Persistent Systems Limited

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NSE & BSE / 2019-20 / 013

PERSISTENT

April 27, 2019

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

Ref: Symbol: PERSISTENT

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

Ref: Scrip Code: 533179

Dear Sir/ Madam,

Sub.: Financial Statements for the quarter and year ended March 31, 2019

We wish to inform you that the Board of Directors at its meeting held on April 26, 2019 and concluded on April 27, 2019, has approved the Financial Statements for the quarter and year ended March 31, 2019.

Accordingly, please find enclosed the following documents:

Audited Consolidated Financial Statements for the quarter and year ended March 31, 2019;
Audited Unconsolidated Financial Statements for the quarter and year ended March 31, 2019.

Please acknowledge the receipt.

Thanking you,

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Yours sincerely,

For Persistent Systems Limited

,f' ,

�[AmitAtre ] Campa y Secretary ICSI Membership Number: ACS 20507

Encl: As above

Persistent Systems Limited, Bhageerath, 402, Senapatl 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 ,c1N - L72300PN1990PLC056696 I Fax· +91 (20) 6703 0009 I e·mall • [email protected]·www.perslstent.com

Deloitte Haskins & Sells LLP

Chartered Accountants 706, 'B' Wing, 7["' ] Floor ICC Trade Tower Senapati Bapat Road Pune-411 016 Maharashtra, India

Tel: +91 20 6624 4600 Fax: +91 20 6624 4605

INDEPENDENT AUDITOR'S REPORT

TO THE BOARD OF DIRECTORS OF PERSISTENT SYSTEMS LIMITED

Report on the Audit of the Consolidated Interim Condensed Financial Statements

Opinion

We have audited the accompanying consolidated interim condensed financial statements ("the Consolidated Condensed Financial Statements") of Persistent Systems Limited ("the Parent") and its subsidiaries (the Parent and its subsidiaries together referred to as "the Group"), its associate, which comprise the Consolidated Condensed Balance Sheet as at 31 March 2019, the Consolidated Condensed Statement of Profit and Loss for the quarter and year ended on that date, the Consolidated Condensed Cash Flows Statement and the Consolidated Condensed Statement of Changes in Equity for the year ended on that date, and notes to the Consolidated Condensed Financial Statements, including a summary of significant accounting policies and other explanatory information.

In our opinion and to the best of our information and according to the explanations given to us, and based on the consideration of reports of the other auditors on separate condensed financial statements of the subsidiaries, associate referred to in the Other Matters paragraph below the aforesaid Consolidated Condensed Financial Statements give a true and fair view in conformity with the Indian Accounting Standard 34 ("Ind AS 34") prescribed under section 133 of the Companies Act, 2013 ("the Act") and other accounting principles generally accepted in India, of their consolidated state of affairs of the Parent as at 31 March 2019, of consolidated profit for the quarter and year ended on that date, its consolidated cash flows and consolidated changes in equity for the year ended on that date.

Basis for Opinion

We conducted our audit of the Consolidated Condensed Financial Statements in accordance with the Standards on Auditing (SAs) issued by the Institute of Chartered Accountants of India (ICAI). Our responsibilities under those Standards are further described in the Auditor's Responsibility for the Audit of the Consolidated Condensed Financial Statements section of our report. We are independent of the Group in accordance with the Code of Ethics issued by the ICAI together with the ethical requirements that are relevant to our audit of the consolidated financial statements under the provisions of the Act and the Rules made thereunder, and we have fulfilled our other responsibilities in accordance with these requirements and the Code of Ethics. We believe that the audit evidence obtained by us and the audit evidence obtained by the other auditors in terms of their reports referred to in the Other Matters paragraph below is sufficient and appropriate to provide a basis for our audit opinion on the Consolidated Condensed Financial Statements.

Regd. Office: lndiabulls Finance Centre, Tower 3, 27"' - 32"" Floor, Senapati Bapat Marg. Elphinstone Road (West), Mumbai - 400 013, Maharashtra, India. (LLP Identification No. AAB-8737)

Deloitte Haskins & Sells LLP

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

The Parent Company's Board of Directors is responsible for the preparation and presentation of these Consolidated Condensed Financial Statements that give a true and fair view of the consolidated financial position, consolidated financial performance, consolidated changes in equity and consolidated cash flows of the Group including its associate in accordance with the Ind AS 34 and other accounting principles generally accepted in India.

The respective Board of Directors of the companies included in the Group and of its associate are responsible for maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Group, its associate 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 the design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring accuracy and completeness of the accounting records, relevant to the preparation and presentation of the Consolidated Financial Statements that give a true and fair view and are free from material misstatement, whether due to fraud or error, which have been used for the purpose of preparation of the Consolidated Financial Statements by the Directors of the Parent Company, as aforesaid.

In preparing the Consolidated Condensed 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 of 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 management either intends to liquidate or cease operations, or has no realistic alternative but to do so.

The respective Board of Directors of the companies included in the Group and of its associate are responsible for overseeing the financial reporting process of the Group and of its associate.

Auditor's Responsibility for the Audit of the Consolidated Condensed Financial Statements

Our objectives are to obtain reasonable assurance about whether the Consolidated Condensed Financial Statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with SAs 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 Condensed Financial Statements.

As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional scepticism throughout the audit. We also:

Identify and assess the risks of material misstatement of the Consolidated Condensed 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.

Deloitte Haskins & Sells LLP

Obtain an understanding of internal financial 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 the effectiveness of the internal financial control of the Group, its associate.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
Conclude on the appropriateness of management's use of the going concern basis of accounting and, 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 auditor's report to the related disclosures in the Consolidated Condensed Financial Statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors' report. However, future events or 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 Consolidated Condensed Financial Statements, including the disclosures, and whether the Consolidated Condensed 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 or business activities within the Group and its associate to express an opinion on the Consolidated Condensed Financial Statements. We are responsible for the direction, supervision and performance of the audit of the financial statements of such entities included in the Consolidated Condensed Financial Statements of which we are the independent auditors. For the other entities included in the Consolidated Condensed Financial Statements, which have been audited by 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.

Materiality is the magnitude of misstatements in the Financial Statements that, individually or in aggregate, makes it probable that the economic decisions of a reasonably knowledgeable user of the Financial Statements may be influenced. We consider quantitative materiality and qualitative factors in (i) planning the scope of our audit work and in evaluating the results of our work; and (ii) to evaluate the effect of any identified misstatements in the Financial Statements.

We communicate with those charged with governance of the Parent and such other entities included in the Consolidated Condensed Financial Statements of which we are the independent auditors regarding, among other matters, the planned scope and timing of the audit and significant audit findings that we identify during our audit.

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.

Deloitte Haskins & Sells LLP

Other Matters

a) We did not audit the condensed financial statements of 16 (sixteen) subsidiaries whose condensed financial statements reflect total assets of Rs. 4,035.33 Million, net total assets of Rs. 1,373.28 Million as at 31 March 2019, total revenues of Rs. 1,129.92 Million and Rs. 5,185.66 Million respectively for the quarter and year ended on that date and net cash flows amounting to Rs. (203.07) Million for the year ended, as considered in the Consolidated Condensed Financial Statements whose financial statements have not been audited by us. These condensed financial statements have been audited by other auditors whose reports have been furnished to us by the Management and our opinion on the Consolidated Condensed 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.
b) The Consolidated Condensed Financial Statements include the Group's share of net profit/loss of Rs. Nil for the quarter and year ended 31 March 2019, as considered in the Consolidated Condensed Financial Statements, in respect of 1 (one) associate, whose condensed financial statements have not been audited by us. This condensed financial statements are unaudited and have been furnished to us by the Management and our opinion on the Consolidated Condensed Financial Statements, in so far as it relates to the amounts and disclosures included in respect of this associate is based solely on such unaudited condensed financial statements. In our opinion and according to the information and explanations given to us by the Management, this condensed financial statements are not material to the Group.

Our opinion on the Consolidated Condensed Financial Statements is not modified in respect of the above matters with respect to our reliance on the work done and the reports of the other auditors and the condensed financial statements certified by the Management.

For DELOITTE HASKINS & SELLS LLP Chartered Accountants (Firm's Registration No. 117366W/W-100018)

Place: Pune Date: 27 April 2019

Partner (Memb r ip No. 038019)

Persistent Systems Limited CONDENSED CONSOLIDATED BALANCE SHEET AS AT MARCH 31, 2019

	Not<s	As at Mar<11 31, 2019	A$ at Marchn,2018
		ln, M!Hlon	Inf MIiiion
ASSETS
Non..urnt assets
Prnpcrty, Pfont and Equipment	''	2,331.24	2,581.30
Capital work·in,p,ogrnss		12.10	7.71
Goodwll OU,er !ntang<bte assets	,.2''	81.24 1,595.41	76.61 2,463.54
!ntangible assets undo, development		303.54	44.72
Financial as,e1s		4,323.53	5,173.88
. lnves1mento		4.345.71	2,881.04
• loans		164.00	142.73
·Olher non.cmrnnt Ftna,.cal assets		349.29	37.43
Deferred tax assets (not)	'"	405.05	642.01
Ot1er non,crent assols	"	68.31 9,655.89 -----c""�--	91.57 8,968.66
Current assets
Financal assets
. Investments . Trade receivables (ne1) · Cash and cash equivalents · Other bank balances • Loans • Otier crrent financial assets	" " " " " "	3,295.53 4,923.01 1,739.45 4,984.39 7.87 2,377.00	5,9!6.31 4,847.40 1,343.72 1,070.25 6.63 2,756.25
Current tax assets(not) Other current assets	"	165.06 1,387.79 16,900.10 ----."- --	233.50 1,563.41 17,739.47
TOTAL		28 555.99	26 708.13
EQUITY ANO LIABILITIES
EQUITY
Equity sha,n capital		791.19	800.00
OUrn, equity		22,655.61	20,471.99
		23,446.80	21,271.99
LIABILITIES
Non· current llablliUes
Financial liabilmcs
· Bonownos	"	11.97	16.55
Provisions Deferred lax liabHilios(net)	20"	252.80	159.75 270.41
		264.77	446.71
Current liabilities
Flnancal liabili1ios
. Trade payables !(dues of micro and small en1erprs-s: f 15.63 million{Previous year	"	1,517.07	1,673.08
f 3.03 mill1on))
. Othe, !inancal liallilities OUw, curront liallililios	""	441.93 1,124.27	396.JJ 1,201.02
Provisions	2'	1,686.35	1,599.49
Current tax liabilities (net)		74.80	119.51
		4,844.42	4,989.0
TOTAL		28,555.99	26,708.13

Summary of significant accounting polrcies Tho accompanying notes are an integral pail of the condenoed consolidated fo1ancial s!atcments As per ou, rnpoit of even da!e

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For Doloitto H3Sklns & Sells LLP
JCAI firm rogistra!ion no. 117366WIW·100018
Chartorod Accountants
Plae<: P"ne
Date : [Ap] ril 27, 2019
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For and on behalf of the Board of Diracto"' of
Persistent S [y] stoms Limited
Dr. Anand Dosh [p ]
Chairman and
Managin [g ] Direcior
o:;;;,:•••"·�;;;
Executive Dirncto, and
Chief Financial Office,
Place: Pune
Date : April 27, 2019
Company Secrdary
: . . . �
3 ""l"" ..
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Page 1 of 40

Persistent Systems Limited CONDENSED CONSOLIDATED STATEMENT OF PROFIT AND LOSS FOR THE QUARTER AND YEAR ENDED MARCH 31, 2019

For thequarer ended March 31, 2019 Inf MIUlon 8.318.54 283.96 March 31, 2018 Inf MIilion 7,525.46 320.87	For theyear March 31, 2019 Inf MHllon 33,659.41 876.55	ended March 31, 2018 Inf Mllllon 30,337.03 1,191.01
8,602.50 4,859.47 862.83 1.03 376.80 1,389.23 7,489.36 1,113.14 298.75 12.52 \42.8) 268.41 844.73 12.19 12.19 7,846.33 4,484.65 86.68 0.32 420.89 1,090.30 6,862.84 983.49 274.74 (25.29) (.02) 246.43 737.06 38.63 38.63	34,535.96 19,249.53 3,490.45 3.05 1,572.51 5,357.03	31,528.04 18,316.46 3,180.63 0.79 1,584.87 4,152.68
	29,672.57 4,863.39 1,343.20 88.81 j85.41) 1,346.60 3,616.79 (47.15) j47.15!	27,235.43 4,292.61 1,203.99 (71.19) j1.07) 1,061.73 3,230.88

		106.88
		106.88
115.57 {58.42) {60.11) 9.65	168.43 113.82	(191.81) 77.70
57.15 69.34 36.54 75.17	282.25	{114.11! (7.23!
	235.10

914.07 10.59 10.59 812.23 9.21 9.21	3 751.89 43.99 43.99	3 223.65 40.39 40.39

The accom[p] anying notes are an inte[g] ral[p] art of the condensed consofidated financial statements As per our report of even date

For Deloitte Haskins & Sells LLP ICAI Finn re[g] istration no. 117366WIW-100018 Chartered Accountants

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Pia Pune Da : A[p] ril 27, 2019

For and on behalf of the Board of Directors of Persistent Systems Limited

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Or. Anand Deshpande Chairman and Mana[g] in[g ] Director Ji/0"+" Sunll Sa[p] re p) Executive Director and Com[p] an[y ] Secretary Chief Financial Officer Place: Pune Date A[p] ril 27. 2019

Page 2 of 40

Persistent Systems Limited CONSOLIDATED CASH FLOW STATEMENT FOR YEAR ENDED MARCH 31, 2019

		Forthe	yearended
		March 31, 2019	March 31, 2018
		Int Million	Int Million
Cash flow from operating activities
Profit before tax		4,863.39	4,292.61
Adjuslmen1s for:
Interest incom		(287.72)	(161.54)
Discount allowd		76.92	11.78
Finance costs		3.05	0.79
Dividend income		{180.77)	(171.25)
Depreciation and amrtization expense		1.572.51	1,584.87
Amrtization of lease premium		0.58	0.58
Unrealised exchange loss/ (gain) (net)		10.54	(123.74)
Change in foreign currency translation reserve		(00.85)	(28.46)
Exchange loss/ {gain) on derivative conlracts		20.51	76.73
Exchange (gain)/ loss on translation of foreign		71.36	{100.66)
currency cash and cash equivalents
Donations in kind		1.40	0.16
Bad debts		71.18	183.97
Provision for doubtful receivables (ne1)		(4.89)	{151.38)
Employee s1ock compensation expenses			3.80
Provision fr doubtful deposits and advances		182.50
Provision for diminulion in value of inves1men!s		13.98	26.96
Remeasurements of the defned benefit liabilities I {asset) {before tax effects)		(70.36)	148.47
Excess provision in respect of eartior years written {bac) I off		(33.89)	(18.19)
Advances wrillen back			(23.76)
(Gain)/ loss on fair valuation of assets designated as at FVTPL		68.92	18.92
{Profi1)1 loss Ol1 sale of investments (net)		{366.09)	(166.84)
{Profit) I loss on sale of fixed asse1s (net)		(4.02)	(2.40)
Operating profit before wordng capital changes		6,018.25	5,381.42
Movements In working capital :
(Inc rease)/ Decrease in non-current and current loans		{5.55)	(1.31)
(Increase) I Decrease in other non current assets		{1.68)	(3.42)
(Increase) I Decrease in other current financial asse1s		(135.26)	72.03
{Increase) I Decrease in o1her current assets		175.62	(696.30)
{Increase} I Decrease in trade receivables		{322.95)	145.39
Increase/ {Decrease) in trade payables and current !1abilrlies		(180.13)	305.93
Increase/ {Decrease) in provisions		179.91	222.03
Operating profit afer working capital ,hanges		5,728.21	5,425.77
Direct taxes paid (net of refunds)		(1,405.07}	(1,213.84)
Net cash generated from operating activities	(A)	4,323.14	4,211.93
Cash flows from Investing activities
Payment towards capital expenditure {including intangible assets}		(379.06)	(654.5)
Proceeds from sale of fixed assets		5,04	3.12
Acquisition of step-dOW subsidiary net of cash of W.35 million		(148. 17)	(408.35)
(Previous year, 169.22 million)
Purchase of bonds		(1.175.31)	(595.43)
Proceeds from safe/ maturity of bonds		199.43
Purchase of non,currenl investments		(144.96)
!nvestmen1s in mutual funds		(22,418.13)	(15,502.22)
Proceeds from sate I maturity of mutual funds		25,010.64	14.290.26
!nveslr ts in bank deposi1s having original maturity over three months Maturity of bank depsits having original maturity over three mnths		(8,094.22) 4,044.26	(326.06) 42.26
Investmnts in deposit wth financial institutions Maturty of deposit wth financial institutions		(300.00) 650.35	(595.35)
Inter corporate deposi1s refunded			0.18
Non current loans p!aced		(16.9)
!nlerest received		327.33	101.00
Dividends received		180.77	171.25
Not cash generated from I (used in) investing activities	(B)	(2,258.99)	{3,473.90)
Cash flows frm financing activities (Repayment of) long term borro"1ngs		(4.58)	(4.56)
Shares bought back		(571.41)
Inte rest paid		(3.66)	(1.54)
Dividends paid		(879.14)	(799.79)
Tax on d1v1dend paid		{137.41)	(150.23)
Net ,ash generated from I (used in) financing activities	(C)	(1,596.20)	(956.14)

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Page 3 of 40

Persistent Systems L1m1ted

Persistent Systems L1m1ted
CONSOLIDATED CASH FLOW STATEMENT FOR VEAR ENDED MARCH 31 2019 Net increase/ {decrease) in cash and cash equivalents {A + B + C) Cash and cash equivalents at the beginning of the year Effect of exchange difference on translation of foreign currency cash and cash equiva!enls Cash and cash equivalents at the end of the year Components of cash and cash equivalents Cash on hand (Refer note 14) Balancs with banks On curren! accoun1s # (Refer note 14) On saving accunts (Refer note 14) On Excange Earers Foreign Curency accun1s (Refer note 14) On deposit accounts with original maturity less than three monlhs (Refer note 14) On Escow accounts .. (Refer note 14) On unpaid dividend accounts• {Refer note 15) Cash and cash equivalents	For the year ended For the year ended March 31, 2019 March 31, 2018 In, Million In, Million 467.95 (218.11) 1.345.13 1.462.58 (71.36) 100.66
	1,741.72 1,345,13 0.22 0.23 1.300.93 1,1%.91 0.91 0.75 114.91 145.83 229.54 92.94 2.27 1.41
	1,741.72 1,345.13

# Oul of the cash and cash equivalent balance as at Marcil 31, 2019, the Group can utilise, 2.15 million only towards research and development activities specified in the loan/ grant agreement. There were no such restrictions for uti!isation of the cash and cash equivalent balance as at March 31. 2018.

Tile Grot1p can u!ilize these balances only towards sett!emont of the respective unpaid dividend.
" The Group can u1ilize these balances only towards buy back of equity shares.

Summary of significant accounting policies - Refer note 4

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

As per our report of even dale

For Deloltte Haskins & Sells LLP ICAI Flrm registration no. 117366W/W-100018 Chartered Accountants

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for and on behalf of the Board of Directors of
Persistent Systems Limited
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R.
�,,,_,y-.J.,1>,-, Dr. Anand Deshpande .p�-->� Klran Umro tkar
Chairman and
Managing Director
Sunil Sapre 1tAtre
Executive Director and Company Secretary
Chief Financial Officer
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Place; Pune Date : April 27. 2019

Place: Pune Date : April 27, 2019

Page 4 of 40

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR YEAR ENDED MARCH 31, 2019 A. Share capital (Refer note 5)

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/Inf Million)
Balance as at April 1, 2018 Changes in equity share capital Balance as at March 31, 2019
during the year (refer note Sd)
800.00 (8.81) 791.19
(In f Million)
Balance as at April 1, 2017 Changes in equity share capital Balance as at March 31, 2018
during the year
800.00 - 800.00
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Page 5 of 40

Persistent Systems Limited

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR YEAR ENDED MARCH 31, 2019 B. Other equity

B. Other equity
	•In" Million:
Pariculars Securties General premium resere Balance as at Aprl 1, 2018 1,336.70 9,30.27 Net profit for theyear Other comprehensive income for the year Dividend Tax on dividend Transfer to general resere 1,260.03 Transfer 10 capital redempton reserve Transfer to Special Economic Zone re-investmnt resere Adjustments toards employees stock options 14.23 Addition on business combinaton (refer note 45) Utilised towards buy back of shares (refer note 5d) (52.60) Other chances durina the vear 114.58' Balance as at March 312019 774.10 10,565.95 Share options outstanding rsere 90.52 (14.23) 76.29 Reseres and su1tus Gain on Capital bargain redemption purchase resere 26.39 1. 8.81 0.25 26.07 52.71 8.81 Special Economic Zone re-investment resere 70.00 70.00 Retained earings 9,544.13 3.516.79 (47.15) (880.0) (137.41) (1,260.03) (8.81) (70.00) 10 657.52		Items of other com2rehensive income Exchange differences Efective porion of on translating the cash fow hedges financial statements of foreign operations 16.63 151.35 168.43 113.82 Total 20,471.99 3,516.79 235.10 (880.00) (137.41) 0.25 (562.60) 11.49
	5 76.29 52.71 8.81 70.00 10 657.52	185.06 265.17 22,655.61

										•In, MJIHonl
				Reseres and	SU!lul			tems of other com1rehensive Income
Parlcular	Securties premlum	Generl rsere	Share options outstanding resere	Gain on bargain purchase	Capital redemption rsere	Speclal Economic Zone r-Investment resere	Retained earings	Eective porion of cash flow hedges	Exchange diferences on translating the flnanclal statements of forign operations	Total
Balance as at Aprl 1, 2017 Net profit for the year Other comprehensive income for the year Dividend	1,336.70	7,837.40	187.12	24.25			8,525.07 3,230.88 10.88 (800.00)	208.44 (191.81)	73.65 77.70	18,192.63 3,230.88 (7.23) {800.00)
Tax on dividend							(150.23)			{150.23)
Transfer to general reserve		1,368.47					{1,368.47)
Employee stock cmpnsaton expenses Adjustments towards emloyees stoc options Other chanoes durino the vear Balance at March 31 2018	1 336.70	100.40 9,306.27	3.80 {100.40) 90.52	2.14 26.39			9544.13	16.63	151.35	3.80 2.14 20471.99

Summa of si niflcant accountin policies - Refer note <1

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

As per our report of even date

For Deloltte Haskins & Sells LLP ICA! Flrm registration no.117366W/W-100018 Chartered Accountants

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For and on behalf of the Board of Directors of
Persistent Systems Limited
v [�][""][�]
0,shpande
Chairmanand £2:: : · t
Managing Director
�'-=�
J;/ [,�,,][Y ]
Sunll Sapre �Amit Atre
Executive Director and Company Secrelary
Chief Financial Officer
Place: Pune
Date : April 27. 2019
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Page 6 of 40

Place: Pune Date : April 27, 2019

Persistent Systems Limited

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR YEAR ENDED MARCH 31, 2019

Nature and purpose of reserves

a) Securities premium reserve

Securities premium reserve is used to record the premium on issue of shares. The reserve is utilised in accordance with the provisions of 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 I expired on 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 1 OAA(1 )(ii) of the Income tax Act, 1961. The reserve should be utilised by the Group for acquiring new plant and machinery for the purpose of its business in terms of 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 such transaction occurs.

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.

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Page 7 of 40

Persistent Systems Limited

Notes forming part of condensed consolidated financial statements

1. Nature of operations

Persistent Systems Limited (tlie "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.

Akshat Corporation (d.b.a. RGen Solutions) based in USA, is a wholly owned subsidiary of Persistent Systems Inc. Akshat Corporation has been dissolved with effect from December 21, 2018. Persistent Systems Inc, its holding company, took over all the assets and liabilities of Akshat Corporation on the date of dissolution.

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

Aepona Group Limited, (an Ireland based wholly owned subsidiary of Aepona Holdings Limited) operates as the holding Company of Aepona Limited and Valista 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 "business logic") to the basic APls exposed to by connected devices, and to expose and monetize these APls.

Valista Limited (an Ireland 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. The company is under liquidation.

Persistent Systems Lanka (Private) Limited (Formerly known as Aepona Software (Private) Limited) (a Sri Lanka based wholly owned subsidiary of Valista 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.

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., is working on implementation of platforms and related IT services for the healthcare industry.

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Page 8 of40

Persistent Systems Limited

Notes forming part of condensed consolidated financial statements

2. Basis of preparation

The 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 seivices. 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.

Statement of compliance:

These financial statements have been prepared in accordance with Ind AS 34 Interim Financial Reporting as notified under the Companies (Indian Accounting Standards) Rules, 2015 read with Section 133 of the Companies Act, 2013.

3. Principles of consolidation

The consolidated financial statements of the Company and its subsidiaries ("the Group") for the quarter and year ended March 31, 2019 are prepared in accordance with generally accepted accounting principles applicable in India, and the Indian Accounting Standard 11 O (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 Company for its separate financial statements.

The Company consolidates entities which it owns or controls. The consolidated financial statements comprise the financial statements of the company, its subsidiaries as disclosed below. Control exists when the parent 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 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 '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 consolidated financial statements. The excess of the Company's portion of equity of the subsidiary over the cost of investment in the subsidiary is treated as gain on bargain purchase in the consolidated financial statements. Goodwill is tested for impainnent on a periodic basis and written off if found Impaired.

The consolidated financial statements are prepared using unifonn accounting policies for like transactions and other events in similar circumstances and necessary adjustments required for deviations, if any, are made in the consolidated financial statements. The consolidated financial statements are presented in the same manner as the Company's separate financial statements.

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

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Page 9 of 40

Persistent Systems Limited

Notes forming part of condensed consolidated financial statements

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

Name of the subsidiary Persistent Systems, Inc. Persistent Systems Pte Ltd. Persistent Systems France SAS Persistent Telecom Solutions Inc. Persistent Systems Malaysia Sdn.Bhd. Akshat Corporation (d.b.a. RGen Solutions) (Dissolved with efect from December 21, 2018)•	Ownership Percentage as at March 31, 2019 March 31, 2018--- 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% - 100%	Ownership Percentage as at March 31, 2019 March 31, 2018--- 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% - 100%	Ownership Percentage as at March 31, 2019 March 31, 2018--- 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% - 100%	Country of incorporation --- USA Singapore
			100% 100% 100% 100%	France
				USA Malaysia USA
Aepona Holdings Limited Aepona Group Limited Aepona Limited Valista Limited	100% 100% 100%		100% 100%	Ireland Ireland
			100%	UK Ireland
	100%		100%
Persistent Systems Lanka (Private) Limited	100%		100%	Sri Lanka
Persistent Systems Mexico, S.A. de c.v.	100%		100%	Mexico Israel Germany-- Switzerland
Persistent Systems Israel ltd. Persistent Systems Gennany GmbH PARX Wer AG	100% 100% 100%		100% - -· 100% 100%
PARX Consulting GmbH	100% 100%	100% -		Germany USA
Herald Technologies Inc**

Refer note 32.

** Refer note 35.

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Page 10 of40

Persistent Systems Limited

Notes forming part of condensed consolidated financial statements

4. Summary of significant accounting policies

(a) Use of estimates

The preparation of the condensed consolidated financial statements in conformity with Ind AS requires the management to make judgments, estimates and assumptions that affect the reported amounts of revenue, expenses, assets and liabilities and disclosure of contingent liabilities at the end of period / year. Although these estimates are based on the management's best knowledge of current events and actions, uncertainty about these assumptions and estimates could result in the outcomes requiring a material adjustment to the carrying amounts of assets or liabilities in future periods.

Critical accounting estimates

i. Revenue recognition

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 royalty 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. Property, plant and equipment

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 ls 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 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 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.

vii. Internally generated Intangible assets

During the period/year, the management continued to assess the recoverability of the Group's internally generated

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Page 11 of40

Persistent Systems Limited Notes forming part of condensed consolidated financial statements

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 the these intangible assets as recoverable.

(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 s�atement 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 impainnent 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

Business combinations are accounted for using the acquisition method under the provisions of Ind AS 103 - Business Combinations.

The cost of an acquisition is measured at the fair value of the assets acquired and liabilities incurred or assumed on the date of acquisition, which is the date on which control is transferred to the Group. The cost of acquisition also includes the fair value of contingent consideration, if any. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair value on the date of acquisition.

Transaction costs that the Group incurs in connection with a business combinations are expensed as incurred.

(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.

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Page 12of40

Persistent Systems Limited Notes forming part of condensed consolidated financial statements

(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	Assets Useful lives
Buildings Computers Computers - Servers and networks Ofice equipments Plant and equipment Plant and equipment (indmill)' Plant and equipment (Solar Energy System) Furniture and fixtures" Vehicles*	25 years 3 years 3 years 5 years 5 years 20 years 10 years 5 years 5 ears

*For these classes of assets, based on internal assessment and independent technical evaluation carried out by external valuers the management believes that the useful lives as given above best represent the period over which the management expects to use these assets. Hence the useful lives of these assets are different from the useful lives as prescribed under Part C of Schedule II of the Companies Act 2013.

Individual assets whose cost does not exceed f 5,000 are fully depreciated in the year of acquisition.

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 commencing from the day the asset is made available for use.

(g) Financial instruments

i) Financial assets

Initial recognition and measurement

Financial assets are initially measured at fair value. Transaction costs that are directly attributable to the acquisition of financial assets (other than financial assets at fair value through profit or loss) are added to the fair value of the financial assets on initial recognition. Transaction costs directly attributable to the acquisition of financial assets at fair value through profit or loss are recognised immediately in profit or loss.

Subsequent measurement

For the purpose of subsequent measurement, financial assets are classified as:

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 assets at amortized cost or as 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.

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Page 13 of40

Persistent Systems Limited

Notes forming part of condensed consolidated financial statements

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 reseive 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 foiward 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 profit or loss or when a hedged transaction is no longer expected to occur.

Derecognition

The Group derecognises a financial asset when the contractual rights to the cash flows from the asset expire, or when it transfers the financial asset and substantially au the risks and rewards of ownership of the asset to another party.

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.

ii) Financial liabilities

Initial recognition and measurement

Financial liabilities are initially measured at fair value. Transaction costs that are directly attributable to the issue of financial liabilities (other than financial liabilities at fair value through profit or loss) are deducted from the fair value of the financial liabilities on initial recognition. Transaction costs directly attributable to the issue of financial liabilities at fair value through profit or loss are recognised immediately in profit or loss.

Subsequent measurement

For the purpose of subsequent measurement, financial liabilities are classified as:

Financial liabilities at amortized cost

Financial liabilities such as loans and borrowings are subsequently measured at amortized cost using the effective interest rate method. The change in measurements are recognized as finance costs in the statement of profit and loss.

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 as 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. AU other changes in fair value of liabilities designated as FVTPL are recognized in the statement of profit and loss. The Group has not designated any financial liability as at FVTPL.

Derecognition

The Group derecognizes financial liabilities when the Group'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 recognized in profit or loss.

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Page 14 of 40

Persistent Systems Limited Notes forming part of condensed consolidated financial statements

(h) Impairment

i) Financial assets

The Group 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 Group expects to receive, discounted at the original effective interest rate.

For trade receivables, the Group recognizes impairment loss allowance based on lifetime ECL at each reporting date, right from its initial recognition. For other financial assets, the Group 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.

ii) 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 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 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.

(i) Borrowing costs

Borrowing cost includes interest, 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.

Amendment to Ind AS 23 Borrowing costs: The amendments clarify that if any specific borrowing remains outstanding after the related asset is ready for its intended use or sale, that borrowing becomes part of the funds that an entity borrows generally when calculating the capitalisation rate on general borrowings. The Group does not expect any impact related to this amendment.

U) Leases

Where the Group is a lessee

Leases, where the lessor effectively retains substantially all the risks and benefits of ownership of the leased item, are classified as operating leases.

Operating lease payments are recognized as an expense in the statement of profit and loss as per the terms of the lease agreements.

Ind AS 116 Leases: On March 30, 2019, Ministry of Corporate Affairs has notified Ind AS 116, Leases. Ind AS 116 will replace the existing leases Standard, Ind AS 17 Leases, and related Interpretations. The Standard sets out the principles for the recognition, measurement, presentation and disclosure of leases for both parties to a contract i.e., the lessee and the lessor. Ind AS 116 introduces a single lessee accounting model and requires a lessee to recognize assets and liabilities for all leases with a term of more than twelve months, unless the underlying asset is of low value. Currently, operating lease expenses are charged to the statement of Profit & Loss. The Standard also contains enhanced disclosure requirements for lessees. Ind AS 116 substantially carries forward the lessor accounting requirements in Ind AS 17.

The effective date for adoption of Ind AS 116 is annual periods beginning on or after April 1, 2019. The standard permits two possible methods of transition:

Full retrospective - Retrospectively to each prior period presented applying Ind AS 8 Accounting Policies, Changes in Accounting Estimates and Errors
Modified retrospective - Retrospectively, with the cumulative effect of initially applying the Standard recognized at the date of initial application.

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Page 15 of40

Persistent Systems Limited

Notes forming part of condensed consolidated financial statements

Under modified retrospective approach, the lessee records the lease liability as the present value of the remaining lease payments, discounted at the incremental borrowing rate and the right of use asset either as:

Its carrying amount as if the standard had been applied sinCe the commencement date, but discounted at lessee's incremental borrowing rate at the date of initial application or
An amount equal to the lease liability, adjusted by the amount of any prepaid or accrued lease payments related to that lease recognized under Ind AS 17 immediately before the date of initial application.

Certain practical expedients are available under both the methods.

On completion of evaluation of the effect of adoption of Ind AS 116, the Group is proposing to use the 'Modified Retrospective Approach' for transitioning to Ind AS 116, and take the cumulative adjustment to retained earnings, on the date of initial application (April 1, 2019). Accordingly, comparatives for the year ended March 31, 2019 will not be retrospectively adjusted. The Group has elected certain available practical expedients on transition.

The effect of adoption as on transition date would majorly result in an increase in Right of use asset approximately by f 611.38 million and an increase in lease liability approximately by� 764.46 million.

(k) Revenue recognition

Revenue is measured at the fair value of the consideration received or receivable taking into account the amount of any trade discounts and volume rebates allowed by the Group. Revenue is recognized to the extent it is probable that the economic benefits will flow to the Group and the revenue can be reliably measured. The following specific recognition criteria must also be met before revenue is recognized:

(i) Income from sale of software services and products

Effective April 1, 2018, the Group adopted Ind AS 115 "Revenue from Contracts with Customers" using the cumulative catch-up transition method, applied to contracts that were not completed as of April 1, 2018. In accordance with the cumulative catch-up transition method, the previous period's/ year's amounts have not been retrospectively adjusted. The following is a summary of new and/or revised significant accounting policies related to revenue recognition. The effect on adoption of Ind AS 115 was insignificant.

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

Revenue is recognized upon transfer of control of promised products or services to customers in an amount that reflects the consideration expected to receive in exchange for those products or services.

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 col!ectabiHty, 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.

The Group has applied the principles under Ind AS 115 to account for revenues from these performance obligations.

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 royalty is recognized in accordance with the terms of the relevant agreements.

The Group accounts for volume discounts and pricing incentives to customers as a reduction of revenue based on the proportionate allocation of the discounts amount to each of the underlying performance obligation that corresponds to the progress by the customer towards earning the discount. Also, when the level of discount varies with increases in levels of revenue transactions, the Group recognizes the liability based on its estimate of the customer's future purchases. If it is probable that the criteria for the discount will not be met, or if the amount thereof cannot be estimated reliably, then discount is not recognized until the payment is probable and the amount can be estimated reliably. The Group recognizes changes in the estimated amount of obligations for discounts in the period in Which the change occurs.

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.

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Page 16 of 40

Persistent Systems Limited Notes forming part of condensed consolidated financial statements

The Group collects Goods and Service Tax, value added taxes (VAT) on behalf of the government and, therefore, these are not economic benefits flowing to the Group. 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. Interest income is included under the head 'Other income' in the statement of profit and loss.

(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.

(I) 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 wm 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 reported 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 I 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.

(n) Retirement and other employee benefits

(i) Provident fund

Provident fund is a defined contribution plan covering eligible employees. The Group 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 Group has no obligation, other than the contribution payable to the provident fund.

(ii) Gratuity

Gratuity is a defined benefit obligation plan operated by the Group for its employees covered under Group 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 statemenLoJ .erofit and loss, except for the �L.t;T • ,(',. '.Y • Page 17 of 40 /,····-•• \ � \<\ /<. . . :·/ . ' !'·)

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Persistent Systems Limited

Notes forming part of condensed consolidated financial statements

remeasurements, comprising of actuarial gains and losses which are recognized in full in the statement of other comprehensive income in the reporting period ln 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

Accumulated leave, which is expected to be utilized within the next twelve months, is treated as short-term employee benefit. The Group measures the expected cost of such absences as the additional amount that it expects to pay as a result of the unused entitlement that has accumulated at the reporting date.

The Group treats accumulated leave expected to be carried foiward beyond twelve months, as long-term employee benefit for measurement purposes. Such long-term compensated absences are provided for based on the 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. Expense on non-accumulating compensated absences is recognized in the period in which the absences occur.

The Group presents the entire leave encashment liability as a current liability in the balance sheet. since it does not have an unconditional right to defer its settlement for twelve months after the reporting date.

{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.

The amendments require an entity:

to use updated assumptions to determine current service cost and net interest for the remainder of the period after a plan amendment, curtailment or settlement; and

to recognise in profit or loss as part of past service cost, or a gain or loss on settlement, any reduction in a surplus, even if that surplus was not previously recognised because of the impact of the asset ceiling.

Effective date for application of this amendment is annual period beginning on or after April 1, 2019. The Group does not expect any impact on account of this amendment.

(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 foiward 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 Group's gr.oss total income is subject

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Page 18 of 40

Persistent Systems Limited Notes forming part of condensed consolidated financial statements

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.

Ind AS 12 Appendix C, Uncertainty over Income Tax Treatments: On March 30, 2019, Ministry of Corporate Affairs has notified Ind AS 12 Appendix C, Uncertainty over Income Tax Treatments which is to be applied while performing the determination of taxable profit (or loss), tax bases, unused tax losses, unused tax credits and tax rates, when there is uncertainty over income tax treatments under Ind AS 12. According to the appendix, companies need to determine the probability of the relevant tax authority accepting each tax treatment, or group of tax treatments, that the companies have used or plan to use in their income tax filing which has to be considered to compute the most likely amount or the expected value of the tax treatment when determining taxable profit (tax loss), tax bases, unused tax losses, unused tax credits and tax rates.

ii) Retrospectively with cumulative effect of initially applying Appendix C recognized by adjusting equity on initial application, without adjusting comparatives.

The effective date for adoption of Ind AS 12 Appendix C is annual periods beginning on or after April 1, 2019. The Group will adopt the standard on April 1, 2019 and has decided to adjust the cumulative effect in equity on the date of initial application i.e. April 1, 2019 without adjusting comparatives.

The effect on adoption of Ind AS 12 Appendix C would be insignificant in the consolidated financial statements.

The amendment clarifies that an entity shall recognise the income tax consequences of dividends in profit or loss, other comprehensive income or equity according to where the entity originally recognised those past transactions or events.

Effective date for application of this amendment is annual period beginning on or after April 1, 2019. The Group is currently evaluating the effect of this amendment on the standalone financial statements.

(p) Segment reporting

(i) Identification of segment

The Group's operations predominantly relate to providing software products, services and technology innovation covering fun life cycle of product to its customers.

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 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.

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19 of 40

Persistent Systems Limited

Notes forming part of condensed consolidated financial statements

(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 as these items are used interchangeably between 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 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 I 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. Further, the weighted average number of equity shares used in computing the basic earnings per share is reduced by the shares held by PSPL ESOP Management Trust at the balance sheet date, which were obtained by subscription to the shares from finance provided by the Group.

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 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 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 nonwoccurrence 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 tenn deposits with an original maturity period of three months or less.

(u) Employee stock compensation expenses

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

In accordance with Ind AS 102 - UShare 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.

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Page 20 of 40

Persistent Systems Limited

Notes forming part of condensed consolidated financial statements

The expense or credit recognized in the statement of profit and loss for a period I year represents the movement in cumulative expense recognized as at the beginning and end of that period I year and is recognized in employee benefits expense. ln 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 tenns 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.

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Page 21 of 40

Persistent Systems Limited

Notes forming part of condensed consolidated financial statements

5. Share capital

hare capital
	As at March 31, 2019 Inf Million As at March 31, 2018 In, Million
Authorized shares (No. in million) 200 (Previous period /Previous year: 200) equity shares off 10 each Issued, subscribed and fully paid-up shares (No. in million) 79.12 (Previous period /Previous year: 80) equity shares off 10 each Issued, subscribed and fully paid-up share capital	2,000.00 2,000.00
	2,000.00 791.19 791.19 2 000.00 800.00 800.00
		791.19 800.00

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		As at
	March	31, 2019	March31,2018
	No. of	Amount	No. of	Amount
	shares		shares
Number of shares at the beginning of the	80.00	800.00	80.00	800.00
period/ year
Less: Sharesboughtback	0.88	8.81
Number of shares at the .end of the period/	79.12	791.19	80.00	800.00
ear

b} Terms I 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 declared an interim dividend of� 8 per share on the face value of� 10 each for the Financial Year 2018-19.

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.

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	For the period of five
		years ended	years ended
		March 31, 2019	March 31, 2018
		No in Million	No in Million
Equity	shares allotted on March 12, 2015 as fully paid	40.00	40.00
bonus	shares by capitalization of securities premium �
400.00	million

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Equity shares bought back 0.88

Page 22 of 40

Persistent Systems Limited

Notes forming part of condensed consolidated financial statements

d) Buyback of Equity Shares of the Parent Company:

The Board of Directors of Persistent Systems Limited ("the Parent Company"), at its meeting in January 2019, approved the buyback of the Parent Company's fully paid-up equity shares of the face value off 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 f 2,250 million ("Maximum Buyback Size"), and at a price not exceeding f 750 per Equity Share ("Maximum Buyback Price").

The indicative maximum number of Equity Shares bought back at the above maximum price would be 3,000,000. If the Equity Shares are bought back at a price below the Maximum Buyback Price of, 750, the actual number of equity shares bought back could exceed the above indicative Maximum Buyback quantity but will always be subject to the Maximum Buyback Size.

The Buyback shall be from the open market purchases through the stock exchanges, by the order matching mechanism except 'all or none' order matching system, as provided under the Buyback Regulations.

The Parent Company will fund the buyback from its securities premium account, free reserves and/or such other source as may be permitted.

The buyback of equity shares through the stock exchanges commenced on February 8, 2019 and is expected to be completed by August 7, 2019 or reaching the Maximum Buyback Size, whichever is earlier.

During the period from February 8, 2019 to March 31, 2019, 881,098 equity shares were purchased from the stock exchanges as follows: (a) 368,851 Equity Shares which have been purchased and extinguished as of March 31, 2019; (b) 447,981 Equity hares which have been purchased but not extinguished as of March 31, 2019; and (c) 64,266 shares which have been purchased but have not been settled and therefore not extinguished as of March 31, 2019. The Parent Company has completed the extinguishment of remaining Equity Shares of 512,247 on April 9, 2019.

Consequently, the paid-up capital of the Group has been reduced from f 800.00 million to i 791.19 million comprising of 79,118,902 Equity Shares off 10 each.

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

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Name of the shareholder As at As at
March 31, 2019 March 31, 2018
No. in % No. in %
Million Holding million Holding
Or. Anand Deshpande jointly with 22.95 29.01 22.93 28.66
Mrs. Sonali Anand Deshpande
----- End of picture text -----*

*** 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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Page 23 of 40

Persistent Systems Limited

Notes fonning part of condensed consolidated financial statements

6.1 Property, Plant and Equipment

6.1 Proper, Pant and Equipment
			Int Million Vehicles Total 4.73 7,323.90 4.66 219.36 0.11 0.95 170.33 17.15
Gross block (At cost) AsatApril1,2018 Additons Additons through business combination (refr note 45) Disposals Effect of foreign currency translation from functional currency to reporting curency A at March 31, 2019 Depreciaton and impainent As at April 1, 2018 Charge for the period Additions through business combination (refer note 45) Disposals Effect of foreign curency translation from functional curency to reporting currency As at March 31, 2019 Net block As at Marh 31, 2019 As at Marh 31, 2018	Land • Freehold 221.03 (0.56)	Buildings* Computers Office Plant and Leasehold Furiture and equipment Eguipment improvement fxtures 2,450.18 2,392.46 86.63 1,408.62 94.84 665.41 O.o7 179.46 3.75 22.56 8.86 0.08 0.03 D.D4 143.23 2.70 22.82 0.59 (2.49) 12.82 1.95 (0.12) (0.61) 6.16
	220.47 220.47 221.03	2,447.72 2,441.59 89.63 1,408.24 94.23 679.87 885.26 2.078.80 62.14 1,097.81 69.78 544.39 98.95 214.59 9-59 92.06 7.66 50.78 0.02 0.01 0.03 142.52 2.40 22.82 0.59 (0.77) 9.47 0.80 {0.12) (0.86) 2.72 983.41 2,160.36 70.13 1,166.93 76.58 597.31 1,464.31 281.23 19.50 241.31 17.65 82.56 1,564.92 313.66 24.49 310.81 25.06 121.02	8.4 7,390.19 4.42 4,742.60 0.76 474.39 0.03 0.95 169.31 11.24 4.23 5,058.95 4.21 2,331.24 0.31 2,581.30

• Note: Building includes those cnstructed on leasehold land:

a) Gross block as on March 31, 2019 i 1,454.06 million (Previous year�1.454.10 million)

b) Depreciation charge for the year� 58.95 minion (Previous year� 58.45 million)

c) Accumulated depreciation as on March 31, 2019 � 439.96 minion (Previous year� 381.05 million)

d) Net book value as on Marcil 31. 2019 � 1,014.10 million (Previous year it 1,073.05 million)

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Page 24 of 40

Persistent Systems Limited

Notes forming part of condensed consolidated financial statements

6.1 Property, Plant and Equipment

6.1 Proper, Plant and Equipment
									{Int Million)
	Land· Freehold	Buildings	Computers	Ofice equipments	Plant and Equipment	Leasehold improvements	Furniture and fixures	Vehicles	Total
Gross block (At cost)
As at April 1, 2017	219.02	2.420.77	2,233.17	76.43	1,373.11	86.38	622.64	4.73	7,036.25
Additions		20.40	189.10	9.97	57.89	1.73	26.66		305.75
Additions through business cmbination			16.83	1.01	3.15		�3.20		34.19
Disposals			90.67	1.05	27.00		0.58		119.30
Effect of foreign currency translation from functional	2.01	9.01	44.03	0.27	1.47	6.73	3.49		67.01
currency to reporing currency
As at March 31, 2018	221.03	2,450.18	2,392.46	86.63	1,408.62	94.84	665.41	4.73	7,323.90
Depreciation and impairment
As at April 1, 2017		784.92	1,863.38	52.41	1,026.57	55.86	480.54	4.21	4,267.89
Charge for the year		98.12	254.08	10.09	94.63	7.85	55.95	0.21	520.93
Additions through business combination			9.95	0.44	2.28		5.94		18.61
Disposals			90.41	0.94	26.64		0.59		118.58
Efect of foreign currency translation from functional currency to reporing currency As at March 31, 2018		2.22 885.26	41.80 2,078.80	0.14 62.14	0.97 1,097.81	6.07 69.78	2.55 54.39	4.42	53.75 4,742.60
Net block
As at March 31, 2018	221.03	1,564.92	313.66	24.49	310.81	25.06	121.02	0.31	2,581.30

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Page 25 of 40

Persistent S stems Limited

Notes forming part of condensed consolidated financial statements

6.2. Goodwlll

Cost Balance at beginning year Additional amounts recognised from business combinations occurring duri11g the year Effect of foreign currency exchange differences Balance at end of year 6,3, Other Intangible assets Gross block AsatAprill,2016 Additions Effect of foreign currency translation from functional curency to reporing currency As at March 31, 2019 Amortlzatlon and Impairmnt As at April 1, 2018 Charge for the period Efect of foreign currency translation from functional currency to reporting currency As at March 31, 2019 Net block As at March 31, 2019 As at March 31, 2018 Gross block As at April 1, 2017 Addrtions Additions through business combi1ialion Effect of foreign currency translation from functional currency to reporting currency As at March 31, 2018 Amorization and Impairmnt AsatApril1,2017 Charge for the year Effect of foreign currency translation from functional curency to reporting currency As at March 31, 2018 Net block As at March 31, 2018 As at March 31, 2017	Software 2,422.24 52.38 100.96 2,575.58 2,076.02 319.05 84.45 2,479.62 96.06 346.22 Software 2,385.43 20.11 16.70 2,422.24 1,724.63 334.64 16.75 2 076.02 346.22 660.80 tnf MIHfon As at As at March 31, 2019 March 31, 2018 In,MU/ion In, MUUon 76.61 76.23 0.77 4.63 (0.39) 81.24 76.61 In fMUllon Acquired contractual Total rl hts 3,983.87 6,406.11 39.61 91.99 185.10 286.0 4,208.58 6,784.16 1,866.55 3,942.57 779.07 1,098.12 63.61 148.06 2,709.23 5,188.76 1,499.36 1,696.41 2,117.32 2,463.54 Inf MIiiion Acquired contractual Total ri his 2,980.69 5,366.12 493.75 513.86 469. 16 469.16 20.27 36.97 3,963.87 6,406.11 1,126.44 2,851.07 729.30 1,063.94 10.81 27.5 1,866.56 3,942.67 2,117.32 2,463.54 1 854.25 2,516.06	tnf MIHfon As at As at March 31, 2019 March 31, 2018 In,MU/ion In, MUUon 76.61 76.23 0.77 4.63 (0.39)

6.4. Depreciation and amortization

6.4. Depreciation and amorization
On Property, Plant and Equipment On other intangible assets	For te quarer ended March 31, 2019 March 31, 2018 115.96 133.77 260.82 287.12 For the year ended March 31, 2019 474.39 1,098.12 March 31, 2018 520.93 1,063.94
	376.80 420.89 1 672.51 1 684.87

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Page 26 of 40

Persistent Systems Limited

Notes l0<mln11 pa,! of condensed con$.Ol dated llnanclal Sla!ements

7. Non..::ummt llna»clal asMl s ln"'>•!mon1o {r!!lor noto 30)

	Asat March 31. 2019 Inf MIiiion Asat March 31, 2018 Int Mll!lo
lnV<tments cnie under equity aunling metho Unqoie Investments Investments In euity Instruments lnas:ia!es Kisma o-Sorvicw P1ivalo Lurnlo IHo<>ng SO% (P1<,,sous year 5.'k)J 0.05 mmion (Peious ye,: 0.05 miRlon) sho,e of '10 each, fu y pd up Le : lmpai,met of non-cuueot unqe invotmen\s Total Investments carrie euity &nllng metho {Al lnV<tments carrie at amottlse cost Quoted lnvos!ments In bnds (Mork< valuo t 2.120.0 mll,on (P,.,ou yea,, 1.139.71 m1f,on)) Ad lnt0� awuO on tm,< Total !nvostmonts cmrle at amor11secost (81 Dsl1nate as fair value through prom and lo .. Qited lnvoscmont• - lnvestn1ents In mutual fonds Fa<r ,alue of long 1em m\ua run< (R<<' Noo 7a) Unquote lnwS!moots -Otho••' C,qua limite [tldng 2 36% (Pn,,,ous year 2 36'/)) 0.04 million (P,clous yea,. O 04 m,11100) share ol GEPOO! eac. fulty paid up Le . lmpirmom of nocmro! unqOe in,o1monts Alt,on Sy,les P,ivale Limne 3.70 <qo,ty sha,o (PrOiou Y"' 3.76 ety •ha,o)o,10 eac fu y pid up - lnVO$lmcn\$ In p,ofcmxt sto� H)lgon: Inc 0 25 million (P,,ioos Y"•r c O 25 m,lhOfl) Proformds!o o/ S 0.01 ooch. fu y pad up Lc•: lmpaiimel o non•Crrent unqO< invelmots OpalaSl00 Inc O 20 m,11,0 (Preious ye,· O 20 m,11,on) P,efono stoc of SO 01 ech. fu y pad up Lo : lmpaifmOOl o non-C,rer,t unquoe ,nvetmets Trunomi !nc 0 28 m,lh0<1 (P,,.ious ye, O 28 m,lhon) Profoues!oo $ 002 each. 1,ily pad up Jata co,p,aton 00 molho (P11Mos yer· 00 m,ll!on) P1el01o s!oc o $0.0\ eac. fu y paid up Amp lno 0 5S milhon (P,,ious year O 55 m,lhon) P1ofou<s1< o $ OAS3 each. tuiy p.d up Cawnalnc 0 35 milr,on (P,eious yoa, Nd) Pr<e,100 slo; o $ 0 01 oct<. fu y paid op - ln.s!mcnts In C wrtibk Noes "'"'' 1 (Pr<iO< Y""': 1) onv<11bo noo of USO 125.0 each. fu y pa,d up Lea· Imparmet o/ non-cur,e! unqute nvelmets Uslyme 1 (PrcYious year; 1) onvebbo nlo of USO 250.0 each, fully pd up Le : Imparment o non-curiot unquteirww\mots Aum,nalno 1 (Prejous year· I) onver1,be no!e of USO 146.429 each. fully pid up Total Investments carri al Fa!rValue (C) Total lnvestmo11ts (A)+ (BJ+ {CJ A1gr<ale amount ol !mplrment In value o lnV(0\0n\s A9groato amount o qlote lnveslmooto A91<<ato amount o unquote lnvetm011ts ' Invetments. wh<O the Gop ds not have JO<n!-cnuo or 1grufcaat mnuen< mcudng s•luation innuece ,s intend to b temr<ary. a,e classfie as �nvetmeils ia olhc,s"	oos (0.05) '" (005)

	2,088 35 "" 2,15.68 t.9?4.91 1 974.91 1381 (1381) ,o ~~,.o~~ 1382 (1382) 13.82 (1382) 17 28 2522 17.28 1:a 22 1.11247 ,m 1,146.11 1.657.49 1,657.49 13.49 (1349) ,. ,.o 1303 (13031 13.03 13.03 "" "" ""
	10.0 '" '" 61.9 8.15 8.15
	1728 (17 28) 10.12 10.12 2 189.03 4.J45.71 67.42 4,131 59 281 5 '"" (1629) "" '·" 1 734.93 2 831.04 51 01 2,0036 12845 s whe<e such joml-<:ontro o, sgnifcnt

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Page 27 of 40

Persistent Systems Limited

Notes forming part of condensed consolidated financial statements

7 a) Details of fair value of invesbnent in long term Mutual Funds (Quoted)

	As at March 31, 2019	As at March 31, 2018
	IntMillion	In1Million
ICICI Prudential Mutual Fund	550.21	664.16
Axis Mutual Fund	304.96
Kotak Mutual Fund	294.32	214.02
HDFC Mutual Fund	205.96	191.64
Adita Bir!a Sun Life Mutual Fund	191.44	157.98
UTI Mutual Fund	160.32	89.43
SBI Mutual Fund	65.18	177.65
Reliance Mutual Fund	58.05	53.81
IDFC Mutual Fund	50.13	108.80
DHFL Pramerica Mutual Fund	32.10
DSP Mutual Fund	32.09
Sundaram Mutual Fund	30.15
	1,974.91	1,657.49

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Page 28 of 40

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Persistent Systems Limited

Notes forming part of condensed consolidated financial statements

12. Current financial assets : Investments

	As at	As at
	March 31, 2019	March 31, 2018
	Inf Million	Inf Million
Designated as fair value through profit and loss
� Quoted investments
Investments in mutual funds
Fair value of current mutual funds (Refer Note 12a)	3,295.53	5,916.31
	3,295.53	5,916.31
Total carring amount of investments	3,295.53	5,916.31
Aggregate amount of quoted investments	3,295.53	5,916.31
Aggregate amount of unquoted investments

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

	Asat	As at
	March 31, 2019	March 31, 2018
	Inf Million	Inf Million
UTI Mutual Fund	625.92	823.08
HDFC Mutual Fund	493.59	174.66
Ais Mutual Fund	426.87	743.70
L& T Mutual Fund	407.39	749.22
!CICI Prudential Mutual Fund	399.98	275.33
Adita Birla Sun Life Mutual Fund	386.73	845.88
SBI Mutual Fund	162.14	50.24
Tata Mutual Fund	115.97	817.81
IDFC Mutual Fund	106.40	349.34
DSP Mutual Fund	103.35	50.39
Sundaram Mutual Fund	67.19	104.15
Reliance Mutual Fund		190.45
Kotak Mutual Fund		300.42
DHFL Pramerica Mutual Fund		441.64
	3,295.53	5,916.31

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Page 30 of40

Persistent Systems Limited

Notos forming part ol condensed consolidated financial statoments

13. Trade receivables (refer note 30)

	Asal Asal March 31, 2019 March 31, 2018 InrMillion Inf Million
Outstanding for a Jriod exceeding si� months from the dale they aw due for payment Unsecured, considered good Unsecured, credit impaired less A!towance lo, croil loss Othors Unsecured. considered good Unsecured. crodit impai1ed Less: Allowance tor creit loss	4.00 23.12 134.54 146.97 138.54 170.09 (134.54) (146.97) 4.00 23.12 4,919.01 4,824.28 4,919.01 4,824.28 4,919.01 4.824.28
	4,923.01 4,847.40

14. Cash and cash equivalents (refer note 30)

	As al	Asat
	March 31, 2019	March 31, 2018
	InrM!llion	Inf Million
Cash and cash equ!valonts as presented in cash flow statement
Cash in hand	0.22	0.23
8a\ancos V1h hanks
On cumml accounts·	1,300.03	1.196.91
On savi! accounts	0.91	0.75
On Exchange Earner's Foreign Currency accounts	114.91	145.83
On depsi1 accounts vith original mturity loss 1han throo months	229.54
On Escrow account"	92.94
	1,739.45	1,343.72

'Out of 1ho cash and cash equivalent balanco as al March 31, 2019, tho Group can utilise f 2. 15 million only towards re so arch and dovo!opmen1 activWos spocifood ill tho loan / gronl agmement Thero were no such rostricijons for u1ilisaUon or tho cash and cash e<:[uivalon1 balance as at March 31, 2018.

•• Tho Gioup can ulilizo 1hoso balancos only towards buy back ol equity shares

15. Other bank balances {refer note 301

	As at March 31, 2019 In" Mllllon As at March 31, 2018 In r MIiiion
Short term bank depsits On deposit accoiont wlll original maturity moro 11\an lwolvo mnths• Add: ln1ores! accrue but not duo on deposits wlh banks Do psits wth banks (Carried at amortsed cost) Loss: Depsits wth mturity mrn Uan twelve months from 1ho balonco shoot data disclose< under other non-curront fnancial assots (rnfor note 9) Loss: !ntorosl accrued but not duo on non-unonl doposi1s v,Hll banks (rofor noto " Balances Vth banks On unpaid dividond accounts ..	4.789.02 228.71 80.24 5,077.97 (94.39) (1.46) 4,982.12 2.27 940.47 130.11 1,070.58 (1.53) (0.21) 1,068.84 1.41
	4,984.39 1,070.25

As at
March 31, 2019
In" Mllllon
As at
March 31, 2018
In r MIiiion

Short term bank depsits
On deposit accoiont wlll original maturity moro 11\an lwolvo mnths•
Add: ln1ores! accrue but not duo on deposits wlh banks
Do psits wth banks (Carried at amortsed cost)
Loss: Depsits wth mturity mrn Uan twelve months from 1ho balonco shoot
data disclose< under other non-curront fnancial assots (rnfor note 9)
Loss: !ntorosl accrued but not duo on non-unonl doposi1s v,Hll banks (rofor noto
"
Balances Vth banks On unpaid dividond accounts ..

4.789.02
228.71
80.24
5,077.97
(94.39)
(1.46)
4,982.12
2.27
940.47
130.11
1,070.58
(1.53)
(0.21)
1,068.84
1.41

4,984.39
1,070.25

Out of tho balance, fiKe<l do posits of , 87.99 million {Previous year: t 63.78 mil.On) have be n earmarked agains1 hank guaranloes availed by the Group

"The Group can utilize \hoso balances only towards setUeme,1t of the respective unpaid dividend

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Page 31 of 40

Persistent Systems L1m1ted

N<.>les formin[g p] art of condensed consolldated financial statements

16. Current financial assets ; loans {refer note 30)

16. Current financial assets ; loans {refer note 30)
Carried al amortised cost Loan to �latedparties(Unsecured, credit impairtd! K!isma e-Servces Private Limited Less: Impairment of current lans Security deposits Unsecurod, consideredgood 17. Other current ff nan cl al assets(refer note 301		As at March 31, 2019 ln"Millh 27.43 As at March 31, 2018 Inf Million 27.43
		27.43 (27.43) 7.87 *1.81* 7.87 27.43 (27.43) 6.63 6.63 6.63




		As at Marcl131, 2019 In" MIH!on As at March 31, 2018 Inf MU!lon
fair value of derivatives designated and efecllve as hedging lnstrumants Forard contracs receivable Advances 10 $Upptiers Unsecured, credr impaired Less: Impairment cf current financial assets Dcposn wnh fnancial lns1nuuons Add: !n1oresl acrued but no! due on deposit wth financial lnsmulions Oepos�s w�h flnanclal lnsl�u1ions(Carried at amo1tised cost) Unbilled revenue 18. Other cum,nt asse1s Advances to suppllers {Unsecured, consideredgood) Advances recoverable In cash or kind or for value to be ieccived Other advances (Unsecured, conslderedgood) VAT rceivable(net) Servce tax and GST receivable(ne1) (Refer note 36)	-	281.27 42.75 0.81 0,61 ----·-... -.. c'°c·c""'-----<°c'="
		250.00 10.97 995.35 20.65
		260.97 1,834.76 2,377.00 1,016.00 \,699.50 2,758.25
		A$ at March 31, 2019 In r Million 432.25 35,07 920.47 955.54 As at Much 31, 201& Inf Million 561.66 74.42 927.31 1,001,73
		1,317.79 1,563.41

(nils space Is lntan/,onally /aft /Jlank}

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Page 32 of 40

Persistent Systems Limited

Notes forming part of condensed consot!dated flnanclal statements

19. Non[.] current financial llabllitk!s; Borrowings {refer note 30)

	A"	As at
	March 31, 2019	March 31, 2018
	In fM!Hlon	lnfMIHlon
Unsecured Borrowngs carrkd at amortised cost
Term loans
Indian rupee loan from others	16.55	21.13
ln1eres1 accrued bu1 no1 due on term loans	0.17	0.78
	16.72	21.91
Less: Curren! maturfy or long·lerm borrowings transferred to o1her current financial liabilities (Refer no1e 22)	(4.58)	(4.56)
Less: Current nrnlurily or Interest accrued but nol due on term loan transferred to o1her current fnancial !iabili1ies	(0.17)	(0.78)
(Refe1 note 22)
	~~(~~4.75~~)~~	(5.361
	11.97	16.55

The term loans rrom Govemmen1 departmen1s have the following terms and conditions

Loan I - amounting to t 5.46 miWon (Previous yeac f 8.19 million) wfth interest payable@ 2% per annum guaranteed by a bank guarantee by the Company and repayable in !en equal semi annual installments ever a peliod or five years commencing from March 2016.

Loan fl - amounting to f 11.09 million (P1evious year: , 12.94 million) with lnlerest payable@ 3% per annum repayable in ten equal annual i11stallmen1s over a period of ten years commencing from September 2015.

20. Non current Uabllitlos : Provisions

20. Non current Uabllitlos : Provisions
	Asat ".. March 31, 2019 March 31, 2018 Inf MIIUon In fMl1llo11 94.34 16.36 156.46 143.37 252,80 159.75
Provision fo1 employee benerrs · Gratuity - Long service awards 21. Trade payables (refer note 30)

21. Trade payables (refer note 30)

	As at ~~A" ~~ Much 31, 2019 March 31, 2018 In fMHllon Inf Million 1,517.07 1,673.08 1 517,07 1 673.0 8 Asal Asal March 31, 2019 March 31, 2018 Inf MIiiion lofM!Hlon
Trade payables ror goods and services 22. Other current flnanclal liabilities (refer note 30)
Cap�a! credilors Current maturrty of long·lerm bor1owings (refer note 19) Curren1 maturity of ioterest on long·term borrowings (refer 11ote 19) Accrued employee liabili1ies Uopaid dividend" Other liabil�ies	55.16 32.36 4.58 4.58 0.17 0.78 377.88 357.02 2.27 1.41 1.87 0.18 441.93 396.33

• Unpaid dividend is transferTed lo Investor Educa1ion and P1otec1ion Fund as aod when due

23.0ther current llabllitles

	A"	As at
	March 31, 2019	March 31, 2018
	Inf MIiiion	Inf MIiiion
Uneared revenue	842.08	921.10
Advance from customers	26.34	25.38
Other payables · S!a!utory liabilrHs	247.67	251.49
. Olher liabilities	8.18	3.05
	1,124.27	1,201.02
24. Current llab!!IUes : Provisions	~~"" ~~ March 31, 2019	As at Marh 31, 2018
	Inf Mllllon	Inf MIHl011
Provislo11 for employee benefs
• Gratuity	17.20	(44.77)
· Leave encashmen1	548.87	468.73
- Long service awards	19.02	22 31
· Other employ benefts	1,101.26	1,153.22
	1,686.35	1,599.49

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Page 33 of 40

Persistent Systems Limited Notes forming part of condensed consolidated financial statements

25. Revenue from operations (net)

		For the quarer	ended	For the year	ended
		March 31, 2019	March 31, 2018	March 31, 2019	March 31, 2018
		In f Million	In f Million	In f Million	In f Million
Sofare Software	serices licenses	7,928.87 389.67	7,294.65 230.81	32,169.39 1,490.02	29,440.60 896.43
		8,318.54	7,525.46	33,659.41	30,337.03

26. Other income

26. Other income
	For the quarter	ended	For the year	ended
	March 31, 2019	March 31, 2018	March 31, 2019	March 31, 2018
	In , M\lllon	In f Million	In , Million	In f MIiiion
Interest income
On financial assets carried at amortised cost	56.65	12.63	103.10	47.87
On others	41.81	36.43	184.62	113.67
Foreign exchange gain (net)		149.54		586.31
Profit on sale of fixed assets (net)	1.50	0.53	4.02	2.40
Dividend income from Investments	42.57	42.02	180.77	171.25
Profit on sale of investments (net)	77.57	12.24	366.09	186.84
Net gain/(loss) arising on financial assets designated as at	19.01	53.62	(68.92)	(18.92)
FVPL
Excess provision in respect of earlier period / years	11.98	13.86	33.89	18.19
written back
Advances written back				23.76
Miscellaneous income	32.87		72.98	59.64
	283.96	320.87	876.55	1,191.01

27. Personnel expenses

	For the quarer	ended	For the year	ended
	March 31, 2019	March 31, 2018	March 31, 2019	March 31, 2018
	Inf Million	Inf Million	Inf MIiiion	Inf Million
27 .1 Employee benefits expense
Salaries, wages and bonus	4,534.42	4,180.55	18,000.86	17,190.37
Contribution to provident fund	100.90	66.10	384.78	346.56
Gratuity expenses	37.84	38.20	155.45	167.78
Defined contribution to other funds	61.63	71.78	216.89	158.08
Staf welfare and benefits	124.68	128.02	491.55	449.87
Employee stock compensation expenses				3.80
	4,859.47	4,484.65	19,249.53	18,316.46
27 .2 Cost of professionals	862.83	866.68	3,490.45	3.180.63
	5,722.30	5,351.33	22,739.98	21,497.09

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Page 34 of 40

Persistent Systems Limited

Notes forming part of condensed consolidated financial statements

Other expenses

28. Other expenses
	For the quarer ended		For the year	ended
	March 31, 2019	March 31, 2018	March 31, 2019	March 31, 2018
	In, Million	In ,MIiiion	In,Million	In,Million
Travelling and conveyance	224.06	226.27	933.11	867.92
Electricty expenses {net)	20.47	23.32	109.45	104.49
Internet link expenses	18.28	18.55	67.37	66.46
Communication expenses	25.98	25.02	100.72	119.86
Recruitment expenses	46.24	16.93	116.63	83.43
Training and seminars	10.24	9.11	30.22	24.25
Royalty expenses	25.52	9.71	65.01	60.46
Purchase of software licenses	304.57	243.18	1,473.20	933.39
Bad debts	0.14	144.69	71.18	183.97
Provision for doubtful receivables/ (provision for doubtful receivables	5.33	(134.63)	(4.89)	(151.38)
written back) (net)
Rent	110.43	106.53	463.72	448.52
Insuranc	7.39	5.95	24.84	24.05
Rates and taxes	28.83	25.26	79.26	115.42
Legal and professional fees	117.81	155.66	572.88	500.35
Repairs and maintenance
- Plant and Machiner	25.83	25.44	114.67	116.18
- Buildings	6.31	8.39	29.56	27.89
- Others	5.83	4.11	20.43	20.77
Selling and marketing expenses	(23.31)	8.47	4.12	36.09
Advertisement, conference and sponsorship fees	120.87	63.72	199.06	116.51
Discount allowed	15.26	(25.84)	76.92	11.78
Computer consumables	1.80	2.65	7.95	7.67
Auditors' remuneration	3.58	2.19	15.75	14.62
Donations	22.97	21.70	80.64	78.10
Books, memberhips, subscriptions	15.61	19.00	77.58	73.27
Foreign exchange loss (net)	58.50		243.10
Directors' sitting fees	1.57	0.98	5.32	3.90
Direcors' commission	3.59	2.97	14.21	9.74
Provision for doubtful deposits {refer note 38)	182.50		182.50
Impairment of non current investments	0.04	(2.06)	13.98	26.96
Miscellaneous expenses	2.99	83.03	168.54	228.01
	1,389.23	1,090.30	5,357.03	4,152.68

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Page 35 of 40

Persistent Systems Limited

Notes forming part of condensed consolidated financial statements

29. Earnings per share

29.Earnings per share
		For the quarter	ended		For the year	ended
		March31, 2019	March	31, 2018	March31, 2019	March31, 2018
Numerator fr Basic and Diluted EPS
Net Profit after tax (In { Million)	(A)	844.73		737.06	3,516.79	3,230.88
Denominator for Basic EPS
Weighted average number of equity shares	(B)	79,772,658	80,000,000		79,943,943	80,000,000
Denominator for Diluted EPS
Number of equity shares	(C)	79,772,658	80,000,000		79,943,943	80,000,000
Basic Earnings per share of face value off10each(In')	(A/8)	10.59		9.21	43.99	40.39
Diluted Earnings per share of face value of,10each (In')	(A/C)	10.59		9.21	43.99	40.39
		For the quarer	ended		For the year	ended
		March31, 2019	March	31, 2018	March31, 2019	March31, 2018
Number of shares considered as basic weighted average shares		79,772,658	80,000,000		79,943,943	80,000,000
outstanding for calculating basic EPS
Add: Effec of dilutive issuesofstock options Number of shares cnsidered as weighted average shares and		79,772,658	80,000,000		79,943,943	80,000,000
potential shares outstanding for calculating Diluted EPS

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Page 36 of 40

Persistent Systems Limited

Notes forming part of condensed consolidated financial statements

30. Financial assets and liabilities

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

fin, millionl Financial asset/ fnancial liabilities Basis of As at March 31, 2019 As at March 31, 2018 Fair value hierarchy measurement Car inn value Fair value Carn inn value Fair value Assets: Investments in associates Equity - accounting Investments in equity instruments, preferred Fair value 214.12 214.12 77.44 77.44level 3 stock and converible notes Investments in bonds• Amorised cost 2,15.68 2,120.86 1.146.11 1.139.71 Investments in mutual funds Fair value 5,270.44 5.270.44 7.573.80 7.573.80level 1 loans Amorised cost 171.87 171.87 149.36 149.36 Deposit with banks and finncial instituionsAmortised cost 5,592.38 5.592.38 2,122.27 2,122.27 Cash and cash equivalents (including Amorised cost 1,741.72 1,741.72 1.345.13 1.345.13 unpaid dividend) Trade receivables {net) Amorised cst 4,923.01 4,923.01 4,847.40 4,847.40 Unbilled revenue Amortised cost 1,834.76 1,834.76 1,69.50 1,699.50 Forward contracts receivables Fair value 281.27 281.27 42.75 42.75Level 2 Total 22,186.25 22,150.43 19,003.76 18,997.36 liabilites: Borrowings (including accrued interest) Amortised cost 16.72 16.72 21.91 21.91 Trade payables Amorised cost 1,517.07 1,517.07 1,673.08 1,673.08 Other financial liabilities (excluding Amorised cost 437.18 437.18 390.97 390.97 borrowings) Total 1,970.97 1,970.97 2,085.96 2,085.96	fin, millionl Financial asset/ fnancial liabilities Basis of As at March 31, 2019 As at March 31, 2018 Fair value hierarchy measurement Car inn value Fair value Carn inn value Fair value Assets: Investments in associates Equity - accounting Investments in equity instruments, preferred Fair value 214.12 214.12 77.44 77.44level 3 stock and converible notes Investments in bonds• Amorised cost 2,15.68 2,120.86 1.146.11 1.139.71 Investments in mutual funds Fair value 5,270.44 5.270.44 7.573.80 7.573.80level 1 loans Amorised cost 171.87 171.87 149.36 149.36 Deposit with banks and finncial instituionsAmortised cost 5,592.38 5.592.38 2,122.27 2,122.27 Cash and cash equivalents (including Amorised cost 1,741.72 1,741.72 1.345.13 1.345.13 unpaid dividend) Trade receivables {net) Amorised cst 4,923.01 4,923.01 4,847.40 4,847.40 Unbilled revenue Amortised cost 1,834.76 1,834.76 1,69.50 1,699.50 Forward contracts receivables Fair value 281.27 281.27 42.75 42.75Level 2 Total 22,186.25 22,150.43 19,003.76 18,997.36 liabilites: Borrowings (including accrued interest) Amortised cost 16.72 16.72 21.91 21.91 Trade payables Amorised cost 1,517.07 1,517.07 1,673.08 1,673.08 Other financial liabilities (excluding Amorised cost 437.18 437.18 390.97 390.97 borrowings) Total 1,970.97 1,970.97 2,085.96 2,085.96	fin, millionl Financial asset/ fnancial liabilities Basis of As at March 31, 2019 As at March 31, 2018 Fair value hierarchy measurement Car inn value Fair value Carn inn value Fair value Assets: Investments in associates Equity - accounting Investments in equity instruments, preferred Fair value 214.12 214.12 77.44 77.44level 3 stock and converible notes Investments in bonds• Amorised cost 2,15.68 2,120.86 1.146.11 1.139.71 Investments in mutual funds Fair value 5,270.44 5.270.44 7.573.80 7.573.80level 1 loans Amorised cost 171.87 171.87 149.36 149.36 Deposit with banks and finncial instituionsAmortised cost 5,592.38 5.592.38 2,122.27 2,122.27 Cash and cash equivalents (including Amorised cost 1,741.72 1,741.72 1.345.13 1.345.13 unpaid dividend) Trade receivables {net) Amorised cst 4,923.01 4,923.01 4,847.40 4,847.40 Unbilled revenue Amortised cost 1,834.76 1,834.76 1,69.50 1,699.50 Forward contracts receivables Fair value 281.27 281.27 42.75 42.75Level 2 Total 22,186.25 22,150.43 19,003.76 18,997.36 liabilites: Borrowings (including accrued interest) Amortised cost 16.72 16.72 21.91 21.91 Trade payables Amorised cost 1,517.07 1,517.07 1,673.08 1,673.08 Other financial liabilities (excluding Amorised cost 437.18 437.18 390.97 390.97 borrowings) Total 1,970.97 1,970.97 2,085.96 2,085.96
	1,970.97	1,970.97 2,085.96 2,085.96

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:

Leve! 1 - Inputs are quoted prices (unadjusted} in active markets for identical assets or liabilities.

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 3 - !nputs 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.

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Page 37 of 40

==> picture [135 x 7] intentionally omitted <==

31. Segmont!nfom,alk>n Opc,a\o"lg "'9'Mhl$ aro o:;,tnpooofll• of an o,rtorl)riso fo, """""'d;s.or<>to finaoo>I W01mat>on is avalabl> thal $ o,...Wt<XI !'Og alloca o rooour os am asso pO<(otmaf>GO. ll,o Gt<>w-.. et.of op0,aw.;i do= ma�o, " !ho C(O am M,magftll Ornctor

T G«><- ro0gor,wd �.� into	!oo 0 0 . "'"' �o,n Al 1. 218. l'>C> !01m ''" op,a� ,gmoots lor ,on	!oo 0 0 . "'"' �o,n Al 1. 218. l'>C> !01m ''" op,a� ,gmoots lor ,on	!oo 0 0 . "'"' �o,n Al 1. 218. l'>C> !01m ''" op,a� ,gmoots lor ,on	rop
T 0.1 iOlOns a,o
• Tocy SoM,
c. Alri (Prouts)
						rlrMl
				A�lan	Ace!er!te {Proucts)	Totl
Rowo	OwrtoroOod OcrYear ened\ **YoaroO>d	Mr-31-219 Mar31-216 Mr·3\·219 M&,-\218	5.741 lS 5.10343 n.ornro 19,37111	2.0119 1,927 73 9,75992 8,2$0	5162 ·�� 1.8U8 2.240.0	8.318.54 7,5;5.46 33.85.41 30.:m.ro
	Qu,tor ondod 0L YoaroO>d Yoa,oOd Ow<toroOOod Ow,woOOod Yoo, erdd Yoaron **	Mar-3\·219 Mor-3-218 Mar-3\·219 Mr·3\·218 Mar·31·219 Mr·31·218 Mar·31·2\9 Mr-31-2!0	3,41 :9 3,0347 13.5\03 11,9293 2,33.76 2.0729 8,5767 7,4016	1,511 31 1,44$.5 6.46191 6,02517	2120 288.62 689.32 1.10.57 l.15 =o 02.14 1,04 :	5.124.75 4.764.62 20.661.59 19.17467 3.193.79 2.76 64 12.7W82 11.1623
	ow,toroflod	Mr·31·2\9				2,3 61
	QwrtoroMod	Mat-31·216				2.o 22
Olr iom (f1 ofo,s)	Yoa,orOd Yoaron< ou,woM<d Ouarto,eod YoaroOd Yoa,o'd Qurtoronod Owrto,oMod	Ma<·31-219 Mr-1-:l0\8 M,-31-219 Mr-3\·218 Mar-3-219 M,-3-218 Ma,-31-219 M<-3!·218				8.6100 8,(76 im rn o,� M866 3.1016 =o 3267
	Yoa,o'<	Mt-31·219				67655
	Yoa,e'd	Ma,-31-216				1.191.01
Prnlbkroto",	Ou,te,ocod OuroreMod	Mt·31·2l0 M,-1-218				1.11314 93.49
	Yoa,o,,od	Mr-31-219				4.83 3
	Yearend	Mt-1·218				4.:'n61
	ow,10,oflod	Mo,-31·219				2.41
	Ouro,onod Yoaro'd	M,-3\·218 Mar-31-219				246.43 1.3.6
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	Ourt<rofod Qorterec<d Yea, Od Yoa<e'd	Ma,-31-2\9 Mar-31-216 Mar-31·219 M,-31-216				6 .73 7370 3,516 79 ,=o

==> picture [234 x 7] intentionally omitted <==

Ourt<rofod Qorterec<d Yea, Od Yoa<e'd Ma,-31-2\9 Mar-31-216 Mar-31·219 M,-31-216 6 .73 7370 3,516 79 ,=o	Ourt<rofod Qorterec<d Yea, Od Yoa<e'd Ma,-31-2\9 Mar-31-216 Mar-31·219 M,-31-216 6 .73 7370 3,516 79 ,=o	Ourt<rofod Qorterec<d Yea, Od Yoa<e'd Ma,-31-2\9 Mar-31-216 Mar-31·219 M,-31-216 6 .73 7370 3,516 79 ,=o	Ourt<rofod Qorterec<d Yea, Od Yoa<e'd Ma,-31-2\9 Mar-31-216 Mar-31·219 M,-31-216 6 .73 7370 3,516 79 ,=o	Ourt<rofod Qorterec<d Yea, Od Yoa<e'd Ma,-31-2\9 Mar-31-216 Mar-31·219 M,-31-216 6 .73 7370 3,516 79 ,=o	Ourt<rofod Qorterec<d Yea, Od Yoa<e'd Ma,-31-2\9 Mar-31-216 Mar-31·219 M,-31-216 6 .73 7370 3,516 79 ,=o
{rMl)
Putula<1 5<gm llta< rooiv•b• UMlloasels	k" k" A" A" Mr·31·219 M>r-31·210 Mar-31-2\9 Mr-31·216	Teh!ky Sorv• 3.�7.07 3,0759	AHlanco 1,021 77 ,�v	ACc!orte {Pto,h•<lsf 35 11 43117	·�· 4,92301 4.847.40 2,62.9 21.673
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P•rtuato	l<>dla HoAmf Rntofto Total w,�
Rowr	Ocorto, ened Ma<-31·219 �r 672.01~~�·�~~ 8.310$ Qurto, 0P1ded M:u-31-216 "0 6.0 2 64437 7.525.�G Yoarond Mar.1·2\9 2.39] 27.5746 3,62 6 33.6941 Yoarond M,u-31·218 1.910.67 25.33 0 3.09 46 3.337 en
Th revr from • Bl rslQmori"" o! ton P<<Cnl ol!ota! ,., o1 U, G<o,. , 1676.21 m.n for ! qrter oM Marr 31. 219 (P,10"" 1rid , 1.631.0in),, 8 079.32 m6nfor ! y,a, en Marr 31 219 (provu y,a,: ! 7,852.92ml,n).

(Trns"P•ceisinlonl!ooal/ylohblonk)

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Page 38 of 40

Persistent Systems Limited Notes forming part of condensed consolidated financial statements

On July 02, 2015, the Company, through its wholly owned subsidiary Persistent Systems Inc., acquired the entire equity capital of US based Akshat Corporation (d.b.a. RGen Solutions in USA). In addition to the upfront purchase consideration, the stock purchase agreement for additional consideration, contingent upon certain conditions being met in future years. The additional contingent consideration payable to the selling shareholders is subject to a maximum amount of USD 3. 75 million. The fair value of the contingent consideration is estimated to be Nil as on the date of acquisition. The contingent consideration would be recorded, as and when the contingency is resolved and the consideration is payable.
Persistent Systems Inc. (a wholly owned subsidiary of Persistent Systems Limited) acquired Digital Content Management Solution product from the US based Akumina Inc. on November 9, 2015. In addition to the upfront purchase consideration, the asset purchase agreement provides for additional consideration, contingent upon certain conditions being met in future years. The additional contingent consideration payable to Akumina Inc., is subject to maximum amount of USO 5.00 million. The fair value of the contingent consideration is estimated to be Nil as on the date of acquisition. The contingent consideration would be recorded, as and when the contingency is resolved and the consideration is payable.
Persistent Telecom Solutions Inc. (a wholly owned subsidiary of Persistent Systems Inc.) acquired a cloud platform open source software from Citrix on February 28, 2016. In addition to the upfront purchase consideration, the asset purchase agreement provides for additional consideration, contingent upon certain conditions being met in future years. The fair value of the contingent consideration is estimated to be Nil as on the date of acquisition. The contingent consideration would be recorded, as and when the contingency is resolved and the consideration is payable.
On August 24, 2018, Persistent Systems Inc. (a wholly owned subsidiary of Persistent Systems Limited) acquired the entire equity capital of a USA based Company Herald technologies Inc. (referred to as 'Herald'). The Company acquired 100% voting equity interest in Herald through share purchase agreement.
a)

The acquisition would strengthen Persistent's IP led offerings in the healthcare domain and create a number of cross sell opportunities

b) The amount of consideration is f148.50 million which is paid/ payable in cash.

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

		fin Million
-	Particulars	Total
Current Assets
Cash and & cash equivalents		0.35
NonMcurrent assets
Property, Plant and Equipment		0.08
Intangible assets under development		148.67
Current liabilities
Trade and other payables		0.35
Net assets		148.75

The gain on bargain purchase arising on acquisition is f 0.25 million.

c) Net cash outflow on acquisition of subsidiaries

Particulars Consideration naid/ navable in cash Less: cash and cash enuivalent balances acauired �	Amount in f million 148.50 10.35\ 148.15

d) Revenue of Herald is Nil. The loss included is f 10.29 million.

Had the business combination been effected on April 1, 2018, there would have been no change in the revenue and the profit after tax for the year ended March 31, 2019 for the Group.

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Page 39 of 40

Persistent Systems Limited

Notes forming part of condensed consolidated financial statements

Persistent Systems Limited ("the Holding Company") had received a show cause notice from Commissioner of Service Tax on December 19, 2016 for non-payment of service tax of if 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 Holding Company to its overseas customers for the period 2011-12 to 2014-15.

Post representations made by the Holding 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� 165.51 million based on the period of limitation and as a result of that, the said demand now covers financial year 2014-15. The Holding 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 Holding 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 Holding Company will be eligible to claim crediUrefund 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 Holding 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 Holding 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.

As on March 31, 2019, the pending litigations in respect of direct taxes amount to f 268.74 million and in respect of indirect taxes amount tot 30.40 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 Company at the first appellate authority in the earlier years, management does not expect any outflow in respect of these litigations.

Persistent Systems Inc., subsidiary of Persistent Systems Limited, has given a guarantee of€ 30.00 million (Previous year:€ 10.00 million to Tech Data Europe GmbH & its Affiliates towards trade payable of Persistent Systems Inc & its Affiliates.

Persistent Systems ltd has given a guarantee of$ 15.17 million on behalf of Persistent Systems Inc. (Previous year: $ 15.17 million).

As reported in the previous quarters, Persistent Systems Limited ("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 are due for maturity from January 2019 to June 2019, of which :( 345 million are overdue as on March 31, 2019. The Group has not accrued any interest on these deposits since April 1, 2018. The amount due till March 31, 2019 and interest due have not been received as on date. 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 amount of:( 182.50 million for impairment in value of deposits as of March 31, 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.
Previous period's / year's figures have been regrouped where necessary to conform to current period's classification for segment disclosure.
The financial statements are presented in :( million and decimal thereof except for per share information or as otherwise stated.

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DELOITTE HASKINS & SELLS LLP Charle red Account,qnts Prepared by .: __ ,:Pt:1.I.-J--------' Reviewed by : __ .c,Aio,c;)�-----" Checked by :. __ J::

Page 40 of40

Deloitte Haskins & Sells LLP

Chartered Accountants 706, 'B' Wing, 7'" Floor ICC Trade Tower Senapati Bapat Road Pune - 411 016 Maharashtra, India

Tel: +91 20 6624 4600 Fax: +91 20 6624 4605

INDEPENDENT AUDITORS' REPORT

TO THE BOARD OF DIRECTORS OF PERSISTENT SYSTEMS INC.

Report on the Audit of the Standalone Interim Condensed Financial Statements

Opinion

We have audited the accompanying standalone interim condensed financial statements ("the Condensed Financial Statements") of Persistent Systems Inc. ("the Company"), which comprise the Condensed Balance Sheet as at 31 March 2019, the Condensed Statement of Profit and Loss for the quarter and year ended on that date, the Condensed Statement of Cash Flows and the Condensed Statement of Changes in Equity for the year then ended, and notes to the Condensed Financial Statements, including a summary of significant accounting policies and other explanatory information.

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid Condensed Financial Statements give a true and fair view in conformity with the Indian Accounting Standard 34 (Ind AS 34) prescribed under section 133 of the Companies Act, 2013 ('the Act') and other accounting principles generally accepted in India, of the state of affairs of the Company as at 31 March 2019, loss for the quarter and year ended on that date, changes in equity and its cash flows for the year then ended.

Basis of Preparation and Restriction on use and distribution

Without modifying our opinion, we draw attention to Note 2 of the financial statements, which describes basis of preparation. These financial Statements have been prepared solely for its Parent Company to assist them in preparation of its Interim Condensed Consolidated Ind AS Financial Statements. Our report is intended solely for the use of management and Board of Directors for the above purpose and should not be distributed to or used by any other parties.

Basis for Opinion

We conducted our audit of the Condensed Financial Statements in accordance with the Standards on Auditing (SAs) issued by the Institute of Chartered Accountants of India (!CAI). Our responsibilities under those Standards are further described in the Auditor's Responsibilities for the Audit of the Condensed Financial Statements section of our report. We are independent of the Company in accordance with the Code of Ethics issued by the !CAI together with the ethical requirements that are relevant to our audit of the financial statements under the provisions of the Act and the Rules made thereunder, and we have fulfilled our other responsibilities in accordance with these requirements and the Code of Ethics. We believe that the audit evidence obtained by us is sufficient and appropriate to provide a basis for our opinion on the Condensed Financial Statements.

Regd. Office: lndiabulls Finance Centre, Tower 3, 27'h - 32"" Floor, Senapati Ba pat Marg, Elphinstone Road (West), Mumbai - 400 013, Maharashtra, India. (LLP Identification No. AAB-8737)

Deloitte Haskins & Sells LLP

Management's Responsibility for the Condensed Financial Statements

The Company's Board of Directors is responsible for the preparation and presentation of these Condensed Financial Statements that give a true and fair view of the financial position, financial performance, changes in equity and cash flows of the Company in accordance with the Ind AS 34 and other accounting principles generally accepted in India.

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 Condensed Financial Statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

In preparing the Condensed Financial Statements, management is responsible for assessing the Company's ability 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.

The Board of Directors are also responsible for overseeing the Company's financial reporting process.

Auditor's Responsibilities for the Audit of the Condensed Financial Statements

Our objectives are to obtain reasonable assurance about whether the Condensed Financial Statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with SAs 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 Financial Statements.

As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional scepticism throughout the audit. We also:

Identify and assess the risks of material misstatement of the Condensed 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 financial 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 the effectiveness of the Company's internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.

Deloitte Haskins & Sells LLP

Conclude on the appropriateness of management's use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors' report to the related disclosures in the Condensed Financial Statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors' report. 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 Condensed Financial Statements, including the disclosures, and whether the Condensed Financial Statements represent the underlying transactions and events in a manner that achieves fair presentation.

Materiality is the magnitude of misstatements in the Financial Statements that, individually or in aggregate, makes it probable that the economic decisions of a reasonably knowledgeable user of the Financial Statements may be influenced. We consider quantitative materiality and qualitative factors in (i) planning the scope of our audit work and in evaluating the results of our work; and (ii) to evaluate the effect of any identified misstatements in the Financial Statements.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings that we identify during our audit.

For DELOITTE HASKINS & SELLS LLP Chartered Accountants (Firm's Registration No. 117366W/W-100018)

Place: Pune Date: 25 April 2019

ant M. Joshi Partner ership No. 038019)

Persistent Systems Limited CONDENSED BALANCE SHEET AS AT MARCH 31, 2019

ASSETS Non-currnt assets Property. Plan1 and Equipmen1 Cap�al wrl.in-progress 01her Intangible assets Intangible assets under development Financial assets . lnveslments - Loans -Olher non current financial assets Deferred !aK asse!s (net) Other non-current asse1s Current assets Financial assets • lnveslr ts - Trade receivables (net) - Cash and cash equivalents . Other bank balances • Loans • Other currenl f,nancial assets 01her curent assets TOTAL EQUIT ANO LIABILITIES EQUITY Equity share capital Other equi1y LIABILITIES Non- current liabilities Financial habih11es · Borrowngs Provisions Current liabilities Financial l1abil11ies • Trade payables [(dues of micro and small enterprises: f 15.63 million (Previous year: f 3.03 mllion)] • Olher financial !iabil•hes Other current liabilities Provisions Current tax liabil,ties (net) TOTAL Summary of si rnficant accounting olicies Notes 5.1 5.2 6 10 11 12 13 14 15 16 17 18 19 20 21 22 23	As at Asat March31,2019 March 31, 2018 In, MiH!on 2,130 26 11.81 83.86 60.32 2,286.25 7,544.01 116.01 428.01 55.56 68.35 10,498.19 3,295.53 2,429.85 565.12 4.654 22 6.63 2.195.74 1,243.44 In, Million 2,323.88 7.32 117.48 7.44 2,456.12 5,504.85 945,81 37.43 31.68 64.00 9,039.89 5.916.31 3.425.07 305.27 676.62 4.47 1,647.70 1,374.62
	14,390.53 24 888.72 791.19 21,420.71 13,750.06 22.789.95 800.00 19.732.04
	22,211.90 20,532.04
	11.97 156.46 170.43 1,019.07 140.00 630.26 664.11 52.93 2,506.39 16.55 143.37 159.92 716.73 290.86 562.63 426.03 99.54 2,097.99

	24,888.72 22 789.95

The accompanying no1es are an integral part of the condensed financial statements

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

As per our report of even date
For Deloitte Haskins & Sells LLP For and on behalf of tho Board of Directors of
ICAI Firm registration no. 117366WfW-100018 Persislent Systems Umited
Chartered Accountants
�-.,y ... ,-�l) ..... . .t�-f(...-r".t c [.] .- �-------.7
-====
Dr. Anand Deshpande �ootkar
Chairman and Managing Director ,�7
Sunil Sapre AmitAtre
Execu1ive Director and Company Secretary
Chief Financial Officer
Place: Pune • Place; Pune
Date : April 27, 2019 Date · April 27. 2019
----- End of picture text -----

Page 1 of 37

Persistent Systems Limited

CONDENSED STATEMENT OF PROFIT ANO LOSS FOR THE QUARTER ANO YEAR ENDED MARCH 31, 2019

Notes Income Revenue from operatons (net) Other income Total Income (A) Expenses Employee benefits expense Cost of professionals Finance costs Depreciation and amrtization expense Other expenses Total expenses (BJ Proft before tax (A· BJ Tax expense Current tax Tax chargeI(credit) in respect of earlier years Deferred tax charge/ (credit) Total tax expense Net profit for the perod I year (C) Other comprehensive Incom e Items that w l not be reclassified to profit and loss (D) - Remeasurements of the defned benefit liabilities / (asset) {net of tax) Items that may be reclasslfled to profit and loss (El • Efective portion of cash flow hedge (net of tax) 24 25 26.1 26.2 5.3 27 Total other comprehensive Income for the period I year (0) + {E) Total comprehensive Income fortt1e period/ year (CJ + (D) + (E) Earings per equity share 28 {Nomlnal value of share f10 (Corresponding perod/ prvious year: f10)1 Baslc (Int) Diluted (Int) Summary of significant accounting polices 3 The accompanying notes are an integral part of the condensed financia	For the quarer ended For the year ended March 31, 2019 Inf MIiiion 5,162.71 255.57 5,418.28 2.468.52 549.06 0.12 114.29 1,324.60 4 456.59 March 31, 2018 Inf MIiiion 4,380.05 312.79 4,692.84 2,103.18 461.23 0.15 122.82 692.84 3 380.22 March 31, 2019 Inf MIiiion 19,598.67 1,037.90 20 636.57 9,491.23 2,195.21 0.51 456.84 4,107.02 16 252.81 March 31, 2018 Inf MIiiion 17,327.49 1,276.82 18,604.31 8,740.6 2,133.03 0.62 537.81 2.640.03 14,052.15
	l s!atemnts 961.69 301.66 15.91 (5.88) 241.69 720.00 4.29 4.29 115.57 115.67 119.86 839.86 9.03 903 1,312.62 298.62 (14.61) 284.01 1 028.61 32.84 32.84 (60.11) (60.11) (27.27) 1 001.34 12.86 12.86 4,383.76 1,283.16 65.00 ( 4.48) 1 233,68 3160.08 (49.83) (49.83) 168.43 168.43 118.60 3 268.68 39.40 39.40 4,652.16 1,175.90 (3.99) (40.92) 1,130.99 3 421.17 104.97 104.97 {191.81) (191.81) (86.84) 3 334.33 42 76 42.76
	l s!atemnts 839.86 9.03 903 1

Notes
Income
Revenue from operatons (net)
Other income
Total Income (A)
Expenses
Employee benefits expense
Cost of professionals
Finance costs
Depreciation and amrtization expense
Other expenses
Total expenses (BJ
Proft before tax (A· BJ
Tax expense
Current tax
Tax chargeI(credit) in respect of earlier years
Deferred tax charge/ (credit)
Total tax expense
Net profit for the perod I year (C)
Other comprehensive Incom e
Items that w l not be reclassified to profit and loss (D)
- Remeasurements of the defned benefit liabilities
/ (asset) {net of tax)
Items that may be reclasslfled to profit and loss (El
• Efective portion of cash flow hedge (net of tax)
24
25
26.1
26.2
5.3
27
Total other comprehensive Income for the period I year (0) + {E)
Total comprehensive Income fortt1e period/ year (CJ + (D) + (E)
Earings per equity share
28
{Nomlnal value of share f10 (Corresponding perod/
prvious year: f10)1
Baslc (Int)
Diluted (Int)
Summary of significant accounting polices
3
The accompanying notes are an integral part of the condensed financia

For the quarer ended
For the year ended
March 31, 2019
Inf MIiiion
5,162.71
255.57
5,418.28
2.468.52
549.06
0.12
114.29
1,324.60
4 456.59
March 31, 2018
Inf MIiiion
4,380.05
312.79
4,692.84
2,103.18
461.23
0.15
122.82
692.84
3 380.22
March 31, 2019
Inf MIiiion
19,598.67
1,037.90
20 636.57
9,491.23
2,195.21
0.51
456.84
4,107.02
16 252.81
March 31, 2018
Inf MIiiion
17,327.49
1,276.82
18,604.31
8,740.6
2,133.03
0.62
537.81
2.640.03
14,052.15

l s!atemnts
961.69
301.66
15.91
(5.88)
241.69
720.00
4.29
4.29
115.57
115.67
119.86
839.86
9.03
903
1,312.62
298.62
(14.61)
284.01
1 028.61
32.84
32.84
(60.11)
(60.11)
(27.27)
1 001.34
12.86
12.86
4,383.76
1,283.16
65.00
( 4.48)
1 233,68
3160.08
(49.83)
(49.83)
168.43
168.43
118.60
3 268.68
39.40
39.40
4,652.16
1,175.90
(3.99)
(40.92)
1,130.99
3 421.17
104.97
104.97
{191.81)
(191.81)
(86.84)
3 334.33
42 76
42.76

l s!atemnts
839.86
9.03
903
1

As per our report of even date

For Deloitte Haskins & Sells LLP ICAI Firm registration no. 11736SW/W-100018 Chartered Accountants

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Place: Pune Date: April 27, 2019

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For and on behalf of the Board of Directors of
Persistent Systems Limited
!rAi��l..}i)"-A,l�f't�� --: Dr. Anand Deshpande Klran U-
Chainnan and Managing Director Director
(
Sunn Sapre A Atre
Executive Director and ompany Secretary
Chief Financial Officer
Place: Pune
Date: April 27, 2019
----- End of picture text -----

Page 2 of 37

Persistent Systems L1m1ted CASH FLOW STATEMENT FOR THE YEAR ENDED MARCH 31, 2019

Cash flows from operting activities
Profit lfor tax
Adjushnents for
Interest income
Fin ance cost
Dividend incom
Depreciation and amorization expense
Amr1jza1ion of lease premium
Unrealised exchange loss/ (gain) {net)
Exchange {gain) I loss on derivative contracls
Exchange {gain)/ loss on translation of foreign
crrency cash and cash equivalents
Donations in kind
Bad debts
Provision for doubtful debts {net)/ (Provision
for doub1ful debts willen back) (net)
Employee stock compensation expenses
Provision for doubtf11I deposits
Remasuremen1s of the defined benefit liabili1ies / {asse1) (bofore tax effects)
Advances wtten back
(Gain} I loss on fair valualion of asse1s designated as at FVTPL
(Prof1) on sale of irweslments (net)
(Profit) on sale of fixed assets (net)
Operating profit before woring capital changes
Movements in worling capital :
{Increase)/ Decrease in non·cu1rent and current loans
{lnc reese)I Decrease in other non cwrent assets
{Increase)/ Decrease in other current fnancial assets
(lncrease)I Decrease in other current assets
(Increase)/ Decrease in trade receivables
Increase I (Decrease) in trade payables and current liabihlies
Increase I (Decrease} in provisions
Operating profit after woring oapital changes
Direct !axes paid {net of refunds)
Net cas generated from operating activities
Cash flows from investing activities
Payment towards capila! expenditure {including in1angible assets)
Proceeds from sale of fixed assets
Sha1e applica1ion money paid
Purchase of bonds
Proceeds from sale/ matr1rity of bonds
Investmnts in mutr1al funds
Proceeds from sale/ maturity of mutual funds
Investments in bank deposits having original maturity over three months
Maturi1y of bank deposits having origi1ial ma1urity over three mnlhs (including
Investments in deposit w!h financial institutions
Maturity of deposit wth financial institutions
Inter corporate deposits (placed) I refunded
Interest received
Dividend received
Net cash generated from I (used In) investing activities
Cash flows from financing activities
{Repayment of} long term borowngs
Shares bought back
Dividend paid
Tax on dtvidend paid
Interest paid
Net cash generated from I {used in) financing activities
(A)
{B)

For the year ended
March 31, 2019
March 31, 2018
Inf MIiiion
Inf MIIUon
4,383.76
4,552.16
(288.82)
{191.60)
0.51
0.62
(392.26)
(259.73)
458.84
537.81
0.58
0.58
80.81
(177.50)
20 51
76.73
75.53
(111.75)
1.40
0.16
23.55
157.62
(6.99)
(146.42)
2.23
182.50
(49.83)
146 57
(17.56)
76.95
16.92
{366.09)
{186.84)
(3.77)
{2.47)
4,197.18
4,399.53
0.16
0.70
(2.29)
(3.18)
(864.55)
(156.56)
131.18
(853.41)
875.95
1.477.87
202.29
(92.85)
251.17
{92.33)
4,791.09
4,679.75
{1,394.77)
(1,119.68)
3,396.32
3,560.07
(2613.87)
(232.81)
3.82
2.94
(78.72)
(1,175.31)
(595.43)
199.43
(22,418.13)
(15,502.22)
25,010.64
14.290.26
(8.000.82)
(225.12)
4,044.26
42.26
(300.00)
{595.35)
650.35
132.74
(429.37)
341.93
124.91
392.26
259.73
(1,466.42)
{2,860.20)
(4.58)
(4.58)
(571.41)
(879. 14)
(799.79)
(137.41)
(150.23)
(1. 12)
(1.37)
{1,593.66}
(955.97)

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Page 3 of 37

Persistent Systems Limited CASH FLOW STATEMENT FOR THE YEAR ENDED MARCH 31, 2019

Net increase I (decrease) in cash and cash equivalents {A+ 8 + C) Cash and cash equivalents at the beginning of the year Effect of exchange differences on translation of foreign curency cash and cash equivalents Cash and cash equivalents at the end of the year Components of cash and cash equivalents Cash on hand (refr note 13) Balances wi1h banks On current acounts# (refer note 13) On saving accounts {refer note 13) On Excange Earer's Foreign Currency acoun1s {refer note 13) On unpaid dividend accoun!s' (refer note 14) On Escrow accounts" {Refer note 13) On deposit accounts with original matmity less than three months (Refer no1e 13) Cash and cash equivalents	For the year ended March 31, 2019 March 31, 2018 Inf MIIUon In, MIUlon 336.24 (25.10) 306.68 451.03 {75.53) 111.75
	567.39 306.68 0.11 0.11 126.71 158.58 0.91 0.75 114.91 145.83 2.27 1-41 92.94 229.54
	567.39 306.68

Net increase I (decrease) in cash and cash equivalents {A+ 8 + C)
Cash and cash equivalents at the beginning of the year
Effect of exchange differences on translation of foreign curency
cash and cash equivalents
Cash and cash equivalents at the end of the year
Components of cash and cash equivalents
Cash on hand (refr note 13)
Balances wi1h banks
On current acounts# (refer note 13)
On saving accounts {refer note 13)
On Excange Earer's Foreign Currency acoun1s {refer note 13)
On unpaid dividend accoun!s' (refer note 14)
On Escrow accounts" {Refer note 13)
On deposit accounts with original matmity less than three months (Refer no1e 13)
Cash and cash equivalents

For the year ended
March 31, 2019
March 31, 2018
Inf MIIUon
In, MIUlon
336.24
(25.10)
306.68
451.03
{75.53)
111.75

567.39
306.68
0.11
0.11
126.71
158.58
0.91
0.75
114.91
145.83
2.27
1-41
92.94
229.54

567.39
306.68

# Out of the cash and cash equivalent balance as at March 31, 2019, the Company can ulifise , 2.15 million only towards research and deve!opment activi1ies specified in the gran1 agreement There were no such restrictions for utilisation of 1he cash and cash equiva!en1 balance as at March 31, 2018.
' The Company can utilize these balances on!y towards settlement of the respective unpaid dividend.
•• The Company can u1ilize these balances only towards buy back of equity shares.

Summary of significant accounting policies - Refer note 3

The accompanying notes are an ln!egral part of the condensed financial sta1emen1s,

As per our report of evon dato

For Deloitte Haskins & Sells LLP ICAl Firm registration no. 117366WIW·100016 Chartered Aceountants

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Place: Pune Dale: April 27. 2019

For and on behalf of the Board of Directors of Persistent Systems Limited

==> picture [199 x 107] intentionally omitted <==

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

V [V] \
t-- "" j)),<//.N'� � -
Dr.Anand Deshpande �
Chairman and Managing Director Direclor
Sunil Sapro
EKecutive Director and Co pany Secretary
Chief Financial Officer
----- End of picture text -----

Place: Pune Date: Apri! 27, 2019

Page 4 of 37

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

Persistent Systems Limited
CONDENSED STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED MARCH 31, 2019
----- End of picture text -----

==> picture [487 x 255] intentionally omitted <==

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

A. Equity share capital
(Refer note 4)
/Inf Million
Balance as at April 1, 2018 Changes in equity share capital during Balance as at March 31, 2019
the year (refer note 4d)
800.00 (8.81 791.19
/In f Million
Balance as at April 1, 2017 Changes in equity share capital during Balance as at March 31, 2018
the year
800.00 - 800.00
(This space is intentionally left blank)
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Page 5 of 37

Persistent Systems L1m1ted

CONDENSED STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED MARCH )1, 2019

B. Other equity

B. Other equity
					/Inf MiHionl
Pariculars Balance asatApril 1, 2018 Ne! profit tor the year Othor comprehensive Income 101 the yea, Diviend Tax on dividend Transfer !o generl reserve Transfer to eap�al redemption reserve Transfer to Special Economic Zone re-lnvestmen1 rcservo Adjustments towards employees stock optjons Other changes durng !ho year UtUisod towards buv back of shares lre!e1 note 4d) Balance as at March 31, 2019	Securities premium 1.336.70 152.60 774.10 General reserve 9,296.47 1.260.03 14.23 10,570.73 Share outs re			Reserves andsurru� options Capital tanding redemption serve reserve 90.52 8.61 (14.23) 76.2! U1 Special--,- Economic Zone r.investment reserve 70.00 70.00 Re!ained earnings 8.991.72 3,150.08 (49.63) (660.00) (137.41) (1.260.03) (6.61) (70,00) 9,735.72	Hems of other comprehensive �-- Ettecllve por on of cash flow hedges 16.63 168.43 185,06 Total 19,732,04 3,150.08 118.60 (680.00) (137,41) 152.60 21,420,71 /Inf Million
Par!cu1ars Balance as at Aprl 1, 2017 Net prom for !he year Other comprehensive income for 1he year Diviend Tax on dividend TraMfe1 to general resere Employee sloek compensation expenses Emplyee s10Ck eompensa1ion expenses of subsidiaries Adlustmenls towards emn1ovees stock o !Ions				Reseres and surlus opllons Capital 1and!ng rademptlon serve reserve 187,12 2.23 1.57 1100.40 90.52 Special Econoic Zone re-Investment reserve Retained earings 7,784.28 3.421.17 104.97 (800.00) (150,23) (1,388.47) 8,991.72	Iems of other comprehensive income Effective porion of cash flow hed9as 208.44 (191.81) 16.63	Total 17.344.14 3,421.17 (66.84) (600.00) (150.23) 2.23 1.57 19,732.04
	Securities premium 1,336.70	General reserve 7,827.60 1,368.47 I00.40 9196.47	Share OUIS re
Balance at March 31, 2018	1,336.70

Summa!)' of signi!icanl accoun11ng policies - Refer no!c 3

The accompanying notes are an Integral part of lhc condensod financial sta1emen1s.

As per our report of even date

For Oelo!tte Haskins & Sells LLP ICAI Firm registration no. 117366WM'-100018 Char1ered Accoun nts Place: Pune Date : April 27, 2019

==> picture [196 x 121] intentionally omitted <==

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

For and on behalf of the Board of Directors of
Perslslent Systems Lim!!ed --,;LZ-
'
hv---(•._, [A] .<' Cll•'",e,_fC·�·· . � :;,
Chairman and Managing Dircclo1 Dr. Anand Deshpande �,rootkar Oirncior / /'- -�.) .
Executive Director and Com ony Sccre1a!)'
Chief Financial Offieor
Place: Pone
Date: April 27, 2019
----- End of picture text -----

Page 6 of 37

Persistent Systems Limited STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED MARCH 31, 2019

Nature and purpose of reserves

a) Securities premium reserve

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

b) General reserve

c) Share options outstanding 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 1 OAA(1 )(ii) of the Income tax Act, 1961. The reserve should be utilised by the Company for acquiring new plant and machinery for the purpose of its business in terms of Section 1 OAA(2) of the Income tax Act, 1961.

f) Cash flow hedge reserve

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

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 such transaction occurs. (This space is intentionally left blank.) a_rr:,
Cfl
:;:;
"'S fr· ��6) Q s,
(0. "-... /<, -�- "'/r11od --=,.,;:;;/ )c ""r'< '
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Page 7 of 37

Persistent Systems Limited

Notes forming part of condensed financial statements

1. Nature of operations

Persistent Systems Limited (the "Company") 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.

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 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.

Statement of compliance

3. Summary of significant accounting policies

(a) Use of estimates

The preparation of the condensed financial statements in conformity with Ind AS requires the management to make judgments, estimates and assumptions that affect the reported amounts of revenue, expenses, assets and liabilities and disclosure of contingent liabilities at the end of period. Although these estimates are based on the management's best knowledge of current events and actions, uncertainty about these assumptions and estimates could result in the outcomes requiring a material adjustment to the carrying amounts of assets or liabilities in future periods.

Critical accounting estimates

i. Revenue recognition

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 detennining 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 Company's assets are detennined 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.

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Page 8 of 37

Persistent Systems Limited

Notes forming part of condensed financial statements

(b) Property, Plant and Equipment

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 arid loss for the period during which such expenses are incurred.

(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 impaim,ent 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.

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 sen 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 impaim,ent 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 ('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 Buildings" Computers Computers - Servers and networks" Ofice equipments Plant and equipment" Plant and equipment (indmill)' Plant and equipment (Solar Energy System) Furniture and fixtures" Vehicles	Useful lives	Useful lives
		25 years 3 years 3 years 5 years 5 years 20 years 10 years 5 years 5 ears

"For these classes of assets, based on internal assessment and independent technical evaluation carried out by external valuers, the management believes that the useful lives as given above best represent the period over which the management expects to use these assets. Hence the useful lives of these assets are different from the useful lives as prescribed under Part C of Schedule II of the Companies Act 2013. Individual assets whose cost does not exceed � 5,000 are fully depreciated in the .year o� acquisition. 4/0s Uct, 0 ff) i ' . If} "'· �� ,:pc·�* ,. / } (;,___ C :'] Page 9 of 37 Q,· ... ,its- !S:18(,1-_ __,, /.1,,:: ,

Persistent Systems Limited Notes forming part of condensed financial statements

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 commencing from the day the asset is made available for use.

{e) Financial instruments
i) Financial assets

Initial recognition and measurement

Subsequent measurement

For the purpose of subsequent measurement, financial assets are classified as:

Financial assets at amortized cost

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 financlal 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 as 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 an changes recognized in the statement of profit and loss.

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 under other comprehensive income is transferred to the statement of profit and loss when the forecasted transaction occurs or affects profit or loss or when a hedged transaction is no longer expected to occur.

Derecognition

The Company derecognises a financial asset when the contractual rights to the cash flows from the asset expire, or when it transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another party.

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 o[JGS&:=,, . ./10 ----- 'I. svstc; r ····,,(S1 h. 'I Page 10of37 �( (;Y \ ) 1' -t.'�--Pu\ 0

Persistent Systems Limited Notes forming part of condensed financial statements

ii) Financial liabilities

Initial recognition and measurement

Financial liabilities are initially measured at fair value. Transaction costs that are directly attributable to issue of financial liabilities (other than financial assets and financial liabilities at fair value through profit or loss) are deducted from the fair value of the financial liabilities on initial recognition. Transaction costs directly attributable to the issue of financial liabilities at fair value through profit or loss are recognised immediately in profit or loss.

Subsequent measurement

For the purpose of subsequent measurement, financial liabilities are classified as:

Financial liabilities at amortized cost

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 as 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 at FVTPL.

Oerecognition

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

iii) Impairment

i) 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 moiith ECL is used to provide for impairment loss. However, if credit risk has increased significantly, lifetime EGL is used.

ii) 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 asset's 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. An impairment loss is recognised in the statement of profit and loss.

Recoverable amount of intangible under development that is not yet available for use is estimated at least at each financial period end even if there is no indication that the asset is impaired.

(f} Borrowing costs

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

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Page11of37

Persistent Systems Limited Notes forming part of condensed financial statements

All other borrowing costs are expensed in the period / year they occur.

Amendment to Ind AS 23 Borrowing costs: The amendments clarify that if any specific borrowing remains outstanding after the related asset is ready for its intended use or sate, that borrowing becomes part of the funds that an entity borrows generally when calculating the capitalisation rate on general borrowings. The Company does not expect any impact related to this amendment.

(g) Leases

Where the Company is a lessee

Leases, where the lessor effectively retains substantially all the risks and benefits of ownership of the leased item, are classified as operating leases.

Operating lease payments are recognized as an expense in the statement of profit and loss as per the terms of the lease agreements.

Ind AS 116 Leases: On March 30, 2019, Ministry of Corporate Affairs has notified Ind AS 116, Leases. Ind AS 116 will replace the existing leases Standard, Ind AS 17 Leases, and related Interpretations. The Standard sets out the principles for the recognition, measurement, presentation and disclosure of leases for both parties to a contract Le., the lessee and the lessor. Ind AS 116 introduces a single lessee accounting model and requires a lessee to recognize assets and liabilities for all leases with a term of more than twelve months, unless the underlying asset is of low value. Currently, operating lease expenses are charged to the statement of Profit & Loss. The Standard also contains enhanced disclosure requirements for lessees. Ind AS 116 substantially carries forward the lessor accounting requirements in Ind AS 17.

The effective date for adoption of Ind AS 116 is annual periods beginning on or after April 1, 2019. The standard permits two possible methods of transition:

Full retrospective - Retrospectively to each prior period presented applying Ind AS 8 Accounting Policies, Changes in Accounting Estimates and Errors
Modified retrospective - Retrospectively, with the cumulative effect of initially applying the Standard recognized at the date of initial application.

Its carrying amount as if the standard had been applied since the commencement date, but discounted at lessee's incremental borrowing rate at the date of initial application or
An amount equal to the lease liability, adjusted by the amount of any prepaid or accrued lease payments related to that lease recognized under Ind AS 17 immediately before the date of initial application.

Certain practical expedients are available under both the methods.

On completion of evaluation of the effect of adoption of Ind AS 116, the Company is proposing to use the 'Modified Retrospective Approach' for transitioning to Ind AS 116, and take the cumulative adjustment to retained earnings, on the date of initial application (April 1, 2019). Accordingly, comparatives for the year ended March 31, 2019 will not be retrospectively adjusted. The Company has elected certain available practical expedients on transition.

The effect of adoption as on transition date would majorly result in an increase in Right of use asset approximately by � 343.51 million and an increase in lease liability approximately by� 481.30 million.

(h) Revenue recognition

Revenue is measured at the fair value of the consideration received or receivable taking into account the amount of any trade discounts and volume rebates allowed by the Company. Revenue is recognized to the extent it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured. The following specific recognition criteria must also be met before revenue is recognized:

(i) Income from sale of software services and products

Effective April 1, 2018, the Company adopted Ind AS 115 "Revenue from Contracts with Customers" using the cumulative catch-up transition method, applied to contracts that were not completed as of April 1, 2018. In accordance with the cumulative catch-up transition method, the previous period's/ year's amounts have not been retrospectively adjusted. The following is a summary of new and/or revised significant accounting policies related to revenue recognition. The effect on adoption of Ind AS 115 was insignificant.

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

Persistent Systems Limited

Notes forming part of condensed financial statements

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.

The company has applied the principles under Ind AS 115 to account for revenues from these performance obligations.

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

The company accounts for volume discounts and pricing incentives to customers as a reduction of revenue based on the proportionate allocation of the discounts amount to each of the underlying performance obligation that corresponds to the progress by the customer towards earning the discount. Also, when the level of discount varies with increases in levels of revenue transactions, the Company recognizes the liability based on its estimate of the customer's future purchases. If it is probable that the criteria for the discount will not be met, or if the amount thereof cannot be estimated reliably, then discount is not recognized until the payment is probable and the amount can be estimated reliably. The company recognizes changes in the estimated amount of obligations for discounts in the period in which the change occurs.

Unbil!ed 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 Service Tax, value added taxes (VAT) on behalf of the government and, therefore, these are not economic benefits flowing to the Company. Hence, they are excluded from revenue.

(ii) Interest

(iii) Dividend

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

(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 reported using the exchange rate prevailing at the reporting date. Non-monetary items, which are mea,sured in terms of historical cost denominated in a foreign curren;}'. are reported using the exchange Lta.

Page 13 of 37

Persistent Systems Limited Notes forming part of condensed financial statements

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 detennined.

Exchange differences

Translation of foreign operations

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

(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 I 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

(iv) Leave encashment

Accumulated leave, which is expected to be utilized within the next twelve months, is treated as short-term employee benefit. The Company measures the expected cost of such absences as the additional amount that it expects to pay as a result of the unused entitlement that has accumulated at the reporting date.

The Company treats accumulated leave expected to be carried foiward beyond twelve months, as long-term employee benefit for measurement purposes. Such long-tern, compensated absences are provided for based on the 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. Expense on non-accumulating compensated absences is recognized in the period in which the absences occur.

The Company presents the entire leave encashment liability as a current liability in the balance sheet, since it does not have an unconditional right to defer its settlement for twelve months after the reporting date.

(v} Long service awards

Long service awards are other long tern, benefits to all eligible employees, as per Company's policy. The cost of providing benefit under long service awards scheme is detem,ined 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.

Amendment to Ind AS 19: plan amendment, curtailment or settlement- On March 30, 2019, Ministry of Corporate Affairs issued amendments to Ind AS 19, 'Employee Benefits', in connection w· �unti,ng for plan amendments, curtailments and settlements. ., s J.:: .. :.:'s ( ·0·j \ (/i[\ ] / ·'"i' } ,· '· ,·\'.0 '� y ""-···"'.,.., <::',/ ·b Page 14 of 37 ..., ,¥ p} -- . i( ''yo,

Persistent Systems Limited Notes forming part of condensed financial statements

The amendments require an entity:

to use updated assumptions to determine current service cost and net interest for the remainder of the period after a plan amendment, curtailment or settlement; and

Effective date for application of this amendment is annual period beginning on or after April 1, 2019. The Company does not expect any impact on account of this amendment.

(I) 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 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 profiU loss at the time of transaction. Deferred tax assets are recognized for all deductible temporary differences, the carry foiward 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 profiV 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 Company'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 ls recognized in the period I year in which the temporary differences originate.

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.

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 foiward. 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 "MAT Credit Entitlement." The Company reviews the·"MAT credit entitlement" 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.

Ind AS 12 Appendix C, Uncertainty over Income Tax Treatments: On March 30, 2019, Ministry of Corporate Affairs has notified Ind AS 12 Appendix C, Uncertainty over Income Tax Treatments which is to be applied while performing the determination of taxable profit (or loss), tax b'ases, unused tax losses, unused tax credits and tax rates, when there is uncertainty over income tax treatments under Ind AS 12. According to the appendix, companies need to determine the probability of the relevant tax authority accepting each tax treatment, or group of tax treatments, that the companies have used or plan to use in their income tax filing which has to be considered to compute the most likely amount or the expected value of the tax treatment when determining taxable profit (tax loss), tax bases, unused tax losses, unused tax credits and tax rates.

The standard permits two possible methods of transition - i) Full retrospective approach - Under this approach, Appendix C will be applied retrospectively to each prior reporting period presented in accordance with Ind AS 8-Accounting Policies, Changes in Accounting Estimates and Errors, without using hindsight and ii) Retrospectively with cumulative effect of initially applying Appendix C recognized by adjusting equity on initial application, without adjusting comparatives.

Page 15of37

Persistent Systems Limited

Notes forming part of condensed financial statements

The Company will adopt the standard on April 1, 2019 and has decided to adjust the cumulative effect in equity on the date of initial application i.e. April 1, 2019 without adjusting comparatives. The effect on adoption of Ind AS 12 Appendix C would be insignificant in the standalone financial statements.

Amendment to Ind AS 12 - Income taxes: On March 30, 2019, Ministry of Corporate Affairs issued amendments to the guidance in Ind AS 12, 'Income Taxes', in connection with accounting for dividend distribution taxes. The amendment clarifies that an entity shall recognise the income tax consequences of dividends in profit or loss, other comprehensive income or equity according to where the entity originally recognised those past transactions or events. Effective date for application of this amendment is annual period beginning on or after April 1, 2019. The Company is currently evaluating the effect of this amendment on the standalone financial statements.

(m) Segment reporting

In accordance with para 4 of Notified Indian Accounting Standard 108 (Ind AS-108) "Operating Segments[n ] the Company has disclosed segment infonnation only on the basis of consolidated financial statements which are presented together with the unconsolidated financial statements.

(n) Earnings per share (EPS)

(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 wilt be required to settle the obligation, in respect of which a reliable estimate can be made. Provisions are detennined 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[N] 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 nonNoccurrence 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 (equityNsettled 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 penod has expired and the Company's best estimate of � r of equity instruments that will ultimately vest � � <:, (,µ _m I � /(/�1---:)tr;s, <\ ¥ age16of37 = "'-.... 0,""·�.�["" ] , 0 '( p0,''

Persistent Systems Limited

Notes forming part of condensed 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 I 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 otheiwise 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.

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Page 17 of 37

Persistent Systems Limited

Notes forming part of condensed financial statements

4. Share capital

Share capital
		As at March 31, 2019 In, Million 2,000.00 As at March 31, 2018 Inf Million 2,000.00
Authorized shares (No. in million) 200 (Previous period/ year: 200) equity shares_of,_10 each Issued, subscribed and fully paid-up shares (No. in million) 79.12 (Previous year: 80) equity shares of �10 each Issued, subscribed and fully paid-up share capital
		2,000.00 2 000.00
		791.19 791.19 800.00 800.00

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		As at
	March 31,	2019	March	31,	2018
	No of shares	Amount	No of shares		Amount
		(			(
Number of shares at the beginning of	80.00	800.00	80.00		800.00
the year
Less: Shares bought back	0.88	8.81
Number of shares at the end of the	79.12	791.19	80.00		800.00
ear

b) Terms I rights attached to equity shares

The Company has only one class of equity shares having a par value of f10 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 Company declared an interim dividend off 8 per share on the face value off 10 each for the Financial Year 2018� 19.

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	For the period of five
	years ended March 31,	years ended March 31,
	2019	2018
	No in Million	No in Million
Equity shares allotted on March 12, 2015 as fully paid	40.00	40.00
bonus shares by capitalization of securities premium f
400.00 million

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Equity shares bought back 0.88

Page 18 of 37

Persistent Systems Limited

Notes forming part of condensed financial statements

d) Buyback of Equity Shares of the Company:

The Board of Directors, at its meeting in January 2019, approved the buyback of the Company's fully paid up equity shares of the face value of, 1 O each from its shareholders/beneficial owners excluding promoters, promoter group and persons who are in control of the 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 indicative maximum number of Equity Shares bought back at the above maximum price would be 3,000,000. If the Equity Shares are bought back at a price below the Maximum Buyback Price of� 750, the actual number of equity shares bought back could exceed the above indicative Maximum Buyback quantity but will always be subject to the Maximum Buyback Size.

The Buyback shall be from the open market purchases through the stock exchanges, by the order matching mechanism except 'all or none' order matching system, as provided under the Buyback Regulations.

The Company will fund the buyback from its securities premium account, free reserves and/or such other source as may be permitted.

The buyback of equity shares through the stock exchanges commenced on February 8, 2019 and is expected to be completed by August 7, 2019 or reaching the Maximum Buyback Size, whichever is earlier.

During the period from February 8,_2019 to March 31, 2019, 881,098 equity shares were purchased from the stock exchanges as follows: (a) 368,851 Equity Shares which have been purchased and extinguished as of March 31, 2019;,{b) 447,981 Equity hares which have been purchased but not extinguished as of March 31, 2019; and (c) 64,266 shares which have been purchased but have not been settled and therefore not extinguished as of March 31, 2019. The Company has completed the extinguishment of remaining Equity Shares of 512,247 on April 9, 2019.

Consequently, the paid-up capital of the Company has been reduced from, 800.00 million to, 791.19 million comprising of 79,118,902 Equity Shares of, 10 each.

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

Name of the shareholder*		As at	As at
	March 31, 2019		March 31,	2018
	No. in	%Holding	No. in million	% Holding
	million
Dr. Anand Deshpande jointly with	22.95	29.01	22.93	28.66
Mrs. Sonali Anand Deshpande

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.

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Page 19 of 37

Persistent Systems Limited

Notes forming part of condensed financial statements

5.1 Property, Plant and Equipment

Freehold land
Buildings"
Computers
Oice
equipments
Gross block (At cost)
AsatApri!1,2018
206.92
2,386.97
1,632.30
53.48
Additions
0.07
147.45
1.76
Disposals
0.04
94.82
2.02
As at March 31, 2019
206.92
2,387.00
1,684.93
53.22
Depreciation and impairment
AsatApril 1,2018
868.36
1,395.62
47.67
Charge for the period
96.42
159.20
3.11
Disposals
0.03
94.80
2.01
As at March 31, 2019
964.75
1,460.02
48.77
Net block
As at March 31, 2019
206.92
1,422.25
224.91
4.45
As at March 31, 2018
206.92
1,518.61
236.68
5.81

(Inf Million)
Plant and
Leasehold
Furniture and
Vehicles
Total
equipment
improvements
fixtures
1,377.70
21.12
511.29
4.73
6,194.51
21.15
4.40
4.66
179.49
22.81
0.60
0.95
121.24
1,376.04
21.12
515.09
8.44
6,252.76
1,080.85
15.43
458.28
4.42
3,870.63
86.33
2.45
24.79
0.76
373.06
22.80
0.60
0.95
121.19
1,144.38
17.88
482.47
4.23
4,122.50
231.66
3.24
32.62
4.21
2,130.26
296.85
5.69
53.01
0.31
2,323.88

"'Note: Building includes those constructed on leasehold land:

a) Gross block as on March 31, 2019 f 1,454.06 million (Previous year f1,454.10 million}

b) Depreciation charge for the year f 58.95 million (Previous year? 58.45 million)

c) Accumulated depreciation as on March 31, 2019 f 439,96 million (Previous year? 381.05 million)

d) Net book value as on March 31, 2019 f 1,014.10 million (Previous year f 1,073.05 million)

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Page 20 of 37

Persistent Systems Limited

Notes forming part of condensed financial statements

5.1 Property, Plant and Equipment

5.1 Propery, Plant and Equipment
	(Inf Million)
Gross block (At cost) AsatApril1,2017 Additions Disposals As at March 31, 2018 Depreciation and impairment AsatApril1,2017 Charge for the year Disposals As at March 31, 2018 Net block As at March 31, 2018	Freehold land Buildings Computers Ofice Plant and Leasehold Furniture and Vehicles Total equipments equipment improvement fixures 206.92 2.366.57 1.565.38 52.09 1,358.96 21.12 500.10 4.73 6,075.87 20.40 156.27 2.44 45.74 11.77 236.62 89.35 1.05 27.00 0.58 117.98
	206.92 2,386.97 1,632.30 53.4 1,377.70 21.12 511.29 4.73 6,194.51
	772.59 1,290.21 44.84 1,018.03 12.67 432.22 4.21 3,574.77 95.77 194.76 3.77 89.46 2.76 26.64 0.21 413.37 89.35 0.94 26.64 0.58 117.51 868.36 1,395.62 47.67 1,080.85 15.43 458.28 4.42 3,870.63

	206.92 1,518.61 236.68 5.81 296.85 5.69 53.01 0.31 2,323.88

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Page 21 of 37

Persistent Systems Limited

Notes forming part of condensed financial statements

5.2 Other Intangible assets

5.2 Other Intangible assets
	Inf Million
	Software Acquired contractual Total rlghts
Gross block As at April 1, 2018 Additions As at March 31, 2019 Amortization and Impairment As at April 1, 2018 Charge for the period As at March 31, 2019 Net block As at March 31, 2019 As at March 31, 2018	60.92 52.16 713.08 543.44 85.78 629.22 83.86 117.48 261 74 922.66 52.16 261.74 974.82 261.74 805.18 85.78 261.74 890.96 83.86 117.48

	Software 641.04 19.88 660.92 431.42 112.02 543.44 117.48 Inf MIiiion Acquired contractual Total rights 261.74 902.78 19.88 261.74 922.66 249.32 680.74 12.42 124.44 261.74 805.18 117.48
Gross block As at April 1, 2017 Additions As at March 31, 2018 Amorization and Impairent As at April 1,2017 Charge for the year As at Marh 31, 2018 Net block As at March 31, 2018 As at March 31, 2017
	209.62 12.42 222.04

5.3 Depreciation and amortization

5.3 Depreciation and amortization
					Inf Mllllon
	For the quarer	ended		For the year	ended
	March 31, 2019	March	31, 2018	March 31, 2019	March 31, 2018
On Property, Plant and Equipment	92.50		99. 15	373.0	413.37
On other intangible assets	21.79		23.67	85.78	124.44
	114.29		122.82	458.84	537.81

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Page 22 of 37

Persistent Systems Limited

Notes forming part of condensed financial statements

6. Non-current financial as sots : Investments (refor note 29)

	Asat March 31, 2019 lnfMill!on Asat March 31, 2018 ln f MIIUon
Investments carried at cost Unquoted investments Investments in equity instruments - In wholly owned subsidar companies Persistent Systems, Inc. (Refer no1e 30) 402 mil ion {Previous year : 402 million) shares of USO 0. 10 each, fully paid up Persistent Systems Pte Ltd. 0.50 milljon (Previous_year._0.50 million} shares of SGO 1 each, fully paid up Persistent Sys1ems France SAS 1.50mllion (Previous year. 1.50mill1on) shares of EUR 1 each, fully pai up Persistent Systems Malaysia Sdn. Bhd 5.45 mil�on {Previous year: 5.45 million) shares of MYR 1 each, fully paid up Persislent Systems Germany GmbH 6.525 million (Previous year: 0.025 mill1011) shares of EUR 1 each, fully paid up -ln associates Kl1sma e-Services Private Limited jHold1ng 50% (Corresponding period/Previous year: 50% JJ 0.005 miUion (Previous year 0.005 millicm} shares off 10 each, fully paid up less : Impairment Total Investments carried at cost (A) hwestments carried at amortised cost Quoted Investments In bonds [Market value , 2,120.66 miHion (Previous year f 1, 139,71 million)] Add: !nteres! aClued on bonds Total Investments carried at amortised cost (8) Designated as fair value through profit and loss Quoted Investments - Investments In mutual funds fair value of long !erm mutual funds (Refer Note 6a) Unquoted Investments -Others• Allizon Systems Private Limited 3,766 equity shares (Previous year: 3.766 equity shares) of, 10 each, fully paid up Total Investments carried at fair value {C) Total investments (A)+ (B) +(C) Aggregate provision for diminution in value of investments Aggregate amount of quoted investments Aggregate amount of unquoted investments	2,476.01 2,478.01
	2,476.01 15.50 2,476.01 15.50
	15.50 15.50
	97.47 97.47
	97.47 102.25 102.25 713.19 97.47 102.25 102.25 2.02
	713.19 0.05 {0.05) 2.02 0.05 (0.05)

	3,406.42 2.088.35 66.33 2,695.25 1,112.47 33.64
	2,156.68 1,146.11
	1,974.91 1,657.49
	1,974.91 1,657.49
	6.00 6.00 1,980.91 7,544.01 0.05 4,131.59 3,412.47 6.00 6.00 1,663.49 5,504.65 0.05 2.803.60 2,701.30

• lrwestments, where the Company does not have join1·COnlrol or significa11t inHuence including siluations where such joint[.] control or significant influence is intended to be temporary, are ciassified as "investments in others"'

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Page 23 of 37

Persistent Systems Limited

Notes forming part of condensed financial statements

6 a) Details of fair value of investment in long term Mutual Funds (Quoted)

	As at	As at
	March 31, 2019	March 31, 2018
	In i Million	In i Million
ICICI Prudential Mutual Fund	550.21	664.16
Ais Mutual Fund	304.96
Kotak Mutual Fund	294.32	214.02
HDFC Mutual Fund	205.96	191.64
Aditya Birla Sun Ufe Mutual Fund	191.44	157.98
UTI Mutual Fund	160.32	89.43
SB! Mutual Fund	65.18	177.65
Reliance Mutual Fund	58.05	53.81
IDFC Mutual Fund	50.13	108.80
DHFL Pramerica Mutual Fund	32.10
DSP Mutual Fund	32.09
Sundaram Mutual Fund	30.15
	1,974.91	1,657.49

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Page 24 of 37

Persistent Systems Limited

Notes formin[g p] art of condensed financial statements

7. Non.i:urrent financ!al ass,:its: Loans[(] refer noto 29[) ]

	As at March 31, 2019 ln, Million As at March 31, 2018 In, Million
Carried at amorised cost Loan to relatedparties Unsecured, oonsideredgood - Persisten1 Systems, Inc. - Persisten! Systems Germany GmbH Add: ln1erest accued but no1 due on loan Security deposit Unsecured, consideredgood Unsecured. cedi1 impaired Less: !mpainnent Other loans and advances Inter corporate deposits Unsecured, cnsidered good Unsecured, cedit impaired Less: lmpainnent	130.34 686.84 13.35
	116.01 116.01 116.01 830.53 115.28 2.19 117.47 2.19 115.28
	0.58 0.56
	0.58 (0.58) 0.58 (0.58)


	116.01 945.61

6. Other nori-<:urrent financial assets[(] refer note 29[) ]

Non-urrent bank balances{Refer note 14) Add: Interest accrued but not due on non-curent bank deposits Non-current deposits vi1h banks{Carried a1 amortised cos1) Oeposi1 wth fnancial institu1ions(Refer no1e 32) Add: lnlerest accrued but not due on deposit with financial institutions less· Credit impaired lrwestmen1 in Persistent Systems Germany GmbH{Shnrspending allotment) (Reier note 30)	Asal March 31, 2019 In, Million 94.39 1.46 Asal March 31, 2018 ln, Million 1.53 0.21
	95.85 1.74
	430.00 5,94 (162.50) 35.00 0.69
	253.44 78.72 35.69
	428.01 37.43

9. Deferred tax assets[{] net[) ]

	Asal March 31, 2019 In, MHllon 40.92 99.83 99.40 24o.15 65.51 62.02 25.74 45.73 9.71 295.71 55.56 Asal March 31, 2019 In, Million 2.06 66.29 68.35 Asal March 31, 2016 In, Million 63.50 117.36 6,80 189.66 54.35 57.34 27.75 73.17 6.73 221.34 31.66 As at March 31, 2018 In, Million 64.00 64.00 Page 25 of 37
Deferrd taK liabiliti8S Differences in book values and tax base values of block of Property, Plant and Equipment and other intangible assets Capital gains{ne1) Others Defrred tax assets Provision for leave encashmenl Provision for long service awards Provision for doubtful debts TaK credit Olhers Deferred tax(liabilities) I assets(net) 10. Other non current assets

Capita! advancs(Unsecured, considered good) Advancs recverable in cash or kind or for value to he received
*_(Tis spac_is inlenl/ona//y lefblank}***

Persistent Systems limited

Persistent Systems limited
Notes forming part of condensed financial statements 11. Current financial assets: Investments (refer note 29)
	As at Asat March 31, 2019 March 31, 2018 ln, MIiiion In, Million
Deslgnated as fair value through prfit and loss - Quoted Investments Investments in mutual funds Fair value of current mutual funds (Refer Note 11a) Total caring amount of Investments Aggregate amount of quoted Investments	3,295.53 5,916.31
	3,295.53 5,916.31 3,295.53 5,916.31 3,295.53 5,916.31
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Page 26 of 37

Persistent Systems Limited

Notes forming part of condensed financial statements

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

11 a) Details of fair value of current investment in mutual	funds (Quoted)
	As at	Asat
	March 31, 2019	March 31, 2018
	Inf Million	Inf Million
UTI Mutual Fund	625.92	823.08
HDFC Mutual Fund	493.59	174.66
Axis Mutual Fund	426.87	743.70
L& T Mutual Fund	407.39	749.22
IClCI Prudential Mutual Fund	399.98	275.33
Aditya Bir!a Sun Life Mutual Fund	386.73	845.88
SBI Mutual Fund	162.14	50.24
Tata Mutual Fund	115.97	817.81
lDFC Mutual Fund	106.40	349.34
DSP Mutual Fund	103.35	50.39
Sundaram Mutual Fund	67.19	104.15
Reliance Mutual Fund		190.45
Kotak Mutual Fund		300.42
DHFL Pramerlca Mutual Fund		441.64
	3,295.53	5,916.31

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Page 27 of 37

Persistent Systems Limited

Notes forming part of condensed flnancial statements

Trade receivables (refer note 29)

Outstanding for a perod exceeding six months from the date they are due for payment Unsecured, considered good Unsecure, credit imaired Less · Allowance for credit toss others Unsecured. considered good Unsecured, credit impaired Less : Allowance for credit loss	As at Asal March 31, 2019 March 31, 2018 In, Million In, MIIUon 1.91 14.52 73.66 80.20 76.57 94.72 (73.6) (80.20)	As at Asal March 31, 2019 March 31, 2018 In, Million In, MIIUon 1.91 14.52 73.66 80.20 76.57 94.72 (73.6) (80.20)

		1.91 14.52
	2,427.94 3,410.55 2,427.94 3,410.55 2,427.94 3,410.65 2 429.85 3 425.07

Cash and cash equivalents {refer note 29)

Cash and cash equivalents as prsented In cash flow statement Cash on hand Balances with banks On current accounts' On saving accunts On E>change Earer's Foreign Currency accounts On deposit accunts with original maturity less than three months On Escrow account""	As at As at March 31, 2019 March 31, 2018 In, Million In, MIiiion 0.11 0.11 126.71 158.58 0.91 0.75 114.91 145.83 229.54 92.94 565.12 305.27

• Out of the cash and cash equivalent balance as at March 31, 2019. \tie Company can utilise t 2.15 million only towards research and development activities specified in the agreement. There were no such restrictions for utilisation of the cash and cash equivalent balance as al March 31, 2018.

" The Company can utilii:e these balances only towards buy back of equity shares

14. Other bank balances (refer note29)

As at
March 31, 2019
In, MIiiion
4,687.90
59.90
4,747.80
(94.39)
(1.46)
4,661.95
2.27
4,664.22
Asat
March 31, 2018
Inf MIiiion
747.03
129.92
876.95
{1.53)
(0.21)
876.21
1.41
876.62

Short term bank deposits•
Add. Interest accrued but not due on deposits with banks
Deposits with banks (Carried at amr1ised cost)
Less: Deposit with maturity mre than twelve mnths from the Balance Sheet dale
disclosed under non.current finanial assets (Refer note 8)
Less: Interest accued but not due on non.current deposits with banks (Refer note 8)
Balances with banks On unpaid dividend accounts•·

Out of the balance, fixed deposits oft 87.99 million (Previous year: t 63,78 million) have been earmarked against bank guarantees avai!�d by the Company

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

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Page 28 of 37

Persistent Systems Limited

Notes forming part of condensed flnanclal statements

Current nnanclal assets : Loans (refer note 29)

Caried at amortised cost
Loan to related paries
Unsecured, credit impaired
• Klisma e..Services Private Limited
less: Impairment
Securty deposits
Unsecured. considered good
16, Other curent fnanclal assets (refer note 29)
Fair value of derivatives designated and efective as hedging Instruments
Forward contracts recelvab!e
Advances to related parties (Unsecured, considered good)
Persistent Sys!ems, Inc.
Persistent Sys!ems Pie Ltd.
Peristent Systems France SAS
Persistent Telecom Solutions tnc.
Persistent Systems Malaysia Sdn. Bhd.
Persistent Systems Lanla (Private) Limited
Persistent Systems Israel Ltd.
Persistent Systems Mexico, S.A. de C.V
Alshat Corporation
Persistent Systems Germany GmbH
Advances to related paries (Unsecured, credit Impaired )
K!isma a-Services Private Limited
Less: Impairent ol current financial assets
Deposit with financial institutions (refer note 32)
Add: Interest acued but not due on deposit wilh financial institutions
Current deposits with financial institutions (Carried at amortised cost)
Unbilled revenue
17. Other current assets
Advances to suppliers (Unsecured, considered good)
Advances recoverable in cash or Kind or for value to be received
Other advances (Unsecured, considered good)
VAT receivable (net)
Service !ax and GST receivable (net) (refer note 31)

As at
March 31, 2019
In, MIilion
27.43
27.43
(27.43)
6.63
6.63
6.63
As at
March 31, 2019
Inf M!trlon
281.27
63.19
0.11
4.14
4.5
0.08
2.41
0.38
0.59
0.57
76.03
0.81
(0.81)
250.00
10.97
260.97
1.577.47
2,195.74
Asat
March 31, 2019
Inf Mlttion
286.27
35.07
922.10
957.17
1,243.44
As at
March 31, 2018
Inf MUllon
27.43
27.43
(27.43)
4.47
4.47
4.47
As at
March 31, 2018
Inf Mlltlon
42.75
67.27
0.15
3.34
0.29
1.95
0.03
0.40
0.05
73.48
0.81
{0.81)
995.35
20.65
1,016.00
715.47
1,847.70
As at
March 31, 2018
Inf Mlll!on
360.47
47.09
967.06
1,014.15
1,374.62

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Page 29 of 37

Persistent Systems Limited

Notes forming part of condensed financial statements

18. Non-current financial liabilities: Borrowings (refer note 29)

Unsecured Borrowings carried at amortised cost Term loans Indian rupee loan from others Interest accrued but not due on term loans Less: Current maturity of long-term borrowings transferred to other current financial liabilities (Refer note 21) Less: Current maturity of interest accrued but not due on term loan transfrred to other current financial liabilities (Refer note 21)	As at As at March 31, 2019 March 31, 2018 Inf Million Inf Million 16.55 21.13 0.17 0.78 16.72 21.91 (4.58) (4.58) (0.17) (0.78) (4.75) (5.36) 11.97 16.55

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

Loan I - amounting to , 5.46 million (Previous year: , 8.19 million) with interest payable @ 2% per annum guaranteed by a bank guarantee by the Company and repayable in ten equal semi annual installments over a period of five years commencing from March 2016.

Loan If • amounting to , 11.09 million (Previous year: t 12.94 million) with Interest payable @ 3% per annum repayable in ten equal annual installments over a period of ten years commencing from September 2015.

19. Non current liabilities: Provisions

		As at	As at
		March 31, 2019	March 31, 2018
		Inf Million	Inf Million
Provision for employee benefts . Long serice awards		158.46	143.37
		158.46	143.37
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Page 30 of 37

Persistent Systems Limited

Notes forming part of condensed financial statements

20. Trade payables (refer note 29)

Trade payables for goods and services (refer note 30)
21. Other current financial liabilities (refer note 29)
Capital creditors
Current maturity of long term-borrowings (refer note 18)
Current maturity of interest on long-term borrowings (refer note18)
Accrued employee liabilities
Unpaid dividend *
Other liabilities
Advance from related paries (Unsecured, considered good)
Aepona Limited
Persistent Telecom Solutions Inc.

As at
March 31, 2019
Inf Million
1,019.07
1,019.07
As at
March 31, 2019
IniMillion
55.16
4.58
0.17
75.79
2.27
1.87
0.16
0.16
140.00
As at
March 31, 2018
Inf Million
716.73
716.73
As at
March 31, 2018
Inf MIiiion
32.36
4.58
0.78
71.42
1.41
0.18
0.44
179.69
180.13
290.86

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

22. Other current liabilities

	As at	As at
	March 31, 2019	March 31, 2018
	Inf Million	Inf Million
Unearned revenue	130.80	137.56
Advance from customers	347.05	241.10
Other payables
� Statutor liabilities	145.46	181.13
� other liabilities	6.97	3.04
	630.28	562.83

23. Current liabilities : Provisions

	As at	Asat
	March 31, 2019	March 31, 2018
	Inf Million	Inf Million
Provision for employee benefits
� Gratuity	94.34	(45.92)
- Leave encashment	187.46	157.04
� Long service awards	19.02	22.31
� Other employee benefits	363.29	294.60
	664.11	428.03

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Page 31 of 37

Persistent Systems Limited

Notes forming part of condensed financial statements

Revenue from operations (net) (refer note 30)

	For the quarer	ended	For the year	ended
	March 31, 2019	March 31, 2018	March 31, 2019	March 31, 2018
	In f MIiiion	In f Mllllon	Inf MIiiion	In, Milllon
Sofre services	4,987.02	4,313.60	19,163.68	17,065.63
Software licenses	175.69	66.45	434.99	261.86
	5,162.71	4,380.05	19,598.67	17,327.49

25. Other Income

	For the quarter ended March 31, 2019 March 31, 2018 Inf Mllllon Inf MIiiion For the year ended March 31, 2019 March 31, 2018 In, Mllllon In, MIiiion
Interest income On financial assets carried at amorised cost On others Foreign exchange gain {net) Profit on sale of fxed assets (net) Dividend income from investments Profit on sale of investments (net) Net gain/{loss) arising on financial assets designated as at FVPL Advances witten back Miscellaneous income	54.49 12.01 40.48 44.88 121.07 1.50 0.53 42.57 68.44 77.57 12.24 10.98 53.62 27.98 255.57 312.79 97.06 47.12 191.76 144.48 596.02 3.77 2.47 392.26 259.73 366.09 186.84 {76.95) (18.92) 17.56 63.91 41.52 1,037.90 1,276.82

26. Personnel expenses

26. Personnel expenses
	For the quarter ended March 31, 2019 March 31, 2018 _In,_Mllllon Inf MIiiion For the year ended March 31, 2019 March 31, 2018 Inf MIiiion In, MUan
26.1 Employee benefits expense Salaries, wages and bonus Contribution to provident fund Gratuity expenses Defined contribution to other funds Staf wlare and benefits Employee stock cmpnsation expenses 26.2 Cost of professionals - Related parties (refer note 30) - Others	2,229.37 87.19 37,18 10.31 104.47 2,468.52 477.38 71.68 1,880.82 76.62 37.47 10.12 98.15 2,103.18 392.51 68.72 8,576.55 7,863.97 328.33 304.60 150.91 163.94 41.31 41.26 394.13 364.66 2.23 9,491.23 8,740.66 1,885.21 1,894.75 310.00 238.28
	549.06 3,017.58 461.23 2,564.41 2,195.21 2,133.03 11,686.44 10,873.69

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\ svstG/· <> ,,,,.-" !; _.?}( "'t _ Pu0[° ]*

Page 32 of 37

Persistent Systems Limited

Notes forming part of condensed financial statements

Other expenses

	For the quarter	ended	For the year	ended
	March 31, 2019	March 31, 2018	March 31, 2019	March 31, 2018
	Inf Million	Inf Million	Inf Million	Inf Million
Travelling and conveyanc Electricit expenses (net)	92.24 15.71	83.55 20.01	338.77 89.96	321.25 85.54
Internet link expenses	13.63	12.86	44.44	46.24
Communication expenses	16.93	16.03	69.13	75.90
Recruitment expenses	23.32	3.31	58.51	27.11
Training and seminars	5.75	5.28	13.66	11.52
Purchase of softare licenses and support expenses	192.80	131.09	687.86	484.07
Bad debts		121.65	23.55	157.62
Provision for doubtful debts/ (provision for doubtful debts	uo	{116.65)	(6.99)	(146.42)
written back) (net)
Rent	60.23	60.49	245.51	242.75
Insurance	4.91	4.22	18.00	18.01
Rates and taxes	19.66	5.80	55.14	77.78
Legal and professional fees	42.94	62.52	206.96	207.86
Repairs and maintenance
- Plant and Machinery	23.15	27.20	101.41	104.73
- Buildings	6.16	8.03	28.09	26.28
- Others	5.71	5.20	19.31	20.09
Selling and marketing expenses	445.80	145.16	1,397.65	614.69
Advertisement, conferenc and sponsorship fees	6.06	4.80	21.29	14.71
Computer consumables	1.59	1.71	6.19	5.63
Auditors' remuneration	7.34	1.77	13.73	8.07
Donations	22.76	21.71	80.43	78.02
Books, memberships, subscriptions	6.40	3.74	23.06	14.77
Proviston for doubtful deposits (refer note 32)	182.50		182.50
Foreign exchange loss (net)	60.17		206.61
Directors' sitting fees'	1.57	0.98	5.32	3.90
Directors' commission	3.59	2.97	14.21	9.74
Miscllaneous expenses	62.58	59.41	162.72	130.17
	1,324.60	692.84	4,107.02	2,640.03

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Page 33 of 37

Persistent Systems Limited

Notes forming part of condensed financial statements

Earnings per share

		For the quarer ended	For the quarer ended		For the year	ended
		March31, 2019	March	31, 2018	March31, 2019	March	31, 2018
Numer;!or for Basic ind Diluted EPS Net Profit afer tax (befre exceptional items) (Int Million)	(A)	720.00		1,028.61	3,150.08		3,421.17
Denominatorfor Basic EPS
Weighted average number of equity shares	(8)	79,772,658		80,000,000	79,943,943		80,000,000
Denominatorfor Diluted EPS
Number of equity shares	(C)	79,772,658		80,000,000	79,943,943		80,000,000
Basic Earnings per share of face value of,10each (In 'l	(A/8)	9.03		12.86	39.4		42.76
DIiuted Earnings per share of face value of,10each (In ')	(AC)	9.03		12.86	39.40		42.76

	For the quarer ended	For the quarer ended		For the year	ended
	March31,2019	March	31,2018	March31,2019	March	31, 2018
Number of shares considered as basic weighted average shares	79,772,658		80,000,000	79,943,943		80,000,000
outstanding for ca!cu!ating Basic EPS
Add: Efect of dilutive issues of stock options Number of shares cnsidered as weighted average shares and	79.772,656		60,000,000	79,943,943		80,000,000
potential shares outstanding for calculating Diluted EPS

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Page 34 of 37

Persistent Systems Limited

Notes forming part of condensed financial statements

29. Financial assets and liabilities

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

						(In, millionl
Financial assets/ financial liabilities	Basis of	As at March	31, 2019	As at March 31, 2018		Fair value
	measurement	Carrvina value	Fair value	Carring value	Fair value	hierarchy
Assets:
Investments in subsidiaries and associates	Cost	3,406.42	3,406.42	2,695.25	2,695.25
Investments in equity instruments	Fair value	6.00	6.00	6.00	6.00	level3
Investments in bonds*	Amorised cost	2,156.68	2,120.86	U46.11	1,139.71
Investments in mutual funds Loans Deposit with banks and fnancial institutions	Fair value Amorised cost Amorised cost	5,270.44 122.64 5,262.21	5,270.44 122.6 5,262.21	7,573.80 950.28 1,928.64	7.573.80 950.28 1,928.64	Leve! 1
Cash and cash equivalents (including unpaid	Amorised cost	567.39	567.39	306.68	306.68
dividend}
Trade receivables (net}	Amorised cost	2,429.85	2,429.85	3,425.07	3,425.07
Forard contracs receivable	Fair value	281.27	281.27	42.75	42.75	Level2
Unbilled revenue	Amortised cost	1.577.47	1,577.47	715.47	715.47
Other current fnancial assets	Amorised cost	76.03	76.03	73.48	73.48
Other non current financial assets (Share	Cost	78.72	78.72	-
application money paid)
Total		21,235.12	21,199.30	18,863.53	18,857.13
Liabilities:
Borrowings (including accrued interest) Trade payables and deferred payment liabilities	Amortised cost Amorise cost	16.72 1,019.07	16.72 1,019.07	21.91 716.73	21.91 716.73
Other financial liabilities (excluding borrowings)	Amorised cost	135.25	135.25	285.50	285.50
Total		1,171.04	1,171.04	1,024.14	1,024.14

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 1 - Inputs are quoted prices (unadjusted} in active markets for identical assets or liabilities.

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

Level 3 - Inputs are not based on observable market data (unobservable inputs). Fair values are determined in whole or in part using a valuation mode! 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.

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Page 35 of 37

Persistent Systems Limited

Notes fom1lng part of condensed financial statements

30. (I) Significant related party transactions

30. (I) Significant related party transactions
			tin, MIiiion
	Name of the relat		ed pary and nature of relationship	For the quarer ended For theyearended
				March 31, March 31, 2019 2018 March 31, March 31, 2019 2018
Sale of software services	Subsidiares Persistent Svstems Total		.'"'	1,607.00 1,156.12 5,521.01 4,199.30
				1,607.00 1,156.12 5,521.01 4,199.30
Cost of prfessionals (excluding rimbursement of expenses)	Subsidiares Persistent Svstems,'"' Total			297.57 314.67 297.57 314.67 1,408.15 1,595.82 1408.15 1 595.82
Reimbursement of expenses	Subsidiaries Persistent Svstems. !nc			15.48
	Total			15.48
Purchase of Softare	Subsidiares Persistent Systems,Inc			11,01 7.22 13.75 8.28
	Total			11.01 7.22 13.75 8.28
Selling and maretlng expenses	Subsidiaries Persistent Systems. Inc.			422.08 144.0 1,305.28 604.01
	Total			422,08 144.0		6 1 305,28 604.01
Loans given	Subsidiaries Persistent Systems, Inc. Persistent Svstems Germnv GmbH					130.34 686.84
	Total					817.HI
Conversion of loan to equity	Subsidiaries Persistent Svstems Germanv GmbH					711.17
	Total					711.17
Commission received on corporate guarantee	Subsidiaries Persistent Svs!e Total	ms.'"'		0.42 1.6		8 1.67 1.85
				0.42 1.6		8 1.67 1.85
Travemng and conveyance	Subsidiaries Persistent Svstems, '"'			0.94 0.5		2 2 5.57 2.6 5.57 2.66
	Total			0.94 0.5
Interest Income	Subsidiares Persistent Systems, Inc			3.9		2 1.07		17.24
	Total			3.9 187.9		2	1.07	17.24
Repayment of lntercorporate deposits#	Subsidiares Persistent Systems, tnc.					0	132.74	187.90
	Total				187.9	0	132.74	187.90
Investment in Persistent Systems Gem1any GmbH (Shares pending allotment)	Subsidiares PersistentSystems Germny GmbH			78.72			78.72
	Total			78.72			78.72

# These transactions are disclosed at the exchange ra!es prevailing on the date of transaction.

(ll) Significant outstanding balances

(ll) Significant outstanding balances
	/nf M1111onl
	Name of the related pary and nature of relationship	As at March 31, Marh 31, 2019 2018
Trade receivables	Subsidiares Persistent Svstems, Inc	285.30	877.07
	Total	285,30	877.07
Trade payables	Subsidiares Persistent Svstems, Inc	409.23	286.94
	Total	409.23	286.94
Advances given (excluding Interest accred)	Subsidiary Persistent Svstems. Inc Total	63.19 63.19	67.27 67.27
Investments	Subsidiares Persistent Systems, Inc	2,478.01	2,478.01
	Total	2,478.01	2,478.01
Loans given	Subsidiary Persistent Systems. Inc Persistent Svstems Gennanv GmbH Total		130.34 686.84 817.18
Interest accrued on loan given	Subsidiar PersistentSvstems, Inc.		13.35
	Total		13.35

(Ill) Guarantee given on behalf of subsidiary Persistent Systems Ltd has given a guarantee of S 15,170,000 on behalf of Persistent Systems Inc (Previous year: S 15.170,000)

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Page 36 of 37

Persistent Systems Limited

Notes forming part of condensed financial statements

Persistent Systems Limited ("the Company") had received a show cause notice from the Commissioner of Service Tax on December 19, 2016 for non-payment of service tax oft 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 t165.51 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 Service Tax, Pune with the Hon'ble 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 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 crediVrefund 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 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 off 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

As on March 31, 2019, the pending litigations in respect of direct taxes amount to f' 268.74 million and in respect of indirect taxes amount to f 30.40 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 Company at the first appellate authority in the earlier years, management does not expect any outflow in respect of these litigations.

Persistent Systems Ltd has given a guarantee of$ 15.17 million on behalf of Persistent Systems Inc. (Previous year: $15.17 million).

As reported in the previous quarters, 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 �IL&FS Group") as on the balance sheet date. These are due for maturity from January 2019 to June 2019, of which f 345 million are overdue as on March 31, 2019.The Company has not accrued any interest on these deposits since April 1, 2018. The amount due till March 31, 2019 and interest due have not been received as on date. In view of the uncertainty prevailing with respect to recovery of outstanding balances from IL&FS Group, Management of the Company has provided an amount off 182.50 million for impairment in value of deposits as of March 31, 2019. The provision currently reflects the exposure that may arise given the uncertainty. With the resolution plan in progress, 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.
The financial statements are presented in f million and decimal thereof except for per share information or as otherwise stated.

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Page 37 of 37

· ·---------·--DELOITTE HASKINS & SELLS LLP Char!ered Accountants Prepared by :......1JC,.------l Reviewed by'' =�-----! Checked by ~~:.~~

AI assistant

Persistent Systems Limited — Interim / Quarterly Report 2019

60826_rns_2019-04-27_05596a32-a7a5-47e5-9ddc-0c5e1d7fdc15.pdf

PERSISTENT

Sub.: Financial Statements for the quarter and year ended March 31, 2019

Deloitte Haskins & Sells LLP

INDEPENDENT AUDITOR'S REPORT

TO THE BOARD OF DIRECTORS OF PERSISTENT SYSTEMS LIMITED

Report on the Audit of the Consolidated Interim Condensed Financial Statements

Opinion

Basis for Opinion

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

Auditor's Responsibility for the Audit of the Consolidated Condensed Financial Statements

Deloitte Haskins & Sells LLP

Other Matters

Persistent Systems Limited CONDENSED CONSOLIDATED BALANCE SHEET AS AT MARCH 31, 2019

Persistent Systems L1m1ted

As per our report of even dale

Persistent Systems Limited

Persistent Systems Limited

Persistent Systems Limited

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR YEAR ENDED MARCH 31, 2019

Nature and purpose of reserves

a) Securities premium reserve

b) General reserve

c) Share options outstanding reserve

d) Gain on bargain purchase

e) Capital redemption reserve

f) Special Economic Zone re-investment reserve

g) Cash flow hedge reserve

h) Foreign currency translation reserve

Persistent Systems Limited

1. Nature of operations

Notes forming part of condensed consolidated financial statements

2. Basis of preparation

Statement of compliance:

3. Principles of consolidation

Persistent Systems Limited

Notes forming part of condensed consolidated financial statements

Notes forming part of condensed consolidated financial statements

4. Summary of significant accounting policies

(a) Use of estimates

Critical accounting estimates

i. Revenue recognition

ii. Income taxes

iii. Intangible assets and contingent consideration in business combinations

iv. Property, plant and equipment

v. Impairment of Goodwill

vi. Provisions

vii. Internally generated Intangible assets

(b) Property, Plant and Equipment

(c) Intangible assets

Research and development cost

(d) Business combinations

(e) Goodwill/ Gain on bargain purchase

(f) Depreciation and amortization

(g) Financial instruments

i) Financial assets

Initial recognition and measurement

Subsequent measurement

Financial assets at amortized cost

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

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

Persistent Systems Limited

Notes forming part of condensed consolidated financial statements

Derecognition

ii) Financial liabilities

Initial recognition and measurement

Subsequent measurement

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

Derecognition

(h) Impairment

i) Financial assets

ii) Non-financial assets

(i) Borrowing costs

U) Leases

Where the Group is a lessee

Persistent Systems Limited

Notes forming part of condensed consolidated financial statements

(k) Revenue recognition

Persistent Systems Limited Interim / Quarterly Report 2019