.80)
- Tax effect on remeasurements of the defined benefit liabilities / (asset)		- 10.25	- (34.80)
Items that may be reclassified to profit and loss (E)
- Effective portion of cash flow hedge (net of tax)		383.54	(429.15)
- Exchange differences in translating the financial statements of foreign operations		(20.07)	323.15
		363.47	(106.00)
Total other comprehensive income for the year (D) + (E)		373.72	(140.80)
Total comprehensive income for the year (C) + (D) + (E)		4,880.49	3,262.09
Earnings per equity share	30
		58.97	44.38
		58.97	44.38
Summary of significant accounting policies	4

The accompanying notes are an integral part of the consolidated financial statements.

As per our report of even date

Chartered Accountants Persistent Systems Limited Firm Registration No.: 001076N/N500013

For Walker Chandiok & Co LLP For and on behalf of the Board of Directors of

Partner Membership No. :- 101797 DIN: 00005721 DIN: 02506494 DIN: 00016814

Dr. Anand Deshpande Chairman and Managing Director

Place: Pune Place: New Jersey, USA Place: Mumbai

Shashi Tadwalkar Sandeep Kalra Praveen Kadle

Executive Director and Chief Executive Officer

Independent Director

Date : April 29, 2021 Date : April 29, 2021 Date : April 29, 2021

Sunil Sapre Executive Director and Amit Atre

Company Secretary

DIN: 06475949 Membership No. A20507

Place: Pune Place: Mumbai Place: Pune Date : April 29, 2021 Date : April 29, 2021 Date : April 29, 2021

Chief Financial Officer

CONSOLIDATED CASH FLOW STATEMENT FOR THE YEAR ENDED MARCH 31, 2021

		For the year ended March 31, 2021	March 31, 2020
Cash flow from operating activities
Profit before tax		6,094.43	4,523.42
Adjustments for:
Interest income		(558.70)	(545.28)
Finance costs		57.94	63.32
Dividend income		-	(13.98)
Depreciation and amortization expense		1,755.50	1,659.62
Unrealised exchange loss/ (gain) (net)		139.55	(131.29)
Change in foreign currency translation reserve		(42.32)	119.30
Exchange (gain) / loss on derivative contracts		(169.80)	58.51
Exchange loss / (gain) on translation of foreign currency cash and cash equivalents		11.50	(46.77)
Bad debts		90.30	-
Provision for expected credit loss (net)		31.32	83.86
Employee stock compensation expenses		290.44	236.79
Provision for doubtful deposits and advances		-	248.48
Provision for diminution in value of investments		18.53	-
Remeasurements of the defined benefit liabilities / asset (before tax effects)		10.25	(46.14)
Impairment of loan		23.96	-
Excess provision in respect of earlier years written (back)		(41.79)	(6.95)
(Gain)/ loss on fair valuation of assets designated at FVTPL		131.39	(119.02)
Profit on sale of investments (net)		(478.13)	(164.81)
Loss / (Profit) on sale of property, plant and equipment (net)		(1.34) 7,363.03	5.96
Operating profit before working capital changes			5,925.02
Movements in working capital : Increase in non-current and current loans		(40.03)	(14.44)
		(76.81)
Increase in other non current assets Increase in other current financial assets		(104.23)	(235.30) (232.15)
Decrease / (Increase) in other current assets		58.26	(559.10)
Decrease / (Increase) in trade receivables		58.49	(894.77)
Increase in trade payables, current liabilities and non current liabilities		757.56	1,000.26
		924.95	(145.37)
Increase /(Decrease) in provisions Operating profit after working capital changes		8,941.22	4,844.15
Direct taxes paid (net of refunds)		(1,581.97)	(1,328.27)
Net cash generated from operating activities	(A)	7,359.25	3,515.88
Cash flows from investing activities
Payment towards capital expenditure (including intangible assets)		(1,281.04)	(758.39)
Proceeds from sale of property, plant and equipment		30.02	12.68
		(448.47)	(435.48)
Purchase of bonds		(712.18)	(901.61)
Proceeds from sale/ maturity of bonds		350.53	819.87
Proceeds from sale of non-current investments		-	25.22
Investments in mutual funds		(24,591.91)	(19,456.95)
Proceeds from sale / maturity of mutual funds		25,068.92	17,670.49
Maturity / (Investments) of bank deposits having original maturity over three months		(4,198.89)	2,108.15
Maturity of deposits with financial institutions		-	250.00
Interest received		366.29	503.60
Dividends received		-	13.98
Net cash used in investing activities	(B)	(5,416.73)	(148.44)
Cash flows from financing activities		(4.54)
(Repayment) of long term borrowings Shares bought back		-	(4.62) (1,677.01)
Payment of lease liabilities		(319.11)	(287.70)
Loan received as a part of COVID-19 relief measures		-	39.14
Specific project related grant received		9.00	3.00
Interest paid		(58.01)	(63.31)
Dividends paid		(1,069.95)	(1,146.38)
Tax on dividend paid		-	(154.14)
Net cash (used in) financing activities	(C )	(1,442.61)	(3,291.02)

CONSOLIDATED CASH FLOW STATEMENT FOR THE YEAR ENDED MARCH 31, 2021

		For the year ended
	March 31, 2021	March 31, 2020
Net increase in cash and cash equivalents (A + B + C)	499.91	76.42
Cash and cash equivalents at the beginning of the year	1,899.99	1,739.45
Cash and cash equivalents acquired on acquisition	30.90	37.35
Effect of exchange difference on translation of foreign	(11.50)	46.77
currency cash and cash equivalents
Cash and cash equivalents at the end of the year	2,419.30	1,899.99
Components of cash and cash equivalents
Cash on hand (refer note 14)	0.41	0.24
Balances with banks
On current accounts # (refer note 14)	1,583.20	1,566.06
On saving accounts (refer note 14)	1.33	0.36
On Exchange Earner's Foreign Currency accounts (refer note 14)	208.57	261.86
On deposit accounts with original maturity less than three months (refer note 14)	625.79	71.47
Cash and cash equivalents	2,419.30	1,899.99

Out of the cash and cash equivalent balance as at March 31, 2021, the Group can utilise 154.39 Million (Previous year: 6.62 Million) only towards certain predefined activities specified in the agreement.

Summary of significant accounting policies - refer note 4

The accompanying notes are an integral part of the consolidated financial statements.

As per our report of even date

For Walker Chandiok & Co LLP For and on behalf of the Board of Directors of Chartered Accountants Persistent Systems Limited Firm Registration No.: 001076N/N500013

Shashi Tadwalkar Dr. Anand Deshpande Praveen Kadle Partner Chairman and Managing Director Independent Director Membership No. :- 101797 DIN: 00005721 DIN: 00016814 Place: Pune Place: Mumbai Date : April 29, 2021 Date : April 29, 2021 Date : April 29, 2021 Sandeep Kalra Executive Director and Chief Executive Officer DIN: 02506494 Place: New Jersey, USA

	Sunil Sapre	Amit Atre
	Executive Director and Chief Financial Officer	Company Secretary
	DIN: 06475949	Membership No. A20507
Place: Pune Date : April 29, 2021	Place: Mumbai Date : April 29, 2021	Place: Pune Date : April 29, 2021

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED MARCH 31, 2021

A. Share capital

(refer note 5)

Balance as at April 1, 2020	Changes in equity share capital during the year	Balance as at March 31, 2021
764.25	-	764.25

Balance as at April 1, 2019	Changes in equity share capital during the year	Balance as at March 31, 2020
791.19	(26.94)	764.25

(1,069.95) (1.87) (140.80) (123.60) (1,146.38) (154.14) (1,650.07) 23,093.30 4,506.77 373.72 290.44 3,402.89 236.79 13.00 23,093.30 27,192.41 22,655.61 - - - - - - - Total Total Exchange differences on Exchange differences on translating the financial (20.07) translating the financial 588.32 568.25 265.17 323.15 588.32 statements of foreign statements of foreign - - - - - - - - - - - - - - - - - Items of other comprehensive income Items of other comprehensive income operations operations Effective portion of cash Effective portion of cash (244.09) (429.15) (244.09) 383.54 139.45 185.06 - - - - - - - - - - - - - - - - - Independent Director Date : April 29, 2021 flow hedges flow hedges Praveen Kadle DIN: 00016814 Place: Mumbai Executive Director and Chief (1,069.95) (2,020.34) (34.80) (26.94) (123.60) (1,146.38) (154.14) (1,630.89) (875.97) 10,087.74 4,506.77 10.25 49.95 11,564.42 10,657.52 3,402.89 20.05 10,087.74 - - - - - - Place: New Jersey, USA Membership No. A20507 Retained earnings Retained earnings Date : April 29, 2021 Date : April 29, 2021 Company Secretary Executive Officer For and on behalf of the Board of Directors of Sandeep Kalra DIN: 02506494 Place: Pune Amit Atre (49.95) (20.05) 49.95 70.00 49.95 Special Economic Zone re- Special Economic Zone re- Persistent Systems Limited Executive Director and Chief - - - - - - - - - - - - - - - - - - - investment reserve investment reserve Chairman and Managing Dr. Anand Deshpande Date : April 29, 2021 Date : April 29, 2021 Financial Officer DIN: 06475949 DIN: 00005721 Place: Mumbai Sunil Sapre Place: Pune Director 35.75 35.75 35.75 26.94 8.81 Capital redemption Capital redemption - - - - - - - - - - - - - - - - - - reserve reserve Reserves and surplus Reserves and surplus (0.40) 5.00 57.71 57.31 52.71 57.71 - - - - - - - - - - - - - - - - - Gain on bargain Gain on bargain purchase purchase (108.78) (1.47) (25.61) 290.44 470.70 76.29 236.79 3.04 290.51 290.51 outstanding reserve outstanding reserve - - - - - - - - - - - - Share options Share options 108.78 14,356.53 10,565.95 1,630.89 2,020.34 4.96 12,227.41 25.61 12,227.41 - - - - - - - - - - - - - - General reserve General reserve (774.10) 774.10 Securities premium Securities premium - - - - - - - - - - - - - - - - - - - - - Particulars Particulars	The accompanying notes are an integral part of the consolidated financial statements. Transfer from Special Economic Zone re-investment reserve Transitional impact on adoption of Ind AS 116 (net of taxes) Summary of significant accounting policies - refer note 4 Utilised towards buy back of shares (refer note 5) Adjustments towards employees stock options Adjustments towards employees stock options Firm Registration No.: 001076N/N500013 Other comprehensive income for the period Other comprehensive income for the period Employee stock compensation expenses Employee stock compensation expenses Transfer to capital redemption reserve For Walker Chandiok & Co LLP Other changes during the year Other changes during the year As per our report of even date Transfer to retained earnings Balance as at April 1, 2020 Balance as at April 1, 2019 Balance at March 31, 2020 Balance at March 31, 2021 Transfer to general reserve Transfer to general reserve Membership No. :- 101797 Chartered Accountants Net profit for the period Net profit for the period Shashi Tadwalkar Tax on dividend Dividend Dividend Partner
	Date : April 29, 2021 Place: Pune

Particulars				Reserves and surplus					Items of other comprehensive income	Total
	Securities premium	General reserve	Share options	Gain on bargain	Capital redemption	Special Economic Zone re-	Retained earnings	Effective portion of cash Exchange differences on
			utstanding reserve	purchase	reserve	investment reserve		flow hedges	translating the financial
									statements of foreign
									operations
Balance as at April 1, 2019	774.10	10,565.95	76.29	52.71	8.81	70.00	10,657.52	185.06	265.17	22,655.61
let profit for the period							3,402.89			3,402.89
Other comprehensive income for the period								(429.15)	323.15	(140.80)
ransfer to capital redemption reserve					26.94					$\ddot{\phantom{0}}$
ransitional impact on adoption of Ind AS 116 (net of taxes)							$(34.80)$ $(26.94)$ $(123.60)$ $(146.38)$
Nidend										$(123.60)$ $(146.38)$
Fax on dividend							(154.14)			(154.14)
ransfer from Special Economic Zone re-investment reserve						(20.05)	20.05
ransfer to general reserve		.630.89					1,630.89)
Employee stock compensation expenses			236.79							236.79
Adjustments towards employees stock options		25.61	(25.61)
Itilised towards buy back of shares (refer note 5)	(774.10)						(875.97)			1,650.07)
ther changes during the year		4.96	3.04	5.00						13.00
Balance at March 31, 2020		12,227.41	290.51	57.71	35.75	49.95	10,087.74	(244.09	588.32	23,093.30

Persistent Systems Limited CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED MARCH 31, 2021

Nature and purpose of reserves

a) Securities premium

Securities premium is used to record the premium on issue of shares. The reserve is utilised in accordance with the provisions of Section 52 of the Companies Act, 2013.

b) General reserve

General reserve represents amounts transferred from profit for the year and from Share options outstanding reserve on exercise / expiry of employee share options. It is a free reserve as per section 2 (43) of the Companies Act, 2013.

c) Share options outstanding reserve

Share options outstanding reserve represents the cumulative expense recognized for equity-settled transactions at each reporting date until the employee share options are exercised / expired upon which such amount is transferred to General reserve.

d) Gain on bargain purchase

The excess of the portion of equity of the acquired company over its cost is treated as gain on bargain purchase in the financial statements.

e) Capital redemption reserve

Capital redemption reserve represents the nominal value of the shares bought back; and is created and utilised in accordance with Section 69 of the Companies Act, 2013.

f) Special Economic Zone re-investment reserve

The Special Economic Zone re-investment reserve has been created out of the profit in terms of the provisions of Section 10AA(1)(ii) of the Income tax Act, 1961. The reserve is utilised by the Group for acquiring new plant and machinery for the purpose of its business in accordance with Section 10AA(2) of the Income tax Act, 1961.

g) Cash flow hedge reserve

The cash flow hedge reserve represents the cumulative effective portion of gains or losses arising on changes in fair value of hedging instruments entered into towards highly probable transactions. Such gains or losses are subsequently recognised in the statement of profit and loss in the period in which the said transaction occurs / hedging instruments are cancelled.

h) Foreign currency translation reserve

The foreign exchange differences arising from the translation of financial statements of foreign operations with functional currency other than Indian rupees is recognised in other comprehensive income and is presented under equity in the foreign currency translation reserve. The amount is transferred to retained earnings upon disposal of investment in foreign operation.

Notes forming part of consolidated financial statements

1. Nature of operations

Persistent Systems Limited (the or is a public Company domiciled in India and incorporated under the provisions of the Companies Act, 1956. The shares of the Company are listed on Bombay Stock Exchange and National Stock Exchange. The Company is a global Company specializing in software products, services and technology innovation. The Company offers complete product life cycle services.

Persistent Systems, Inc. (PSI) based in the USA, a wholly owned subsidiary of PSL, is engaged in software product, services and technology innovation.

Persistent Systems Pte. Ltd. (PS Pte.) based in Singapore, a wholly owned subsidiary of PSL, is engaged in software development, professional and marketing services.

Persistent Systems France SAS (PSFS) based in France, a wholly owned subsidiary of PSL, is engaged in software products, services and technology innovation

Persistent Telecom Solutions, Inc. (PTSI) based in the USA, a wholly owned subsidiary of Persistent Systems, Inc., is engaged in software products, services and technology innovation in telecom and Product Lifecycle Management domains.

Persistent Systems Malaysia Sdn. Bhd. (PSM) based in Malaysia, a wholly owned subsidiary of PSL, is engaged in software products and services.

Aepona Holdings Limited (was an Ireland based wholly owned subsidiary of Persistent Systems, Inc.) operated as the holding Company of Aepona Group Limited.

Aepona Holdings Limited has been dissolved with effect from October 24, 2019. Persistent Systems, Inc., its holding Company, took over all the assets and liabilities of Aepona Holdings Limited on the date of dissolution.

Aepona Group Limited, an Ireland based wholly owned subsidiary of Persistent Systems, Inc. (previously owned by Aepona Holdings Limited) operates as the holding Company of Aepona Limited.

Aepona Limited (a UK based wholly owned subsidiary of Aepona Group Limited) is engaged in the business of a telecommunication API gateway for defining, exposing, controlling and monetizing telecom services to partners and application developers and an Internet of Things service creation platform that allows enterprises to add a service layer (or to the basic APIs exposed to by connected devices, and to expose and monetize these APIs.

Valista Limited (an Ireland based wholly owned subsidiary of Aepona Group Limited) has been dissolved with effect from June 24, 2020. Aepona Group Limited, its holding Company, took over all the assets and liabilities of Valista Limited on the date of dissolution.

Persistent Systems Lanka (Private) Limited (a Sri Lanka based wholly owned subsidiary of Aepona Group Limited) has adopted indirect sales model, with services revenue being billed to Aepona Limited. Sale of services are then contracted between Aepona Limited and customers.

Persistent Systems Mexico, S.A. de C.V (a Mexico based wholly owned subsidiary of Persistent Systems Inc.) has adopted indirect sales model, with services revenue being billed to Persistent Systems Inc. Sale of services are then contracted between Persistent Systems Inc. and customers.

Persistent Systems Israel Ltd. (an Israel based wholly owned subsidiary of Persistent Systems Inc.) has adopted indirect sales model, with services revenue being billed to Persistent Systems Inc. Sale of services are then contracted between Persistent Systems Inc. and customers.

Persistent Systems Germany GmbH (wholly owned subsidiary of Persistent Systems Limited) operates as the holding Company of PARX Werk AG and Youperience GmbH.

PARX Werk AG (a Switzerland based wholly owned subsidiary of Persistent Systems Germany GmbH) is engaged in the business of software products, services and technology innovation in the digital practice.

PARX Consulting GmbH (a Germany based wholly owned subsidiary of PARX Werk AG) is engaged in the business of software products, services and technology innovation in the digital practice.

Herald Technologies Inc. (HTI), based in the USA a wholly owned subsidiary of Persistent Systems Inc., was working on implementation of platforms and related IT services for the healthcare industry.

Herald Technologies Inc. has been dissolved with effect from June 24, 2019. Persistent Systems Inc, its holding company, took over all the assets and liabilities of Herald Technologies, Inc. on the date of dissolution.

Youperience GmbH (a Germany based wholly owned subsidiary of Persistent Systems Germany GmbH) is engaged in Salesforce related implementation services.

Youperience Limited (a United Kingdom based wholly owned subsidiary of Youperience GmbH) is engaged in Salesforce related implementation services.

CAPIOT Software Private Limited (a India based wholly owned subsidiary of Persistent Systems Limited) is engaged in enterprise integration and modernization with expertise in MuleSoft, Red Hat and TIBCO.

CAPIOT Software Inc (a US based wholly owned subsidiary of Persistent Systems Inc) is engaged in enterprise and data integration services across platforms.

CAPIOT Software Pty Limited (a Australia based wholly owned subsidiary of CAPIOT Software Inc) is engaged in enterprise and data integration services across platforms.

CAPIOT Software Pte Limited (a Singapore based wholly owned subsidiary of CAPIOT Software Inc) is engaged in enterprise and data integration services across platforms.

Persistent Systems SRL is a subsidiary of Persistent Systems Inc. and is incorporated on March 23, 2021.

Klisma e-Services Private Limited was engaged in the business of internet, telecommunications, mobile technology and other media enabling electronic commerce.

Notes forming part of consolidated financial statements

2. Basis of preparation

The consolidated financial statements of the Group have been prepared on an accrual basis and under the historical cost convention except for certain financial instruments, equity settled employee stock options and initial recognition of assets acquired under business combinations which have been measured at fair value. Historical cost is generally based on the fair value of the consideration given in exchange for goods and services. The accounting policies are consistently applied by the Group during the year and are consistent with those used in previous year except where a newly issued accounting standard is initially adopted or a revision to an existing accounting standard requires a change in the accounting policy hitherto in use. These consolidated financial statements are prepared in accordance with Indian Accounting Standard (Ind AS), the provisions of the Companies Act, 2013 (to the extent notified) and guidelines issued by the Securities and Exchange Board of India (SEBI). The Ind AS are prescribed under Section 133 of the Act read with Rule 3 of the Companies (Indian Accounting Standards) Rules, 2015 and relevant amendment rules issued thereafter.

All assets and liabilities have been classified as current or non-current as per the Group operating cycle and other criteria set out in the Schedule III of the Companies Act, 2013 (the Based on the nature of products/ services and the time between the acquisition of assets for processing and their realisation in cash and cash equivalents, the Group has ascertained its operating cycle as 12 months for the purpose of current and non-current classification of assets and liabilities

3. Principles of consolidation

The consolidated financial statements of the Parent Company and its subsidiaries for the year ended March 31, 2021 are prepared in accordance with generally accepted accounting principles applicable in India, and the Indian Accounting Standard 110 (Ind AS 110) on Financial notified by Companies (Accounting Standards) Rules, 2015,

The Parent Company consolidates entities which it owns or controls. The consolidated financial statements comprise the financial statements of the company and its subsidiaries as disclosed below. Control exists when the parent company has power over the entity, is exposed or has rights to variable returns from its involvement with the entity; and has the ability to affect those returns by using its power over the entity. Power is demonstrated through existing rights that give the ability to direct relevant activities, those which significantly affect the entity's returns. Subsidiaries are consolidated from the date control commences until the date control ceases.

The financial statements of the Parent Company and its subsidiary companies have been combined on line by line basis by adding together the book values of like items of assets and liabilities, income and expenses after eliminating intra group balances and intra group transactions except where cost cannot be recovered. The unrealized profits or losses resulting from the intra group transactions and balances have been eliminated.

The consolidated financial statements include the share of profit / loss of associate companies, which are accounted for under the The share of profit / loss of the associate company has been adjusted to the cost of investment in the associate, as per the An associate is an enterprise in which the investor has significant influence and which is neither a subsidiary nor a joint venture.

The excess of the cost to the Company of its investment in a subsidiary and the portion of equity of subsidiary on the date at which investment in the subsidiary is made, is described as goodwill and recognized separately as an asset in the consolidated financial statements. The excess of the portion of equity of the acquired company over its cost is treated as gain on bargain purchase in the financial statements. Goodwill arising on consolidation is not amortized. It is tested for impairment on a periodic basis and written off if found impaired.

The consolidated financial statements are prepared using uniform accounting policies for like transactions and other events in similar circumstances and necessary adjustments required for deviations,

The financial statements of the subsidiary companies used in the consolidation are drawn up to the same reporting date as of the Parent Company.

The subsidiary and associate companies considered in consolidated financial statements are as follows:

Name of the subsidiary/ associate	Ownership Percentage as at		Country of incorporation
	31-Mar-21	31-Mar-20
Persistent Systems, Inc.	100%	100%	USA
Persistent Systems Pte Ltd.	100%	100%	Singapore
Persistent Systems France SAS	100%	100%	France
Persistent Telecom Solutions Inc.	100%	100%	USA
Persistent Systems Malaysia Sdn. Bhd.	100%	100%	Malaysia
Aepona Holdings Limited (Dissolved with effect from October 24, 2019)	-	-	Ireland
Aepona Group Limited	100%	100%	Ireland
Aepona Limited	100%	100%	UK
Valista Limited (Dissolved with effect from June 24, 2020)	-	100%	Ireland
Persistent Systems Lanka (Private) Limited	100%	100%	Sri Lanka
Persistent Systems Mexico, S.A. de C.V.	100%	100%	Mexico
Persistent Systems Israel Ltd.	100%	100%	Israel
Persistent Systems Germany GmbH	100%	100%	Germany
PARX Werk AG	100%	100%	Switzerland
PARX Consulting GmbH	100%	100%	Germany
Youperience GmbH	100%	100%	Germany
Youperience Limited	100%	100%	United Kingdom
CAPIOT Software Private Limited (Acquired w.e.f. October 29, 2020)	100%	-	India
CAPIOT Software Inc. (Acquired w.e.f. November 7, 2020)	100%	-	USA
CAPIOT Software Pty Limited (Acquired w.e.f. November 7, 2020)	100%	-	Australia
CAPIOT Software Pte Limited (Acquired w.e.f. November 7, 2020)	100%	-	Singapore
Persistent Systems S.R.L. (Incorporated on March 23, 2021)	100%	-	Italy
Klisma e-Services India Pvt. Ltd. (under liquidation)	50%	50%	India

The share of subsidiaries in the consolidated net assets, consolidated profit or loss and consolidated other comprehensive income is as follows:

Name of the Company	Share in Net assets		Share in Profit or (loss)		Share in Other Comprehensive Income (OCI)		Share in Total Comprehensive Income
	As a % of consolidated net assets	Amount	As a % of consolidated profit	Amount	As a % of consolidated OCI	Amount	As a % of consolidated Total Comprehensive Income	Amount
Parent Company:
Persistent Systems Limited		85.82% 27,655.24		97.84% 5,050.86	101.44%	399.48	98.09%	5,450.34
Foreign subsidiaries:
Persistent Systems, Inc.		9.05% 2,915.05		-3.25% (167.87)	-	-	-3.02%	(167.87)
Persistent Systems Pte. Ltd.	0.11%	35.32	-0.17%	(8.59)	-	-	-0.15%	(8.59)
Persistent Systems France SAS	0.57%	183.40	0.22%	11.51	-	-	0.21%	11.51
Persistent Telecom Solutions Inc.	-0.02%	(6.43)	1.16%	59.96	-	-	1.08%	59.96
Persistent Systems Malaysia Sdn. Bhd.	0.54%	173.95	0.79%	40.80	-	-	0.73%	40.80
Aepona Group Limited	0.11%	34.98	0.65%	33.73	-	-	0.61%	33.73
Aepona Limited	-0.87%	(278.97)		2.25% 115.93	-	-	2.09%	115.93
Valista Limited	0.00%	-	-0.02%	(1.08)	-	-	-0.02%	(1.08)
Persistent Systems Lanka (Private) Limited	0.57%	182.19	0.63%	32.46	-1.44%	(5.69)	0.48%	26.77
Persistent Systems Israel Ltd.	0.48%	154.34	0.57%	29.29	-	-	0.53%	29.29
Persistent Systems Mexico, S.A. de C.V.	0.00%	(1.04)		-0.20% (10.35)	-	-	-0.19%	(10.35)
Persistent Systems Germany GmbH		3.74% 1,206.49	-0.10%	(5.02)	-	-	-0.09%	(5.02)
PARX Werk AG	0.22%	71.37	0.22%	11.50	-	-	0.21%	11.50
PARX Consulting GmbH	-0.25%	(81.04)	0.34%	17.62	-	-	0.32%	17.62
Youperience Limited	-0.05%	(17.31)	-0.18%	(9.29)	-	-	-0.17%	(9.29)
Youperience GmbH	-0.30%	(96.60)		-0.86% (44.45)	-	-	-0.80%	(44.45)
CAPIOT Software Private Limited	0.24%	75.74	0.04%	2.30	-	-	0.04%	2.30
CAPIOT Software Inc.	0.06%	19.83	-0.03%	(1.54)	-	-	-0.03%	(1.54)
CAPIOT Software Pty Limited	0.02%	5.67	0.06%	2.92	-	-	0.05%	2.92
CAPIOT Software Pte Limited	-0.03%	(9.93)	0.04%	1.97	-	-	0.04%	1.97
Persistent Systems S.R.L	0.00%	0.81	0.00%	(0.05)	-	-	0.00%	(0.05)
Subtotal		100.00% 32,223.06		100.00% 5,162.61	100.00%	393.79		100.00% 5,556.40
Associates:
Klisma e-Service Private Limited	-	-	-	-	-	-	-	-
FCTR	-	-	-	-	-	(20.07)	-	(20.07)
Consolidation adjustments	-	(4,266.40)	-	-	-	-	-	-
Amortization of Intangibles recognized on Business Combination	-	-	-	(305.37)	-	-	-	(305.37)
Adjustment for eliminating margin on cost transfer for capitalization	-	-	-	9.54	-	-	-	9.54
DTA on items recognised on consolidation	-	-	-	(9.34)	-	-	-	(9.34)
Dividend from subsidiaries	-	-	-	(159.97)	-	-	-	(159.97)
Others	-	-	-	(190.70)	-	-	-	(190.70)
Total		27,956.66		4,506.77		373.72		4,880.49

4. Summary of significant accounting policies

(a) Use of estimates

A. The preparation of the consolidated financial statements in conformity with Ind AS requires the Management to make estimates, judgments and assumptions. These estimates, judgments and assumptions affect the application of accounting policies and the reported amounts of assets and liabilities, the disclosures of contingent assets and liabilities at the date of the consolidated financial statements and reported amounts of revenues and expenses during the period. The application of accounting policies that require critical accounting estimates involving complex and subjective judgments and the use of assumptions in these consolidated financial statements have been disclosed appropriately. Accounting estimates could change from period to period. Actual results could differ from those estimates. Appropriate changes in estimates are made as the Management becomes aware of changes in circumstances surrounding the estimates. Changes in estimates are reflected in the consolidated financial statements in the period in which changes are made and, if material, their effects are disclosed in the notes to the consolidated financial statements.

B. Estimation of uncertainties relating to the global health pandemic from COVID-19:

The Group has evaluated likely impact of COVID - 19 on the overall business of the Group. The Group as at the date of the approval of these consolidated financial statements, has used various the estimate as on the date of the approval of the condensed interim consolidated financial statements.

(i) Expected credit loss:

The Group has considered the current and anticipated future economic conditions relating to the industries the Group deals with and the countries where it operates. In calculating expected credit loss, the Group has also considered related credit information for its customers to estimate the probability of default in future and has taken into account estimates of possible effect from the pandemic, COVID -19 using the forward looking approach prescribed by Ind AS 109.

(ii) Impact on hedged and unhedged foreign currency exposure:

Based on its assessment, the Group believes that the probability of occurrence of its forecasted transaction are not likely to be impacted by COVID - 19. Hence, the Group continues to believe that there is no foreseeable impact the effectiveness of its cash flow hedges due to this global pandemic.

(iii) Carrying value of financial instruments:

mainly investments in liquid securities and no material permanent decline in their carrying value are expected.

(iv) Impact on revenue:

The Group continues to re-evaluate the probable revenues from customers in various verticals to assess any possible drops in revenue from any of these verticals due to the economic stress caused by COVID - 19. Accordingly, it is of the opinion that the customers could re-prioritise their discretionary spend in immediate future to conserve resources.

The impact assessment of COVID - 19 is a continuing process given the uncertainties associated with its nature and duration. The Group has considered the same to the extent known currently and has taken steps to measure the cost budgets required to complete its performance obligations in respect of fixed price contracts and incorporated the impact of likely delays and costs in meeting its obligations.

C. Critical accounting estimates

i. Revenue recognition

measurement when the contract has been approved, in writing, by the parties to the contract, the parties to the contract are committed to perform their respective obligations under the contract, and the contract is legally enforceable. The Group assesses the services promised in a contract and identifies distinct performance obligations in the contract. Identification of distinct performance obligations to determine the deliverables and the ability of the customer to benefit independently from such deliverables, and allocation of transaction price to these distinct performance obligations involves significant judgment.

The Group uses the percentage-of-completion method in accounting for its fixed-price contracts. Use of the percentage-of-completion method requires the Group to estimate the efforts or costs expended to date as a proportion of the total efforts or costs to be expended. Efforts or costs expended have been used to measure progress towards completion. Provisions for estimated losses, if any, on uncompleted contracts are recorded in the period in which such losses become probable based on the expected contract estimates at the reporting date.

Further, the Group uses significant judgement while determining the transaction price allocated to performance obligations using the expected cost plus margin approach.

In respect of the contracts where the transaction price is payable as revenue share at pre-defined percentage of customer revenue and bearing in mind, the time gap between the close of the accounting period and availability of the revenue report from the customer, the Group is required to use its judgement to ascertain the income from revenue share on the basis of historical trends of customer revenue.

ii. Income taxes

The Group's two major tax jurisdictions are India and the United States, though the Group also files tax returns in other overseas jurisdictions. Significant judgements are involved in determining the provision for income taxes.

iii. Intangible assets and contingent consideration in business combinations

Business combinations are accounted for using Ind AS 103, Business Combinations. Ind AS 103 requires the identifiable intangible assets and contingent consideration to be fair valued in order to ascertain the net fair value of identifiable assets, liabilities and contingent liabilities of the acquiree. Significant estimates are required to be made in determining the value of contingent consideration and intangible assets. These valuations are conducted by independent valuation experts.

iv. Estimates related to useful life of property, plant and equipment and intangible assets

expected useful life and the expected residual value at the end of its life. The useful lives and residual values of Group's assets are determined by management at the time the asset is acquired and reviewed periodically. The lives are based on historical experience with similar assets as well as anticipation of future events, which may impact their life, such as changes in technology.

v. Impairment of Goodwill

Goodwill is tested for impairment on an annual basis and whenever there is an indication that the recoverable amount of a cash generating unit is less than its carrying amount based on a number of factors including operating results, business plans, future cash flows and economic conditions. The recoverable amount of cash generating units is determined based on higher of value-in-use and fair value less cost to sell. The goodwill impairment test is performed at the level of the cash-generating unit or groups of cash-generating units which are benefiting from the synergies of the acquisition and which represents the lowest level at which goodwill is monitored for internal management purposes. Market related information and estimates are used to determine the recoverable amount. Key assumptions on which management has based its determination of recoverable amount include estimated long term growth rates, weighted average cost

vi. Provisions

Provisions are determined based on the best estimate required to settle the obligation at the reporting date. If the effect of time value of money is material, provisions are discounted using a current pre-tax rate that reflects the risks specific to the liability. These estimates are reviewed at each balance sheet date and adjusted to reflect the best estimates of the amount required.

vii. Internally generated Intangible assets

of business, expected future revenue and the basis of amortization followed, the management considers the carrying value of these intangible assets as recoverable.

viii. Leases

Ind AS 116 requires lessees to determine the lease term as the non-cancellable period of a lease adjusted with any option to extend or terminate the lease, if the use of such option is reasonably certain. The Group makes an assessment on the expected lease term on a lease-by-lease basis and thereby assesses whether it is reasonably certain that any options to extend or terminate the contract will be exercised. In evaluating the lease term, the Group considers factors such as any significant leasehold improvements undertaken over the lease term, costs relating to the termination of the lease and the importance of the underlying asset to the Group operations taking into account the location of the underlying asset and the availability of suitable alternatives. The lease term in future periods is reassessed to ensure that the lease term reflects the current economic circumstances. After considering current and future economic conditions, the Group has concluded that no changes are required to lease periods relating to the existing lease contracts.

(b) Property, Plant and Equipment

Property, Plant and Equipment are stated at cost, less accumulated depreciation and accumulated impairment losses, if any. The cost comprises the purchase price and directly attributable costs of bringing the asset to its working condition for its intended use. Any trade discounts and rebates are deducted in arriving at the purchase price. Capital work-in-progress includes cost of Property, Plant and Equipment that are not ready to be put to use.

Subsequent expenditure related to an item of Property, Plant and Equipment is added to its original cost only if it is probable that future economic benefits associated with the item will flow to the Group. All other expenses on existing Property, Plant and Equipment, including day-to-day repair and maintenance expenditure and cost of replacing parts, are charged to the statement of profit and loss for the period during which such expenses are incurred.

Gains or losses arising from disposal of Property, Plant and Equipment are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognized in the statement of profit and loss when the asset is disposed.

(c) Intangible assets

Intangible assets including software licenses of enduring nature and contractual rights acquired separately are measured on initial recognition at cost. Following initial recognition, intangible assets are carried at cost less accumulated amortization and accumulated impairment losses, if any. Cost comprises the purchase price and any directly attributable cost of bringing the asset to its working condition for its intended use.

Gains or losses arising from disposal of an intangible asset are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognized in the statement of profit and loss when the asset is disposed.

Research and development cost

Research costs are expensed as incurred. Development expenditure incurred on an individual project is recognized as an intangible asset when the Group can demonstrate:

• -technical feasibility of completing the intangible asset so that it will be available for use or sale;
• -its intention to complete the asset;
• -its ability to use or sell the asset;
• -how the asset will generate probable future economic benefits;
• -the availability of adequate resources to complete the development and to use or sell the asset; and
• -the ability to measure reliably the expenditure attributable to the intangible asset during development.

Such development expenditure, until capitalization, is reflected as intangible assets under development.

Following the initial recognition, internally generated intangible assets are carried at cost less accumulated amortization and accumulated impairment losses, if any. Amortization of internally generated intangible asset begins when the development is complete and the asset is available for use.

(d) Business combinations

The acquisition method of accounting is used to account for all business combinations, regardless of whether equity instruments or other assets are acquired. The consideration transferred for the acquisition of a subsidiary comprises the:

• Fair values of the assets transferred;
• Liabilities incurred to the former owners of the acquired business;
• Equity interests issued by the Group; and
• Fair value of any asset or liability resulting from a contingent consideration arrangement.

Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are, with limited exceptions, measured initially at their fair values at the acquisition date. The Group recognizes any non-controlling interest in the acquired entity on an acquisition-by-acquisition basis either at fair value or at the non-controlling proportionate share of the acquired

Acquisition-related costs are expensed as incurred

The excess of the:

• Consideration transferred;

• Amount of any non-controlling interest in the acquired entity, and

• Acquisition-date fair value of any previous equity interest in the acquired entity

over the fair value of the net identifiable assets acquired is recorded as goodwill. If those amounts are less than the fair value of the net identifiable assets of the business acquired, the difference is recognized in other comprehensive income and accumulated in equity as capital reserve provided there is clear evidence of the underlying reasons for classifying the business combination as a bargain purchase. In other cases, the bargain purchase is recognized directly in equity as capital reserve.

Business combinations involving entities that are controlled by the group are accounted for using the pooling of interest method as follows:

The asset and liabilities of the combining entities are reflected at their carrying amounts. Adjustments are only made to harmonise accounting policies.

The financial information in the financial statements in respect of prior periods is restated as if the business combination had occurred from the beginning of the preceding period in the financial statements, irrespective of the actual date of the combination. However, where the business combination had occurred after that date, the prior period information restated only from that date.

The balance of the retained earnings appearing in the financial statement of the transferor is aggregated with the corresponding balance appearing in the financial statement of the transferee or is adjusted against general reserve.

• The identity of the reserves are preserved and the reserves of the transferor become the reserves of the transferee.
• The difference, if any, between the accounts recorded as share capital issued plus any additional consideration in the form of cash or other assets and the amount of share capital of transferor is transferred to capital reserve and is presented separately from other capital reserves.

(e) Goodwill/ Gain on bargain purchase

Goodwill represents the cost of business acquisition in excess of the Group's interest in the net fair value of identifiable assets, liabilities and contingent liabilities of the acquiree. When the net fair value of the identifiable assets, liabilities and contingent liabilities acquired exceeds the cost of business acquisition, a gain is recognized in the other comprehensive income as gain on bargain purchase. Goodwill is measured at cost less accumulated impairment losses.

(f) Depreciation and amortization

The management estimates the useful lives for the Property, Plant and Equipment as follows:

Assets	Useful lives
Buildings*	25 years
Computers	3 years
Computers - Servers and networks*	3 years
Office equipments	5 years
Plant and equipment*	5 years
Plant and equipment (Windmill)*	20 years
Plant and equipment (Solar Energy System) *	10 years
Furniture and fixtures*	5 years
Vehicles*	5 years

*For these classes of assets, based on a technical evaluation, the management believes that the useful lives as given above best represent the period over which the management expects to use these assets.

Leasehold improvements are amortized over the period of lease or useful life, whichever is lower.

part is determined separately and such asset component is depreciated over its separate useful life.

Intangible assets are amortized on a straight-line basis over their estimated useful lives ranging from 3 to 6 years from the day the asset is made available for use.

Depreciation methods, useful lives and residual values are reviewed periodically.

(g) Borrowing costs

Borrowing cost includes interest and amortization of ancillary costs incurred in connection with the arrangement of borrowings.

Borrowing costs directly attributable to the acquisition, construction or development of an asset that necessarily takes a substantial period of time to get ready for its intended use or sale are capitalized as part of the cost of the respective asset. All other borrowing costs are expensed in the year they occur.

Notes forming part of consolidated financial statements

(h) Leases

The lease asset classes primarily consist of leases for land and office premises. The Group assesses whether a contract contains a lease, at inception of a contract. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration.

To assess whether a contract conveys the right to control the use of an identified asset, the Group assesses whether:

• (i) the contract involves the use of an identified asset
• (ii) the Group has substantially all of the economic benefits from use of the asset through the period of the lease and
• (iii) the Group has the right to direct the use of the asset

Where the Group is a lessee

The Group accounts for each lease component within the contract as a lease separately from non-lease components of the contract and allocates the consideration in the contract to each lease component on the basis of the relative stand-alone price of the lease component and the aggregate stand-alone price of the non-lease components.

The Group recognises right-of-use asset representing its right to use the underlying asset for the lease term at the lease commencement date. The cost of the right-of-use asset measured at inception shall comprise of the amount of the initial measurement of the lease liability adjusted for any lease payments made at or before the commencement date less any lease incentives received, plus any initial direct costs incurred and an estimate of costs to be incurred by the lessee in dismantling and removing the underlying asset or restoring the underlying asset or site on which it is located.

The right-of-use assets is subsequently measured at cost less any accumulated depreciation, accumulated impairment losses, if any and adjusted for any remeasurement of the lease liability. The rightof-use assets is depreciated using the straight-line method from the commencement date over the shorter of lease term or useful life of right-of-use asset. The estimated useful lives of right-of use assets are determined on the same basis as those of property, plant and equipment.

Right-of-use assets are tested for impairment whenever there is any indication that their carrying amounts may not be recoverable. Impairment loss, if any, is recognised in the statement of profit and loss.

The Group measures the lease liability at the present value of the lease payments that are not paid at the commencement date of the lease. The lease payments are discounted using the interest rate implicit in the lease, if that rate can be readily determined. If that rate cannot be readily determined, the Group uses incremental borrowing rate.

The lease payments shall include fixed payments, variable lease payments based on an index or rate, residual value guarantees, exercise price of a purchase option where the Group is reasonably certain to exercise that option and payments of penalties for terminating the lease, if the lease term reflects the lessee exercising an option to terminate the lease.

The lease liability is subsequently remeasured by increasing the carrying amount to reflect interest on the lease liability, reducing the carrying amount to reflect the lease payments made and remeasuring the carrying amount to reflect any reassessment or lease modifications or to reflect revised in-substance fixed lease payments.

When the lease liability is remeasured, the corresponding adjustment is reflected in the right-of-use asset, or statement of profit and loss if the right-of-use asset is already reduced to zero.

The Group has elected not to apply the requirements of Ind AS 116 to short-term leases of all assets that have a lease term of 12 months or less and leases for which the underlying asset is of low value. The lease expenses associated with these leases are recognized in the statement of profit and loss on a straight line basis.

Group as a lessor

At the inception of the lease, the Group classifies each of its leases as either an operating lease or a finance lease. Whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee, the contract is classified as a finance lease. All other leases are classified as operating leases. The Group recognises lease payments received under operating leases as income over the lease term on a straight line basis.

(i) Financial instruments

Initial recognition

The Company recognizes financial assets and financial liabilities when it becomes a party to the contractual provisions of the instrument. All financial assets and liabilities are recognized at fair value on initial recognition, except for trade receivables which are initially measured at transaction price. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities, which are not at fair value through profit or loss, are added to the fair value on initial recognition.

A. Non-derivative financial instruments

Subsequent measurement

i) Financial assets

Financial assets at amortized cost

Financial assets that are held within a business model whose objective is to hold assets for collecting contractual cash flows and whose contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding are subsequently measured at amortized cost using the effective interest rate method. The change in measurements are recognized as finance income in the statement of profit and loss.

Financial assets at fair value through other comprehensive income (FVTOCI)

represent solely payments of principal and interest on the principal amount outstanding are subsequently measured at fair value. Fair value movements are recognized in other comprehensive income.

Financial assets at fair value through profit or loss (FVTPL)

Any financial asset which does not meet the criteria for categorization as financial asset at amortized cost or at FVTOCI, is classified as financial asset at FVTPL. Financial assets except derivative contracts included within the FVTPL category are subsequently measured at fair value with all changes recognized in the statement of profit and loss.

Notes forming part of consolidated financial statements

ii) Financial liabilities

Financial liabilities at amortised cost

Financial liabilities are subsequently carried at amortized cost using the effective interest method, except for contingent consideration recognized in a business combination which is subsequently measured at fair value through profit or loss. For trade and other payables maturing within one year from the Balance Sheet date, the carrying amounts approximate fair value due to the short maturity of these instruments.

Financial liabilities at fair value through profit or loss (FVTPL)

Fair value gains or losses on liabilities designated as FVTPL attributable to changes in own credit risk are recognized in other comprehensive income. All other changes in fair value of liabilities designated as FVTPL are recognized in the statement of profit and loss. The Company has not designated any financial liability as FVTPL.

Investments in subsidiaries, associates and joint ventures

Investment in subsidiaries, associates and joint ventures are carried at cost.

B. Derivative financial instruments

The Company uses derivatives for economic hedging purposes. At the inception of hedging relationship, the Group documents the hedging relationship between the hedging instrument and hedged item including whether the changes in cash flows of the hedging instruments are expected to offset the changes in cash flows of the hedged items. The Company documents its objective and strategy for undertaking its hedging transactions.

Derivatives are initially recognised at fair value on the date a derivative contract is entered and are subsequently re-measured at fair value at each reporting date.

For cash flow hedges that qualify for hedge accounting, the effective portion of fair value of derivatives are recognised in cash flow hedging reserve within equity.

Gains or losses relating to the ineffective portion is immediately recognised in profit or loss.

Amounts accumulated in equity are reclassified to profit or loss in the period when the hedged item affects profit and loss or hedged future cash flows are no longer expected to occur.

Derivatives which do not qualify for hedge accounting are accounted as fair value through profit or loss.

C. Derecognition

The Company derecognizes a financial asset when the contractual rights to the cash flows from the financial asset expire or it transfers the financial asset and the transfer qualifies for derecognition loss that had been recognised in other comprehensive income and accumulated in equity, if any, is recognised in profit or loss, except in case of equity instruments classified as FVOCI, where such cumulative gain or loss is not recycled to statement of profit and loss.

derecognized and the consideration paid and payable is recognised in profit or loss.

D. Fair value of financial instruments

In determining the fair value of its financial instruments, the Company uses a variety of methods and assumptions that are based on market conditions and risks existing at each reporting date. The methods used to determine fair value include discounted cash flow analysis, available quoted market prices, dealer quotes.

For equity instruments of unlisted companies, in limited circumstances, insufficient more recent information is available to measure fair value, or if there are a wide range of possible fair value measurements and cost represents the best estimate of fair value within that range. The Company recognises such equity instruments at cost, which is considered as appropriate estimate of fair value.

All methods of assessing fair value result in general approximation of value, and such value may never actually be realized. Refer to the table on financial instruments by category below for the disclosure on carrying value and fair value of financial assets and liabilities. For financial assets and liabilities maturing within one year from the Balance Sheet date and which are not carried at fair value, the carrying amounts approximate fair value due to the short maturity of these instruments.

E. Impairment of financial assets

The Company applies Expected Credit Loss (ECL) model for measurement and recognition of impairment loss on financial assets measured at amortized cost and financial assets that are debts instruments and are measured at fair value through other comprehensive income (FVTOCI). ECL is the difference between contractual cash flows that are due and the cash flows that the Company expects to receive, discounted at the original effective interest rate.

For trade receivables, the Company recognizes impairment loss allowance based on lifetime ECL at each reporting date, right from its initial recognition. For other financial assets, the Company etermines whether there has been a significant increase in the credit risk since initial recognition. If credit risk has not increased significantly, 12 month ECL is used to provide for impairment loss. However, if credit risk has increased significantly, lifetime ECL is used.

F. Impairment of Non-financial assets

The carrying amounts of Property, Plant and Equipment and Goodwill are reviewed at each balance sheet date or whenever there is any indication of impairment based on internal/external factors. If

In such cases, the recoverable amount is determined for the Cash Generating Unit (CGU) to which the asset belongs. If the recoverable amount of an asset (or CGU) is estimated to be less than its carrying amount, the carrying amount of the asset (or CGU) is reduced to its recoverable amount. The recoverable amount is the greater of the asset's fair value and its value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and risks specific to the asset.

(j) Revenue recognition

Revenues from customer contracts are considered for recognition and measurement when the contract has been approved by the parties to the contract, the parties to the contract are committed to perform their respective obligations under the contract, and the contract is legally enforceable. Revenue is recognized upon transfer of control of promised products or services to customers in an amount that reflects the consideration the Company has received or expects to receive in exchange for these products or services When there is uncertainty as to collectability, revenue recognition is postponed until such uncertainty is resolved. The Company assesses the services promised in a contract and identifies distinct performance obligations in the contract. The Company allocates the transaction price to each distinct performance obligation based on the relative standalone selling price. The price that is regularly charged for an item when sold separately is the best evidence of its standalone selling price. In the absence of such evidence, the primary method used to estimate standalone selling price is the expected cost plus a margin, under which the Company estimates the cost of satisfying the performance obligation and then adds an appropriate margin based on similar services. The contracts may include variable consideration including rebates, volume discounts and penalties. The Company includes variable consideration as part of transaction price when there is a basis to reasonably estimate the amount of the variable consideration and when it is probable that a significant reversal of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is resolved.

(i) Income from software services and products

The company derives revenues primarily from IT services comprising of software development and related services and from the licensing of software products.

Arrangements with customers for software related services are either on a time-and-material or a fixed-price basis.

Revenue on time-and-material contracts are recognized as and when the related services are performed. Revenue from fixed-price contracts, where the performance obligations are satisfied over time and where there is no uncertainty as to measurement or collectability of consideration, is recognized as per the percentage-of-completion method. When there is uncertainty as to measurement or ultimate collectability, revenue recognition is postponed until such uncertainty is resolved.

When support services are provided in conjunction with the licensing arrangement and the license and the support services have been identified as two separate performance obligations, the transaction price for such contracts are allocated to each performance obligation of the contract based on their relative standalone selling prices. Maintenance revenue is recognized proportionately over the period in which the services are rendered.

Revenue from revenue share is recognized in accordance with the terms of the relevant agreements.

Unbilled revenue represents revenue recognized in relation to work done until the balance sheet date for which billing has not taken place.

Unearned revenue represents the billing in respect of contracts for which the revenue is not recognized.

The Company collects Goods and Services Tax on behalf of the government and, therefore, these are not economic benefits flowing to the Company. Hence, they are excluded from revenue.

(ii) Interest

Interest income is recognized on a time proportion basis taking into account the carrying amount and the effective interest rate.

(iii) Dividend

(k) Government grants

Government grants are recognised at fair value when there is reasonable assurance that the Group will comply with the conditions attaching to them and the grants will be received. Grants related to purchase of assets are treated as deferred income and allocated to income statement over the useful lives of the related assets while grants related to expenses are deducted in reporting the related expenses in the income statement.

(l) Foreign currency translation

Foreign currency transactions and balances

Initial recognition

Foreign currency transactions are recorded in the respective functional currencies of the entities in the Group, by applying to the foreign currency amount the exchange rate between the functional currency of each individual entity and the foreign currency at the date of the transaction.

Conversion

Foreign currency monetary items are converted using the exchange rate prevailing at the reporting date. Non-monetary items, which are measured in terms of historical cost denominated in a foreign currency are reported using the exchange rate at the date of the transaction. Non-monetary items which are carried at fair value or other similar valuation denominated in a foreign currency are reported using the exchange rates at the date when the values were determined.

Exchange differences

Exchange differences arising on conversion / settlement of foreign currency monetary items and on foreign currency liabilities relating to Property, Plant and Equipment acquisition are recognized as income or expenses in the year in which they arise.

Translation of foreign operations

The Group presents the financial statements in INR which is the functional currency of the Parent Company.

The assets and liabilities of a foreign operation are translated into the reporting currency (INR) at the exchange rate prevailing at the reporting date. Their statement of profit and loss are translated at exchange rates prevailing at the dates of transactions or weighted average rates, where such rates approximate the exchange rate at the date of transaction. The exchange differences arising on translation are accumulated in the foreign currency translation reserve under other comprehensive income. On disposal of a foreign operation, the accumulated foreign currency translation reserve relating to that foreign operation is recognized in the statement of profit and loss.

(m) Retirement and other employee benefits

(i) Provident fund

Provident fund is a defined contribution plan covering eligible employees. The Parent Company and the eligible employees make a monthly contribution to the provident fund maintained by the Regional Provident Fund Commissioner equal to the specified percentage of the basic salary of the eligible employees as per the scheme. The contributions to the provident fund are charged to the statement of profit and loss for the year when the contributions are due. The Parent Company has no obligation, other than the contribution payable to the provident fund.

(ii) Gratuity

Gratuity is a defined benefit obligation plan operated by Persistent Systems Limited and Persistent Systems Lanka (Private) Limited for their employees covered under Gratuity Scheme. The cost of providing benefit under gratuity plan is determined on the basis of actuarial valuation using the projected unit credit method at the reporting date and are charged to the statement of profit and loss, except for the remeasurements, comprising of actuarial gains and losses which are recognized in full in the statement of other comprehensive income in the reporting period in which they occur. Remeasurements are not reclassified to profit and loss subsequently.

(iii) Superannuation

Superannuation is a defined contribution plan covering eligible employees of the Parent Company. The contribution to the superannuation fund managed by the insurer is equal to the specified percentage of the basic salary of the eligible employees as per the scheme. The contribution to this scheme is charged to the statement of profit and loss on an accrual basis. There are no other contributions payable other than contribution payable to the respective fund.

(iv) Leave encashment

The expected cost of accumulating leave encashment is determined by actuarial valuation performed by an independent actuary at each Balance Sheet date using projected unit credit method on the additional amount expected to be paid / availed as a result of the unused entitlement that has accumulated at the Balance Sheet date. Expense on non-accumulating leave encashment is recognized in the period in which the absences occur.

(v) Long service awards

Long service awards are other long term benefits to all eligible employees, as per policy. The cost of providing benefit under long service awards scheme is determined on the basis of actuarial valuation using the projected unit credit method at the reporting date. Remeasurements, comprising of actuarial gains and losses are recognized in full in the statement of profit and loss.

(n) Income taxes

Tax expense comprises of current and deferred tax. Current income tax is measured at the amount expected to be paid to the tax authorities in accordance with the Income Tax Act, 1961 enacted in India and tax laws prevailing in the respective tax jurisdictions where the Group operates. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted, at the reporting date. Current income tax relating to items recognized directly in equity is recognized in equity and not in statement of profit and loss.

Deferred income taxes reflect the impact of temporary differences between tax base of assets and liabilities and their carrying amounts. Deferred tax is measured based on the tax rates and the tax laws enacted or substantively enacted at the reporting date.

Deferred tax liabilities are recognized for all taxable temporary differences, except deferred tax liability arising from initial recognition of goodwill or an asset or liability in a transaction that is not a business combination and, affects neither accounting nor taxable profit/ loss at the time of transaction. Deferred tax assets are recognized for all deductible temporary differences, the carry forward of unused tax credits and any unused tax losses, except deferred tax assets arising from initial recognition of goodwill or an asset or liability in a transaction that is not a business combination and, affects neither accounting nor taxable profit/ loss at the time of transaction. Deferred tax assets are recognized only to the extent that sufficient future taxable income will be available against which such deferred tax assets can be realized.

In the situations where the Group is entitled to a tax holiday under the Income-tax Act, 1961 enacted in India or tax laws prevailing in the respective tax jurisdictions where it operates, no deferred tax (asset or liability) is recognized in respect of temporary differences which reverse during the tax holiday period, to the extent the gross total income is subject to the deduction during the tax holiday period. Deferred tax in respect of temporary differences which reverse after the tax holiday period is recognized in the year in which the temporary differences originate.

The carrying amount of deferred tax asset is reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available against which such deferred tax assets can be realized.

Deferred tax assets and deferred tax liabilities are offset, if a legally enforceable right exists to set off current tax assets against current tax liabilities and the deferred tax assets and deferred tax liabilities relate to the same taxable entity and the same taxation authority.

Deferred tax relating to items recognized outside the statement of profit and loss is recognized in co-relation to the underlying transaction either in other comprehensive income or directly in equity.

Notes forming part of consolidated financial statements

Minimum alternate tax (MAT) paid in a year is charged to the statement of profit and loss as current tax. MAT credit available is recognized as an asset only to the extent that there is convincing evidence that the Group will pay normal income tax during the period, i.e., the period for which MAT credit is allowed to be carried forward. In the year in which the Group recognizes MAT credit as an asset in accordance with the Guidance Note on Accounting for Credit Available in respect of Minimum Alternative Tax under the Income-tax Act, 1961, the said asset is created by way of credit to the statement of profit and loss and shown as Credit The Group reviews the credit asset at each reporting date and writes down the asset to the extent the Group does not have convincing evidence that it will pay normal tax during the specified period.

(o) Segment reporting

(i) Identification of segment

The components of the Group that engage in business activities from which they earn revenue and incur expenses, whose operating results are regularly reviewed by the Chief Operating Decision Maker are identified as operating segments.

(ii) Allocation of income and direct expenses

Income and direct expenses allocable to segments are classified based on items that are individually identifiable to that segment such as salaries, project related travel expenses etc. The remainder is considered as un-allocable expense and is charged against the total income.

(iii) Unallocated items

Unallocated items include general corporate income and expense items which are not allocated to any business segment.

Segregation of assets, liabilities, depreciation and amortization and other non-cash expenses into various reportable segments have not been presented except for trade receivables and unbilled revenue as these items are used interchangeably among segments and the Group is of the view that it is not practical to reasonably allocate these items to individual segments and an ad-hoc allocation will not be meaningful.

(iv) Inter-segment transfers

There are no inter-segments transactions.

(v) Segment accounting policies

The Group prepares its segment information in conformity with accounting policies for preparing and presenting the financial statements of the Group as a whole.

(p) Earnings per share (EPS)

Basic earnings per share are calculated by dividing the net profit for the year attributable to equity shareholders by the weighted average number of equity shares outstanding during the year. The weighted average number of equity shares outstanding during the reporting period is adjusted for events such as bonus issue, bonus element in a rights issue, share split, and reverse share split (consolidation of shares), if any occurred during the reporting period, that have changed the number of equity shares outstanding, without a corresponding change in resources.

For the purpose of calculating diluted earnings per share, the net profit for the year attributable to the equity shareholders and the weighted average number of equity shares outstanding during the year, are adjusted for the effects of all dilutive potential equity shares.

The number of shares and potential dilutive equity shares are adjusted retrospectively for all periods presented for any bonus shares issues including for changes effected prior to the approval of the financial statements by the Board of Directors.

(q) Provisions

A provision is recognized when the Group has a present obligation as a result of past event; it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation, in respect of which a reliable estimate can be made. Provisions are determined based on the best estimate of the amount required to settle the obligation at the reporting date. If the effect of time value of money is material, provisions are discounted using a current pre-tax rate that reflects the risks specific to the liability. These estimates are reviewed at each balance sheet date and adjusted to reflect the current best estimates.

(r) Contingent liabilities

A contingent liability is a possible obligation that arises from past events whose existence will be confirmed by the occurrence or non-occurrence of one or more uncertain future events beyond the control of the Group or a present obligation that is not recognized because it is not probable that an outflow of resources will be required to settle the obligation. A contingent liability also arises in extremely rare cases where there is a liability that cannot be recognized because it cannot be measured reliably.

(s) Cash and cash equivalents

Cash and cash equivalents in the cash flow statement comprises of cash at bank, cash in hand and short term deposits with an original maturity period of three months or less. (This space is intentionally left blank)

Notes forming part of consolidated financial statements

(t) Employee stock compensation expenses

Employees of the Group receive remuneration in the form of share based payment transactions, whereby employees render services as consideration for equity instruments granted (equity-settled transactions).

In accordance with Ind AS 102 Based the cost of equity-settled transactions is determined by the fair value of the options at the date of the grant and recognized as employee compensation cost over the vesting period. The cumulative expense recognized for equity-settled transactions at each reporting date until the vesting date reflects the extent to which the vesting period

The expense or credit recognized in the statement of profit and loss for a year represents the movement in cumulative expense recognized as at the beginning and end of that year and is recognized in employee benefits expense. In case of the employee stock option schemes having a graded vesting schedule, each vesting tranche having different vesting period has been considered as a separate option grant and accounted for accordingly.

Where the terms of an equity-settled transaction award are modified, the minimum expense recognized is the expense as if the terms had not been modified, if the original terms of the award are met. An additional expense is recognized for any modification that increases the total fair value of the share-based payment transaction or is otherwise beneficial to the employee as measured at the date of modification.

The employee stock option expenses in respect of the employees of the subsidiaries are charged to the respective subsidiary.

(u) Equity

Ordinary shares are classified as equity share capital. Incremental costs directly attributable to the issuance of new ordinary shares, share options and buyback are recognized as a deduction from equity, net of any tax effects.

(v) Dividend

Directors.

Notes forming part of consolidated financial statements

5 Share capital

	As at March 31, 2021	As at March 31, 2020
Authorized shares (No. in million)
200 (Previous year: 200) equity shares of 10 each	2,000.00	2,000.00
	2,000.00	2,000.00
Issued, subscribed and fully paid-up shares (No. in million)
76.43 (Previous year: 76.43) equity shares of 10 each	764.25	764.25
Issued, subscribed and fully paid-up share capital	764.25	764.25

a) Reconciliation of the shares outstanding at the beginning and at the end of the year

The reconciliation of the number of shares outstanding and the amount of share capital is set out below:

				(In Million)
	As at		As at
	March 31, 2021				March 31, 2020
	No of shares		No of shares
Number of shares at the beginning of the year	76.43	764.25	79.12	791.19
Less: Shares bought back	-	-	2.69	26.94
Number of shares at the end of the year	76.43	764.25	76.43	764.25

b) Terms / rights attached to equity shares

The Group has only one class of equity shares having a par value of 10 per share. Each holder of equity shares is entitled to one vote per share. The Group declares and pays dividends in Indian rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting.

The Parent Company declares and pays dividends in Indian rupees. The Finance Act, 2020 in India has repealed Dividend Distribution Tax (DDT). The Companies are now required to pay/ distribute dividend after deducting applicable taxes. The remittance of dividends outside India is governed by Indian law on foreign exchange and is also subject to withholding tax at applicable rates as per Finance Act, 2020.

In the event of liquidation of the Parent Company, the holders of equity shares will be entitled to receive remaining assets of the Parent Company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

c) Aggregate number of bonus shares issued, shares issued for consideration other than cash and shares bought back during the period of five years immediately preceding the reporting date

	For the period of five years ended March 31, 2021 No in Million	For the period of five years ended March 31, 2020 No in Million
Equity shares allotted on March 12, 2015 as fully paid bonus shares by	-	40.000
400 million
Equity shares bought back	3.575	3.575

d) Buyback of Equity Shares of the Parent Company:

The Board of Directors, at its meeting in January 2019, had approved the buyback of the Parent fully paid-up equity shares of the face value of 10 each from its shareholders/beneficial owners excluding promoters, promoter group and persons who are in control of the Parent Company, via the route through the stock exchanges, for a total amount not exceeding 2,250 million Buyback and at a price not

The buyback was offered to all eligible equity shareholders of the Parent Company (other than the Promoters, the Promoter Group and Persons in Control of the Group) under the open market route through the stock exchanges. The buyback of equity shares through the stock exchange commenced on February 8, 2019 and was completed on June 27, 2019. During this buyback period the Parent Company had purchased and extinguished a total of 3,575,000 equity shares from the stock exchange at an average buy back price of per equity share comprising 4.47% of the pre buyback paid-up equity share capital of the Parent Company. The buyback resulted in a cash outflow of million (excluding transaction costs). The Parent Company funded the buyback from utilization of its securities premium and free reserves. The total number of equity shares outstanding post buyback stands at 76,425,000.

e) Details of shareholders holding more than 5% shares in the Group

Name of the shareholder*	As at March 31, 2021		As at March 31, 2020
	No. in million	% Holding	No. in million	% Holding
Dr. Anand Deshpande jointly with Mrs. Sonali Anand Deshpande	22.96	30.04	22.96	30.04
Schemes of HDFC Mutual Fund	5.37	7.03	6.53	8.54

* The shareholding information is based on legal ownership of shares and has been extracted from the records of the Group including register of shareholders / members.

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(18.53) (19.30) 161.59 139.85 7,370.07 659.43 35.33 5,145.47 28.33 468.66 2,401.40 2,224.60 7,884.71 5,483.31 Total 7.24 4.05 2.26 Vehicles 7.24 0.93 4.98 3.19 - - - - - - - Furniture and 693.12 36.27 7.20 35.39 1.40 699.80 2.30 41.53 31.23 1.83 654.28 45.52 643.51 49.61 fixtures - - 45.92 2.18 44.29 5.79 2.94 1.48 39.84 4.45 improvements 3.81 35.51 10.41 Leasehold - - - 39.87 1,416.28 0.05 36.56 191.77 0.12 1,206.20 54.40 0.42 1,399.41 56.41 0.21 1,224.51 193.21 Plant and equipment (1.32) (0.86) 93.20 6.17 0.69 2.23 80.57 0.34 8.38 2.02 10.10 12.63 96.51 86.41 equipments Office (21.12) (19.28) 2,092.05 2,289.84 653.75 2,457.77 27.32 80.29 2,943.59 25.64 258.53 67.10 365.72 559.91 Computers Buildings 1,271.64 2,452.04 0.67 2.38 2,455.09 1,083.58 99.10 0.77 1,183.45 1,368.46 - - - - Freehold 221.37 0.54 221.37 221.91 221.91 Land - - - - - - - - - - Effect of foreign currency translation from functional currency to reporting currency Effect of foreign currency translation from functional currency to reporting currency Note: Buildings include those constructed on leasehold land: Additions through business combination (refer note 45) Additions through business combination (refer note 45) 6.1 Property, plant and equipment Accumulated Depreciation Gross block (At cost) As at March 31, 2020 As at March 31, 2021 As at March 31, 2021 As at March 31, 2021 Charge for the year As at April 1, 2020 As at April 1, 2020 Net block Disposals Disposals Additions	499.03 million)

5,058.95 453.35 7,390.19 319.10 64.50 7,370.07 404.54 35.96 5,145.47 2,224.60 409.01 7.24 4.05 8.44 1.20 4.23 1.02 1.20 3.19 - - - - - and fixtures 679.87 7.45 10.79 693.12 44.88 7.30 8.62 643.51 49.61 9.91 597.31 - - (1.88) (1.26) improvements 94.23 46.43 45.92 76.58 6.62 46.43 35.51 10.41 - - - 1,408.24 14.38 0.06 25.10 1.83 1,166.93 0.06 59.02 20.78 0.97 1,206.20 1,399.41 193.21 equipment equipments 89.63 0.40 0.03 3.20 93.20 70.13 8.16 0.03 80.57 12.63 2.31 - - Computers 2,441.59 5.23 328.80 45.64 2,457.77 2,160.36 1.69 234.72 328.80 24.08 2,092.05 365.72 294.11 Buildings 2,447.72 0.30 4.02 2,452.04 98.93 1.24 1,083.58 1,368.46 983.41 - - - - 220.47 0.90 221.37 221.37 Freehold - - - - - - - - - Effect of foreign currency translation from functional currency Effect of foreign currency translation from functional currency Gross block (At cost) Charge for the year As at April 1, 2019 Net block Disposals Disposals
Additions through business combination Additions through business combination Accumulated Depreciation As at March 31, 2020 As at March 31, 2020 As at March 31, 2020 to reporting currency to reporting currency As at April 1, 2019 Additions
4.21 82.56 17.65 241.31 19.50 281.23 220.47
2,331.24 1,464.31 As at March 31, 2019

Notes forming part of consolidated financial statements

6.2 Right-of-use assets

	Leasehold Land	Office premises	Total
Gross block (At cost)	37.50
As at April 1, 2020	-	796.75	834.25
Additions during the period		584.67 2.52	584.67
Acquistion Disposals	-	165.16	2.52 165.16
Effect of foreign currency translation of foreign operations from functional currency to	-	(10.65)	(10.65)
reporting currency
As at March 31, 2021	37.50	1,208.13	1,245.63
Accumulated Depreciation
As at April 1, 2020	0.60	266.84	267.44
Acquistion		0.10	0.10
Charge for the year	0.58	250.88	251.46
Disposals	-	121.83	121.83
Effect of foreign currency translation of foreign operations from functional currency to reporting currency	-	(4.12)	(4.12)
As at March 31, 2021	1.18	391.87	393.05
Net block As at March 31, 2021	36.32	816.26	852.58
As at March 31, 2020	36.90	529.91	566.81
	Leasehold Land	Office premises	Total
Gross block (At cost)
As at April 1, 2019	-	-	-
Additions (Transitional impact on adoption of Ind AS 116)	37.50	722.51	760.01
Additions during the period	-	77.80	77.80
Disposals	-	9.35	9.35
Effect of foreign currency translation of foreign operations from functional currency to	-	5.79	5.79
reporting currency
As at March 31, 2020	37.50	796.75	834.25
Accumulated Depreciation
As at April 1, 2019	-	-	-
Charge for the year	0.60	260.73	261.33
Disposals	-	1.12	1.12
Effect of foreign currency translation of foreign operations from functional currency to	-	7.23	7.23
reporting currency
As at March 31, 2020	0.60	266.84	267.44
Net block
As at March 31, 2020	36.90	529.91	566.81

6.3 Goodwill
	As at	As at
	March 31, 2021	March 31, 2020
Cost
Balance at beginning of year	88.94	81.24
Effect of foreign currency translation of foreign operations from	(3.00)	7.70
functional currency to reporting currency
Balance at end of year	85.94	88.94

Notes forming part of consolidated financial statements

6.4 Other Intangible assets

	Software	Acquired	Total
		contractual rights
Gross block
As at April 1, 2020	2,779.57	5,214.42	7,993.99
Additions	185.76	256.64	442.40
Additions through business combination	-	363.16	363.16
Disposals	2.94		2.94
Effect of foreign currency translation from functional currency to reporting currency	(49.62)	(89.29)	(138.91)
As at March 31, 2021	2,912.77	5,744.93	8,657.70
Accumulated Amortization
As at April 1, 2020	2,732.72	3,826.34	6,559.06
Charge for the period	59.74	975.64	1,035.38
Disposals	2.89		2.89
Effect of foreign currency translation from functional currency to reporting currency	(52.77)	(110.58)	(163.35)
As at March 31, 2021	2,736.80	4,691.40	7,428.20
Net block
As at March 31, 2021	175.97	1,053.53	1,229.50
As at March 31, 2020	46.85	1,388.08	1,434.93

	Software	Acquired contractual	Total
		rights
Gross block
As at April 1, 2019	2,575.58	4,208.58	6,784.16
Additions	30.88	97.75	128.63
Additions through business combination	-	527.31	527.31
Effect of foreign currency translation from functional currency to reporting currency	173.11	380.78	553.89
As at March 31, 2020	2,779.57	5,214.42	7,993.99
Accumulated Amortization
As at April 1, 2019	2,479.52	2,709.23	5,188.75
Charge for the year	80.84	864.10	944.94
Effect of foreign currency translation from functional currency to reporting currency	172.36	253.01	425.37
As at March 31, 2020	2,732.72	3,826.34	6,559.06
Net block
As at March 31, 2020	46.85	1,388.08	1,434.93
As at March 31, 2019	96.06	1,499.35	1,595.41
6.5 Depreciation and amortization
			For the year ended

	March 31, 2021	March 31, 2020
On Property, Plant and Equipment	468.66	453.35
On Right of Use assets	251.46	261.33
On Other Intangible assets	1,035.38	944.94
	1,755.50	1,659.62

Notes forming part of consolidated financial statements

1. Non-current financial assets : Investments (refer note 32)

	As at March 31, 2021	As at March 31, 2020
Investments carried under equity accounting method
Unquoted Investments Investments in equity instruments In associates
Klisma e-Services Private Limited [Holding 50%. (Previous year 50%)]
	0.05	0.05
Add / (less) : Change in fair value of investment	(0.05) -	(0.05) -
Total investments carried equity accounting method (A)	-	-
Investments carried at amortised cost
Quoted Investments In bonds	2,557.92	2,171.52
Add: Interest accrued on bonds	72.88	68.69
Total investments carried at amortised cost (B)	2,630.80	2,240.21
Designated as fair value through profit and loss Quoted Investments
- Investments in mutual funds Fair value of long term mutual funds (refer Note 7a)	806.99	2,174.51
	806.99	2,174.51
Unquoted Investments Investments in Common Stocks / Preferred Stocks
- Others*
Ciqual Limited [Holding 2.38% (Previous year 2.38%)] 0.04 million (Previous year : 0.04 million) shares of GBP 0.01 each, fully paid up	14.73	14.36
Add / (less) : Change in fair value of investment	(14.73)	(14.36)
	-	-
Altizon Systems Private Limited	6.00	6.00
	6.00	6.00
Hygenx Inc.	14.62	15.13
0.25 million (Previous year : 0.25 million) Preferred stock of \$ 0.001 each, fully paid
up Add / (less) : Change in fair value of investment	(14.62)	(15.13)
	-	-
OpsDataStore Inc.	14.62	15.13
0.20 million (Previous year : 0.20 million) Preferred stock of \$ 0.001 each, fully paid
up Add / (less) : Change in fair value of investment	(14.62)	(15.13)
	-	-
Trunomi Inc. 0.28 million (Previous year : 0.28 million) Preferred stock of \$ 0.0002 each, fully paid up	18.28	18.92
Ampool Inc. 0.55 million (Previous year : 0.55 million) Preferred stock of \$ 0.4583 each, fully paid	18.28	18.92
up
Add / (less) : Change in fair value of investment	(18.28)	-
	-	18.92
Cazena Inc. 0.59 million Common Stock of \$ 0.0001 each (Previous year: 0.59 million Preferred	146.22	151.33
Stock of \$ 0.0001 each), fully paid up	164.50	189.17

Notes forming part of consolidated financial statements

1. Non-current financial assets : Investments (refer note 32) (contd)

	As at March 31, 2021	As at March 31, 2020
DxNow 169,975 Preferred Shares fully paid up (Previous year : 1 convertible note of USD	9.14	9.46
125,000 each, fully paid up
Add / (less) : Change in fair value of investment	(9.14) -	(9.46) -
Akumina Inc. 400,667 Preference shares of \$ 0.443 each (Previous year : 1 convertible note of USD 146,429 each, fully paid up)	12.98	11.08
	12.98	11.08
- Investments in Convertible Notes Ustyme	18.28	18.92
1 (Previous year : 1) convertible note of USD 250,000 each, fully paid up
Add / (less) : Change in fair value of investment	(18.28)	(18.92)
	-	-
Total Investments carried at Fair Value (C)	990.47	2,380.76
Total investments (A) + (B) + (C)	3,621.27	4,620.97
Aggregate amount of impairment in value / change in fair value of investments	89.72	73.05
Aggregate amount of quoted investments Aggregate amount of unquoted investments	3,437.79 273.20	4,414.72 279.30

* Investments, where the Group does not have joint-control or significant influence including situations where such jointcontrol or significant influence is intended to be temporary, are classified as "investments in others".

Notes forming part of consolidated financial statements

7 a) Details of fair value of investment in long term mutual funds (Quoted)

	As at March 31, 2021	As at March 31, 2020
Axis Mutual Fund	400.50	898.93
IDFC Mutual Fund	370.31	630.06
Sundaram Mutual Fund	36.18	33.15
ICICI Prudential Mutual Fund	-	141.38
Kotak Mutual Fund	-	105.86
UTI Mutual Fund	-	105.73
Aditya Birla Sun Life Mutual Fund	-	82.65
SBI Mutual Fund	-	71.06
HDFC Mutual Fund	-	35.66
PGIM India Mutual Fund (formerly known as DHFL Pramerica Mutual Fund)	-	35.03
DSP Mutual Fund	-	35.00
	806.99	2,174.51

Notes forming part of consolidated financial statements

1. Non-current financial assets : Loans (refer note 32)

	As at	As at
	March 31, 2021	March 31, 2020
Carried at amortised cost
Security deposits
Unsecured, considered good	134.76	176.13
	134.76	176.13
Other loans and advances
Unsecured, considered good - Deposits	-	-
Unsecured, credit impaired	23.63	0.58
	23.63	0.58
Less: Impairment of non-current loans	(23.63)	(0.58)
	-	-
	134.76	176.13

9. Other non-current financial assets (refer note 32)

	As at	As at
	March 31, 2021	March 31, 2020
Non-current bank balances (refer note 15)	24.42	344.55
Add: Interest accrued but not due on non-current bank deposits	1.34	14.38
(refer note 15)
Non-current deposits with banks (Carried at amortised cost)	25.76	358.93
Deposits with financial institutions	430.00	430.00
Add: Interest accrued on deposit with financial institutions	0.98	0.98
Less: Credit impaired (refer note 47)	(430.98)	(430.98)
	-	-
	25.76	358.93

10. Deferred tax asset (net) *

	As at March 31, 2021	As at March 31, 2020
Deferred tax liabilities
Differences in book values and tax base values of block of Property, plant and equipment and intangible assets	-	120.96
Capital gains	61.06	76.67
Others	66.47	21.63
	127.53	219.26
Deferred tax assets
Provision for leave encashment	184.65	127.70
Provision for long service awards	117.05	83.27
Provision for expected credit loss	93.49	62.50
Provision for gratuity	-	2.86
Differences in book values and tax base values of block of Property, Plant and Equipment and intangible assets	63.43	91.81
Brought forward and current year losses	43.77	112.94
Tax credits	435.71	328.80
Difference in Book values and tax base values of ROU asset and Lease liability	31.74	37.29
Stock Option	40.28	-
Others	154.98	332.17
	1,165.10	1,179.34
Deferred tax liabilities after set off	-	-
Deferred tax assets after set off	1,037.57	960.08

* Deferred tax assets and deferred tax liabilities have been offset wherever the Group has a legally enforceable right to set off current tax assets against current tax liabilities and where the deferred tax assets and deferred tax liabilities relate to income taxes levied by the same taxation authority. In all other cases the same have been separately disclosed.

11. Other non-current assets

	As at March 31, 2021	As at March 31, 2020
Capital advances (Unsecured, considered good)	60.54	27.14
Balances with government authorities (refer note 43 (c) )	296.55	296.55
Advances recoverable in cash or kind or for value to be received	84.43	7.62
	441.52	331.31

Notes forming part of consolidated financial statements

1. Current financial assets : Investments (refer note 32)

	As at	As at
	March 31, 2021	March 31, 2020
Designated as fair value through profit and loss - Quoted investments
Investments in mutual funds
Fair value of current mutual funds (refer Note 12a)	6,374.95	5,164.77
	6,374.95	5,164.77
Total carrying amount of investments	6,374.95	5,164.77
Aggregate amount of quoted investments Aggregate amount of unquoted investments	6,374.95 -	5,164.77 -

12 (a) Details of fair value of current investment in mutual funds (Quoted)

	As at	As at
	March 31, 2021	March 31, 2020
Aditya Birla Sun Life Mutual Fund	1,011.03	973.04
HDFC Mutual Fund	963.10	185.88
IDFC Mutual Fund	911.72	640.78
Axis Mutual Fund	824.68	396.02
UTI Mutual Fund	723.19	809.46
ICICI Prudential Mutual Fund	710.33	940.50
L&T Mutual Fund	511.71	734.90
Kotak Mutual Fund	478.21	421.51
SBI Mutual Fund	166.36	-
DSP Mutual Fund	37.38	-
PGIM India Mutual Fund (formerly known as DHFL Pramerica Mutual Fund)	37.24	-
Nippon India Mutual Fund (formerly known as Reliance Mutual Fund)	-	62.68
	6,374.95	5,164.77

Notes forming part of consolidated financial statements

13. Trade receivables (refer note 32)

	As at	As at
	March 31, 2021	March 31, 2020
Unsecured, considered good	5,708.97	5,921.96
Unsecured, credit impaired	271.64	242.13
	5,980.61	6,164.09
Less : Allowance for expected credit loss	(271.64)	(242.13)
	5,708.97	5,921.96
	5,708.97	5,921.96

14. Cash and cash equivalents (refer note 32)

	As at
	March 31, 2021	March 31, 2020
Cash and cash equivalents as presented in cash flow statement
Cash in hand	0.41	0.24
Balances with banks
On current accounts #	1,583.20	1,566.06
On saving accounts	1.33	0.36
On Exchange Earner's Foreign Currency accounts	208.57	261.86
On deposit accounts with original maturity less than three months	625.79	71.47
	2,419.30	1,899.99

6.62 million) only towards certain predefined activities specified in the agreement.

15. Other bank balances (refer note 32)

	As at		As at
	March 31, 2021	March 31, 2020
Deposits with banks*	7,108.47	2,909.58
Add: Interest accrued but not due on deposits with banks	303.99	117.49
Deposits with banks (carried at amortised cost)	7,412.46	3,027.07
Less: Deposits with maturity more than twelve months from the balance sheet date disclosed under other non-current financial assets (refer note 9)	(24.42)	(344.55)
Less: Interest accrued but not due on non-current deposits with banks (refer note 9)	(1.34)	(14.38)
	7,386.70	2,668.14
Balances with banks on unpaid dividend accounts** - Earmarked balances with banks	3.00	4.05
	7,389.70	2,672.19

facilities and bank guarantees availed by the Group.

** The Group can utilize these balances only towards settlement of the respective unpaid dividend.

Notes forming part of consolidated financial statements

16. Current financial assets : Loans (refer note 32)

	As at	As at
	March 31, 2021	March 31, 2020
Carried at amortised cost		-
Loan to related parties (Unsecured, credit impaired)
Unsecured, considered good - Deposits Long term	-	-
Klisma e-Services Private Limited	27.43	27.43
	27.43	27.43
Less: Impairment of current loans	(27.43)	(27.43)
	-	-
Loan to others (Unsecured, considered good)
LHS Solution Inc.	21.90	-
Interest accrued but not due at amortised cost	1.72	-
Less: Impairment	(23.62)	-
	-	-
Other advances	21.79	-
Security deposits
Unsecured, considered good - Deposits Long term	49.47	13.71
	71.26	13.71

1. Other current financial assets (refer note 32)

	As at	As at
	March 31, 2021	March 31, 2020
Fair value of derivatives designated as hedging instruments
Forward contracts receivable	294.46	-
Advances to related parties (Unsecured, credit impaired)
Unsecured, credit impaired	0.81	0.81
Less: Impairment of current financial assets	(0.81)	(0.81)
	-	-
Unbilled revenue	2,172.77	2,068.54
	2,467.23	2,068.54

18. Other current assets	As at	As at
	March 31, 2021	March 31, 2020
Advances to suppliers (Unsecured, considered good)
Advances recoverable in cash or kind or for value to be received	815.19	931.97
Excess fund balance with Life Insurance Corporation (refer note 31)	113.08	128.54
Other advances (Unsecured, considered good)
VAT receivable (net)	97.19	31.50
Service tax and GST receivable (net) (refer note 43)	1,058.26	858.51
	1,155.45	890.01
	2,083.72	1,950.52

Notes forming part of consolidated financial statements

19. Non-current financial liabilities : Borrowings (refer note 32)

	As at	As at
		March 31, 2021 March 31, 2020
Unsecured Borrowings carried at amortised cost
Term loans
Indian rupee loan from others	7.39	11.93
Interest accrued but not due on term loans	0.11	0.18
Foreign currency loan from others	38.73	39.14
	46.23	51.25
Less: Current maturity of long-term borrowings transferred to other current financial liabilities (refer note 23)	(1.85)	(4.85)
Less: Current maturity of interest accrued but not due on term loan transferred to other current financial liabilities (refer note 23)	(0.11)	(0.18)
	(1.96)	(5.03)
	44.27	46.22

The term loans from Government departments have the following terms and conditions:

Loan I - amounting to 7.39 million (Previous year 9.24 million) with Interest payable @ 3% per annum repayable in ten equal annual installments over a period of ten years commencing from October 2015.

Loan II - amounting to 38.73 million (Previous year 39.14). The interest free loan is given under a Covid-19 scheme for medium and small scale Industries by the Government of Switzerland to a subsidiary company with a repayment period of five years from March 2020.

Loan III - amounting to Nil (Previous year 2.69 million) with interest payable @ 2% per annum has been guaranteed by a bank guarantee by the Group and was repayable in ten equal semi annual installments over a period of five years commencing from September 2016.

20. Lease liabilities (refer note 35)

	As at	As at
	March 31, 2021 March 31, 2020
Lease liabilities	938.17	662.42
Less: Current portion of lease liabilities	(222.00)	(309.06)
	716.17	353.36
Movement of lease liabilities
	For the year ended
	March 31, 2021 March 31, 2020
Opening balance	662.42	-
Additions (Transitional impact on adoption of Ind AS 116)	-	811.10
Additions	587.19	77.80
Deletions	(43.33)	-
Add: Interest recognised during the year	57.53	61.22
Less: Payments made	(319.11)	(287.70)
Translation differences	(6.53)	-
Closing balance	938.17	662.42

1. Non current liabilities : Provisions

	As at	As at
		March 31, 2021 March 31, 2020
Provision for employee benefits
- Long service awards	240.94	182.79
	240.94	182.79

22. Trade payables (refer note 32)

	As at	As at March 31, 2021 March 31, 2020
Trade payables for goods and services	2,733.44	2,247.09
	2,733.44	2,247.09

Disclosure of payable to vendors as defined under the Small and Medium Enterprise Development Act, is based on the information available with the Parent Company regarding the status of registration of such vendors under the said Act, as per the intimation received from them on requests made by the Parent Company. There are no overdue principal amounts / interest payable amounts for delayed payments to such vendors at the Balance Sheet date. There are no delays in payment made to such suppliers during the period or for any earlier years and accordingly there is no interest paid or outstanding interest in this regard in respect of payment made during the period or on balance brought forward from previous year.

Notes forming part of consolidated financial statements

23. Other current financial liabilities (refer note 32)

	As at	As at
		March 31, 2021 March 31, 2020
Capital creditors	237.83	36.24
Current maturity of long-term borrowings (refer note 19)	1.85	4.85
Current maturity of interest on long-term borrowings (refer note 19)	0.11	0.18
Accrued employee liabilities	127.50	421.17
Unpaid dividend*	3.00	4.05
Other liabilities	7.96	7.96
Payable to selling shareholders	11.92	-
Fair value of derivatives designated as hedging instruments
Forward contracts payable	-	387.89
	390.17	862.34

* Unpaid dividend is transferred to Investor Education and Protection Fund as and when due.

24.Other current liabilities

	As at	As at
		March 31, 2021 March 31, 2020
Unearned revenue	966.07	887.20
Advance from customers	93.67	264.82
Other payables
- Statutory liabilities	296.20	157.19
- Other liabilities*	159.01	10.92
	1,514.95	1,320.13

agreement.

25. Current liabilities : Provisions

	As at	As at
		March 31, 2021 March 31, 2020
Provision for employee benefits
- Gratuity (refer note 31)	37.78	20.41
- Leave encashment	815.28	638.05
- Long service awards - Short term provisions	17.19	21.35
- Other employee benefits	1,607.54	931.18
	2,477.79	1,610.99

Notes forming part of consolidated financial statements

1. Revenue from operations (net)

	For the year ended
	March 31, 2021	March 31, 2020
Software services	40,158.83	34,494.34
Software licenses	1,720.05	1,163.74
	41,878.88	35,658.08

The table below presents disaggregated revenues from contracts with customers by segments, geography and type. The Group believes 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.

	For the year ended March 31, 2021	For the year ended March 31, 2020
Revenue by industry segments
BFSI	12,857.05	10,506.77
Healthcare & Life Sciences	8,104.24	6,719.15
Technology Companies and Emerging Verticals	20,917.59	18,432.16
Total	41,878.88	35,658.08
Geographical disclosure
India	3,512.59	2,657.29
North America	33,861.61	28,891.15
Rest of the World	4,504.68	4,109.64
Total	41,878.88	35,658.08
Customers' Industry wise disclosure
IP Led	18,986.36	14,148.50
Offshore	15,925.78	14,247.31
Onsite	6,966.74	7,262.27
Total	41,878.88	35,658.08

The remaining performance obligation disclosure provides the aggregate amount of the transaction price yet to be recognized as at the end of the reporting period and an explanation as to when the Company expects to recognize these amounts in revenue. Applying the practical expedient as given in Ind AS 115, the Company has not disclosed the remaining performance obligation-related disclosures for contracts where the revenue recognized corresponds directly with the value to the customer of the performance completed to date, typically those contracts where invoicing is on time and material and unit of work-based contracts. Remaining performance obligation estimates are subject to change and are affected by several factors, including terminations, changes in the scope of contracts, periodic revalidations, adjustment for revenue that has not materialized and adjustments for currency.

While disclosing the aggregate amount of transaction price yet to be recognised as revenue towards unsatisfied (or partially) satisfied performance obligations, along with the broad time band for the expected time to recognize those revenues, the Group has applied the practical expedient in Ind AS 115. Accordingly, the Group has not disclosed the aggregate transaction price allocated to unsatisfied (or partially satisfied) performance obligations which pertain to contracts where revenue recognised corresponds to the value transferred to customer typically involving time and material, outcome based and event based contracts.

During the year, 1,991.99 million (Previous Year: 1,721.62 million) of opening unbilled revenue has been reclassified to trade receivables upon billing to customers on completion of milestones. In addition to that, 113.49 million (Previous year - Nil) has been reversed in to revenue from operations in current year.

During the year, the Company recognised revenue of 799.81 million (Previous Year: 822.73 million) arising from opening unearned revenue.

In respect of the contracts wherein the transaction price is in the form of revenue share, the estimated revenue for the customer is considered based on the historical trends and management judgement with respect to customer business. The estimated revenue from these contracts included in the total revenue for the year is 923.81 million (Previous Year: 1,016.80 million).

Notes forming part of consolidated financial statements

27. Other income

	For the year ended
	March 31, 2021	March 31, 2020
Interest income
On deposits carried at amortised cost	388.77	389.59
On Others	169.93	155.69
Foreign exchange gain (net)	33.81	364.35
Profit on sale of Property, Plant and Equipment (net)	1.34	-
Dividend income from investments	-	13.98
Profit on sale of investments (net)	478.13	164.81
Net gain/(loss) arising on financial assets designated as FVTPL	(131.39)	119.02
Excess provision in respect of earlier years written back	41.79	6.95
Miscellaneous income	95.34	109.38
	1,077.72	1,323.77

28. Personnel expenses

	For the year ended
	March 31, 2021	March 31, 2020
28.1 Employee benefits expense
Salaries, wages and bonus	22,852.56	19,594.62
Contribution to provident and other funds (refer note 31)	1,528.58	1,199.20
Staff welfare and benefits	486.41	525.79
Share based payments to employees (refer note 37)	290.44	236.79
	25,157.99	21,556.40
28.2 Cost of professionals	5,563.68	3,918.94
	30,721.67	25,475.34

Notes forming part of consolidated financial statements

1. Other expenses

	For the year ended
	March 31, 2021	March 31, 2020
Travelling and conveyance	173.62	936.86
Electricity expenses (net)	82.58	114.94
Internet link expenses	70.86	73.30
Communication expenses	102.18	105.72
Recruitment expenses	135.10	128.80
Training and seminars	57.36	34.63
Royalty expenses	94.83	76.82
Purchase of software licenses	1,855.62	1,724.51
Bad debts	90.30	-
Provision for expected credit loss (net)	31.32	83.86
Rent (refer note 35)	140.89	135.25
Insurance	40.01	34.49
Rates and taxes	87.86	88.07
Legal and professional fees	514.81	517.13
Repairs and maintenance
- Plant and Machinery	113.88	123.04
- Buildings	21.63	24.10
- Others	18.69	21.60
Selling and marketing expenses	10.43	7.85
Advertisement, conference and sponsorship fees	140.01	191.01
Computer consumables	5.54	7.01
Auditors' remuneration (refer note 39)	21.73	18.89
Donations	204.05	86.35
Books, memberships, subscriptions	20.66	38.05
Loss on sale of Property, Plant and Equipment	-	5.96
Directors' sitting fees	4.84	6.58
Directors' commission	10.22	14.85
Provision for doubtful deposits and advances (refer note 47)	-	248.48
Impairment of loan	23.96	-
Impairment of non current investments	18.53	-
Miscellaneous expenses	235.55	412.00
	4,327.06	5,260.15

Notes forming part of consolidated financial statements

1. Earnings per share

		For the year ended
		March 31, 2021	March 31, 2020
Numerator for Basic and Diluted EPS
	(A)	4,506.77	3,402.89
Denominator for Basic EPS
Weighted average number of equity shares	(B)	76,425,000	76,684,672
Denominator for Diluted EPS
Number of equity shares	(C)	76,425,000	76,684,672
	(A/B)	58.97	44.38
	(A/C)	58.97	44.38
		For the year ended
		March 31, 2021	March 31, 2020
Number of shares considered as basic weighted average shares outstanding		76,425,000	76,684,672
Add: Effect of dilutive issues of stock options		-	-
Number of shares considered as weighted average shares and potential shares outstanding		76,425,000	76,684,672

Notes forming part of consolidated financial statements

31. Gratuity plan:

Persistent Systems Limited and Persistent Systems Lanka (Private) Limited have defined benefit gratuity plans. Each employee in the companies is eligible for gratuity on completion of minimum five years of service at 15 days basic salary (last drawn basic salary) for each completed year of service. The scheme is funded with an insurance Company in the form of a qualifying insurance policy.

The following tables summarize the components of net benefit expense recognized in the statement of profit and loss and the funded status and amounts recognized in the Balance Sheet for the respective plans.

Statement of profit and loss

Net employee benefit expense (recognized in statement of profit and loss)

	For the year ended
	March 31,		March 31,
	2021	2020
Current service cost	170.19	194.91
Interest cost on benefit obligation	58.49	70.65
Expected return on plan assets	(70.85)	(68.89)
Curtailment of benefits*	-	(272.59)
Other	(29.52)	(3.50)
Net benefit expense	128.31	(79.42)
Net actuarial (gain) / loss recognized in the year	(17.68)	36.67

Balance sheet

Changes in the fair value of plan assets (recognized in the Balance Sheet) are as follows:

		For the year ended
	March 31,	March 31,
	2021	2020
Opening fair value of plan assets	985.61	831.31
Expected return	70.85	68.89
Adjustment to expected return	(10.85)	(8.88)
Contribution by employer	117.99	184.25
Benefits paid	(112.81)	(89.96)
Closing fair value of plan assets	1,050.79	985.61

Changes in the present value of the defined benefit obligation (recognized in Balance Sheet) are as follows:

		For the year ended
	March 31, 2021	March 31, 2020
Opening defined benefit obligation	877.48	942.85
Interest cost	58.49	70.65
Current service cost	170.19	194.91
Benefits paid	(112.81)	(95.37)
Curtailments*	-	(272.59)
Actuarial losses on obligation	(17.68)	36.67
Exchange difference	(0.18)	0.36
Closing defined benefit obligation	975.49	877.48

Benefit asset / (liability)

		As at
	March 31,	March 31,
	2021	2020
Fair value of plan assets	1,050.79	985.61
Less: Defined benefit obligations	(937.71)	(857.07)
Plan asset / (liability) for Persistent Systems Limited	113.08	128.54
Gratuity liability for Persistent Systems Lanka (Private) Limited	(37.78)	(20.41)

Notes forming part of consolidated financial statements

Persistent Systems Limited

	As at
	March 31,	March 31,
	2021	2020
Discount rate	6.70%	6.77%
Mortality	IALM (2012-14) Ult.	IALM (2012-14) Ult.
Attrition rate	PS: 0 to 1 : 17%	PS: 0 to 1 : 17%
	PS: 1 to 3 : 14%	PS: 1 to 3 : 14%
	PS: 3 to 4 : 10%	PS: 3 to 4 : 10%
	PS: 4 to 7 : 5%	PS: 4 to 7 : 5%
	PS: 7 to 10 : 3%	PS: 7 to 10 : 3% PS:10
	PS:10 to 47 :1%	to 47 :1%
Increment rate	5.50%	5.50%

The major categories of plan assets as a percentage of the fair value of total plan assets:

	As at
	March 31,	March 31,
	2021	2020
Investments with insurer including accrued interest	100%	100%

Persistent Systems Lanka (Private) Limited

		As at
	March 31, 2021	March 31, 2020
Discount rate	8.55%	10.17%
Increment rate	6.00%	6.00%

The estimates of future salary increases, considered in actuarial valuation, take account of inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market.

As at March 31, 2021, every percentage point increase / decrease in discount rate will change the gratuity benefit obligation to approximately 84.95 million / 111.54 million (previous year: 97.26 million / 115.94 million) respectively.

As at March 31, 2021, every percentage point increase / decrease in rate of increase in compensation levels will change the gratuity benefit obligation to approximately 103.17 million / 91.74 million (previous year: 108.86 million / 87.88 million) respectively.

Amounts for the current and previous year are as follows:

		In Million
		As at
	March 31, 2021	March 31, 2020
Plan assets	1,050.79	985.61
Defined benefit obligation	(937.71)	(857.07)
Plan asset for Persistent Systems Limited	113.08	128.54
Gratuity liability for Persistent Systems Lanka (Private) Limited	(37.78)	(20.41)

Maturity Profile of defined benefit obligations:

		(In Million)
		As at
	March 31,	March 31,
	2021	2020
Within 1 year	36.45	46.27
1-2 years	32.19	43.40
2-3 years	33.66	36.71
3-4 years	36.11	32.76
4-5 years	36.29	35.57
5-10 years	222.48	181.58

Superannuation Fund

The Group contributed 43.55 million and 41.12 million to superannuation fund during the years ended March 31, 2021 and March 31, 2020 respectively and the same is recognised in the Statement of profit and loss under the head employee benefit expenses.

Defined contribution plan - Provident Fund

The Parent Company has certain defined contribution plans. Contributions are made to provident fund for its employees @ 12% of Basic salary as per regulation. The contributions are made to registered provident fund administered by the Government of India. The obligation of the Parent Company is limited to the amount contributed. and it has no further contractual nor any constructive obligation. The expense recognised during the period towards defined contribution plan (provident fund) is INR 484.36 million (Previous year - INR 404.90 million).

*During the previous year, the gratuity scheme had an element in its structure which caps the basic salary beyond a certain amount. Giving effect to that in valuation of benefit obligation had resulted into curtailment of benefits to the extent of INR 272.59 million which was reflected in the report.

neither in estimate companies, are best The fair value hierarchy is based on inputs to valuation techniques that are used to measure fair value that are either observable or unobservable and consists of the following three levels: that the unlisted Level 3 Level 2 Level 2 Level 1 assumptions represents of 206.25 7,339.28 189.84 3,027.07 1,904.04 5,921.96 2,068.54 22,893.79 51.25 662.42 2,247.09 469.42 3,818.07 2,236.81 Fair value instruments - - cost on based and equity measurements Carrying value 206.25 7,339.28 189.84 3,027.07 1,904.04 5,921.96 2,068.54 22,897.19 51.25 662.42 2,247.09 469.42 387.89 3,818.07 2,240.21 model - - of valuation respect of fair value within that range. The Company recognises such equity instruments at cost, which is considered as appropriate estimate of fair value. value In 183.48 2,727.32 7,181.94 206.02 7,412.46 2,422.30 5,708.97 2,172.77 294.46 28,309.72 46.23 938.17 2,733.44 4,106.05 a Fair value 388.21 using data. - - fair possible part market in Carrying value 183.48 2,630.80 7,181.94 206.02 7,412.46 2,422.30 5,708.97 2,172.77 294.46 28,213.20 46.23 938.17 2,733.44 4,106.05 388.21 or available of - - whole range in wide on determined based a are they there Equity accounting are are Amortised cost Amortised cost Amortised cost Amortised cost Amortised cost Amortised cost Amortised cost Amortised cost Amortised cost Amortised cost if values or nor Fair value Fair value Fair value Fair value value, instrument Fair fair inputs). measure same (unobservable to the Investments in equity instruments, preferred stock and convertible notes available in transactions data is information market Cash and cash equivalents (including unpaid dividend) market Deposit with banks and financial institutions (net) observable Other financial liabilities (excluding borrowings) recent current more Borrowings (including accrued interest) Fair value includes interest accrued. observable on insufficient based Investments in associates (net) Forward contracts receivables Investments in mutual funds Forward contracts payable not from Trade receivables (net) Investments in bonds Fair value hierarchy: circumstances, are prices Inputs Unbilled revenue Trade payables Lease liabilities by Liabilities: supported

foreign Group's the of currency exposure is in USD. The Group holds plain vanilla forward contracts against expected future receivables in USD to mitigate the risk of changes in exchange rates. 90% to 80% Around 731.64 396.18 186.96 372.00 444.98 75.17 13.61 10.61 Total Total risk. exchange 130.42 15.32 5.48 1.50 30.47 1.80 10.00 79.11 Other currencies Other currencies foreign to exposed 291.84 13.05 7.58 35.74 123.40 11.45 8.67 34.91 is (This space is intentionally left blank) GBP GBP Group The following table analyses unhedged foreign currency risk from financial instruments as of March 31, 2021: The following table analyses unhedged foreign currency risk from financial instruments as of March 31, 2020: the consequently 121.75 28.10 0.26 14.66 105.93 29.52 0.14 8.78 EUR EUR and geographies 187.63 0.29 135.06 63.56 373.54 21.48 339.71 - various USD USD across spread operations Cash and cash equivalents and bank balances Cash and cash equivalents and bank balances its with globally Trade and other payables Trade and other payables Other financial assets Other financial assets operates Trade receivables Trade receivables Group		excess liquidity is governed by the Investment policy of the Group. The Group's Risk Management Committee monitors risks and policies implemented to mitigate risk exposures. than more for overdue	focus Credit exchange the Group's The by approved days. foreign The 90 risk. is	responsible which the uses foresee Directors is Group Force to The of Task is Board risk.	principles financial risk of financial written credit unpredictability provide for derivative	of to foreign exchange Investment seek mitigate and foreign markets management. to on instruments
	Market risk The

	នី	舌	品	ther currencies	Total
rade receivables	63.56	105.93	123.40	79.11	372.00
Cash and cash equivalents and bank balar	373.54	29.52	1.45	30.47	44.98
l assets nancial Other -		0.14	8.67	80	10.61
Trade and other p.	21.48	25.78	34.91	0.00	75.17

		As at March 31, 2021			As at March 31, 2020
		preign currency Average rate	$\star$ (million)	Foreign currency Average ₹ (million)
	million			million
Derivatives designated as cash flow hedges
Forward contracts
9SD	35.00	77.11	10,410.34		125.00 74.03	9,253.21

valued contracts based groupings are forward instruments maturity exchange 9,253.21 2,182.07 financial (million) (million) 2,358.34 2,224.70 2,488.10 9,253.21 relevant foreign derivative into 74.03 As at March 31, 2020 As at March 31, 2020 73.70 74.16 75.40 72.74 designated Average Average instruments rate rate These 32.00 30.00 33.00 has 125.00 30.00 exposures. 125.00 Foreign currency Foreign currency financial Group (million) (million) The derivative currency marketplace. the 10,410.34 foreign 2,432.98 10,410.34 2,643.64 2,659.11 2,674.61 analyses as cash flow hedges to mitigate the risk of foreign exchange exposure on highly probable forecast sales transactions. (million) (million) the on (This space is intentionally left blank) in rates observable below exchange table 77.11 As at March 31, 2021 As at March 31, 2021 78.48 77.08 76.63 76.42 indirectly The in Average rate Average rate changes The following table gives details in respect of outstanding foreign currency forward contracts: months. or directly of twelve risk are the 135.00 31.00 of Foreign currency Foreign currency 34.50 34.50 35.00 135.00 that period mitigate (million) (million) inputs maximum to or contracts markets a within on the remaining period as of the balance sheet date: forward active Later than 9 months and not later than 12 months Later than 3 months and not later than 6 months Later than 6 months and not later than 9 months mature Derivatives designated as cash flow hedges currency in assets contracts foreign similar Derivative financial instruments forward derivative for prices Not later than 3 months exchange Forward contracts holds quoted foreign Group on based Total USD The The

		As at
	March 31, 2021	March 31, 2020
Receivables overdue for more than 90 days (₹ million)*	966.82	409.44
Total receivables (gross) (₹ million)	5.980.61	6,164.09
Overdue for more than 90 days as a % of total	16.2%	6.6%
Ireceivables

trade Force to for for Directors overdue experience from Task through credit approvals, establishing credit limits and continuously monitoring the recovery status of customers to which the Group grants credit terms in the normal course of business. primarily Credit of receivables Board historical by is Group the date of by Group's percentage reporting the approved by the managed the and policy of respect at factors risk is provisioning risk credit in risk Credit concentration the credit a States. to uses exposure internal Group United risk and of maximum The the details external in loss. located gives The impairment available table primarily loss. following financial 6.6% 1070.08 234.12 253.99 320.03 (242.13) 134.54 242.13 account 89.41 409.44 6,164.09 4,196.46 5,921.96 83.86 23.73 the customers March 31, 2020 March 31, 2020 March 31, 2020 242.13 million) have been provided for. assess The a into in to days. resulting takes from model As at As at As at 90 earned policy party than loss 271.64 16.2% (271.64) 242.13 (1.81) 966.82 3,815.33 897.30 211.23 89.93 17.24 949.58 5,708.97 31.32 5,980.61 March 31, 2021 March 31, 2021 March 31, 2021 The revenue credit more counter receivables. for expected from overdue the by derived uses million (March 31, 2020: obligation Receivables overdue for more than 90 days ( million) trade receivables are Group for Movement in expected credit loss allowance Overdue for more than 90 days as a % of total and allowance its Movement in expected credit loss allowance the unsecured on of 109, case default Total receivables (gross) ( million) loss AS in of typically mainly Ind credit Ageing of trade receivables risk of Less: Expected credit loss 121 and above past due 91 to 120 days past due the adoption perceived Within the credit period expected 31 to 60 days past due 61 to 90 days past due Translation differences Net trade receivables are 1 to 30 days past due Out of this amount, more than 90 days: to receivables Closing balance Opening balance refers of the is account receivables Credit risk customers. risk risk compute Credit Credit Trade
include primarily Investments ratings. credit high with institutions financial and banks with deposits in invests generally Group the as limited investment in debts mutual funds, quoted bonds. is equivalents cash and cash on risk Credit

		As at
	March 31, 2021	March 31, 2020
Opening balance	242.13	134.54
Movement in expected credit loss allowance	31.32	83.86
Translation differences	(1.81)	23.73
Closing balance	271.64	242.13

The table below provides details regarding the contractual maturities of significant financial liabilities:
Trade payables and deferred payment liabilities Borrowings (including accrued interest)
Other financial liabilities (excluding borrowings) Lease Liabilities

Notes forming part of consolidated financial statements

32.c) Derivative instruments and un-hedged foreign currency exposures

(i) Forward contracts outstanding at the end of the year:

	As at	As at
	March 31, 2021	March 31, 2020
Forward contracts to sell USD: Hedging of expected receivables of USD	10,410.34	9,253.21
135 Million (Previous year USD 125 Million)

(ii) Details of un-hedged foreign currency exposures at the end of the year:

		March 31, 2021			March 31, 2020
	In million	Foreign currency (In million)	Conversion rate ( )	In million	Foreign currency (In million)	Conversion rate ( )
Bank balances	1.33	JPY 2.02	0.66	0.34	JPY 0.49	0.70
	339.71	USD 4.65	73.11	373.54	USD 4.93	75.66
	13.05	GBP 0.13	100.69	11.45	GBP 0.12	93.49
	8.81	CAD 0.15	58.02	6.10	CAD 0.11	53.06
	28.10	EUR 0.33	85.78	29.52	EUR 0.35	82.76
	2.41	AUD 0.04	55.67	6.19	AUD 0.13	46.07
	2.77	ZAR 0.56	4.94	17.84	ZAR 4.20	4.25
Trade and other payables	135.06	USD 1.85	73.11	21.48	USD 0.28	75.66
	35.74	GBP 0.35	100.69	34.91	GBP 0.37	93.49
	14.66	EUR 0.17	85.78	8.78	EUR 0.11	82.76
	0.08	SGD 0.002	54.40	0.32	SGD 0.01	53.03
	0.15	ZAR 0.03	4.94	0.63	ZAR 0.15	4.25
	0.81	CAD 0.01	58.02	8.53	CAD 0.16	5306
	0.03	AUD 0.001	55.67	0.42	AUD 0.01	46.07
	0.43	JPY 0.65	0.66	-	-	-
	-	-	-	0.10	CHF 0.001	78.28
					AUD 0.01	46.07
Advances given and deposits placed	3.97	AUD 0.07	55.67	0.36	GBP 0.10	93.49
	7.58	GBP 0.08	100.69	8.67	EUR 0.001	82.76
	0.26	EUR 0.003	85.78	0.14	CAD 0.03	53.06
	1.46	CAD 0.03	58.02	1.40	JPY 0.06	0.70
	0.04	JPY 0.07	0.66	0.04
	0.29 0.01	USD 0.004 MYR 0.0004	73.11 17.65	- -	- -	- -
Trade receivables	121.75	EUR 1.42	85.78	105.93	EUR 1.28	82.76
	187.63	USD 2.56	73.11	63.56	USD 0.84	75.66
	291.84	GBP 2.90	100.69	123.40	GBP 1.32	93.49
	40.66	CAD 0.70	58.02	-	-	-
	52.27	AUD 0.94	55.67	41.00	AUD 0.89	46.07
	5.04	CHF 0.06	77.46
	29.74	ZAR 6.02	4.94	29.47	ZAR 6.93 SGD 0.16	4.25 53.03
	2.71 -	SGD 0.05 -	54.40 -	8.49 0.15	BRL 0.01	14.61

Notes forming part of consolidated financial statements

33. Income taxes

The reconciliation of estimated income tax expense at Indian statutory income tax rate to income tax expense reported in statement of profit and loss is as follows:

	For the year ended
	March 31, 2021	March 31, 2020
Profit before tax	6,094.43	4,523.42
Enacted tax rate in India	25.17%	25.17%
Computed tax expense at enacted tax rate	1,533.85	1,138.45
Effect of exempt income	(90.04)	(69.30)
Effect of non-deductible expenses	40.25	42.06
Effect of concessions (R&D allowance)	(144.67)	(127.18)
Effect of concessions (Tax holidays)	(9.69)	(12.37)
Effect of unused tax losses not recognised as	1.70	78.54
deferred tax assets
Effect of previously unrecognised deferred tax	(8.54)	(58.40)
assets now recognised
Effect of different tax rates of subsidiaries	7.65	(4.11)
operating in other jurisdictions
Effect of different tax rates for different heads of	(2.06)	(31.80)
income
Effect of change in tax rates in India	-	24.76
Short Tax Provision of earlier years (net)	11.28	52.55
Reversal of Deferred tax asset created in earlier	73.38	-
years
Others	174.55	87.33
Income tax expense	1,587.66	1,120.53

Note:

In previous year, The Parent Company has decided to opt for the new tax regime announced by the Government of India and avail the benefit of Section 115BAA of the Income Tax Act. This provides for the concessional tax rate of 22% plus applicable surcharge and cess (totaling to 25.17% ) from April 1, 2019, without claiming the following major tax exemptions / incentives which were availed till earlier financial year.

(i) Tax holiday under section 10AA of the Income Tax Act available for units set up under the Special Economic Zone Act, 2005 (SEZ units).

(ii) Weighted Deduction under section 35 (2AB) of the Income Tax Act on the expenditure on scientific research carried out in in-house research and development facility as approved by the prescribed authority under Income Tax Act.

The Income Tax expense and deferred tax expense for the year ended March 31, 2021 include the effect of the net benefit of section 115BAA opted for by the Parent Company from April 1,2019.

Notes forming part of consolidated financial statements

34. Segment information

Operating segments are components of an enterprise for which discrete financial information is available that is evaluated regularly by the chief operating decision makers, in deciding how to allocate resources and assessing performance. The Group's chief operating decision makers are the Chief Executive Officer and the Chairman & Managing Director.

Considering the focus on industry verticals, the Group has decided to reorganize its operating segments from April 1, 2020. The figures for the corresponding periods / year have been appropriately reclassified in line with the current period's classification.

a. Banking, Financial Services and Insurance (BFSI) b. Healthcare & Life Sciences

c. Technology Companies and Emerging Verticals

Particulars			BFSI	Healthcare & Life Sciences	Technology Companies and Emerging Verticals	Total
Revenue
	Year ended	March 31, 2021	12,857.05	8,104.24	20,917.59	41,878.88
	Year ended	March 31, 2020	10,506.77	6,719.15	18,432.16	35,658.08
Identifiable expense
	Year ended	March 31, 2021	8,038.67	4,121.77	14,468.19	26,628.63
	Year ended	March 31, 2020	6,908.62	3,818.97	12,013.97	22,741.56
Segmental result
	Year ended	March 31, 2021	4,818.38	3,982.47	6,449.40	15,250.25
	Year ended	March 31, 2020	3,598.15	2,900.18	6,418.19	12,916.52
Unallocable expenses
	Year ended	March 31, 2021				10,233.54
	Year ended	March 31, 2020				9,716.87
Operating income
	Year ended	March 31, 2021				5,016.71
	Year ended	March 31, 2020				3,199.65
Other income (net of expenses)
	Year ended	March 31, 2021				1,077.72
	Year ended	March 31, 2020				1,323.77
Profit before taxes
	Year ended	March 31, 2021				6,094.43
	Year ended	March 31, 2020				4,523.42
Tax expense
	Year ended	March 31, 2021				1,587.66
	Year ended	March 31, 2020				1,120.53
Profit after tax
	Year ended	March 31, 2021				4,506.77
	Year ended	March 31, 2020				3,402.89

Particulars			BFSI	Healthcare & Life Sciences	Technology Companies and Emerging Verticals	Total
Segmental trade receivables (net)
	As at	March 31, 2021	1,355.88	1,363.40	2,989.69	5,708.97
	As at	March 31, 2020	1,818.41	1,340.70	2,762.85	5,921.96
Segmental Unbilled revenue
	As at	March 31, 2021	594.57	162.29	1,415.91	2,172.77
	As at	March 31, 2020	409.33	273.90	1,385.31	2,068.54
Unallocated assets
	As at	March 31, 2021	-	-	-	28,773.50
	As at	March 31, 2020	-	-	-	22,931.19
Unallocated liabilities
	As at	March 31, 2021	-	-	-	36,655.24
	As at	March 31, 2020	-	-	-	30,921.69

Segregation of assets (other than trade receivables and unbilled revenue), liabilities, depreciation and amortization and other non-cash expenses into various reportable segments have not been presented as the assets are used interchangeably among segments and the Group is of the view that it is not practical to reasonably allocate the other assets, liabilities and other non-cash expenses to individual segments and an ad-hoc allocation will not be meaningful.

Geographical Information

India North America Rest of the World Particulars	Total
Revenue
March 31, 2021 3,512.59 Year ended 33,861.61 4,504.68	41,878.88
March 31, 2020 2,657.29 Year ended 28,891.15 4,109.64	35,658.08

Notes forming part of consolidated financial statements

35 Leases

The table below provides details regarding the contractual maturities of lease liabilities on an undiscounted basis:

	As at	As at
	March 31, 2021	March 31, 2020
- Less than one year	222.00	309.06
- One to five years	623.21	436.94
- More than five years	164.13	68.11

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

million).

The aggregate depreciation on ROU assets has been included under depreciation and amortisation expense in the Statement of Profit and Loss.

Notes forming part of consolidated financial statements

36 Related Party Disclosures

(i) Names of related parties and related party relationship

Associates	Klisma e-Services Private Limited
Key management personnel	Dr. Anand Deshpande, Chairman and Managing Director
	Mr. Christopher O'Connor, Chief Executive Officer and Director
	(resigned wef August 9, 2020)
	Mr Sandeep Kalra, Executive Director and Chief Executive Officer (Executive Director and President was appointed as the Chief Executive Officer
	of the Company with effect from October 23, 2020)
	Mr. Sunil Sapre, Executive Director and Chief Financial Officer
	Mr. Amit Atre, Company Secretary
	Mr. Sudhir Kulkarni, Director, Persistent Systems, Inc., USA
	(resigned as Director of Persistent Systems, Inc (wholly owned subsidiary) w.e.f. April 19, 2019)
	Mr. Azlin Ghazali, Director, Persistent Systems Malaysia Sdn. Bhd.
	Mr. John Ryan, Director, Persistent Systems Malaysia Sdn. Bhd.
	Ms. Audrey Reutens, Director, Persistent Systems Malaysia Sdn. Bhd.
	Mr. Arnaud Pierrel, Director General, Persistent Systems France SAS
	Mr. Steven Ward, Director, Youperience Limited, United Kingdom
	Mr. Bruno Orsier, Director, Persistent Systems France SAS
	Mr. Thomas Klein, Director, Persistent Systems, Inc., USA
	Ms. Roshini Bakshi, Independent Director
	Mr. Pradeep Bhargava, Independent Director
	Mr. Sanjay Bhattacharya, Independent Director (resigned as an Independent Director of the Company w.e.f. July 1, 2019)
	Dr. Anant Jhingran, Director, Persistent Systems, Inc., USA
	Mr. Thomas Kendra, Independent Director
	Mr. Prakash Telang, Independent Director (Retired wef July 24, 2020)
	Mr. Kiran Umrootkar, Independent Director (Retired wef July 24, 2020)
	Mr. Deepak Phatak, Independent Director
	Mr. Guy Eiferman, Independent Director
	Mr. Silvio Galfetti, Director, Parx Werk AG, Switzerland
	Mr. Steffen Drilich, Director, Youperience GmbH, Germany
	Mr. Daniel Seiler, Director, PARX Werk AG
	Mr. Beat Kach, Director, PARX Werk AG
	Mr. Simon Nicholas Llyod-Jenkins, Director, Youperience Limited
	Mr. Steven Ward, Director, Youperience Limited
	Mr. Kolitha Ratwatte, Director, Persistent Systems (Lanka) Private Limited
	Mr. Hitesh Salla, Director, Capiot Software Private Limited
	Mr. Ashish Kapoor, Director, Capiot Software Private Limited
	Mr. Sameer Bendre, Director, Capiot Software Private Limited
	Mr. Sameer Dixit, Director, Capiot Software Private Limited
	Mr. Vaudeva Anumukonda, Director, Capiot Software Inc Mr. Ashish Kapoor, Director, Capiot Software PTE Ltd
	Mr. Mohan Shankar, Director, Capiot Software Pty Ltd, Australia
Relatives of Key management personnel	Mr. Suresh Deshpande
	(Father of the Chairman and Managing Director)
	Mrs. Sulabha Deshpande
	(Mother of the Chairman and Managing Director)
	Mrs. Sonali Anand Deshpande
	(Wife of the Chairman and Managing Director)
	Dr. Mukund Deshpande \$
	(Brother of the Chairman and Managing Director)
	Mrs. Chitra Buzruk \$
	(Sister of the Chairman and Managing Director)
	Mr. Arul Deshpande **
	(Son of the Chairman and Managing Director)
Members of Promoter Group	Rama Purushottam Foundation
Entities over which a key management	Deazzle Services Private Limited
personnel have significant influence	Azure Associates, LLC
	Persistent Foundation

Notes forming part of consolidated financial statements

1. (ii) Related party transactions

	Name of the related party and nature of relationship	For the year ended
		March 31,	March 31,
Sale of software services	Entity over which a key management personnel has significant influence	2021	2020
	Deazzle Services Private Limited	-	7.47
	Total	-	7.47
Legal and professional fees	Entity over which a key management personnel has significant influence	-
	Azure Associates, LLC Total	-	12.38 12.38
Donation given	Entity over which a key management personnel has significant influence
	Persistent Foundation	140.00	79.21
	Key Management Personnel	140.00	79.21
Remuneration # (Salaries, bonus and contribution to	Dr. Anand Deshpande	26.26	23.88
other funds)	Mr. Christopher O'Connor	158.50	58.35
	million during the year 2020-21 (Previous year: Nil)	46.42	13.31
	Mr. Amit Atre	3.40	3.38
	Sudhir Kulkarni	-	10.77
	45.84 million during the year 2020-21 (Previous year: Nil)	110.53	43.64
	Mr. Azlin Ghazali	10.33	9.66
	Ms. Audrey Reutens	5.38	5.12
	Mr. Arnaud Pierrel Mr. Bruno Orsier	14.66 11.36	13.01 10.26
	Mr. Thomas Klein	44.87	35.47
	Mr. Steffen Drilich	17.89	6.87
	Mr. Steven Ward	22.94	6.08
	Mr. Simon Nicholas Lloyd Jenkins	22.57	6.08
	Mr. Silvio Galfetti	3.09	35.01
	Mr. Daniel Seiler	29.33	25.16
	Mr. Kolitha Ratwatte Mr. Hitesh Salla, Director	6.88 2.46	6.59 -
	Mr. Ashish Kapoor	2.46	-
	Mr. Vasudeva Anumukonda	6.37	-
	Mr. Mohan Shankar	3.09	-
	0.19 million ^	11.07
	Independent directors:
	Ms. Roshini Bakshi	2.09	2.48
	Mr. Pradeep Bhargava Mr. Sanjay Bhattacharyya	2.26 -	3.13 0.78
	Dr. Anant Jhingran	1.83	2.23
	Mr. Thomas Kendra	1.69	2.33
	Mr. Prakash Telang	0.74	3.00
	Mr. Kiran Umrootkar	0.74	3.05
	Mr. Guy Eiferman Dr. Deepak Phatak	2.08 1.81	2.28 2.40
	Relatives of Key Management Personnel
	Mrs. Chitra Buzruk \$	-	2.10
	Dr. Mukund Deshpande (including value of perquisites for stock options 9.80 million during the year 2019-20) \$	2.87	14.20
		575.97
Dividend paid	Total Key Management Personnel		350.62
	Dr. Anand Deshpande	319.90	342.71
	Mr. Sunil Sapre	0.06	0.07
	Mr Sandeep Kalra	0.56	-
	Independent directors:	0.18
	Pradeep Bhargava Sanjay Bhattacharyya	-	0.20 0.04
	Prakash Telang	-	0.27
	Kiran Umrootkar	-	0.09
	Roshini Bakshi	0.07	-
	Relatives of Key Management Personnel
	Mr. Suresh Deshpande Mrs. Chitra Buzruk	0.07 6.57	0.08 7.04
	Dr. Mukund Deshpande	5.60	5.65
	Mrs. Sonali Anand Deshpande	1.57	1.68
	Mrs. Sulabha Suresh Deshpande	0.64	2.49
	Rama Purushottam Foundation	-	4.92
	Mr. Arul Deshpande Total	0.14 335.36	- 365.24

Notes forming part of consolidated financial statements

(iii) Outstanding balances

	Name of the related party and nature of relationship	As at
		March 31,	March 31,
		2021	2020
Advances given	Associate
	Klisma e-Services Private Limited @	0.81	0.81
	Total	0.81	0.81
Investments	Associate
	Klisma e-Services Private Limited @	0.05	0.05
	Total	0.05	0.05
Loans given	Associate
	Klisma e-Services Private Limited @	27.43	27.43
	Total	27.43	27.43

\$ Dr. Mukund Deshpande and Mrs. Chitra Buzruk and have resigned w.e.f. Apr 28, 2020 and May 29, 2020 respectively.

The remuneration to the key managerial personnel does not include the provisions made for gratuity, long service awards and leave benefits, as they are determined on an actuarial basis for the Company/Group as a whole.

** Mr. Arul Deshpande has joined with effect from March 8, 2021

^ Mr. Sameer Bendre was appointed as Director in Capiot Software Private Limited during financial year 2020-21 and hence his remuneration is disclosed for the current financial year only.

The key managerial personnel though appointed during the year, their remuneration for the financials year ended March 31, 2021 and March 31, 2020 has been disclosed for the entire financial year.

@These balances are fully provided for.

Notes forming part of consolidated financial statements

37 Employees stock option plans (ESOP)

Certain information in this note relating to number of shares, options and per share/option price has been disclosed in full and is not rounded off.

a) Details of Employee stock option plans

The Group has framed various share-based payment schemes for its employees. The details of various equity-settled employee stock option plan schemes adopted by the Board of Directors are as follows:

ESOP scheme	No. of options granted #	Date of adoption by the Board/Members	Initial Grant date	Exercise period
Scheme I	4,560,500	December 11, 1999	December 11, 1999	*
Scheme II	753,200	April 23, 2004	April 23, 2004	10 Years
Scheme III	2,533,300	April 23, 2004	April 23, 2004	*
Scheme IV	6,958,250	April 23, 2006	April 23, 2006	10 Years
Scheme V	1,890,525	April 23, 2006	April 23, 2006	*
Scheme VI	1,216,250	October 31, 2006	October 31, 2006	10 Years
Scheme VII	1,784,975	April 30, 2007	April 30, 2007	10 Years
Scheme VIII	42,000	July 24, 2007	July 24, 2007	3 Years
Scheme IX	1,374,462	June 29, 2009	June 29, 2009	10 Years
Scheme X	3,062,272	June 10, 2010	October 29, 2010	2-3 Years
Scheme XI **	1,357,000	July 26, 2014	November 3, 2014	1 Year
Scheme XII ***	67,300	February 4, 2016	April 8, 2016	2.5 Months
Scheme XIII	2,922,500	July 27, 2017	August 1, 2019	4 Years
Scheme XIV	80,000	July 27, 2017	May 1, 2019	3 Years

Adjusted for bonus issue of shares.

*No contractual life is defined in the scheme.

**The options under Scheme XI, which is a performance based ESOP scheme will vest after 2-3 years in proportion of credit points earned by the employees every quarter based on performance. The maximum options which can be granted under this scheme are 2,000,000.

***The options under Scheme XII, ESOP scheme would vest after 1 year. The maximum options which granted under this scheme are 50 per employee.

The vesting period and conditions of the above ESOP schemes is as follows:

All the above ESOP schemes have service condition (other than scheme XI which Is based on performance criteria), which require the employee to complete a specified period of service, as a vesting condition. The vesting pattern of various schemes has been provided below:

(i) Scheme I to V, VII, VIII, X, XIII and XIV:

Service period from the date of grant	% of Options vesting
	Scheme I to V & X	Scheme VII	Scheme VIII & XIII	Scheme XIV
12 Months	10%	20%	25%	0.00%
24 Months	30%	40%	50%	33.33%
36 Months	60%	60%	75%	66.66%
48 Months	100%	80%	100%	100.00%
60 Months	NA	100%	NA	NA
(ii) Scheme VI
Service period from the date of grant				% of Options vesting
18 Months				30%
Every quarter thereafter				5%
(iii) Scheme IX
Service period from the date of grant				% of Options vesting
				100%
(iv) Scheme XI
Service period from the date of grant				% of Options vesting
2-3 years varying from employee to employee				Based on credit points earned
(v) Scheme XII
Service period from the date of grant				% of Options vesting
1 year				100%

Notes forming part of consolidated financial statements

b) Details of activity of the ESOP schemes

Movement for the year ended March 31, 2021 and March 31, 2020:

ESOP Scheme	Particulars	Year Ended	Outstanding at the beginning of the Year	Granted during the Year	Forfeited during the Year	Exercised during the Year	Outstanding at the end of the Year	Exercisable at the end of the Year
Scheme I	Number of Option	31-Mar-21	17	-	4	-	13	13
	Weighted Average Price	31-Mar-21	4.42	-	4.58	-	4.37	4.37
	Number of Option	31-Mar-20	18	-	-	1	17	17
	Weighted Average Price	31-Mar-20	4.42	-	-	5.05	4.42	4.42
Scheme II	Number of Option	31-Mar-21	-	-	-	-	-	-
	Weighted Average Price	31-Mar-21	-	-	-	-	-	-
	Number of Option	31-Mar-20	3	-	3	-	-	-
	Weighted Average Price	31-Mar-20	24.18	-	24.18	-	-	-
Scheme III	Number of Option	31-Mar-21 31-Mar-21	147,835 31.94	-	-	20,473	127,362	127,362
	Weighted Average Price	31-Mar-20	158,625	-	-	30.22	32.07	32.07
	Number of Option Weighted Average Price	31-Mar-20	31.89	- -	- -	10,790 31.20	147,835 31.94	147,835 31.94
Scheme IV	Number of Option	31-Mar-21	406,348	-	-	80,050	326,298	326,298
	Weighted Average Price	31-Mar-21	53.07	-	-	46.70	54.83	54.83
	Number of Option	31-Mar-20	499,773	-	-	93,425	406,348	406,348
	Weighted Average Price	31-Mar-20	52.37	-	-	48.66	53.07	53.07
Scheme V	Number of Option	31-Mar-21	60,332	-	-	8,641	51,691	51,691
	Weighted Average Price	31-Mar-21	27.58	-	-	28.99	27.22	27.22
	Number of Option	31-Mar-20	62,793	-	-	2,461	60,332	60,332
	Weighted Average Price	31-Mar-20	27.37	-	-	22.23	27.58	27.58
Scheme VI	Number of Option	31-Mar-21	-	-	-	-	-	-
	Weighted Average Price	31-Mar-21	-	-	-	-	-	-
	Number of Option	31-Mar-20 31-Mar-20	- -	-	-	-	-	-
Scheme VII	Weighted Average Price Number of Option	31-Mar-21	6,961	- -	- -	- 3,620	- 3,341	- 3,201
	Weighted Average Price	31-Mar-21	58.18	-	-	56.83	59.65	61.12
	Number of Option	31-Mar-20	34,996	-	-	28,035	6,961	6,961
	Weighted Average Price	31-Mar-20	33.55	-	-	27.44	58.18	58.18
Scheme VIII	Number of Option	31-Mar-21	-	-	-	-	-	-
	Weighted Average Price	31-Mar-21	-	-	-	-	-	-
	Number of Option	31-Mar-20	-	-	-	-	-	-
	Weighted Average Price	31-Mar-20	-	-	-	-	-	-
Scheme IX	Number of Option	31-Mar-21	135,920	-	-	6,216	129,704	129,704
	Weighted Average Price	31-Mar-21	54.74	-	-	54.74	54.74	54.74
	Number of Option	31-Mar-20	142,120	-	-	6,200	135,920	135,920
Scheme X	Weighted Average Price Number of Option	31-Mar-20 31-Mar-21	54.74 125,062	- -	- 92,955	54.74 32,107	54.74 -	54.74 -
	Weighted Average Price	31-Mar-21	188.75	-	183.38	204.30	-	-
	Number of Option	31-Mar-20	155,650	-	-	30,588	125,062	125,062
	Weighted Average Price	31-Mar-20	206.73	-	-	221.47	188.75	188.75
Scheme XI	Number of Option	31-Mar-21	570,000	295,000	300,000	119,000	446,000	6,000
	Weighted Average Price	31-Mar-21	10.00	10.00	10.00	10.00	10.00	10.00
	Number of Option	31-Mar-20	-	570,000	-	-	570,000	-
	Weighted Average Price	31-Mar-20	-	10.00	-	-	10.00	-
Scheme XII	Number of Option	31-Mar-21	-	-	-	-	-	-
	Weighted Average Price	31-Mar-21	-	-	-	-	-	-
	Number of Option	31-Mar-20 31-Mar-20	- -	-	-	-	-	-
Scheme XIII	Weighted Average Price Number of Option	31-Mar-21	920,000	- 1,947,500	- -	- 121,275	- 2,746,225	- 98,850
	Weighted Average Price	31-Mar-21	451.65	1,008.29	-	442.47	846.80	442.47
	Number of Option	31-Mar-20	-	975,000	55,000	-	920,000	-
	Weighted Average Price	31-Mar-20	-	451.13	442.47	-	451.65	-
Scheme XIV	Number of Option	31-Mar-21	80,000	-	40,000	-	40,000	10,000
	Weighted Average Price	31-Mar-21	540.82	-	540.82	-	540.82	540.82
	Number of Option	31-Mar-20	-	80,000	-	-	80,000	-
	Weighted Average Price	31-Mar-20	-	540.82	-	-	540.82	-
Total	Number of Option	31-Mar-21	2,452,475	2,142,500	432,959	391,382	3,870,634	753,119
	Number of Option	31-Mar-20	1,053,978	1,625,000	55,003	171,500	2,452,475	882,475

Notes forming part of consolidated financial statements

c) Details of exercise price for stock options outstanding at the end of the year

Scheme	Range of exercise		As at March 31, 2021		As at March 31, 2020
	price	No. of Options outstanding*	Weighted average remaining	No. of Options outstanding	Weighted average remaining
Scheme I		13	contractual life Note (i)	17	contractual life Note (i)
Scheme II		-	-	-	-
Scheme III		127,362	Note (i)	147,835	Note (i)
Scheme IV		326,298	2.02	406,348	3.02
Scheme V		51,691	Note (i)	60,332	Note (i)
Scheme VI		-	-	-	-
Scheme VII		3,341	2.73	6,961	3.52
Scheme VIII		-	-	-	-
Scheme IX		129,704	.2.24	135,920	3.24
Scheme X		-	-	125,062	5.55
Scheme XI	10.00	446,000	2.25	570,000	2.30
Scheme XII	10.00	-	-	-	-
Scheme XIII		2,746,225	5.59	920,000	4.36
Scheme XIV		40,000	3.08	80,000	4.08

Note (i) No contractual life is defined in the scheme.

d) Effect of the employee share-based payment plans on the statement of profit and loss and on its financial position

Compensation expense arising from equity-settled employee share-based payment plans for the year ended March 31, 2021 amounted to 290.44 million

e) Weighted average exercise prices and weighted average fair values of options

The Binomial tree and Black-Scholes valuation models have been used for computing the weighted average fair value of the stock options granted during the financial year 2020-21:

	As at March 31, 2021			As at March 31, 2020
Particulars	RSU	ESOP	ESOP	RSU	ESOP	ESOP
	Scheme XI	Scheme XIII	Scheme IV	Scheme XI	Scheme XIII	Scheme IV
Weighted average share price (Rs.)	948.4	1182.97	-	637.32	620.86	636.25
Weighted Exercise Price (Rs.)	10	1008	-	10	451.13	540.82
Weighted Average Fair Value (Rs.)	838.75	424.39	-	446.15	202.78	171.45
Expected Volatility	31.7	29.09	-	26.54	26.54	26.54
Life of the options granted		4 yrs	-	4 yrs	5 yrs	5 yrs
(Vesting and exercise period)	4 yrs
Dividend Yield	2.00%	2.00%	-	2.00%	2.00%	2.00%
Average risk-free interest rate	5.56%	5.49%	-	6.80%	6.24%	7.10%

Notes forming part of consolidated financial statements

38 Capital and other commitments

	As at
	March 31, 2021	March 31, 2020
Capital commitments
Estimated amount of contracts remaining to be executed on capital account and not provided for	223.81	143.37
Other commitments
Forward contracts	10,410.34	9,253.21

39

		For the year ended
	March 31, 2021	March 31, 2020
As auditor:
- Audit fee	10.45	9.73
In other capacity:
- Other services	11.08	8.93
Reimbursement of expenses	0.20	0.23
	21.73	18.89

40 Research and development expenditure

The particulars of expenditure incurred on in-house research and development are as follows:

		For the year ended
	March 31, 2021	March 31, 2020
Capital	-	1.04
Revenue	641.42	778.89
	641.42	779.93

41 The Parent Company was required to spend an amount of 94.49 million during the financial year 2020-21 (Previous year 85.05 million) on Corporate Social Responsibility in accordance with section 135(5) of the Companies Act, 2013. The Parent Company has spent 150.00 million during the financial year 2020-21 (Previous year 86.11 million) on purposes other than construction / acquisition of any asset.

42 Net dividend remitted in foreign exchange

Particulars	Period to which dividend	No. of non resident shareholders	No. of equity shares held on which dividend was due		For the year ended
	relates		(in million)	March 31, 2021	March 31, 2020
Interim dividend	2020-21	4	0.37	0.06	-
Final dividend	2018-19	3	0.37	-	0.02
Interim dividend	2019-20	3	0.37	-	0.05

Notes forming part of consolidated financial statements

43 Contingent liabilities

(a) Persistent Systems Limited Parent had received a show cause notice from Commissioner of Service Tax on December 19, 2016 for non-payment of service tax of 452.15 million under import of services on reverse charge basis, excluding interest and penalty if applicable. The issue relates to the professional and technical services rendered by overseas subsidiaries on behalf of the Parent Company to its overseas customers for the period 2011-12 to 2014-15.

Post representations made by the Parent Company, the Learned Principal Commissioner of Service Tax, Pune, adjudicated the aforesaid show-cause notice and issued an order on May 29, 2017, reducing the demand to 173.78 million based on the period of limitation and as a result of that, the said demand now covers financial year 2014-15. The Parent Company has filed an appeal against the order passed by Learned Principal Commissioner of Service Tax, Pune

The Group, based on independent legal opinion obtained in respect of issues related to this matter, believes that the liability is not likely to arise and therefore, no provision is considered necessary in the financial statements. If the appeal filed as mentioned above results in a demand, there will be no impact on the profitability as the Group will be eligible to claim credit/refund for the amount paid.

The GST department has filed an appeal on October 11, 2017 with appellate authorities against the Order passed by Learned Principal Commissioner of Service Tax, Pune. Though the GST department has acknowledged the ground of revenue neutrality, the said appeal mainly questions non-application of extended period of limitation. The Parent Company has filed reply to this appeal on December 18, 2017.

Considering the view of the Service Tax Authorities, based on legal advice and due prudence, the Parent Company has deposited, an amount of 647.36 million towards service tax in respect of the above matter, for the period from April 01, 2014 to June 30, 2017, under protest. This balance, post adjustment of service tax liability of million for the month of June 2017 (i.e. net amount of 629.60 million) was considered as transitional credit under GST Regime and recorded accordingly as GST receivable. The disputed demand currently stands at 173.78 million towards which 165.58 million was paid under protest and forms part of the aforementioned GST receivable balance.

• (b) As on March 31, 2021, the pending litigations in respect of direct taxes amount to 478.70 million and in respect of indirect taxes amount 27.33 million (excluding the show cause received from Commissioner of Service Tax on May 29, 2017 of 173.78 million under import of services on reverse charge basis as mentioned above). Based on the advice obtained and judgments in favour of the Parent Company at the first appellate authority in the earlier years, management does not expect any outflow in respect of these litigations.
• (c) In respect of export incentives pertaining to previous periods amounting to 255.52 million, which have been refunded under protest with interest of 41.03 million, the Parent Company filed an application with Directorate General of Foreign Trade (DGFT). The Parent Company has also represented with industrial association, The National Association of Software and Service Companies (NASSCOM), to ensure continued applicability of such incentives to the eligible information technology companies. The Parent Company understands from NASSCOM that they have also taken up the matter with concerned authorities. During the year, the Parent Company has received a Show Cause Notice from the Directorate Of Revenue Intelligence (DRI), in which the DRI has raised certain additional matters with applicable penalties which relates to eligibility of Parent company to seek the incentives. During the quarter the Parent Company has submitted a reply to the notice. Based on the documents filed with relevant authorities and based on the consultations with subject matter specialists, the Parent Company believes that its position is likely be upheld on ultimate resolution and accordingly, no provision is necessary to be made against such claims in these financial statements.

Notes forming part of consolidated financial statements

• (d) Persistent Systems Limited has given a performance guarantee upto \$ 10 million to HSBC Bank USA in respect of payment obligations under the Receivables Purchase agreement entered into by Persistent Systems, Inc. with HSBC Bank, USA (Previous year: \$10 million). Persistent Systems Limited has also given performance guarantee upto \$ 5 million to Citibank USA (Previous year: \$ 5 million) in respect of working capital facilities for Persistent Systems, Inc. and \$ 0.17 million to Sun Life Assurance Company of Canada for timely payment of rent instalments and damages, in respect of office rented to Persistent Systems, Inc.
• (e) Persistent Systems, Inc., has given commercial guarantee of 30 million Euros (Previous year: 30 Million euros) to Tech Data Europe GmbH on behalf of Persistent Systems France S.A.S. For the said guarantee, Persistent Systems, Inc. has charged guarantee fees of 0.25% of the guarantee amount.
• (f) Persistent Systems, Inc., subsidiary of Persistent Systems Limited, has also given a performance guarantee of upto \$ 3 million to United States Cellular Corporation (USCC) Services & its affiliates towards trade payable of Aepona Limited.

Notes forming part of consolidated financial statements

44 Customer Contract

On May 12, 2020, the Company had entered into an agreement with a customer to acquire a business division together with skilled employees and had also entered into a contract with the same customer for a period of five years. The Company has paid INR 136.10 million and assumed employee benefit liabilities of INR 42.66 million in consideration for contractual rights for service contracts aggregating to INR 178.76 million.

Subsequently effective January 1, 2021, the Customer entered into a definitive contract to sell its business to a third party and has consequently entered into amendment to the agreement with the Company. Based on the agreement and amendments thereto, the Company has re-evaluated the arrangement and has made necessary adjustments to the carrying amounts of transactions and balances in these financial statements from the effective date.

45 Business Combination

The Group acquired 100% share capital of CAPIOT Software Private Limited, a company based in India, with effect from October 29, 2020 and 100% share capital of CAPIOT Software Inc, a company based in USA, along with its wholly owned subsidiaries CAPIOT Software Pty Limited, a company based in Australia and CAPIOT Software Pte Limited, a company based in Singapore, with effect from November 7, 2020. The acquisition of the said business is accounted for using the acquisition method of accounting. Further, the Company is in process to complete exercise of purchase price allocation pending fair valuation of assets and liabilities assumed as at the reporting date. As a result, the Company has exercised the option of using the exemption available under Ind AS 103, which provides the Company a period of twelve months from the acquisition date for completing the accounting of purchase price allocation.

a)

The fair value of assets acquired and liabilities assumed as on the date of acquisition are as follows:

Particulars	CAPIOT Software Private Limited	CAPIOT Software Inc.	Total
Current Assets
Cash and & cash equivalents	20.00	10.90	30.90
Trade receivables	48.52	22.10	70.62
Other current assets	127.10	64.36	191.46
Non-current assets
Property, Plant and Equipment	6.26	0.74	7.00
Deferred tax asset	0.11	-	0.11
Contractual rights	344.91	18.25	363.16
Current liabilities
Trade and other payables	105.21	25.28	130.49
Borrowings	34.38	49.91	84.29
Net assets	407.31	41.16	448.47

b) Net cash outflow on acquisition of subsidiaries

Particulars
Consideration paid/ payable in cash	448.47
Less: cash and cash equivalent balances acquired	(30.90)
	417.57

c) Revenue of 143.97 million for the period ended March 31, 2021 is included in the financial statements. The profit included

Had the business combination been effected on April 1, 2020, the revenue for the year ended March 31, 2021 for the 42,132.37 million and the net profit for the year ended March

Notes forming part of consolidated financial statements

• 46 The code on Social security, 2020 relating to employee benefits has been approved by the Parliament and has also been published in Official Gazette of India. However, the date on which it comes into effect has not been notified and the rules are yet to be framed. The Group will complete its evaluation and will give appropriate impact in its financial statements in the period in which, the Code becomes effective and the related rules are published.
• 47 The Parent Company has deposits of 430 million with the financial institutions viz. Infrastructure Leasing & Financial Services Ltd. (IL&FS) and IL&FS Financial Services Ltd. (referred to as as on the balance sheet date. These were due for maturity from January 2019 to June 2019. In view of the uncertainty prevailing with respect to recovery of outstanding balances from IL&FS Group, Management of the Parent Company has fully provided for these deposits, along with interest accrued thereon till the date the deposits had become doubtful of recovery. The Management is hopeful of recovery though with a time lag. The Parent Company continues to monitor developments in the matter and is committed to take steps including legal action that may be necessary to ensure full recovery of the said deposits.
• 48 Ministry of Corporate Affairs (MCA), vide its notification dated March 24, 2021, amended Schedule III of the Companies Act, 2013 with effect from April 1, 2021. Management is of the view that since the changes are applicable from April 1, 2021, those are applicable for the financial year commencing from April 1, 2021 and are applicable to Financial statements issued in respect of accounting years commencing on or after April 1st, 2021. Therefore, related disclosures are not considered in these financial statements for the year ended on March 31, 2021, although issued after April 1, 2021.
• 49
• 50

Chartered Accountants Persistent Systems Limited Firm Registration No.: 001076N/N500013

Shashi Tadwalkar Dr. Anand Deshpande Sandeep Kalra Praveen Kadle

Partner Membership No. :- 101797 DIN: 00005721 DIN: 02506494 DIN: 00016814

For Walker Chandiok & Co LLP For and on behalf of the Board of Directors of

Chairman and Managing Director

Executive Director and Chief Executive Officer Independent Director

Place: Pune Place: New Jersey, USA Place: Mumbai

Date : April 29, 2021 Date : April 29, 2021 Date : April 29, 2021

Sunil Sapre Amit Atre Executive Director and Chief Financial Officer Company Secretary DIN: 06475949 Membership No. A20507

Place: Pune Place: Mumbai Place: Pune Date : April 29, 2021 Date : April 29, 2021 Date : April 29, 2021

Walker Chandiok & Co LLP

11th Floor, Tower II, One International Center, S B Marg, Prabhadevi (W), Mumbai - 400013 Maharashtra, India T +91 22 6626 2699 F +91 22 6626 2601

To the Members of Persistent Systems Limited

Report on the Audit of the Standalone Financial Statements

Opinion

• 1. We have audited the accompanying standalone financial statements of Persistent Systems Limited 21, the Statement of Profit and Loss (including Other Comprehensive Income), the Cash Flow Statement and the Statement of Changes in Equity for the year then ended, and a summary of the significant accounting policies and other explanatory information.
• 1. In our opinion and to the best of our information and according to the explanations given to us, the aforesaid so required and give a true and fair view in conformity with the accounting principles generally accepted in India including India affairs of the Company as at 31 March 2021, and its profit (including other comprehensive income), its cash flows and the changes in equity for the year ended on that date.

Basis for Opinion

1. We conducted our audit in accordance with the Standards on Auditing specified under section 143(10) of the Act. Our responsibilities under those standards are further described in the Audit of the Financial Statements section of our report. We are independent of the Company in accordance ethical requirements that are relevant to our audit of the financial statements under the provisions of the Act and the rules thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Key Audit Matters

1. Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the standalone financial statements of the current period. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

Chartered Accountants

1. We have determined the matters described below to be the key audit matters to be communicated in our report.

Key audit matter	How our audit addressed the key audit matter
Accuracy of revenues and onerous obligations	Our audit work included but was not restricted to the
in respect of fixed-price contracts Refer Notes 3(h)(i) notes forming part of the Standalone Financial Statements. The Company has entered into various fixed-price software development contracts, for which revenue is recognized by the Company using the percentage of completion computed as per the Input method prescribed under Ind AS 115 Revenue from Contracts with Customers. The said revenue recognition accounting policy involves exercise of significant judgement by the management and the following factors requiring significant auditor attention: High inherent risk around accuracy of revenue, given the customised and complex nature of these contracts and significant involvement of IT systems. High estimation uncertainty relating to determination of the progress of each contract, costs incurred till date and additional costs required to complete the remaining contract. Identification and determination of onerous contracts and related obligations. Determination of unbilled revenue receivables and unearned revenue related to these contracts as at end of reporting period. Considering the materiality of the amounts involved, and significant degree of judgement and subjectivity involved in the estimates as mentioned above, we have identified revenue recognition for fixed price contracts and determination of onerous contracts and related provisions, as a key audit matter for the current year audit.	following procedures: Obtained an understanding of the systems, processes and controls implemented by management for recording and calculating revenue, and the associated unbilled revenue, unearned and deferred revenue balances, and onerous contract obligations. Tested the design and operating effectiveness of related experts to assess key information technology (IT) controls over: IT environment in which the business systems operate, including access controls, segregation of duties, program change controls, program development controls and IT operation controls; Testing the IT controls over the completeness and accuracy of cost/efforts and revenue reports generated by the system; and Testing the access and application controls pertaining to allocation of resources and budgeting systems which prevents the unauthorized changes to recording of efforts incurred and controls relating to the estimation of contract efforts required to complete the project. Selected a sample of contracts and performed a retrospective review of efforts incurred with estimated efforts to identify significant variations and verify whether those variations have been considered in estimating the remaining efforts to complete the contract. Reviewed a sample of contracts with unbilled revenues to identify possible delays in achieving milestones, which require change in estimated efforts to complete the remaining performance obligations. Performed analytical procedures for reasonableness of incurred and estimated efforts. contracts based on estimates tested as above. Evaluated the appropriateness of disclosures made in the financial statements with respect to revenue recognized during the year as required
	by applicable Indian Accounting Standards.

Walker Chandiok & Co LLP is registered with limited liability with identification number AAC-2085 and has its registered office at L-41, Connaught Circus, Outer Circle, New Delhi, 110001, India

Key audit matter	How our audit addressed the key audit matter
Unbilled revenue in respect of revenue sharing	Our audit work included but was not restricted to the
arrangements, i.e., Royalty income	following procedures:
Refer Note 3(h)(i) notes forming part of the Standalone Financial Statements. Royalty income from one of the main customers is accrued as a percentage of total onward sales made by the customer during the period. Recognition of royalty income for the period of three months before year end, involves estimations made by the Company based on prior trends and booked as an unbilled receivable, since sales for the period by the customer is determined subsequent to the period end. Considering the materiality of the amounts involved, and significant degree of judgement and subjectivity involved in the estimates of the unbilled revenue, we have identified unbilled receivable in respect of revenue sharing arrangements as a key audit matter for the current year audit.	Obtained an understanding of the systems, processes and controls implemented by management for estimating revenue and the associated unbilled revenue. Tested the design and operating effectiveness of the internal controls relating to estimation of share of revenue involved in recognition of royalty income. Evaluated basis of estimation of aforesaid unbilled receivable from the terms of the contract and past trends, and verified arithmetical accuracy of management computation. Assessed historical accuracy of the forecasts made by the management in earlier period/s. Performed analytical procedures for reasonableness of revenue and associated unbilled revenue recorded and disclosed as at year end. Evaluated the appropriateness of disclosures made in the financial statements with respect to unbilled revenue recognized during the year as required by applicable Indian Accounting Standards.

Chartered Accountants

Key audit matter	How our audit addressed the key audit matter
Contingent liabilities relating to export	Our audit work included but was not restricted to the
incentive litigation following procedures:
Refer Note 36 notes forming part of the Standalone Financial Statements regarding dispute process on export incentives scrips awarded to the Company.	and the underlying controls for identification and monitoring of the pending litigations and completeness of such litigations for financial reporting
The Company in previous years has deposited under protest Rs 296.55 million with the Directorate General of Foreign Trade pursuant to the Summons received from the Directorate of Revenue Intelligence have made a corresponding application with the relevant	accounting policies relating to provisions and contingent liability disclosure, in accordance with the applicable Indian Accounting Standards
authorities. Further in the current year, the Company has received Show Cause Notice SCN from DRI,	Discussed developments during the year in the export incentive matter with the management and obtained opinion from the m
claiming that the Company is not eligible for the Obtained benefit under the scheme and if the Company has wrongfully claimed such benefits, it will be liable for the such consequential penalties.	the documents for various correspondences made between the Company and the respective departments
The management based their assessment and interpretation of various applicable rules, regulations, practices and precedents, and based on various documents filed with relevant authorities to avail these claims, believes that they have a strong case and the export incentives of 296.55 million deposited under protest are fully recoverable. Accordingly, the duty paid under protest, has been presented as receivable from management. government authority and has been correspondingly disclosed under contingent liability. In view of the amounts involved and uncertainty pertaining to the final outcome of the matter requiring significant management judgement in determination of recoverability of the aforesaid balance with respect to the said litigation, this matter is considered as a key audit matter for the	g assumptions in estimating the export incentive benefits and the possible outcome of the matters. This involved assessing the probability of an unfavourable outcome of a given proceeding and the reliability of estimates of related amounts which involved consideration of legal precedence and other rulings and expert opinion obtained by the Assessed adequacy and appropriateness of the disclosure made in the financial statement to determine whether management has presented the facts and circumstances adequately.

1. the information included in the Annual Report, but does not include the standalone financial statements and auditor's report.

Our opinion on the standalone financial statements does not cover the other information and we will not express any form of assurance conclusion thereon.

In connection with our audit of the standalone financial statements, our responsibility is to read the other information identified above when it becomes available and, in doing so, consider whether the other information is materially inconsistent with the standalone financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated.

When we read the Annual Report, if we conclude that there is a material misstatement therein, we are required to communicate the matter to those charged with governance.

Responsibilities of Management and Those Charged with Governance for the Standalone Financial Statements

• 1. The accompanying to the preparation of these standalone financial statements that give a true and fair view of the financial position, financial performance including other comprehensive income, changes in equity and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Ind AS specified under section 133 of the Act. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
• 1. continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.
• 1. Those Board of Directors is

e Audit of the Financial Statements

• 1. Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with Standards on Auditing will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
• 1. As part of an audit in accordance with Standards on Auditing, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:
• Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control;
• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances Under section 143(3)(i) of the Act, we are also responsible for expressing our opinion on whether the Company has adequate internal financial controls with reference to financial statements in place and the operating effectiveness of such controls;

Chartered Accountants

Offices in Bengaluru, Chandigarh, Chennai, Gurugram, Hyderabad, Kochi, Kolkata, Mumbai, New Delhi, Noida and Pune

• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management;
• based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast sig related disclosures in the financial statements or, if such disclosures are inadequate, to modify our However, future events or conditions may cause the Company to cease to continue as a going concern;
• Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation;
• 1. We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
• 1. We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.
• 1. From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the financial statements of the current period and are therefore the key audit about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

Report on Other Legal and Regulatory Requirements

• 1. As required by section 197(16) of the Act, based on our audit, we report that the Company has paid remuneration to its directors during the year in accordance with the provisions of and limits laid down under section 197 read with Schedule V to the Act.
• 1. A of India in terms of section 143(11) of the Act, we give in the Annexure A a statement on the matters specified in paragraphs 3 and 4 of the Order.
• 1. Further to our comments in Annexure A, as required by section 143(3) of the Act, based on our audit, we report, to the extent applicable, that:
• a) we have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit of the accompanying standalone financial statements;
• b) in our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books;
• c) the standalone financial statements dealt with by this report are in agreement with the books of account;
• d) in our opinion, the aforesaid standalone financial statements comply with Ind AS specified under section 133 of the Act;

Chartered Accountants

Offices in Bengaluru, Chandigarh, Chennai, Gurugram, Hyderabad, Kochi, Kolkata, Mumbai, New Delhi, Noida and Pune

• e) on the basis of the written representations received from the directors and taken on record by the Board of Directors, none of the directors is disqualified as on 31 March 2021 from being appointed as a director in terms of section 164(2) of the Act;
• f) we have also audited the internal financial controls with reference to financial statements of the Company as on 31 March 2021 in conjunction with our audit of the standalone financial statements of the Company for the year ended on that date and our report dated 29 April 2021 as per Annexure B expressed unmodified opinion; and
• g) Companies (Audit and Auditors) Rules, 2014 (as amended), in our opinion and to the best of our information and according to the explanations given to us:
• i. the Company, as detailed in note 36 to the standalone financial statements, has disclosed the impact of pending litigations on its financial position as at 31 March 2021.
• ii. the Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses as at 31 March 2021.;
• iii. there were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Company during the year ended 31 March 2021.; and
• iv. the disclosure requirements relating to holdings as well as dealings in specified bank notes were applicable for the period from 8 November 2016 to 30 December 2016, which are not relevant to these standalone financial statements. Hence, reporting under this clause is not applicable.

For Walker Chandiok & Co LLP

Chartered Accountants :001076N/N500013

Shashi Tadwalkar

Partner Membership No:101797

UDIN:21101797AAAAAP9108

Place: Pune Date: 29 April 2021

Chartered Accountants

Annexure A Persistent Systems Limited, on the standalone financial statements for the year ended 31 March 2020

Based on the audit procedures performed for the purpose of reporting a true and fair view on the standalone financial statements of the Company and taking into consideration the information and explanations given to us and the books of account and other records examined by us in the normal course of audit, and to the best of our knowledge and belief, we report that:

• (i) (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of property, plant and equipment.
• (b) The Company has a regular program of physical verification of its property, plant and equipment under which property, plant and equipment are verified in a phased manner over a period of three years, which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. In accordance with this program, certain property, plant and equipment were verified during the year and no material discrepancies were noticed on such verification.
• (c) plant and equipment ) are held in the name of the Company.
• (ii) The Company does not have any inventory. Accordingly, the provisions of clause 3(ii) of the Order are not applicable.
• (iii) The Company has not granted any loan, secured or unsecured to companies, firms, Limited Liability Partnerships (LLPs) or other parties covered in the register maintained under Section 189 of the Act. Accordingly, the provisions of clauses 3(iii)(a), 3(iii)(b) and 3(iii)(c) of the Order are not applicable.
• (iv) In our opinion, the Company has complied with the provisions of Sections 185 and 186 of the Act in respect of loans, investments, guarantees and security.
• (v) In our opinion, the Company has not accepted any deposits within the meaning of Sections 73 to 76 of the Act and the Companies (Acceptance of Deposits) Rules, 2014 (as amended). Accordingly, the provisions of clause 3(v) of the Order are not applicable.
• (vi) The Central Government has not specified maintenance of cost records under sub-section (1) . Accordingly, the provisions of clause 3(vi) of the Order are not applicable.
• (vii) (a) Undisputed statutory -tax, sales-tax, service tax, duty of customs, duty of excise, goods and services tax, value added tax, cess and other material statutory dues, as applicable, have generally been regularly deposited to the appropriate authorities, though there has been a slight delay in a few cases. Further, no undisputed amounts payable in respect thereof were outstanding at the year-end for a period of more than six months from the date they became payable.

Chartered Accountants

Offices in Bengaluru, Chandigarh, Chennai, Gurugram, Hyderabad, Kochi, Kolkata, Mumbai, New Delhi, Noida and Pune

Annexure A (Contd)

(b) The dues outstanding in respect of income-tax, sales-tax, service-tax, duty of customs, duty of excise and value added tax on account of any dispute, are as follows:

Statement of Disputed Dues

Name of the statute	Nature of dues	Amount Million)	Amount paid under Protest Million)	Period to which the amount relates	Forum where dispute is pending
The Income Tax Act, 1961	Income tax	28.69	-	2009-10	Honourable High Court
The Income Tax Act, 1961	Income tax	19.06	-	2010-11	Honourable High Court
The Income Tax Act, 1961	Income tax	12.52	-	2008-09	Honourable High Court
The Income Tax Act, 1961	Income tax	28.57	25.20	2013-14	Income Tax Appellate Tribunal
The Income Tax Act, 1961	Income tax	42.14	42.14	2014-15	Income Tax Appellate Tribunal
The Income Tax Act, 1961	Income tax	29.85	1.50	2015-16	Income Tax Appellate Tribunal
The Income Tax Act, 1961	Income tax	277.22	-	2017-18	Assessing officer (AO)
Maharashtra Value added Tax Act, 2002	Sales Tax	0.82	-	2014-15	Customs, Excise and Service Tax Appellate Tribunal
The Customs Act, 1962	Export incentive	296.55	296.55	2015-16, 2016-17 and 2017-18	Directorate of Revenue Intelligence
Maharashtra Value added Tax Act, 2002	Sales Tax	26.51	23.44	2005-06 and 2013-14	Joint Commissioner (Appeals) VAT
The Finance Act, 1994	Service tax	173.78	165.58	2014-15	Central Excise and Service Tax Appellate Tribunal

Chartered Accountants

Annexure A (Contd)

• (viii) The Company has not defaulted in repayment of loans or borrowings to any bank or financial institution or government during the year. The Company did not have any outstanding debentures during the year.
• (ix) The Company did not raise moneys by way of initial public offer or further public offer (including debt instruments). In our opinion, the term loans were applied for the purposes for which the loans were obtained.
• (x) No fraud by the Company or on the Company by its officers or employees has been noticed or reported during the period covered by our audit.
• (xi) Managerial remuneration has been paid and provided by the Company in accordance with the requisite approvals mandated by the provisions of Section 197 of the Act read with Schedule V to the Act.
• (xii) In our opinion, the Company is not a Nidhi Company. Accordingly, provisions of clause 3(xii) of the Order are not applicable.
• (xiii) In our opinion, all transactions with the related parties are in compliance with Sections 177 and 188 of the Act, where applicable, and the requisite details have been disclosed in the financial statements etc., as required by the applicable Ind AS.
• (xiv) During the year, the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures.
• (xv) In our opinion, the Company has not entered into any non-cash transactions with the directors or persons connected with them covered under Section 192 of the Act.
• (xvi) The Company is not required to be registered under Section 45-IA of the Reserve Bank of India Act, 1934.

For Walker Chandiok & Co LLP

Chartered Accountants Firm Registration No:001076N/N500013

Shashi Tadwalkar Partner Membership No:101797

UDIN:21101797AAAAAP9108

Place: Pune Date: 29 April 2021

Chartered Accountants

Limited on the standalone financial statements for the year ended 31 March 2021

Report on the internal financial controls with reference to the standalone financial statements under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 the Act

1. In conjunction with our audit of the standalone financial statements of Persistent Systems Limited ( the Company as at and for the year ended 31 March 2021, we have audited the internal financial controls with reference to financial statements of the Company as at that date.

Responsibilities of Management and Those Charged with Governance for Internal Financial Controls

1. Board of Directors is responsible for establishing and maintaining internal financial controls based on the internal financial controls with reference to financial statements criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting issued by the Institute of Chartered Accountants of India. These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of the business, including adherence to policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Act.

Auditor s Responsibility for the Audit of the Internal Financial Controls with Reference to Financial Statements

• 1. Our responsibility is to express an opinion on the Company's internal financial controls with reference to financial statements based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India ( ICAI ) prescribed under Section 143(10) of the Act, to the extent applicable to an audit of internal financial controls with reference to financial statements, and the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting ( the Guidance Note issued by the ICAI. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls with reference to financial statements were established and maintained and if such controls operated effectively in all material respects.
• 1. Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls with reference to financial statements and their operating effectiveness. Our audit of internal financial controls with reference to financial statements includes obtaining an understanding of such internal financial controls, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.
• 1. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our internal financial controls with reference to financial statements.

Meaning of Internal Financial Controls with Reference to Financial Statements

1. A company's internal financial controls with reference to financial statements is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company's internal financial controls with reference to financial statements include those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as

Chartered Accountants

Offices in Bengaluru, Chandigarh, Chennai, Gurugram, Hyderabad, Kochi, Kolkata, Mumbai, New Delhi, Noida and Pune

Annexure B (Contd)

necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorisations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorised acquisition, use, or disposition of the company's assets that could have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls with Reference to Financial Statements

1. Because of the inherent limitations of internal financial controls with reference to financial statements, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls with reference to financial statements to future periods are subject to the risk that the internal financial controls with reference to financial statements may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Opinion

1. In our opinion, the Company has, in all material respects, adequate internal financial controls with reference to financial statements and such controls were operating effectively as at 31 March 2021, based on the internal financial controls with reference to financial statements criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting issued by the Institute of Chartered Accountants of India.

For Walker Chandiok & Co LLP Chartered Accountants Firm s Registration No:001076N/N500013

Shashi Tadwalkar Partner Membership No:101797

UDIN:21101797AAAAAP9108

Place: Pune Date: 29 April 2021

	Notes	As at	As at
		March 31, 2021	March 31, 2020
ASSETS
Non-current assets
Property, Plant and Equipment	5.1	2,270.24 112.33	2,048.77
Capital work-in-progress Right of Use assets	5.2	314.62	48.27 269.40
Other Intangible assets	5.3	171.65	46.97
Intangible assets under development		-	137.20
		2,868.84	2,550.61
Financial assets	6	7,779.54
- Investments - Loans	7	52.23	8,379.86 123.57
- Other non current financial assets	8	25.76	358.93
Deferred tax assets (net)	9	245.74	317.35
Other non-current assets	10	419.73	329.39
		11,391.84	12,059.71
Current assets
Financial assets
- Investments	11	6,374.95	5,164.77
- Trade receivables (net)	12	2,966.26	2,883.09
- Cash and cash equivalents	13	862.72	532.63
- Other bank balances	14	7,387.00	2,405.32
- Loans	15	49.33	4.76
- Other current financial assets Other current assets	16 17	2,063.79 1,656.93	2,080.07 1,485.37
		21,360.98	14,556.01
TOTAL		32,752.82	26,615.72
EQUITY AND LIABILITIES
EQUITY
Equity share capital	4	764.25	764.25
Other equity		26,890.99	22,221.13
		27,655.24	22,985.38
LIABILITIES
Non- current liabilities
Financial liabilities
- Lease liabilities	20 18	304.72 5.54	191.26
- Borrowings Provisions	19	240.94	7.08 182.79
		551.20	381.13
Current liabilities
Financial liabilities
- Lease liabilities	20	73.82	165.38
	21	938.40	972.49
- Other financial liabilities	22	397.42	549.73
Other current liabilities	23	1,679.01	851.02
Provisions	24	1,145.59	590.38
Current tax liabilities (net)		312.14	120.21
		4,546.38	3,249.21
TOTAL		32,752.82	26,615.72
		-	-

The accompanying notes are an integral part of the financial statements.

For Walker Chandiok & Co LLP For and on behalf of the Board of Directors of

As per our report of even date

Chartered Accountants Persistent Systems Limited Firm Registration No.: 001076N/N500013 Shashi Tadwalkar Sandeep Kalra Praveen Kadle Partner Executive Director and Chief Executive Officer Independent Director Membership No.: 101797 DIN: 02506494 DIN: 00016814 Place: Pune Place: New Jersey, USA Place: Mumbai Date : April 29, 2021 Date : April 29, 2021 Date : April 29, 2021 Amit Atre Company Secretary DIN: 00005721 Executive Director and Chief Financial Officer Sunil Sapre Dr. Anand Deshpande Chairman and Managing Director

Place: Pune Place: Mumbai Place: Pune

DIN: 06475949 Membership No. A20507

Date : April 29, 2021 Date : April 29, 2021 Date : April 29, 2021

Persistent Systems Limited STATEMENT OF PROFIT AND LOSS FOR THE YEAR ENDED MARCH 31, 2021

Notes March 31, 2021 March 31, 2020 Income Revenue from operations (net) 25 24,796.08 21,081.22 Other income 26 1,176.16 1,599.04 Total income (A) 22,680.26 25,972.24 Expenses Employee benefits expense 27.1 14,093.21 11,029.06 Cost of professionals 27.2 1,775.07 1,825.37 Finance costs (refer note 33) 38.21 44.51 Depreciation and amortization expense 5.4 566.79 555.12 Other expenses 28 2,818.76 3,897.14 Total expenses (B) 17,351.20 19,292.04 Profit before tax (A - B) 5,329.06 6,680.20 Tax expense Current tax 1,684.00 1,297.91 Tax charge / (credit) in respect of earlier years 2.74 (1.60) Deferred tax credit (57.40) (44.48) Total tax expense (refer note 31) 1,251.83 1,629.34 Net profit for the year (C) 5,050.86 4,077.23 Other comprehensive income Items that will not be reclassified to profit and loss (D) - Remeasurements of the defined benefit liabilities / asset (net of tax) 15.93 (30.46) 15.93 (30.46) Items that may be reclassified to profit and loss (E) - Effective portion of cash flow hedge (net of tax) 383.55 (429.15) 383.55 (429.15) Total other comprehensive income for the year (D) + (E) 399.48 (459.61) Total comprehensive income for the year (C) + (D) + (E) 5,450.34 3,617.62 29 53.17 66.09 53.17 66.09 Summary of significant accounting policies 3 Earnings per equity share For the year ended

The accompanying notes are an integral part of the financial statements.

As per our report of even date

For Walker Chandiok & Co LLP For and on behalf of the Board of Directors of Chartered Accountants Persistent Systems Limited Firm Registration No.: 001076N/N500013

Partner Executive Director and Membership No.: 101797 DIN: 02506494 DIN: 00016814 Dr. Anand Deshpande Chairman and Managing Director DIN: 00005721

Shashi Tadwalkar Sandeep Kalra Praveen Kadle Chief Executive Officer

Place: Pune Place: New Jersey, USA Place: Mumbai

Date : April 29, 2021 Date : April 29, 2021 Date : April 29, 2021

Independent Director

	Sunil Sapre	Amit Atre
	Executive Director and	Company Secretary
	Chief Financial Officer
	DIN: 06475949	Membership No. A20507
Place: Pune	Place: Mumbai	Place: Pune
Date : April 29, 2021	Date : April 29, 2021	Date : April 29, 2021

CASH FLOW STATEMENT FOR THE YEAR ENDED MARCH 31, 2021

			For the year ended
		March 31, 2021	March 31, 2020
Cash flows from operating activities
Profit before tax		6,680.20	5,329.06
Adjustments for:
Interest income		(548.82)	(525.76)
Finance cost		38.21	44.51
Dividend income		(131.45)	(410.72)
Depreciation and amortization expense		566.79	555.12
Unrealised exchange (gain) / loss (net)		151.02	(128.86)
Exchange (gain) / loss on derivative contracts		(169.80)	58.51
Exchange (gain) / loss on translation of foreign currency cash and cash equivalents		23.15	(46.82)
Bad debts		46.96	-
Provision for expected credit loss (net)		(20.20)	47.31
Provision for doubtful deposits		-	248.48
Employee stock compensation expenses		236.33	60.01
Remeasurements of the defined benefit liabilities / asset (before tax effects)		15.93	(41.80)
(Gain) / loss on fair valuation of mutual funds		133.70	(119.02)
(Profit) on sale of investments (net)		(478.13)	(164.81)
(Profit) on sale of Property, Plant and Equipment (net)		8.10	-
Operating profit before working capital changes		6,551.99	4,905.21
Movements in working capital :
Decrease / (Increase) in non-current and current loans		37.02	(5.29)
Increase In other non current assets		(78.73)	(261.04)
Decrease / (Increase) in other current financial assets		363.88	(246.75)
Increase in other current assets		(171.56)	(241.93)
Increase in trade receivables		(312.65)	(373.81)
Increase in trade payables, current liabilities and non current liabilities		1,059.46 613.36	253.67
Increase / (Decrease) in provisions Operating profit after working capital changes		8,062.77	(49.40) 3,980.66
Direct taxes paid (net of refunds)		(1,494.81)	(1,217.69)
Net cash generated from operating activities	(A)	6,567.96	2,762.97
Cash flows from investing activities
Payment towards capital expenditure (including intangible assets)		(707.24)	(483.57)
Proceeds from sale of Property, Plant and Equipment		4.13	4.08
Investment in wholly owned subsidiaries		(376.61)	(474.00)
Purchase of bonds		(712.18)	(901.61)
Proceeds from sale of bonds		350.53	819.87
Investments in mutual funds		(24,591.91) 25,068.92	(19,456.95)
Proceeds from sale / maturity of mutual funds		(4,464.82)	17,670.49
(Investments)/ maturity in bank deposits having original maturity over three months			2,044.25
Maturity of deposit with financial institutions Interest received		- 359.89	250.00 484.68
Dividend received		131.45	410.72
Net cash (used in) / generated from investing activities	(B)	(4,937.84)	367.96
Cash flows from financing activities
(Repayment of) long term borrowings		(4.54)	(4.62)
Shares bought back		-	(1,677.01)
Specific project related grant received		9.00	3.00
Payment of lease liabilities		(173.11)	(188.37)
Dividend paid		(1,069.95)	(1,144.60)
Tax on dividend paid		- (38.28)	(154.14)
Interest paid Net cash used in financing activities	(C )	(1,276.88)	(44.50) (3,210.24)

CASH FLOW STATEMENT FOR THE YEAR ENDED MARCH 31, 2021

	For the year ended
	March 31, 2021	March 31, 2020
Net increase/ (decrease) in cash and cash equivalents (A + B + C)	353.24	(79.31)
Cash and cash equivalents at the beginning of the year	532.63	565.12
Effect of exchange differences on translation of foreign currency	(23.15)	46.82
cash and cash equivalents
Cash and cash equivalents at the end of the year	862.72	532.63
Components of cash and cash equivalents
Cash on hand (refer note 13)	0.10	0.15
Balances with banks
On current accounts # (refer note 13)	360.22	198.79
On saving accounts (refer note 13)	1.33	0.36
On deposit account with maturity of less than three months (Refer note 13)	292.50	71.47
On Exchange Earner's Foreign Currency accounts (refer note 13)	208.57	261.86
Cash and cash equivalents	862.72	532.63

Out of the cash and cash equivalent balance as at March 31, 2021, the Company can utilise 154.39 Million (Previous year: 6.62 Million) only towards certain predefined activities specified in the agreement.

Summary of significant accounting policies - Refer note 3

The accompanying notes are an integral part of the financial statements.

As per our report of even date

Chartered Accountants Persistent Systems Limited Firm Registration No.: 001076N/N500013

For Walker Chandiok & Co LLP For and on behalf of the Board of Directors of

Membership No.: 101797 DIN: 02506494 DIN: 00016814

Shashi Tadwalkar Praveen Kadle Partner Independent Director Dr. Anand Deshpande Chairman and Managing Director DIN: 00005721

Place: Pune Place: New Jersey, USA Place: Mumbai

Amit Atre Company Secretary

Date : April 29, 2021 Date : April 29, 2021 Date : April 29, 2021

Place: Pune Place: Mumbai Place: Pune

Executive Director and Chief Executive Officer Sandeep Kalra

Date : April 29, 2021 Date : April 29, 2021 Date : April 29, 2021

DIN: 06475949 Membership No. A20507 Sunil Sapre Executive Director and Chief Financial Officer

STATEMENT OF CHANGES IN EQUITY SHARE CAPITAL FOR THE YEAR ENDED MARCH 31, 2021

A. Equity share capital (Refer note 4)

Balance as at April 1, 2020	Changes in equity share capital	Balance as at March 31, 2021
	during the year
764.25	-	764.25

Balance as at April 1, 2019	Changes in equity share capital	Balance as at March 31, 2020
	during the year
791.19	(26.94)	764.25

STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED MARCH 31, 2021

B. Other equity

Particulars		Reserves and surplus					Items of other	Total
							comprehensive
							income
	Securities	General reserve Share options		Capital	Special Economic Zone	Retained earnings	Effective portion of
	premium		outstanding	redemption	re-investment reserve		cash flow hedges
	reserve		reserve	reserve
Balance as at April 1, 2020	-	12,227.23	290.51	35.75	49.95	9,861.78	(244.09)	22,221.13
Net profit for the year	-	-	-	-	-	5,050.86	-	5,050.86
Other comprehensive income for the year	-	-	-	-	-	15.93	383.55	399.48
Dividend	-	-	-	-	-	(1,069.95)	-	(1,069.95)
Transfer to retained earnings	-	-	-	-	(49.95)	49.95	-	-
Transfer to general reserve	-	2,020.34	-	-	-	(2,020.34)	-	-
Adjustments towards employees stock options	-	108.78	(108.78)	-	-	-	-	-
Employee stock compensation expenses	-	-	236.33	-	-	-	-	236.33
Employee stock compensation expenses of subsidiaries	-	-	53.14	-	-	-	-	53.14
Balance as at March 31, 2021	-	14,356.35	471.20	35.75	-	11,888.23	139.46	26,890.99

Particulars				Reserves and surplus			Items of other	Total
							comprehensive
							income
	Securities	General reserve Share options		Capital	Special Economic Zone	Retained earnings	Effective portion of
	premium		outstanding	redemption	re-investment reserve		cash flow hedges
	reserve		reserve	reserve
Balance as at April 1, 2019	774.10	10,570.73	76.29	8.81	70.00	9,735.72	185.06	21,420.71
Net profit for the year	-	-	-	-	-	4,077.23	-	4,077.23
Other comprehensive income for the year	-	-	-	-	-	(30.46)	(429.15)	(459.61)
Dividend	-	-	-	-	-	(1,146.38)	-	(1,146.38)
Tax on dividend	-	-	-	-	-	(154.14)	-	(154.14)
Transfer to capital redemption reserve	-	-	-	26.94	-	(26.94)	-	-
Transitional impact on adoption of Ind AS 116	-	-	-	-	-	(106.44)	-	(106.44)
Transferred from Special Economic Zone Reinvestment	-	-	-	-	(20.05)	20.05	-	-
Reserve on utilization
Transfer to general reserve	-	1,630.89	-	-	-	(1,630.89)	-	-
Employee stock compensation expenses	-	-	60.01	-	-	-	-	60.01
Employee stock compensation expenses of subsidiaries	-	-	179.82	-	-	-	-	179.82
Adjustments towards employees stock options	-	25.61	(25.61)	-	-	-	-	-
Utilised towards buy back of shares (refer note 4d)	(774.10)	-	-	-	-	(875.97)	-	(1,650.07)
Balance at March 31, 2020	-	12,227.23	290.51	35.75	49.95	9,861.78	(244.09)	22,221.13

Summary of significant accounting policies - Refer note 3

The accompanying notes are an integral part of the financial statements.

As per our report of even date

Chartered Accountants Persistent Systems Limited

Firm Registration No.: 001076N/N500013

For Walker Chandiok & Co LLP For and on behalf of the Board of Directors of

Shashi Tadwalkar Partner	Dr. Anand Deshpande Chairman and Managing Director	Sandeep Kalra Executive Director and Chief Executive Officer	Praveen Kadle
Membership No.: 101797	DIN: 00005721	DIN: 02506494	DIN: 00016814

Independent Director

Place: Pune Place: New Jersey, USA Place: Mumbai Date : April 29, 2021 Date : April 29, 2021 Date : April 29, 2021

Sunil Sapre Amit Atre

Executive Director and Chief Financial Officer Company Secretary

DIN: 06475949 Membership No. A20507

Date : April 29, 2021 Date : April 29, 2021 Date : April 29, 2021

Place: Pune Place: Mumbai Place: Pune

STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED MARCH 31, 2021

Nature and purpose of reserves

a) Securities premium

Securities premium is used to record the premium on issue of shares. The reserve is utilised in accordance with the provisions of Section 52 of the Companies Act, 2013.

b) General reserve

General reserve represents amounts transferred from profit for the year and from Share options outstanding reserve on exercise / expiry of employee share options. It is a free reserve in terms of section 2 (43) of the Companies Act, 2013.

c) Share options outstanding reserve

Share options outstanding reserve represents the cumulative expense recognized for equity-settled transactions at each reporting date until the employee share options are exercised / expired on which such amount is transferred to General reserve.

d) Capital redemption reserve

Capital redemption reserve represents the nominal value of the shares bought back and is created and utilised in accordance with Section 69 of the Companies Act, 2013.

e) Special Economic Zone re-investment reserve

The Special Economic Zone re-investment reserve has been created out of the profit in terms of the provisions of Section 10AA(1)(ii) of the Income tax Act, 1961. The reserve is utilised by the Company for acquiring new plant and machinery for the purpose of its business in accordance with Section 10AA(2) of the Income tax Act, 1961.

f) Cash flow hedge reserve

The cash flow hedge reserve represents the cumulative effective portion of gains or losses arising on changes in fair value of hedging instruments entered into towards highly probable transactions. Such gains or losses are subsequently recognised in the statement of profit and loss in the period in which the said transaction occurs / hedging instruments are cancelled.

1 Nature of operations

Persistent Systems Limited (the is a public Company domiciled in India and incorporated under the provisions of the Companies Act, 1956. The shares of the Company are listed on Bombay Stock Exchange and National Stock Exchange. The Company is a global company specializing in software products, services and technology innovation. The Company offers complete product life cycle services.

2 Basis of preparation

The financial statements of the Company have been prepared on an accrual basis and under the historical cost convention except for certain financial instruments and equity settled employee stock options which have been measured at fair value. Historical cost is generally based on the fair value of consideration given in exchange of goods and services. The accounting policies are consistently applied by the Company during the year and are consistent with those used in previous year except where a newly issued accounting standard is initially adopted or a revision to an existing accounting standard requires a change in the accounting policy hitherto in use. These financial statements are prepared in accordance with Indian Accounting Standard (Ind AS), the provisions of the Companies Act, 2013 (to the extent notified) and guidelines issued by the Securities and Exchange Board of India (SEBI). The Ind AS are prescribed under Section 133 of the Act read with Rule 3 of the Companies (Indian Accounting Standards) Rules, 2015 and relevant amendment rules issued thereafter.

All assets and liabilities have been classified as current or non-current as per the operating cycle and other criteria set out in the Schedule III of the Companies Act, 2013 (the Based on the nature of products/ services and the time between the acquisition of assets for processing and their realisation in cash and cash equivalents, the Company has ascertained its operating cycle as 12 months for the purpose of current and non-current classification of assets and liabilities.

3 Summary of significant accounting policies

(a) Use of estimates

A. The preparation of the financial statements in conformity with Ind AS requires the Management to make estimates, judgments and assumptions. These estimates, judgments and assumptions affect the application of accounting policies and the reported amounts of assets and liabilities, the disclosures of contingent assets and liabilities at the date of the financial statements and reported amounts of revenues and expenses during the period. The application of accounting policies that require critical accounting estimates involving complex and subjective judgments and the use of assumptions in these financial statements have been disclosed appropriately. Accounting estimates could change from period to period. Actual results could differ from those estimates. Appropriate changes in estimates are made as the Management becomes aware of changes in circumstances surrounding the estimates. Changes in estimates are reflected in the financial statements in the period in which changes are made and, if material, their effects are disclosed in the notes to the financial statements.

B. Estimation of uncertainties relating to the global health pandemic from COVID-19:

The Company has evaluated the likely impact of on the overall business of the Company. The Company as at the date of the approval of these financials, has used various available sources of information to analyse the carrying amount of its financial assets and exposures. The impact of COVID-

i. Expected credit loss:

The Company has considered the current and anticipated future economic conditions relating to industries the Company deals with and the countries where it operates. In calculating expected credit loss, the Company has also considered related credit information for its customers to estimate the probability of default in future and has taken into account estimates of possible effect from the pandemic, COVID -19 using the forward looking approach prescribed by Ind AS 109.

ii. Impact on unhedged foreign currency exposure:

Based on its assessment, the Company believes that the probability of occurrence of its forecasted transactions are not likely to be impacted by COVID 19. Hence, the Company continues to believe that there is no foreseeable impact on the effectiveness of its cash flow hedges due to this global pandemic.

iii. Carrying value of financial instruments:

Investments in mutual funds are classified as having fair value marked to an active market which factors in the uncertainties arising out of COVID

iv. Impact on revenue:

The Company continues to re-evaluate the probable revenues from customers in various verticals to assess any possible drops in revenue from any of these verticals due to the economic stress caused by COVID 19. Accordingly, it is the opinion of the Company that the customers could re-prioritise their discretionary spend in the immediate future to conserve resources.

The impact assessment of COVID 19 is a continuing process given the uncertainties associated with its nature and duration. The Company has considered the same to the extent known currently and has taken steps to measure the cost budgets required to complete its performance obligations in respect of fixed price contracts and incorporated the impact of likely delays and costs in meeting its obligations.

C. Critical accounting estimates

i. Revenue recognition

The contracts with customers include promises to transfer multiple products and services to a customer. Revenues from customer contracts are considered for recognition and measurement when the contract has been approved by the parties to the contract, the parties to the contract are committed to perform their respective obligations under the contract, and the contract is legally enforceable. The Company assesses the services promised in a contract and identifies distinct performance obligations in the contract. Identification of distinct performance obligations to determine the deliverables and the ability of the customer to benefit independently from such deliverables, and allocation of transaction price to these distinct performance obligations involves significant judgment.

The Company uses the percentage-of-completion method in accounting for its fixed-price contracts. Use of the percentage-of-completion method requires the Company to estimate the efforts or costs expended to date as a proportion of the total efforts or costs to be expended. Efforts or costs expended have been used to measure progress towards completion. Provisions for estimated losses, if any, on uncompleted contracts are recorded in the period in which such losses become probable based on the expected contract estimates at the reporting date.

Further, the Company uses significant judgement while determining the transaction price allocated to performance obligations using the expected cost plus margin approach.

In respect of the contracts where the transaction price is payable as revenue share at pre-defined percentage of customer revenue and bearing in mind, the time gap between the close of the accounting period and availability of the revenue report from the customer, the Company is required to use its judgement to ascertain the income from revenue share on the basis of historical trends of customer revenue.

ii. Income taxes

The Company's major tax jurisdiction is India, though the Company also files tax returns in other overseas jurisdictions. Significant judgements are involved in determining the provision for income taxes.

iii. Property, plant and equipment

Property, plant and equipment represent a significant proportion of the asset base of the Company. The charge in respect of depreciation is derived after determining an estimate of an expected useful life and the expected residual value at the end of its life. The useful lives and residual values of Company's assets are determined by management at the time the asset is acquired and reviewed periodically. The lives are based on historical experience with similar assets as well as anticipation of future events, which may impact their life, such as changes in technology.

iv. Provisions

Provisions are determined based on the best estimate required to settle the obligation at the reporting date. If the effect of time value of money is material, provisions are discounted using a current pre-tax rate that reflects the risks specific to the liability. These estimates are reviewed at each balance sheet date and adjusted to reflect the current best estimates.

v. Leases

Ind AS 116 requires lessees to determine the lease term as the non-cancellable period of a lease adjusted with any option to extend or terminate the lease, if the use of such option is reasonably certain. The Company makes an assessment on the expected lease term on a lease-by-lease basis and thereby assesses whether it is reasonably certain that any options to extend or terminate the contract will be exercised. In evaluating the lease term, the Company considers factors such as any significant leasehold improvements undertaken over the lease term, costs relating to the termination of the lease and the importance of the underlying asset to the operations taking into account the location of the underlying asset and the availability of suitable alternatives. The lease term in future periods is reassessed to ensure that the lease term reflects the current economic circumstances. After considering current and future economic conditions, the Company has concluded that no changes are required to lease periods relating to the existing lease contracts.

(b) Property, Plant and Equipment

Property, Plant and Equipment are stated at cost, less accumulated depreciation and accumulated impairment losses, if any. The cost comprises the purchase price and directly attributable costs of bringing the asset to its working condition for its intended use. Any trade discounts and rebates are deducted in arriving at the purchase price. Capital work-in-progress includes cost of Property, Plant and Equipment that are not ready to be put to use.

Subsequent expenditure related to an item of Property, Plant and Equipment is added to its original cost only if it is probable that future economic benefits associated with the item will flow to the Company. All other expenses on existing Property, Plant and Equipment, including day-to-day repair and maintenance expenditure and cost of replacing parts, are charged to the statement of profit and loss for the period during which such expenses are incurred.

Gains or losses arising from disposal of Property, Plant and Equipment are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognized in the statement of profit and loss when the asset is disposed.

(c) Intangible assets

Intangible assets including software licenses of enduring nature and contractual rights acquired separately are measured on initial recognition at cost. Following initial recognition, intangible assets are carried at cost less accumulated amortization and accumulated impairment losses, if any. Cost comprises the purchase price and any directly attributable cost of bringing the asset to its working condition for its intended use.

Gains or losses arising from disposal of an intangible asset are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognized in the statement of profit and loss when the asset is disposed.

Research and development cost

Research costs are expensed as incurred. Development expenditure incurred on an individual project is recognized as an intangible asset when the Company can demonstrate:

• technical feasibility of completing the intangible asset so that it will be available for use or sale;
• its intention to complete the asset;
• its ability to use or sell the asset;
• how the asset will generate probable future economic benefits;
• the availability of adequate resources to complete the development and to use or sell the asset; and
• the ability to measure reliably the expenditure attributable to the intangible asset during development.

Such development expenditure, until capitalization, is reflected as intangible assets under development.

Following the initial recognition, internally generated intangible assets are carried at cost less accumulated amortization and accumulated impairment losses, if any. Amortization of internally generated intangible asset begins when the development is complete and the asset is available for use.

(d) Depreciation and amortization

Depreciation on Property, Plant and Equipment is provided using the Straight Line Method over the useful lives of the assets estimated by the management.

The management estimates the useful lives for the Property, Plant and Equipment as follows:

Assets	Useful lives
Buildings*	25 years
Computers	3 years
Computers - Servers and networks*	3 years
Office equipments	5 years
Plant and equipment*	5 years
Plant and equipment (Windmill)*	20 years
Plant and equipment (Solar Energy System)*	10 years
Furniture and fixtures*	5 years
Vehicles*	5 years

*For these classes of assets, based on a technical evaluation, the management believes that the useful lives as given above best represent the period over which the management expects to use these assets.

Leasehold improvements are amortized over the period of lease or useful life, whichever is lower.

Intangible assets are amortized on a straight-line basis over their estimated useful lives ranging from 3 to 6 years from the day the asset is made available for use.

Where cost of a part of the asset is significant to total cost of the asset and useful life of that part is different from the useful life of the remaining asset, useful life of that significant part is determined separately and such asset component is depreciated over its separate useful life.

Depreciation methods, useful lives and residual values are reviewed periodically.

(e) Borrowing costs

Borrowing cost includes interest and amortization of ancillary costs incurred in connection with the arrangement of borrowings.

Borrowing costs directly attributable to the acquisition, construction or development of an asset that necessarily takes a substantial period of time to get ready for its intended use or sale are capitalized as part of the cost of the respective asset. All other borrowing costs are expensed in the year they occur.

(f) Leases

The lease asset classes primarily consist of leases for land and office premises. The Company assesses whether a contract contains a lease, at inception of a contract. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration.

• To assess whether a contract conveys the right to control the use of an identified asset, the Company assesses whether:
• (i) the contract involves the use of an identified asset
• (ii) the Company has substantially all of the economic benefits from use of the asset through the period of the lease and (iii) the Company has the right to direct the use of the asset

Where the Company is a lessee

The Company accounts for each lease component within the contract as a lease separately from non-lease components of the contract and allocates the consideration in the contract to each lease component on the basis of the relative stand-alone price of the lease component and the aggregate standalone price of the non-lease components.

The Company recognises right-of-use asset representing its right to use the underlying asset for the lease term at the lease commencement date. The cost of the right-of-use asset measured at inception shall comprise of the amount of the initial measurement of the lease liability adjusted for any lease payments made at or before the commencement date less any lease incentives received, plus any initial direct costs incurred and an estimate of costs to be incurred by the lessee in dismantling and removing the underlying asset or restoring the underlying asset or site on which it is located.

The right-of-use assets is subsequently measured at cost less any accumulated depreciation, accumulated impairment losses, if any and adjusted for any remeasurement of the lease liability. The right-of-use assets is depreciated using the straight-line method from the commencement date over the shorter of lease term or useful life of right-of-use asset. The estimated useful lives of right-of use assets are determined on the same basis as those of property, plant and equipment.

Right-of-use assets are tested for impairment whenever there is any indication that their carrying amounts may not be recoverable. Impairment loss, if any, is recognised in the statement of profit and loss.

The Company measures the lease liability at the present value of the lease payments that are not paid at the commencement date of the lease. The lease payments are discounted using the interest rate implicit in the lease, if that rate can be readily determined. If that rate cannot be readily determined, the Company uses incremental borrowing rate.

The lease payments shall include fixed payments, variable lease payments based on an index or rate, residual value guarantees, exercise price of a purchase option where the Company is reasonably certain to exercise that option and payments of penalties for terminating the lease, if the lease term reflects the lessee exercising an option to terminate the lease.

The lease liability is subsequently remeasured by increasing the carrying amount to reflect interest on the lease liability, reducing the carrying amount to reflect the lease payments made and remeasuring the carrying amount to reflect any reassessment or lease modifications or to reflect revised insubstance fixed lease payments.

When the lease liability is remeasured, the corresponding adjustment is reflected in the right-of-use asset, or statement of profit and loss if the right-of-use asset is already reduced to zero.

The Company has elected not to apply the requirements of Ind AS 116 to short-term leases of all assets that have a lease term of 12 months or less and leases for which the underlying asset is of low value. The lease expenses associated with these leases are recognized in the statement of profit and loss on a straight line basis.

Company as a lessor

At the inception of the lease, the Company classifies each of its leases as either an operating lease or a finance lease. Whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee, the contract is classified as a finance lease. All other leases are classified as operating leases. The Company recognises lease payments received under operating leases as income over the lease term on a straight line basis.

(g) Financial instruments

Initial recognition and measurement

The Company recognizes financial assets and financial liabilities when it becomes a party to the contractual provisions of the instrument. All financial assets and liabilities are recognized at fair value on initial recognition, except for trade receivables which are initially measured at transaction price. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities, which are not at fair value through profit or loss, are added to the fair value on initial recognition.

A. Non-derivative financial instruments

Subsequent measurement

i) Financial assets

Financial assets at amortized cost

Financial assets that are held within a business model whose objective is to hold assets for collecting contractual cash flows and whose contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding are subsequently measured at amortized cost using the effective interest rate method. The change in measurements are recognized as finance income in the statement of profit and loss.

Financial assets at fair value through other comprehensive income (FVTOCI)

Financial assets that are held within a business model whose objective is achieved both by collecting contractual cash flows and selling the financial assets and the contractual cash flows represent solely payments of principal and interest on the principal amount outstanding are subsequently measured at fair value. Fair value movements are recognized in other comprehensive income.

Financial assets at fair value through profit or loss (FVTPL)

Any financial asset which does not meet the criteria for categorization as financial asset at amortized cost or at FVTOCI, is classified as financial asset at FVTPL. Financial assets except derivative contracts included within the FVTPL category are subsequently measured at fair value with all changes recognized in the statement of profit and loss.

ii) Financial liabilities

Financial liabilities at amortised cost

Financial liabilities are subsequently carried at amortized cost using the effective interest method, except for contingent consideration recognized in a business combination which is subsequently measured at fair value through profit or loss. For trade and other payables maturing within one year from the Balance Sheet date, the carrying amounts approximate fair value due to the short maturity of these instruments.

Financial liabilities at fair value through profit or loss (FVTPL)

Financial liabilities include financial liabilities held for trading and financial liabilities designated upon initial recognition at fair value through profit or loss if the recognition criteria as per Ind AS 109 are satisfied. Gains or losses on liabilities held for trading are recognized in statement of profit and loss.

Fair value gains or losses on liabilities designated as FVTPL attributable to changes in own credit risk are recognized in other comprehensive income. All other changes in fair value of liabilities designated as FVTPL are recognized in the statement of profit and loss. The Company has not designated any financial liability as FVTPL.

Investments in subsidiaries, associates and joint ventures

Investment in subsidiaries, associates and joint ventures are carried at cost.

B. Derivative financial instruments

The Company uses derivatives for economic hedging purposes. At the inception of hedging relationship, the Company documents the hedging relationship between the hedging instrument and hedged item including whether the changes in cash flows of the hedging instruments are expected to offset the changes in cash flows of the hedged items. The Company documents its objective and strategy for undertaking its hedging transactions.

Derivatives are initially recognised at fair value on the date a derivative contract is entered and are subsequently re-measured at fair value at each reporting date.

For cash flow hedges that qualify for hedge accounting, the effective portion of fair value of derivatives are recognised in cash flow hedging reserve within equity.

Gains or losses relating to the ineffective portion is immediately recognised in profit or loss.

Amounts accumulated in equity are reclassified to profit or loss in the period when the hedged item affects profit and loss or hedged future cash flows are no longer expected to occur.

Derivatives which do not qualify for hedge accounting are accounted as fair value through profit or loss.

C. Derecognition

The Company derecognizes a financial asset when the contractual rights to the cash flows from the financial asset expire or it transfers the financial asset and the transfer qualifies for derecognition under Ind AS 109. A financial liability (or a part of a financial liability) is derecognized from the Balance Sheet when the obligation specified in the contract is discharged or cancelled or expires. On derecognition of a financial asset in its entirety, the difference between the carrying amount and the sum of the consideration received and receivable and the cumulative gain or loss that had been recognised in other comprehensive income and accumulated in equity, if any, is recognised in profit or loss, except in case of equity instruments classified as FVOCI, where such cumulative gain or loss is not recycled to statement of profit and loss.

The Company derecognizes financial liabilities when the obligations are discharged, cancelled or have expired. The difference between the carrying amount of the financial liability derecognized and the consideration paid and payable is recognised in profit or loss.

D. Fair value of financial instruments

In determining the fair value of its financial instruments, the Company uses a variety of methods and assumptions that are based on market conditions and risks existing at each reporting date. The methods used to determine fair value include discounted cash flow analysis, available quoted market prices, dealer quotes.

For equity instruments of unlisted companies, in limited circumstances, insufficient more recent information is available to measure fair value, or if there are a wide range of possible fair value measurements and cost represents the best estimate of fair value within that range. The Company recognises such equity instruments at cost, which is considered as appropriate estimate of fair value.

All methods of assessing fair value result in general approximation of value, and such value may never actually be realized. Refer to the table on financial instruments by category below for the disclosure on carrying value and fair value of financial assets and liabilities. For financial assets and liabilities maturing within one year from the Balance Sheet date and which are not carried at fair value, the carrying amounts approximate fair value due to the short maturity of these instruments.

E. Impairment of financial assets

The Company applies Expected Credit Loss (ECL) model for measurement and recognition of impairment loss on financial assets measured at amortized cost and financial assets that are debts instruments and are measured at fair value through other comprehensive income (FVTOCI). ECL is the difference between contractual cash flows that are due and the cash flows that the Company expects to receive, discounted at the original effective interest rate.

For trade receivables, the Company recognizes impairment loss allowance based on lifetime ECL at each reporting date, right from its initial recognition. For other financial assets, the Company determines whether there has been a significant increase in the credit risk since initial recognition. If credit risk has not increased significantly, 12 month ECL is used to provide for impairment loss. However, if credit risk has increased significantly, lifetime ECL is used.

F. Impairment of Non-financial assets

The carrying amounts of Property, Plant and Equipment and Goodwill are reviewed at each balance sheet date or whenever there is any indication of impairment based on internal/external factors. If any indications exist, the Company estimates the recoverable amount unless the asset does not generate cash flows that are largely independent of those from other assets.

In such cases, the recoverable amount is determined for the Cash Generating Unit (CGU) to which the asset belongs. If the recoverable amount of an asset (or CGU) is estimated to be less than its carrying amount, the carrying amount of the asset (or CGU) is reduced to its recoverable amount. The recoverable amount is the greater of the asset's fair value and its value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and risks specific to the asset.

(h) Revenue recognition

Revenues from customer contracts are considered for recognition and measurement when the contract has been approved by the parties to the contract, the parties to the contract are committed to perform their respective obligations under the contract, and the contract is legally enforceable. Revenue is recognized upon transfer of control of promised products or services to customers in an amount that reflects the consideration the Company has received or expects to receive in exchange for these products or services When there is uncertainty as to collectability, revenue recognition is postponed until such uncertainty is resolved. The Company assesses the services promised in a contract and identifies distinct performance obligations in the contract. The Company allocates the transaction price to each distinct performance obligation based on the relative standalone selling price. The price that is regularly charged for an item when sold separately is the best evidence of its standalone selling price. In the absence of such evidence, the primary method used to estimate standalone selling price is the expected cost plus a margin, under which the Company estimates the cost of satisfying the performance obligation and then adds an appropriate margin based on similar services. The contracts may include variable consideration including rebates, volume discounts and penalties. The Company includes variable consideration as part of transaction price when there is a basis to reasonably estimate the amount of the variable consideration and when it is probable that a significant reversal of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is resolved.

i. Income from software services and products

The company derives revenues primarily from IT services comprising of software development and related services and from the licensing of software products.

Arrangements with customers for software related services are either on a time-and-material or a fixed-price basis.

Revenue on time-and-material contracts are recognized as and when the related services are performed. Revenue from fixed-price contracts, where the performance obligations are satisfied over time and where there is no uncertainty as to measurement or collectability of consideration, is recognized as per the percentage-of-completion method. When there is uncertainty as to measurement or ultimate collectability, revenue recognition is postponed until such uncertainty is resolved.

Revenue from licenses where the customer obtains a to the licenses is recognized at the time the license is made available to the customer.

When support services are provided in conjunction with the licensing arrangement and the license and the support services have been identified as two separate performance obligations, the transaction price for such contracts are allocated to each performance obligation of the contract based on their relative standalone selling prices. Maintenance revenue is recognized proportionately over the period in which the services are rendered.

Revenue from revenue share is recognized in accordance with the terms of the relevant agreements.

Unbilled revenue represents revenue recognized in relation to work done until the balance sheet date for which billing has not taken place.

Unearned revenue represents the billing in respect of contracts for which the revenue is not recognized.

The Company collects Goods and Services Tax on behalf of the government and, therefore, these are not economic benefits flowing to the Company. Hence, they are excluded from revenue.

ii. Interest

Interest income is recognized on a time proportion basis taking into account the carrying amount and the effective interest rate.

iii. Dividend

Dividend income is recognized when the right to receive dividend is established. Dividend income is included under the head in the statement of profit and loss.

Notes forming part of financial statements

(i) Government grants

Government grants are recognised at fair value when there is reasonable assurance that the Company will comply with the conditions attaching to them and the grants will be received. Grants related to purchase of assets are treated as deferred income and allocated to income statement over the useful lives of the related assets while grants related to expenses are deducted in reporting the related expenses in the income statement.

(j) Foreign currency translation

Foreign currency transactions and balances

Initial recognition

Foreign currency transactions are recorded in the functional currency of the Company, by applying to the foreign currency amount the exchange rate between the functional currency and the foreign currency at the date of the transaction.

Conversion

Foreign currency monetary items are converted using the exchange rate prevailing at the reporting date. Non-monetary items, which are measured in terms of historical cost denominated in a foreign currency are reported using the exchange rate at the date of the transaction. Non-monetary items which are carried at fair value or other similar valuation denominated in a foreign currency are reported using the exchange rates at the date when the values were determined.

Exchange differences

Exchange differences arising on conversion / settlement of foreign currency monetary items and on foreign currency liabilities relating to Property, Plant and Equipment acquisition are recognized as income or expenses in the period in which they arise.

Translation of foreign operations

The assets and liabilities of a foreign operation are translated into the reporting currency (INR) at the exchange rate prevailing at the reporting date.

(k) Retirement and other employee benefits

i. Provident fund

Provident fund is a defined contribution plan covering eligible employees. The Company and the eligible employees make a monthly contribution to the provident fund maintained by the Regional Provident Fund Commissioner equal to the specified percentage of the eligible salary of the entitled employees as per the scheme. The contributions to the provident fund are charged to the statement of profit and loss for the year when the contributions are due. The Company has no obligation, other than the contribution payable to the provident fund.

ii. Gratuity

Gratuity is a defined benefit obligation plan operated by the Company for its employees covered under Company Gratuity Scheme. The cost of providing benefit under gratuity plan is determined on the basis of actuarial valuation using the projected unit credit method at the reporting date and are charged to the statement of profit and loss, except for the remeasurements, comprising of actuarial gains and losses which are recognized in full in the statement of other comprehensive income in the reporting period in which they occur. Remeasurements are not reclassified to profit and loss subsequently.

iii. Superannuation

Superannuation is a defined contribution plan covering eligible employees. The contribution to the superannuation fund managed by the insurer is equal to the specified percentage of the basic salary of the eligible employees as per the scheme. The contribution to this scheme is charged to the statement of profit and loss on an accrual basis. There are no other contributions payable other than contribution payable to the respective fund.

iv. Leave encashment

The expected cost of accumulating leave encashment is determined by actuarial valuation performed by an independent actuary at each Balance Sheet date using projected unit credit method on the additional amount expected to be paid / availed as a result of the unused entitlement that has accumulated at the Balance Sheet date. Expense on non-accumulating leave encashment is recognized in the period in which the absences occur.

v. Long service awards

Long service awards are other long term benefits to all eligible employees, as per policy. The cost of providing benefit under long service awards scheme is determined on the basis of actuarial valuation using the projected unit credit method at the reporting date. Remeasurements, comprising of actuarial gains and losses are recognized in full in the statement of profit and loss.

(l) Income taxes

Tax expense comprises of current and deferred tax. Current income tax is measured at the amount expected to be paid to the tax authorities in accordance with the Income Tax Act, 1961 enacted in India and tax laws prevailing in the respective tax jurisdictions where the Company operates. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted, at the reporting date. Current income tax relating to items recognized directly in equity is recognized in equity and not in statement of profit and loss.

Deferred income taxes reflect the impact of temporary differences between tax base of assets and liabilities and their carrying amounts. Deferred tax is measured based on the tax rates and the tax laws enacted or substantively enacted at the reporting date.

Deferred tax liabilities are recognized for all taxable temporary differences, except deferred tax liability arising from initial recognition of goodwill or an asset or liability in a transaction that is not a business combination and, affects neither accounting nor taxable profit/ loss at the time of transaction. Deferred tax assets are recognized for all deductible temporary differences, the carry forward of unused tax credits and any unused tax losses, except deferred tax assets arising from initial recognition of goodwill or an asset or liability in a transaction that is not a business combination and, affects neither accounting nor taxable profit/ loss at the time of transaction. Deferred tax assets are recognized only to the extent that sufficient future taxable income will be available against which such deferred tax assets can be realized.

In the situations where the Company is entitled to a tax holiday under the Income-tax Act, 1961 enacted in India or tax laws prevailing in the respective tax jurisdictions where it operates, no deferred tax (asset or liability) is recognized in respect of temporary differences which reverse during the tax holiday period, to the extent the gross total income is subject to the deduction during the tax holiday period. Deferred tax in respect of temporary differences which reverse after the tax holiday period is recognized in the period in which the temporary differences originate.

The carrying amount of deferred tax asset is reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available against which such deferred tax assets can be realized.

Deferred tax assets and deferred tax liabilities are offset, if a legally enforceable right exists to set off current tax assets against current tax liabilities and the deferred tax assets and deferred tax liabilities relate to the same taxable entity and the same taxation authority.

Deferred tax relating to items recognized outside the statement of profit and loss is recognized in co-relation to the underlying transaction either in other comprehensive income or directly in equity.

Minimum alternate tax (MAT) paid in a period is charged to the statement of profit and loss as current tax. MAT credit available is recognized as an asset only to the extent that there is convincing evidence that the Company will pay normal income tax during the period, i.e., the period for which MAT credit is allowed to be carried forward. In the year in which the Company recognizes MAT credit as an asset in accordance with the Guidance Note on Accounting for Credit Available in respect of Minimum Alternative Tax under the Income-tax Act, 1961, the said asset is created by way of credit to the statement of profit and loss and shown as Credit The Company reviews the credit asset at each reporting date and writes down the asset to the extent the Company does not have convincing evidence that it will pay normal tax during the specified period.

(m) Segment reporting

In accordance with para 4 of Notified Indian Accounting Standard 108 (Ind AS-108) the Company has disclosed segment information only in consolidated financial statements which are presented together with the standalone financial statements.

(n) Earnings per share (EPS)

Basic earnings per share are calculated by dividing the net profit for the year attributable to equity shareholders by the weighted average number of equity shares outstanding during the year. The weighted average number of equity shares outstanding during the reporting period is adjusted for events such as bonus issue, bonus element in a rights issue, share split, and reverse share split (consolidation of shares), if any occurred during the reporting period, that have changed the number of equity shares outstanding, without a corresponding change in resources.

For the purpose of calculating diluted earnings per share, the net profit for the year attributable to the equity shareholders and the weighted average number of equity shares outstanding during the year, are adjusted for the effects of all dilutive potential equity shares.

The number of shares and potential dilutive equity shares are adjusted retrospectively for all periods presented for any bonus shares issues including for changes effected prior to the approval of the financial statements by the Board of Directors.

(o) Provisions

A provision is recognized when the Company has a present obligation as a result of past event; it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation, in respect of which a reliable estimate can be made. Provisions are determined based on the best estimate of the amount required to settle the obligation at the reporting date. If the effect of time value of money is material, provisions are discounted using a current pre-tax rate that reflects the risks specific to the liability. These estimates are reviewed at each balance sheet date and adjusted to reflect the current best estimates.

(p) Contingent liabilities

A contingent liability is a possible obligation that arises from past events whose existence will be confirmed by the occurrence or non-occurrence of one or more uncertain future events beyond the control of the Company or a present obligation that is not recognized because it is not probable that an outflow of resources will be required to settle the obligation. A contingent liability also arises in extremely rare cases where there is a liability that cannot be recognized because it cannot be measured reliably.

(q) Cash and cash equivalents

Cash and cash equivalents in the cash flow statement comprises of cash at bank, cash in hand and short term deposits with an original maturity period of three months or less.

(r) Employee stock compensation expenses

Employees of the Company receive remuneration in the form of share based payment transactions, whereby employees render services as consideration for equity instruments granted (equity-settled transactions).

In accordance with Ind AS 102 Based the cost of equity-settled transactions is determined by the fair value of the options at the date of the grant and recognized as employee compensation cost over the vesting period. The cumulative expense recognized for equity-settled transactions at each reporting date until the vesting date reflects the extent to which the vesting period has expired and the best estimate of the number of equity instruments that will ultimately vest.

The expense or credit recognized in the statement of profit and loss for a period represents the movement in cumulative expense recognized as at the beginning and end of that period and is recognized in employee benefits expense. In case of the employee stock option schemes having a graded vesting schedule, each vesting tranche having different vesting period has been considered as a separate option grant and accounted for accordingly.

Where the terms of an equity-settled transaction award are modified, the minimum expense recognized is the expense as if the terms had not been modified, if the original terms of the award are met. An additional expense is recognized for any modification that increases the total fair value of the sharebased payment transaction or is otherwise beneficial to the employee as measured at the date of modification.

The employee stock option expenses in respect of the employees of the subsidiaries are charged to the respective subsidiary.

(s) Equity

Ordinary shares are classified as equity share capital. Incremental costs directly attributable to the issuance of new ordinary shares, share options and buyback are recognized as a deduction from equity, net of any tax effects

(t) Dividend

Final dividend on shares are recorded as a liability on the date of approval by the shareholders and interim dividends are recorded as a liability on the date

Notes forming part of financial statements

4. Share Capital

	As at March 31, 2021	As at March 31, 2020
Authorized shares (No. in million)
	2,000.00	2,000.00
	2,000.00	2,000.00
Issued, subscribed and fully paid-up shares (No. in million)
76.43 (Previous year: 76.43) equity shares of 10 each	764.25	764.25
Issued, subscribed and fully paid-up share capital	764.25	764.25

a) Reconciliation of the shares outstanding at the beginning and at the end of the year

The reconciliation of the number of shares outstanding and the amount of share capital is set out below:

				(In Million)
	As at March 31, 2021		As at
			March 31, 2020
	No of Shares		No of Shares
Number of shares at the beginning of the year	76.43	764.25	79.12	791.19
Less: Shares bought back	-	-	2.69	26.94
Number of shares at the end of the year	76.43	764.25	76.43	764.25

b) Terms / rights attached to equity shares

The Company has only one class of equity shares having a par value of per share. Each holder of equity shares is entitled to one vote per share. The Company declares and pays dividends in Indian rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting.

The Board of Directors of Persistent Systems Limited, at its meeting held on January 28, 2021, declared an interim dividend of INR 14 per equity share of face value of INR 10 each for the Financial Year 2020-21.

The Company declares and pays dividends in Indian rupees. The Finance Act, 2020 in India has repealed Dividend Distribution Tax (DDT). The Companies are now required to pay/ distribute dividend after deducting applicable taxes. The remittance of dividends outside India is governed by Indian law on foreign exchange and is also subject to withholding tax at applicable rates as per Finance Act, 2020.

In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

c) Aggregate number of bonus shares issued, shares issued for consideration other than cash and shares bought back during the period of five years immediately preceding the reporting date

	For the period of five years ended March 31, 2021	For the period of five years ended March 31, 2020 No in Million
Equity shares allotted on March 12, 2015 as fully paid bonus shares by capitalization of securities premium 400 million	No in Million -	40.000
Equity shares bought back	3.575	3.575

d) Buyback of Equity Shares of the Company:

The Board of Directors, at its meeting in January 2019, had approved the buyback of the fully paid-up equity shares of the face value of each from its shareholders/beneficial owners excluding promoters, promoter group and persons who are in control of the Company, via the route through the stock exchanges, for a total amount not exceeding 2,250 million Buyback and at a price not exceeding

The buyback was offered to all eligible equity shareholders of the Company (other than the Promoters, the Promoter Group and Persons in Control of the Company) under the open market route through the stock exchanges. The buyback of equity shares through the stock exchange commenced on February 8, 2019 and was completed on June 27, 2019. During this buyback period the Company had purchased and extinguished a total of 3,575,000 equity shares from the stock exchange at an average buy back price of per equity share comprising 4.47% of the pre buyback paid-up equity share capital of the Company. The buyback resulted in a cash outflow of million (excluding transaction costs). The Company funded the buyback from utilization of its securities premium and free reserves. The total number of equity shares outstanding post buyback stands at 76,425,000.

e) Details of shareholders holding more than 5% shares in the Company

Name of the shareholder*	As at		As at
	March 31, 2021		March 31, 2020
	No. in million	% Holding	No. in million	% Holding
Dr. Anand Deshpande jointly with Mrs. Sonali Anand Deshpande	22.96	30.04	22.96	30.04
Schemes of HDFC Mutual Fund	5.37	7.03	6.53	8.54

* The shareholding information is based on legal ownership of shares and has been extracted from the records of the Company including register of shareholders / members.

Notes forming part of financial statements

5.1 Property, plant and equipment

	Freehold		Buildings* Computers	Office	Plant and	Leasehold	Furniture	Vehicles	Total
	land			equipments	equipment	improvements	and fixtures
Gross block (at cost)
As at April 1, 2019	206.92	2,387.00	1,684.93	53.22	1,376.04	21.12	515.09	8.44	6,252.76
Additions	-	0.06	248.42	0.39	25.29	-	9.06	-	283.22
Disposals	-	-	82.01	0.03	23.95	-	2.84	1.20	110.03
As at March 31, 2020	206.92	2,387.06	1,851.34	53.58	1,377.38	21.12	521.31	7.24	6,425.95
Accumulated depreciation
As at April 1, 2019	-	964.75	1,460.02	48.77	1,144.38	17.88	482.47	4.23	4,122.50
Charge for the year	-	96.36	170.46	2.19	66.30	1.44	22.86	1.02	360.63
Disposals	-	-	81.74	0.03	20.14	-	2.84	1.20	105.95
As at March 31, 2020	-	1,061.11	1,548.74	50.93	1,190.54	19.32	502.49	4.05	4,377.18
Net block
As at March 31, 2020	206.92	1,325.95	302.60	2.65	186.84	1.80	18.82	3.19	2,048.77
As at March 31, 2019	206.92	1,422.25	224.91	4.45	231.66	3.24	32.62	4.21	2,130.26
5.2 Right of use assets
							Office premises	Leasehold land	Total
Gross block (at cost)
As at April 1, 2019							-	-	-
Additions (transitional impact on adoption of Ind AS 116)							358.91	37.50	396.41
As at March 31, 2020							358.91	37.50	396.41
Accumulated depreciation
As at April 1, 2019							-	-	-
Charge for the year							126.41	0.60	127.01
As at March 31, 2020							126.41	0.60	127.01

Net block As at March 31, 2020 36.90 232.50 269.40 As at March 31, 2019 - - -

Notes forming part of financial statements

5.3 Other Intangible assets

	Software	Acquired contractual rights	Total
Gross block
As at April 1, 2020	743.67	261.74	1,005.41
Additions	181.44	-	181.44
As at March 31, 2021	925.11	261.74	1,186.85
Accumulated Amortization
As at April 1, 2020	696.70	261.74	958.44
Charge for the year	56.76	-	56.76
As at March 31, 2021	753.46	261.74	1,015.20
Net block
As at March 31, 2021	171.65	-	171.65
As at March 31, 2020	46.97	-	46.97

	Software	Acquired contractual rights	Total
Gross block
As at April 1, 2019	713.08	261.74	974.82
Additions	30.59	-	30.59
As at March 31, 2020	743.67	261.74	1,005.41
Accumulated Amortization
As at April 1, 2019	629.22	261.74	890.96
Charge for the year	67.48	-	67.48
As at March 31, 2020	696.70	261.74	958.44
Net block
As at March 31, 2020	46.97	-	46.97
As at March 31, 2019	83.86	-	83.86

5.4 Depreciation and amortization expense

March 31, 2021	March 31, 2020
398.33	360.63
	127.01
	67.48
566.79	555.12
	For the year ended 111.70 56.76

Notes forming part of financial statements

1. Non-current financial assets : Investments (refer note 32)

	As at March 31, 2021	As at March 31, 2020
Investments carried at cost Unquoted investments Investments in equity instruments
- In wholly owned subsidiary companies (Refer note 34)
Persistent Systems, Inc. 402 million (Previous year: 402 million) shares of USD 0.10 each, fully paid up	2,478.01	2,478.01
Persistent Systems Pte Ltd.	2,478.01	2,478.01
0.50 million (Previous year: 0.50 million) shares of SGD 1 each, fully paid up	15.50 15.50	15.50 15.50
Persistent Systems France SAS 1.50 million (Previous year: 1.50 million) shares of EUR 1 each, fully paid up	97.47	97.47
	97.47	97.47
Persistent Systems Malaysia Sdn. Bhd. 5.45 million (Previous year: 5.45 million) shares of MYR 1 each, fully paid up	102.25	102.25
	102.25	102.25
Persistent Systems Germany GmbH 11.6527 million (Previous year: 11.6527 million) shares of EUR 1 each, fully paid up	1,265.91	1,265.91
	1,265.91	1,265.91
CAPIOT Software Private Limited
0.1867 million (Previous year: Nil ) shares of Rs. 10 each, fully paid up	376.61 376.61	- -
-In associates
Klisma e-Services Private Limited [Holding 50% (Previous year: 50%)]	0.05	0.05
Less : Impairment	(0.05) -	(0.05) -
Total investments carried at cost (A)	4,335.75	3,959.14
Investments carried at amortised cost Quoted Investments
In bonds	2,557.92	2,171.52
Add: Interest accrued on bonds Total investments carried at amortised cost (B)	72.88 2,630.80	68.69 2,240.21
Designated as fair value through profit and loss
Quoted Investments - Investments in mutual funds
Fair value of long term mutual funds (Refer Note 6 (a))	806.99 806.99	2,174.51 2,174.51
Unquoted Investments
-Others*
Altizon Systems Private Limited	6.00	6.00
	6.00	6.00
Total investments carried at fair value (C)	812.99	2,180.51
Total investments (A) + (B) + (C)	7,779.54	8,379.86
Aggregate provision for diminution in value of investments Aggregate amount of quoted investments	0.05 3,437.79	0.05 4,414.72
Aggregate amount of unquoted investments	4,341.80	3,965.19

* Investments, where the Company does not have joint-control or significant influence including situations where such joint-control or significant influence is intended to be temporary, are classified as "investments in others"

Notes forming part of financial statements

6 (a) Details of fair value of non current investment in mutual funds (Quoted)

	As at	As at
	March 31, 2021	March 31, 2020
Axis Mutual Fund	400.50	898.93
IDFC Mutual Fund	370.31	630.06
Sundaram Mutual Fund	36.18	33.15
ICICI Prudential Mutual Fund	-	141.38
Kotak Mutual Fund	-	105.86
UTI Mutual Fund	-	105.73
Aditya Birla Sun Life Mutual Fund	-	82.65
SBI Mutual Fund	-	71.06
HDFC Mutual Fund	-	35.66
PGIM India Mutual Fund (formerly known as DHFL Pramerica Mutual Fund)	-	35.03
DSP Mutual Fund	-	35.00
	806.99	2,174.51

7. Non-current financial assets : Loans (refer note 32)

	As at	As at
	March 31, 2021	March 31, 2020
Carried at amortised cost
Security deposits
Unsecured, considered good	52.23	123.57
	52.23	123.57
Other loans and advances
Unsecured, considered good	-	-
	0.58	0.58
Less: Impairment	(0.58)	(0.58)
	-	-
	52.23	123.57

8. Other non-current financial assets (refer note 32)

	As at	As at
	March 31, 2021	March 31, 2020
Non-current bank balances (refer note 14)	24.42	344.55
Add: Interest accrued but not due on non-current bank deposits	1.34	14.38
Non-current deposits with banks (carried at amortised cost)	25.76	358.93
Deposit with financial institutions	430.00	430.00
Add: Interest accrued but not due on deposit with financial institutions	0.98	0.98
Less: Credit impaired	(430.98)	(430.98)
Non-current deposits with financial institutions (carried at amortised cost)	-	-
	25.76	358.93

9. Deferred tax assets (net)

	As at	As at
	March 31, 2021	March 31, 2020
Deferred tax liabilities
Differences in book values and tax base values of block of Property, plant and equipment	41.87	24.30
and other intangible assets
Capital gains (net)	61.06	76.67
	102.93	100.97
Deferred tax assets
Provision for leave encashment	95.76	47.15
Provision for long service awards	64.97	51.38
Provision for expected credit loss	28.85	33.45
Tax credit	62.37	67.69
Right of use asset and lease liability	26.36	31.86
Others	70.36	186.79
	348.67	418.32
Deferred tax assets (net)	245.74	317.35

Notes forming part of financial statements

10. Other non current assets

	As at March 31, 2021	As at March 31, 2020
Capital advances (Unsecured, considered good)	38.75	27.14
Advances recoverable in cash or kind or for value to be received	84.43	5.70
Balances with government authorities (refer note 36 (c) )	296.55	296.55
	419.73	329.39

1. Current financial assets : Investments (refer note 32)

	As at	As at
	March 31, 2021	March 31, 2020
Designated as fair value through profit and loss
- Quoted investments
Investments in mutual funds
Fair value of current mutual funds (refer note 'a' below)	6,374.95	5,164.77
Total carrying amount of investments	6,374.95	5,164.77
Aggregate amount of quoted investments Aggregate amount of unquoted investments	6,374.95 -	5,164.77 -

11(a) Details of fair value of current investment in mutual funds (Quoted)

	As at	As at
	March 31, 2021	March 31, 2020
Aditya Birla Sun Life Mutual Fund	1,011.03	973.04
HDFC Mutual Fund	963.10	185.88
IDFC Mutual Fund	911.72	640.78
Axis Mutual Fund	824.68	396.02
UTI Mutual Fund	723.19	809.46
ICICI Prudential Mutual Fund	710.33	940.50
L&T Mutual Fund	511.71	734.90
Kotak Mutual Fund	478.21	421.51
SBI Mutual Fund	166.36	-
DSP Mutual Fund	37.38	-
PGIM India Mutual Fund (formerly known as DHFL Pramerica Mutual Fund)	37.24	-
Nippon India Mutual Fund (formerly known as Reliance Mutual Fund)	-	62.68
	6,374.95	5,164.77

Notes forming part of financial statements

12. Trade receivables (refer note 32)

	As at	As at
	March 31, 2021	March 31, 2020
Unsecured, considered good*	2,966.26	2,883.09
Unsecured, credit impaired	118.29	132.91
	3,084.55	3,016.00
Less : Allowance for expected credit loss	(118.29)	(132.91)
	2,966.26	2,883.09
	2,966.26	2,883.09
*Includes dues from related parties (refer note 34)

13. Cash and cash equivalents (refer note 32)

	As at	As at
	March 31, 2021	March 31, 2020
Cash and cash equivalents as presented in cash flow statement
Cash on hand	0.10	0.15
Balances with banks
On current accounts#	360.22	198.79
On saving accounts	1.33	0.36
On Exchange Earner's Foreign Currency accounts	208.57	261.86
On Deposit accounts with original maturity less than three months	292.50	71.47
	862.72	532.63

Out of the cash and cash equivalent balance as at March 31, 2021, the Company can utilise 154.39 million (Previous year: 6.62 million) only towards certain predefined activities specified in the agreement.

14. Other bank balances (refer note 32)

	As at
	March 31, 2021	March 31, 2020
Deposits with banks*	7,108.47	2,643.65
Add: Interest accrued but not due on deposits with banks	301.29	116.55
Deposits with banks (carried at amortised cost)	7,409.76	2,760.20
Less: Deposit with maturity more than twelve months from the Balance Sheet date disclosed under non-current financial assets (refer note 8)	(24.42)	(344.55)
Less: Interest accrued but not due on non-current deposits with banks (refer note 8)	(1.34)	(14.38)
	7,384.00	2,401.27
Balances with banks on unpaid dividend accounts** - Earmarked balances with banks	3.00	4.05
	7,387.00	2,405.32

* Out of the balance, fixed deposits of 675.89 million (Previous year : 71.10 million) have been earmarked against credit facilities and bank guarantees availed by the Company.

** The Company can utilize these balances only towards settlement of the respective unpaid dividend.

Notes forming part of financial statements

15. Current financial assets : Loans (refer note 32)

	As at	As at
	March 31, 2021	March 31, 2020
Carried at amortised cost
Loan to related parties (Refer note 34 and note 43)
Unsecured, credit impaired
- Klisma e-Services Private Limited	27.43	27.43
	27.43	27.43
Less: Impairment	(27.43)	(27.43)
	-	-
Security deposits
Unsecured, considered good	49.33	4.76
	49.33	4.76
	49.33	4.76

16. Other current financial assets (refer note 32)

1. Other current assets

	As at	As at
	March 31, 2021	March 31, 2020
Fair value of derivatives designated as hedging instruments
Forward contracts receivable	294.46	-
Advances to related parties (Unsecured, considered good) (refer note 34)
Persistent Systems, Inc. - Short term adv to related parties	18.72	63.08
Persistent Systems France SAS - Short term adv to related parties	0.38	6.71
Persistent Telecom Solutions Inc.	0.01	3.05
Persistent Systems Malaysia Sdn. Bhd.	-	0.15
Persistent Systems Lanka (Private) Limited	0.02	2.67
Aepona Limited	2.34	-
PARX Consulting GmbH	-	0.04
Persistent Systems Israel Ltd.	-	1.05
Persistent Systems Mexico, S.A. de C.V	-	1.12
Youperience GmbH	-	0.05
PARX Werk AG	-	1.79
Persistent Systems Germany GmbH	-	0.31
	21.47	80.02
Advances to related parties (Unsecured, credit impaired) (refer note 34)
Klisma e-Services Private Limited	0.81	0.81
Less: Impairment of current financial assets	(0.81)	(0.81)
	-	-
Other advances	21.79	-
Unbilled revenue	1,726.07	2,000.05
	2,063.79	2,080.07

	As at March 31, 2021		As at
		March 31, 2020
Advances to suppliers (Unsecured, considered good)
Advances recoverable in cash or kind or for value to be received	388.32	460.97
Excess fund balance with Life Insurance Corporation (Refer Note 30)	113.08	128.54
Other advances (Unsecured, considered good)
VAT receivable (net)	23.44	31.50
Service tax and GST receivable (net) (refer note 36)	1,132.09	864.36
	1,155.53	895.86
	1,656.93	1,485.37

Notes forming part of financial statements

18. Non-current financial liabilities : Borrowings (refer note 32)

	As at March 31, 2021	As at
		March 31, 2020
Unsecured Borrowings carried at amortised cost
Term loans
Indian rupee loan from others	7.39	11.93
Interest accrued but not due on term loans	0.11	0.18
	7.50	12.11
Less: Current maturity of long-term borrowings transferred to other current financial liabilities (Refer note 22)	(1.85)	(4.85)
Less: Current maturity of interest accrued but not due on term loan transferred to other current financial liabilities (Refer note 22)	(0.11)	(0.18)
	(1.96)	(5.03)
	5.54	7.08

The term loans from Government departments have the following terms and conditions:

Loan I - amounting to 7.39 million (Previous year 9.24 million) with Interest payable @ 3% per annum repayable in ten equal annual installments over a period of ten years commencing from October 2015.

Loan II - amounting to Nil (Previous year 2.69 million) with interest payable @ 2% per annum has been guaranteed by a bank guarantee by the Company and was repayable in ten equal semi annual installments over a period of five years commencing from September 2016. The loan has been fully repaid in current year.

19. Non current liabilities : Provisions

	As at	As at
	March 31, 2021	March 31, 2020
Provision for employee benefits
- Long service awards - Long term provisions	240.94	182.79
	240.94	182.79

Notes forming part of financial statements

20. Lease liabilities (refer note 32)

	As at	As at
	March 31, 2021	March 31, 2020
Lease liabilities	378.54	356.64
Less: Current portion of lease liabilities	(73.82)	(165.38)
	304.72	191.26
Movement of lease liabilities
	For the year ended
	March 31, 2021	March 31, 2020
Opening balance	356.64	-
Additions	176.95	501.15
Deletions	(20.03)	-
Add: Interest recognised during the year	38.09	43.86
Less: Payments made	(173.11)	(188.37)
Closing balance	378.54	356.64

21. Trade payables (refer note 32)

	As at	As at
	March 31, 2021	March 31, 2020
Trade payables for goods and services*	938.40	972.49
	938.40	972.49

*Includes dues payable to related parties (refer note 34)

Disclosure of payable to vendors as defined under the Small and Medium Enterprise Development Act, is based on the information available with the Company regarding the status of registration of such vendors under the said Act, as per the intimation received from them on requests made by the Company. There are no overdue principal amounts / interest payable amounts for delayed payments to such vendors at the Balance Sheet date. There are no delays in payment made to such suppliers during the period or for any earlier years and accordingly there is no interest paid or outstanding interest in this regard in respect of payment made during the period or on balance brought forward from previous year.

22. Other current financial liabilities (refer note 32)

	As at	As at
	March 31, 2021	March 31, 2020
Capital creditors	237.83	36.23
Current maturity of long term-borrowings (refer note 18)	1.85	4.85
Current maturity of interest on long-term borrowings (refer note18)	0.11	0.18
Accrued employee liabilities	154.58	105.64
Unpaid dividend *	3.00	4.05
Other liabilities	0.05	4.40
Fair value of derivatives designated as hedging instruments
Forward contracts payable	-	387.89
Advance from related parties (Unsecured, considered good) (refer note 34)
Persistent Systems Pte Ltd	-	2.77
PARX Werk AG	-	2.55
Aepona Limited	-	1.17
	-	6.49
	397.42	549.73

* Unpaid dividend is credited to Investor Education and Protection Fund as and when due.

Notes forming part of financial statements

23. Other current liabilities

	As at	As at
	March 31, 2021	March 31, 2020
Unearned revenue	260.40	135.88
Advance from customers	1,023.53	558.34
Other payables
- Statutory liabilities	228.03	146.89
- Other liabilities*	167.05	9.91
	1,679.01	851.02

24. Current liabilities : Provisions

	As at March 31, 2021	As at March 31, 2020
Provision for employee benefits
- Leave encashment	380.49	187.35
- Long service awards	17.19	21.35
- Other employee benefits	747.91	381.68
	1,145.59	590.38

Notes forming part of financial statements

25. Revenue from operations (net) (refer note 34)

	For the year ended
	March 31, 2021	March 31, 2020
Software services	24,270.63	20,775.56
Software licenses	525.45	305.66
	24,796.08	21,081.22

The table below presents disaggregated revenues from contracts with customers by segments, geography and type. The Company believes 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.

	For the year ended
	March 31, 2021	March 31, 2020
Revenue by industry segments
Banking, Financial Services and Insurance (BFSI)	4,070.00	3,404.15
Healthcare & Life Sciences	3,525.00	2,676.62
Technology Companies and Emerging Verticals	17,201.08	15,000.45
Total	24,796.08	21,081.22
Geographical disclosure
India	3,392.01	2,682.26
North America	19,844.83	16,700.22
Rest of the World	1,559.24	1,698.74
Total	24,796.08	21,081.22
Onsite / offshore / IP Led
IP Led	1,447.06	1,686.48
Offshore	22,597.95	18,481.33
Onsite	751.07	913.41
Total	24,796.08	21,081.22

The remaining performance obligation disclosure provides the aggregate amount of the transaction price yet to be recognized as at the end of the reporting period and an explanation as to when the Company expects to recognize these amounts in revenue. Applying the practical expedient as given in Ind AS 115, the Company has not disclosed the remaining performance obligation-related disclosures for contracts where the revenue recognized corresponds directly with the value to the customer of the performance completed to date, typically those contracts where invoicing is on time and material and unit of work-based contracts. Remaining performance obligation estimates are subject to change and are affected by several factors, including terminations, changes in the scope of contracts, periodic revalidations, adjustment for revenue that has not materialized and adjustments for currency.

reversed in to revenue from operations in current year.

unearned revenue.

In respect of the contracts wherein the transaction price is in the form of revenue share, the estimated revenue for the customer is considered based on the historical trends and management judgement with respect to customer business. The estimated revenue

Notes forming part of financial statements

1. Other income

	For the year ended
	March 31, 2021	March 31, 2020
Interest income
On deposits carried at amortised cost	381.66	373.29
On bonds	167.16	152.47
Foreign exchange gain (net)	67.12	274.26
Profit on sale of Property, plant and equipment (net)	8.10	-
Dividend income from investments	131.45	410.72
Profit on sale of investments (net)	478.13	164.81
Net gain/(loss) arising on financial assets designated as FVTPL	(133.70)	119.02
Miscellaneous income	76.24	104.47
	1,176.16	1,599.04

27. Personnel expenses

For the year ended
March 31, 2021	March 31, 2020
	10,178.10
	372.96
	417.99
	60.01
14,093.21	11,029.06
	1,565.67
	259.70
1,775.07	1,825.37
15,868.28	12,854.43
	12,806.57 666.24 384.07 236.33 1,323.73 451.34

Notes forming part of financial statements

1. Other expenses*

	For the year ended
	March 31, 2021	March 31, 2020
Travelling and conveyance	39.58	338.29
Electricity expenses (net)	69.09	97.02
Internet link expenses	50.14	48.83
Communication expenses	73.17	72.52
Recruitment expenses	75.40	69.43
Training and seminars	23.97	22.82
Purchase of software licenses and support expenses	908.00	852.77
Bad debts	46.96	-
Provision for expected credit loss (net)	(20.20)	47.31
Rent (refer note 33)	77.50	68.33
Insurance	31.37	25.91
Rates and taxes	52.57	49.17
Legal and professional fees	196.13	187.49
Repairs and maintenance
- Plant and Machinery	94.92	109.12
- Buildings	19.26	21.32
- Others	15.20	18.21
Selling and marketing expenses	739.82	660.03
Fees for sales enablement services	-	627.90
Advertisement, conference and sponsorship fees	3.54	23.02
Computer consumables	3.14	4.47
Auditors' remuneration (refer note 38)	9.00	10.26
Donations	163.93	86.11
Books, memberships, subscriptions	12.69	22.42
Provision for doubtful deposits (refer note 44)	-	248.48
Loss on sale of Property, Plant and Equipment (net)	-	5.50
Directors' sitting fees	4.84	6.58
Directors' commission	10.22	14.85
Miscellaneous expenses	118.52	158.98
	2,818.76	3,897.14
* Includes expenses incurred with related parties (refer note 34)

Notes forming part of financial statements

1. Earnings per share

		For the year ended
		March 31, 2021	March 31, 2020
Numerator for Basic and Diluted EPS
	(A)	5,050.86	4,077.23
Denominator for Basic EPS
Weighted average number of equity shares	(B)	76,425,000	76,684,672
Denominator for Diluted EPS
Number of equity shares	(C)	76,425,000	76,684,672
	(A/B)	66.09	53.17
(After exceptional items)	(A/C)	66.09	53.17

	For the year ended
	March 31, 2021	March 31, 2020
Number of shares considered as basic weighted average shares outstanding	76,425,000	76,684,672
Add: Effect of dilutive issues of stock options	-	-
Number of shares considered as weighted average shares and potential shares outstanding	76,425,000	76,684,672

Notes forming part of financial statements

30. Gratuity plan:

The Company has a defined benefit gratuity plan. Each employee is eligible for gratuity on completion of minimum five years of service at 15 days basic salary (last drawn basic salary) for each completed year of service. The scheme is funded with an insurance company in the form of a qualifying insurance policy.

The following tables summarize the components of net benefit expense recognized in the statement of profit and loss and the funded status and amounts recognized in the Balance Sheet for the respective plans.

Statement of profit and loss

Net employee benefit expense (recognized in statement of profit and loss)

	For the year ended
	March 31,	March 31,
	2021	2020
Current service cost	167.38	192.44
Interest cost on benefit obligation	56.48	68.74
Expected return on plan assets	(70.85)	(68.89)
Curtailment effect*	-	(272.59)
Others	(0.02)	(0.02)
Net benefit (income) / expense	152.99	(80.32)
Net actuarial (gain) / loss recognized in the year	(32.37)	32.79

Balance sheet

Changes in the fair value of plan assets (recognized in the Balance Sheet) are as follows:

	For the year ended
	March 31,	March 31,
	2021	2020
Opening fair value of plan assets	985.61	831.31
Expected return on plan assets	70.85	68.89
Adjustment to expected return	(10.85)	(8.88)
Contribution by employer	116.03	184.25
Benefits paid	(110.85)	(89.96)
Closing fair value of plan assets	1,050.79	985.61

Changes in the present value of the defined benefit obligation (recognized in Balance Sheet) are as follows:

	For the year ended
	March 31,	March 31,
	2021	2020
Opening defined benefit obligation	857.07	925.65
Interest cost	56.48	68.74
Current service cost	167.38	192.44
Benefits paid	(110.85)	(89.96)
Curtailments*	-	(272.59)
Actuarial (gain) / losses on obligation	(32.37)	32.79
Closing defined benefit obligation	937.71	857.07

Benefit asset/ (liability)

	As at
	March 31,	March 31,
	2021	2020
Fair value of plan assets	1,050.79 985.61
(Less) : Defined benefit obligations	(937.71)	(857.07)
Plan asset / (liability)	113.08	128.54

The major categories of plan assets as a percentage of the fair value of total plan assets:

	As at
	March 31,	March 31,
	2021	2020
Investments with insurer including accrued interest	100%	100%

Notes forming part of financial statements

		As at
	March 31,	March 31,
	2021	2020
Discount rate	6.70%	6.77%
Mortality		IALM (2012-14) Ult. IALM (2012-14) Ult.
Attrition rate	PS: 0 to 1 : 17%	PS: 0 to 1 : 17%
	PS: 1 to 3 : 14%	PS: 1 to 3 : 14%
	PS: 3 to 4 : 10%	PS: 3 to 4 : 10%
	PS: 4 to 7 : 5%	PS: 4 to 7 : 5%
	PS: 7 to 10 : 3%	PS: 7 to 10 : 3%
	PS:10 to 47 :1%	PS:10 to 47 :1%
Increment rate	5.50%	5.50%

The estimates of future salary increases, considered in actuarial valuation, take account of inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market.

Every percentage point increase / decrease in discount rate will change the gratuity benefit obligation to approximately 82.00 million / 108.01

Every percentage point increase / decrease in rate of increase in compensation levels will change the gratuity benefit obligation to approximately

Amounts for the current and previous year are as follows:

	As at
	March 31,	March 31,
	2021	2020
Plan assets	1,050.79 985.61
Defined benefit obligation	(937.71) (857.07)
Surplus / (Deficit)	113.08 128.54
Experience adjustments on plan liabilities - Loss	(32.37)	32.79

Maturity Profile of defined benefit obligations:

	As at
	March 31,	March 31,
	2021	2020
Within 1 year	36.45	45.52
1-2 years	32.91	42.59
2-3 years	33.66	33.43
3-4 years	36.11	31.94
4-5 years	36.29	34.70
5-10 years	222.48	174.92

Superannuation Fund

2020 respectively and the same is recognised in the Statement of profit and loss under the head employee benefit expenses.

Defined contribution plan - Provident Fund

The Company has certain defined contribution plans. Contributions are made to provident fund for employees @ 12% of Basic salary as per regulation. The contributions are made to registered provident fund administered by the government. The obligation of the company is limited to the amount contributed and it has no further contractual nor any constructive obligation. The expense recognised during the period towards

*The gratuity scheme had an element in its structure which caps the basic salary beyond a certain amount. Giving effect to that in valuation of benefit obligation had resulted into curtailment of benefits to the extent of 272.59 million which was reflected in the report for previous financial year 2019-20.

Notes forming part of financial statements

31. Income taxes

The reconciliation of estimated income tax expense at Indian statutory income tax rate to income tax expense reported in statement of profit and loss is as follows:

		For the year ended
	March 31, 2021	March 31, 2020
Profit before tax	6,680.20	5,329.06
Enacted tax rate in India	25.17%	25.17%
Computed tax expense at enacted tax rate	1,681.27	1,341.22
Effect of exempt income	(90.04)	(69.20)
Effect of non-deductible expenses	30.01	12.62
Effect of concessions (R&D allowance)	5.32	(21.95)
Tax (credit) / charge in respect of earlier years	2.74	(1.60)
Effect of different tax rates for different heads of income	(2.06)	(31.80)
Effect of Change in tax rate in current year (refer note below)	-	24.76
Others	2.10	(2.22)
Income tax expense	1,629.34	1,251.83

Note:

In previous year, The Company has decided to opt for the new tax regime announced by the Government of India and avail the benefit of Section 115BAA of the Income Tax Act. This provides for the concessional tax rate of 22% plus applicable surcharge and cess (totalling to 25.17% ) from April 1, 2019, without claiming the following major tax exemptions / incentives which were availed till earlier financial year.

(i) Tax holiday under section 10AA of the Income Tax Act available for units set up under the Special Economic Zone Act, 2005 (SEZ units).

(ii) Weighted Deduction under section 35 (2AB) of the Income Tax Act on the expenditure on scientific research carried out in in-house research and development facility as approved by the prescribed authority under Income Tax Act.

The Income Tax expense and deferred tax expense for the year ended March 31, 2021 include the effect of the net benefit of section 115BAA opted for by the Company from April 1, 2019.

32. Financial assets and liabilities

The carrying values and fair values of financial instruments by categories are as follows:

Financial assets/ financial liabilities	Basis of measurement	As at March 31, 2021		As at March 31, 2020		Fair value hierarchy
		Carrying value	Fair value	Carrying value	Fair value
Assets:
Investments in subsidiaries and associates	Cost	4,335.75	4,335.75	3,959.14	3,959.14
Investments in equity instruments	Fair value	6.00	6.00	6.00	6.00 Level 3
Investments in bonds*	Amortised cost	2,630.80	2,727.32	2,240.21	2,236.81
Investments in mutual funds	Fair value	7,181.94	7,181.94	7,339.28	7,339.28 Level 1
Loans	Amortised cost	101.56	101.56	128.33	128.33
Deposit with banks and financial institutions (including interest accrued but not due on deposits with banks)	Amortised cost	7,409.76	7,409.76	2,760.20	2,760.20
Cash and cash equivalents (including unpaid dividend)	Amortised cost	865.72	865.72	536.68	536.68
Trade receivables (net)	Amortised cost	2,966.26	2,966.26	2,883.09	2,883.09
Forward contracts receivable	Fair value	294.46	294.46	-	-	Level 2
Unbilled revenue	Amortised cost	1,726.07	1,726.07	2,000.05	2,000.05
Other current financial assets	Amortised cost	43.26	43.26	80.02	80.02
Total		27,561.58	27,658.10	21,933.00	21,929.60
Liabilities:
Borrowings (including accrued interest)	Amortised cost	7.50	7.50	12.11	12.11
Trade payables	Amortised cost	938.40	938.40	972.49	972.49
Lease liabilities	Amortised cost	378.54	378.54	356.64	356.64
Other financial liabilities (excluding borrowings)	Amortised cost	395.46	395.46	156.81	156.81
Forward contracts payable	Fair value	-	-	387.89	387.89 Level 2
Total		1,719.90	1,719.90	1,885.94	1,885.94

* Fair value includes interest accrued.

Fair value hierarchy:

The fair value hierarchy is based on inputs to valuation techniques that are used to measure fair value that are either observable or unobservable and consists of the following three

Level 3 Inputs are not based on observable market data (unobservable inputs). Fair values are determined in whole or in part using a valuation model based on assumptions that are neither supported by prices from observable current market transactions in the same instrument nor are they based on available market data. In respect of equity instruments of unlisted companies, in limited circumstances, insufficient more recent information is available to measure fair value, or if there are a wide range of possible fair value measurements and cost represents the best estimate of fair value within that range. The Company recognises such equity instruments at cost, which is considered as appropriate estimate of fair value.

	9	EUR	GBP	Other currencies
rade receivables
Cash and cash equivalents and bank balances	233.54 297.77 2941.63 423.83 400.81	121 73 5 26 9 9 9 9 9 9 9 9 9 9 9 9 9 9 9 9 9 9	$125.08$ $11.45$	$\begin{array}{c} 135.39 \ 30.47 \ 30.47 \ 21.97 \ 63.30 \ 63.32 \ 5.32 \end{array}$	$\begin{array}{r} \textbf{Total} \ \hline 615.74 \ 344.95 \ 4,573.00 \ 88.68 \ 525.17 \ 525.17 \ 407.30 \end{array}$
nvestments
Other financial assets (including loans and interest accrued)			$8.67$ 59.04
Trade and other payables
ther liabilities

		As at March 31, 2021			As at March 31, 2020
	reign currency	Average rate	$\overline{\phantom{a}}$ (million)	Foreign currency Average rate ₹ (million)
	million)			(million)
ß is cas
í 5b	135.00	77.11	10,410.34	125.00		74.03 9,253.21

		As at
	March 31, 2021 March 31, 2020
Receivables overdue for more than 90 days (₹ million)*	215.02	402.06
Total receivables (gross) (₹ million)	1,084.55	016.00
Overdue for more than 90 days as a % of total receivables	$7.0\%$	13.3%

Credit risk is perceived mainly in case of receivables overdue for more than 90 days. The following table gives details of risk concentration in respect of percentage of receivables overdue for more than 90 days: (132.91) 13.3% 402.06 3,016.00 1,819.49 406.33 213.28 174.84 282.25 2,883.09 73.66 11.94 132.91 119.81 47.31 March 31, 2020 March 31, 2020 March 31, 2020 As at As at As at 7.0% (118.29) (20.20) 215.02 3,084.55 2,356.35 210.40 219.92 82.86 36.02 179.00 2,966.26 5.58 118.29 132.91 March 31, 2021 March 31, 2021 March 31, 2021
Credit risk on cash and cash equivalents is limited as the Company generally invests in deposits with banks and financial institutions with high credit ratings. Investments primarily include investment in debts mutual funds, quoted bonds. Overdue for more than 90 days as a % of total receivables Movement in expected credit loss allowance Movement in expected credit loss allowance Ageing of trade receivables Less: Expected credit loss 121 and above past due 91 to 120 days past due Within the credit period 31 to 60 days past due 61 to 90 days past due Net trade receivables Translation differences 1 to 30 days past due Closing balance Opening balance
(This space is intentionally left blank)

	As at
	March 31, 2021 March 31, 2020
Opening balance	132.91	73.66
Movement in expected credit loss allowance	(20.20)	47.31
Translation differences	5.58	11.94
Closing balance	118.29	132.91

Less than 1 year
Trade payables and deferred payment liabilities Borrowings (including accrued interest)
Other financial liabilities (excluding borrowings) Lease liabilities

Notes forming part of financial statements

32. (b) Derivative instruments and un-hedged foreign currency exposures

(i) Forward contracts outstanding at the end of the year:

	As at	As at
	March 31, 2021	March 31, 2020
Forward contracts to sell USD: Hedging of expected receivables of USD 135 Million (Previous year USD 125 Million)	10,410.34	9,253.21

(ii) Details of un-hedged foreign currency exposures at the end of the year:

		As at			As at
		March 31, 2021			March 31, 2020
	million	Foreign currency (In million)	Conversion rate ( )	million	Foreign currency (In million)	Conversion rate ( )
	1.33	JPY 2.01			JPY 0.49
Bank balances		USD 4.31	0.66	0.34	USD 3.93	0.70
	314.92 13.05	GBP 0.13	73.11 100.69	297.77 11.45	GBP 0.12	75.66 93.49
	8.81	CAD 0.15	58.02	6.10	CAD 0.11	53.06
	6.02	EUR 0.07	85.78	5.26	EUR 0.06	82.76
	2.41	AUD 0.04	55.67	6.19	AUD 0.13	46.07
	2.77	ZAR 0.56	4.94	17.84	ZAR 4.20	4.25
Investments		2,939.02 USD 40.20	73.11	3,041.63	USD 40.20	75.66
	27.20	SGD 0.50	54.40	26.52	SGD 0.50	53.03
		1,460.83 EUR 17.03	85.78	1,409.40	EUR 17.03	82.76
	96.19	MYR 5.45	17.65	95.45	MYR 5.45	17.51
Trade and other payables	0.10	SGD 0.002	54.40	0.32	SGD 0.01	53.03
	234.12	USD 3.2	73.11	423.83	USD 5.60	75.66
	44.12	GBP 0.44	100.69	59.04	GBP 0.63	93.49
	0.81	CAD 0.01	58.02	8.53	CAD 0.16	53.06
	14.01	EUR 0.16	85.78	32.30	EUR 0.39	82.76
	0.03	AUD 0.001	55.67	0.42	AUD 0.01	46.07
	0.85 0.15	CHF 0.01 ZAR 0.03	77.46 4.94	0.10 0.63	CHF0.001 ZAR 0.15	78.28 4.25
	0.43	JPY 0.65	0.66	-	-	-
Advances given and deposits placed	0.29	USD 0.004	73.11	66.13	USD 0.87	75.66
	7.58	GBP 0.08	100.69	8.67	GBP 0.10	93.49
	0.26	EUR 0.01	85.78	5.58	EUR 0.07	82.76
	0.01	MXN 0.002	3.56	1.12	MXN 0.35	3.20
	0.16	MYR 0.01	17.65	0.16	MYR 0.01	17.51
	1.46	CAD 0.03	58.02	1.40	CAD 0.03	53.06
	0.04	JPY 0.07	0.66	0.04	JPY 0.06	0.70
	0.71	ILS 0.03	21.89	0.75	ILS 0.04 ZAR 0.002	21.28
	- 3.97	AUD 0.07	- - 55.67	0.01 0.36	AUD 0.01	4.25 46.07
	3.04	LKR 8.3	0.37	2.67	LKR 6.68	0.40
	-		- -	1.79	CHF 0.02	78.28
Advances received	-		- -	2.55	CHF 0.03	78.28
	2.82	SGD 0.05	54.40	2.77	SGD 0.05	53.03
	324.19	USD 4.43	73.11	400.81	USD 5.30	75.66
	0.58 0.57	GBP 0.01 EUR 0.01	100.69 85.78	1.17 -	GBP 0.01 -	93.49 -
Trade receivables	131.51	USD 1.79	73.11	233.54	USD 3.09	75.66
	112.91	EUR 1.32	85.78	121.73	EUR 1.47	82.76
	268.36	GBP 2.67	100.69	125.08	GBP 1.34	93.49
	53.35	AUD 0.96	55.67	41.01	AUD 0.89	46.07
	2.71	SGD 0.05	54.40	8.42	SGD 0.16	53.03
	29.74	ZAR 6.02	4.94	29.45	ZAR 6.93	4.25
	0.21	CAD 0.004	58.02	0.04	CAD 0.001	53.06
	1.51	CHF 0.02	77.46	-		- -
	-		- -	56.47	MYR 3.22	17.51

Notes forming part of financial statements

33. Leases

The table below provides details regarding the contractual maturities of lease liabilities on an undiscounted basis:

	As at	As at
	March 31, 2021	March 31, 2020
- Less than one year	108.09	165.38
- One to five years	358.48	218.84
- More than five years	17.37	68.11

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

The aggregate depreciation on ROU assets has been included under depreciation and amortisation expense in the Statement of Profit and Loss. (Refer note 5.4)

Notes forming part of financial statements

1. Related party disclosures

(i) Names of related parties and related party relationship

Related parties where control exists
Subsidiaries	i. Persistent Systems, Inc.
	ii. Persistent Systems Pte Ltd. iii. Persistent Systems France SAS
	iv. Persistent Systems Malaysia Sdn. Bhd.
	v. Persistent Systems Germany GmbH
	vi. CAPIOT Software Private Limited
	vii. Persistent Telecom Solutions Inc.
	(wholly owned subsidiary of Persistent Systems, Inc.)
	viii. CAPIOT Software Inc.
	(wholly owned subsidiary of Persistent Systems, Inc.)
	ix. CAPIOT Software Pty Limited (wholly owned subsidiary of CAPIOT Software Inc.)
	x. CAPIOT Software Pte Limited
	(wholly owned subsidiary of CAPIOT Software Inc.)
	xi. Persistent Systems S.R.L
	(Incorporated with effect from March 23, 2021)
	(wholly owned subsidiary of Persistent Systems, Inc.)
	xii. Aepona Holdings Limited
	(wholly owned subsidiary of Persistent Systems, Inc.) (Dissolved with effect from October 24, 2019)
	xiii. Aepona Group Limited
	(wholly owned subsidiary of Persistent Systems, Inc.)
	xiv. Aepona Limited
	(wholly owned subsidiary of Aepona Group Limited)
	xv. Valista Limited
	(wholly owned subsidiary of Aepona Group Limited) (Dissolved with effect from June 24, 2020)
	xvi. Persistent Systems Lanka (Private) Limited (Formerly known as Aepona Software (Private) Limited)
	(wholly owned subsidiary of Aepona Group Limited)
	xvii. Persistent Systems Mexico, S.A. de C.V.
	(wholly owned subsidiary of Persistent Systems Inc.)
	xviii. Persistent Systems Israel Ltd. (wholly owned subsidiary of Persistent Systems Inc.)
	xix. PARX Werk AG
	(wholly owned subsidiary of Persistent Systems Germany GmbH)
	xx. PARX Consulting GmbH
	(wholly owned subsidiary of PARX Werk AG)
	xxi. Herald Technologies Inc
	(wholly owned subsidiary of Persistent Systems, Inc.)
	(Dissolved with effect from June 24, 2019) xxii. Youperience GmbH
	(wholly owned subsidiary of Persistent Systems Germany GmbH)
	xxiii. Youperience Limited
	(wholly owned subsidiary of Youperience GmbH)
Related parties with whom transactions have taken place Associate	i. Klisma e-Services Private Limited
Key management personnel	i. Dr. Anand Deshpande, Chairman and Managing Director
	ii. Mr. Christopher O' Connor (Resigned wef 9 August 2020) @
	iii. Mr Sandeep Kalra, Executive Director and Chief Executive Officer *
	iv. Mr. Sunil Sapre, Executive Director and Chief Financial Officer
	v. Mr. Amit Atre, Company Secretary
	vi. Ms. Roshini Bakshi, Independent Director vii. Mr. Pradeep Bhargava, Independent Director
	viii. Mr. Sanjay Bhattacharya*, Independent Director (Resigned Wef July 1,
	2019)
	ix. Dr. Anant Jhingran, Independent Director
	x. Mr. Thomas Kendra, Non executive non independent director
	xi. Mr. Prakash Telang, Independent Director
	(Retired wef July 24, 2020)
	xii. Mr. Kiran Umrootkar, Independent Director (Retired wef July 24, 2020)
	xiii. Mr. Guy Eiferman, Independent Director
	xiv. Dr. Deepak Phatak, Independent Director
Relatives of Key management personnel	i. Mr. Suresh Deshpande
	(Father of the Chairman and Managing Director)
	ii. Mrs. Sulabha Deshpande (Mother of the Chairman and Managing Director)
	iii. Mrs. Sonali Anand Deshpande
	(Wife of the Chairman and Managing Director)
	iv. Dr. Mukund Deshpande \$ %
	(Brother of the Chairman and Managing Director)
	v. Mrs. Chitra Buzruk \$ %
	(Sister of the Chairman and Managing Director)
	vi. Mr. Arul Deshpande**
	(Son of the Chairman and Managing Director)
Members of Promoter Group	i. Rama Purushottam Foundation

Notes forming part of financial statements

(ii) Related party transactions

	Name of the related party and nature of relationship		For the year ended
		March 31, 2021	March 31, 2020
Sale of software services	Subsidiaries
	Persistent Systems, Inc.	8,456.81	6,917.59
	Persistent Systems Malaysia Sdn. Bhd.	97.44	100.90
	Persistent Systems Pte Ltd	-	0.01
	Persistent Systems France SAS	43.97	37.10
	Persistent Telecom Solutions Inc.	166.69	167.58
	Persistent Systems Germany GmbH	42.26	28.35
	Aepona Limited	12.52	28.66
	PARX Werk AG	2.88	-
	PARX Consulting GmbH	-	17.08
	Youperience Limited	48.67
	CAPIOT Software Private Limited	73.10	-
	Entity over which a key management personnel has significant
	influence
	Deazzle Services Private Limited	-	7.47
	Total	8,944.34	7,304.74
Fees for sales & marketing services	Subsidiaries
	Aepona Limited	-	6.92
	Persistent Systems France SAS	-	7.74
	Persistent Systems Malaysia Sdn. Bhd.	-	6.11
	Total	-	20.77
Legal and professional fees	Entity over which a key management personnel has significant
	influence
	Azure Associates, LLC	-	10.63
	Subsidiaries
	PARX Werk AG	-	0.34
	Total	-	10.97
Recovery of cost of assets	Subsidiaries
	Persistent Systems, Inc.	18.93	17.29
	Total	18.93	17.29
Investment in wholly owned subsidiary	Subsidiaries
	Persistent Systems Germany GmbH	-	552.72
	CAPIOT Software Private Limited	376.61	-
	Total	376.61	552.72
Payment of liability on behalf of	Subsidiaries
	Persistent Systems, Inc.	42.42	67.60
	Total	42.42	67.60
Interest income	Subsidiaries
	CAPIOT Software Private Limited	1.45	-
	Total	1.45	-
Dividend Income	Subsidiaries
	Persistent Systems Pte Ltd	70.33	180.37
	Persistent Systems Malaysia Sdn. Bhd.	61.12	220.31
	Total	131.45	400.68
Cost of professionals	Subsidiaries
	Persistent Systems, Inc.	1,011.10	1,175.54
	Persistent Systems France SAS	36.72	35.63
	Persistent Systems Malaysia Sdn. Bhd.	98.36	83.15
	Persistent Telecom Solutions Inc.	41.19	79.32
	Aepona Limited	26.00	30.94
	Persistent Systems Lanka (Private) Limited	54.50	93.72
	Persistent Systems Mexico, S.A. de C.V.	34.03	46.47
	Parx Werk AG	3.62	13.82
	Persistent Systems Pte Ltd	4.40	7.08
		0.56
	Youperience GmbH	9.15	-
	Youperience Limited	4.10	-
	CAPIOT Software Private Limited	1,323.73	-
	Total		1,565.67

Notes forming part of financial statements

(ii) Related party transactions

	Name of the related party and nature of relationship	For the year ended
		March 31, 2021	March 31, 2020
Reimbursement of expenses received	Subsidiary
	Persistent Systems, Inc.	- -	19.44
	Persistent Telecom Solutions Inc. Total	-	0.03 19.47
Purchase of Software	Subsidiary
	Persistent Systems, Inc.	52.21	17.94
	Persistent Telecom Solutions Inc.	4.10	3.54
	Total	56.31	21.48
Selling and marketing expenses	Subsidiaries	737.83
	Persistent Systems, Inc. Aepona Limited	-	627.44 4.74
	Persistent Telecom Solutions Inc.	-	26.26
	Persistent Systems Pte Ltd	1.99	-
	Total	739.82	658.44
Fees for sales enablement services	Subsidiaries
	Persistent Systems, Inc.	-	614.52
	Parx Werk AG Total	- -	13.39 627.91
Commission received on corporate	Subsidiary
guarantee
	Persistent Systems, Inc.	2.61	2.80
	Total	2.61	2.80
Travelling and conveyance	Subsidiary
	Persistent Systems, Inc.	- -	1.08
	PARX Werk AG Total	-	0.46 1.54
Remuneration #	Key Management Personnel
(Salaries, bonus and contribution to PF)	Dr. Anand Deshpande	26.26	23.88
	Mr. Christopher O'Connor@	0.71	1.60
	Mr. Sunil Sapre (including value of perquisites for stock options exercised	46.42	13.31
	Mr. Amit Atre	3.40	3.38
	Mr Sandeep Kalra* Independent directors:	1.21	-
	Ms. Roshini Bakshi	2.09	2.48
	Mr. Pradeep Bhargava	2.26	3.13
	Mr. Sanjay Bhattacharyya	-	0.78
	Dr. Anant Jhingran	1.83	2.23
	Mr. Thomas Kendra Mr. Prakash Telang	1.69 0.74	2.33 3.00
	Mr. Kiran Umrootkar	0.74	3.05
	Mr. Praveen Kadle	2.08	-
	Mr. Guy Eiferman	1.79	2.28
	Dr. Deepak Phatak	1.81	2.40
	Relatives of Key Management Personnel Mrs. Chitra Buzruk \$	-	2.10
	Dr. Mukund Deshpande (including value of perquisites for stock options	2.87	14.20
	9.80 million during the year
	2019-20) \$
	Mr. Arul Deshpande **	0.03	-
	Total Key Management Personnel	95.93	80.15
Dividend paid	Dr. Anand Deshpande	319.90	342.71
	Mr. Sunil Sapre	0.06	0.07
	Mr Sandeep Kalra	0.56	-
	Independent directors:
	Pradeep Bhargava	0.18 -	0.20
	Sanjay Bhattacharyya Prakash Telang	-	0.04 0.27
	Kiran Umrootkar	-	0.09
	Roshini Bakshi	0.07	-
	Relatives of Key Management Personnel
	Mr. Suresh Deshpande	0.07 6.57	0.08
	Mrs. Chitra Buzruk \$ Dr. Mukund Deshpande \$	5.60	7.04 5.65
	Mrs. Sonali Anand Deshpande	1.57	1.68
	Mrs. Sulabha Suresh Deshpande	0.64	2.49
	Rama Purushottam Foundation	-	4.92
	Mr. Arul Deshpande **	0.14	-
	Total	335.36	365.24

Notes forming part of financial statements

(ii) Related party transactions

	Name of the related party and nature of relationship		For the year ended
		March 31, 2021	March 31, 2020
Employee stock compensation -	Subsidiaries
	Persistent Systems Inc.	53.14	179.82
	Total	53.14	179.82
Advance given	Subsidiaries
	PARX Consulting GmbH	-	0.04
	Persistent Systems Lanka (Private) Limited	2.34	-
	PARX Werk AG	-	1.79
	Youperience GmbH	-	0.05
	Total	2.34	1.87
Advance received	Subsidiaries
	PARX Werk AG	1.79	2.55
	PARX Consulting GmbH	0.04	-
	Persistent Systems Israel Ltd.	1.05	-
	Persistent Systems Mexico, S.A. de C.V	1.12	-
	Persistent Systems, Inc.	44.36	-
	Persistent Systems Pte Ltd.	6.33	-
	Persistent Systems France SAS	3.04	-
	Persistent Telecom Solutions Inc.	0.15	-
	Persistent Systems Malaysia Sdn. Bhd.	2.65	-
	Youperience GmbH	0.05	-
	Persistent Systems Germany GmbH	0.31	-
	Persistent Systems Pte Ltd	-	2.77
	Aepona Limited	-	1.17
	Total	60.89	6.49
Donation given	Entity over which a key management personnel has significant
	influence
	Persistent Foundation	140.00	79.21
		140.00	79.21

Notes

Amount of remuneration represents remuneration paid through Persistent Systems Limited only, for the entire financial year 2020-21.

@ Amount of remuneration for Mr. Christopher O' Connor represents remuneration paid through Persistent Systems Limited only. He has resigned wef August 9, 2020.

\$ Dr. Mukund Deshpande and Mrs. Chitra Buzruk and have resigned w.e.f. Apr 28, 2020 and May 29, 2020 respectively.

** Mr. Arul Deshpande has joined with effect from March 8, 2021

The remuneration to the key managerial personnel does not include the provisions made for gratuity, long service awards and leave benefits, as they are determined on an actuarial basis for the Company as a whole.

Notes forming part of financial statements

(iii) Outstanding balances

	Name of the related party and nature of relationship		As at March 31, 2020
Advances given	Subsidiaries	March 31, 2021
	Persistent Systems, Inc.	18.72	63.08
	Persistent Systems France SAS	0.38	4.74
	Persistent Telecom Solutions Inc.	0.01	3.05
	Persistent Systems Israel Ltd.	-	0.75
	Persistent Systems Lanka (Private) Limited	0.02	2.67
	Persistent Systems Malaysia Sdn. Bhd	-	0.15
	Persistent Systems México, S.A. de C.V.	-	1.12
	Persistent Systems Germany GmbH	-	0.61
	PARX Consulting GmbH	-	0.04
	PARX Werk AG	-	1.79
	Youperience GmbH	-	0.05
	Aepona Limited	2.34	-
	Associate
	Klisma e-Services Private Limited @	0.81	0.81
	Total	22.28	78.86
Advances received inclusive of Advances	Subsidiaries
from customers	PARX Werk AG	0.17	2.55
	Persistent Systems Pte Ltd	-	2.77
	Aepona Limited	1.64	1.17
	Persistent Systems Israel Ltd.	1.28 15.00	-
	CAPIOT Software Private Limited	3.57	-
	Persistent Systems France SAS Persistent Systems, Inc.	976.15	- 400.81
		997.81	407.30
Trade payables	Subsidiaries
	Persistent Systems France SAS	-	23.52
	Persistent Systems, Inc.	165.68	244.13
	Persistent Systems Malaysia Sdn. Bhd.	22.21	43.04
	Persistent Telecom Solutions Inc.	3.41	39.27
	Persistent Systems Pte Ltd	2.83	7.10
	Aepona Limited	8.77	24.12
	Youperience GmbH	0.05	-
	Youperience Limited	1.30	-
	Persistent Systems Lanka (Private) Limited	-	42.79
	Persistent Systems Mexico, S.A. de C.V.	3.39	16.16
	PARX Werk AG	0.60	9.86
	Total	208.24	449.99
Trade receivables	Subsidiaries
	Persistent Systems France SAS	-	28.01
	Persistent Systems, Inc.	- 36.37	216.89
	Persistent Telecom Solutions Inc. Persistent Systems Malaysia Sdn. Bhd.	26.41	1.89 56.47
	Persistent Systems Germany GmbH	6.43	24.66
	PARX Consulting GmbH	18.82	15.49
	Aepona Limited	-	1.59
	Persistent Systems Lanka (Private) Limited	3.67	-
	Total	91.70	345.00
Unbilled Receivable	Subsidiaries
	Persistent Systems, Inc.	712.44	950.65
	Persistent Telecom Solutions Inc.	14.00	18.56
	Persistent Systems Malaysia Sdn. Bhd.	10.09	8.66
	Aepona Limited	0.60	8.30
	Persistent Systems Germany GmbH	14.04	4.42
	Persistent Systems France SAS	13.17	2.08
	Youperience Limited	6.43	0.26
	CAPIOT Software Private Ltd.	73.10	-
	Total	843.87	992.93
Loans given	Associate
	Klisma e-Services Private Limited @	27.43	27.43
	Total	27.43	27.43

Notes forming part of financial statements

(iii) Outstanding balances

	Name of the related party and nature of relationship	As at
		March 31, 2021	March 31, 2020
Investments	Subsidiaries
	Persistent Systems, Inc.	2,478.01	2,478.01
	Persistent Systems Pte Ltd	15.50	15.50
	Persistent Systems France SAS	97.47	97.47
	Persistent Systems Malaysia Sdn. Bhd.	102.25	102.25
	Persistent Systems Germany GmbH	1,265.91	1,265.91
	CAPIOT Software Private Ltd.	376.61	-
	Associates
	Klisma eService Private Limited @	0.05	0.05
	Total	4,335.80	3,959.19

@ These balances are fully provided for.

(iv) Guarantee given on behalf of subsidiary

Persistent Systems Ltd has given a performance guarantee up to \$ 10 million to HSBC Bank USA in respect of payment obligations under the Receivables Purchase agreement entered into by Persistent Systems Inc with HSBC Bank, USA (Previous year: \$10 million). Persistent Systems Ltd. has also given performance guarantee up to \$ 5 million to Citibank USA (Previous year: \$ 5 million) in respect of working capital facilities for Persistent Systems Inc. and \$ 0.17 million to Sun Life Assurance Company of Canada for timely payment of rent instalments and damages, in respect of office rented to Persistent Systems Inc.

Notes forming part of financial statements

35. Employees stock option plans (ESOP)

Certain information in this note relating to number of shares, options and per share/option price has been disclosed in full and is not rounded off.

a) Details of Employee stock option plans

The Company has framed various share-based payment schemes for its employees. The details of various equity-settled employee stock option

		Date of adoption	Initial	Exercise period
ESOP scheme	No. of options granted #	by the Board/Members	Grant date
Scheme I	4,560,500	11-Dec-99	11-Dec-99	*
Scheme II	753,200	23-Apr-04	23-Apr-04	10 Years
Scheme III	2,533,300	23-Apr-04	23-Apr-04	*
Scheme IV	6,958,250	23-Apr-06	23-Apr-06	10 Years
Scheme V	1,890,525	23-Apr-06	23-Apr-06	*
Scheme VI	1,216,250	31-Oct-06	31-Oct-06	10 Years
Scheme VII	1,784,975	30-Apr-07	30-Apr-07	10 Years
Scheme VIII	42,000	24-Jul-07	24-Jul-07	3 Years
Scheme IX	1,374,462	29-Jun-09	29-Jun-09	10 Years
Scheme X	3,062,272	10-Jun-10	29-Oct-10	2-3 Years
Scheme XI **	1,357,000	26-Jul-14	3-Nov-14	1 Year
Scheme XII ***	67,300	4-Feb-16	8-Apr-16	2.5 Months
Scheme XIII	2,922,500	27-Jul-17	1-Aug-19	4 Years
Scheme XIV	80,000	27-Jul-17	1-May-19	3 Years

Adjusted for bonus issue of shares.

*No contractual life is defined in the scheme.

**The options under Scheme XI, which is a performance based ESOP scheme will vest after 2-3 years in proportion of credit points earned by the employees every quarter based on performance. The maximum options which can be granted under this scheme are 2,000,000.

***The options under Scheme XII, ESOP scheme would vest after 1 year. The maximum options which are granted under this scheme are 50 per employee.

The vesting period and conditions of the above ESOP schemes is as follows:

All the above ESOP schemes have service condition (other than scheme XI which Is based on performance criteria), which require the employee to complete a specified period of service, as a vesting condition. The vesting pattern of various schemes has been provided below:

(i) Scheme I to V, VII, VIII, X, XIII and XIV

Service period from the			% of Options vesting
date of grant	Scheme I to V & X	Scheme VII	Scheme VIII & XIII	Scheme XIV
12 Months	10%	20%	25%	0.00%
24 Months	30%	40%	50%	33.33%
36 Months	60%	60%	75%	66.66%
48 Months	100%	80%	100%	100%
60 Months	NA	100%	NA	NA

(ii) Scheme VI

Service period from the date of grant	% of Options vesting
18 Months	30%
Every quarter thereafter	5%
(iii) Scheme IX
Service period from the date of grant	% of Options vesting
	100%
(iv) Scheme XI
Service period from the date of grant	% of Options vesting
2-3 years varying from employee to employee	Based on credit points earned
(v) Scheme XII:
Service period from the date of grant	% of Options vesting
1 year	100%

Notes forming part of financial statements

b) Details of activity of the ESOP schemes

Movement for the year ended March 31, 2021 and March 31, 2020:

ESOP Scheme	Particulars	Year Ended	Outstanding at the beginning of the Year	Granted during the Year	Forfeited during the Year	Exercised during the Year	Outstanding at the end of the Year	Exercisable at the end of the Year
Scheme I	Number of Option	31-Mar-21	17	-	4	-	13	13
	Weighted Average Price	31-Mar-21	4.42	-	4.58	-	4.37	4.37
	Number of Option	31-Mar-20	18	-	-	1	17	17
	Weighted Average Price	31-Mar-20	4.42	-	-	5.05	4.42	4.42
Scheme II	Number of Option	31-Mar-21	-	-	-	-	-	-
	Weighted Average Price	31-Mar-21	-	-	-	-	-	-
	Number of Option	31-Mar-20	3	-	3	-	-	-
	Weighted Average Price	31-Mar-20	24.18	-	24.18	-	-	-
Scheme III	Number of Option	31-Mar-21	147,835	-		20,473	127,362	127,362
	Weighted Average Price	31-Mar-21	31.94	-	-	30.22	32.07	32.07
	Number of Option	31-Mar-20	158,625	-	-	10,790	147,835	147,835
	Weighted Average Price	31-Mar-20	31.89	-	-	31.20	31.94	31.94
Scheme IV	Number of Option	31-Mar-21	406,348	-	-	80,050	326,298	326,298
	Weighted Average Price	31-Mar-21	53.07	-	-	46.70	54.83	54.83
	Number of Option	31-Mar-20 31-Mar-20	499,773 52.37	-	-	93,425	406,348	406,348
Scheme V	Weighted Average Price Number of Option	31-Mar-21	60,332	- -	- -	48.66 8,641	53.07 51,691	53.07 51,691
	Weighted Average Price	31-Mar-21	27.58	-	-	28.99	27.22	27.22
	Number of Option	31-Mar-20	62,793	-	-	2,461	60,332	60,332
	Weighted Average Price	31-Mar-20	27.37	-	-	22.23	27.58	27.58
Scheme VI	Number of Option	31-Mar-21	-	-	-	-	-	-
	Weighted Average Price	31-Mar-21	-	-	-	-	-	-
	Number of Option	31-Mar-20	-	-	-	-	-	-
	Weighted Average Price	31-Mar-20	-	-	-	-	-	-
	Scheme VII Number of Option	31-Mar-21	6,961	-	-	3,620	3,341	3,201
	Weighted Average Price	31-Mar-21	58.18	-	-	56.83	59.65	61.12
	Number of Option	31-Mar-20	34,996	-	-	28,035	6,961	6,961
	Weighted Average Price	31-Mar-20	33.55	-	-	27.44	58.18	58.18
	Scheme VIII Number of Option	31-Mar-21	-	-	-	-	-	-
	Weighted Average Price	31-Mar-21	-	-	-	-	-	-
	Number of Option	31-Mar-20 31-Mar-20	- -	-	-	-	-	-
Scheme IX	Weighted Average Price Number of Option	31-Mar-21	135,920	- -	-	- 6,216	- 129,704	- 129,704
	Weighted Average Price	31-Mar-21	54.74	-	-	54.74	54.74	54.74
	Number of Option	31-Mar-20	142,120	-	-	6,200	135,920	135,920
	Weighted Average Price	31-Mar-20	54.74	-	-	54.74	54.74	54.74
Scheme X	Number of Option	31-Mar-21	125,062	-	92,955	32,107	-	-
	Weighted Average Price	31-Mar-21	188.75	-	183.38	204.30	-	-
	Number of Option	31-Mar-20	155,650	-	-	30,588	125,062	125,062
	Weighted Average Price	31-Mar-20	206.73	-	-	221.47	188.75	188.75
Scheme XI	Number of Option	31-Mar-21	570,000	295,000	300,000	119,000	446,000	6,000
	Weighted Average Price	31-Mar-21	10.00	10.00	10.00	10.00	10.00	10.00
	Number of Option	31-Mar-20	-	570,000	-	-	570,000	-
	Weighted Average Price	31-Mar-20	-	10.00	-	-	10.00	-
	Scheme XII Number of Option	31-Mar-21	-	-	-	-	-	-
	Weighted Average Price	31-Mar-21	-	-	-	-	-	-
	Number of Option	31-Mar-20	-	-	-	-	-	-
	Weighted Average Price Scheme XIII Number of Option	31-Mar-20 31-Mar-21	- 920,000	-	-	-	-	-
		31-Mar-21	451.65	1,947,500	-	121,275	2,746,225	98,850
	Weighted Average Price Number of Option	31-Mar-20	-	1,008.29 975,000	- 55,000	442.47 -	846.80 920,000	442.47 -
	Weighted Average Price	31-Mar-20	-	451.13	442.47	-	451.65	-
	Scheme XIV Number of Option	31-Mar-21	80,000	-	40,000	-	40,000	10,000
	Weighted Average Price	31-Mar-21	540.82	-	540.82	-	540.82	540.82
	Number of Option	31-Mar-20	-	80,000	-	-	80,000	-
	Weighted Average Price	31-Mar-20	-	540.82	-	-	540.82	-
Total	Number of Option	31-Mar-21	2,452,475	2,242,500	432,959	391,382	3,870,634	753,119
	Number of Option	31-Mar-20	1,053,978	1,625,000	55,003	171,500	2,452,475	882,475

Notes forming part of financial statements

c) Details of exercise price for stock options outstanding at the end of the year

			As at March 31, 2021		As at March 31, 2020
Scheme	Range of exercise price	No. of Options outstanding*	Weighted average remaining contractual	No. of Options outstanding	Weighted average remaining contractual
Scheme I		13	Note (i)	17	Note (i)
Scheme II		-	-	-	-
Scheme III		127,362	Note (i)	147,835	Note (i)
Scheme IV		326,298	2.02	406,348	3.02
Scheme V		51,691	Note (i)	60,332	Note (i)
Scheme VI		-	-	-	-
Scheme VII		3,341	2.73	6,961	3.52
Scheme VIII		-	-	-	-
Scheme IX		129,704	2.24	135,920	3.24
Scheme X		-	-	125,062	5.55
Scheme XI	10	446,000	2.25	570,000	2.3
Scheme XII	10		- -	-	-
Scheme XIII		2,746,225	5.59	920,000	4.36
Scheme XIV		40,000	3.08	80,000	4.08

Note (i) No contractual life is defined in the scheme.

d) Effect of the employee share-based payment plans on the statement of profit and loss and on its financial position

Compensation expense arising from equity-settled employee share-based payment plans for the year ended March 31, 2021 amounted to 236.33 million (Previous year 60.01

e) Weighted average exercise prices and weighted average fair values of options

The Binomial tree and Black-Scholes valuation models have been used for computing the weighted average fair value of the stock options granted during the financial year 2020- 21:

		March 31, 2021			March 31, 2020
Particulars	RSU	ESOP	ESOP	RSU	ESOP	ESOP
	Scheme XI	Scheme XIII	Scheme IV	Scheme XI	Scheme XIII	Scheme IV
Weighted average share price (Rs.)	948.4	1182.97	-	637.32	620.86	636.25
Weighted Exercise Price (Rs.)	10	1008	-	10	451.13	540.82
Weighted Average Fair Value (Rs.)	838.75	424.39	-	446.15	202.78	171.45
Expected Volatility	31.7	29.09	-	26.54	26.54	26.54
Life of the options granted (Vesting and exercise period)	4 yrs	4 yrs	-	4 yrs	5 yrs	5 yrs
Dividend Yield	2.00%	2.00%	-	2.00%	2.00%	2.00%
Average risk-free interest rate	5.56%	5.49%	-	6.80%	6.24%	7.10%

36. Contingent liabilities

(a) Persistent Systems Limited had received a show cause notice from the Commissioner of Service Tax on December 19, 2016 for nonpayment of service tax of 452.15 million under import of services on reverse charge basis, excluding interest and penalty, if applicable. The issue relates to the professional and technical services rendered by overseas subsidiaries on behalf of the Company to its overseas customers for the period 2011-12 to 2014-15.

Post representations made by the Company, the Learned Principal Commissioner of Service Tax, Pune, adjudicated the aforesaid show-cause notice and issued an order on May 29, 2017, reducing the demand to million based on the period of limitation and as a result of that, the said demand now covers financial year 2014-15. The Company has filed an appeal against the order passed by Learned Principal Commissioner of

The Company, based on independent legal opinion obtained in respect of issues related to this matter, believes that the liability is not likely to arise and therefore, no provision is considered necessary in the financial statements. If the appeal filed as mentioned above results in a demand, there will be no impact on the profitability as the Company will be eligible to claim credit/refund for the amount paid.

The GST department has filed an appeal on October 11, 2017 with appellate authorities against the Order passed by Learned Principal Commissioner of Service Tax, Pune. Though the GST department has acknowledged the ground of revenue neutrality, the said appeal mainly questions nonapplication of extended period of limitation. The Company has filed reply to this appeal on December 18, 2017.

Considering the view of the Service Tax Authorities, based on legal advice and due prudence, the Company has deposited, an amount of 647.36 million towards service tax in respect of the above matter, for the period from April 01, 2014 to June 30, 2017, under protest. This balance, post under GST Regime and recorded accordingly as GST receivable. The disputed demand currently stands at 173.78 million towards which 165.58 million was paid under protest and forms part of the aforementioned GST receivable balance.

• (b) As on March 31, 2021, the pending litigations in respect of direct taxes amount to 478.70 million and in respect of indirect taxes amount 27.33 million (excluding the show cause notice received from Commissioner of Service Tax on May 29, 2017 of 173.78 million under import of services on reverse charge basis as mentioned above). Based on the advice obtained and judgments in favour of the Company at the first appellate authority in the earlier years, management does not expect any outflow in respect of these litigations.
• (c) In respect of export incentives pertaining to previous periods amounting to 255.52 million, which have been refunded under protest with interest of 41.03 million, the Company filed an application with Directorate General of Foreign Trade (DGFT). The Company has also represented with industrial association, The National Association of Software and Service Companies (NASSCOM), to ensure continued applicability of such incentives to the eligible information technology companies. The Company understands from NASSCOM that they have also taken up the matter with concerned authorities. During the year, the Company has received a Show Cause Notice from the Directorate Of Revenue Intelligence (DRI), in which the DRI has raised certain additional matters with applicable penalties which relates to eligibility of company to seek the incentives. During the quarter the Company has submitted a reply to the notice. Based on the documents filed with relevant authorities and based on the consultations with subject matter specialists, the Company believes that its position is likely be upheld on ultimate resolution and accordingly, no provision is necessary to be made against such claims in these financial statements.
• (d) Persistent Systems Ltd has given a performance guarantee up to \$ 10 million to HSBC Bank USA in respect of payment obligations under the Receivables Purchase agreement entered into by Persistent Systems Inc with HSBC Bank, USA (Previous year: \$10 million). Persistent Systems Ltd. has also given performance guarantee up to \$ 5 million to Citibank USA (Previous year: \$ 5 million) in respect of working capital facilities for Persistent Systems Inc. and \$ 0.17 million to Sun Life Assurance Company of Canada for timely payment of rent instalments and damages, in respect of office rented to Persistent Systems Inc.

37. Capital and other commitments

	As at
	March 31, 2021	March 31, 2020
Capital commitments
Estimated amount of contracts remaining to be executed on capital account and not provided for	41.03	67.71
Other commitments
Forward contracts	10,410.34	9,253.21

For commitments relating to lease agreements, please refer note 33.

Notes forming part of financial statements

	For the year ended
	March 31, 2021	March 31, 2020
As auditor:
- Audit fee	7.58	8.50
In other capacity:
- Other services	1.22	1.53
Reimbursement of expenses	0.20	0.23
	9.00	10.26

39. Research and development expenditure

The particulars of expenditure incurred on in-house research and development are as follows:

	For the year ended
	March 31, 2021	March 31, 2020
Capital	-	1.04
Revenue	196.72	243.05
	196.72	244.09

1. The Company was required to spend an amount of 94.49 million during the financial year 2020-21 (Previous year 85.05 million) on Corporate Social Responsibility in accordance with section 135(5) of the Companies Act, 2013.

The Company has spent 150.00 million during the financial year 2020-21 (Previous year 86.11 million) on purposes other than construction / acquisition of any asset.

41. Details of dues to micro and small enterprises as defined under MSMED Act, 2006

There are no defaults and overdue amounts payable to suppliers, who have intimated about their status as Micro and Small Enterprises as per the provisions of Micro, Small and Medium Enterprises Development Act, 2006 (MSMED Act, 2006).

42. Net dividend remitted in foreign exchange

					(In USD Million)
Particulars	Period to which dividend relates	No. of non-resident shareholders	No. of equity shares held on which dividend was due	For the year ended
			(in million)	March 31, 2021	March 31, 2020
Interim dividend	2020-21	4	0.37	0.06	-
Final dividend	2018-19	3	0.37	-	0.02
Interim dividend	2019-20	3	0.37	-	0.05

43. Loans and advances in the nature of loans given to subsidiaries and associates and firms / companies in which directors are interested

a) Loan to Klisma e-Service Private Limited

Principal is receivable at the end of twelve months and interest is receivable quarterly @ 12 % p.a. This amount is utilized for meeting business

requirements. The outstanding balance has been fully provided for.

Notes forming part of financial statements

1. The Company has deposits of 430 million with the financial institutions viz. Infrastructure Leasing & Financial Services Ltd. (IL&FS) and IL&FS Financial Services Ltd. (referred to as as on the balance sheet date. These were due for maturity from January 2019 to June 2019. In view of the uncertainty prevailing with respect to recovery of outstanding balances from IL&FS Group, Management of the Company has fully provided for these deposits along with interest accrued thereon till the date the deposits had become doubtful of recovery. The Management is hopeful of recovery though with a time lag. The Company continues to monitor developments in the matter and is committed to take steps including legal action that may be necessary to ensure full recovery of the said deposits.

2. The code on Social security, 2020 relating to employee benefits has been approved by the Parliament and has also been published in Official Gazette of India. However, the date on which it comes into effect has not been notified and the rules are yet to be framed. The Company will complete its evaluation and will give appropriate impact in its financial statements in the period in which, the Code becomes effective and the related rules are published.

3. Ministry of Corporate Affairs (MCA), vide its notification dated March 24, 2021, amended Schedule III of the Companies Act, 2013 with effect from April 1, 2021. Management is of the view that since the changes are applicable from April 1, 2021, those are applicable for the financial year commencing from April 1, 2021 and are applicable to Financial statements issued in respect of accounting years commencing on or after April 1, 2021. Therefore, related disclosures are not considered in these financial statements for the year ended on March 31, 2021, although issued after April 1, 2021.

47.

48.

For Walker Chandiok & Co LLP For and on behalf of the Board of Directors of Chartered Accountants Persistent Systems Limited Firm Registration No.: 001076N/N500013

Chairman and Managing Director

Shashi Tadwalkar Dr. Anand Deshpande Sandeep Kalra Praveen Kadle Executive Director and Chief Executive Officer Independent Director Membership No.: 101797 DIN: 00005721 DIN: 02506494 DIN: 00016814 Place: Pune Place: New Jersey, USA Place: Mumbai

Date : April 29, 2021 Date : April 29, 2021 Date : April 29, 2021

Sunil Sapre Amit Atre Executive Director and Chief Financial Officer

Company Secretary

DIN: 06475949 Membership No. A20507

Place: Pune Place: Mumbai Place: Pune

Date : April 29, 2021 Date : April 29, 2021 Date : April 29, 2021

Partner

Walker Chandiok & Co LLP

11th Floor, Tower II, One International Center, S B Marg, Prabhadevi (W), Mumbai - 400013 Maharashtra, India T +91 22 6626 2699 F +91 22 6626 2601

To the Members of Persistent Systems Limited

Report on the Audit of the Condensed Interim Consolidated Financial Statements

Opinion

• 1. We have audited the accompanying condensed interim consolidated financial statements of Persistent Systems Limited Holding and its subsidiaries (the Holding Company and its and its associate, as listed in Annexure 1 , which comprise the Condensed interim consolidated Balance Sheet as at 31 March 2021, the Condensed interim consolidated Statement of Profit and Loss (including Other Comprehensive Income) for the quarter and year ended 31 March 2021, the Condensed interim consolidated Cash Flow Statement and the Condensed interim consolidated Statement of Changes in Equity for the year ended 31 March 2021, and a summary of the significant accounting policies and other explanatory information.
• 1. In our opinion and to the best of our information and according to the explanations given to us and based on the consideration of the reports of the other auditors on separate condensed interim financial statements and on the other financial information of the subsidiaries, the aforesaid condensed interim consolidated financial give a true and fair view in conformity with the accounting principles generally accepted in India, in accordance with Indian Accounting Standard specified under Section 133 of the Act, of the consolidated state of affairs of the Group and its associate as at 31 March 2021, and its consolidated profit (including other comprehensive income) for the quarter and year ended 31 March 2021, its consolidated cash flows and the consolidated changes in equity for the year ended 31 March 2021.

Basis for Opinion

1. We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Our responsibilities under those standards are further described in the Audit of the condensed interim consolidated financial statements section of our report. We are independent of the Company in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India audit of the condensed interim consolidated financial statements under the provisions of the Act and the rules thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the Code of Ethics. We believe that the audit evidence we have obtained and the audit evidence obtained by the other auditors in terms of their reports referred to in paragraph 11 of the Other Matters section below is sufficient and appropriate to provide a basis for our opinion.

Page 1 of 5

Walker Chandiok & Co LLP is registered with limited liability with identification number AAC-2085 and has its registered office at L-41, Connaught Circus, Outer Circle, New Delhi, 110001, India

Chartered Accountants

Responsibilities of Management and Those Charged with Governance for the Condensed Interim Consolidated Financial Statements

• 1. The accompanying condensed interim consolidated financial statements have been approved by the Holding in Section 134(5) of the Act with respect to the preparation of these condensed interim consolidated financial statements that give a true and fair view of the consolidated state of affairs (consolidated financial position), consolidated profit or loss (consolidated financial performance including other comprehensive income), consolidated changes in equity and consolidated cash flows of the Group including its associate in accordance with the accounting principles generally accepted in India, in accordance with Ind AS 34 specified under Section 133 of the Act. of records including financial information considered necessary for the preparation of condensed interim consolidated Ind AS 34 financial statements. Further, in terms of the provisions of the Act, the respective Board of Directors /management of the companies included in the Group and its associate, covered under the Act are responsible for maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the condensed interim consolidated financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error. These condensed interim consolidated financial statements have been used for the purpose of preparation of the condensed interim consolidated financial statements by the Directors of the Holding Company, as aforesaid.
• 1. In preparing the condensed interim consolidated financial statements, the respective Board of Directors of the companies included in the Group and of its associate are responsible for assessing the ability of the Group and its associate to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Board of Directors either intends to liquidate the Group and its associate or to cease operations, or has no realistic alternative but to do so.
• 1. The Board of Directors are also responsible for overseeing the financial reporting process of the companies included in the Group and its associate.

Condensed Interim Consolidated Financial Statements

• 1. Our objectives are to obtain reasonable assurance about whether the condensed interim consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an guarantee that an audit conducted in accordance with Standards on Auditing will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these condensed interim consolidated financial statements.
• 1. As part of an audit in accordance with Standards on Auditing, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:
• Identify and assess the risks of material misstatement of the condensed interim consolidated financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

Page 2 of 5

Walker Chandiok & Co LLP is registered with limited liability with identification number AAC-2085 and has its registered office at L-41, Connaught Circus, Outer Circle, New Delhi, 110001, India

Offices in Bengaluru, Chandigarh, Chennai, Gurugram, Hyderabad, Kochi, Kolkata, Mumbai, New Delhi, Noida and Pune

Chartered Accountants

Persistent Systems Limited on the Audit of the Condensed Interim Consolidated Financial Statements

• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on whether the Group and its associate have in place an adequate internal financial controls system over financial reporting and the operating effectiveness of such controls.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
• based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the ability of the Group and its associate to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our isclosures in the condensed interim consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit conditions may cause the Group and its associate to cease to continue as a going concern.
• Evaluate the overall presentation, structure, and content of the condensed interim consolidated financial statements, including the disclosures, and whether the condensed interim consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
• Obtain sufficient appropriate audit evidence regarding the financial information of the entities within the Group and its associate to express an opinion on the condensed interim consolidated financial statements. We are responsible for the direction, supervision, and performance of the audit of the condensed interim consolidated financial statements of such entities included in the condensed interim consolidated financial statements, of which we are the independent auditors. For the other entities included in the condensed interim consolidated financial statements, which have been audited by the other auditors, such other auditors remain responsible for the direction, supervision and performance of the audits carried out by them. We remain solely responsible for our audit opinion.
• 1. We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
• 1. We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

Other Matters

1. We did not audit the condensed interim financial statements of twenty subsidiaries, whose condensed interim financial statements (before eliminating intercompany balances/transactions) reflect total assets of 4,631.34 million 1,652.75 million as at 31 March 2021 5,140.16 million and net cash inflows 7.87 million for the year ended on that date, as considered in the condensed interim consolidated financial statements. These condensed interim financial statements have been audited by other auditors whose reports have been furnished to us by the management and our opinion on the condensed interim consolidated financial statements, in so far as it relates to the amounts and disclosures included in respect of these subsidiaries, is based solely on the reports of the other auditors.

Our opinion above on the condensed interim consolidated financial statements, is not modified in respect of the above matter with respect to our reliance on the work done by and the reports of the other auditors.

Page 3 of 5

Offices in Bengaluru, Chandigarh, Chennai, Gurugram, Hyderabad, Kochi, Kolkata, Mumbai, New Delhi, Noida and Pune

Chartered Accountants

Persistent Systems Limited on the Audit of the Condensed Interim Consolidated Financial Statements

1. The condensed interim consolidated Nil for the year ended 31 March 2021, as considered in the condensed interim consolidated financial statements, in respect of one associate, whose financial statements have not been audited by us. These condensed interim financial statements are unaudited and have been furnished to us by the management and our opinion on the condensed interim consolidated financial statements, in so far as it relates to the aforesaid associate is based solely on such unaudited condensed interim financial statements. In our opinion and according to the information and explanations given to us by the management, these condensed interim financial statements are not material to the Group and its associate.

Our opinion above on the condensed interim consolidated financial statements, is not modified in respect of the above matter with respect to our reliance on the financial statements certified by management.

For Walker Chandiok & Co LLP Chartered Accountants Firm Registration No:001076N/N500013

Shashi Tadwalkar Partner Membership No:101797

UDIN:21101797AAAAAS2933

Place: Pune Date: 29 April 2021

Page 4 of 5

Walker Chandiok & Co LLP is registered with limited liability with identification number AAC-2085 and has its registered office at L-41, Connaught Circus, Outer Circle, New Delhi, 110001, India

Chartered Accountants

Offices in Bengaluru, Chandigarh, Chennai, Gurugram, Hyderabad, Kochi, Kolkata, Mumbai, New Delhi, Noida and Pune

Persistent Systems Limited on the Audit of the Condensed Interim Consolidated Financial Statements

Annexure 1

List of entities included

Sr. No.	Name of Entity	Relationship
1	Persistent Systems Limited (PSL)	Holding Company
2	Persistent Systems, Inc. (PSI)	Wholly owned subsidiary of PSL
3	Persistent Systems Pte Ltd.	Wholly owned subsidiary of PSL
4	Persistent Systems France SAS	Wholly owned subsidiary of PSL
5	Persistent Systems Malaysia Sdn. Bhd.	Wholly owned subsidiary of PSL
6	Persistent Systems Germany GmbH (PSGG)	Wholly owned subsidiary of PSL
7	Persistent Telecom Solutions Inc.	Wholly owned subsidiary of PSI
8	Valista Limited (VL) (Dissolved w.e.f. 24 June 2020)	Wholly owned subsidiary of AGL
9	Aepona Group Limited (AGL)	Wholly owned subsidiary of PSI
10	Aepona Limited	Wholly owned subsidiary of AGL
11	Youperience GmbH (YGmbH)	Wholly owned subsidiary of PSGG
12	Youperience Limited	Wholly owned subsidiary of YGmbH
13	Persistent Systems Lanka (Private) Limited	Wholly owned subsidiary of AGL
14	Persistent Systems Mexico, S.A. de C.V.	Wholly owned subsidiary of PSI
15	Persistent Systems Israel Ltd	Wholly owned subsidiary of PSI
16	PARX Werk AG	Wholly owned subsidiary of PSGG
17	PARX Consulting GmbH	Wholly owned subsidiary of PARX Werk AG
18	Capiot Software Private Limited (Acquired w.e.f. October 29, 2020)	Wholly owned subsidiary of PSL
19	Capiot Software Inc. (Capiot US) (Acquired w.e.f. November 7, 2020)	Wholly owned subsidiary of PSI
20	Capiot Software Pty Limited (Acquired w.e.f. November 7, 2020)	Wholly owned subsidiary of Capiot US
21	Capiot Software Pte Limited (Acquired w.e.f. November 7, 2020)	Wholly owned subsidiary of Capiot US
22	Persistent Systems S.R.L. (incorporated on March 23, 2021)	Wholly owned subsidiary of PSI
23	Klisma e-Services Private Limited	Associate Company of PSL

This space has been intentionally left blank

Page 5 of 5

Offices in Bengaluru, Chandigarh, Chennai, Gurugram, Hyderabad, Kochi, Kolkata, Mumbai, New Delhi, Noida and Pune

Walker Chandiok & Co LLP is registered with limited liability with identification number AAC-2085 and has its registered office at L-41, Connaught Circus, Outer Circle, New Delhi, 110001, India

Chartered Accountants

	Notes	As at	As at
		March 31, 2021 In ₹ Million	March 31, 2020 In ₹ Million
ASSETS
Non-current assets
Property, plant and equipment	6.1	2,401.40	2,224.60
Capital work in progress		121.81	166.18
Right of use assets Goodwill	6.2 6.3	852.58 85.94	566.81 88.94
Other Intangible assets	6.4	1,229.50	1,434.93
Intangible assets under development		÷.	137.20
Financial assets		4,691.23	4,618.66
- Investments	$\overline{7}$	3,621.27	4,620.97
- Loans	8	134.76	176.13
- Other non-current financial assets	9 10	25.76	358.93
Deferred tax assets (net) Other non-current assets	11	1.037.57 441.52	960.08 331 31
		9,952.11	11,066.08
Current assets
Financial assets
- Investments	12	6,374.95	5,164.77
- Trade receivables (net)	13	5,708.97	5,921.96
- Cash and cash equivalents	14 15	2,419.30	1,899.99
- Other bank balances - Loans	16	7,389.70 71.26	2,672.19 13.71
- Other current financial assets	17	2.467.23	2.068.54
Current tax assets (net)		188.00	163.93
Other current assets	18	2,083.72	1,950.52
		26,703.13	19,855.61
TOTAL		36,655.24	30,921.69
EQUITY AND LIABILITIES
EQUITY
Equity share capital	5	764.25	764.25
Other equity		27,192.41	23,093.30
		27,956.66	23,857 55
LIABILITIES
Non-current liabilities Financial liabilities
- Lease liabilities	20	716.17	353.36
- Borrowings	19	44 27	46.22
Provisions	21	240.94	182.79
		1,001.38	582.37
Current liabilities Financial liabilities
- Lease liabilities	20	222.00	309.06
- Trade payables	22	2,733.44	2,247.09
[dues of micro and small enterprises ₹ 30.20 million (Previous year: ₹ 5.15 million)]
Other financial liabilities	23	390.17	862.34
Other current liabilities	24	1,514.95	1,320.13
Provisions	25	2,477.79	1,610.99
Current tax liabilities (net)		358.85 7,697.20	132.16 6,481 77
TOTAL		36,655.24	30,921.69
Summary of significant accounting policies	4

The accompanying notes are an integral part of the condensed interim consolidated financial statements.

As per our report of even date

For Walker Chandiok & Co LLP Chartered Accountants
Firm Registration No.: 001076N/N500013

Anand Deshpande |
|Digitally signed by SHASHI
|TADWALKAR
|Date: 2021.04.29 23:01:03 +05'30'

SHASHI TADWALKAR Shahshi Tadwalkar

Partner

Membership No. :- 101797

Sandeep Kalna

For and on behalf of the Board of Directors of Persistent Systems Limited

mk

Dr. Anand Deshpande Praveen Kadie Chairman and Managing Independent Director
Director DIN: 00005721 DIN: 00016814 Place: Pune
Date : April 29, 2021

Place: Mumbai
Date : April 29, 2021

Sandeep Kalra Executive Director and
Chief Executive Officer
DIN: 02506494 Place: New Jersey, USA
Date: April 29, 2021 SUNIL SADYC
Sunil Sapre
Executive Director and, 2021 20:01 GMT+5.5)
Chief Financial Officer DIN: 06475949

Place: Mumbai
Date : April 29, 2021

Amit Atre

Amit Atre
Company Secretary
Membership No. A20507 Amit Atre (Apr 29, 2021 19:58 GMT+5.5)

Place: Pune
Date : April 29, 2021

Place: Pune
Date : April 29, 2021

Persistent Systems Limited
CONDENSED INTERIM CONSOLIDATED STATEMENT OF PROFIT AND LOSS FOR THE QUARTER AND YEAR ENDED MARCH 31, 2021

	Notes	For the quarter ended		For the year ended
		March 31, 2021	March 31,2020	March 31, 2021	March 31, 2020
		In ₹ Million	In ₹ Million	In ₹ Million	In ₹ Million
Income
Revenue from operations (net)	26	11,133.58	9,263.65	41,878.88	35,658.08
Other income	27	400.36	293.20	1,077.72	1,323.77
Total income (A)		11,533.94	9,556 85	42,956.60	36,981.85
Expenses
Employee benefits expense	28.1	6,853.90	5,675.97	25,157.99	21.556.40
Cost of professionals	28.2	1,543.13	1,163.23	5,563.68	3,918.94
Finance costs (refer note 35)		15.83	11.68	57.94	63 32
Depreciation and amortization expense	6,5	419.05	419 80	1,755.50	1,659.62
Other expenses	29	853 25	1,15574	4,327.06	5,260.15
Total expenses (B)		9,685.16	8,426.42	36,862.17	32,458 43
Profit before tax (A - B)		1,848.78	1,130.43	6,094.43	4,523.42
Tax expense
Current tax		495.67	366.06	1,774.01	1.35470
Tax (credit) / charge in respect of earlier period / year		3.68	6.58	10.58	52.55
Deferred tax (credit) / charge		(28.16)	(80.42)	(196.93)	(286.72)
Total tax expense		471.19	292.22	1,587.66	1 120 53
Net profit for the period / year (C)		1,377.59	838 21	4,506.77	3,402.89
Other comprehensive income
Items that will not be reclassified to profit and loss (D)
- Remeasurements of the defined benefit asset / liabilities (net of tax)		24 52	2.37	10.25	(34.80)
tems that may be reclassified to profit and loss (E)		24 52	2.37	10.25	(34.80)
- Effective portion of cash flow hedge (net of tax)		(53.45)	(250.14)	383.54	(429.15)
- Exchange differences in translating the financial statements of foreign operations		120.35	369.96	(20.07)	323 15
		66.90	119.82	363.47	(106.00)
Total other comprehensive income for the period / year (D) $+$ (E)		91.42	122.19	373.72	(140.80)
Total comprehensive income for the period / year $(C) + (D) + (E)$		1,469.01	960.40	4,880.49	3,262.09
Earnings per equity share [Nominal value of share ₹10 (Corresponding period / Previous year: ₹10)]	30
Basic (In ₹)		18.03	10.97	58.97	44.38
Diluted (In ₹)		18.03	10.97	58.97	44 38
Summary of cionificant accounting policies

The accompanying notes are an integral part of the condensed interim consolidated financial statements.

As per our report of even date

For Walker Chandiok & Co LLP Chartered Accountants Firm Registration No.: 001076N/N500013

Digitally signed by
SHASHI TADWALKAR SHASHI TADWALKAR Date: 2021.04.29

Shahshi Tadwalkar

Partner Membership No.: - 101797 For and on behalf of the Board of Directors of Persistent Systems Limited

'n n $\Lambda$ a

Sandeep Kalra

DIN: 02506494

Dr. Anand Deshpande Chairman and Managing Director DIN: 00005721

Praveen Kadle Executive Director and Independent Director Chief Executive Officer

DIN: 00016814

Place: Pune Date: April 29, 2021 Place: New Jersey, USA Place: Mumbai Date: April 29, 2021 Date: April 29, 2021

Amit Atre Amit Atre (Apr 29, 2021 19:58 GMT+5.5)

Anand Deshponde

Sunil Sapre Sunil Sapre (Apr 29, 2021 20:01 GMT+5.5)

Company Secretary Membership No. A20507

Amit Atre

Sunil Sapre Executive Director and Chief Financial Officer DIN: 06475949

Place: Pune Date: April 29, 2021 Place: Mumbai Date: April 29, 2021

Place: Pune Date: April 29, 2021

Persistent Systems Limited
CONSOLIDATED INTERIM CASH FLOW STATEMENT FOR THE YEAR ENDED MARCH 31, 2021

		For the year ended March 31, 2021 In ₹ Million	March 31, 2020 In ₹ Million
Cash flow from operating activities
Profit before tax		6.094.43	4,523.42
Adjustments for:
Interest income		(558.70)	(545.28)
Finance costs Dividend income		57.94	63.32 (13.98)
Depreciation and amortization expense		1,755 50	1,659 62
Unrealised exchange loss / (gain) (net)		139.55	(131.29)
Change in foreign currency translation reserve		(42.32)	119.30
Exchange (gain) / loss on derivative contracts		(169.80)	58.51
Exchange loss / (gain) on translation of foreign		11.50	(46.77)
currency cash and cash equivalents
Bad debts		90.30
Provision for expected credit loss (net)		31.32 290.44	83.86 236.79
Employee stock compensation expenses Provision for doubtful deposits and advances		$\frac{1}{2}$	248.48
Impairment of loan		23 96
Provision for diminution in value of investments		18 53
Remeasurements of the defined benefit liabilities / asset (before tax effects)		10.25	(46.14)
Advances written off
Provision for diminution in value of non current investments written back
Excess provision in respect of earlier periods / years (written back)		(41.79)	(6.95)
Loss / (Gain) on fair valuation of assets designated at FVTPL		131.39	(119.02)
Profit on sale of investments (net)		(478.13)	(164.81)
(Profit) / Loss on sale of Property, plant and equipment (net)		(1.34)	5.96
Operating profit before working capital changes		7.363.03	5,925.02
Movements in working capital:
(Increase) / Decrease in non-current and current loans Increase in other non current assets		(40.03) (76.81)	(14.44) (235.30)
Increase in other current financial assets		(104.23)	(232.15)
Decrease / (Increase) in other current assets		58.26	(559.10)
Increase in trade receivables		58.49	(894.77)
Increase / (Decrease) in trade payables, current liabilities and non current liabilities		757.56	1,000 26
Increase / (Decrease) in provisions		924.95	(145.37)
Operating profit after working capital changes		8,941.22	4,844.15
Direct taxes paid (net of refunds)		(1,581.97)	(1,328.27)
Net cash generated from operating activities	(A)	7 359 25	3,515.88
Cash flows from investing activities
Payment towards capital expenditure (including intangible assets)		(1, 281.04)	(758.39)
Proceeds from sale of property, plant and equipment Acquisition of step-down subsidiary including cash and cash equivalents of $\bar{\tau}$ 30.90 million		30.02	12.68
(Previous year : ₹ 37 35 million) Purchase of bonds		(448.47) (712.18)	(435.48) (901.61)
Proceeds from sale/ maturity of bonds		350.53	819.87
Proceeds from sale of non-current investments		$\blacksquare$	25 22
Investments in mutual funds		(24, 591.91)	(19, 456.95)
Proceeds from sale / maturity of mutual funds		25,068.92	17,670.49
(Investments) / maturity of bank deposits having original maturity over three months		(4, 198.89)	2,108.15
Maturity of deposits with financial institutions			250.00
Interest received		366.29	503.60
Dividends received			13.98
Net cash (used in)/ generated from investing activities	(B)	(5, 416, 73)	(148.44)
Cash flows from financing activities
Repayment of long term borrowings Payment of lease liabilities		(4.54) (319.11)	(4.62) (287.70)
Shares bought back			(1,677.01)
Loan received as a part of COVID-19 relief measures			39.14
Specific project related grant received		9.00	3.00
Interest paid		(58.01)	(63.31)
Dividends paid		(1,069.95)	(1, 146.38)
Tax on dividend paid		$\blacksquare$	(154.14)
Net cash used in financing activities	(C)	(1,442.61)	(3, 291.02)

CONSOLIDATED INTERIM CASH FLOW STATEMENT FOR THE YEAR ENDED MARCH 31, 2021

	For the year ended
	March 31, 2021	March 31, 2020
	In ₹ Million	In ₹ Million
Net (decrease) / increase in cash and cash equivalents $(A + B + C)$	499.91	76.42
Cash and cash equivalents at the beginning of the year	1.899 99	1.739.45
Cash and cash equivalents acquired on acquisition	30.90	37 35
Effect of exchange difference on translation of foreign	(11.50)	46.77
currency cash and cash equivalents
Cash and cash equivalents at the end of the year	2,419.30	1,899.99
Components of cash and cash equivalents
Cash on hand (refer note 14)	0.41	0.24
Balances with banks
On current accounts # (refer note 14)	1,583.20	1,566.06
On saving accounts (refer note 14)	1 3 3	0.36
On Exchange Earner's Foreign Currency accounts (refer note 14)	208 57	261.86
On deposit accounts with original maturity less than three months (refer note 14)	625.79	71.47
Cash and cash equivalents	2,419.30	1,899.99

Out of the cash and cash equivalent balance as at March 31, 2021, the Group can utilise ₹ 154.39 Million (Previous year: ₹ 6.62 Million) only towards certain predefined activities specified in the agreement.

Summary of significant accounting policies - refer note 4

The accompanying notes are an integral part of the condensed interim consolidated financial statements.

As per our report of even date

Shahshi Tadwalkar

Membership No.: - 101797

Partner

For Walker Chandiok & Co LLP Chartered Accountants Firm Registration No.: 001076N/N500013

Digitally signed by SHASHI SHASHI TADWALKAR TADWALKAR Date: 2021.04.29

Sunil Sapre

unil Sapre (Apr 29, 2021 20:01 GMT+5.5)

For and on behalf of the Board of Directors of Persistent Systems Limited

$2m$ $\overline{L}$

Anand Dishpande

Dr. Anand Deshpande Chairman and Managing Director DIN: 00005721

DIN: 00016814

Praveen Kadle

Independent Director

Place: Pune Date: April 29, 2021 Place: Mumbai Date: April 29, 2021

iandeep Kalra

Sandeep Kalra (Apr4 .2021 10:32 EDT) Sunil Sapre

Executive Director and Chief Financial Officer DIN: 06475949 Place: Mumbai Date: April 29, 2021

Sandeep Kalra Executive Director and Chief Executive Officer DIN: 02506494 Place: New Jersey, USA Date: April 29, 2021

Amit Atre

it Atre (Apr 29, 2021 19:58 GMT+5.5) Amit Atre Company Secretary Membership No. A20507 Place: Pune Date: April 29, 2021

Place: Pune Date: April 29, 2021

CONDENSED INTERIM CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED MARCH 31, 2021

A. Share capital

(refer note 5)

$(ln ₹$ Million)

		.
Balance as at April 1, 2020	Changes in equity share capital during the period	Balance as at March 31, 2021
764.25	ш	764.25

$(ln ₹$ Million)

		.
Balance as at April 1, 2019	Changes in equity share capital during the year (refer note 5d)	Balance as at March 31, 2020
791.19	(26.94)	764.25

Particulars				Reserves and surplus					Items of other comprehensive income	(In ₹ Million) Total
	Securities premium	eral reserve ခြ	Share options outstanding reserve	Gain on bargain purchase	Capital redemption reserve	Zone re-investment Special Economic reserve	Retained earnings	Effective portion of cash flow hedges	financial statements translating the differences on of foreign Exchange operations
Balance as at April 1, 2020		12,22741	290.51	$\frac{1}{57}$	35.75	$\frac{95}{6}$	$\frac{10,08774}{4,50677}$	(24409)	58832	23,093.30 4,506.77
Other comprehensive income for the period Net profit for the period			$\,$	$\mathbf{I}$	$\mathbf{I}$	$\,$	1025	38354	(20.07)	37372
Interim dividend	and the team of the team			$\mathbf{I}$	$\,$		(1,069.95)			(1,069.95)
Transfer to retained earnings Transfer to general reserve		2,02034		$\mathbf{I}$	$\sim$ $\mathbf{u}$	(49.95)	(2,020,34) 4995
Employee stock compensation expenses			$29044$ (108.78)	$\mathbf{I}$	$\mathbf{u}$					29044
Adjustments towards employees stock options		10878	(147		$\mathbf{I}$					(1.87)
Other changes during the period Balance at March 31, 2021		14,356.53	470.70	$\frac{(0.40)}{57.31}$	3575		11,564.42	13945	568.25	$\frac{27,19241}{27}$
										(In ₹ Million)
Particulars	Securities premium	General reserve	Share options outstanding reserve	Reserves and surplus Gain on bargain Capi purchase	Capital redemption reserve	Zone re-investment Special Economic reserve	Retained earnings		financial statements ltems of other comprehensive income Effective portion of Exchange cash flow hedges differences on translating the of foreign operation	Total
	774.10	10,565.95	7629	52.71	8.81	PO 07	10,657 52 3,402 89	18506	265.17	22,655.61 3,402.89
Other comprehensive income for the period Balance as at April 1, 2019 Net profit for the year		$\mathbf{1}$	$\mathbf{r}$	$\mathbf{1}$		$\mathbf{1}$	(3480)	(429.15)	323 15	(140.80)
Transitional impact on adoption of Ind AS 116 (net of taxes) Transfer to capital redemption reserve		$\mathbf{r}$ and the contract of the con-	$\mathbf{r}$ $\mathbf{I}$		26.94	$\blacksquare$ $\blacksquare$	(26.94) (123.60)			(123.60)
Dividend		$\mathbf{I}$	$\mathbf{I}$	the contract of the con-		$\blacksquare$	(1, 146.38)		$\mathbf{L}$	(1, 146.38)
Transfer from Special Economic Zone re-investment reserve Tax on dividend			$\mathbf{1}$			(20.05)	(154.14) 2005		$\mathbf{0}$ and $\mathbf{0}$ and $\mathbf{0}$	(154.14)
Transfer to general reserve		1,630.89			$\blacksquare$		(1,630.89)
Adjustments towards employees stock options Employee stock compensation expenses		25.61	(25.61) 236.79	$\sim 1$ $\sim$ 10 $\,$	$\mathbf{u}$ $\mathbf{u}$				$\blacksquare$ $\mathbf{u}$	23679
Utilised towards buy back of shares (refer note 5d) Addition on business combination (refer note 45)	(77410)			$\mathbf{u}$	$\blacksquare$ $\,$	$\blacksquare$	(875.97)			(1,650.07)
Other changes during the year Balance at March 31, 2020		4.96 12,22741	3.04 290.51	5.00 57.71	3575	4995	10,08774	(24409)	588 32	1300 23,093.30
Summary of significant accounting policies - refer note
The accompanying notes are an integral part of the condensed interim consolidated financial statements.
As per our report of even date
For Walker Chandiok & Co LLP Chartered Accountants					Persistent Systems Limited	For and on behalf of the Board of Directors of
Firm Registration No: 001076N/N500013
SHASHI TADWALKAR Digitally signed by SHASHI						Ч	2021 10:32 EDT Sandeep Kalra (Apr 29 , and
			Anand Derhpmal
TADWALKAR Date: 2021.04.29								MAK
Membership No.: 101797 Shahshi Tadwalkar Partner					Chairman and Managing Director Dr. Anand Deshpande		Executive Director and Chief Executive Officer Sandeep Kalra		Independent Director Praveen Kadle
					DIN: 00005721		DIN: 02506494		DIN: 00016814
					Date: April 29, 2021 Place: Pune		Place: New Jersey, USA Date: April 29, 2021		Date: April 29, 2021 Place: Mumbai
		Amit Atre						Sunil Sapre
		2021 19:58 GMT+5.5 Amit Atre (Apr 29			Amit Atre Company Secretary Membership No. A20507		DIN: 06475949 Sunil Sapre	ouuu oapre Sunil Sapre (Apr 29, 2021 20:01 GMT+5.5) Executive Director and Chief Financial Officer
Place: Pune					Place: Pune Date : April 29, 2021		Place: Pune
Date: April 29, 2021							Date: April 29, 2021

I

CONDENSED INTERIM CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED MARCH 31, 2021

Nature and purpose of reserves

a) Securities premium

Securities premium is used to record the premium on issue of shares. The reserve is utilised in accordance with the provisions of Section 52 of the Companies Act, 2013.

b) General reserve

General reserve represents amounts transferred from profit for the year and from Share options outstanding reserve on exercise / expiry of employee share options. It is a free reserve as per section 2 (43) of the Companies Act, 2013.

c) Share options outstanding reserve

Share options outstanding reserve represents the cumulative expense recognized for equity-settled transactions at each reporting date until the employee share options are exercised / expired upon which such amount is transferred to General reserve

d) Gain on bargain purchase

The excess of the Group's portion of equity of the acquired company over its cost is treated as gain on bargain purchase in the financial statements.

e) Capital redemption reserve

Capital redemption reserve represents the nominal value of the shares bought back; and is created and utilised in accordance with Section 69 of the Companies Act, 2013.

f) Special Economic Zone re-investment reserve

The Special Economic Zone re-investment reserve has been created out of the profit in terms of the provisions of Section 10AA(1)(ii) of the Income tax Act, 1961. The reserve is utilised by the Group for acquiring new plant and machinery for the purpose of its business in accordance with Section 10AA(2) of the Income tax Act, 1961.

g) Cash flow hedge reserve

The cash flow hedge reserve represents the cumulative effective portion of gains or losses arising on changes in fair value of hedging instruments entered into towards highly probable transactions. Such gains or losses are subsequently recognised in the statement of profit and loss in the period in which the said transaction occurs / hedging instruments are cancelled.

h) Foreign currency translation reserve

The foreign exchange differences arising from the translation of financial statements of foreign operations with functional currency other than Indian rupees is recognised in other comprehensive income and is presented under equity in the foreign currency translation reserve. The amount is transferred to retained earnings upon disposal of investment in foreign operation.

Notes forming part of Condensed Interim Consolidated Financial Statements

1. Nature of operations

Persistent Systems Limited (the "Parent Company" or "PSL") is a public Company domiciled in India and incorporated under the provisions of the Companies Act, 1956 (the "Act"). The shares of the Company are listed on Bombay Stock Exchange and National Stock Exchange. The Company is a global Company specializing in software products, services and technology innovation. The Company offers complete product life cycle services.

Persistent Systems, Inc. (PSI) based in the USA, a wholly owned subsidiary of PSL, is engaged in software product, services and technology innovation.

Persistent Systems Pte. Ltd. (PS Pte.) based in Singapore, a wholly owned subsidiary of PSL, is engaged in software development, professional and marketing services.

Persistent Systems France SAS (PSFS) based in France, a wholly owned subsidiary of PSL, is engaged in software products, services and technology innovation.

Persistent Telecom Solutions Inc. (PTSI) based in the USA, a wholly owned subsidiary of Persistent Systems Inc., is engaged in software products, services and technology innovation in telecom and Product Lifecycle Management domains.

Persistent Systems Malaysia Sdn. Bhd. (PSM) based in Malaysia, a wholly owned subsidiary of PSL, is engaged in software products and services.

Aepona Holdings Limited has been dissolved with effect from October 24, 2019. Persistent Systems, Inc., its holding Company, took over all the assets and liabilities of Aepona Holdings Limited on the date of dissolution.

Aepona Group Limited, an Ireland based wholly owned subsidiary of Persistent Systems, Inc. (previously owned by Aepona Holdings Limited) operates as the holding Company of Aepona Limited.

Valista Limited (an Ireland based wholly owned subsidiary of Aepona Group Limited) has been dissolved with effect from June 24, 2020.

Aepona Limited (a UK based wholly owned subsidiary of Aepona Group Limited) is engaged in the business of a telecommunication API gateway for defining, exposing, controlling and monetizing telecom services to partners and application developers and an Internet of Things service creation platform that allows enterprises to add a service layer (or "business logic") to the basic APIs exposed to by connected devices, and to expose and monetize these APIs.

Valista Limited has been dissolved with effect from June 24, 2020. Aepona Group Limited, its holding Company, took over all the assets and liabilities of Valista Limited on the date of dissolution.

Persistent Systems Lanka (Private) Limited (Formerly known as Aepona Software (Private) Limited) (a Sri Lanka based wholly owned subsidiary of Aepona Group Limited) has adopted indirect sales model, with services revenue being billed to Aepona Limited. Sale of services are then contracted between Aepona Limited and customers.

Persistent Systems Mexico, S.A. de C.V (a Mexico based wholly owned subsidiary of Persistent Systems Inc.) has adopted indirect sales model, with services revenue being billed to Persistent Systems Inc. Sale of services are then contracted between Persistent Systems Inc. and customers.

Persistent Systems Israel Ltd. (an Israel based wholly owned subsidiary of Persistent Systems Inc.) has adopted indirect sales model, with services revenue being billed to Persistent Systems Inc. Sale of services are then contracted between Persistent Systems Inc. and customers.

Persistent Systems Germany GmbH (wholly owned subsidiary of Persistent Systems Limited) operates as the holding Company of PARX Werk AG and Youpereince GmbH. The Company is specializing in software development.

PARX Werk AG (a Switzerland based wholly owned subsidiary of Persistent Systems Germany GmbH) is engaged in the business of software products, services and technology innovation in the digital practice.

PARX Consulting GmbH (a Germany based wholly owned subsidiary of PARX Werk AG) is engaged in the business of software products, services and technology innovation in the digital practice.

Herald Technologies Inc. (HTI), based in the USA a wholly owned subsidiary of Persistent Systems Inc., was working on implementation of platforms and related IT services for the healthcare industry.

Herald Technologies Inc. has been dissolved with effect from June 24, 2019. Persistent Systems, Inc., its holding Company, took over all the assets and liabilities of Herald Technologies, Inc. on the date of dissolution.

Youperience GmbH (a Germany based wholly owned subsidiary of Persistent Systems Germany GmbH) is engaged in Salesforce related implementation services.

Youperience Limited (a United Kingdom based wholly owned subsidiary of Youperience GmbH) is engaged in Salesforce related implementation services.

CAPIOT Software Private Limited (a India based wholly owned subsidiary of Persistent Systems Limited) is engaged in enterprise integration and modernization with expertise in MuleSoft, Red Hat and TIBCO.

Notes forming part of Condensed Interim Consolidated Financial Statements

CAPIOT Software Inc (a US based wholly owned subsidiary of Persistent Systems Inc) is engaged in enterprise and data integration services across platforms.

CAPIOT Software Pty Limited (a Australia based wholly owned subsidiary of CAPIOT Software Inc) is engaged in enterprise and data integration services across platforms.

CAPIOT Software Pte Limited (a Singapore based wholly owned subsidiary of CAPIOT Software Inc) is engaged in enterprise and data integration services across platforms.

Persistent Systems S.R.L. is a wholly owned subsidiary of Persistent Systems Inc. and is incorporated on March 23, 2021.

Klisma e-Services Private Limited is engaged in the business of internet, telecommunications, mobile technology and other media enabling electronic commerce. The Company is under liquidation.

$2¹$ Basis of preparation

The condensed interim consolidated financial statements of the Group have been prepared on an accrual basis and under the historical cost convention except for certain financial instruments, equity settled employee stock options and initial recognition of assets acquired under business combinations which have been measured at fair value. Historical cost is generally based on the fair value of the consideration given in exchange of goods and services. The accounting policies are consistently applied by the Group except where a newly issued accounting standard is initially adopted or a revision to an existing accounting standard requires a change in the accounting policy hitherto in use.

These condensed interim consolidated financial statements are prepared in accordance with Indian Accounting Standard (Ind AS), the provisions of the Companies Act, 2013 ("the Act") (to the extent notified) and guidelines issued by the Securities and Exchange Board of India (SEBI). The Ind AS are prescribed under Section 133 of the Act read with Rule 3 of the Companies (Indian Accounting Standards) Rules, 2015 and relevant amendment rules issued thereafter.

$3₁$ Principles of consolidation

The condensed interim consolidated financial statements of the Parent Company and its subsidiaries ("the Group") for the year ended March 31, 2021 are prepared in accordance with generally accepted accounting principles applicable in India, and the Indian Accounting Standard, 110 (Ind AS 110) on 'Consolidated Financial Statements', notified by Companies (Accounting Standards) Rules, 2015, ("Indian Accounting Standards") by and to the extent possible in the same format as that adopted by the Parent Company for its separate financial statements.

The Parent Company consolidates entities which it owns or controls. The condensed interim consolidated financial statements comprise the condensed interim financial statements of the Company and its subsidiaries as disclosed below. Control exists when the Parent Company has power over the entity, is exposed or has rights to variable returns from its involvement with the entity; and has the ability to affect those returns by using its power over the entity. Power is demonstrated through existing rights that give the ability to direct relevant activities, those which significantly affect the entity's returns. Subsidiaries are consolidated from the date control commences until the date control ceases.

The condensed interim consolidated financial statements of the Parent Company and its subsidiary companies have been combined on line by line basis by adding together the book values of like items of assets and liabilities, income and expenses after eliminating intra group balances and intra group transactions except where cost cannot be recovered. The unrealized profits or losses resulting from the intra group transactions and balances have been eliminated.

The condensed interim consolidated financial statements include the share of profit / loss of associate companies, which are accounted for under the 'Equity method'. The share of profit / loss of the associate company has been adjusted to the cost of investment in the associate, as per the 'Equity method'. An associate is an enterprise in which the investor has significant influence and which is neither a subsidiary nor a joint venture.

The excess of the cost to the Company of its investment in a subsidiary and the Company's portion of equity of subsidiary on the date at which investment in the subsidiary is made, is described as goodwill and recognized separately as an asset in the condensed interim consolidated financial statements. The excess of the Company's portion of equity of the acquired Company over its cost is treated as gain on bargain purchase in the condensed interim consolidated financial statements. Goodwill arising on consolidation is not amortized. It is tested for impairment on a periodic basis and written off if found impaired.

The condensed interim consolidated financial statements are prepared using uniform accounting policies for like transactions and other events in similar circumstances and necessary adjustments required for deviations, if any, are made in the condensed interim consolidated financial statements. The condensed interim consolidated financial statements are presented in the same manner as the Parent Company's separate condensed interim financial statements.

The subsidiary and associate companies considered in condensed interim consolidated financial statements are as follows:

Name of the subsidiary/associate		Ownership Percentage as at	Country of incorporation
	March 31, 2021	March 31, 2020
Persistent Systems, Inc.	100%	100%	USA
Persistent Systems Pte Ltd.	100%	100%	Singapore
Persistent Systems France SAS	100%	100%	France
Persistent Telecom Solutions Inc.	100%	100%	USA
Persistent Systems Malaysia Sdn. Bhd.	100%	100%	Malaysia
Aepona Holdings Limited (Dissolved with effect from October 24, 2019)			Ireland
Aepona Group Limited	100%	100%	Ireland
Aepona Limited	100%	100%	UK
Valista Limited (Dissolved with effect from June 24, 2020)		100%	Ireland
Persistent Systems Lanka (Private) Limited	100%	100%	Sri Lanka
Persistent Systems Mexico, S.A. de C.V.	100%	100%	Mexico
Persistent Systems Israel Ltd.	100%	100%	Israel
Persistent Systems Germany GmbH	100%	100%	Germany
PARX Werk AG	100%	100%	Switzerland
PARX Consulting GmbH	100%	100%	Germany
Youperience GmbH	100%	100%	Germany
Youperience Limited	100%	100%	United Kingdom
CAPIOT Software Private Limited (Acquired w.e.f. October 29, 2020)	100%		India
CAPIOT Software Inc. (Acquired w.e.f. November 7, 2020)	100%		USA
CAPIOT Software Pty Limited (Acquired w.e.f. November 7, 2020)	100%		Australia
CAPIOT Software Pte Limited (Acquired w.e.f. November 7, 2020)	100%		Singapore
Persistent Systems S R L (Incorporated on March 23, 2021)	100%		Italy
Klisma e-Services India Pvt. Ltd. (under liquidation)	50%	50%	India

Notes forming part of Condensed Interim Consolidated Financial Statements

Summary of significant accounting policies 4.

$(a)$ Use of estimates

A. The preparation of the condensed interim consolidated financial statements in conformity with Ind AS requires the Management to make estimates, judgments and assumptions. These estimates, judgments and assumptions affect the application of accounting policies and the reported amounts of assets and liabilities, the disclosures of contingent assets and liabilities at the date of the financial statements and reported amounts of revenues and expenses during the period. The application of accounting policies that require critical accounting estimates involving complex and subjective judgments and the use of assumptions in these condensed interim consolidated financial statements have been disclosed appropriately. Accounting estimates could change from period to period. Actual results could differ from those estimates. Appropriate changes in estimates are made as the Management becomes aware of changes in circumstances surrounding the estimates. Changes in estimates are reflected in the condensed interim consolidated financial statements in the period in which changes are made and, if material, their effects are disclosed in the notes to the condensed interim consolidated financial statements.

B. Estimation of uncertainties relating to the global health pandemic, COVID-19:

The Group has evaluated likely impact of COVID - 19 on the overall business of the Group. The Group as at the date of the approval of these condensed interim consolidated financial statements, has used various available sources of information to analyse the carrying amount of its financial assets and exposures. The impact of COVID - 19 on the Group's condensed interim consolidated financial statements may differ from the estimate as on the date of the approval of the condensed interim consolidated financial statements.

(i) Expected credit loss:

The Group has considered the current and anticipated future economic conditions relating to the industries the Group deals with and the countries where it operates. In calculating expected credit loss, the Group has also considered related credit information for its customers to estimate the probability of default in future and has taken into account estimates of possible effect from the pandemic, COVID-19 using the forward looking approach prescribed by Ind AS 109.

(ii) Impact on hedged and unhedged foreign currency exposure:

Based on its assessment, the Group believes that the probability of occurrence of its forecasted transaction are not likely to be impacted by COVID - 19. Hence, the Group continues to believe that there is no foreseeable impact the effectiveness of its cash flow hedges due to this global pandemic.

(iii) Carrying value of financial instruments:

Investments in mutual funds are classified as "Level 1" having fair value marked to an active market which factors in the uncertainties arising out of COVID - 19. These financial assets are mainly investments in liquid securities and no material permanent decline in their carrying value are expected.

(iv) Impact on revenue:

The Group continues to re-evaluate the probable revenues from customers in various verticals to assess any possible drops in revenue from any of these verticals due to the economic stress caused by COVID - 19. Accordingly, it is of the opinion that the customers could re-prioritise their discretionary spend in immediate future to conserve resources.

The impact assessment of COVID - 19 is a continuing process given the uncertainties associated with its nature and duration. The Group has considered the same to the extent known currently and has taken steps to measure the cost budgets required to complete its performance obligations in respect of fixed price contracts and incorporated the impact of likely delays and costs in meeting its obligations.

C. Critical accounting estimates

i Revenue recognition

The Group's contracts with customers include promises to transfer multiple products and services to a customer. Revenues from customer contracts are considered for recognition and measurement when the contract has been approved, in writing, by the parties to the contract, the parties to the contract are committed to perform their respective obligations under the contract, and the contract is legally enforceable. The Group assesses the services promised in a contract and identifies distinct performance obligations in the contract. Identification of distinct performance obligations to determine the deliverables and the ability of the customer to benefit independently from such deliverables, and allocation of transaction price to these distinct performance obligations involves significant judgment.

The Group uses the percentage-of-completion method in accounting for its fixed-price contracts. Use of the percentage-ofcompletion method requires the Group to estimate the efforts or costs expended to date as a proportion of the total efforts or costs to be expended. Efforts or costs expended have been used to measure progress towards completion. Provisions for estimated losses, if any, on uncompleted contracts are recorded in the period in which such losses become probable based on the expected contract estimates at the reporting date.

Notes forming part of Condensed Interim Consolidated Financial Statements

In respect of the contracts where the transaction price is payable as revenue share at pre-defined percentage of customer revenue and bearing in mind, the time gap between the close of the accounting period and availability of the revenue report from the customer, the Group is required to use its judgement to ascertain the income from royalty on the basis of historical trends of customer revenue.

ii. Income taxes

The Group's two major tax jurisdictions are India and the United States, though the Group also files tax returns in other overseas jurisdictions. Significant judgements are involved in determining the provision for income taxes.

iii. Intangible assets and contingent consideration in business combinations

Business combinations are accounted for using Ind AS 103, Business Combinations. Ind AS 103 requires the identifiable intangible assets and contingent consideration to be fair valued in order to ascertain the net fair value of identifiable assets, liabilities and contingent liabilities of the acquiree. Significant estimates are required to be made in determining the value of contingent consideration and intangible assets. These valuations are conducted by independent valuation experts.

iv. Estimates related to useful life of Property, Plant and Equipment and intangible assets

Property, Plant and Equipment represent a significant proportion of the asset base of the Group. The charge in respect of depreciation is derived after determining an estimate of an asset's expected useful life and the expected residual value at the end of its life. The useful lives and residual values of Group's assets are determined by management at the time the asset is acquired and reviewed periodically. The lives are based on historical experience with similar assets as well as anticipation of future events, which may impact their life, such as changes in technology.

v. Impairment of Goodwill

Goodwill is tested for impairment on an annual basis and whenever there is an indication that the recoverable amount of a cash generating unit is less than its carrying amount based on a number of factors including operating results, business plans, future cash flows and economic conditions. The recoverable amount of cash generating units is determined based on higher of value-in-use and fair value less cost to sell. The goodwill impairment test is performed at the level of the cashgenerating unit or groups of cash-generating units which are benefiting from the synergies of the acquisition and which represents the lowest level at which goodwill is monitored for internal management purposes. Market related information and estimates are used to determine the recoverable amount. Key assumptions on which management has based its determination of recoverable amount include estimated long term growth rates, weighted average cost of capital and estimated operating margins. Cash flow projections take into account past experience and represent management's best estimate about future developments

vi Provisions

Provisions are determined based on the best estimate of the amount required to settle the obligation at the reporting date. If the effect of time value of money is material, provisions are discounted using a current pre-tax rate that reflects the risks specific to the liability. These estimates are reviewed at each balance sheet date and adjusted to reflect the current best estimates of the amount required.

vii. Internally generated Intangible assets

During the year, the management continued to assess the recoverability of the Group's internally generated intangible assets including those under development. Based on the current revenue generated from these lines of business, expected future revenue and the basis of amortization followed, the management considers the carrying value of these intangible assets as recoverable

viii. Leases

Ind AS 116 requires lessees to determine the lease term as the non-cancellable period of a lease adjusted with any option to extend or terminate the lease, if the use of such option is reasonably certain. The Group makes an assessment on the expected lease term on a lease-by-lease basis and thereby assesses whether it is reasonably certain that any options to extend or terminate the contract will be exercised. In evaluating the lease term, the Group considers factors such as any significant leasehold improvements undertaken over the lease term, costs relating to the termination of the lease and the importance of the underlying asset to the Group operations taking into account the location of the underlying asset and the availability of suitable alternatives. The lease term in future periods is reassessed to ensure that the lease term reflects the current economic circumstances. After considering current and future economic conditions, the Group has concluded that no changes are required to lease periods relating to the existing lease contracts.

(b) Property, Plant and Equipment

Property, Plant and Equipment are stated at cost, less accumulated depreciation and accumulated impairment losses, if any. The cost comprises the purchase price and directly attributable costs of bringing the asset to its working condition for its intended use. Any trade discounts and rebates are deducted in arriving at the purchase price. Capital work-in-progress includes cost of Property, Plant and Equipment that are not ready to be put to use.

Subsequent expenditure related to an item of Property, Plant and Equipment is added to its original cost only if it is probable that future economic benefits associated with the item will flow to the Group. All other expenses on existing Property, Plant and Equipment, including day-to-day repair and maintenance expenditure and cost of replacing parts, are charged to the statement of profit and loss for the period during which such expenses are incurred.

Where cost of a part of the asset ("asset component") is significant to total cost of the asset and useful life of that part is different from the useful life of the remaining asset, useful life of that significant part is determined separately and such asset component is depreciated over its separate useful life.

Gains or losses arising from disposal of Property, Plant and Equipment are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognized in the statement of profit and loss when the asset is disposed.

(c) Intangible assets

Intangible assets including software licenses of enduring nature and contractual rights acquired separately are measured on initial recognition at cost. Following initial recognition, intangible assets are carried at cost less accumulated amortization and accumulated impairment losses, if any. Cost comprises the purchase price and any directly attributable cost of bringing the asset to its working condition for its intended use.

Gains or losses arising from disposal of an intangible asset are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognized in the statement of profit and loss when the asset is disposed.

Research and development cost

Research costs are expensed as incurred. Development expenditure incurred on an individual project is recognized as an intangible asset when the Group can demonstrate:

• technical feasibility of completing the intangible asset so that it will be available for use or sale;
• its intention to complete the asset;
• its ability to use or sell the asset;
• how the asset will generate probable future economic benefits;
• the availability of adequate resources to complete the development and to use or sell the asset; and
• the ability to measure reliably the expenditure attributable to the intangible asset during development.

Such development expenditure, until capitalization, is reflected as intangible assets under development.

Following the initial recognition, internally generated intangible assets are carried at cost less accumulated amortization and accumulated impairment losses, if any. Amortization of internally generated intangible asset begins when the development is complete and the asset is available for use.

(d) Business combinations

The acquisition method of accounting is used to account for all business combinations, regardless of whether equity instruments or other assets are acquired. The consideration transferred for the acquisition of a subsidiary comprises the

• Fair values of the assets transferred;
• Liabilities incurred to the former owners of the acquired business;
• Equity interests issued by the Group; and
• Fair value of any asset or liability resulting from a contingent consideration arrangement.

Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are, with limited exceptions, measured initially at their fair values at the acquisition date. The Group recognizes any non-controlling interest in the acquired entity on an acquisition-by-acquisition basis either at fair value or at the non-controlling interest's proportionate share of the acquired entity's net identifiable assets.

Acquisition-related costs are expensed as incurred.

The excess of the:

• Consideration transferred;
• $\bullet$ Amount of any non-controlling interest in the acquired entity, and
• Acquisition-date fair value of any previous equity interest in the acquired entity

over the fair value of the net identifiable assets acquired is recorded as goodwill. If those amounts are less than the fair value of the net identifiable assets of the business acquired, the difference is recognized in other comprehensive income and accumulated in equity as capital reserve provided there is clear evidence of the underlying reasons for classifying the business combination as a bargain purchase. In other cases, the bargain purchase is recognized directly in equity as capital reserve.

(e) Goodwill/ Gain on bargain purchase

Goodwill represents the cost of business acquisition in excess of the Group's interest in the net fair value of identifiable assets, liabilities and contingent liabilities of the acquiree. When the net fair value of the identifiable assets, liabilities and contingent liabilities acquired exceeds the cost of business acquisition, a gain is recognized in the other comprehensive income as gain on bargain purchase. Goodwill is measured at cost less accumulated impairment losses.

(f) Depreciation and amortization

Depreciation on Property, Plant and Equipment is provided using the Straight Line Method ('SLM') over the useful lives of the assets estimated by the management.

The management estimates the useful lives for the Property, Plant and Equipment as follows:

Assets	Useful lives
Buildings*	25 years
Computers	3 years
Computers - Servers and networks*	3 years
Office equipments	5 years
Plant and equipment*	5 years
Plant and equipment (Windmill)*	20 years
Plant and equipment (Solar Energy System)*	10 years
Furniture and fixtures*	5 years
Vehicles*	5 years

*For these classes of assets, based on technical evaluation, the management believes that the useful lives as given above best represent the period over which the management expects to use these assets.

Leasehold improvements are amortized over the period of lease or useful life, whichever is lower.

Intangible assets are amortized on a straight-line basis over their estimated useful lives ranging from 3 to 6 years from the day the asset is made available for use.

Where cost of a part of the asset ("asset component") is significant to total cost of the asset and useful life of that part is different from the useful life of the remaining asset, useful life of that significant part is determined separately and such asset component is depreciated over its separate useful life.

Depreciation method, useful lives and residual values are reviewed periodically.

(g) Borrowing costs

Borrowing cost includes interest and amortization of ancillary costs incurred in connection with the arrangement of borrowings.

Borrowing costs directly attributable to the acquisition, construction or development of an asset that necessarily takes a substantial period of time to get ready for its intended use or sale are capitalized as part of the cost of the respective asset. All other borrowing costs are expensed in the period / year they occur.

(h) Leases

The Group's lease asset classes primarily consist of leases for land and office premises. The Group assesses whether a contract contains a lease, at inception of a contract. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration.

To assess whether a contract conveys the right to control the use of an identified asset, the Group assesses whether:

(i) the contract involves the use of an identified asset

(ii) the Group has substantially all of the economic benefits from use of the asset through the period of the lease and (iii) the Group has the right to direct the use of the asset

Where the Group is a lessee

The Group accounts for each lease component within the contract as a lease separately from non-lease components of the contract and allocates the consideration in the contract to each lease component on the basis of the relative stand-alone price of the lease component and the aggregate stand-alone price of the non-lease components.

The Group recognises right-of-use asset representing its right to use the underlying asset for the lease term at the lease commencement date. The cost of the right-of-use asset measured at inception shall comprise of the amount of the initial measurement of the lease liability adjusted for any lease payments made at or before the commencement date less any lease incentives received, plus any initial direct costs incurred and an estimate of costs to be incurred by the lessee in dismantling and removing the underlying asset or restoring the underlying asset or site on which it is located.

Notes forming part of Condensed Interim Consolidated Financial Statements

The right-of-use assets is subsequently measured at cost less any accumulated depreciation, accumulated impairment losses, if any and adjusted for any remeasurement of the lease liability. The right-of-use assets is depreciated using the straight-line method from the commencement date over the shorter of lease term or useful life of right-of-use asset. The estimated useful lives of right-of use assets are determined on the same basis as those of Property, Plant and Equipment.

Right-of-use assets are tested for impairment whenever there is any indication that their carrying amounts may not be recoverable. Impairment loss, if any, is recognised in the statement of profit and loss.

The Group measures the lease liability at the present value of the lease payments that are not paid at the commencement date of the lease. The lease payments are discounted using the interest rate implicit in the lease, if that rate can be readily determined. If that rate cannot be readily determined, the Group uses incremental borrowing rate.

The lease payments shall include fixed payments, variable lease payments based on an index or rate, residual value guarantees, exercise price of a purchase option where the Group is reasonably certain to exercise that option and payments of penalties for terminating the lease, if the lease term reflects the lessee exercising an option to terminate the lease.

The lease liability is subsequently remeasured by increasing the carrying amount to reflect interest on the lease liability, reducing the carrying amount to reflect the lease payments made and remeasuring the carrying amount to reflect any reassessment or lease modifications or to reflect revised in-substance fixed lease payments.

When the lease liability is remeasured, the corresponding adjustment is reflected in the right-of-use asset, or statement of profit and loss if the right-of-use asset is already reduced to zero.

The Group has elected not to apply the requirements of Ind AS 116 to short-term leases of all assets that have a lease term of 12 months or less and leases for which the underlying asset is of low value. The lease expenses associated with these leases are recognized in the statement of profit and loss on a straight line basis.

Group as a lessor

At the inception of the lease, the Group classifies each of its leases as either an operating lease or a finance lease. Whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee, the contract is classified as a finance lease. All other leases are classified as operating leases. The Group recognises lease payments received under operating leases as income over the lease term on a straight line basis.

$(i)$ Financial instruments

Initial recognition and measurement

The Company recognizes financial assets and financial liabilities when it becomes a party to the contractual provisions of the instrument. All financial assets and liabilities are recognized at fair value on initial recognition, except for trade receivables which are initially measured at transaction price. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities, which are not at fair value through profit or loss, are added to the fair value on initial recognition.

A. Non-derivative financial instruments

Subsequent measurement

i) Financial assets

Financial assets at amortized cost

Financial assets that are held within a business model whose objective is to hold assets for collecting contractual cash flows and whose contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding are subsequently measured at amortized cost using the effective interest rate method. The change in measurements are recognized as finance income in the statement of profit and loss.

Financial assets at fair value through other comprehensive income (FVTOCI)

Financial assets that are held within a business model whose objective is achieved both by collecting contractual cash flows and selling the financial assets and the assets' contractual cash flows represent solely payments of principal and interest on the principal amount outstanding are subsequently measured at fair value. Fair value movements are recognized in other comprehensive income.

Financial assets at fair value through profit or loss (FVTPL)

Any financial asset which does not meet the criteria for categorization as financial asset at amortized cost or at FVTOCI, is classified as financial asset at FVTPL. Financial assets except derivative contracts included within the FVTPL category are subsequently measured at fair value with all changes recognized in the statement of profit and loss.

Notes forming part of Condensed Interim Consolidated Financial Statements

ii) Financial liabilities

Financial liabilities at amortised cost

Financial liabilities are subsequently carried at amortized cost using the effective interest method, except for contingent consideration recognized in a business combination which is subsequently measured at fair value through profit or loss. For trade and other payables maturing within one year from the Balance Sheet date, the carrying amounts approximate fair value due to the short maturity of these instruments.

Financial liabilities at fair value through profit or loss (FVTPL)

Financial liabilities include financial liabilities held for trading and financial liabilities designated upon initial recognition at fair value through profit or loss if the recognition criteria as per Ind AS 109 - "Financial Instruments" are satisfied. Gains or losses on liabilities held for trading are recognized in statement of profit and loss.

Fair value gains or losses on liabilities designated as FVTPL attributable to changes in own credit risk are recognized in other comprehensive income. All other changes in fair value of liabilities designated as FVTPL are recognized in the statement of profit and loss. The Company has not designated any financial liability as FVTPL.

Investments in subsidiaries, associates and joint ventures

Investment in subsidiaries, associates and joint ventures are carried at cost.

B. Derivative financial instruments

Forward exchange contracts not intended for trading or speculation purposes, classified as derivative financial instruments

As per the accounting principles laid down in Ind AS 109 – "Financial Instruments" relating to cash flow hedges, derivative financial instruments which qualify for cash flow hedge accounting are fair valued at balance sheet date and the effective portion of the resultant loss / (gain) is debited / (credited) to the hedge reserve under other comprehensive income and the ineffective portion is recognized to the statement of profit and loss. Derivative financial instruments are carried as forward contract receivable when the fair value is positive and as forward contract payable when the fair value is negative.

Changes in the fair value of derivative instruments that do not qualify for hedge accounting are recognized in the statement of profit and loss as they arise.

Hedge accounting is discontinued when the hedging instrument expires or is sold, or terminated, or exercised, or no longer qualifies for hedge accounting. Any cumulative gain or loss on the hedging instrument recognized under other comprehensive income is transferred to the statement of profit and loss when the forecasted transaction occurs or affects the statement of profit and loss or when a hedged transaction is no longer expected to occur.

C. Derecognition

The Company derecognizes a financial asset when the contractual rights to the cash flows from the financial asset expire or it transfers the financial asset and the transfer qualifies for derecognition under Ind AS 109. A financial liability (or a part of a financial liability) is derecognized from the Company's Balance Sheet when the obligation specified in the contract is discharged or cancelled or expires. On derecognition of a financial asset in its entirety, the difference between the asset's carrying amount and the sum of the consideration received and receivable and the cumulative gain or loss that had been recognised in other comprehensive income and accumulated in equity, if any, is recognised in profit or loss, except in case of equity instruments classified as FVOCI, where such cumulative gain or loss is not recycled to statement of profit and loss.

The Company derecognizes financial liabilities when the Company's obligations are discharged, cancelled or have expired. The difference between the carrying amount of the financial liability derecognized and the consideration paid and payable is recognised in profit or loss.

D. Fair value of financial instruments

In determining the fair value of its financial instruments, the Company uses a variety of methods and assumptions that are based on market conditions and risks existing at each reporting date. The methods used to determine fair value include discounted cash flow analysis, available quoted market prices, dealer quotes.

For equity instruments of unlisted companies, in limited circumstances, insufficient more recent information is available to measure fair value, or if there are a wide range of possible fair value measurements and cost represents the best estimate of fair value within that range. The Company recognises such equity instruments at cost, which is considered as appropriate estimate of fair value.

All methods of assessing fair value result in general approximation of value, and such value may never actually be realized. Refer to the table on financial instruments by category below for the disclosure on carrying value and fair value of financial assets and liabilities. For financial assets and liabilities maturing within one year from the Balance Sheet date and which are not carried at fair value, the carrying amounts approximate fair value due to the short maturity of these instruments.

E. Impairment of financial assets

The Company applies Expected Credit Loss (ECL) model for measurement and recognition of impairment loss on financial assets measured at amortized cost and financial assets that are debts instruments and are measured at fair value through other comprehensive income (FVTOCI). ECL is the difference between contractual cash flows that are due and the cash flows that the Company expects to receive, discounted at the original effective interest rate.

For trade receivables, the Company recognizes impairment loss allowance based on lifetime ECL at each reporting date, right from its initial recognition. For other financial assets, the Company determines whether there has been a significant increase in the credit risk since initial recognition. If credit risk has not increased significantly, 12 months ECL is used to provide for impairment loss. However, if credit risk has increased significantly, lifetime ECL is used.

Impairment of Non-financial assets $(i)$

The carrying amounts of Property, Plant and Equipment and Goodwill are reviewed at each balance sheet date or whenever there is any indication of impairment based on internal/external factors. If any indications exist, the Group estimates the asset's recoverable amount.

In such cases, the recoverable amount is determined for the Cash Generating Unit (CGU) to which the asset belongs. If the recoverable amount of an asset (or CGU) is estimated to be less than its carrying amount, the carrying amount of the asset (or CGU) is reduced to its recoverable amount. The recoverable amount is the greater of the asset's fair value and its value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and risks specific to the asset.

An impairment loss is recognised in the statement of profit and loss.

Recoverable amount of intangible assets under development that is not yet available for use is estimated at least at each financial period / year end even if there is no indication that the asset is impaired.

(k) Revenue recognition

Revenues from customer contracts are considered for recognition and measurement when the contract has been approved by the parties to the contract, the parties to the contract are committed to perform their respective obligations under the contract, and the contract is legally enforceable. Revenue is recognized upon transfer of control of promised products or services ("performance obligations") to customers in an amount that reflects the consideration the Company has received or expects to receive in exchange for these products or services ("transaction price"). When there is uncertainty as to collectability, revenue recognition is postponed until such uncertainty is resolved. The Company assesses the services promised in a contract and identifies distinct performance obligations in the contract. The Company allocates the transaction price to each distinct performance obligation based on the relative standalone selling price. The price that is regularly charged for an item when sold separately is the best evidence of its standalone selling price. In the absence of such evidence, the primary method used to estimate standalone selling price is the expected cost plus a margin, under which the Company estimates the cost of satisfying the performance obligation and then adds an appropriate margin based on similar services. The Company's contracts may include variable consideration including rebates, volume discounts and penalties. The Company includes variable consideration as part of transaction price when there is a basis to reasonably estimate the amount of the variable consideration and when it is probable that a significant reversal of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is resolved.

$(i)$ Income from sale of software services and products

The company derives revenues primarily from IT services comprising of software development and related services and from the licensing of software products.

Arrangements with customers for software related services are either on a time-and-material or a fixed-price basis.

Revenue on time-and-material contracts are recognized as and when the related services are performed. Revenue from fixedprice contracts, where the performance obligations are satisfied over time and where there is no uncertainty as to measurement or collectability of consideration, is recognized as per the percentage-of-completion method. When there is uncertainty as to measurement or ultimate collectability, revenue recognition is postponed until such uncertainty is resolved.

Revenue from licenses where the customer obtains a "right to use" the licenses is recognized at the time the license is made available to the customer. Revenue from licenses where the customer obtains a "right to access" is recognized over the access period.

When support services are provided in conjunction with the licensing arrangement and the license and the support services have been identified as two separate performance obligations, the transaction price for such contracts are allocated to each performance obligation of the contract based on their relative standalone selling prices. Maintenance revenue is recognized proportionately over the period in which the services are rendered.

Revenue from revenue share is recognized in accordance with the terms of the relevant agreements. Unbilled revenue represents revenue recognized in relation to work done until the balance sheet date for which billing has not taken place.

Unearned revenue represents the billing in respect of contracts for which the revenue is not recognized.

Notes forming part of Condensed Interim Consolidated Financial Statements

The Company collects Goods and Services Tax on behalf of the government and, therefore, these are not economic benefits flowing to the Company. Hence, they are excluded from revenue.

(ii) Interest

Interest income is recognized on a time proportion basis taking into account the carrying amount and the effective interest rate.

(iii) Dividend

Dividend income is recognized when the Group's right to receive dividend is established. Dividend income is included under the head 'Other income' in the statement of profit and loss.

$(1)$ Government grants

Government grants are recognized at fair value when there is reasonable assurance that the Group will comply with the conditions attaching to them and the grants will be received. Grants related to purchase of assets are treated as deferred income and allocated to income statement over the useful lives of the related assets while grants related to expenses are deducted in reporting the related expenses in the income statement.

(m) Foreign currency translation

Foreign currency transactions and balances

Initial recognition

Foreign currency transactions are recorded in the respective functional currencies of the entities in the Group, by applying to the foreign currency amount the exchange rate between the functional currency of each individual entity and the foreign currency at the date of the transaction.

Conversion

Foreign currency monetary items are converted using the exchange rate prevailing at the reporting date. Non-monetary items, which are measured in terms of historical cost denominated in a foreign currency are reported using the exchange rate at the date of the transaction. Non-monetary items which are carried at fair value or other similar valuation denominated in a foreign currency are reported using the exchange rates at the date when the values were determined.

Exchange differences

Exchange differences arising on conversion / settlement of foreign currency monetary items and on foreign currency liabilities relating to Property, Plant and Equipment acquisition are recognized as income or expenses in the period / year in which they arise.

Translation of foreign operations

The assets and liabilities of a foreign operation are translated into the reporting currency (INR) at the exchange rate prevailing at the reporting date. Their statement of profit and loss are translated at exchange rates prevailing at the dates of transactions or weighted average rates, where such rates approximate the exchange rate at the date of transaction. The exchange differences arising on translation are accumulated in the foreign currency translation reserve under other comprehensive income. On disposal of a foreign operation, the accumulated foreign currency translation reserve relating to that foreign operation is recognized in the statement of profit and loss.

(n) Retirement and other employee benefits

Provident fund $(i)$

Provident fund is a defined contribution plan covering eligible employees. The Parent Company and the eligible employees make a monthly contribution to the provident fund maintained by the Regional Provident Fund Commissioner equal to the specified percentage of the basic salary of the eligible employees as per the scheme. The contributions to the provident fund are charged to the statement of profit and loss for the period / year when the contributions are due. The Parent Company has no obligation, other than the contribution payable to the provident fund.

(ii) Gratuity

Gratuity is a defined benefit obligation plan operated by Persistent Systems Limited and Persistent Systems Lanka (Private) Limited for their employees covered under Group's Gratuity Scheme. The cost of providing benefit under gratuity plan is determined on the basis of actuarial valuation using the projected unit credit method at the reporting date and are charged to the statement of profit and loss, except for the remeasurements, comprising of actuarial gains and losses which are recognized in full in the statement of other comprehensive income in the reporting period in which they occur. Remeasurements are not reclassified to the statement of profit and loss subsequently.

Notes forming part of Condensed Interim Consolidated Financial Statements

(iii) Superannuation

Superannuation is a defined contribution plan covering eligible employees of the Parent Company. The contribution to the superannuation fund managed by the insurer is equal to the specified percentage of the basic salary of the eligible employees as per the scheme. The contribution to this scheme is charged to the statement of profit and loss on an accrual basis. There are no other contributions payable other than contribution payable to the respective fund.

(iv) Leave encashment

The expected cost of accumulating leave encashment is determined by actuarial valuation performed by an independent actuary at each Balance Sheet date using projected unit credit method on the additional amount expected to be paid / availed as a result of the unused entitlement that has accumulated at the Balance Sheet date. Expense on non-accumulating leave encashment is recognized in the period in which the absences occur.

(v) Long service awards

Long service awards are other long term benefits to all eligible employees, as per Group's policy. The cost of providing benefit under long service awards scheme is determined on the basis of actuarial valuation using the projected unit credit method at the reporting date. Remeasurements, comprising of actuarial gains and losses are recognized in full in the statement of profit and loss.

(o) Income taxes

Tax expense comprises of current and deferred tax. Current income tax is measured at the amount expected to be paid to the tax authorities in accordance with the Income Tax Act, 1961 enacted in India and tax laws prevailing in the respective tax jurisdictions where the Group operates. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted, at the reporting date. Current income tax relating to items recognized directly in equity is recognized in equity and not in statement of profit and loss.

Deferred income taxes reflect the impact of temporary differences between tax base of assets and liabilities and their carrying amounts. Deferred tax is measured based on the tax rates and the tax laws enacted or substantively enacted at the reporting date.

Deferred tax liabilities are recognized for all taxable temporary differences, except deferred tax liability arising from initial recognition of goodwill or an asset or liability in a transaction that is not a business combination and, affects neither accounting nor taxable profit/ loss at the time of transaction. Deferred tax assets are recognized for all deductible temporary differences, the carry forward of unused tax credits and any unused tax losses, except deferred tax assets arising from initial recognition of goodwill or an asset or liability in a transaction that is not a business combination and, affects neither accounting nor taxable profit/ loss at the time of transaction.

In the situations where the Group is entitled to a tax holiday under the Income-tax Act, 1961 enacted in India or tax laws prevailing in the respective tax jurisdictions where it operates, no deferred tax (asset or liability) is recognized in respect of temporary differences which reverse during the tax holiday period, to the extent the Group's gross total income is subject to the deduction during the tax holiday period. Deferred tax in respect of temporary differences which reverse after the tax holiday period is recognized in the period / year in which the temporary differences originate.

The carrying amount of deferred tax asset is reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available against which such deferred tax assets can be realized.

Deferred tax assets and deferred tax liabilities are offset, if a legally enforceable right exists to set off current tax assets against current tax liabilities and the deferred tax assets and deferred tax liabilities relate to the same taxable entity and the same taxation authority

Deferred tax relating to items recognized outside the statement of profit and loss is recognized in co-relation to the underlying transaction either in other comprehensive income or directly in equity.

Minimum alternate tax (MAT) paid in a period / year is charged to the statement of profit and loss as current tax. MAT credit available is recognized as an asset only to the extent that there is convincing evidence that the Group will pay normal income tax during the period, i.e., the period for which MAT credit is allowed to be carried forward. In the year in which the Group recognizes MAT credit as an asset in accordance with the Guidance Note on Accounting for Credit Available in respect of Minimum Alternative Tax under the Income-tax Act, 1961, the said asset is created by way of credit to the statement of profit and loss and shown as "MAT Credit Entitlement." The Group reviews the "MAT credit entitlement" asset at each reporting date and writes down the asset to the extent the Group does not have convincing evidence that it will pay normal tax during the specified period.

(p) Segment reporting

$(i)$ Identification of segment

The Group's operations predominantly relate to providing software products, services and technology innovation covering full life cycle of product to its customers.

Notes forming part of Condensed Interim Consolidated Financial Statements

The components of the Group that engage in business activities from which they earn revenue and incur expenses, whose operating results are regularly reviewed by the Group's Chief Operating Decision Makers are identified as operating segments.

(ii) Allocation of income and direct expenses

Income and direct expenses allocable to segments are classified based on items that are individually identifiable to that segment such as salaries, project related travel expenses etc. The remainder is considered as un-allocable expense and is charged against the total income.

(iii) Unallocated items

Unallocated items include general corporate income and expense items which are not allocated to any business segment.

Segregation of assets, liabilities, depreciation and amortization and other non-cash expenses into various reportable segments have not been presented except for trade receivables and unbilled revenue as these items are used interchangeably among segments and the Group is of the view that it is not practical to reasonably allocate these items to individual segments and an ad-hoc allocation will not be meaningful.

(iv) Inter-segment transfers

There are no inter-segments transactions.

(v) Segment accounting policies

The Group prepares its segment information in conformity with accounting policies adopted for preparing and presenting the condensed interim consolidated financial statements of the Group as a whole.

(q) Earnings per share (EPS)

Basic earnings per share are calculated by dividing the net profit for the period / year attributable to equity shareholders by the weighted average number of equity shares outstanding during the period / year. The weighted average number of equity shares outstanding during the reporting year is adjusted for events such as bonus issue, bonus element in a rights issue, share split, and reverse share split (consolidation of shares), if any occurred during the reporting year, that have changed the number of equity shares outstanding, without a corresponding change in resources.

For the purpose of calculating diluted earnings per share, the net profit for the period / year attributable to the equity shareholders and the weighted average number of equity shares outstanding during the period / year, are adjusted for the effects of all dilutive potential equity shares.

The number of shares and potential dilutive equity shares are adjusted retrospectively for all periods presented for any bonus shares issues including for changes effected prior to the approval of the condensed interim consolidated financial statements by the Board of Directors.

(r) Provisions

A provision is recognized when the Group has a present obligation as a result of past event; it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation, in respect of which a reliable estimate can be made. Provisions are determined based on the best estimate of the amount required to settle the obligation at the reporting date. If the effect of time value of money is material, provisions are discounted using a current pre-tax rate that reflects the risks specific to the liability. These estimates are reviewed at each balance sheet date and adjusted to reflect the current best estimates.

(s) Contingent liabilities

A contingent liability is a possible obligation that arises from past events whose existence will be confirmed by the occurrence or non-occurrence of one or more uncertain future events beyond the control of the Group or a present obligation that is not recognized because it is not probable that an outflow of resources will be required to settle the obligation. A contingent liability also arises in extremely rare cases where there is a liability that cannot be recognized because it cannot be measured reliably.

(t) Cash and cash equivalents

Cash and cash equivalents in the cash flow statement comprises of cash at bank, cash in hand and short term deposits with an original maturity period of three months or less.

(u) Employee stock compensation expenses

Employees of the Group receive remuneration in the form of share based payment transactions, whereby employees render services as consideration for equity instruments granted (equity-settled transactions).

In accordance with Ind AS 102 - "Share Based Payments", the cost of equity-settled transactions is determined by the fair value of the options at the date of the grant and recognized as employee compensation cost over the vesting period. The cumulative expense recognized for equity-settled transactions at each reporting date until the vesting date reflects the extent to which the vesting period has expired and the Group's best estimate of the number of equity instruments that will ultimately vest.

Notes forming part of Condensed Interim Consolidated Financial Statements

The expense or credit recognized in the statement of profit and loss for a period / year represents the movement in cumulative expense recognized as at the beginning and end of that period / year and is recognized in employee benefits expense. In case of the employee stock option schemes having a graded vesting schedule, each vesting tranche having different vesting period has been considered as a separate option grant and accounted for accordingly.

Where the terms of an equity-settled transaction award are modified, the minimum expense recognized is the expense as if the terms had not been modified, if the original terms of the award are met. An additional expense is recognized for any modification that increases the total fair value of the share-based payment transaction or is otherwise beneficial to the employee as measured at the date of modification.

The employee stock option expenses in respect of the employees of the subsidiaries are charged to the respective subsidiary.

$(v)$ Equity

Ordinary shares are classified as equity share capital. Incremental costs directly attributable to the issuance of new ordinary shares, share options and buyback are recognized as a deduction from equity, net of any tax effects.

(w) Dividend

Final dividend on shares are recorded as a liability on the date of approval by the shareholders and interim dividends are recorded as a liability on the date of declaration by the Company's Board of Directors.

Notes forming part of Condensed Interim Consolidated Financial Statements

5. Share capital

	As at March 31, 2021 In ₹ Million	As at March 31, 2020 In ₹ Million
Authorized shares (No. in million)
200 (Previous year: 200) equity shares of ₹10 each	2,000.00	2,000.00
	2.000.00	2,000.00
Issued, subscribed and fully paid-up shares (No. in million)
76.43 (Previous year: 76.43 equity shares of ₹10 each) equity shares of $\bar{\tau}$ 10 each	764.25	764.25
Issued, subscribed and fully paid-up share capital	764.25	764.25

Reconciliation of the shares outstanding at the beginning and at the end of the period/year a)

The reconciliation of the number of shares outstanding and the amount of share capital is set out below:

				THE MILLION
	As at March 31, 2021		As at March 31, 2020
	No of shares	Amount	No of shares	Amount
Number of shares at the beginning of the year	76 43	764.25	79 12	791.19
Less: Shares bought back	-		2.69	26.94
Number of shares at the end of the year	76.43	764.25	76.43	764.25

$\theta$ in Milliam).

(Nos.in Million)

b) Terms / rights attached to equity shares

The Group has only one class of equity shares having a par value of ₹ 10 per share. Each holder of equity shares is entitled to one vote per share. The Group declares and pays dividends in Indian rupees.

The Parent Company declared interim dividend of ₹ 14 per share on January 28, 2021 on the face value of ₹ 10 each; for the Financial Year 2020-21

The Parent Company declares and pays dividends in Indian rupees. The Finance Act, 2020 in India has repealed Dividend Distribution Tax (DDT). The Companies are now required to pay/ distribute dividend after deducting applicable taxes. The remittance of dividends outside India is governed by Indian law on foreign exchange and is also subject to withholding tax at applicable rates as per Finance Act, 2020.

In the event of liquidation of the Parent Company, the holders of equity shares will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

Aggregate number of bonus shares issued, shares issued for consideration other than cash and shares bought back c) during the period of five years immediately preceding the reporting date

	For the period of five years ended March 31, 2021 No in Million	For the period of five years ended March 31, 2020 No in Million
Equity shares allotted on March 12, 2015 as fully paid bonus shares by capitalization of securities premium ₹400 million		40.000
Equity shares bought back	3.575	3.575

d) Buyback of Equity Shares of the Parent Company:

The Board of Directors, at its meeting in January 2019, had approved the buyback of the Parent Company's fully paid-up equity shares of the face value of ₹ 10 each from its shareholders/beneficial owners excluding promoters, promoter group and persons who are in control of the Parent Company, via the "open market" route through the stock exchanges, for a total amount not exceeding ₹ 2,250 million ("Maximum Buyback Size"), and at a price not exceeding ₹ 750 per Equity Share ("Maximum Buyback Price")

The buyback was offered to all eligible equity shareholders of the Parent Company (other than the Promoters, the Promoter Group and Persons in Control of the Group) under the open market route through the stock exchanges. The buyback of equity shares through the stock exchange commenced on February 8, 2019 and was completed on June 27, 2019. During this buyback period the Parent Company had purchased and extinguished a total of 3,575,000 equity shares from the stock exchange at an average buy back price of ₹628,93/- per equity share comprising 4.47% of the pre buyback paid-up equity share capital of the Parent Company. The buyback resulted in a cash outflow of ₹2,248.42 million (excluding transaction costs). The Parent Company funded the buyback from utilization of its securities premium and free reserves. The total number of equity shares outstanding post buyback stands at 76,425,000.

e) Details of shareholders holding more than 5% shares in the Group

Name of the shareholder*	As at March 31, 2021		As at March 31, 2020
	No. in million	% Holding	No. in million	% Holding
Dr. Anand Deshpande jointly with Mrs. Sonali Anand Deshpande	22.96	30.04	22.96	30.04
Schemes of HDFC Mutual Fund	5.37	7.03	6.53	8.54

* The shareholding information is based on legal ownership of shares and has been extracted from the records of the Group including register of shareholders / members.

Parsistent Systems Limited
Notes forming part of Condensed Interim Consolidated Financial Statements

6.1 Property, plant and equipment

									(In ₹ Million)
	Land - Freehold	Buildings	Computers	equipments Office	Equipment Plant and	improvements Leasehold	Furniture and Vehicles fixtures		Total
Gross block (At cost)
As at April 1, 2020	22137	2,452 04	2,45777	9320	1,39941	4592	69312	724	7,370.07
Additions		067	55991	617	5641				65943
Additions through business combination (refer note 38)			2732	0.69	0.12		36 27 7 20		3533
Disposals			8029	223	3987	3.81	3539		161.59
Effect of foreign currency translation from functional currency to reporting currency	0.54	238	(21.12)	(132)	0.21	218	(140)		(1853)
As at March 31, 2021	22191	2,455 09	2,943 59	96 51	1,416.28	44 29	69980	7 24	7,884.71
Accumulated Depreciation
As at April 1, 2020		,083,58	2,09205	80.57	1,20620	35.51	64351	405	5, 145.47
Additions through business combination (refer note 38)			2564	0.34	0.05		230		2833
Charge for the period		99 10	25853	838	54 40	579	4153	0.93	468 66
Disposals		$\mathbf{I}$	6710	202	3656	294	3123		13985
Effect of foreign currency translation from functional currency to reporting currency		0.77	(1928)	(0.86)	0.42	148	(183)		(1930)
As at March 31, 2021		1,183.45	2,28984	86 41	1.224.51	3984	65428	4.98	5,483.31
Net block
As at March 31, 2021	221.91	1,271 64	65375	10.10	19177	445	45 52	226	2,401 40
As at March 31, 2020	221.37	1,368 46	36572	12.63	19321	10.41	49.61	$\frac{9}{3}$	2,224 60

* Note: Buildings include those constructed on leasehold land:

a) Gross block as on March 31, 2021 ₹ 1,454.60 million (Previous year ₹ 1,454.30 million)
b) Depreciation charge for the year ₹ 59.04 million (Previous year ₹ 59.07 million)
c) Accumulated depreciation as on March 31, 2021

Persistent Systems Limited
Notes forming part of Condensed Interim Consolidated Financial Statements

6.1 Property, plant and equipment

י האירוי האירוי האירוי האירוי האירוי האירוי האירוי האירוי האירוי האירוי האירוי האירוי האירוי האירוי האירוי האי									$(ln \bar{z}$ Million)
	Freehold Land -	Buildings	Computers	equipments Office	Equipment Plant and	improvements Leasehold	Furniture fixtures and	Vehicles	Total
Gross block (At cost)
As at April 1, 2019	220.47	2,44772	2,441.59	8963	1,408.24	9423	67987	844	7,390.19
Additions	ï	0.30	294.11	0.40	14.38	ı	5 91	ï	319.10
Additions through business combination	ı	ï	523	í.	0.06	ı	í.	ï	529
Disposals			32880	0.03	25.10	4643	745	1.20	409.01
Effect of foreign currency translation from functional currency to reporting currency	0.90	4.02	45.64	3.20	183	(1.88)	10.79		64.50
As at March 31, 2020	22137	2,452 04	2,457.77	93.20	1,39941	45.92	693.12	7 24	7,370.07
Accumulated Depreciation
As at April 1, 2019		98341	2,160.36	7013	1,166.93	7658	59731	423	5,058.95
Additions through business combination			169	ï	0.06				175
Charge for the year		9893	23472	816	5902	6.62	44.88	102	45335
Disposals			32880	0.03	2078	4643	730	1.20	404.54
Effect of foreign currency translation from functional currency to reporting currency		1.24	24.08	2.31	0.97	(1.26)	8.62		3596
As at March 31, 2020		1,083.58	2,09205	80.57	1,206 20	3551	64351	4.05	5,145 47
Net block
As at March 31, 2020	221.37	1,36846	365.72	12.63	193.21	10.41	49.61	3.19	2,224 60
As at March 31, 2019	$\frac{220}{47}$	1,464.31	28123	$\frac{19.50}{ }$	241.31	$\frac{1765}{ }$	$\frac{8}{2.56}$	4.21	2,331 24

Notes forming part of Condensed Interim Consolidated Financial Statements

6.2 Right of use assets

			(In ₹ Million)
	Leasehold Land	Office premises	Total
Gross block (At cost)
As at April 1, 2020	37.50	796.75	834.25
Additions during the period		584.67	584.67
Acquistion		252	2.52
Disposals		165.16	165 16
Effect of foreign currency translation of foreign operations from functional currency to reporting currency		(10.65)	(10.65)
As at March 31, 2021	37.50	1,208.13	1,245.63
Accumulated Depreciation
As at April 1, 2020	0.60	266.84	267.44
Acquisition		0.10	0.10
Charge for the period	0.58	250.88	251.46
Disposals		121.83	121.83
Effect of foreign currency translation of foreign operations from functional currency to reporting currency		(4.12)	(4.12)
As at March 31, 2021	1.18	391.87	393.05
Net block
As at March 31, 2021	36 32	816 26	852.58
As at March 31, 2020	36.90	529.91	566 81

Notes forming part of Condensed Interim Consolidated Financial Statements

			(In ₹ Million)
	Leasehold Land	Office premises	Total
Gross block (At cost)
As at April 1, 2019
Additions (Transitional impact on adoption of Ind AS 116)	37.50	722.51	760.01
Additions during the year		77.80	77.80
Disposals		9.35	9.35
Effect of foreign currency translation of foreign operations from functional currency to reporting currency		5.79	5.79
As at March 31, 2020	37 50	796 75	834 25
Accumulated Depreciation
As at April 1, 2019
Charge for the year	0.60	260.73	261.33
Disposals		1.12	1.12
Effect of foreign currency translation of foreign operations from functional currency to reporting currency		7.23	7.23
As at March 31, 2020	0.60	266 84	267 44
Net block
As at March 31, 2020	36.90	529 91	566.81
6.3 Goodwill
			(In ₹ Million)
		As at	As at
		March 31, 2021	March 31, 2020
Cost
.		00.01	0.401

Balance at end of year	8594	88.94
from functional currency to reporting currency
Effect of foreign currency translation of foreign operations	(3.00)	7.70
Additional amounts recognised from business combinations		$\blacksquare$
Balance at beginning of year	88.94	81.24
uost

6.4 Other Intangible assets

			(In ₹ Million)
	Software	Acquired	Total
		contractual rights
Gross block
As at April 1, 2020	2.779.57	5.214.42	7,993.99
Additions	185.76	256.64	442.40
Additions through business combination (refer note 38)		363 16	363.16
Disposals	2.94		294
Effect of foreign currency translation of foreign operations from functional currency to reporting currency	(49.62)	(89.29)	(138.91)
As at March 31, 2021	2,91277	5,744 93	8,657.70
Accumulated Amortization
As at April 1, 2020	2.732.72	3.826.34	6,559.06
Charge for the period	59.74	975.64	1,035.38
Disposals	2.89		289
Effect of foreign currency translation of foreign operations from functional currency to reporting currency	(52.77)	(110.58)	(163.35)
As at March 31, 2021	2,736.80	4,691.40	7,428.20
Net block
As at March 31, 2021	175.97	1,053 53	1,229.50
As at March 31, 2020	46.85	1.388.08	1.434.93

Notes forming part of Condensed Interim Consolidated Financial Statements

			(In ₹ Million)
	Software	Acquired	Total
		contractual rights
Gross block
As at April 1, 2019	2,575.58	4,208.58	6,784.16
Additions	30.88	97.75	128.63
Additions through business combination		527.31	527.31
Effect of foreign currency translation of foreign operations from functional currency to reporting currency	173 11	380.78	553.89
As at March 31, 2020	2,779.57	5,214.42	7,993.99
Accumulated Amortization
As at April 1, 2019	2.479.52	2.709.23	5,18875
Charge for the year	80.84	864 10	944.94
Effect of foreign currency translation of foreign operations from functional currency to reporting currency	172 36	253.01	425.37
As at March 31, 2020	2,732.72	3,826.34	6,559.06
Net block
As at March 31, 2020	46.85	1,388.08	1,434.93
As at March 31, 2019	96.06	1.499 35	1.595 41

6.5 Depreciation and amortization

.				(In ₹ Million)
	For the quarter ended		For the year ended
	March 31, 2021	March 31.2020	March 31, 2021	March 31, 2020
On Property, Plant and Equipment	124.68	116.32	468 66	453 35
On Right of use assets	64.26	66.83	251.46	26133
On Other Intangible assets	230 11	236.65	1.035 38	944 94
	419.05	419.80	1.755.50	1.659.62

Persistent Systems Limited
Notes forming part of Condensed Interim Consolidated Financial Statements

1. Non-current financial assets : Investments (refer note 31)

	As at	As at
	March 31, 2021 In ₹ Million	March 31, 2020 In ₹ Million
Investments carried under equity accounting method
Unquoted Investments
Investments in equity instruments In associates (refer note 32A)
Klisma e-Services Private Limited [Holding 50% (Previous year: 50% )]
0.005 million (Previous year : 0.005 million) shares of ₹10 each, fully paid up	0.05	0.05
Add / (less) : Change in fair value of investment	(0.05)	(0.05)
	$\sim$
Total investments carried equity accounting method (A)
Investments carried at amortised cost
Quoted Investments In bonds	2,557.92	2,171.52
[Market value ₹ 2,727.32 million (Previous year ₹ 2,236.81 million)]
Add: Interest accrued on bonds	72.88	68.69
Total investments carried at amortised cost (B)	2.630.80	2,240.21
Designated as fair value through profit and loss Quoted Investments
- Investments in mutual funds
Fair value of long term mutual funds (refer Note 7a)	806.99	2,174.51
	806.99	2,174.51
Unquoted Investments Investments in Common Stocks / Preferred Stocks
- Others* Ciqual Limited [Holding 2 38% (Previous year 2 38%)]
0.04 million (Previous year: 0.04 million) shares of GBP 0.01 each, fully paid up	14.73	14.36
Add / (less) : Change in fair value of investment	(14.73)	(14.36)
Altizon Systems Private Limited 3,766 equity shares (Previous year : 3,766 equity shares) of ₹ 10 each, fully paid	6.00	6.00
up	6.00	6.00
Hygenx, Inc. 0.25 million (Previous year: 0.25 million) Preferred stock of \$0.001 each, fully paid up	14.62	15.13
Add / (less) : Change in fair value of investment	(14 62)	(15.13)
	$\blacksquare$
OpsDataStore, Inc. 0.20 million (Previous year: 0.20 million) Preferred stock of \$ 0.001 each, fully paid up	14 62	15.13
Add / (less) : Change in fair value of investment	(14.62)	(15.13)
Trunomi, Inc. 0.28 million (Previous year: 0.28 million) Preferred stock of \$ 0.0002 each, fully paid up	18.28	18.92
Ampool, Inc. 0.55 million (Previous year: 0.55 million) Preferred stock of \$0.4583 each, fully paid up	18.28	18.92
Add / (less) : Change in fair value of investment	(18.28)
		18.92
Cazena, Inc. 0.59 million Common Stock of \$ 0.0001 each (Previous year - 0.59 million	146.22	151.33
Common Stock of \$ 0.0001 each), fully paid up	164.50	189.17

Persistent Systems Limited
Notes forming part of Condensed Interim Consolidated Financial Statements

1. Non-current financial assets : Investments (refer note 31) (continued)

	As at March 31, 2021	As at March 31, 2020
	In ₹ Million	In ₹ Million
DxNow 169,975 Preferred Shares fully paid up (Previous year : 1 convertible note of USD 125,000 each, fully paid up	9.14	9.46
Add / (less) : Change in fair value of investment	(9.14)	(9.46)
	٠	٠
Akumina, Inc. 400,667 Preference shares of \$0.443 each (Previous year: 1 convertible note of USD 146,429 each, fully paid up)	12.98	11.08
	12.98	11.08
- Investments in Convertible Notes Ustyme 1 (Previous year : 1) convertible note of USD 250,000 each, fully paid up	18.28	18 92
Add / (less) : Change in fair value of investment	(18.28)	(18.92)
	۰	۰
Total Investments carried at Fair Value (C)	990.47	2,380.76
Total investments $(A) + (B) + (C)$	3,621.27	4.620.97
Aggregate amount of impairment in / change in fair value of investments Aggregate amount of quoted investments Aggregate amount of unquoted investments	89.72 3.437.79 273.20	73.05 4.41472 279.30

-
Thyestments, where the Group does not have joint-control or significant influence including situations where such joint-control
or significant influence is intended to be temporary, are classified as "investments in othe

Notes forming part of Condensed Interim Consolidated Financial Statements

7 a) Details of fair value of investment in long term mutual funds (Quoted)

	As at March 31, 2021	As at March 31, 2020
	In ₹ Million	In ₹ Million
Axis Mutual Fund	400.50	898.93
IDFC Mutual Fund	370.31	630.06
Sundaram Mutual Fund	36 18	33 15
ICICI Prudential Mutual Fund		141.38
Kotak Mutual Fund		105.86
UTI Mutual Fund		105.73
Aditya Birla Sun Life Mutual Fund		82.65
SBI Mutual Fund		71.06
HDFC Mutual Fund		35.66
PGIM India Mutual Fund (formerly known as DHFL Pramerica Mutual Fund)		35.03
DSP Mutual Fund		35.00
	806 99	2.174.51

Notes forming part of Condensed Interim Consolidated Financial Statements

1. Non-current financial assets : Loans (refer note 31)

	As at	As at
	March 31, 2021	March 31, 2020
	In ₹ Million	In ₹ Million
Carried at amortised cost
Security deposits
Unsecured, considered good	134.76	176.13
	134.76	176.13
Other loans and advances
Unsecured, considered good	۰
Unsecured, credit impaired	23.63	0.58
	23.63	0.58
Less: Impairment of non-current loans	(23.63)	(0.58)
	$\blacksquare$
	134.76	176.13

9. Other non-current financial assets (refer note 31)

	As at	As at
	March 31, 2021	March 31, 2020
	In ₹ Million	In ₹ Million
Non-current bank balances (refer note 15)	24.42	344.55
Add: Interest accrued but not due on non-current bank deposits
(refer note 15)	1.34	14 38
Non-current deposits with banks (Carried at amortised cost)	25.76	358.93
Deposits with financial institutions	430.00	430.00
Add: Interest accrued on deposit with financial institutions	0.98	0.98
Less: Credit impaired (refer note 34)	(430.98)	(430.98)

$25.76$

358.93

10. Deferred tax asset (net) *

	As at	As at
	March 31, 2021	March 31, 2020
	In ₹ Million	In ₹ Million
Deferred tax liabilities
Differences in book values and tax base values of block of Property, Plant and Equipment and intangible assets		120.96
Capital gains	61.06	76.67
Others	66.47	21.63
	127.53	219.26
Deferred tax assets
Provision for leave encashment	184.65	127.70
Provision for long service awards	117.05	83.27
Provision for expected credit loss	93.49	62.50
Provision for gratuity		2.86
Differences in book values and tax base values of block of Property, Plant and Equipment and intangible assets	63.43	9181
Brought forward and current period / year losses	43.77	112.94
Tax credits	435.71	328.80
Difference in Book values and tax base values of ROU asset and Lease liability	31.74	37.29
Provision for Share based payments to employees	40.28
Others	154.98	332.17
	1,165.10	1,179 34
Deferred tax liabilities after set off
Deferred tax assets after set off	1.037.57	960.08

* Deferred tax assets and deferred tax liabilities have been offset wherever the Group has a legally enforceable right to set off
current tax assets against current tax liabilities and where the deferred tax assets and def

11. Other non-current assets

	As at	As at
	March 31, 2021	March 31, 2020
	In ₹ Million	In ₹ Million
Capital advances (Unsecured, considered good)	60.54	27.14
Balances with government authorities (refer note 33 (c))	296.55	296.55
Advances recoverable in cash or kind or for value to be received	84.43	7.62
	441.52	331 31

Persistent Systems Limited
Notes forming part of Condensed Interim Consolidated Financial Statements

1. Current financial assets : Investments (refer note 31)

	As at	As at
	March 31, 2021	March 31, 2020
	In ₹ Million	In ₹ Million
Designated as fair value through profit and loss
Quoted investments
Investments in mutual funds
Fair value of current mutual funds (refer Note 12a)	6.374 95	5.164.77
	6.374.95	5,164.77
Total carrying amount of investments	6.374.95	5,164.77
Aggregate amount of quoted investments Aggregate amount of unquoted investments	6,374.95	5.16477

12 (a) Details of fair value of current investment in mutual funds (Quoted)

	As at	As at
	March 31, 2021	March 31, 2020
	In ₹ Million	In ₹ Million
Aditya Birla Sun Life Mutual Fund	1.011 03	973.04
HDFC Mutual Fund	963.10	185.88
IDFC Mutual Fund	911.72	640.78
Axis Mutual Fund	824.68	396.02
UTI Mutual Fund	723.19	809.46
ICICI Prudential Mutual Fund	710.33	940.50
L&T Mutual Fund	511.71	734.90
Kotak Mutual Fund	478.21	421 51
SBI Mutual Fund	166.36
DSP Mutual Fund	37.38
PGIM India Mutual Fund (formerly known as DHFL Pramerica Mutual Fund)	37.24
Nippon India Mutual Fund (formerly known as Reliance Mutual Fund)		62.68
	6.374.95	5.164.77

Notes forming part of Condensed Interim Consolidated Financial Statements

13. Trade receivables (refer note 31)

	As at	As at
	March 31, 2021	March 31, 2020
	In ₹ Million	In ₹ Million
Unsecured, considered good	5.708.97	5.921.96
Unsecured, credit impaired	271 64	242.13
	5,980.61	6,164.09
Less: Allowance for expected credit loss	(271.64)	(242.13)
	5,708 97	5,921.96
	5,708.97	5,921.96

1. Cash and cash equivalents (refer note 31)

	As at	As at
	March 31, 2021	March 31, 2020
	In ₹ Million	In ₹ Million
Cash and cash equivalents as presented in cash flow statement
Cash in hand	0.41	0.24
Balances with banks
On current accounts #	1.583 20	1.566.06
On saving accounts	1.33	0.36
On Exchange Earner's Foreign Currency accounts	208.57	261.86
On deposit accounts with original maturity less than three months	625.79	71.47
	2.419.30	1.899.99

Out of the cash and cash equivalent balance as at March 31, 2021, the Group can utilise ₹ 154.39 Million (Previous year: ₹
6.62 Million) only towards certain predefined activities specified in the agreement.

15. Other bank balances (refer note 31)

	As at	As at
	March 31, 2021	March 31, 2020
	In ₹ Million	In ₹ Million
Deposits with banks*	7.108.47	2.909 58
Add: Interest accrued but not due on deposits with banks	303.99	117.49
Deposits with banks (carried at amortised cost)	7.412.46	3,027.07
Less: Deposits with maturity more than twelve months from the balance sheet date disclosed under other non-current financial assets (refer note 9)	(24.42)	(344.55)
Less: Interest accrued but not due on non-current deposits with banks (refer note 9)	(1.34)	(14.38)
	7.386.70	2,668.14
Balances with banks on unpaid dividend accounts**	3.00	405
	7.389.70	2.672.19

* Out of the balance, fixed deposits of ₹ 675.89 million (Previous year : ₹ 71.10 million) have been earmarked against credit facilities and bank guarantees availed by the Group.

** The Group can utilize these balances only towards settlement of the respective unpaid dividend.

Persistent Systems Limited
Notes forming part of Condensed Interim Consolidated Financial Statements

16. Current financial assets : Loans (refer note 31)

	As at	As at
	March 31, 2021	March 31, 2020
	In ₹ Million	In ₹ Million
Carried at amortised cost
Loan to related parties (Unsecured, credit impaired) (refer note 32A) Unsecured, considered good
Klisma e-Services Private Limited	27.43	27.43
	27.43	27.43
Less: Impairment of current loans	(27.43)	(27.43)
	ä,
Loan to others (Unsecured, considered good)
Loan to LHS Solutions, Inc.	21.90
Interest accrued but not due at amortised cost	1.72
Less: Impairment	(23.62)
Other advances	21.79
Security deposits
Unsecured, considered good	49 47 71 26	1371 13.71
17. Other current financial assets (refer note 31)
	As at	As at
	March 31, 2021	March 31, 2020
	In ₹ Million	In ₹ Million
Fair value of derivatives designated as hedging instruments
Forward contracts receivable	294.46
Advances to related parties (Unsecured, credit impaired)
Unsecured, credit impaired	0.81	0.81
Less: Impairment of current financial assets	(0.81)	(0.81)
	ä,	$\blacksquare$
Unbilled revenue	2,172.77	2,068.54
	2,467 23	2,068.54
18. Other current assets
	As at	As at
	March 31, 2021	March 31, 2020
	In ₹ Million	In ₹ Million
Advances to suppliers (Unsecured, considered good)
Advances recoverable in cash or kind or for value to be received	815 19	931.97
Excess fund balance with Life Insurance Corporation	113.08	128.54
Other advances (Unsecured, considered good)
VAT receivable (net)	97.19	31.50
Service tax and GST receivable (net) (refer note 33 (a))	1,058.26	858.51
	1,155.45	890.01
	2,083.72	1,950.52

Notes forming part of Condensed Interim Consolidated Financial Statements

1. Non-current financial liabilities : Borrowings (refer note 31)

	As at	As at
	March 31, 2021	March 31, 2020
	In ₹ Million	In ₹ Million
Unsecured Borrowings carried at amortised cost
Term loans
Indian rupee loan from others	7.39	11.93
Interest accrued but not due on term loans	0.11	0.18
Foreign currency loan from others	3873	39.14
	46.23	51.25
Less: Current maturity of long-term borrowings transferred to other current financial liabilities (refer note 23)	(1.85)	(4.85)
Less: Current maturity of interest accrued but not due on term loan transferred to other current financial liabilities (refer note 23)	(0.11)	(0.18)
	(1.96)	(5.03)
	44 27	46.22

The term loans from Government departments have the following terms and conditions:

Loan I - amounting to ₹ 7.39 million (Previous year ₹ 9.24 million) with Interest payable @ 3% per annum repayable in ten equal annual installments over a period of ten years commencing from October 2015.

Loan II - amounting to ₹38.73 million (Previous year ₹39.14). The interest free loan is given under a Covid-19 scheme for medium and small scale Industries by the Government of Switzerland to a subsidiary company with a repayment period of five years from March 2020.

Loan III - amounting to Nil (Previous year ₹ 2.69 million) with interest payable @ 2% per annum has been guaranteed by a bank guarantee by the Group and was repayable in ten equal semi annual installments over a period of five years commencing from September 2016.

20. Lease liabilities (refer note 31)

	As at	As at
	March 31, 2021	March 31, 2020
	In ₹ Million	In ₹ Million
Lease liabilities	938.17	662.42
Less: Current portion of lease liabilities	(222.00)	(309.06)
	716.17	353.36
Movement of lease liabilities
	For the Nine Months For the year ended
	March 31, 2021	March 31, 2020
	In ₹ Million	In ₹ Million
Opening balance	662 42
Additions (Transitional impact on adoption of Ind AS 116)		811.10
Additions	587.19	77.80
Deletions	(43.33)
Add: Interest recognised during the period / year	57 53	61 22
Translation difference	(6.53)
Less: Payments made	(319.11)	(287, 70)
Closing balance	938.17	662.42

21. Non current liabilities : Provisions

	As at	As at
	March 31, 2021	March 31, 2020
	In ₹ Million	In ₹ Million
Provision for employee benefits
- Long service awards	240.94	182.79
	240.94	182.79

Notes forming part of Condensed Interim Consolidated Financial Statements

1. Trade payables (refer note 31)

	As at March 31, 2021 In ₹ Million	As at March 31, 2020 In ₹ Million
Trade payables for goods and services [(dues of micro and small enterprises ₹ 30.20 million (Previous year: ₹ 5.15 million)]	2.733.44	2.247.09

2,733.44 $2,247.09$

Disclosure of payable to vendors as defined under the "Micro, Small and Medium Enterprise Development Act, 2006" is based on the information available with the Parent Company regarding the status of registration of such v delayed payments to such vendors at the Balance Sheet date. There are no delays in payment made to such suppliers during the period or for any earlier periods / years and accordingly there is no interest paid or outstanding interest in this regard in respect of payment made during the period or on balance brought forward from previous period / year

23. Other current financial liabilities (refer note 31)

	As at	As at
	March 31, 2021	March 31, 2020
	In ₹ Million	In ₹ Million
Capital creditors	23783	36.24
Current maturity of long-term borrowings (refer note 19)	1.85	485
Current maturity of interest on long-term borrowings (refer note 19)	0.11	0.18
Accrued employee liabilities	127.50	421.17
Unpaid dividend*	3.00	4.05
Other liabilities	7.96	7.96
Pavable to selling shareholders	11.92	$\sim$
Fair value of derivatives designated and effective as hedging instruments
Forward contracts payable		387.89
	390 17	862.34

* Unpaid dividend is transferred to Investor Education and Protection Fund as and when due.

24 Other current liabilities

	As at March 31, 2021 In ₹ Million	As at March 31, 2020 In ₹ Million
Unearned revenue	966.07	887.20
Advance from customers	93.67	264.82
Other payables
- Statutory liabilities	296.20	157.19
- Other liabilities*	159 01	10.92
	1,514.95	1,320.13

*Includes balance of ₹ 154.16 million (previous year: Nil) to be utilised against certain predefined activities specified in the agreement.

25 Current liabilities : Provisions

	As at	As at
	March 31, 2021	March 31, 2020
	In ₹ Million	In ₹ Million
Provision for employee benefits
- Gratuity	37.78	20.41
- Leave encashment	815.28	638.05
- Long service awards	17.19	21.35
- Other employee benefits	1.607.54	931.18
	2.477.79	1,610.99

Persistent Systems Limited
Notes forming part of Condensed Interim Consolidated Financial Statements

1. Revenue from operations (net)

		For the quarter ended		For the year ended
	March 31, 2021 In ₹ Million	March 31.2020 In ₹ Million	March 31, 2021 In ₹ Million	March 31, 2020 In ₹ Million
Software services	10.788.82	9.112.41	40.158.83	34.494.34
Software licenses	344.76	151.24	1.720.05	1.16374
	11.133.58	9.263.65	41.878.88	35.658.08

1. Other income

	For the quarter ended		For the year ended
	March 31, 2021	March 31.2020	March 31, 2021	March 31, 2020
	In ₹ Million	In ₹ Million	In ₹ Million	In $\bar{\tau}$ Million
Interest income
On deposits carried at amortised cost	111.99	86.76	388.77	389.59
On Others	43 39	30.52	169 93	155.69
Foreign exchange (loss) / gain (net)	173.77	44.50	33.81	364.35
Profit on sale of Property, Plant and Equipment (net)	(5.75)	(0.49)	1.34
Dividend income from investments		0.03		13.98
Profit on sale of investments (net)	64 76	1186	478 13	164.81
Net (loss) / gain arising on financial assets designated as FVTPL	(4.16)	81.77	(131.39)	119.02
Excess provision in respect of earlier periods / years written back	12.56	2 3 6	41.79	6.95
Miscellaneous income	3.80	35.89	95.34	109.38
	400.36	293.20	1,077.72	1.323.77

28. Personnel expenses

	For the quarter ended		For the year ended
	March 31, 2021	March 31,2020	March 31, 2021	March 31, 2020
	In ₹ Million	In ₹ Million	In ₹ Million	In ₹ Million
28.1 Employee benefits expense
Salaries, wages and bonus	6.177.85	5.166.04	22.852.56	19,594.62
Contribution to provident and other funds	455.49	314 30	1.528.58	1.199.20
Staff welfare and benefits	173.77	124.18	486.41	525.79
Share based payments to employees	46.79	71.45	290.44	236.79
	6,853.90	5,675.97	25,157.99	21,556.40
28.2 Cost of professionals	1.543.13	1.163.23	5.563 68	3.918.94
	8.397.03	6.839.20	30.721.67	25.475.34

Persistent Systems Limited
Notes forming part of Condensed Interim Consolidated Financial Statements

29. Other expenses

		For the quarter ended		For the year ended
	March 31, 2021	March 31,2020	March 31, 2021	March 31, 2020
	In ₹ Million	In ₹ Million	In ₹ Million	In ₹ Million
Travelling and conveyance	29.60	218.22	173.62	936.86
Electricity expenses (net)	20.24	24 56	82.58	114 94
Internet link expenses	15 24	25.49	7086	73.30
Communication expenses	12 95	28.84	102 18	10572
Recruitment expenses	31.63	34.76	135.10	128.80
Training and seminars	8.58	10.96	57 36	34 63
Royalty expenses	41.07	25.50	94 83	7682
Purchase of software licenses	329 96	333.08	1.855.62	1,724.51
Bad debts	478		90 30
Provision for expected credit loss (net)	(0.05)	38.78	31 32	8386
Rent	33 68	37.69	14089	135 25
Insurance	10.52	11.02	40.01	34 49
Rates and taxes	15 11	22.92	8786	88.07
Legal and professional fees	135 38	70.06	51481	517 13
Repairs and maintenance
- Plant and Machinery	30.82	29.81	11388	123 04
- Buildings	468	3.06	21.63	24.10
- Others	1.74	6.98	18.69	21 60
Selling and marketing expenses	4.04	(2.46)	1043	7.85
Advertisement, conference and sponsorship fees	41.57	37.24	140.01	191.01
Computer consumables	197	1.28	5.54	7.01
Auditors' remuneration	9.55	6.54	2173	18.89
Donations (refer note 32A)	1.89	29.70	204 05	86 35
Books, memberships, subscriptions	4 4 7	10.74	20.66	38 05
Loss on sale of Property, Plant and Equipment		5.96		5.96
Directors' sitting fees	1.18	1.88	4.84	6.58
Directors' commission	2.36	360	10.22	1485
Provision for doubtful deposits and advances		48.48	$\blacksquare$	248 48
Impairment of loan	(0.13)		23 96
Impairment of non current investments	(0.10)		1853
Miscellaneous expenses	60.52	91.05	235 55	412.00
	853 25	1,155.74	4,327.06	5,260.15

Notes forming part of Condensed Interim Consolidated Financial Statements

30. Earnings per share

		For the quarter ended		For the year ended
		March 31, 2021	March 31,2020	March 31, 2021	March 31, 2020
Numerator for Basic and Diluted EPS
Net Profit after tax (In ₹ Million)	(A)	1,377.59	838.21	4,506.77	3,402 89
Denominator for Basic EPS
Weighted average number of equity shares	(B)	76,425,000	76,425,000	76,425,000	76,684,672
Denominator for Diluted EPS
Number of equity shares	(C)	76.425.000	76.425,000	76.425.000	76,684,672
Basic Earnings per share of face value of ₹10 each (In ₹)	(A/B)	18.03	10.97	58.97	44.38
Diluted Earnings per share of face value of ₹ 10 each (In ₹)	(A/C	18.03	10.97	58.97	44.38
		For the quarter ended		For the year ended
		March 31, 2021	March 31,2020	March 31, 2021	March 31, 2020
Kitologicko oraz eta eragea erageatzia egun eragin egita erageatzat eta eragea eragea eragea		70.105.000	70.105.000	70.405.000	70.004.070

Number of shares considered as basic weighted average shares	76.425.000	76.425.000	76.425.000	76.684.672
outstanding
Add: Effect of dilutive issues of stock options
Number of shares considered as weighted average shares	76.425.000	76.425.000	76.425.000	76.684.672
and potential shares outstanding

Notes forming part of Condensed Interim Consolidated Financial Statements

1. Financial assets and liabilities

The carrying values and fair values of financial instruments by categories are as follows:

					(In ₹ Million)
cial assets/financial liabilities Finan	Basis of measurement	As at March 31, 2021		As at March 31, 2020		Fair value hierarchy
		Carrying value Fair value		Carrying value	Fair value
Assets:
nvestments in equity instruments, preferred stock and convertible notes	Fair value	18348	18348	20625	20625	Level 3
nvestments in bonds*	Amortised cost	,630.80	2,72732	:240 21	23681
Investments in mutual funds	Fair value	18194	18194	,339 28	7,339.28	Level1
Loans	Amortised cost	20602	206.02	18984	18984
Deposit with banks and financial institutions (net)	Amortised cost	,41246	7,412.46	3,027.07	3,027 07
Cash and cash equivalents (including unpaid dividend)	Amortised cost	2,422 30	2,422.30	90404	1,904.04
Trade receivables (net)	Amortised cost	5,70897		,92196	5,92196
Unbilled revenue	Amortised cost	2,172.77	5,708 97 2,172 77	2,06854	2,068.54
êδ Forward contracts receivat	Fair value	294.46	294 46			evel 2
Total		28,213.20	28,30972	22,897 19	22,893.79
iabilities:
Borrowings (including accrued interest)	Amortised cost	4623	46.23	5125	5125
Trade payables	Amortised cost	2,73344	2,73344	2,247 09	2,247.09
_ease liabilities	Amortised cost	938.17	938.17	662 42	662 42
Other financial liabilities (excluding borrowings)	Amortised cost	388 21	388 21	469 42	46942
Forward contracts payable	Fair value			38789	38789	Level 2
Total		4,10605	4,106 05	3,818 07	3,818.07

* Fair value includes interest accrued

Fair value hierarchy:

The fair value hierarchy is based on inputs to valuation techniques that are used to measure fair value that are either observable or unobservable and consists of the following three levels:

Level 2 — Inputs are 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 1 - Inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities.

Level 3 — Inputs are not based on observable market data (unobservable inputs). Fair values are determined in whole or in part using a valuation model based on assumptions that are neither
supported by prices from observab

Persistent Systems Limited Notes forming part of Condensed Interim Consolidated Financial Statements

32. Segment information

Operating segments are components of an enterprise for which discrete financial information is available that is evaluated regularly by the chief operating decision makers, in deciding how to allocate
resources and assessi

Considering the focus on industry verticals, the Group has decided to reorganize its operating segments from April 1, 2020. The figures for the corresponding periods / year have been appropriately Construction in the current period's classification.
The dassified in line with the current period's classification.
a. Banking, Financial Services and Insurance (BFSI)
b. Healthcare & Life Sciences
c. Technology Companies

						(In ₹ Million)
Particulars			BFSI	Healthcare & Life Sciences	Technology Companies and Emerging Verticals	Total
Revenue	Quarter ended	March 31, 2021	3,328.54	2.150.23	5,654.81	11,133.58
	Quarter ended	March 31,2020	2,888.34	1,776.78	4,598.53	9,263.65
	Year ended	March 31, 2021	12,857.05	8,104.24	20,917.59	41,878.88
	Year ended	March 31, 2020	10,506.77	6,719.15	18,432.16	35,658.08
Identifiable expense
	Quarter ended	March 31, 2021	2,076.88	1,103.27	4,032.25	7,212.40
	Quarter ended	March 31,2020	1,839.50	991.04	3,026.89	5,857.43
	Year ended	March 31, 2021	8,038.67	4,121.77	14,468.19	26,628.63
	Year ended	March 31, 2020	6,908.62	3,818.97	12,013.97	22,741.56
Segmental result
	Quarter ended	March 31, 2021	1,251.66	1,046.96	1,622.56	3.921.18
	Quarter ended	March 31, 2021	1,048.84	785.74	1,571,64	3,406.22
	Year ended Year ended	March 31, 2021 March 31, 2020	4,818.38 3,598.15	3,982.47 2,900.18	6,449.40 6,418.19	15,250.25 12,916.52
Unallocable expenses	Quarter ended	March 31, 2021				2.472.76
	Quarter ended	March 31, 2021				2,568.99
	Year ended	March 31, 2021				10,233.54
	Year ended	March 31, 2020				9,716.87
Operating income
	Quarter ended	March 31, 2021				1,448.42
	Quarter ended	March 31, 2021				837.23
	Year ended	March 31, 2021				5,016.71
	Year ended	March 31, 2020				3,199.65
Other income (net of expenses)
	Quarter ended	March 31, 2021				400.36
	Quarter ended	March 31, 2021				293.20
	Year ended Year ended	March 31, 2021				1,077.72
Profit before taxes		March 31, 2020				1,323.77
	Quarter ended	March 31, 2021				1,848.78
	Quarter ended	March 31, 2021				1,130,43
	Year ended	March 31, 2021				6.094.43
	Year ended	March 31, 2020				4,523.42
Tax expense
	Quarter ended	March 31, 2021				471.19
	Quarter ended	March 31, 2021				292.22
	Year ended	March 31, 2021				1,587.66
	Year ended	March 31, 2020				1,120.53
Profit after tax	Quarter ended	March 31, 2021				1.377.59
	Quarter ended	March 31, 2021				838.21
	Year ended	March 31, 2021				4,506.77
						3.402.89
	Year ended	March 31, 2020

						(In ₹ Million)
Particulars			BFSI	Healthcare & Life Sciences	Technology Companies and Emerging Verticals	Total
Segmental trade receivables (net)
	l As at	March 31, 2021	1,355,88	1,363,40	2,989.69	5,708.97
	As at	March 31, 2020	1,818.41	1,340.70	2,762.85	5,921.96
Segmental Unbilled revenue
	l As at	March 31, 2021	594.57	162.29	1,415.91	2,172.77
	As at	March 31, 2020	409.33	273 90	1,385.31	2.068.54
Unallocated assets
	As at	March 31, 2021	۰	۰.	$\sim$	28,773.50
	As at	March 31, 2020	۰		$\sim$	22,931.19
Unallocated liabilities
	As at	March 31, 2021	۰	۰	٠	36,655.24
	l As at	March 31, 2020	۰		×.	30.921.69

Segregation of assets (other than trade receivables and unbilled receivables), liabilities, depreciation and amortization and other non-cash expenses into various reportable segments have not been
presented as the assets a

Geographical Information
The following table shows the distribution of the Group's consolidated sales by geographical market regardless of from where the services were rendered

						(in ₹ Million)
Particulars			India	North America	Rest of the World	Total
Revenue
	Quarter ended	March 31, 2021	988.36	8.901.28	243.94	11.133.58
	Quarter ended	March 31, 2020	826.49	7.509.23	927.93	9.263.65
	Year ended	March 31, 2021	3,512.59	33,861.61	4,504.68	41,878.88
	استانست بمناكلا	$M = -1$ $24$ $2020$	0.05700	0000115		$1.40001$ $250000$

The revenue from individual customers in excess of ten percent of total revenue of the Group is ₹ 2,961,67 million for the quarter ended March 31, 2021 (Corresponding period: ₹ 2,808,57 million),
₹ 12,146.55 Million for t

					(In ₹ Million)
	Name of the related party and nature of relationship		For the quarter ended	For the year ended
		March 31.	March 31.	March 31.	March 31.
		2021	2020	2021	2020
Sale of software services	Entity over which a key management personnel has
	sianificant influence
	Deazzle Services Private Limited	$\blacksquare$	1.50		7.47
	Total		1.50		7.47
Legal and professional fees	Entity over which a key management personnel has
	significant influence
	Azure Associates, LLC				12 38
	Total	۰			12.38
Donation given	Entity over which a key management personnel has
	significant influence
	Persistent Foundation	$\blacksquare$	22 81	140.00	79.21
		$\blacksquare$	22.81	140.00	79.21

(ii) Significant outstanding balances @			$(In ₹$ Million)
	Name of the related party and nature of relationship	As at
		March 31, 2021	March 31, 2020
Trade receivables	Entity over which a key management personnel has significant influence
	Deazzle Services Private Limited
	Total
Trade payables	Entity over which a key management personnel has significant influence
	Azure Associates, LLC
	Total
Advances given	Associate
	Klisma e Services Private Limited @	0.81	0.81
	Total	0.81	0.81
Investments	Associate
	Klisma e Services Private Limited @	0.05	0.05
	Total	0.05	0.05
Loans given	Associate
	Klisma e Services Private Limited @	27.43	27.43
	Total	27.43	27.43

These balances are fully provided for

33. Contingent liabilities

(a) Persistent Systems Limited ("the Parent Company") had received a show cause notice from the Commissioner of Service Tax on December 19, 2016 for non-payment of service tax of ₹452.15 million under import of services on reverse charge basis, excluding interest and penalty if applicable. The issue relates to the professional and technical services rendered by overseas subsidiaries on behalf of the Parent Company to its overseas customers for the period 2011-12 to 2014-15.

Post representations made by the Parent Company, the Learned Principal Commissioner of Service Tax, Pune, adjudicated the aforesaid show-cause notice and issued an order on May 29, 2017, reducing the demand to ₹173.78 million based on the period of limitation and as a result of that, the said demand now covers financial year 2014-15. The Parent Company has filed an appeal against the order passed by Learned Principal Commissioner of Service Tax, Pune with the Hon'ble Central Excise and Service Tax Appellate Tribunal (CESTAT) on September 23, 2017.

The Group, based on independent legal opinion obtained in respect of issues related to this matter, believes that the liability is not likely to arise and therefore, no provision is considered necessary in the condensed interim consolidated financial statements. If the appeal filed as mentioned above results in a demand, there will be no impact on the profitability as the Group will be eligible to claim credit/refund for the amount paid.

The GST department filed an appeal on October 11, 2017 with appellate authorities against the Order passed by Learned Principal Commissioner of Service Tax, Pune. Though the GST department acknowledged the ground of revenue neutrality, the said appeal mainly questions non-application of extended period of limitation. The Parent Company filed reply to this appeal on December 18, 2017.

Considering the view of the Service Tax Authorities, based on legal advice and due prudence, the Company deposited, an amount of ₹647.36 million towards service tax in respect of the above matter, for the period from April 01, 2014 to June 30, 2017, under protest. This balance, post adjustment of service tax liability of ₹17.76 million for the month of June 2017 (i.e. net amount of ₹ 629.60 million) was considered as transitional credit under GST Regime and recorded accordingly as GST receivable. The disputed demand currently stands at ₹ 173.78 million towards which ₹ 165.58 million was paid under protest and forms part of the aforementioned GST receivable balance.

(b) As on March 31, 2021, the pending litigations in respect of direct taxes amount to $\bar{\tau}$ 478.70 million and in respect of indirect taxes amount to ₹ 27.33 million (excluding the show cause notice received from Commissioner of Service Tax on May 29, 2017 of ₹ 173.78 million under import of services on reverse charge basis as mentioned above). Based on the advice obtained and judgments in favour of the Parent Company at the first appellate authority in the earlier years, management does not expect any outflow in respect of these litigations.

(c) In respect of export incentives pertaining to previous periods amounting to ₹ 255.52 million, which have been refunded under protest with interest of ₹ 41.03 million, the Parent Company filed an application with Directorate General of Foreign Trade (DGFT). The Parent Company has also represented with industrial association, The National Association of Software and Service Companies (NASSCOM), to ensure continued applicability of such incentives to the eligible information technology companies. The Parent Company understands from NASSCOM that they have also taken up the matter with concerned authorities. During the year, the Parent Company has received a Show Cause Notice from the Directorate Of Revenue Intelligence (DRI), in which the DRI has raised certain additional matters with applicable penalties which relates to eligibility of Parent company to seek the incentives. During the quarter the Parent Company has submitted a reply to the notice. Based on the documents filed with relevant authorities and based on the consultations with subject matter specialists, the Parent Company believes that its position is likely be upheld on ultimate resolution and accordingly, no provision is necessary to be made against such claims in these financial statements.

(d) Persistent Systems Limited has given a performance guarantee up to \$ 10 million to HSBC Bank USA in respect of payment obligations under the Receivables Purchase agreement entered into by Persistent Systems, Inc. with HSBC Bank, USA (Corresponding period / Previous year: \$10 million). Persistent Systems Limited has also given performance guarantee up to \$5 million to Citibank USA (Corresponding period / Previous year: \$5 million) in respect of working capital facilities for Persistent Systems, Inc. and \$ 0.17 million to Sun Life Assurance Company of Canada for timely payment of rent instalments and damages, in respect of office leased to Persistent Systems, Inc.

(e) Persistent Systems, Inc. has given commercial guarantee of 30 million Euros (Corresponding period / Previous year: 30 Million euros) to Tech Data Europe GmbH on behalf of Persistent Systems France S.A.S. For the said guarantee, Persistent Systems, Inc. has charged guarantee fees of 0.25% of the guarantee amount.

(f) Persistent Systems, Inc. has also given a performance guarantee of up to \$3 million (Corresponding period / Previous year: \$ 3 million) to United States Cellular Corporation (USCC) Services & its affiliates towards trade payable of Aepona Limited.

1. The Parent Company has deposits of ₹ 430 million with the financial institutions viz. Infrastructure Leasing & Financial Services Ltd. (IL&FS) and IL&FS Financial Services Ltd. (referred to as "IL&FS Group") as on the balance sheet date. These were due for maturity from January 2019 to June 2019. In view of the uncertainty prevailing with respect to recovery of outstanding balances from IL&FS Group, Management of the Parent Company has fully provided for these deposits along with interest accrued thereon till the date the deposits had become doubtful of recovery. The Management is hopeful of recovery though with a time lag. The Parent Company continues to monitor developments in the matter and is committed to take steps including legal action that may be necessary to ensure full recovery of the said deposits.

Notes forming part of Condensed Interim Consolidated Financial Statements

• 1. Effective April 1, 2019, the Group has adopted Ind AS 116, Leases; and has recognized interest expense of ₹ 57.53 million (Previous year: ₹61.22 million).
• 1. The condensed interim consolidated financial statements are presented in ₹ million and decimal thereof except for per share information or as otherwise stated.

37 Customer Contract

On May 12, 2020, the Company had entered into an agreement with a customer to acquire a business division together with skilled employees and had also entered into a contract with the same customer for a period of five years. The Company has paid INR 136.10 million and assumed employee benefit liabilities of INR 42.66 million in consideration for contractual rights for service contracts aggregating to INR 178.76 million.

Subsequently effective January 1, 2021, the Customer entered into a definitive contract to sell its business to a third party and has consequently entered into amendment to the agreement with the Company. Based on the agreement and amendments thereto, the Company has re-evaluated the arrangement and has made necessary adjustments to the carrying amounts of transactions and balances in these financial statements from the effective date.

38. Business combination

Entities acquisition ("CAPIOT Group") :

The Group acquired 100% share capital of CAPIOT Software Private Limited, a company based in India, with effect from October 29, 2020 and 100% share capital of CAPIOT Software Inc, a company based in USA, along with its wholly owned subsidiaries CAPIOT Software Pty Limited, a company based in Australia and CAPIOT Software Pte Limited, a company based in Singapore, with effect from November 7, 2020. The acquisition of the said business is accounted for using the acquisition method of accounting. Further, the Company is in process to complete exercise of purchase price allocation pending fair valuation of assets and liabilities assumed as at the reporting date. As a result, the Company has exercised the option of using the exemption available under Ind AS 103, which provides the Company a period of twelve months from the acquisition date for completing the accounting of purchase price allocation.

a) The amount of consideration paid/payable is ₹ 448.47 million.

The fair value of assets acquired and liabilities assumed as on the date of acquisition are as follows:

	( In ₹ Million )

Particulars	CAPIOT Software Private Limited	CAPIOT Software Inc.	Total
Current Assets
Cash and & cash equivalents	20.00	10.90	30.90
Trade receivables	48.52	22.10	70.62
Other current assets	127.10	64 36	191.46
Non-current assets
Property, Plant and Equipment	6.26	0.74	7.00
Deferred tax asset	0.11		0.11
Contractual rights	344.91	18.25	363.16
Current liabilities
Trade and other payables	105.21	25.28	130.49
Borrowings	34.38	49.91	84 29
Net assets	407.31	41.16	448.47

b) Net cash outflow on acquisition of subsidiaries

Particulars	Amount in $\bar{\tau}$ million
Consideration paid/ payable in cash	448.47
Less: cash and cash equivalent balances acquired	(30.90
	417.57

c) Revenue of ₹143.97 million for the period ended March 31, 2021 is included in the financial statements. The profit included for the period ended March 31, 2021 is ₹ 68.46 million.

Had the business combination been effected on April 1, 2020, the revenue for the year ended March 31, 2021 for the Company from the continuing operations would have been ₹ 42,137.37 million and the net profit for the year ended March 31, 2021 would have been ₹ 4,495 47 million.

1. The code on Social security, 2020 relating to employee benefits has been approved by the Parliament and has also been published in Official Gazette of India. However, the date on which it comes into effect has not been notified and the rules are yet to be framed. The Group will complete its evaluation and will give appropriate impact in its financial statements in the period in which, the Code becomes effective and the related rules are published.

Notes forming part of Condensed Interim Consolidated Financial Statements

• 1. Ministry of Corporate Affairs (MCA), vide its notification dated March 24, 2021, amended Schedule III of the Companies Act, 2013 with effect from April 1, 2021. Management is of the view that since the changes are applicable from April 1, 2021, those are applicable for the financial year commencing from April 1, 2021 and are applicable to Financial statements issued in respect of accounting years commencing on or after April 1st, 2021. Therefore, related disclosures are not considered in these financial statements for the year ended on March 31, 2021, although issued after April 1, 2021.
• 1. The amounts reported for quarter ended March 31, 2020 were balancing figures between year ended March 31, 2020 (Audited) and nine months ended December 31, 2019 (Unaudited).
• 1. Previous periods' / year's figures have been regrouped where necessary to conform with the current periods'/ year's classification

For Walker Chandiok & Co LLP Chartered Accountants Firm Registration No.: 001076N/N500013 For and on behalf of the Board of Directors of Persistent Systems Limited

Digitally signed by Anand Deshponde SHASHI SHASHI TADWALKAR TADWALKAR Date: 2021.04.29

Shashi Tadwalkar Partner

Membership No: 101797

Dr. Anand Deshpande Chairman and Managing Director

DIN: 00005721

Place: Pune Date: April 29, 2021

Sandeep Kalra

Sandeep Kalra Executive Director and Chief Executive Officer DIN: 02506494

Place: New Jersey, USA Date: April 29, 2021

mkele

Praveen Kadle Independent Director

DIN: 00016814

Place: Mumbai Date: April 29, 2021

Amit Atre 2021 19:58 GMT+5.5)

Amit Atre Company Secretary Membership No. A20507

Place: Pune Date: April 29, 2021 Place: Pune Date: April 29, 2021

Sunil Sapre

unil Sapre (Apr 29, 2021 20:01 GMT+5.5)

Sunil Sapre Executive Director and Chief Financial Officer DIN: 06475949

Place: Mumbai Date: April 29, 2021

Walker Chandiok & Co LLP

3rd floor, Unit No. 309 to 312, West Wing, Nyati Unitree Nagar Road, Yerwada, Pune - 411006 Maharashtra, India T +91 20 6744 8888 F +91 20 6744 8899

To the Members of Persistent Systems Limited

Report on the Audit of the Condensed Interim Standalone Financial Statements

Opinion

• 1. We have audited the accompanying condensed interim standalone financial statements of Persistent Systems Limited condensed interim Balance Sheet as at 31 March 2021, the condensed interim Statement of Profit and Loss (including Other Comprehensive Income) for the quarter and year ended 31 March 2021, the condensed interim Cash Flow Statement and the Statement of condensed interim Changes in Equity for the year ended 31 March 2021, and a summary of the significant accounting policies and other explanatory information.
• 1. In our opinion and to the best of our information and according to the explanations given to us, the aforesaid condensed interim standalone financial statements give the information required by the Companies Act, 2013 e a true and fair view in conformity with the accounting principles generally accepted in India in accordance with Indian Accounting Standard, 34 , Interim Financial Reporting (Ind As 34) specified under section 133 of the Act, of the state of affairs of the Company as at 31 March 2021, and its profit (including other comprehensive income) for the quarter and year ended 31 March 2021, its cash flows and the changes in equity for the year ended on that date.

Basis for Opinion

1. We conducted our audit in accordance with the Standards on Auditing specified under section 143(10) of the Act. Our responsibilities under those standards are further described in the Audit of the Condensed Financial Statements section of our report. We are independent of the Company in with the ethical requirements that are relevant to our audit of the financial statements under the provisions of the Act and the rules thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Responsibilities of Management and Those Charged with Governance for the Standalone Financial Statements

1. The accompanying condensed interim Board of Directors. of the Act with respect to the preparation of these condensed interim standalone financial statements that give a true and fair view of the financial position, financial performance including other comprehensive income, changes in equity and cash flows of the Company in accordance with the accounting principles generally accepted in India, in accordance with Ind AS 34 specified under section 133 of the Act. This responsibility also

Page 1 of 3

Chartered Accountants

Persistent Systems Limited on the Audit of the Condensed Interim Standalone Financial Statements

includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the condensed interim financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

• 1. In preparing the condensed interim standalone financial statements, management is responsible for assessing to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.
• 1. Those Board of Directors is
• 1. Our objectives are to obtain reasonable assurance about whether the condensed interim standalone financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an guarantee that an audit conducted in accordance with Standards on Auditing will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these condensed interim standalone financial statements.
• 1. As part of an audit in accordance with Standards on Auditing, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:
• Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control;
• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on whether the Company has in place an adequate internal financial controls with reference to financial statements in place and the operating effectiveness of such controls;
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management;
• based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Comp related disclosures in the condensed interim standalone financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the continue as a going concern;
• Evaluate the overall presentation, structure and content of the condensed interim standalone financial statements, including the disclosures, and whether the condensed interim standalone financial statements represent the underlying transactions and events in a manner that achieves fair presentation;

Page 2 of 3

Walker Chandiok & Co LLP is registered with limited liability with identification number AAC-2085 and has its registered office at L-41, Connaught Circus, Outer Circle, New Delhi, 110001, India

Chartered Accountants

Offices in Bengaluru, Chandigarh, Chennai, Gurugram, Hyderabad, Kochi, Kolkata, Mumbai, New Delhi, Noida and Pune

Persistent Systems Limited on the Audit of the Condensed Interim Standalone Financial Statements

• 1. We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
• 1. We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

For Walker Chandiok & Co LLP Chartered Accountants :001076N/N500013

Shashi Tadwalkar Partner Membership No:101797

UDIN:21101797AAAAAR7192

Place: Pune Date: 29 April 2021

Page 3 of 3

Chartered Accountants

CONDENSED INTERIM BALANCE SHEET AS AT MARCH 31, 2021

	Notes	As at March 31, 2021	As at March 31, 2020
ASSETS
Non-current assets
Property, Plant and Equipment	5.1	2,270.24	2,048.77
Capital work-in-progress		112.33	48.27
Right of Use assets	5.2	314.62	269.40
Other Intangible assets	5.3	171.65	46.97
Intangible assets under development		- 2,868.84	137.20 2,550.61
Financial assets
- Investments	6	7,779.54	8,379.86
- Loans	7	52.23	123.57
- Other non current financial assets	8	25.76	358.93
Deferred tax assets (net)	9 10	245.74 419.73	317.35
Other non-current assets		11,391.84	329.39 12,059.71
Current assets
Financial assets
- Investments	11	6,374.95	5,164.77
- Trade receivables (net)	12	2,966.26	2,883.09
- Cash and cash equivalents	13	862.72	532.63
- Other bank balances	14 15	7,387.00 49.33	2,405.32
- Loans - Other current financial assets	16	2,063.79	4.76 2,080.07
Other current assets	17	1,656.93	1,485.37
		21,360.98	14,556.01
TOTAL
		32,752.82	26,615.72
EQUITY AND LIABILITIES
EQUITY
Equity share capital	4	764.25	764.25
Other equity		26,890.99	22,221.13
		27,655.24	22,985.38
LIABILITIES
Non- current liabilities
Financial liabilities
- Lease liabilities	20	304.72	191.26
- Borrowings	18	5.54	7.08
Provisions	19	240.94	182.79
		551.20	381.13
Current liabilities
Financial liabilities
- Lease liabilities	20	73.82 938.40	165.38
	21		972.49
- Other financial liabilities	22	397.42	549.73
Other current liabilities	23	1,679.01	851.02
Provisions	24	1,145.59	590.38
Current tax liabilities (net)		312.14	120.21
		4,546.38	3,249.21
TOTAL		32,752.82	26,615.72
Summary of significant accounting policies The accompanying notes are an integral part of the condensed interim financial statements.	3

As per our report of even date

For Walker Chandiok & Co LLP For and on behalf of the Board of Directors of Chartered Accountants Persistent Systems Limited Firm Registration No.: 001076N/N500013

Shashi Tadwalkar Sandeep Kalra Praveen Kadle Partner Executive Director and Chief Executive Officer

Membership No.: 101797 DIN: 02506494 DIN: 00016814

Place: New Jersey, USA Place: Mumbai

Date : April 29, 2021 Date : April 29, 2021

Independent Director

Sunil Sapre Executive Director and Chief Financial Officer DIN: 06475949

Place: Mumbai Date : April 29, 2021

Dr. Anand Deshpande Chairman and Managing

Director DIN: 00005721 Place: Pune Date : April 29, 2021

Amit Atre

Company Secretary

Membership No. A20507

Place: Pune Place: Pune Date : April 29, 2021 Date : April 29, 2021

CONDENSED INTERIM STATEMENT OF PROFIT AND LOSS FOR THE QUARTER AND YEAR ENDED MARCH 31, 2021

	Notes	For the quarter ended		For the year ended
		March 31, 2021	March 31, 2020	March 31, 2021	March 31, 2020
Income
Revenue from operations (net)	25	6,846.58	5,661.39	24,796.08	21,081.22
Other income	26	349.75	323.32	1,176.16	1,599.04
Total income (A)		7,196.33	5,984.71	25,972.24	22,680.26
Expenses
Employee benefits expense	27.1	4,071.22	2,944.26	14,093.21	11,029.06
Cost of professionals	27.2	464.79	394.63	1,775.07	1,825.37
Finance costs (refer note 34)		11.21	9.71	38.21	44.51
Depreciation and amortization expense	5.4	155.52	136.46	566.79	555.12
Other expenses	28	592.63	835.44	2,818.76	3,897.14
Total expenses (B)		5,295.37	4,320.50	19,292.04	17,351.20
Profit before tax (A - B)		1,900.96	1,664.21	6,680.20	5,329.06
Tax expense
Current tax		468.18	372.31	1,684.00	1,297.91
Tax charge / (credit) in respect of earlier periods / years		-	-	2.74	(1.60)
Deferred tax charge/ (credit)		32.06	17.08	(57.40)	(44.48)
Total tax expense		500.24	389.39	1,629.34	1,251.83
Net profit for the period / year (C)		1,400.72	1,274.82	5,050.86	4,077.23
Other comprehensive income Items that will not be reclassified to profit and loss (D) - Remeasurements of the defined benefit asset / liabilities (net		24.56	3.09	15.93	(30.46)
of tax)
		24.56	3.09	15.93	(30.46)
Items that may be reclassified to profit and loss (E)
- Effective portion of cash flow hedge (net of tax)		(53.44)	(250.14)	383.55	(429.15)
		(53.44)	(250.14)	383.55	(429.15)
Total other comprehensive income for the period / year (D) + (E)		(28.88)	(247.05)	399.48	(459.61)
		1,371.84
Total comprehensive income for the period / year (C) + (D) + (E)			1,027.77	5,450.34	3,617.62
Earnings per equity share	29
		18.33	16.68	66.09	53.17
		18.33	16.68	66.09	53.17
Summary of significant accounting policies	3
The accompanying notes are an integral part of the condensed interim financial statements.

As per our report of even date

For Walker Chandiok & Co LLP For and on behalf of the Board of Directors of Chartered Accountants Persistent Systems Limited Firm Registration No.: 001076N/N500013

Partner Chairman and Managing Director

Shashi Tadwalkar Dr. Anand Deshpande Praveen Kadle Membership No.: 101797 DIN: 00005721 DIN: 00016814 Sandeep Kalra Executive Director and Chief Executive Officer DIN: 02506494

Place: Pune Place: Mumbai Date : April 29, 2021 Date : April 29, 2021 Date : April 29, 2021 Place: New Jersey, USA

Independent Director

Sunil Sapre Amit Atre

Chief Financial Officer

Executive Director and Company Secretary

DIN: 06475949 Membership No. A20507

Place: Pune Place: Mumbai Place: Pune Date : April 29, 2021 Date : April 29, 2021 Date : April 29, 2021

CONDENSED INTERIM CASH FLOW STATEMENT FOR THE YEAR ENDED MARCH 31, 2021

March 31, 2021 March 31, 2020 Cash flows from operating activities 6,680.20 Profit before tax 5,329.06 Adjustments for: (548.82) Interest income (525.76) 38.21 Finance cost 44.51 (131.45) Dividend income (410.72) 566.79 Depreciation and amortization expense 555.12 Unrealised exchange (gain)/ loss(net) 151.02 (128.86) (169.80) Exchange (gain) / loss on derivative contracts 58.51 Exchange (gain)/ loss on translation of foreign currency cash 23.15 (46.82) and cash equivalents 46.96 Bad debts - (20.20) Provision for expected credit loss (net) 47.31 - Provision for doubtful deposits 248.48 236.33 Employee stock compensation expenses 60.01 15.93 Remeasurements of the defined benefit liabilities / asset (before tax effects) (41.80) 133.70 (Gain)/ Loss on fair valuation of mutual funds (119.02) (478.13) Profit on sale of investments (net) (164.81) 8.10 (Profit)/ Loss on sale of Property, Plant and Equipment (net) - 6,551.99 Operating profit before working capital changes 4,905.21 Movements in working capital : 37.02 Decrease / (Increase) in non-current and current loans (5.29) (78.73) Increase in other non current assets (261.04) 363.88 Decrease / (Increase) in other current financial assets (246.75) (171.56) Increase in other current assets (241.93) (312.65) Increase in trade receivables (373.81) Increase in trade payables, current liabilities and non current liabilities 1,059.46 253.67 613.36 Increase / (Decrease) in provisions (49.40) 8,062.77 Operating profit after working capital changes 3,980.66 (1,494.81) Direct taxes paid (net of refunds) (1,217.69) (A) 6,567.96 Net cash generated from operating activities 2,762.97 Cash flows from investing activities (707.24) Payment towards capital expenditure (including intangible assets) (483.57) Proceeds from sale of Property, Plant and Equipment 4.13 4.08 (376.61) Investment in wholly owned subsidiaries (474.00) (712.18) Purchase of bonds (901.61) 350.53 Proceeds from sale of bonds 819.87 (24,591.91) Investments in mutual funds (19,456.95) 25,068.92 Proceeds from sale / maturity of mutual funds 17,670.49 (Investments)/ maturity in bank deposits having original (4,464.82) 2,044.25 maturity over three months - Maturity of deposit with financial institutions 250.00 359.89 Interest received 484.68 131.45 Dividend received 410.72 (B) (4,937.84) Net cash (used in) / generated from investing activities 367.96 Cash flows from financing activities (4.54) Repayment of long term borrowings (4.62) (173.11) Payment of lease liabilities (188.37) - Shares bought back (1,677.01) 9.00 Specific project related grant received 3.00 (1,069.95) Dividend paid (1,144.60) - Tax on dividend paid (154.14) (38.28) Interest paid (44.50) (1,276.88) Net cash used in financing activities (C ) (3,210.24)		For the year ended	For the year ended

CONDENSED INTERIM CASH FLOW STATEMENT FOR THE YEAR ENDED MARCH 31, 2021

	For the year ended	For the year ended
	March 31, 2021	March 31, 2020
Net increase / (decrease) in cash and cash equivalents (A + B + C)	353.24	(79.31)
Cash and cash equivalents at the beginning of the year	532.63	565.12
Effect of exchange differences on translation of foreign currency	(23.15)	46.82
cash and cash equivalents
Cash and cash equivalents at the end of the year	862.72	532.63
Components of cash and cash equivalents
Cash on hand (refer note 13)	0.10	0.15
Balances with banks
On current accounts # (refer note 13)	360.22	198.79
On saving accounts (refer note 13)	1.33	0.36
On Exchange Earner's Foreign Currency accounts (refer note 13)	208.57	261.86
On deposit account with maturity of less than three months (refer note 13)	292.50	71.47
Cash and cash equivalents	862.72	532.63

towards certain predefined activities specified in the agreement.

Summary of significant accounting policies - Refer note 3

The accompanying notes are an integral part of the condensed interim financial statements.

As per our report of even date

Chartered Accountants Persistent Systems Limited Firm Registration No.: 001076N/N500013

For Walker Chandiok & Co LLP For and on behalf of the Board of Directors of

Shashi Tadwalkar Sandeep Kalra Praveen Kadle Partner Executive Director and Membership No.: 101797 DIN: 02506494 DIN: 00016814 Dr. Anand Deshpande Chairman and Managing Director DIN: 00005721

Date : April 29, 2021 Place: Pune

Place: New Jersey, USA Place: Mumbai Date : April 29, 2021 Date : April 29, 2021

Independent Director

Sunil Sapre Amit Atre Executive Director and Chief Financial Officer

Company Secretary DIN: 06475949 Membership No. A20507

Place: Pune Place: Mumbai Place: Pune Date : April 29, 2021 Date : April 29, 2021 Date : April 29, 2021

CONDENSED INTERIM STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED MARCH 31, 2021

A. Equity share capital (Refer note 4)

Balance as at April 1, 2020	Changes in equity share capital during the year	Balance as at March 31, 2021
764.25	-	764.25

Balance as at April 1, 2019	Changes in equity share capital during the year (Refer Note 4d)	Balance as at March 31, 2020
791.19	(26.94)	764.25

CONDENSED INTERIM STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED MARCH 31, 2021

B. Other equity

Particulars				Reserves and surplus			Items of other comprehensive income	Total
	Securities premium reserve	General reserve	Share options outstanding reserve	Capital redemption reserve	Special Economic Zone re-investment reserve	Retained earnings	Effective portion of cash flow hedges
Balance as at April 1, 2020	-	12,227.23	290.51	35.75	49.95	9,861.78	(244.09)	22,221.13
Net profit for the period	-	-	-	-	-	5,050.86	-	5,050.86
Other comprehensive income for the period	-	-	-	-	-	15.93	383.55	399.48
Dividend	-	-	-	-	-	(1,069.95)	-	(1,069.95)
Transfer to general reserve	-	2,020.34		-	-	(2,020.34)	-	-
Transfer to retained earnings	-	-	-	-	(49.95)	49.95	-	-
Employee stock compensation expenses	-	-	236.33	-	-	-	-	236.33
Employee stock compensation expenses of subsidiaries	-	-	53.14	-	-	-	-	53.14
Adjustments towards employees stock options	-	108.78	(108.78)	-	-	-	-	-
Balance as at March 31, 2021	-	14,356.35	471.20	35.75	-	11,888.23	139.46	26,890.99

Particulars				Reserves and surplus			Items of other comprehensive income	Total
	Securities premium reserve	General reserve	Share options outstanding reserve	Capital redemption reserve	Special Economic Zone re-investment reserve	Retained earnings	Effective portion of cash flow hedges
Balance as at April 1, 2019	774.10	10,570.73	76.29	8.81	70.00	9,735.72	185.06	21,420.71
Net profit for the year	-	-	-	-	-	4,077.23	-	4,077.23
Other comprehensive income for the year	-	-	-	-	-	(30.46)	(429.15)	(459.61)
Dividend	-	-	-	-	-	(1,146.38)	-	(1,146.38)
Tax on dividend	-	-	-	-	-	(154.14)	-	(154.14)
Transfer to capital redemption reserve	-	-	-	26.94	-	(26.94)	-	-
Transitional impact on adoption of Ind AS 116	-	-	-	-	-	(106.44)	-	(106.44)
Transfer to Special Economic Zone re-investment reserve	-	-	-	-	(20.05)	20.05	-	-
Transfer to general reserve	-	1,630.89	-	-	-	(1,630.89)	-	-
Employee stock compensation expenses	-	-	60.01	-	-	-	-	60.01
Employee stock compensation expenses of subsidiaries	-	-	179.82	-	-	-	-	179.82
Adjustments towards employees stock options	-	25.61	(25.61)	-	-	-	-	-
Utilised towards buy back of shares (refer note 4d)	(774.10)	-	-	-	-	(875.97)	-	(1,650.07)
Balance at March 31, 2020	-	12,227.23	290.51	35.75	49.95	9,861.78	(244.09)	22,221.13

Summary of significant accounting policies - Refer note 3

The accompanying notes are an integral part of the condensed interim financial statements.

As per our report of even date

For Walker Chandiok & Co LLP For and on behalf of the Board of Directors of Chartered Accountants Persistent Systems Limited Firm Registration No.: 001076N/N500013

Shashi Tadwalkar Dr. Anand Deshpande Praveen Kadle Partner Chairman and Managing Director Independent Director

Membership No.: 101797 DIN: 00005721 DIN: 02506494 DIN: 00016814 Sandeep Kalra Executive Director and Chief Executive Officer

Place: Pune Place: New Jersey, USA Place: Mumbai

Date : April 29, 2021 Date : April 29, 2021 Date : April 29, 2021

Sunil Sapre Amit Atre Executive Director Company Secretary and Chief Financial Officer Membership No. A20507 DIN: 06475949

Place: Pune Place: Mumbai Place: Pune

Date : April 29, 2021 Date : April 29, 2021 Date : April 29, 2021

CONDENSED INTERIM STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED MARCH 31, 2021

Nature and purpose of reserves

a) Securities premium

Securities premium is used to record the premium on issue of shares. The reserve is utilised in accordance with the provisions of Section 52 of the Companies Act, 2013.

b) General reserve

General reserve represents amounts transferred from profit for the year and from Share options outstanding reserve on exercise / expiry of employee share options. It is a free reserve in terms of section 2 (43) of the Companies Act, 2013.

c) Share options outstanding reserve

Share options outstanding reserve represents the cumulative expense recognized for equity-settled transactions at each reporting date until the employee share options are exercised / expired on which such amount is transferred to General reserve.

d) Capital redemption reserve

Capital redemption reserve represents the nominal value of the shares bought back and is created and utilised in accordance with Section 69 of the Companies Act, 2013.

e) Special Economic Zone re-investment reserve

The Special Economic Zone re-investment reserve has been created out of the profit in terms of the provisions of Section 10AA(1)(ii) of the Income tax Act, 1961. The reserve is utilised by the Company for acquiring new plant and machinery for the purpose of its business in accordance with Section 10AA(2) of the Income tax Act, 1961.

f) Cash flow hedge reserve

The cash flow hedge reserve represents the cumulative effective portion of gains or losses arising on changes in fair value of hedging instruments entered into towards highly probable transactions. Such gains or losses are subsequently recognised in the statement of profit and loss in the period in which the said transaction occurs / hedging instruments are cancelled.

Notes forming part of Condensed Interim Financial Statements

1. Nature of operations

of the Companies Act, 1956. The shares of the Company are listed on Bombay Stock Exchange and National Stock Exchange. The Company is a global company specializing in software products, services and technology innovation. The Company offers complete product life cycle services.

2. Basis of preparation

The condensed interim financial statements of the Company have been prepared on an accrual basis and under the historical cost convention except for certain financial instruments and equity settled employee stock options which have been measured at fair value. Historical cost is generally based on the fair value of consideration given in exchange of goods and services. The accounting policies are consistently applied by the Company during the period and are consistent with those used in previous year except where a newly issued accounting standard is initially adopted or a revision to an existing accounting standard requires a change in the accounting policy hitherto in use. These condensed interim financial statements are prepared in accordance with Indian Accounting Standard (Ind AS), the provisions of the Companies Act, Ind AS are prescribed under Section 133 of the Act read with Rule 3 of the Companies (Indian Accounting Standards) Rules, 2015 and relevant amendment rules issued thereafter.

3. Summary of significant accounting policies

(a) Use of estimates

A. The preparation of the condensed interim financial statements in conformity with Ind AS requires the Management to make estimates, judgments, and assumptions. These estimates, judgments and assumptions affect the application of accounting policies and the reported amounts of assets and liabilities, the disclosures of contingent assets and liabilities at the date of the condensed interim financial statements and reported amounts of revenues and expenses during the period. The application of accounting policies that require critical accounting estimates involving complex and subjective judgments and the use of assumptions in these condensed interim financial statements have been disclosed appropriately. Accounting estimates could change from period to period. Actual results could differ from those estimates. Appropriate changes in estimates are made as the Management becomes aware of changes in circumstances surrounding the estimates. Changes in estimates are reflected in the condensed interim financial statements in the period in which changes are made and, if material, their effects are disclosed in the notes to the condensed interim financial statements.

B. Estimation of uncertainties relating to the global health pandemic from COVID-19:

The Company has evaluated the likely impact of the COVID 19 on the overall business of the Company. The Company as at the date of the approval of these financials, has used various available sources of information to analyse the carrying amount of its financial assets and exposures. The impact of the COVID- condensed interim financial statements may differ from the estimate as on the date of the approval of the condensed interim financial statements.

(i) Expected credit loss:

The Company has considered the current and anticipated future economic conditions relating to industries the Company deals with and the countries where it operates. In calculating expected credit loss, the Company has also considered related credit information for its customers to estimate the probability of default in future and has taken into account estimates of possible effect from the pandemic relating to COVID -19 using the forward looking approach prescribed by Ind AS 109.

(ii) Impact on hedged and unhedged foreign currency exposure:

Based on its assessment, the Company believes that the probability of occurrence of its forecasted transactions are not likely to be impacted by COVID 19. Hence, the Company continues to believe that there is no foreseeable impact on the effectiveness of its cash flow hedges due to this global pandemic.

(iii) Carrying value of financial instruments:

hich factors in the uncertainties arising out of COVID 19. These financial assets are mainly investments in liquid securities and no material permanent decline in their carrying value are expected.

(iv) Impact on revenue:

The Company continues to re-evaluate the probable revenues from customers in various verticals to assess any possible drops in revenue from any of these verticals due to the economic stress caused by COVID 19. Accordingly, it is the opinion of the Company that the customers could re-prioritise their discretionary spend in the immediate future to conserve resources.

Notes forming part of Condensed Interim Financial Statements

The impact assessment of COVID 19 is a continuing process given the uncertainties associated with its nature and duration. The Company has considered the same to the extent known currently and has taken steps to measure the cost budgets required to complete its performance obligations in respect of fixed price contracts and incorporated the impact of likely delays and costs in meeting its obligations.

C. Critical accounting estimates

i. Revenue recognition

Revenues from customer contracts are considered for recognition and measurement when the contract has been approved by the parties to the contract, the parties to the contract are committed to perform their respective obligations under the contract, and the contract is legally enforceable. The Company assesses the services promised in a contract and identifies distinct performance obligations in the contract. Identification of distinct performance obligations to determine the deliverables and the ability of the customer to benefit independently from such deliverables, and allocation of transaction price to these distinct performance obligations involves significant judgment.

The Company uses the percentage-of-completion method in accounting for its fixed-price contracts. Use of the percentage-of-completion method requires the Company to estimate the efforts or costs expended to date as a proportion of the total efforts or costs to be expended. Efforts or costs expended have been used to measure progress towards completion. Provisions for estimated losses, if any, on uncompleted contracts are recorded in the period in which such losses become probable based on the expected contract estimates at the reporting date.

Further, the Company uses significant judgement while determining the transaction price allocated to performance obligations using the expected cost plus margin approach.

In respect of the contracts where the transaction price is payable as revenue share at pre-defined percentage of customer revenue and bearing in mind, the time gap between the close of the accounting period and availability of the revenue report from the customer, the Company is required to use its judgement to ascertain the income from revenue share on the basis of historical trends of customer revenue.

ii. Income taxes

The Company's major tax jurisdiction is India, though the Company also files tax returns in other overseas jurisdictions. Significant judgements are involved in determining the provision for income taxes.

iii. Property, Plant and Equipment

Property, Plant and Equipment represent a significant proportion of the asset base of the Company. The charge in residual value at the end of its life. The useful lives and residual values of Company's assets are determined by management at the time the asset is acquired and reviewed periodically. The lives are based on historical experience with similar assets as well as anticipation of future events, which may impact their life, such as changes in technology.

iv. Provisions

Provisions are determined based on the best estimate of the amount required to settle the obligation at the reporting date. If the effect of time value of money is material, provisions are discounted using a current pre-tax rate that reflects the risks specific to the liability. These estimates are reviewed at each balance sheet date and adjusted to reflect the current best estimates.

v.Leases

Ind AS 116 requires lessees to determine the lease term as the non-cancellable period of a lease adjusted with any option to extend or terminate the lease, if the use of such option is reasonably certain. The Company makes an assessment on the expected lease term on a lease-by-lease basis and thereby assesses whether it is reasonably certain that any options to extend or terminate the contract will be exercised. In evaluating the lease term, the Company considers factors such as any significant leasehold improvements undertaken over the lease term, costs relating to the the location of the underlying asset and the availability of suitable alternatives. The lease term in future periods is reassessed to ensure that the lease term reflects the current economic circumstances. After considering current and future economic conditions, the Company has concluded that no changes are required to lease periods relating to the existing lease contracts.

(b) Property, Plant and Equipment

Property, Plant and Equipment are stated at cost, less accumulated depreciation and accumulated impairment losses, if any. The cost comprises the purchase price and directly attributable costs of bringing the asset to its working condition for its intended use. Any trade discounts and rebates are deducted in arriving at the purchase price. Capital work-in-progress includes cost of Property, Plant and Equipment that are not ready to be put to use.

Subsequent expenditure related to an item of Property, Plant and Equipment is added to its original cost only if it is probable that future economic benefits associated with the item will flow to the Company. All other expenses on existing Property, Plant and Equipment, including day-to-day repair and maintenance expenditure and cost of replacing parts, are charged to the statement of profit and loss for the period during which such expenses are incurred.

Gains or losses arising from disposal of Property, Plant and Equipment are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognized in the statement of profit and loss when the asset is disposed.

(c) Intangible assets

Intangible assets including software licenses of enduring nature and contractual rights acquired separately are measured on initial recognition at cost. Following initial recognition, intangible assets are carried at cost less accumulated amortization and accumulated impairment losses, if any. Cost comprises the purchase price and any directly attributable cost of bringing the asset to its working condition for its intended use.

Gains or losses arising from disposal of an intangible asset are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognized in the statement of profit and loss when the asset is disposed.

Research and development cost

Research costs are expensed as incurred. Development expenditure incurred on an individual project is recognized as an intangible asset when the Company can demonstrate:

• technical feasibility of completing the intangible asset so that it will be available for use or sale;
• its intention to complete the asset;
• its ability to use or sell the asset;
• how the asset will generate probable future economic benefits;
• the availability of adequate resources to complete the development and to use or sell the asset; and
• the ability to measure reliably the expenditure attributable to the intangible asset during development.

Such development expenditure, until capitalization, is reflected as intangible assets under development.

Following the initial recognition, internally generated intangible assets are carried at cost less accumulated amortization and accumulated impairment losses, if any. Amortization of internally generated intangible asset begins when the development is complete and the asset is available for use.

(d) Depreciation and amortization

lives of the assets estimated by the management.

The management estimates the useful lives for the Property, Plant and Equipment as follows:

Assets	Useful lives
Buildings*	25 years
Computers	3 years
Computers - Servers and networks*	3 years
Office equipments	5 years
Plant and equipment*	5 years
Plant and equipment (Windmill)*	20 years
Plant and equipment (Solar Energy System)*	10 years
Furniture and fixtures*	5 years
Vehicles*	5 years

*For these classes of assets, based on technical evaluation, the management believes that the useful lives as given above best represent the period over which the management expects to use these assets.

Leasehold improvements are amortized over the period of lease or useful life, whichever is lower.

Intangible assets are amortized on a straight-line basis over their estimated useful lives ranging from 3 to 6 years from the day the asset is made available for use.

Notes forming part of Condensed Interim Financial Statements

is different from the useful life of the remaining asset, useful life of that significant part is determined separately and such asset component is depreciated over its separate useful life.

Depreciation methods, useful lives and residual values are reviewed periodically.

(e) Borrowing costs

Borrowing cost includes interest and amortization of ancillary costs incurred in connection with the arrangement of borrowings.

Borrowing costs directly attributable to the acquisition, construction or development of an asset that necessarily takes a substantial period of time to get ready for its intended use or sale are capitalized as part of the cost of the respective asset. All other borrowing costs are expensed in the period / year they occur.

(f) Leases

remises. The Company assesses whether a contract contains a lease, at inception of a contract. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration.

To assess whether a contract conveys the right to control the use of an identified asset, the Company assesses whether:

(i) the contract involves the use of an identified asset

(ii) the Company has substantially all of the economic benefits from use of the asset through the period of the lease and (iii) the Company has the right to direct the use of the asset

Where the Company is a lessee

The Company accounts for each lease component within the contract as a lease separately from non-lease components of the contract and allocates the consideration in the contract to each lease component on the basis of the relative stand-alone price of the lease component and the aggregate stand-alone price of the non-lease components.

The Company recognises right-of-use asset representing its right to use the underlying asset for the lease term at the lease commencement date. The cost of the right-of-use asset measured at inception shall comprise of the amount of the initial measurement of the lease liability adjusted for any lease payments made at or before the commencement date less any lease incentives received, plus any initial direct costs incurred and an estimate of costs to be incurred by the lessee in dismantling and removing the underlying asset or restoring the underlying asset or site on which it is located.

The right-of-use assets is subsequently measured at cost less any accumulated depreciation, accumulated impairment losses, if any and adjusted for any remeasurement of the lease liability. The right-of-use assets is depreciated using the straight-line method from the commencement date over the shorter of lease term or useful life of right-of-use asset. The estimated useful lives of right-of use assets are determined on the same basis as those of Property, Plant and Equipment.

Right-of-use assets are tested for impairment whenever there is any indication that their carrying amounts may not be recoverable. Impairment loss, if any, is recognised in the statement of profit and loss.

The Company measures the lease liability at the present value of the lease payments that are not paid at the commencement date of the lease. The lease payments are discounted using the interest rate implicit in the lease, if that rate can be readily determined. If that rate cannot be readily determined, the Company uses incremental borrowing rate.

The lease payments shall include fixed payments, variable lease payments based on an index or rate, residual value guarantees, exercise price of a purchase option where the Company is reasonably certain to exercise that option and payments of penalties for terminating the lease, if the lease term reflects the lessee exercising an option to terminate the lease.

The lease liability is subsequently remeasured by increasing the carrying amount to reflect interest on the lease liability, reducing the carrying amount to reflect the lease payments made and remeasuring the carrying amount to reflect any reassessment or lease modifications or to reflect revised in-substance fixed lease payments.

When the lease liability is remeasured, the corresponding adjustment is reflected in the right-of-use asset, or statement of profit and loss if the right-of-use asset is already reduced to zero.

The Company has elected not to apply the requirements of Ind AS 116 to short-term leases of all assets that have a lease term of 12 months or less and leases for which the underlying asset is of low value. The lease expenses associated with these leases are recognized in the statement of profit and loss on a straight line basis.

Notes forming part of Condensed Interim Financial Statements

Company as a lessor

At the inception of the lease, the Company classifies each of its leases as either an operating lease or a finance lease. Whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee, the contract is classified as a finance lease. All other leases are classified as operating leases. The Company recognises lease payments received under operating leases as income over the lease term on a straight line basis.

(g) Financial instruments

Initial recognition and measurement

The Company recognizes financial assets and financial liabilities when it becomes a party to the contractual provisions of the instrument. All financial assets and liabilities are recognized at fair value on initial recognition, except for trade receivables which are initially measured at transaction price. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities, which are not at fair value through profit or loss, are added to the fair value on initial recognition.

A. Non-derivative financial instruments

Subsequent measurement

(i) Financial Assets

- Financial assets at amortized cost

Financial assets that are held within a business model whose objective is to hold assets for collecting contractual cash flows and whose contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding are subsequently measured at amortized cost using the effective interest rate method. The change in measurements are recognized as finance income in the statement of profit and loss.

- Financial assets at fair value through other comprehensive income (FVTOCI)

Financial assets that are held within a business model whose objective is achieved both by collecting contractual cash flows and interest on the principal amount outstanding are subsequently measured at fair value. Fair value movements are recognized in other comprehensive income.

- Financial assets at fair value through profit or loss (FVTPL)

Any financial asset which does not meet the criteria for categorization as financial asset at amortized cost or at FVTOCI, is classified as financial asset at FVTPL. Financial assets except derivative contracts included within the FVTPL category are subsequently measured at fair value with all changes recognized in the statement of profit and loss.

(ii) Financial Liabilities

- Financial liabilities at amortized cost

Financial liabilities are subsequently carried at amortized cost using the effective interest method, except for contingent consideration recognized in a business combination which is subsequently measured at fair value through profit or loss. For trade and other payables maturing within one year from the Balance Sheet date, the carrying amounts approximate fair value due to the short maturity of these instruments.

- Financial liabilities at fair value through profit or loss (FVTPL)

Financial liabilities include financial liabilities held for trading and financial liabilities designated upon initial recognition at fair value through profit or loss if the recognition criteria as per Ind AS 109 Gains or losses on liabilities held for trading are recognized in statement of profit and loss.

Fair value gains or losses on liabilities designated as FVTPL attributable to changes in own credit risk are recognized in other comprehensive income. All other changes in fair value of liabilities designated as FVTPL are recognized in the statement of profit and loss. The Company has not designated any financial liability as FVTPL.

- Investments in subsidiaries, associates and joint ventures

Investment in subsidiaries, associates and joint ventures are carried at cost.

B. Derivative financial instruments

The Company uses derivatives for economic hedging purposes. At the inception of hedging relationship, the Company documents the hedging relationship between the hedging instrument and hedged item including whether the changes in cash flows of the hedging instruments are expected to offset the changes in cash flows of the hedged items. The Company documents its objective and strategy for undertaking its hedging transactions.

Derivatives are initially recognised at fair value on the date a derivative contract is entered and are subsequently remeasured at fair value at each reporting date.

For cash flow hedges, that qualify for hedge accounting, the effective portion of fair value of derivatives are recognised in cash flow hedging reserve within equity.

Gains or losses relating to the ineffective portion is immediately recognised in profit or loss.

Amounts accumulated in equity are reclassified to profit or loss in the period when the hedged item affects profit and loss or hedged future cash flows are no longer expected to occur.

Derivatives which do not qualify for hedge accounting are accounted as fair value through profit or loss.

C. Derecognition

The Company derecognizes a financial asset when the contractual rights to the cash flows from the financial asset expire or it transfers the financial asset and the transfer qualifies for derecognition under Ind AS 109. A financial liability ied in the contract is discharged or cancelled or expires. On derecognition of a financial asset in its entirety, the difference gain or loss that had been recognised in other comprehensive income and accumulated in equity, if any, is recognised in profit or loss, except in case of equity instruments classified as FVOCI, where such cumulative gain or loss is not recycled to statement of profit and loss.

expired. The difference between the carrying amount of the financial liability derecognized and the consideration paid and payable is recognised in profit or loss.

D. Fair value of financial instruments

In determining the fair value of its financial instruments, the Company uses a variety of methods and assumptions that are based on market conditions and risks existing at each reporting date. The methods used to determine fair value include discounted cash flow analysis, available quoted market prices, dealer quotes.

For equity instruments of unlisted companies, in limited circumstances, insufficient more recent information is available to measure fair value, or if there are a wide range of possible fair value measurements and cost represents the best estimate of fair value within that range. The Company recognises such equity instruments at cost, which is considered as appropriate estimate of fair value.

All methods of assessing fair value result in general approximation of value, and such value may never actually be realized. Refer to the table on financial instruments by category below for the disclosure on carrying value and fair value of financial assets and liabilities. For financial assets and liabilities maturing within one year from the Balance Sheet date and which are not carried at fair value, the carrying amounts approximate fair value due to the short maturity of these instruments.

E. Impairment of financial assets

The Company applies Expected Credit Loss (ECL) model for measurement and recognition of impairment loss on financial assets measured at amortized cost and financial assets that are debts instruments and are measured at fair value through other comprehensive income (FVTOCI). ECL is the difference between contractual cash flows that are due and the cash flows that the Company expects to receive, discounted at the original effective interest rate.

For trade receivables, the Company recognizes impairment loss allowance based on lifetime ECL at each reporting date, right from its initial recognition. For other financial assets, the Company determines whether there has been a significant increase in the credit risk since initial recognition. If credit risk has not increased significantly, 12 month ECL is used to provide for impairment loss. However, if credit risk has increased significantly, lifetime ECL is used.

F. Impairment of Non-Financial assets

The carrying amounts of Property, Plant and Equipment are reviewed at each balance sheet date or whenever there is any indication of impairment based on internal/external factors. If any indications exist, the Company estimates the coverable amount unless the asset does not generate cash flows that are largely independent of those from other assets. In such cases, the recoverable amount is determined for the Cash Generating Unit (CGU) to which the asset belongs. If the recoverable amount of an asset (or CGU) is estimated to be less than its carrying amount, the carrying amount of the asset (or CGU) is reduced to its recoverable amount. The recoverable amount is the greater of the asset's fair value and its value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and risks specific to the asset.

(h) Revenue recognition

Revenues from customer contracts are considered for recognition and measurement when the contract has been approved by the parties to the contract, the parties to the contract are committed to perform their respective obligations under the contract, and the contract is legally enforceable. Revenue is recognized upon transfer of control of promised products or or expects to receive in exchange for these produc collectability, revenue recognition is postponed until such uncertainty is resolved. The Company assesses the services promised in a contract and identifies distinct performance obligations in the contract. The Company allocates the transaction price to each distinct performance obligation based on the relative standalone selling price. The price that is regularly charged for an item when sold separately is the best evidence of its standalone selling price. In the absence of such evidence, the primary method used to estimate standalone selling price is the expected cost plus a margin, under which the Company estimates the cost of satisfying the performance obligation and then adds an appropriate margin based on similar The Company includes variable consideration as part of transaction price when there is a basis to reasonably estimate the amount of the variable consideration and when it is probable that a significant reversal of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is resolved.

(i) Income from software services and products

The company derives revenues primarily from IT services comprising of software development and related services and from the licensing of software products.

Arrangements with customers for software related services are either on a time-and-material or a fixed-price basis.

Revenue on time-and-material contracts are recognized as and when the related services are performed. Revenue from fixed-price contracts, where the performance obligations are satisfied over time and where there is no uncertainty as to measurement or collectability of consideration, is recognized as per the percentage-of-completion method. When there is uncertainty as to measurement or ultimate collectability, revenue recognition is postponed until such uncertainty is resolved.

nized over the access period.

When support services are provided in conjunction with the licensing arrangement and the license and the support services have been identified as two separate performance obligations, the transaction price for such contracts are allocated to each performance obligation of the contract based on their relative standalone selling prices. Maintenance revenue is recognized proportionately over the period in which the services are rendered.

Revenue from revenue share is recognized in accordance with the terms of the relevant agreements.

Unbilled revenue represents revenue recognized in relation to work done until the balance sheet date for which billing has not taken place.

Unearned revenue represents the billing in respect of contracts for which the revenue is not recognized.

The Company collects Goods and Services Tax on behalf of the government and, therefore, these are not economic benefits flowing to the Company. Hence, they are excluded from revenue.

(ii) Interest

Interest income is recognized on a time proportion basis taking into account the carrying amount and the effective interest rate.

Notes forming part of Condensed Interim Financial Statements

(iii) Dividend

uded

(i) Government grants

Government grants are recognized at fair value when there is reasonable assurance that the Company will comply with the conditions attaching to them and the grants will be received. Grants related to purchase of assets are treated as deferred income and allocated to income statement over the useful lives of the related assets while grants related to expenses are deducted in reporting the related expenses in the income statement.

(j) Foreign currency translation

Foreign currency transactions and balances

Initial recognition

Foreign currency transactions are recorded in the functional currency of the Company, by applying to the foreign currency amount the exchange rate between the functional currency and the foreign currency at the date of the transaction.

Conversion

Foreign currency monetary items are converted using the exchange rate prevailing at the reporting date. Non-monetary items, which are measured in terms of historical cost denominated in a foreign currency are reported using the exchange rate at the date of the transaction. Non-monetary items which are carried at fair value or other similar valuation denominated in a foreign currency are reported using the exchange rates at the date when the values were determined.

Exchange differences

Exchange differences arising on conversion / settlement of foreign currency monetary items and on foreign currency liabilities relating to Property, Plant and Equipment acquisition are recognized as income or expenses in the period in which they arise.

Translation of foreign operations

The assets and liabilities of a foreign operations are translated into the reporting currency (INR) at the exchange rate prevailing at the reporting date.

(k) Retirement and other employee benefits

(i) Provident fund

Provident fund is a defined contribution plan covering eligible employees. The Company and the eligible employees make a monthly contribution to the provident fund maintained by the Regional Provident Fund Commissioner equal to the specified percentage of the basic salary of the eligible employees as per the scheme. The contributions to the provident fund are charged to the statement of profit and loss for the period / year when the contributions are due. The Company has no obligation, other than the contribution payable to the provident fund.

(ii) Gratuity

Gratuity is a defined benefit obligation plan operated by the Company for its employees covered under Company Gratuity Scheme. The cost of providing benefit under gratuity plan is determined on the basis of actuarial valuation using the projected unit credit method at the reporting date and are charged to the statement of profit and loss, except for the remeasurements, comprising of actuarial gains and losses which are recognized in full in the statement of other comprehensive income in the reporting period in which they occur. Remeasurements are not reclassified to the statement of profit and loss subsequently.

(iii) Superannuation

Superannuation is a defined contribution plan covering eligible employees. The contribution to the superannuation fund managed by the insurer is equal to the specified percentage of the basic salary of the eligible employees as per the scheme. The contribution to this scheme is charged to the statement of profit and loss on an accrual basis. There are no other contributions payable other than contribution payable to the respective fund.

(iv) Leave encashment

The expected cost of accumulating leave encashment is determined by actuarial valuation performed by an independent actuary at each Balance Sheet date using projected unit credit method on the additional amount expected to be paid / availed as a result of the unused entitlement that has accumulated at the Balance Sheet date. Expense on non-accumulating leave encashment is recognized in the period in which the absences occur.

(v) Long service awards

The cost of providing benefit under long service awards scheme is determined on the basis of actuarial valuation using the projected unit credit method at the reporting date. Remeasurements, comprising of actuarial gains and losses are recognized in full in the statement of profit and loss.

(l) Income taxes

Tax expense comprises of current and deferred tax. Current income tax is measured at the amount expected to be paid to the tax authorities in accordance with the Income Tax Act, 1961 enacted in India and tax laws prevailing in the respective tax jurisdictions where the Company operates. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted, at the reporting date. Current income tax relating to items recognized directly in equity is recognized in equity and not in statement of profit and loss.

Deferred income taxes reflect the impact of temporary differences between tax base of assets and liabilities and their carrying amounts. Deferred tax is measured based on the tax rates and the tax laws enacted or substantively enacted at the reporting date.

Deferred tax liabilities are recognized for all taxable temporary differences, except deferred tax liability arising from initial recognition of goodwill or an asset or liability in a transaction that is not a business combination and, affects neither accounting nor taxable profit/ loss at the time of transaction. Deferred tax assets are recognized for all deductible temporary differences, the carry forward of unused tax credits and any unused tax losses, except deferred tax assets arising from initial recognition of goodwill or an asset or liability in a transaction that is not a business combination and, affects neither accounting nor taxable profit/ loss at the time of transaction. Deferred tax assets are recognized only to the extent that sufficient future taxable income will be available against which such deferred tax assets can be realized.

In the situations where the Company is entitled to a tax holiday under the Income-tax Act, 1961 enacted in India or tax laws prevailing in the respective tax jurisdictions where it operates, no deferred tax (asset or liability) is recognized in respect of bject to the deduction during the tax holiday period. Deferred tax in respect of temporary differences which reverse after the tax holiday period is recognized in the period / year in which the temporary differences originate.

The carrying amount of deferred tax asset is reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available against which such deferred tax assets can be realized.

Deferred tax assets and deferred tax liabilities are offset, if a legally enforceable right exists to set off current tax assets against current tax liabilities and the deferred tax assets and deferred tax liabilities relate to the same taxable entity and the same taxation authority.

Deferred tax relating to items recognized outside the statement of profit and loss is recognized in co-relation to the underlying transaction either in other comprehensive income or directly in equity.

Minimum alternate tax (MAT) paid in a period / year is charged to the statement of profit and loss as current tax. MAT credit available is recognized as an asset only to the extent that there is convincing evidence that the Company will pay normal income tax during the period, i.e., the period for which MAT credit is allowed to be carried forward. In the period / year in which the Company recognizes MAT credit as an asset in accordance with the Guidance Note on Accounting for Credit Available in respect of Minimum Alternative Tax under the Income-tax Act, 1961, the said asset is created by way of credit ve convincing evidence that it will pay normal tax during the specified period.

(m) Segment reporting

In accordance with para 4 of Notified Indian Accounting Standard 108 (Ind AShas disclosed segment information only in consolidated financial statements which are presented together with the standalone financial statements.

(n) Earnings per share (EPS)

Basic earnings per share are calculated by dividing the net profit for the period / year attributable to equity shareholders by the weighted average number of equity shares outstanding during the period / year. The weighted average number of equity shares outstanding during the reporting period is adjusted for events such as bonus issue, bonus element in a rights issue, share split, and reverse share split (consolidation of shares), if any occurred during the reporting period, that have changed the number of equity shares outstanding, without a corresponding change in resources.

For the purpose of calculating diluted earnings per share, the net profit for the period / year attributable to the equity shareholders and the weighted average number of equity shares outstanding during the period / year, are adjusted for the effects of all dilutive potential equity shares.

The number of shares and potential dilutive equity shares are adjusted retrospectively for all periods presented for any bonus shares issues including for changes effected prior to the approval of the condensed interim financial statements by the Board of Directors.

(o) Provisions

A provision is recognized when the Company has a present obligation as a result of past event; it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation, in respect of which a reliable estimate can be made. Provisions are determined based on the best estimate of the amount required to settle the obligation at the reporting date. If the effect of time value of money is material, provisions are discounted using a current pre-tax rate that reflects the risks specific to the liability. These estimates are reviewed at each balance sheet date and adjusted to reflect the current best estimates.

(p) Contingent liabilities

A contingent liability is a possible obligation that arises from past events whose existence will be confirmed by the occurrence or non-occurrence of one or more uncertain future events beyond the control of the Company or a present obligation that is not recognized because it is not probable that an outflow of resources will be required to settle the obligation. A contingent liability also arises in extremely rare cases where there is a liability that cannot be recognized because it cannot be measured reliably.

(q) Cash and cash equivalents

Cash and cash equivalents in the cash flow statement comprises of cash at bank, cash in hand and short term deposits with an original maturity period of three months or less.

(r) Employee stock compensation expenses

Employees of the Company receive remuneration in the form of share based payment transactions, whereby employees render services as consideration for equity instruments granted (equity-settled transactions).

In accordance with Ind AS 102 -settled transactions is determined by the fair value of the options at the date of the grant and recognized as employee compensation cost over the vesting period. The cumulative expense recognized for equity-settled transactions at each reporting date until the vesting date reflects the extent ultimately vest.

The expense or credit recognized in the statement of profit and loss for a period / year represents the movement in cumulative expense recognized as at the beginning and end of that period / year and is recognized in employee benefits expense. In case of the employee stock option schemes having a graded vesting schedule, each vesting tranche having different vesting period has been considered as a separate option grant and accounted for accordingly.

Where the terms of an equity-settled transaction award are modified, the minimum expense recognized is the expense as if the terms had not been modified, if the original terms of the award are met. An additional expense is recognized for any modification that increases the total fair value of the share-based payment transaction, or is otherwise beneficial to the employee as measured at the date of modification.

The employee stock option expenses in respect of the employees of the subsidiaries are charged to the respective subsidiary.

(s) Equity

Ordinary shares are classified as equity share capital. Incremental costs directly attributable to the issuance of new ordinary shares, share options and buyback are recognized as a deduction from equity, net of any tax effects

(t) Dividend

Final dividend on shares are recorded as a liability on the date of approval by the shareholders and interim dividends are .

Notes forming part of Condensed Interim Financial Statements

4. Share capital

	As at March 31, 2021 In Million	As at March 31, 2020 In Million
Authorized shares (No. in million) 200 (Previous year: 200) equity shares of 10 each	2,000.00	2,000.00
	2,000.00	2,000.00
Issued, subscribed and fully paid-up shares (No. in million)
76.43 (Previous year: 76.43) equity shares of 10 each	764.25	764.25
Issued, subscribed and fully paid-up share capital	764.25	764.25

a) Reconciliation of the shares outstanding at the beginning and at the end of the period/ year

The reconciliation of the number of shares outstanding and the amount of share capital is set out below:

				(In Million)
	As at	March 31, 2021	As at March 31, 2020
	No. of shares	Amount In	No. of shares	Amount In
Number of shares at the beginning of the year	76.43	764.25	79.12	791.19
Less: Shares bought back	-	-	2.69	26.94
Number of shares at the end of the year	76.43	764.25	76.43	764.25

b) Terms / rights attached to equity shares

The Company has only one class of equity shares having a par value of 10 per share. Each holder of equity shares is entitled to one vote per share. The Company declares and pays dividends in Indian rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting

The Board of Directors of Persistent Systems Limited, at its meeting held on January 28, 2021, declared an interim dividend of INR 14 per equity share of face value of INR 10 each for the Financial Year 2020-21.

The Company declares and pays dividends in Indian rupees. The Finance Act, 2020 in India has repealed Dividend Distribution Tax (DDT). The Companies are now required to pay/ distribute dividend after deducting applicable taxes. The remittance of dividends outside India is governed by Indian law on foreign exchange and is also subject to withholding tax at applicable rates as per Finance Act, 2020.

In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

c) Aggregate number of bonus shares issued, shares issued for consideration other than cash and shares bought back during the period of five years immediately preceding the reporting date

	For the period of five years ended March 31, 2021 No in Million	For the period of five years ended March 31, 2020 No in Million
Equity shares allotted on March 12, 2015 as fully	-	40.00
paid bonus shares by capitalization of securities
premium 400.00 million
Equity shares bought back	3.575	3.575

Notes forming part of Condensed Interim Financial Statements

d) Buyback of Equity Shares of the Company:

-up equity ficial owners excluding promoters, promoter group and

The buyback was offered to all eligible equity shareholders of the Company (other than the Promoters, the Promoter Group and Persons in Control of the Company) under the open market route through the stock exchanges. The buyback of equity shares through the stock exchange commenced on February 8, 2019 and was completed on June 27, 2019. During this buyback period the Company had purchased and extinguished a total of 3,575,000 equity shares from the stock exchange - per equity share comprising 4.47% of the pre buyback paid-up equity share million (excluding transaction costs). The Company funded the buyback from utilization of its securities premium and free reserves. The total number of equity shares outstanding post buyback stands at 76,425,000.

e) Details of shareholders holding more than 5% shares in the Company

Name of the shareholder*		As at March 31, 2021		As at March 31, 2020
	No. in million	% Holding	No. in million	% Holding
Dr. Anand Deshpande jointly with Mrs. Sonali Anand Deshpande	22.96	30.04	22.96	30.04
Schemes of HDFC Mutual Fund	5.37	7.03	6.53	8.54

* The shareholding information is based on legal ownership of shares and has been extracted from the records of the Company including register of shareholders / members.

Total 6,425.95 632.03 6,946.17 4,377.18 398.33 99.58 4,675.93 2,270.24 2,048.77 176.95 92.69 480.67 111.70 72.66 166.05 314.62 111.81 396.41 127.01 Leasehold land 7.24 7.24 4.05 0.93 4.98 2.26 3.19 37.50 37.50 0.60 0.58 1.18 36.32 - - - - - - 33.50 27.49 527.32 502.49 17.86 27.38 492.97 34.35 18.82 Office premises 176.95 92.69 443.17 111.12 72.66 164.87 278.30 521.31 358.91 126.41 fixtures improvements 21.12 0.33 20.79 19.32 1.12 0.25 20.19 0.60 1.80 - 1,407.04 1,215.65 186.84 1,377.38 55.45 25.79 1,190.54 50.87 25.76 191.39 equipment 53.58 6.28 57.84 50.93 2.84 51.75 6.09 2.65 2.02 2.02 equipments 1,851.34 536.13 56.18 2,331.29 1,548.74 228.33 44.17 1,732.90 598.39 302.60 1,230.24 1,325.95 2,387.06 0.67 2,387.73 96.38 1,157.49 1,061.11 - - 206.92 206.92 206.92 206.92 - - - - - - land * Note: Building includes those constructed on leasehold land: Accumulated depreciation Accumulated depreciation 5.2 Right of use assets Gross block (At cost) Gross block (At cost) As at March 31, 2020 As at March 31, 2021 As at March 31, 2021 As at March 31, 2021 As at March 31, 2021 As at March 31, 2021 As at March 31, 2021 Charge for the period Charge for the period As at April 1, 2020 As at April 1, 2020 As at April 1, 2020 As at April 1, 2020 Net block Net block Disposals Disposals Disposals Disposals Additions Additions	269.40 36.90 232.50 As at March 31, 2020

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		(In ₹ Millior
	Office premises Leasehold land	Ĕ
Gross block (At cost)
As at April 1, 2020	37.50 358.91	396.41
Additions	176.95	176.95
Disposals	ı 92.69	92.69
As at March 31, 2021	37.50 443.17	480.67
Accumulated depreciation
As at April 1, 2020	0.60 126.41	127.01
Charge for the period	0.58 111.12	11.70
Disposals	$\overline{\phantom{a}}$ 72.66	72.66
As at March 31, 2021	1.18 164.87	166.05
Net block
As at March 31, 2021	36.32 278.30	314.62
As at March 31, 2020	36.90 232.50	269.40

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Total 6,252.76 283.22 110.03 6,425.95 4,122.50 360.63 105.95 4,377.18 2,048.77 2,130.26 269.40 396.41 396.41 127.01 127.01 - - - 8.44 1.20 7.24 4.23 1.02 1.20 4.05 3.19 37.50 37.50 0.60 0.60 36.90 4.21 Leasehold land - - - - Office premises 9.06 22.86 502.49 515.09 2.84 482.47 2.84 18.82 32.62 232.50 521.31 358.91 126.41 358.91 126.41 - - - fixtures 17.88 3.24 21.12 21.12 1.44 19.32 1.80 improvements - - - 1,376.04 25.29 23.95 1,377.38 1,144.38 66.30 20.14 1,190.54 186.84 231.66 equipment equipments 53.22 0.39 0.03 53.58 48.77 2.19 0.03 50.93 2.65 4.45 1,684.93 248.42 1,851.34 1,460.02 170.46 81.74 1,548.74 302.60 82.01 224.91 2,387.00 0.06 2,387.06 964.75 96.36 1,325.95 1,422.25 1,061.11 - - 206.92 206.92 206.92 206.92 land - - - - - - Additions (Transitional impact on adoption of Ind AS 116) Accumulated depreciation Accumulated depreciation 5.2 Right of use assets Gross block (At cost) Gross block (At cost) As at March 31, 2020 As at March 31, 2020 As at March 31, 2020 As at March 31, 2019 As at March 31, 2020 As at March 31, 2020 As at March 31, 2020 As at March 31, 2019 Charge for the year Charge for the year As at April 1, 2019 As at April 1, 2019 As at April 1, 2019 As at April 1, 2019 Net block Net block Disposals Disposals Additions

Notes forming part of Condensed Interim Financial Statements

5.3 Other Intangible assets

	Software	Acquired contractual rights	Total
Gross block
As at April 1, 2020	743.67	261.74	1,005.41
Additions	181.44	-	181.44
As at March 31, 2021	925.11	261.74	1,186.85
Accumulated amortization
As at April 1, 2020	696.70	261.74	958.44
Charge for the period	56.76	-	56.76
As at March 31, 2021	753.46	261.74	1,015.20
Net block
As at March 31, 2021	171.65	-	171.65
As at March 31, 2020	46.97	-	46.97
	Software	Acquired contractual	Total
		rights
Gross block
As at April 1, 2019	713.08	261.74	974.82
Additions	30.59	-	30.59
As at March 31, 2020	743.67	261.74	1,005.41
Accumulated amortization
As at April 1, 2019	629.22	261.74	890.96
Charge for the year	67.48	-	67.48
As at March 31, 2020	696.70	261.74	958.44
Net block
As at March 31, 2020	46.97	-	46.97
	83.86

5.4 Depreciation and amortization expense

		For the quarter ended		For the year ended
	March 31, 2021	March 31, 2020	March 31, 2021	March 31, 2020
On Property, Plant and Equipment	113.58	92.33	398.33	360.63
On Right of use assets	26.64	32.02	111.70	127.01
On Other intangible assets	15.30	12.11	56.76	67.48
	155.52	136.46	566.79	555.12

Notes forming part of Condensed Interim Financial Statements

1. Non-current financial assets : Investments (refer note 30)

	As at March 31, 2021	As at March 31, 2020
Investments carried at cost
Unquoted investments
Investments in equity instruments
- In wholly owned subsidiary companies (Refer note 31)
Persistent Systems, Inc.
402 million (Previous year : 402 million) shares of USD 0.10 each, fully paid up	2,478.01	2,478.01
	2,478.01	2,478.01
Persistent Systems Pte Ltd.
0.50 million (Previous year: 0.50 million) shares of SGD 1 each, fully paid up	15.50	15.50
	15.50	15.50
Persistent Systems France SAS
1.50 million (Previous year: 1.50 million) shares of EUR 1 each, fully paid up	97.47	97.47
	97.47	97.47
Persistent Systems Malaysia Sdn. Bhd.
5.45 million (Previous year: 5.45 million) shares of MYR 1 each, fully paid up	102.25	102.25
Persistent Systems Germany GmbH	102.25	102.25
11.6527 million (Previous year: 11.6527 million) shares of EUR 1 each, fully paid up	1,265.91	1,265.91
	1,265.91	1,265.91
CAPIOT Software Private Limited
0.1867 million (Previous year: Nil ) shares of Rs. 10 each, fully paid up (refer note 35)	376.61	-
	376.61	-
-In associates
Klisma e-Services Private Limited [Holding 50% (Previous year: 50% )]
	0.05	0.05
Less : Impairment	(0.05)	(0.05)
	-	-
Total investments carried at cost (A)	4,335.75	3,959.14
Investments carried at amortised cost
Quoted Investments
In bonds	2,557.92	2,171.52
Add: Interest accrued on bonds	72.88	68.69
Total investments carried at amortised cost (B)	2,630.80	2,240.21
Designated as fair value through profit and loss
Quoted Investments
- Investments in mutual funds
Fair value of long term mutual funds (Refer Note 6a)	806.99	2,174.51
	806.99	2,174.51
Unquoted Investments
-Others*
Altizon Systems Private Limited
	6.00 6.00	6.00 6.00
Total investments carried at fair value (C)	812.99	2,180.51
Total investments (A) + (B) + (C)	7,779.54	8,379.86
Aggregate provision for diminution in value of investments	0.05	0.05
Aggregate amount of quoted investments	3,437.79	4,414.72
Aggregate amount of unquoted investments	4,341.80	3,965.19

* Investments, where the Company does not have joint-control or significant influence including situations where such joint-control or significant influence is intended to be temporary, are classified as "investments in others"

Notes forming part of Condensed Interim Financial Statements

6 a) Details of fair value of investment in long term futual funds (Quoted)

	As at	As at
	March 31, 2021	March 31, 2020
Axis Mutual Fund	400.50	898.93
IDFC Mutual Fund	370.31	630.06
Sundaram Mutual Fund	36.18	33.15
ICICI Prudential Mutual Fund	-	141.38
Kotak Mutual Fund	-	105.86
UTI Mutual Fund	-	105.73
Aditya Birla Sun Life Mutual Fund	-	82.65
SBI Mutual Fund	-	71.06
HDFC Mutual Fund	-	35.66
PGIM India Mutual Fund (formerly known as DHFL Pramerica Mutual Fund)	-	35.03
DSP Mutual Fund	-	35.00
	806.99	2,174.51

Notes forming part of Condensed Interim Financial Statements

1. Non-current financial assets : Loans (refer note 30)

	As at	As at
	March 31, 2021	March 31, 2020
Carried at amortised cost
Security deposits
Unsecured, considered good	52.23	123.57
	52.23	123.57
Other loans and advances
Inter corporate deposits
Unsecured, credit impaired	0.58	0.58
	0.58	0.58
Less: Impairment	(0.58)	(0.58)
	-	-
	52.23	123.57

8. Other non-current financial assets (refer note 30)

	As at	As at
	March 31, 2021	March 31, 2020
Non-current bank balances (Refer note 14)	24.42	344.55
Add: Interest accrued but not due on non-current bank deposits	1.34	14.38
Non-current deposits with banks (Carried at amortised cost)	25.76	358.93
Deposit with financial institutions	430.00	430.00
Add: Interest accrued but not due on deposit with financial institutions	0.98	0.98
Less: Credit impaired	(430.98)	(430.98)
Non-current deposits with financial institutions (Carried at amortised cost)	-	-
	25.76	358.93

9. Deferred tax assets (net)

	As at	As at
	March 31, 2021	March 31, 2020
Deferred tax liabilities
Differences in book values and tax base values of block of Property, plant and equipment and other intangible assets	41.87	24.30
Capital gains (net)	61.06	76.67
	102.93	100.97
Deferred tax assets
Provision for leave encashment	95.76	47.15
Provision for long service awards	64.97	51.38
Provision for expected credit loss	28.85	33.45
Tax credit	62.37	67.69
Right of use asset and lease liability	26.36	31.86
Others	70.36	186.79
	348.67	418.32
Deferred tax assets (net)	245.74	317.35

1. Other non current assets

	As at	As at
	March 31, 2021	March 31, 2020
Capital advances (Unsecured, considered good)	38.75	27.14
Advances recoverable in cash or kind or for value to be received	84.43	5.70
Balances with government authorities (refer note 32 (c))	296.55	296.55
	419.73	329.39

Notes forming part of Condensed Interim Financial Statements

1. Current financial assets : Investments (refer note 30)

As at	As at
March 31, 2021	March 31, 2020
6,374.95	5,164.77
6,374.95	5,164.77
6,374.95	5,164.77
	-
	-

Notes forming part of Condensed Interim Financial Statements

11 a) Details of fair value of current investment in mutual funds (Quoted)

	As at	As at
	March 31, 2021	March 31, 2020
Aditya Birla Sun Life Mutual Fund	1,011.03	973.04
HDFC Mutual Fund	963.10	185.88
IDFC Mutual Fund	911.72	640.78
Axis Mutual Fund	824.68	396.02
UTI Mutual Fund	723.19	809.46
ICICI Prudential Mutual Fund	710.33	940.50
L&T Mutual Fund	511.71	734.90
Kotak Mutual Fund	478.21	421.51
SBI Mutual Fund	166.36	-
DSP Mutual Fund	37.38	-
PGIM India Mutual Fund (formerly known as DHFL Pramerica Mutual Fund)	37.24	-
Nippon India Mutual Fund (formerly known as Reliance Mutual Fund)	-	62.68
	6,374.95	5,164.77

Notes forming part of Condensed Interim Financial Statements

1. Trade receivables (refer note 30)

	As at	As at
	March 31, 2021	March 31, 2020
Unsecured, considered good*	2,966.26	2,883.09
Unsecured, credit impaired	118.29	132.91
	3,084.55	3,016.00
Less : Allowance for expected credit loss	(118.29)	(132.91)
	2,966.26	2,883.09
	2,966.26	2,883.09
*includes dues from related parties (refer note 31)

13. Cash and cash equivalents (refer note 30)

	As at	As at
	March 31, 2021	March 31, 2020
Cash and cash equivalents as presented in cash flow statement
Cash on hand	0.10	0.15
Balances with banks
On current accounts#	360.22	198.79
On saving accounts	1.33	0.36
On Exchange Earner's Foreign Currency accounts	208.57	261.86
On deposit accounts with original maturity less than three months	292.50	71.47
	862.72	532.63

Out of the cash and cash equivalent balance as at March 31, 2021, the Company can utilise 154.39 million (Previous year: 6.62 million) only towards predefined activities specified in the agreement.

14. Other bank balances (refer note 30)

	As at	As at
	March 31, 2021	March 31, 2020
Deposits with banks*	7,108.47	2,643.65
Add: Interest accrued but not due on deposits with banks	301.29	116.55
Deposits with banks (Carried at amortised cost)	7,409.76	2,760.20
Less: Deposit with maturity more than twelve months from the Balance Sheet date disclosed under non-current financial assets (Refer note 8)	(24.42)	(344.55)
Less: Interest accrued but not due on non-current deposits with banks (Refer note 8)	(1.34)	(14.38)
	7,384.00	2,401.27
Balances with banks on unpaid dividend accounts**	3.00	4.05
	7,387.00	2,405.32

* Out of the balance, fixed deposits of 675.89 million (Previous year : 71.10 million) have been earmarked against credit facilities and bank guarantees availed by the Company.

** The Company can utilize these balances only towards settlement of the respective unpaid dividend.

Notes forming part of Condensed Interim Financial Statements

1. Current financial assets : Loans (refer note 30)

	As at March 31, 2021	As at March 31, 2020
Carried at amortised cost
Loan to related parties (refer note 31)
Unsecured, credit impaired
- Klisma e-Services Private Limited	27.43	27.43
	27.43	27.43
Less: Impairment	(27.43)	(27.43)
	-	-
Security deposits
Unsecured, considered good	49.33	4.76
	49.33	4.76
	49.33	4.76

16. Other current financial assets (refer note 30)

1. Other current assets

	As at	As at
	March 31, 2021	March 31, 2020
Fair value of derivatives designated as hedging instruments
Forward contracts receivable	294.46	-
Advances to related parties (Unsecured, considered good) (refer note 31)
Persistent Systems, Inc.	18.72	63.08
Persistent Systems France SAS	0.38	6.71
Persistent Telecom Solutions Inc.	0.01	3.05
Persistent Systems Malaysia Sdn. Bhd.	-	0.15
Persistent Systems Lanka (Private) Limited	0.02	2.67
Aepona Limited	2.34	-
PARX Consulting GmbH	-	0.04
Persistent Systems Israel Ltd.	-	1.05
Persistent Systems Mexico, S.A. de C.V	-	1.12
Youperience GmbH	-	0.05
PARX Werk AG	-	1.79
Persistent Systems Germany GmbH	-	0.31
	21.47	80.02
Advances to related parties (Unsecured, credit impaired ) (refer note 31)
Klisma e-Services Private Limited	0.81	0.81
Less: Impairment of current financial assets	(0.81)	(0.81)
	-	-
Other advances	21.79	-
Unbilled revenue	1,726.07	2,000.05
	2,063.79	2,080.07

As at As at March 31, 2021 March 31, 2020 Advances to suppliers (Unsecured, considered good) Advances recoverable in cash or kind or for value to be received 460.97 388.32 Excess fund balance with Life Insurance Corporation 113.08 128.54 Other advances (Unsecured, considered good) VAT receivable (net) 31.50 23.44 Service tax and GST receivable (net) (refer note 32) 864.36 1,132.09 895.86 1,155.53 1,656.93 1,485.37

Notes forming part of Condensed Interim Financial Statements

1. Non-current financial liabilities : Borrowings (refer note 30)

	As at	As at
	March 31, 2021	March 31, 2020
Unsecured Borrowings carried at amortised cost
Term loans
Indian rupee loan from others	7.39	11.93
Interest accrued but not due on term loans	0.11	0.18
	7.50	12.11
Less: Current maturity of long-term borrowings transferred to other current financial liabilities (Refer note 22)	(1.85)	(4.85)
Less: Current maturity of interest accrued but not due on term loan transferred to other current financial liabilities (Refer note 22)	(0.11)	(0.18)
	(1.96)	(5.03)
	5.54	7.08

The term loans from Government departments have the following terms and conditions:

Loan I - amounting to 7.39 million (Previous year 9.24 million) with Interest payable @ 3% per annum repayable in ten equal annual installments over a period of ten years commencing from October 2015.

Loan II - amounting to Nil (Previous year 2.69 million) with interest payable @ 2% per annum has been guaranteed by a bank guarantee by the Company and was repayable in ten equal semi annual installments over a period of five years commencing from September 2016. The loan has been fully repaid in current year.

19. Non current liabilities : Provisions

As at	As at
March 31, 2021	March 31, 2020
240.94	182.79
240.94	182.79

Notes forming part of Condensed Interim Financial Statements

20. Lease Liabilities (refer note 30)

	As at	As at
	March 31, 2021	March 31, 2020
Lease liabilities	378.54	356.64
Less: Current portion of lease liabilities	(73.82)	(165.38)
	304.72	191.26
Movement of lease liabilities
	For the year ended	For the year ended
	March 31, 2021	March 31, 2020
Opening balance	356.64	-
Additions	176.95	501.15
Deletions	(20.03)	-
Add: Interest recognised during the year (refer note 34)	38.09	43.86

21. Trade payables (refer note 30)

	As at	As at
	March 31, 2021	March 31, 2020
Trade payables for goods and services*	938.40	972.49
	938.40	972.49
*Includes dues payables to related parties (refer note 31)

Less: Payments made (173.11) (188.37) Closing balance 356.64 378.54

Disclosure of payable to vendors as defined under the Small and Medium Enterprise Development Act, is based on the information available with the Company regarding the status of registration of such vendors under the said Act, as per the intimation received from them on requests made by the Company. There are no overdue principal amounts / interest payable amounts for delayed payments to such vendors at the Balance Sheet date. There are no delays in payment made to such suppliers during the period or for any earlier periods / years and accordingly there is no interest paid or outstanding interest in this regard in respect of payment made during the period or on balance brought forward from previous period / year.

22. Other current financial liabilities (refer note 30)

	As at	As at
	March 31, 2021	March 31, 2020
Capital creditors	237.83	36.23
Current maturity of long term-borrowings (refer note 18)	1.85	4.85
Current maturity of interest on long-term borrowings (refer note18)	0.11	0.18
Accrued employee liabilities	154.58	105.64
Unpaid dividend *	3.00	4.05
Other liabilities	0.05	4.40
Fair value of derivatives designated as hedging instruments
Forward contracts payable	-	387.89
Advance from related parties (Unsecured, considered good) (refer note 31)
Persistent Systems Pte Ltd	-	2.77
PARX Werk AG	-	2.55
Aepona Limited	-	1.17
	-	6.49
	397.42	549.73

* Unpaid dividend is credited to Investor Education and Protection Fund as and when due.

Notes forming part of Condensed Interim Financial Statements

23. Other current liabilities

	As at	As at
	March 31, 2021	March 31, 2020
Unearned revenue	260.40	135.88
Advance from customers (refer note 31)	1,023.53	558.34
Other payables
- Statutory liabilities	228.03	146.89
- Other liabilities	167.05	9.91
	1,679.01	851.02

24. Current liabilities : Provisions

	As at March 31, 2021	As at March 31, 2020
Provision for employee benefits
- Leave encashment	380.49	187.35
- Long service awards	17.19	21.35
- Other employee benefits	747.91	381.68
	1,145.59	590.38

Notes forming part of Condensed Interim Financial Statements

1. Revenue from operations (net) (refer note 31)

		For the quarter ended		For the year ended
	March 31, 2021	March 31, 2020		March 31, 2020
Software services	6,750.86	5,624.46	24,270.63	20,775.56
Software licenses	95.72	36.93	525.45	305.66
	6,846.58	5,661.39	24,796.08	21,081.22

26. Other income

	For the quarter ended			For the year ended
	March 31, 2021	March 31, 2020	March 31, 2021	March 31, 2020
Interest income
On deposits carried at amortised cost	110.71	84.21	381.66	373.29
On others	41.81	33.27	167.16	152.47
Foreign exchange (loss) / gain (net)	128.53	(60.67)	67.12	274.26
Profit/ (Loss) on sale of Property, Plant and Equipment (net)	1.47	(0.94)	8.10	-
Dividend income from investments*	-	138.46	131.45	410.72
Profit on sale of investments (net)	64.76	11.86	478.13	164.81
Net gain/ (loss) arising on financial assets designated at FVTPL	(6.47)	81.77	(133.70)	119.02
Miscellaneous income	8.94	35.36	76.24	104.47
	349.75	323.32	1,176.16	1,599.04

*Includes dividends received from investments in wholly owned subsidiaries (refer note 31)

27. Personnel expenses

		For the quarter ended		For the year ended
	March 31, 2021	March 31, 2020	March 31, 2021	March 31, 2020
27.1 Employee benefits expense
Salaries, wages and bonus	3,644.89	2,674.30	12,806.57	10,178.10
Contribution to provident and other funds	197.46	137.79	666.24	372.96
Staff welfare and benefits	149.52	111.46	384.07	417.99
Share based payments to employees	79.35	20.71	236.33	60.01
	4,071.22	2,944.26	14,093.21	11,029.06
27.2 Cost of professionals
- Related parties (refer note 31)	260.29	333.54	1,323.73	1,565.67
- Others	204.50	61.09	451.34	259.70
	464.79	394.63	1,775.07	1,825.37
	4,536.01	3,338.89	15,868.28	12,854.43

Notes forming part of Condensed Interim Financial Statements

28. Other expenses*

	For the quarter ended		For the year ended
	March 31, 2021	March 31, 2020	March 31, 2021	March 31, 2020
Travelling and conveyance	(3.29)	89.04	39.58	338.29
Electricity expenses (net)	16.68	20.29	69.09	97.02
Internet link expenses	9.67	18.02	50.14	48.83
Communication expenses	4.98	20.48	73.17	72.52
Recruitment expenses	13.28	20.73	75.40	69.43
Training and seminars	3.17	6.51	23.97	22.82
Purchase of software licenses and support expenses	180.23	172.76	908.00	852.77
Bad debts	3.59	-	46.96	-
Provision for expected credit loss (net)	(15.53)	19.43	(20.20)	47.31
Rent	18.01	22.98	77.50	68.33
Insurance	7.59	6.97	31.37	25.91
Rates and taxes	8.14	14.78	52.57	49.17
Legal and professional fees	79.26	53.52	196.13	187.49
Repairs and maintenance
- Plant and Machinery	21.97	25.01	94.92	109.12
- Buildings	4.17	3.63	19.26	21.32
- Others	2.82	4.66	15.20	18.21
Selling and marketing expenses	196.37	142.74	739.82	660.03
Fees for sales enablement services	-	43.40	-	627.90
Advertisement, conference and sponsorship fees	0.84	7.43	3.54	23.02
Computer consumables	1.07	0.77	3.14	4.47
Auditor's remuneration	4.65	3.62	9.00	10.26
Donations	2.02	29.70	163.93	86.11
Books, memberships, subscriptions	2.05	6.60	12.69	22.42
Provision for doubtful deposits (refer note 33)	-	48.48	-	248.48
Loss on sale of Property, Plant and Equipment (net)	-	5.50	-	5.50
Directors' sitting fees	1.18	1.88	4.84	6.58
Directors' commission	2.36	3.60	10.22	14.85
Miscellaneous expenses	27.35	42.91	118.52	158.98
	592.63	835.44	2,818.76	3,897.14

* includes expenses incurred with related parties (refer note 31)

Notes forming part of Condensed Interim Financial Statements

29. Earnings per share

For the quarter ended For the year ended
	March 31, 2021	March 31, 2020		March 31, 2020
(A)	1,400.72	1,274.82	5,050.86	4,077.23
(B)	76,425,000	76,425,000	76,425,000	76,684,672
(C)	76,425,000	76,425,000	76,425,000	76,684,672
	18.33	16.68	66.09	53.17
	18.33	16.68	66.09	53.17
		(A/B) (A/C)		March 31, 2021

	For the quarter ended		For the year ended
	March 31, 2021	March 31, 2020	March 31, 2021	March 31, 2020
Number of shares considered as basic weighted average shares outstanding	76,425,000	76,425,000	76,425,000	76,684,672
Add: Effect of dilutive issues of stock options	-	-	-	-
Number of shares considered as weighted average shares and potential shares	76,425,000	76,425,000	76,425,000	76,684,672
outstanding

Basis of measurement Fair value Cost Financial assets/ financial liabilities Investments in subsidiaries and associates (net) Investments in equity instruments	The carrying values and fair values of financial instruments by categories are as follows:
		Fair value As at March 31, 2021 Carrying value	As at March 31, 2020 Carrying value	Fair value	Fair value hierarchy
		6.00 4,335.75 6.00 4,335.75	6.00 3,959.14	3,959.14	6.00 Level 3
Amortised cost		2,727.32 2,630.80	2,240.21	2,236.81
Fair value		7,181.94 7,181.94	7,339.28	7,339.28 Level 1
Amortised cost Amortised cost Deposit with banks and financial institutions (including interest accrued		101.56 7,409.76 101.56 7,409.76	128.33 2,760.20	128.33 2,760.20
but not due on deposits with banks)
Amortised cost Amortised cost Cash and cash equivalents (including unpaid dividend)		865.72 2,966.26 865.72 2,966.26	536.68 2,883.09	536.68 2,883.09
Fair value		294.46 294.46	-		- Level 2
Amortised cost Amortised cost		1,726.07 43.26 1,726.07 43.26	2,000.05 80.02	2,000.05 80.02
		27,658.10 27,561.58	21,933.00	21,929.60
Amortised cost Amortised cost Borrowings (including accrued interest)		7.50 378.54 7.50 378.54	12.11 356.64	12.11 356.64
Amortised cost		938.40 938.40	972.49	972.49
Amortised cost Fair value Other financial liabilities (excluding borrowings)		395.46 395.46 -	156.81 387.89 -	156.81	387.89 Level 2
		1,719.90 1,719.90	1,885.94	1,885.94
* Fair value includes interest accrued.
The fair value hierarchy is based on inputs to valuation techniques that are used to measure fair value that are either observable or unobservable and consists of the following three
Fair Company is the inputs). information in transactions The (unobservable recent range. market more that data within insufficient current market value observable observable circumstances, fair of estimate from on	measure nor such instrument are recognises to values available same	there in at on or instruments if based whole or value, they in determined fair equity are	valuation data. range market is wide a which using available a are cost, part	based fair respect possible model as considered In of	of that measurements fair instruments of assumptions estimate equity value appropriate on of
	(This space is intentionally left blank)

1. (i) Significant related party transactions (excluding transactions with Key Management personnel and their relatives)

	Name of the related party and nature of relationship		For the quarter ended		For the year ended
		March 31, 2021	March 31, 2020	March 31, 2021	March 31, 2020
Sale of software services	Subsidiaries
	Persistent Systems, Inc.	2,338.27	1,899.99	8,456.81	6,917.59
	Other subsidiaries	172.06	87.08	487.53	379.68
	Entity over which a key management personnel has
	significant influence
	Deazzle Services Private Limited	-	4.57	-	7.47
	Total	2,510.33	1,991.64	8,944.34	7,304.74
Fees for sales & marketing services	Subsidiaries
	Other subsidiaries	-	15.28	-	20.77
	Total	-	15.28	-	20.77
Cost of professionals (excluding	Subsidiaries
reimbursement of expenses)	Persistent Systems, Inc.	204.69	256.56	1,011.10	1,175.54
	Other subsidiaries	55.60	79.23	312.63	390.14
	Total	260.29	335.79	1,323.73	1,565.68
Legal and professional fees	Subsidiaries
	Other subsidiaries	-	0.34	-	0.34
	Entity over which a key management personnel has
	significant influence
	Azure Associates, LLC	-	-	-	10.63
	Total	-	0.34	-	10.97
Recovery of cost of assets	Subsidiaries
	Persistent Systems, Inc.	18.93	9.62	18.93	17.29
	Total	18.93	9.62	18.93	17.29
Purchase of Software	Subsidiaries
	Persistent Systems, Inc.	2.13	6.41	52.21	17.94
	Other subsidiaries	0.29	3.54	4.10	3.54
	Total	2.42	9.95	56.31	21.48
Selling and marketing expenses	Subsidiaries
	Persistent Systems, Inc.	195.09	137.35	737.83	627.44
	Other subsidiaries	1.28	5.18	1.99	31.00
	Total	196.37	142.53	739.82	658.44
Fees for sales enablement services	Subsidiaries
	Persistent Systems, Inc.	-	30.02	-	614.52
	Other subsidiaries	-	13.39	-	13.39
	Total	-	43.41	-	627.91
Commission received on corporate	Subsidiaries
guarantee	Persistent Systems, Inc.	0.43	0.48	2.61	2.80
	Total	0.43	0.48	2.61	2.80
Dividend Income	Subsidiaries
	Persistent Systems Pte Ltd	-	52.11	70.33	180.37
	Persistent Systems Malaysia Sdn. Bhd.	-	86.32	61.12	220.31
	Total	-	138.43	131.45	400.68
Travelling and conveyance	Subsidiaries
	Persistent Systems, Inc.	-	-	-	1.08
	Other subsidiaries	-	0.46	-	0.46
	Total	-	0.46	-	1.54
Interest income	Subsidiaries
	Persistent Systems, Inc.	-	-		-
	Other subsidiaries	0.78	-	1.45	-
	Total	0.78	-	1.45	-
Investment in wholly owned subsidiary	Subsidiaries
(including Shares pending allotment)	Persistent Systems Germany GmbH	-	-	-	552.72
	CAPIOT Software Private Limited	-	-	376.61	-
	Total	-	-	376.61	552.72
Payment of liability on behalf of	Subsidiaries
	Persistent Systems, Inc.	-	67.60	42.42	67.60
	Total	-	67.60	42.42	67.60
Employee stock compensation	Subsidiaries
	Persistent Systems, Inc.	18.66	53.19	53.14	179.82
	Total	18.66	53.19	53.14	179.82
Advance given	Subsidiaries
	Other subsidiaries	2.34	1.87	2.34	1.87
	Total	2.34	1.87	2.34	1.87
Advance received	Subsidiaries
	Persistent Systems, Inc.	44.36	-	44.36	-
	Other subsidiaries	16.53	6.49	16.53	6.49
	Total	60.89	6.49	60.89	6.49
Donation given	Entity over which a key management personnel has
	significant influence
	Persistent Foundation	-	22.81	140.00	79.21
		-	22.81	140.00	79.21

These transactions are disclosed at the exchange rates prevailing on the date of transaction.

1. (ii) Significant outstanding balances

	Name of the related party and nature of relationship	As at
		March 31, 2021	March 31, 2020
Trade receivables	Subsidiaries
	Persistent Systems, Inc.	-	216.89
	Other subsidiaries	91.70	128.11
	Total	91.70	345.00
Trade payables	Subsidiaries
	Persistent Systems, Inc.	165.68	244.13
	Other subsidiaries	42.56	205.86
	Entity over which a key management personnel has
	significant influence
	Azure Associates, LLC	-	-
	Total	208.24	449.99
Advances given	Subsidiaries
	Persistent Systems, Inc.	18.72	63.08
	Other subsidiaries	2.75	14.97
	Associate
	Klisma e-Services Private Limited @	0.81	0.81
	Total	22.28	78.86
Advances received inclusive of Advances	Subsidiaries
from customers	Persistent Systems, Inc.	976.15	400.81
	Other subsidiaries	21.66	6.49
		997.81	407.30
Unbilled Receivable	Subsidiaries
	Persistent Systems, Inc.	712.44	950.65
	Other subsidiaries	131.43	42.28
		843.87	992.93
Investments	Subsidiaries
	Persistent Systems, Inc.	2,478.01	2,478.01
	Other subsidiaries	1,857.74	1,481.13
	Associate
	Klisma e-Services Private Limited @	0.05	0.05
	Total	4,335.80	3,959.19
Loans given	Associate
	Klisma e-Services Private Limited @	27.43	27.43
	Total	27.43	27.43

@ These balances are fully provided for.

(iii) Guarantee given on behalf of subsidiary

Persistent Systems Limited has given a performance guarantee up to \$ 10 million to HSBC Bank USA in respect of payment obligations under the Receivables Purchase agreement entered into by Persistent Systems Inc with HSBC Bank, USA (Previous year: \$10 million). Persistent Systems Limited has also given performance guarantee up to \$ 5 million to Citibank USA (Previous year: \$ 5 million) in respect of working capital facilities for Persistent Systems Inc. and \$ 0.17 million to Sun Life Assurance Company of Canada (Previous year: \$ 0.17 million) for timely payment of rent instalments and damages, in respect of office leased to Persistent Systems Inc.

32. Contingent liabilities

a) on December 19, 2016 for nonbasis, excluding interest and penalty, if applicable. The issue relates to the professional and technical services rendered by overseas subsidiaries on behalf of the Company to its overseas customers for the period 2011-12 to 2014-15.

Post representations made by the Company, the Learned Principal Commissioner of Service Tax, Pune, adjudicated the aforesaid showon the period of limitation and as a result of that, the said demand now covers financial year 2014-15. The Company Central Excise and Service Tax Appellate Tribunal (CESTAT) on September 23, 2017.

The Company, based on independent legal opinion obtained in respect of issues related to this matter, believes that the liability is not likely to arise and therefore, no provision is considered necessary in the condensed interim financial statements. If the appeal filed as mentioned above results in a demand, there will be no impact on the profitability as the Company will be eligible to claim credit/refund for the amount paid.

The GST department filed an appeal on October 11, 2017 with appellate authorities against the Order passed by Learned Principal Commissioner of Service Tax, Pune. Though the GST department acknowledged the ground of revenue neutrality, the said appeal mainly questions non-application of extended period of limitation. The Company filed reply to this appeal on December 18, 2017.

Considering the view of the Service Tax Authorities, based on legal advice and due prudence, the Company deposited, towards service tax in respect of the above matter, for the period from April 01, 2014 to June 2017 (i.e. ) was considered as transitional credit under GST Regime and recorded million was paid under protest and forms part of the aforementioned GST receivable balance.

• b) As on March 31, 2021, the pending litigations in respect of direct taxes amount to 478.70 million and in respect of indirect taxes amount to 7.33 million (excluding the show cause notice received from Commissioner of Service Tax the advice obtained and judgments in favour of the Company at the first appellate authority in the earlier years, management does not expect any outflow in respect of these litigations.
• c) the Company filed an application with Directorate General of Foreign Trade (DGFT). The Company has also represented with industrial association, The National Association of Software and Service Companies (NASSCOM), to ensure continued applicability of such incentives to the eligible information technology companies. The Company understands from NASSCOM that they have also taken up the matter with concerned authorities. During the year, the Company has received a Show Cause Notice from the Directorate Of Revenue Intelligence (DRI), in which the DRI has raised certain additional matters with applicable penalties which relates to eligibility of company to seek the incentives. During the quarter the Company has submitted a reply to the notice. Based on the documents filed with relevant authorities and based on the consultations with subject matter specialists, the Company believes that its position is likely be upheld on ultimate resolution and accordingly, no provision is necessary to be made against such claims in these financial statements.
• d) Persistent Systems Limited has given a performance guarantee up to \$ 10 million to HSBC Bank USA in respect of payment obligations under the Receivables Purchase agreement entered into by Persistent Systems Inc with HSBC Bank, USA (Corresponding period/ Previous year: \$10 million). Persistent Systems Limited. has also given performance guarantee up to \$ 5 million to Citibank USA (Corresponding period / Previous year: \$ 5 million) in respect of working capital facilities for Persistent Systems Inc. and \$ 0.17 million to Sun Life Assurance Company of Canada (Corresponding period / Previous year: \$ 0.17 million) for timely payment of rent instalments and damages, in respect of office leased to Persistent Systems Inc.
• 1. due for maturity from January 2019 to June 2019. In view of the uncertainty prevailing with respect to recovery of outstanding balances from IL&FS Group, Management of the Company has fully provided for these deposits along with interest accrued thereon till the date the deposits had become doubtful of recovery. The Management is hopeful of recovery though with a time lag. The Company continues to monitor developments in the matter and is committed to take steps including legal action that may be necessary to ensure full recovery of the said deposits.
• 1. Effective April 1, 2019, the C 38.09 million (previous year: 43.86 million) under finance cost.

Notes forming part of Condensed Interim Financial Statements

• 1. The code on Social security, 2020 relating to employee benefits has been approved by the Parliament and has also been published in Official Gazette of India. However, the date on which it comes into effect has not been notified and the rules are yet to be framed. The Company will complete its evaluation and will give appropriate impact in its financial statements in the period in which, the Code becomes effective and the related rules are published.
• 1. Ministry of Corporate Affairs (MCA), vide its notification dated March 24, 2021, amended Schedule III of the Companies Act, 2013 with effect from April 1, 2021. Management is of the view that since the changes are applicable from April 1, 2021, those are applicable for the financial year commencing from April 1, 2021 and are applicable to Financial statements issued in respect of accounting years commencing on or after April 1, 2021. Therefore, related disclosures are not considered in these financial statements for the year ended on March 31, 2021, although issued after April 1, 2021.
• 1. The condensed interim financial statements are presented in million and decimal thereof except for per share information or as otherwise stated.
• 1. Results for the Quarter ended March 31, 2020 are balancing figures between audited figures for the full financial year and reviewed year to date figures up to December 31, 2019 of the financial year.
• 1. year s classification.

For Walker Chandiok & Co LLP For and on behalf of the Board of Directors of Chartered Accountants Persistent Systems Limited Firm Registration No.: 001076N/N500013

Shashi Tadwalkar Dr. Anand Deshpande Sandeep Kalra Managing Director Executive Officer Membership No.: 101797 DIN: 00005721 DIN: 02506494

Partner Chairman and Executive Director and Chief

Place: Pune Place: New Jersey, USA Date: April 29, 2021 Date: April 29, 2021

Praveen Kadle Sunil Sapre

Place: Mumbai Place: Mumbai Date: April 29, 2021 Date: April 29, 2021

Amit Atre Company Secretary Membership No. A20507

Place: Pune Place: Pune

Date: April 29, 2021 Date: April 29, 2021

Independent Director Executive Director and Chief Financial Officer DIN: 00016814 DIN: 06475949