Persistent Systems Limited — Interim / Quarterly Report 2019

Nov 4, 2019

NSE & BSE / 2019-20 / 78

November 4, 2019

The Manager, Corporate Services, National Stock Exchange of India Limited Exchange Plaza, Bandra Kurla Complex, Bandra (E), Mumbai 400051

The Manager, Corporate Services, BSE Limited 14th Floor, P J Towers, Dalal Street, Mumbai 400001

Ref: Symbol: PERSISTENT Ref: Scrip Code: 533179

Dear Sir/ Madam,

Sub.: Submission of the Newspaper Advertisement under Regulations 47 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015

, ...

Pursuant to the Regulation 47 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, we hereby submit the newspaper advertisement of the Financial Results for the quarter and half year ended September 30, 2019. The same will be published on Tuesday, November 5, 2019 in the following newspapers:

• 1. Financial Express (All Editions)
• 1. Loksatta (Pune Edition)

The Audited Results for the said period were approved by the Board of Directors of the Company at its meeting held on November 3, 2019 and concluded on November 4, 2019.

We request you to take the same on your records.

Thanking you,

Yours sincerely, For Persistent Systems Limited

re Company Secretary ICSI Membership Number: ACS 20507

Encl: As above

Persistent Systems Limited, Bhageerath, 402, Senapati Bapat Road, Pune 411016 I Tel : +91 (20) 670 30000 Persistent Systems Inc., 2055, Laurelwood Rd, Suite 210, Santa Clara, CA 95054, USA I Tel : +1 (408) 216 7010 CIN - L72300PN1990PLC056696 I Fax - +91 (20) 6703 0009 I e-mail - info@persistent.com I Website - www.persistent.com

Persistent Systems Limited cP

Registered Office : Bhageerath, 402, Senapati Bapat Road, Pune 411016, India Persistent Ph. No. +91(20)67030000; Fax +91(20)67030009; Email : info@persistent.com, 'www.persistent.com'. CIN L72300PN1990PLC056696

Audited consolidated financial results of Persistent Systems Limited

Half year endedQuarter endedSr.Partia.JlarsSept 30, 2019 ]Lile 30, 2019 Sept 30, 2018 Sept 30, 2019 Sept 30, 2018No.(Audted)(ALdred)(ALdred)(ALdred)(Audled)Income1 Revenue from operations (net)8,846.008,321.148,355.57 17,167.14 16,698.382 other income382.46300.36232.21682.82418.96(1+2)9,228.46 8,621.50 8,587.78 17,849.96 17,117.343 Total income4 Expenses- Employee benefits expense5,369.714,916.254,862.36 10,285.969,480.73- Cost of professionals897.18859.82877.051,757.001,721.73- Finance costs18.3818.501.0736.881.35- Depreciation and amortization expense424.90386.17398.58811.07799.39- Other expenses1,362.661,343.151,179.932,705.812,659.10Total Expenses8,072.83 7,523.89 7,318.99 15,596.72 14,662.305 Profit before exceptional items and tax (3-4)1,155.63 1,097.61 1,268.79 2,253.24 2,455.04-----6 Exceptional items------7 Profit before tax(5-6)1,155.63 1,097.61 1,268.79 2,253.24 2,455.048 Tax expense- current tax289.72350.55422.37640.27778.42- Tax charge / ( credit) in respect of(1.37)---(1.37)2.902.90earlier years(n.64)(37.89)(71.08)(81.17)- Deferred tax charge/ (credit)6.56Total tax expense294.91272.91387.38567.82700.15(7-8)860.72824.70881.41 1,685.42 1,754.899 Profit for the pel1od / year10 other comprehensive incomeA. Items that will not be reclassifiedID profit and loss- Remeasurements of the defined benefit(10.03)(26.37)(12.79)(36.40)(25.84)liabilities/ assets (net of tax)(10.03)(26.37)(12,79)(36.40)(25.84)B. Items that may be reclassified IDprofit and loss- Effective portion of cash flow hedge(124.71)(23.19)(139.16)(147.90)(298.29)(net of tax)- Exchange differences in translating the(0.63)83.04185.9182.41337.71financial statements of foreign operations(41.67)(23.82)46.75(65.49)39.42(51.70)(50.19)33.96 (101.89)Total other comprehensive income(A+B)13.58for the period / year(9+10)809.02774.51915.37 1,583.53 1,768.4711 Total comprehensive income for theperiod / year (Comprising Profit/(Loss) and Other ComprehensiveIncome for the period / year)12 Paid-up equity share capital764.25764.25764.25BOO.ODBOO.OD(Face value of share, 10 each)13 Other equity excluding revaluation reserves14 Earnings per equity share in ,(Face value of share, 10 each)- Basic11.2610.6511.0221.9021.94- Diluted11.26lD.6511.0221.9021.9415 Dividend per share (in ")(Nominal value per share , 10)Interim dividend--------------------Final dMdend------	for the quarter and half year ended September 30, 2019						fin Million
						Year ended
							Mardi 31, 2019(ALdred)
							33,659.41
							876.55
							34,535.96
							19,249.53
							3,490.45
							3.05
							1,572.51
							5,357.03
							29,672.57
							4,863.39
							---
							4,863.39
							1,343.20
							88.81
							(85.41)
							1,346.60
							3,516.79
							(47.15)
							(47,15)
							168.43
							113.82
							282.25
							235.10
							3,751.89
							791.19
							22,655.61
							43.9943.99
							8.00
Total dividend		--	-	---	---	--	3.0011.00

	Audited consolidated statement of assets and liabilities

	Asat	Asat	As1i.
Particulars	(Audted)	Sept. 30, 2019 Sept. 30, 2018(Audled)	March 31, 2019(Aud!Ed)
ASSETS
Non-airrent assets
Property, Plant and Equipment	2,338.71	2,450.98	2,331.24
capital work-in-progress	6.34	3.15	12.10
Right- of- use assets	625.11	---	---
Goodwill	90.06	85.20	81.24
other Intangible assets	1,819.07	2,227.99	1,595.41
Intangible assets under development	142.50	243.96	303.54
Financial assets
- Investments	3,658.58	3,460.35	4,345.71
- Loans	146.13	158.00	164.00
- other non-current financial assets	355.45	25.40	344.33
Deferred tax assets (net)	613.16	647.26	405.05
Other non-aJrrent assets	407.45	78.74	68.31
Total non-current assets	10,202.56	9,381.03	9,650.93
Current assets
Financial assets
- Investments	1,522.23	7,382.85	3,295.53
- Trade receivables (net)	5,049.74	4,778.08	4,923.01
- cash and cash equivalents	1,350.67	1,080.68	1,739.45
- Other bank balances	5,734.38	459.40	4,989.35
- Loans	34.41	8.05	7.87
- other current financial assets	2,357.40	3,488.97	2,377.00
Current tax assets (net)
	134.70	244.70
Other current assets	1,747.72	1,973.51	185.061,387.79
Total current assets		17,931.25 19,416.24	18,905.06
TOTAL ASSETS		28133.81 28 797.27	28 555.99
EQUITY AND LIABILMES
Equity
Equity share capital	764.25	800.00	791.19
other equity	22,293.43	22,029.11	22,655.61
Total Equity		23,057.68 22,829.11	23,446.80
Liabilities
Non- current liabilities
Financial liabilities
- Borrowings	10.61	15.18	11.97
- Other long-term financial liabilities	485.50	1.83
Provisions	186.98	153.56
Total Non - airrent llabllltles	683.09	170.57
Current liabilities			1.83
Financial liabilities
- Trade payables	1,403.84	1,917.52	174.94188.741,517.07
- Other financial liabilities	746.87	975.14	441.93
Other current liabilities	1,006.65	1,255.26	1,122.44
Provisions	1,235.68	1,540.38	1,764.21
Current tax liabilities (net)	---	109.29	74.80
Total current liabilitiesTOTAL EQUITY AND UABILITIES	4,393.04	5,797.5928,133.81 28,797.27	4,920.4528,555.99

Segment wise Revenue, Results and Capital Employed

		Quarter ended			Half year ended	Year ended
	Particulars	(11.dtl!d)	Sep. 30, 2019 lire 30, 2019 Sep. 30, 2018 Sep. 30, 2019 Sep. 30, 2018(Audled)	(11.dted)	(11.dted)	(lldted)	Mal1:h31,l019(Aldted)
	Revenue from operations (net)	5,017.09	4,953.95	4,936.30	9,971.04	9,556.21	19,598.67

Profit after tax	1,068.46	834.39	896.82	1,902.85	1,820.07	3,150.08
Profit before tax	1,343.36	1,114.73	1,306.23	2,458.09	2,511.63	4,383.76

The Group reorganised itself into three business units from April 1, 2018, which form the operating segments for segment reporting. The operating segments are:

a. Technology Services

b. Alliance

c. Aa:elerite (Products) fin Million

			Quarter ended			Half year ended	Year Ended
Sr.No.	Particulars	(Audted)	(Audled)	(Al.Kited)	(Audted)	Sept. 30, 2019 ]Lile 30, 2019 Sept. 30, 2018 Sept. 30, 2019 Sept. 30, 2018 March 31, 2019(Audled)	(Au <ited)< td=""></ited)<>
	1 Segment revenue
	- Technology Services	5,979.85	5,704.51	5,436.54	11,684.36	10,679.71	22,018.03
	-Alliance	2,492.86	2,312.65	2,466.94	4,805.51	5,157.62	9,759.92
	- Accelerite (Products)	373.29	303.98	452.09	677.27	861.05	1,881.46
	Total	8,846.00	8,321.14			8,355.57 17,167.14 16,698.38 33,659.41
	2 Less: Inter segment revenue	---	--	--	---	---	---
	3 Net revenue/ income from operations	8,846.00	8,321.14	8,355.57	17,167.14	16,698.38	33,659.41
	4 Segment results profit/ (loss) before tax,interest and depreciation and amortization
	- Technology Services	2,285.07	2,068.09	2,034.70	4,353.17	4,033.26	8,507.67
	-Alliance	849.59	748.61	826.50	1,598.20	1,686.87	3,298.01
	- Accelerite (Products)	186.17	107.92	241.80	294.09	404.07	992.14
	Total	3,320.83	2,924.62	3,103.00	6,245.46		6,124.20 12,797.82
	5 Less:
	- Finance costs	18.38	18.50	1.07	36.88	1.35	3.05
	- other un-allocable expenses	2,529.28	2,108.87	2,065.35	4,638.16	4,086.77	8,807.93
	6 Un-allocable income	382.46	300.36	232.21	682.82	418.96	876.55
	7 Total prof"rt before tax	1,155.63	1,097.61	1,268.79	2,253.24	2,455.04	4,863.39

			fin Million
8 Segment assets	Asat
[Trade receivables (net)]	(Audited)	Sept. 30, 2019 Sept. 30, 2018 Math 31, 2019(Audited)	(Au <ited)< th=""></ited)<>
- Technology Services	4,270.88	3,426.75	3,547.07
-Alliance	554.44	1,100.09	1,021.77
-Accelerite (Products)	224.42	251.24	354.17
Total allocable segment assets	5,049.74	4,778.08	4,923.01
Unallocable assets	23,084.07	24,019.19	23,632.98
Total assets		28,133.81 28,797.27 28,555.99

Note forsegmentwise information:

Operating segments are components of an enterprise for which discrete financial infonnation 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.

Segment wise capital employed

Segregation of assets (other than trade receivables), liabilities, depreciation and amortization and other non-cash expenses into various reportable segments have not been presented as the assets are used interchangeably between 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 indMdual segments and an ad-hoc allocation will not be meaningful.

Notes:

• 1 The audited condensed consolidated financial statements for the quarter ended September 30, 2019, have been taken on record by the Board of Directors at its meeting concluded on November 4, 2019 as recommended by the Audit Committee at its meeting held on November 3, 2019. The statutory auditors have expressed an unqualified audit opinion. The information presented above is extracted from the audited condensed consolidated financial statements.
• 2 The Board of Directors, in its meeting held in January 2019, approved the partial buyback by the Company of its fully paid-up equity shares having face value of, 10 each. The window for buying the shares opened on February 8, 2019 and the Company has purchased 3,575,000 equity shares between February 2019 and June 2019 and has extinguished these shares after following the due process. The Company has completed the Buyback on June 27, 2019 and the total number of equity shares outstanding as on June 30, 2019 post buyback stands at 76,425,000.The Company has completed the extinguishment of 549,887 equity shares on July 3, 2019, which were bought back before June 27, 2019; after following the due process.
• 3 Effective April 1, 2019, the Group adopted Ind AS 116 "Leases", applied to all applicable lease contracts existing on April 1, 2019 using the modified retrospective method and has taken the cumulative adjustment to retained earnings, on the date of initial application. Accordingly, comparatives for the period / year have not been retrospectively adjusted. On transition, the adoption of the new standard resulted in recognition of Right-of-Use assets (ROU) of, 722.51 million and a lease liability of, 888.90 million. The cumulative effect of applying the standard resulted in, 123.60 million being debited to retained earnings, net of taxes. The effect of this adoption is insignificant on the profit for the period and earnings per share.
• 4 As reported in the previous quarters, Persistent Systems Limited ("the Parent Company") has deposits of, 430.00 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. The Group has not accrued any interest on these deposits since April 1, 2018. In view of the uncertainty prevailing with respect to recovery of outstanding balances from Il.&FS Group, Management of the Parent Company has provided an additional amount of , 150.00 million during half year ended September 30,2019, thereby taking the total provision to, 332.50 million for impainnent in value of deposits as of September 30, 2019. The provision currently reflects the exposure that may arise given the uncertainty. With the resolution plan in progress, the Management of the Parent Company 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.
• 5 Aepona Holdings Limited, Ireland, the wholly owned subsidiary of Persistent Systems Inc., USA and step down subsidiary of the Company, dissolved w.e.f. October 24, 2019.
• 6 The Members of the Company approved the appointment of M/s. Walker Chandiok & Co LLP (Firm Registration No. 001076N/N500013) as Statutory Auditors of the Company to hold office from the conclusion of Extra Ordinary General Meeting held on September 4, 2019 up to the conclusion of the 30th Annual General Meeting of the Company to be held in the calendar year 2020 i.e. on or before September 30, 2020.
• 7 The Members at the 29th Annual General Meeting of the Company held on July 24, 2019, had approved payment of Final Dividend of, 3.00 per Equity share of, 10 each for FY 2018-19. Accordingly,, 277.27 Million were paid towards the above DMdend and Dividend Disbibution Tax during August 2019.

Particulars		Consolidated cash Flow Statement For The Half Year Ended Septemebr 30, 2019	For the haf year ended	, in MillionFor the year ended
		Sept. 30, 2019(Audted)	Sept. 30, 2018(Audted)	March 31, 2019(Aud!Ed)
Cash flow from operating activities
Profit before tax		2,253.24	2,455.04	4,863.39
Adjustments for:Interest inoome		(279.52)	(132.58)	(287.72)
Discount allowed		75.54	---	76.92
Finance oosts		36.88	1.35	3.05
Dividend income		(13.95)	(83.88)	(180.77)
Depreciation and amortization expense		811.07	799.39	1,572.51
Amortization of lease premiumUnrealised exchange loss/ (gain) (net)		0.29(12.80)	0.29(47.84)	0.58
Change in foreign currency translation reserve		99.34	75.86	106.52(86.85)
Exchange loss/ (gain) on derivative contracts		(61.47)	128.96	20.51
Exchange (gain)/ loss on translation of foreign		(8.37)	11.99	71.36
currency cash and cash equivalents
Donations in kind		---	---	1.40
Bad debts		---	70.28	71.18
Provision for doubtful receivables (net)/ (provision written back)Employee stock compensation expenses		29.7393.36	(26.34)---	(4.89)---
Provision for doubtful deposits and advances		150.00	---	182.50
Provision for diminution in value of investments		---	---	13.98
Remeasurements of the defined benefit liabilities/ asset (before tax effects)		(49.10)	(38.20)	(70.36)
Excess provision in respect of earlier years written (back)		(4.60)	(20.07)	(33.89)
(Gain)/ loss on fair valuation of assets designated at FVTPL		20.47	115.69	68.92
(Profit)/ loss on sale of investments (net)		(144.17)	(213.57)	(366.09)
(Profit)/ loss on sale of Property, Plant and Equipment (net)		(0.50)	(1.51)	(4.02)
Operating profit before working capltal changes		2,995.44	3,094.86	6,018.23
Movements in working capital :(Increase)/ Decrease in non-<:urrent and current loans		(5.14)	(2.57)	(5.55)
(Increase)/ Decrease in other non current assets		(338.58)	(14.17)	(1.68)
(Increase)/ Decrease in other current financial assets		(413.07)	(557.23)	(135.26)
(Increase)/ Decrease in other current assets		(356.30)	(410.10)	175.62
(Increase)/ Decrease in trade receivables		(142.59)	67.16	(322.95)
Increase/ (Decrease) in trade payables, current liabilities and non current liabilities		(362.79)	351.24	(180.13)
Increase/ (Decrease) in provisions		(516.49)	(65.30)	179.91
Operating profit aftl!r working capital changes		860.48	2,463.89	5,728.19
Direct taxes paid (net of refunds)		(661.49)	(790.38)	(1,405.07)
Net cash generated from operating activitiesCash flows from investing activities	(A)	198.99	1,673.51	4,323.12
Payment towards capital expenditure (including intangible assets)		(429.11)	(186.16)	(379.06)
Proceeds from sale of Property, Plant and Equipment		9.79	1.94	5.04
Acquisition of step-down subsidiary including cash and cash equivalents of		(435.48)	(148.15)	(148.15)
, 37.35 million (Previous period / year, 0.35 million)
Purchase of bonds		(171.48)	(529.89)	(1,175.31)
Proceeds from sale/ maturity of bonds		330.38	---	199.43
Purchase of non-current investmentsProceeds from sale of non-current investments		---25.22	(144.96)---	(144.96)---
Investments in mutual funds		(7,780.50)	(11,581.81)	(22,418.13)
Proceeds from sale / maturity of mutual funds		10,212.14	10,369.76	25,010.64
Investments in bank deposits having original maturity over three months		(1,707.95)	(1,650.12)	(8,094.22)
Maturity of bank deposits having original maturity over three months		715.00	2,112.51	4,044.26
Investments in deposits with financial institutions		---	(300.00)	(300.00)
Maturity of deposits with financial institutions		250.00	150.35	650.35
Non current loans placed		---	(14.12)	(16.96)
Interest receivedDividends received		326.0813.95	173.2383.88	327.33180.77
Net cash generated from / (used in) investing activities	(B)	1,358.04	(1,663.54)	(2,258.97)
Cash flows from financing activities
(Repayment of) long term borrowings		(3.21)	(3.22)	(4.58)
Shares bought back		(1,677.01)	---	(571.41)
Specific project related grant received		3.00	4.50	---
Interest paid		(37.04)	(2.12)	(3.66)
Dividends paidTax on dividend paid		(229.28)(47.99)	(241.41)(20.18)	(881.41)(137.41)
Net cash used In flnandng activities		(C) (1,991.53)	(262.43)	(1,598.47)
				fm M1ll1on
			For the haf year ended	For the year ended
Particulars
		Sept 30, 2019(Al.dtEd)	Sept. 30, 2018(Al.dtEd)	March 31, 2019(Aud!Ed)
		(434.50)	(252.46)
		1,739.45	1,345.13	465.681,345.13
Net increase/ (decrease) in cash and cash equivalents (A+ B + C)
cash and cash equivalents at the beginning of the period / year
cash and cash equivalents acquired on acquisition		37.35	---
Effect of exchange difference on translation of foreign		8.37	(11.99)
currency cash and cash equivalents
Cash and cash equivalents at the end of the period / yearComponents of cash and cash equivalents		1,350.67	1,080.68	---(71.36)1,739.45
cash on hand		0.28	0.25
Cheques on hand		---	5.33	0.22---
Balances with banks
On a.irrent accounts*		1,162.76	927.77
On saving accounts		0.60	20.20
On Exchange Earner's Foreign Currency acoounts		187.03	127.13
On deposit accounts with original maturity less than three months		---	---
On Escrow accounts**		---	---
Cash and cash equivalents		1,350.67	1,080.68
* Out of the cash and cash equivalents balance as at September 30, 2019, the Group can utilise , 5.14 Million (Corresponding				1,300.930.91114.91229.5492.941,739.45
period : , 2.98 Million/ Previous year: , 2.15 Million) only towards research and development activities specified in an agreement.
** The Parent Company concluded the buyback scheme with effect from June 27, 2019 and minimum balance maintained in Escrow
account was released on completion of statutory formalities.
		By order of Board of Directors of Persistent Systems Limited
Pune	Dr. Anand Deshpande			Kiran Umrootl <ar< td=""></ar<>

"For risks and uncertainties relating to forward-looking statements, please visit our website :- www.persistent.oomn