Persistent Systems Limited — Interim / Quarterly Report 2019

Jan 28, 2019

NSE & BSE / 2018-19 / 92

PE IS TENT

January 28, 2019

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

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

Ref: Symbol: PERSISTENT

Ref: Scrip Code: 533179

Dear Sir/ Madam,

Sub.: Financial Results[f] or the quarter and period ended December 31, 2018

We wish to inform you that the Board of Directors at its meeting held on January 27, 2019 and concluded on January 28, 2019, has approved the Financial Results for the quarter and period ended December 31, 2018.

Accordingly, please find enclosed the following documents:

1. Audited Consolidated Financial Results for the quarter and period ended December 31, 2018;

2. Audited Unconsolidated Financial Results for the quarter and period ended December 31, 2018.

Please acknowledge the receipt.

Thanking you, Yours faithfully, A · Atre' Company Secretary Encl: As above

Persistent Systems Limited, Bhageerath, 402, Senapati Bapat Road, Pune 411016 I Tel: +91 (20) 670 30000 Persistent Systems Inc., 2055, Laurelwood Rd, Suite 210, Santa Clara, CA 95054, USA I Tel: +1 (408) 216 7010 CIN - L 72300PN1990PLC056696 I Fax - +91 (20) 6703 0009 I e-mail - info@persistent.com I Website - www.persistent.com

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

Deloitte Haskins & Sells LLP

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

INDEPENDENT AUDITORS' 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 December 2018, the Consolidated Condensed Statement of Profit and Loss for the quarter and nine months ended on that date, the Consolidated Condensed Statement of Changes in Equity and the Consolidated Condensed Cash Flows Statement for the nine months period then ended, 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 December 2018, of consolidated profit/(loss) for the quarter and nine months ended on that date, consolidated changes in equity and its consolidated cash flows for the nine months period then ended.

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 (!CAI). Our responsibilities under those Standards are further described in the Auditor's Responsibilities 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 !CAI together with the independence 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 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 ldentificalion No. AAB·8737)

Deloitte Haskins & Sells LLP

Emphasis of Matter

We draw attention to Note 38 to the Consolidated Condensed Financial Statements, relating to the deposits of Rs 430 million in Infrastructure Leasing & Financial Services Group as at 31 December 2018, whose rating was significantly downgraded by credit rating agency - _ICRA in August 2018. No provision against these deposits is considered necessary by the management as at 31 December 2018 for the reasons stated in the said note.

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; the 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 management either intends to liquidate the Group or to 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 Responsibilities 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.

Deloitte Haskins & Sells LLP

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.

• 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 auditors' 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.

• 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.

Deloitte Haskins & Sells LLP

• We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

Other Matters

• a) We did not audit the condensed financial statements of 16 (sixteen) subsidiaries whose condensed financial statements reflect total assets of Rs. 1,556.27 Million as at 31 December 2018, total revenues of Rs. 1,249.55 Million and Rs. 4,068.40 Million respectively for the quarter and nine months ended on that date and net cash flows amounting to Rs. (161.24) Million for the nine months period then 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 nine months ended 31 December 2018, 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: 28 January 2019

f ,? �;{; M. Joshi Partner (Me rship No. 038019)

Persistent Systems Limited CONDENSED CONSOLIDATED BALANCE SHEET AS AT DECEMBER 31, 2018

	Notes	As at	As at	As at
		December :u, 2018	December 31, 2017	March 31, 2018
		InrM!lflon	Inf MIiiion	Inf MIiiion
ASSETS
Non.urront assets
Property. Planl and Equipment Captal work-in-progress	,.,	2.408.27 8.68	2.605.99 35.81	2,561.30 7.71
Gooo,,;11	6.2	82.01	75.20	76.61
01!1or lntong1blo ossots	,.,	1,667.78	2.668.08	2,463.54
Intangible assets under developmenl		271.10	58.15	44.72
		4,637.84	5,442.11	5,173.88
Financial assets
• Investments - Loans		3.100.28 158.51	2.499.45 133.0	2.8B1.04 142.73
-Other non-eurronl financial ossots		29.78	323.63	37.43
Doforwd lax assets (ne1)	"	719.89	328.87	842.01
Other non-current assels	"	74.68	62.50	91.57
		9 520.98	8,790.62	8 968.86
Cumrnt assets
Financial assets
• lnvostmonts	"	7,352.25	5.532.19	5,916.31
- Trade rnc!lvablos (net)	"	4.726.66	5.005,07	4,847.40
• Cash and cash equivalents	,.	1.432.34	1.781.52	1,343.72
- Other bank boloncos	"	1.824.47	694.08	1.Q?0.25
• Loans	"	11.14	12.40	6.63
- Ot1101 cwren1 financial assols	"	2,9%.53	2.799.20	2.756.2S
Current lax assets (net)		172.56	12.89	233.50
Othor current assets	"	1.463.68	1.303.58	1.563.41
		19,979.$5	17,140.93	17,739.47
TOTAL		29 500.63	25 931.55	26 706.13
EQUITY AND LIABILITIES
EQUITY
Equity share capital		800.00	800.00	800.00
O!h&r equity		23.075.37	20.311.23	20,471.99
		23,875.37	21,111.23	21 271.99
LIABILITIES
Non- current !!abllltles
Financial hal�lities
• Borro�ngs	"	13.33	17.91	16.55
Provisions	20	168.47	158.92	159.75
DolrrOd tax llablll11es {net)	,0	315.75		270.41
		497.55	176.83	446.71
c,ment llablliUes
Financial habllit,es
- Tredo payables [(duos of m1cm and small on!erp1ises: NII (Docombor 31, 20171Marcl1	"	1,645.25	1,50.36	1,673.08
31, 2016: N,1)1
. Olher financial liabili11es	"	429.32	466.93	396.33
Other curron1 liablllllos	23	1.335.81	1.219.30	1,201.02
Provisions	"	1.717.33	1.450.86	1.599.49
Curronl ta, 1>ab"'1es (net)				1\9.51
		5127.71	4,643.49	4 989.43
TOTAL		29 500.63	25 931.55	26 708.13

Summary o! significant accounting policies

The accompanying no1es are an lnlogral pa1t of 1110 condensed consol1datod fmancial s1atements.

As per our report of even dale

For Deloitte Haskins & Sells LLP ICAt Finn registration no. 117366WMM00018 Cllarlerod Accountonts

For and on behalf of tile Board or Directors of Pers!stenl Sys!oms Limited

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Place: Puna
Dalo . January 28, 2019
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Dr. Anand Deshpande
Chairman and Managing Director
Sun!I Sai)re
Executive Director and -1/+
Chief Financial Officer
Place: Pune
Date : January 28. 2019
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Persistent Systems L1m1ted

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

	Notes	Forthe quarerended	Forthe quarerended	For the nine	months ended	For the year ended
		December 31, 2018	December 31, 2017	December 31, 2018	December 31, 2017	March 31, 2018
		In , MIiiion	In, Million	In, MIIUon	In, MIiiion	In, MIiiion
Income
Revenue from opera1ions (net}	25	8,642.49	7,918.90	25,340.87	22,811.57	30,337.03
Olhermcome	26	229.93	192.76	592.59	897.01	1,191.01
Total Income (A)		8,872.42	8,111.88	25,933.48	23,708.58	31.528.04
Expenses
Employee benefits expense	27.i	4,909.33	4,787.18	14.390.06	13,831.81	18,316.46
Cost of profess1onals Finance costs	27.2	905.89 0.67	775.55°''	2.627.62 2.02	2,313.95 0.47	3,180.63 0.79
Depreciation and amort,za1,on expense	,,	396.32	392.83	1,195.71	1,163.98	1,564.87
Other expenses	28	1,365.00	981.00	3.97.60	3,089.25	4,152.68
Tota! e)penses (8)		7,577.21	6,938.50	22 183.21	20,399.48	27,235.43
Profit befor hl) {A - B)		1,295.21	1,175.16	3,750.25	3,309.12	4,292.61
Tax e)pense
Currant hl)		266.03	300.69	1,044.45	929.25	1,203.99
Tax c1ed11 in respect of earlier years		73.39	(33.66)	76.29	(45.90)	(71.19)
Oefeued tax charge I (credit)		38.62	(8.57)	(42.55)	(68.05)	(71.07)
Totaf tax expense		378.04	258.46	1,078.19	815.30	1,061.73
Net profit for tho period I year (C)		917.17	916.70	2,872.06	2,493.82	3,230.86
Other comprehensive income
Items that will not be roclasslried to profit end loss (OJ
• Remasuremen1s or the defined benent liabili!ies I (asset) (ne1 of 1ax)		(33.50)	11.51	(59.34)	68.25	106 88
		(33.50)	11.51	(59.34)	68.25	106.88
Items that may be reclassif!ed to profit and loss (E)
• Effective portion of cash flow hedge (nel of tax)		351.15	27.40	52.86	(131.70)	(191 81)
• Exchange differences in translating lho fnancial s1a1emenls of foreign		{165.47)	(91.04)	172.24	{16.95)	77.70
operations
		185.68	(63.64)	225.10	(50.65)	{114.11)
Total other comprehensive Income for the perod I year (0) + (E)		152.18	(52.13)	185.76	*{82.40*	(7.23!
Total comprohens!ve lncomo for Iha perod I year (C) + (D} + (E)		1.069.35	864.57	2,837.82	2,411.42	3 223.65
Earings per equity share	29
(Nominal value ot share ,10 (Coresponding pwlod I Previous
year: ,10)]
Basic (In")		11.46	11.46	33.40	31 17	40.39
Diluted (In ')		11.46	11.46	33.40	31. 17	40.39

Summa of si nificanl accounlin policies

The accompariying notes are an integral part of 1he condensed consolidated financial statemen1S

As per our report of even dale

For Deloitte Haskins & Soils LLP ICAl Firm reglatratlon no. 117366WM'-100018 Chartered Acco�ntants

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

Place: Pune Dale : January 28, 2019

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Dr. Anand Deshpande � � �--·->
Chairman and Manag,ng Director
--,
. //
/,
Di"�'"
$uni! Sapre A
Executive Di1ector and C p y ry
Chief Financial Officer
Place: Puna
Dale January 26. 2019
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Persistent Systems Limited

CONSOLIDATED CASH FLOW STATEMENT FOR NINE MONTHS ENDED DECEMBER 31, 2018

		For the n!ne month& ended	For the n!ne month& ended	For the year ended
		December 31, 2018	December 31, 2017	March 31, 2018
		In , Million	In, MUllon	In, MIiiion
Cash flow from operating activities
Profit before tex		3,750.25	3,309.12	4,292.61
Adjuslmen1s for:
ln1erest income		(189.26)	(112.48)	(161.54)
Finenca incoma on lease daposits
Oiscoun1 allowed		61.66	37.62	11.78
F,nnnce costs		2.02	0.47	0.79
Dividend income		(138.20)	(129.23)	(171.25)
Oepreciallon and amortiza1ion expense		1,195.71	1,163.g8	1,584.87
Amortization of lease premium		0.44	0.44	0.58
Unrealised exchange loss/ (gain) (nel)		105.58	(74.21)	(123.74)
Change in foreign currency trens\Mion r0Se1Ve		16.96	13.48	(28.46)
Exchange loss/ (gain) on derivaliva contracts		74.58	48.0	76.73
Exchange {gem) I loss on 1ranslation of foreign		51.84	(55.51)	(100.66)
currency cash and cash equivalents
Oona1ions in kind		1.40	0.25	0.16
Bad debts		71.04	39.28	183.97
Provision for doublful receivables (net)		(10.22)	(16.75)	(151.38)
Employee stock compensa1ion expenses			3.80	3.80
Provision for diminu!ion m value of non curranl investments		13.94	29.02	26,96
Remeasuramen1s of 1l1e defned benefit liabilities I {asset) (before tax effects)		(85.10)	97.40	148.47
Excess provision In respec1 of earlier years willen (back)_I_off Advances wllen back		(21.91)	(4.33} (23.76)	{18.19) (23.76)
(Gain)/ loss on fair valuation of assets designated as al FVTPL		87.93	72.54	16.92
(Profit)/ loss on sale of inves1men1s (ne1)		(288.52)	(174.60)	(186.84)
(Profit)/ loss Oil sale or fxed assets (nel)		(2.52)	(1.87)	(2.40)
Operatlng profit befre woring capital changes		4,707.62	4,212.73	5,381.42
Movements In working capital:
(Increase) I Decrease in non-cmrenl and current loans		(6.83)	2.62	(1 31)
(lncrease) I Decrease in o\her non current assets		(10.11)	6.47	(3.42)
{lncrease) I Decrease 1n other cu/fent financial assets		(448.71)	(317.43)	72.03
(tncrease) I Decrease in other current assets		99.73	(436.47)	(696.30)
{Increase) I Decrease in 1rade receivables		{111.75)	(75.63)	145.39
Increase I {Decrease) in 1rade payables a1\d curren! liabilities		141.93	221.01	305.93
Increase/ (Decrease) in provisions		125.56	72.59	222.03
Operating profit after working capital changes		4,498.44	3,685.89	5,425.77
Direct taxes paid (net or refunds)		(1,153.57)	{850.85)	(1,213.84}
Net cash generated from/ (used ln) operating activities	(Al	3,344.87	2,835.04	4,211.93
Cash flowa from Investing activities
Payme11t towards capital expenditure (illCluding intangible assets)		(296.52)	(541.62)	(654.56)
Proceeds from sale of fixed asse!s		2.94	2.15	3.12
Acquisition of s1ep.dow subsidiary ne1 o! cash of W.35 million		(148.15)	(413.99)	(408.35)
(Previous period I year f 169.22 million)
Purchase of bonds		(906.90)	{495.74)	(595.43)
Proceeds fiom selel ma!un\y of bonds		50.00
Purchase of non-curren1 inves1ments		(144.95)
lnves!ments in mutual funds		(16,937.29)	(9.913.09)	{15,502.22}
Proceeds from sale I ma!urity of mutual funds		15,712 64	9.303.53	14,290.26
lnvestmen1s in bank deposils having original maturity over three mon1hs		(3,183.29)	(18.90)	(326.06)
Maturity of bank deposits having original ma!ur�y over three months		2,285.66	16.15	42.26
lnvestmen1s In deposit wth financial institutions Maturity of deposit w!h fnancial institutions		(300.00) 550.35	(405.35)	(595.35)
Inter corporate deposits refunded			0.15	0.18
Non currellt loans (made) I refunded		{13.46)
ln1eresl received		259.95	52.19	101.00
Dividends received		138.20	129.23	171.25
Net cash generated from / {used In) !nvastlng activities	(S)	(2,932.83)	(2,285.29)	(3,473.90)
Cash flows from financing activities
(Repayment of long term borrowmgs		(3.22)	(3.22)	(4.58}
Specific projec1 rela!ed grent received		4.50
llllerest peid		(2.58)	(1.13)	(1.54)
Dividends paid		(239.30)	{239.72)	(799.79)
Tax Oil dividend paid		(20.18)	(50.77)	(150.23)
Net cash generated from I {used in) financing activities	(Cl	(260.88)	(294.84)	(956.14)

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Persistent Systems Limited

CONSOLIDATED CASH FLOW STATEMENT FOR NINE MONTHS ENDED DECEMBER 31, 2018

	Fw the nine month, ended	Fw the nine month, ended	For the year ended
	December 31, 2018	December 31, 2017	March 31, 2018
	In' MIUlon	In, MIiiion	In, MIiiion
Net increase I (decrease) in cash and cash equivalents (A+ S + C)	151.16	254.91	(218.11)
Cash and cash equivalents at !he beginning of the penod I year	1.345.13	1.462.58	1,462.58
Effect of exchange difference on translation of foreign	(61.84)	65.51	100.66
currency cash and cash equ1valen1s
Cash and cash equivalents al the End of thE period/ year	1434.45	1 783.00	1 345.13
Components of cash and cash equ!valents
Cash on hand (Refer note 14)	0.25	0.32	0.23
Cheqt1es on hand (Refer note 14)	26.97
Balances with banks
On curron1 accounts# (Refer note 14)	1.073.50	1.585.31	1,196.91
On saving accoun1s {Refer note 14)	8.07	0.60	0.75
On Exchange Earner's Foreign Currency accounts (Refer note 14)	323.55	195.29	145.83
On unpaid dividend acoun1s• (Refer note 15)	2.11	1.48	1.41
CB$h and cash aqulvalants	1434.45	1 783.00	1 345.13

# Out of \he cash and cash equivalent balance as a! December 31, 2018, the Group can u11lise , 2.98 mimon only towards research and development activities specified in the loa1\ I graril agreement Th era were no such restnctioris for uhl1sat1on of tho cash and cash equ,valen\ balance as at December 31, 2017 and March 31, 2018

• The Group can ulilize those balances only towards seU1emen1 of the respective unpaid d1v1dend

Summary of significan1 accounting gohcies - Refer note 4

The accompanying no!es are an integral par1 of the condensed consolidated financial s!o!emenls.

As per our report of even dote

For Deto!tte Haskins & Se!ls LLP !CAI Firm registration no.117368W/W,100018 Chartered Accountants

for and on bahalf of Iha Board of Directors of Pers!stent Systems Limited

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---,
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Dr. Anand Deshpande �-� Kiran Umrootkar
Chairman and Managing Director Director
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/
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Sunll Sapre Am
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Executi�e Director and Company Secratary
Chief Financial Otf1cer
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Place: Puna Date : January 28. 2019

Place: Pune Date January 28, 2019

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Persistent Systems Limited

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CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR NINE MONTHS ENDED
DECEMBER 31, 2018
A. Share capital
(Refer note 5)
(In , Million
Balance as at April 1, 2018 Changes In equity share capital Balance as at December 31, 2018
during the period
800.00 . 800.00
/In, Million
Balance as at April 1, 2017 Changes In equity share capital Balance as at December 31, 2017
during the period
800.00 . 800.00
/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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s of 37

Persistent Systems Limited

CONOEtlSED CONSOUOATED STATEMENT OF CHANGES IN EQUITY FOR NINE MONTI S ENOEO DECEMBER 31, 201S B.oth<!<equity

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R£WM$ and :<umlus ,1-;
Part;eular,: Securities premium ,, SMreoptions out!;landlng pureha..., Gain on ba'9ain Reto.lned earnings El'!ecti"" portion <>I' Ca$h !low 11<,d,gcs Excl>ange differences of foreign operations financial stat<>ments ontl'anslating the Total
Balance as at Aptll 1, 2018 1.3M.70 9.306.27 90.52 �.� 9.54'1.13 151,35 20.471.99
Net prof� lot the pe<iod 2.6n.oo 2.6n.OO
OIM, c<>mp,eherr.;,�e mcome !o, the penod {59 34) 52.&6 172.24 165,76
Q;v,clend {240 00) (240,00)
Tax°" div,dend {20.18) (20.18)
Adjustments towards emplo1ees stock opt,o<>S 10.64 (10.64)
AddibM on busmess comt.na-tron (refe, note 35) 0.25 0.25
Other ch.a dun=!h� oeriod /4.97 30.45 I 25.49
Balance as at Dec mber 31 2018 1 336.70 9311.94 79.S8 57.10 118�.67 f;9.49 I 323.59 2l07S.37
lln, MIH!on
Res.erves and surplus -..
Particular,: Securities -·· [�-] Share <>p6o<ls outstanding ��- G,i;non baf!lain Retained evning• EffectiYe po<tlon of cash flow hedges of ,.,,...,;gn operations Exchange d!flerences financial swements on translatlng the ,,
S..lance as at AP<� 1, 2017 1.3M.70 7.S37. [4] 0 187.12 24.25 8,525.07 206.44 Hl,192.53
Net p,oM for !he pemxj 2,493.82 2,493.82
Othe, comprnhensr,e rncomc for tho P"n,;d 55.25 (131.70) (18.95) {82AO)
DrvrdenTa>< <>n divrdend {50.77)
EmplC)lee sloe!< comp,,noatton expMses ,ro
AdjUS:m<.mts towar<:ls employ= stock opl!<ms 50.32 (50.32)
Ott,�, cham,cs dunno the oon<><l {5.85) ,�n,I ($.85
Balance as at December 31 2017 1,336.70 7 8117.72 140.60 1&.40 10,796.37 I 76.74 �" 20 311.23
nn, Mmlon
R�rv=ane, com ns!Ye l»come
Partk:ulars S<,cur�les premium -"" Share options outstandlng purchase Ga!non bargain Retain<>d .,,, nlngs Effective portion o! =� flow hedges Exchanged!fle== linanel:rl statements on translating the ,_,
of 1,,..,ign operations
Balance as atA;>,U 1, 2017 1,336.70 7.837. [4] 0 187.12 24.25 8,525.07 73.65 18.192.63
Net prof� for the year 3,230.88 3.230.88
Otho: comprehenSlve rncome lo, the yea, \06.88 (191.81) 77.70 [7.23)
D1Vlder.d 1800.00) {800.00)
Ta><on d<wknd 1150.23) (150.2S)
T,arn,forl<> general reserve 1,368.47
Employ"" slock comp,,n$<1tiOn cxp,nses ;ro 3.80
Adjustments !ow,,rds employees stock opl!ons 100. [4] 0 (100.40)
Olhe, chanoes dun<><1 tl.e year 2.14 (1.36Bt7)1 2.14
Bal.::rnce at March 31 2018 1 336.70 90.52 �.� 9 s«.13 16.63 151.35 20,471.99
•=-"
Summa, or si n<f,cant ac,;ourrn c,es - Refer r,o\e 4
"n(Mll!ion
,.ro
73.65
15.53
205.44
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As por ou, rePQrt of <>Ven date

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For Deloitte Haskins & Sel $ LLP
•. 117366WfW [.] 100018
Piao,, Pune
Da1e Janua"f 26. 201S
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Dr. Anand Deshp,ande C�a,rman an<!MaMg,ng D,recto• �::
Suni! Saprc -1,-�� AmltAm! ( '
Executvc D,r�ctor and ComP<tny er .aiy
Chia! Fonancial O!fiCN � / ·�· 7
�ace Pune
D-1 e c Janw,:y 2S. 2019
6 of37
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Notes forming part of condensed consolidated financial statements

Persistent Systems Limited

1. Nature of operations

Persistent Systems Limited (the "Company" or "PSL") is a pubhc 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.

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 mode!, 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.

7 of 37

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 conyention except for certain financial instruments, equity settled employee stock options and initial reC:ogllition -of aSsets aCquir[.] ed under business combinations which have been measured at fair value. Historical cost[. ] is generally-b�sed .on th� fair value of the consideration given in exchange for goods and services. The accounting Policies are ConsiStent!y applied by the requires a change in the accounting policy hitherto in use.Group except where a newly issued accounting standard is initially adopted or a revi$.ipo to <; �xi.sti.ng_t�ccounti_ng $1pn,d.c!.rd · ·

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· nine months ended December 31, 2018 are prepared in accordance with generally accepted accounting p·rinCiples applicable in·!fldia, and the Indian Accounting Standard 110 (Ind AS 110} on 'Consolidated Financial Statements', n·otified by CorTlpanieS (Accounting Standards) Rules, 2015, ("Indian Accounting Standards") by and to the �xtent possi_ble !n the S<;1me (ormat_ 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 thefinancia! 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 t�ose 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 ba"sis 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 qf 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 ls tested for impairment on a periodic basis and written off if found impaired.

The consolidated financial statements are prepared using uniform accounting policies for like transactions and other events in similar circumstances and necessary adjustments required for deviations, 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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8 of 37

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 subsidiar		""-----·--"--·------·"··-----·----------· Ownership Percentage as at Countr of	""-----·--"--·------·"··-----·----------· Ownership Percentage as at Countr of	""-----·--"--·------·"··-----·----------· Ownership Percentage as at Countr of	""-----·--"--·------·"··-----·----------· Ownership Percentage as at Countr of	""-----·--"--·------·"··-----·----------· Ownership Percentage as at Countr of
		December	December	March 31,		incorporation
		31,2018	31,2017	2018
Persistent Systems, Inc.		100%	100%	100%		USA
Persistent Systems Pte Ltd.		100%	100%	100%		Singapore
Persistent Systems France SAS		100%	100%	100%		France
Persistent Telecom Solutions Inc.		100%	100%	100%		USA
Persistent Systems Malaysia Sdn.Bhd.		100%	100%	100%		Malaysia
Akshat Corporation (d.b.a. RGen
Solutions) (Dissolved with effect from		-	100%	100%		USA
December 21, 2018) •
Aepona Holdings Limited		100%	100%	100%		Ireland
.-- -,		"-------			-	-------
Aepona Group Limited		100%	100%	100%		Ireland
Aepona Limited		100%	100%	100%		UK
�·
Valista Limited		100%	100%	100%		Ireland
------- Persistent Systems Lanka (Private) Limited ····-	-	100%	100%	100% -		Sri Lanka
Persistent Systems Mexico, S.A. de rv.		100% ··-·-··--···----··-·-	100% ---·-····-·-·--···- ..... _ ..	100% __ ,,, .. ,---�--	Mexico ..... ......... -··--·-·-·----
Persisteht Systems Israel Ltd.		100%	100%	100%		Israel
Persistent Systems Germany GmbH		100%	100%	100%		Germany
PARXWerk AG		100%	100%	100%		Switzerland
---·---					"--
PARX Consulting GmbH		100%	100%	100%		Germany
Herald Technologies Inc*"		100%	-	-		USA

• Refer note 32.

*" Refer note 35.

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9 of 37

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 amoun.ts of revenue, -expenses, assets and liabilities and disclosure of contingent liabilities at the end of period I 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 pei"centage­ of-completion method requires the Group to estimate the efforts or costs expended to date as ·a Prop6rtion of the totai efforts or costs to be expended. Efforts or costs expended have been used to measure prOgi-eSs towards completion. Provisions for estimated losses, if any, on uncompleted contracts are recorded in the period in which such ·1osses become probable based on the expected contract estimates at the reporting date.

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 ta·xes.

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 val�a�ion expe�s.

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 is acquired and reviewed periodically. The lives are based on historical experience with similar assets as well as anticipation of future events, which may impact their life, such as changes in technology.

v. lmpainnent 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 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.

Persistent Systems Limited Noles forming part of condensed consolidated financial statements

(b) Property, Plant and Equipment

Property, Plant and Equipment are stated at cost, less accumulated depreciation and accumulated impaim,ent 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 book value only if it is probable that future economic benefits associated with the item will flow to the Group. AU other expenses on existing Property, Plant and Equipment, including day-to-day repair and maintenance expenditure and cost of replacing parts, are charged to the statement of profit and loss for the period during which such expenses are incurred.

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

(c) Intangible assets

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

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

Research and development cost

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

• technical feasibility of completing the intangible asset so that it will be available for use or sale; its intention to complete the asset;

its ability to use or sell the asset;

how the asset will generate probable future economic benefits; the availability of adequate resources to complete the development and to use or sell the asset; and the ability to measure reliably the expenditure attributable to the intangible asset during development.

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

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

(d) Business combinations

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

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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 impainnent losses.
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11 of 37

Persistent Systems Limited

Notes forming part of condensed consolidated financial statements

• (f) Depreci<'!tion and amortization

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

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

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

*For these classes of assets, based on internal assessment and independent technical ev<:1luati�n carried out by erterna! 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 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 toss 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.

12 of 37

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 reserve under other comprehensive income and the ineffective po11ion 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 tenninated, 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 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 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 lnd AS 109 are satisfied. Gains or losses on habilities 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 Group has not designated any financial liability as at FVTPL.

Derecognition

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

The Group derecognises financial liabilities when the Group's obligations are discharged, cancelled or have expired.
The diffe"rence between the carrying amount of the financial liability derecognised .and the c sideration. paid and
payable is recognised in profit or loss. 0 [t ][Sys-] 1 [,� ]
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13 of 37

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}. EGL 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.

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

An impairment loss is recognized wherever the carrying amount of an asset exceeds its recoverable amount. The recoverable amount is the greater of the asset's fair value and its value in use. In assessing val4e 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.

(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.

Leases (j)

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.

(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 co!lectability of consideration, is recognized as per the percentage-of-completion method. When there

0' . . Svsr ',, , -"�') ;J/�/' (fl Q[)][! ] ; (..\ \,. /

Persistent Systems Limited

Notes forming part of condensed consolidated financial statements

is uncertainty as to measurement or ultimate collectabi!ity, 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 pe1formance 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.

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

(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 p�riod / year in which they arise.

(-: � .[,.__] ,,v.J /" 0 .-:> Yst"�,,-• ',,, 0,� Cl, ' J'U/ ,� * * o/37 G) Pi1n0 y

Persistent Systems Limited Notes forming part of condensed consolidated financial statements

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 statement of profit and loss, except for the remeasurements, comprising of actuarial gains and losses which are recognized in full in the statement of other comprehensive income in the reporting period in which they occur. Remeasurements are not reclassified to profit and loss subsequently.

(iii) Superannuation

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

(iv) Leave encashment

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 forward 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.

(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 , [°'] �� \, v J Sf " Uj· , SP . Q), ), { ' ..1 Q• . . I),\ ,;'// 37 .,

Persistent Systems Limited

Notes forming part of condensed consolidated financial statements

carrying-amounts. Deferred tax is measured based on the tax rates and the tax laws enacted or substantively enacted at the reporting date.

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

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

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

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

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

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

(p) Segment reporting

(i) Identification of segment

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

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-al!ocab!e expense and is charged against the total income.

(iii) Unallocated items

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

Segregation of assets, liabilities, depreciation and amortization and other non-cash expenses into various reportable segments have not been presented except for trade receivables as these items are used interchangeably between segments and the Group ls 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.

Persistent Systems Limited

Notes forming part of condensed consolidated financial statements

(q) Earnings per share (EPS)

Basic earnings per share are calculated by dividing the net profit for the period / year attributable to equity shareholders by the weighted average number of equity shares outstanding during the period/ year. The weighted average number of equity shares outstanding during the reporting 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 I 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 wm 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 non-occurrence of one or more uncertain future events beyond the control of the Group or a present obligation that is not recognized because it is not probable that an outflow of resources will be required to settle the obligation. A contingent liability also arises in extremely rare cases where there is a liability that cannot be recognized because it cannot be measured reliably.

(t) Cash and cash equivalents

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

(u) Employee stock compensation expenses

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

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

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

==> picture [452 x 103] intentionally omitted <==

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

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 falr value of the share-based payment transaction.or is otherwise beneficial to the
employee as measured at the date of modification. \'- ._, J 11 Sf"'�
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18 of 37

Persistent System's ·Limited

Notes forming part of condensed consolidated financial statements

5. Share capital

are capital
	As at	As at	As at
	December 31,	December 31,	March 31, 2018
	2018	2017
	In f Million	Inf Million	Inf Million
Authorized shares (No. in million)
200 (Previous period /Previous year: 200) equity	2,000.00	2,000.00	2,000.00
shares of { 1 O each
	2,000.00	2,000.00	2,000.00
Issued, subscribed and fully paid-up shares (No.
in million)
80 (Previous period /Previous year: 80) equity	800.00	800.00	800.00
shares of� 10 each
Issued, subscribed and fully paid-up share	800.00	800.00	800.00
capital

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	As at
	December	31,	2018	December 31, 2017		March	31, 2018
	No. of	Amount		No. of	Amount	No. of	Amount
	shars			shares		shares
Number of shares at the beginning	80.00		800.00	80.00	800.00	80.00	800.00
of the period/ year
Number of shares at the end of	80.00		800.00	80.00	800.00	80.00	800.00
the period/ year

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.

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

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

	For the period of five years ended	For the period of five years ended	For the period of five yea r ended
	December 31, 2018	December 31, 2017	March 31, 2018
	No in Million	No in Million	No in Million
Equity shares allotted on March 12, 2015 as	40.00	40.00	40.00
fully paid bonus shares by capitalization of
securities premium f 400.00 million

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19 of 37

Persistent Systems Limited

Notes forming part of condensed consolidated financial statements

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

			,..,,,.__-	-	--	-
Name of the shareholder*	As	at	As at		As at
	December	31, 2018	December 31,	2017	March.31,	2018
	No. in	%	No. in	%	No. in	%
	Million	Holding	million Holding		million	Holding
Dr. Anand Deshpande jointly with	22.95	28.69	22.93	28.66	22.93	28.66
Mrs. Sonali Anand Deshpande
Saif Advisors Mauritius	1.30	1.62	4.27	5.33	3.70	4.62
Limited

• 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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20 of 37

Persistent Systems Limited Notes forming part of condensed consolidated fiMncial statements

6.1 Property, Plant and Equipment

									ln i Million
	Land - Freehold	Buildings•	Computers	Office	Plant and	Leasehold	Furniture and	Vthicln	Total
				equipments	Equipment	improvements	fixtures
Gross block !At cost)
As at April 1, 2018	221.03	2.450.18	2.392.46	S6.63	1,408.62	94.84	**665.41 **	4.73	7,323.90
Addrtions		0.07	148.23	3.38	14.79		7.58	4.66	178.71
Addttions lhrough business combinatton (refer note 35)			0.08				0.03		0.11
Disposals			39.01	2.49	19.64		0.47	0.95	62.56
Efect of foreign currency translation from 1,mctional currency to reporing currency	(0.14)	(0.64)	9.69	2.29	(0.36)	(1.52)	7.50	O.Q3	16.75
As at December 31, 2018	220.89	2,449.61	2 511.45	89.81	1.403.41	93.22	680.05	8.47	7.456.91
Depreciation and Impairment
As at April 1, 2018		885.26	2.078.80	62.14	1.097.81	69.78	544.39	4.42	4.742.60
Charge for the period		74.44	163.81	7.31	67.43	5.88	3B.97	0.57	358.41
Addtt10ns through business combination (refer note 35)			0.02				O.o1		0.03
Disposals			38.88	2.20	19.64		0.47	0.95	62.14
Efec1 or foreign currency translatton from functional		(0.20)	5.98	1.01	(0.2S)	(1.66)	3.88	O.o1	9.74
currency to reporting currency
As at December 31, 2018		959.50	2 210.73	68.26	1.145.32	74.00	586.78	4.05	5 048.64
Net block
As at December 31, 2018	220.89	1,490.11	300.72	21.55	258.09	19.22	93.27	4.42	2,408.27
As at March 31, 2018	221.03	1 564.92	313.66	24.49	210.81	25.06	121.02	0.31	2 581.30

									{In i Minion)
	Land. Freehold	Buildings•	Computer	Ofice	Plant and	Leasehold	Furn!lure and	Vehicles	Total
				equipments	Equipment	Improvements	fl:uras
Gross block (At cost)
As al April 1. 2017	219.02	2,420.77	2.233.17	**76. 43 **	1.373.11	86.ZS	522.64	4.73	7,035.25
Add�,ons		12.10	134.88	9.79	29.45	1.66	**20.77 **		208.65
Add�ions through business combination			3.61	4.27			6.92		14.80
Disposals			74.85	0.85	5.65				B1.36
Efecl of foreign currency translalion lrom functional	1.25	5.58	13.32	(0.39)	**0.46 **	1.70	(0.89)		21.03
currency to ,eponing currency
As at December 31, 2017	220.27	2,438.45	2,310.13	89.25	1,397.36	89.74	649.44	4.73	7,199.37
Deprciation and Impairment
As at April 1. 2017		784.92	1,863.38	52.41	1.026.57	55.86	A80.54	A.21	4.267.89
Charge for lhe period		73.86	190.07	7.57	i0.95	5.64	38.91	0.16	387.16
Additions through business combination			0.15	0.14			0.26		0.55
Disposals			7A.68	0.74	5.66				81.08
Effect of foreign currency translation from functional		1.32	14.27	(0.15)	0.36	2.74	0.32		18.86
currency to reporting currency
As at December 31, 2017		860.10	1,993.19	59.23	1.092.22	84.24	520.03	4.37	4.593.3S
Net block
As at December 31, 2017	220.27	1,578.35	316.94	30.02	305.14	25.50	129.41	0.36	2,605.99

• Nole: Building includes lhose conslructed on leasehokl land

• a) Gross block as on December 31. 2018 f 1.454, 10 million (Correspondrng period! 1,445.80 mrnronl Previous year t 1.[4] 54, 10 mimon)

b) Depreciation charge for the period t 44.41 mirnon (Corresponding period� 43.98 mmion I Previous year f 58.45 million)

c) Accumulated depreciation as on December 31, 2018 f 425.46 mm ion (Corresponding period f 366.58 million I P,evlous year f 381 .05 mi!Jion)

d) Net book value as on December 31 2018 f 1.028.64 mill,on (Corresponding period f 1,079.22 mmron I Previous year, 1.073. 05 million)

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21 of 37
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Persistent Systems Limited

Notes forming part of condensed consolidated financial statements

6.1 Property, Plant and Equipment

6.1 Proper, Plant and Equipment
									(In! Million)
	Land·	Buildings	Computers	Office equipments	Plant and	Leasehold	Furniture and	Vehicles	Total
	Freehold				Equipment	improvement	fixtures
Gross block {At cost)
As atApri! 1. 2017	219.02	2.420.77	2.233.17	76.43	1,373.11	86.38	622.6	4.73	7,036.25
Additions		20.40	189.10	9.97	57.89	1.73	26.66		305.75
Additions through business combinalion			16.83	1.01	3.15		13.20		34.19
Disposals			90.67	1.05	27.00		0.58		119.30
Effect of foreign curency translation from functional curency to reporing curency	2.01	9.01	44.03	0.27	1.47	6.73	3.49		67.01
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		2.22	41.80	0.14	0.97	6.07	2.55		53.75
As at March 31, 2018		885.26	2,078.80	62.14	1,097.81	69.78	544.39	4.42	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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22 of 37

Persistent S $tems Limited

Not"s fom1ing part of cond<,nsed c<insolidat"d financial stat('{tlents

6.2. Goodwill

6.2. Goodwill
			nfMillion
	Asal	Asal	Asat
	Oec,mb<r31, 2018	Oec.mb<r 31, 2017	March 31, 2018
	Inf Million	In fMitlion	In fMillion
Cost
Ba\ano_at_beginnir of pc!io /year Add!honal amoun1s ie.nfse lrom busiM&S combinat,ons occuirir,g dwin 1ho perio/year Effec of fo,Cgn am ency oxdoango dtflmenes Balanc" al mid of p,od /year	76.61 5.40 82.01	76.23 on (1.80) 75.20	76.23 o (0 39) 76.61
6.3. Oil.. Intangible aswts
			In fMiHion
	Sof!ware	Acquired contractual	Total
		ri his
Gross Mock
AsalAp,il1.201B	2,422 24	3.963-67	6.40 11
Addtlions	44.17	39.61	83.76
EUec of Jo,C**functional cmrenc to IO(>Ortng cricncy As at Oe<(bcr 31, 2018	10S.65 2,572.0	21 28 4,264.76	3.93 6,65.82
Amorization and lmpaiment AsalApri\1.2018 Charge fo1 the prio Effec oJ fore,gn crrency lranslal1on hor functional c,.mcnc !o fC{)Olling cwroncy As at Occ.rbcr 31, 2018	2.076.02 199.24 93.18 2,368.44	1.66.55 6' 0 115.99 2,620.60	3.942.57 837.3 20.17 4.989.04
Net block
As at Oecontcr 31, 2018 As at March 31, 2018	203.62 36.22	1,664.16 2,117.32	1,867.78 2,463.5

						In fMillion	In fMillion
				Software	Acquired contractual	Total
					ri his
Gross block
As al Ap1il 1. 2017				2.385.43	2.960.69		5.36.12
Additions				15 35	476.12		491.47
Add,1ions lhrough husiness coml�na\1011 Dispoals EHec ol fore**honc1ional cuucncy1o 1e1>1ting wuvnc As al Oec.mb"r 31, 2017				(18.76) 2,382.02	46.98 (30.64) 3.893.15		4698 {49.40) 6.275.17
Amortization and lmpalm1cnt k at />1il 1. 2017 Charge for the perio Effect of foregn cunency transla�on florn functior,al crnrnnc !o rnpm�ng crrency				1.724.63 258.94 (14.1)	1,12.44 S17.68 (669)		2,851.07 776.82 (2080)
As at Oecetnbm 31, 2017				1,969.46	1,637.63		3,607.09
Net block
As at Oec.mb"r 31, 2017				412.56	2,255.52		2,668.08
						In	fMiUion
				Software	Acquired contractual	Total
					rights
Gross block
AsalApnll.2017				2,365.43	2.980.69		5.3612
				20.11	493.75		513.66
Additions 1h1ot,gh lwsiness cmbnation EHec of foregn currency lranslalmn from functor1al cunencylo rnpmting currency				16.70	469.16 20.27		489.16 3.97
As at March 31, 2018				2,422.24	3,983.87		6,406.11
Amortization and impaiment
Mat April 1, 2017				1,724.63	1,126.44		2,851.07
Cha,9e for the year				334.64	729.30		1,063.94
Effec o! !oC<gn cumctrnns\atjon !ror				16.75	10.61		27.5
functional currency to reporting currency
As at March 31, 2018				2,076.02	1,6G6.55		3,942.57
Net block
As al March 31, 2018 As at March 31, 2017				346.n 660.80	2,117.32 1,65.25		2,463.5 2,515.05
6.4. DepreciaHon and amortiztion
	For thequa11.rendcd December 31, 2018 Oecemb"r		31, 2017	Foru,.nine December 31, 2018	months ended Oec.mber 31, 2017	In P Million For theyear ended March 31,2016
OnPropcr.-Planl and",c c, c.cq�------­ On other intangible assets	115.83 280.49		124 37 2 .2	356.41 837.30	367.16 776.62		520.93 1,03.9
	396.32		392.63	1,195.71	1,163.98		1,584,87

(Tlus space is ,rJ/en/iom,1/y /ell />lank)

23 of 37

'\:.':tr

Persistent Systems Limited Noto, fom1lng por1 ofcondonso<I consoll<lol<Xf nnonelOI ,tolomont, 1. Non<:urron! fin•nelol »>ol, lnvo,lmont> (ro!or no!o JO)

		As o! Oe<emb<, J1, 2016	A> al Ooccmb<r J\, 2017	A> al Ooccmb<r J\, 2017	;,-., MorchJ1,201B
		In, Mllllon		Inf MIiiion	In fMllllon
!nvM!n,enl> conlo< un<or oqul!y occounUng m�thOd
Unquoto< lnvMlment,
!nvc.,n,ont, In equltyln,lrumonl,
In a"oclalN
K1ena n-Somco, l'nva1o ! ,m,lod ll!ol; �% 1Co1>r\d"'9 p1<od I l't<,v,ous ioar 5%)1
0.05 m1ll<on (Corros�n<1ng pcco< /hov,ous yoo,	O.O�n11lbon) ,ho,os o1 l10oach, l�ly pa,d up	000		000	0.0&
loss lnlf"nlOOt of non-cur<onl u<>quolo onvoolmenls		(0�1		00)	{OW)
Tola! lnvo,.mon1' e>rtlod oqullyaccountlng moti,O (A)
ln'°•ln><nl• eo,rled al •morll,od co,t
Quoted lnve,tmont•
ln lond•		1.971 37		1,01218	1.11747
(M>!�Ol valuo { 2,09 01 m,11,o<> jCWC'flO«d•n� pr,od • 1,05• OV m<ll1oo/ l',e;sou, ye,,/ !,13J1
m,11,on))
Atld lmo,o" acauo on bc.Js Toi•! lnVO>lm•n1' OO(IOd 01 �morU,od eo,1 (I)		2.ttSA_t			1.t.«i.11
o .. 1gn>tod"' f•I• -.1uo 11trough pront and !o••
Quoted lnvo,tmon!>
• lnvo,imenl> In mutual fund>
ro" ,ah,o oflo,1( term mUual 1U!\<s lfMor Nole 7a)		1,66 N			1,t5749
		16-46.79		1,J7J.JG	1.G�l.49
Unquo1ed lnveslment>
-au,.,..
G,q,,a, l 1n1,tod ft!otd•"O 136% (GorrospM,np pof<o<I I Prov,ou,, ioar 1 :3%1)
ON m,11,on (Con<'po,vl"� f""od I P,o,,ous yo,,	00� m,11,on) oi,ar,,s of GUf' O 01 ooc,. fully rm,d
"'' ).(I~l•'1~••11~M~•t1tunri1,o.lo3...._..·K1'1t~		rt)e.t)			113(9)
Ne,or, S)"'°'"' p.,,a,o Um,io		00		00	00
3.706 oqwi)' r.haros ICorrosporad,nu p<<wd / l',ov,ouc iea, J,7& oqu,\y sha<os) ol f <O o,c-h. fully
pa,O up
		-�0"00, __		,000, ___ �e.oo
• !nvo,1menl> In p,or«rod stoc�
Higon,lr>e		139		,�oo
O 25 m.:t,�njGo 1ear ful<y1H dup	O ]Sn111',on) Prn!e,10J '"''of� O 0\ oach
loS> lmpa•rmonlol '"'"·Cuttont ut,quiod ,nvosunon1,		(139)		{170)	11303)
OpsOataStmo Inc		13.00		1230	f)_03
O ; m,lhon (Cou,prl1<>1 p"od / r>,o,-ous i·c,r fullyl,d ep	O 2 m,t11or,) r>,ol<Ste<l sloc� o1 $ 001 coc,
loo, lmp,11mont ol oco-cwen\u"'iuO!od ,nvowi,or,tc		(13()5
				12.SO	n.ai
Trunom• It,: 0 28 m1li,on (Coriospa1n P""Cd_I_r>,ovoo"s yoat	O ia "'"ho") Profo"od siok o1 $ O 02 oacl,	17,'1.t		....
follypo,d up
Jo;ota Cc<po,aMn				1�9
OO m,n,on (Ccrrcspond;n� pom4 I P,o.ous yea,	00 n,,1',on) Prolc"cd ""'' ol $ 00! eacl,
fully pa,d up
,�n�olln		t7AC		....
O 5� mlll1on (Corrcsfn p nod I l'rev,o�s )'c•<	055 mdl,on) P<01<'<ed stock of$ O 4SH3 oact,
f,,u, p,,d ,,r
Cozen, lac
O 30 m1tt1on (Corm;�nd,n pnod I f>rov,ous yea,	fHJ l'rc1e«OJ sloe• ol $ 001 " ''· (ullj Pld	\395•
"'
		19UG		60.71
• lnvo,1ment• In Convcr11bl• Noto, D,Now 1 (Corrospond,ng ponod / Provmu, )car 1)ccnvo,�blo n,lo of USO 1'5.0 oach, fully pa,dup loss lmpa,rmont of non,cu,icn\ uaqu100 mvo,\monls		r r		00 1300	0 \5 e 15
Ustymo		1744
1 (Cwospnd,ng ponod / rro,ious yoar !)convortblo n,loo1 USO 2!>.0 oach, fully P"'dup tess lmpa>rmont of oonsu«on\uaquoto ,nvos\monls		117 44)			(16 ;)
Ahmmalr,c		10 22		9l7	95!
1 (Cor<osrt<f.,,g r<'Md I P,ovious yoar l)con"n,blo Mio o1 USO 146,429each, !ully pa,d up
		10.22		9.37	'·"
Tot.I !nvo•lm•nls corrlo< ot f,i, Voluc (CJ		1 6$4.67		1 449 50	1 7J 9l
Tot.I !nv .. tmont• jA) + (B) • jC)		3,90.23		2 499,45	l,.,11.04
Aggng•lo amount oflmpalrm•n! In voluo of lnvo>tmont> Aggngalo amount ot q"oted lnv.,!monls		e,w 3.692 2		4980 2.42J.3|51 0** 2,603 6**
Aggngato amount ot unquotod lnvostmcnt<		27607		12'.04	120•5

• 1n,·o@n<t<1!s. whorn \ho Group <loos not haw JOln-wn�ol or s,gn,ficanlmfiuonw mdudmg O<l"'"on, whoro such10"\l,cornrol or s,gn1f,can( ,ntvenco ",nten�od to bo \on1p0rary, •ro dass,f,od as ",nvo,1<1,.,, 1, ,n cti,ors"

==> picture [29 x 7] intentionally omitted <==

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

24 of 37
----- End of picture text -----

Persistent Systems Limited

Notes forming part of condensed consolidated financial statements

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

	As at December 31, 2018	As at December 31, 2017	As at March 31, 2018
	In f Million	InfMillion	In f Million
ICICI Prudential Mutual Fund	534.72	594.49	664.16
Kotak Mutual Fund	286.82	180.31	214.02
HDFC Mutual Fund	200.85	158.38	191.64
Aditya Birla Sun Life Mutual Fund	186.42	105.35	157.98
UTI Mutual Fund	155.83	57.98	89.43
Ais Mutual Fund	100.00
SBI Mutual Fund	63.25	116.39	177.65
Rellance Mutual Fund	56.61	52.84	53.81
DHFL Pramer!ca Mutual Fund	31.18
DSP Mutual Fund	31.11
IDFC Mutual Fund		107.62	108.80
	1,646.79	1,373.36	1,657.49

(This space is intentionally left blank)

25 of 37

Persistent Systems Llmlled

8. tlon-:;urron\ �n,nc!ol •""': Loan, (refer note 301

8. tlon-urron\ �n,nc!ol •""': Loan, (refer note 301
	A, •I	A• •t	A��·
	Domb 31. 2016	DombOr l1, 7017	Marc11l1.201B
	tn,MIHI"	lnrMllllo	ln ,Ml!llon
C•rtlod ,c amorll•e< co,t
S.curUydop,n,
Un . w,od. ,nsido<edl Un . wr<. co=doroddou!!Y!	14081	13003""	13649 l .19
	U0.61	1H.22	140.66
		(219)	(l19)
		133.0J	136.49
Loan to olhoro (IJn<ocurod, con,h!Ord gOOJ
loans	1710		r
	17.70		•. 24
OU,or loon. ond odvonco•
Into, eorpmato dop•ll•
lJn>erro. c,m,,do,od good		003
lJmow«,<.w, <d<e0<d0<Kl\lul	....	O!,O	00
	O.H	O.G1	O.SB
	f061J	(051	(05)
		O.Ol
	1SU1	131.08	142.73
9. om« non cum,nt �nonclo! ••••t•
	A, •t	A, ol	Mat
	Ooomb<l1.201B	Domb, 31, 2017	Moroh31.W1&
	It,, Million	In, MUll<n	In, Mll!ion
Ncn-ror,onl bonk balancos (Hofo, noto 15) Md lntoroct •=uo bulnot du on Mn-WJnkdO!M! Non..urront Mposl!> with lnh (C•rrl�d •1 omor •od OMlf !Jop,,Msw1h fr.an<ool ,Mot<n! Arid lnteocl oc.uuo b! not du< on dop»I '"�' f,nancal ,nS,tut,of	2• r r 29.7!	's; "" 1.71 =o ?I Ul	1.H 350 ow
N,,,-,ur,cnt dc1>>•11• w h fmanclal ln•mul!on• (Corr1o< at amortl>«I «»1)		321,92	l�.69
	29.16	nl.Gl	37.43
10. O.f00U ll•blllly(no1) •
	As al	A• at	Asat
	O mt31.2018	OcomW, J1, 2017	Morch31.W1&
	In, Million	In, MIiiion	Inf Million
Oolorr«ltull•b!IIUc,
O,l!oconco> '" Ook valu< """ ta, t.> . 1. o!t,lod (qu,pmo,,1 •nd ,,,�,no•bo aosot,	Z�41	131 15	2�610
	7526	OOM	IOU)
	�0 l15.7S	406! 270.70	""'
Ofe<r{d\uo»ct, Pro1os,on ro, loo,o o,,ashmon1 Pro1os,on ro, lo»g . '' " awrd, Proo,s,n for Qouhi!ul <obi•	H017 101 08 �..	17] 46 0'" 8503	\2036 9\3 41 81
Pro,;,. , ro, g,a1u,ti	"'
01florc=• ,n book Vl\luos and ta, Ww valuos o1 blvck of f>rpe,ly, Plan\ and Equ,pmont and ,ntong.bo n�w,o {ovorwas) Oro ugh< 1orw,rd and curiont 1100 I 1"'' lo= TO<cls OU,o,,	&02 64 6) �,o 27 16	'" "0 1547• MO>	117 1i 41 12 281 37 3912
	719.69	�OD.51	737.BS
O.fo,rc< tax !lollbo, ofter ,01 oft	31S.75		210.41
Oclorro tax a,sct• allcr set ol	719.69	32981	�42.01

• O<rlonc� '"' ••S<'ts Mo!ally Ofl!oru,ab!o r,91,t \o &N off n•ron\ ta, aosel� a9,in$\<UffM1 la< hab,l,brn! and whoro U,o OOhmcd ''" aswto and OOforrod In Oot>,lrt'<'> relate lo mromo tams lcv,od by u,o sa,oc toxobon autt,o«ly In all <,U><,r c,,,., ,. tho oamo havo DCarnteli

d<.elosod

11. OU\0< non-<:UrtMt a net,

		A,at	A,ot	As at
		PcmW< 31. 2018	Ocon,br 31, 2017	Morch 31, 2018
Cop,t,l odvan< (ln,w"><.I, C'>sdo�gd) A,h .. ncos ,oo,o,abtc m ca>!, or kH\d o< Jo, valuo 10 bo '" o ,.		In, MIiiion "0 74.8&	ln,Mll!i< /82 �0 62.60	Inf Million ,;o 6457 91.67

(The, spo,;,, "' nlonl•>noly /ell blank)

26 of 37

Persistent Systems Limited

Notes forming part of condensed consolidated financial statements

1. Current financial assets: Investments

	Asat	As at	As at
	December 31, 2018	December 31, 2017	March 31, 2018
	Inf Million	Inf Million	Inf Million
Designated as fair value through profit and loss
- Quoted investment
Investments in mutual funds
Fair value of current mutual funds (Refer Note 12a)	7,352.25	5,532.19	5,916.31
	7,352.25	5,532.19	5,916.31
Total carrying amount of investments	7,352.25	5,532.19	5,916.31
Aggregate amount of quoted investment	7,352.25	5,532.19	5,916.31
Aggregate amount of unquoted investments

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

	As at	A at	As at
	December 31, 2018	December 31, 2017	March 31, 2018
	Inf Milllon	Inf Million	Inf Million
UTI Mutual Fund	1.133.60	712.37	823.08
Adita Bir!a Sun Life Mutual Fund	1.074.98	888.59	845.88
L&T Mutual Fund	1.004.83	725.37	749.22
Axis Mutual Fund	894.64	494.64	743.70
IC!CI Prudential Mutual Fund	795.56	220.41	275.33
Tata Mutual Fund	704.22	691.56	817.81
DSP Mutual Fund	475.05		50.39
HDFC Mutual Fund	439.11	509.56	174.66
S81 Mutual Fund	338.53		50.24
Sundaram Mutual Fund	237.93		104.15
Kotak Mutual Fund	230.67	163.79	300.42
IDFC Mutual Fund	23.13	463.50	349.34
DHFL Pramerica Mutual Fund		366.45	441.64
Reliance Mutual Fund		295.95	190.45
	7,352.25	5,532.19	5,916.31

(This space is intentionally left blank)

27 of37

Persistent Systems Limited

Notes fom>ing part of condensed consolidated financial statements

13. Trade receivables {refer note JO)

	Asal	As at	As at
	December 31, 2018	Docorbor 31, 2017	March 31, 2018
	Inf Mil!ion	In r M,11mn	In r Million
Outoiandin9 for" period <xcceding six month from the date they arc duo
for payment
Unscwrcd, considcrnd good	3.49	11.41	23.\2
Unsecured, cons,dcrcd doubtful	130.30	273.85	146.97
	133.79	285.26	170.09
Less Nlowancc for cred,t loss	(130.30)	(273.B5}	(146.97)
	3.49	11.41	23.12
ou,ers
Unsecured, con,idernd good	4.723.17	4,99).66	4,824.28
Unsecured. considcrnd doubtful
	4,723.17	4,$93.66	4,824.28
Less : Nlow�ncc for cred,t loss
	4,723.17	4,993.66	4,824.28
	4,726.66	5 005.07	4,847.40
14. Cash and cash equivalents {rcfo, note 30)
	As at	As al	As �I
	December 31, 2018	December 31, 2017	March 31, 2018
	Inf MHlion	Inf Minion	Inf Million
Cash and cash equivalents as p,esen!< in cash flow statenmn1
Cash in hand	0.25	"'	0"
Cheque� on hand	26 97
Balances,,;u,bar,ks
On e<mW\1 accounts•	1,073.50	1.585.31	1,196 !1
O!l snving accounts	'"'	0.60	0.75
On fachange Earei's Foreign Cuu�ncy acc.o"nls	323.55	195 29	145.83
	1,432.34	1,781.52	1,343.72

•0u1 o1 !he cash and cash equivalent balance as ul December 3. 2018, the G1oup can ut,lise � 2.98 million only 1ow,1rds iescarch and development acLivilrns specif<ed in u,e loan I grant agreement 'There were no such rns!nct,ons lo, ut,lisa!ion o1 !he cash ,md cash equivaler1l balance as at Deccmbe1 31, 2017 a11d March 31. 2018

15. Other bank balances (relcr note 30)

15. Other bank balances (relcr note 30)
	As a1	Asat	As al
	December 31, 20111	Oecembor 31, 2017	March 31, 2018
	In r Million	In r Million	In r Million
Shm1 le1m bank deposits'	1,65221
On dcposil account wU, onuinul malu1ity mote lhan twelve monll,s •	t7S.34	575.\2	940.47
Add; Interest accrued bul r,o\ due on dcposi1s wiU, banks	21.59	119.19	130.11
Deposits ..11, bar>ks (Ca,ncd at amortised cost)	1,852.14	GN,31	1,070.56
Less: Deposits ,._!h maturity mo,e than 1wclve months ltom the balance slrnet	(24.99)	(1 53)	(1.53}
date d,sclosed u11de1 othc1 non-current fmancial assets (refer note 9)
Less· lntc1esl accrued bt,t no1 due on nor,-cuncnt dcposo!s ,ith ba11ks (rcfc, note	j4 79)	(0.18)	(0.21)
"'
	1,822.3G	G92.GO	1,065.64
Balances vtt, banks On ,mp aid dividend accoun1s"	2.11	'"	1.41
	1,624.47	G94.08	1,070.25

• Oll\ of !he balance, f,xed deposits of, 86 65 milhon {Co,respon,lmg period ! 62.56 !!!illm<\ / Prnviou, yem t 63 78 n»llwn) have been carma1ked aga,nst hank guarnntces availed by !he Group

• •• Fhe Group can ubl1rn U,ese balances only lov«uds seltlemenl o! the respective unpaid d,vidend

(Tl1's apace,. mtenrwnJ//y /ef/ blank)

28 of 37

Persistent Systems Limited Notes forming part of condensed consolida1ed financial statement•

16. Current financial assets: loans (refer no!e 30)

	As at	As at	As al
	O.<bcr31,2018	O.cmber 31, 2017	Maret, 31, 2018
	In r Million	In r Million	Inf Million
Carrid a! amrtiscd cost
l""n lo relate P3rtis (Unsecure, co11si<cre doubtful)
Klisma c-Scrviccs Pnvalc Limicd	27.43	27.43	27.43
	27.43	27.43	27.43
Less: !mp�im1e11\ of cuucn1 loan�	(27.43)	{2743)	(27.43)
Security deposits Unsecured. co1side,ed good	11.14 11.14	8.24 8.24	" 6.63
	11.H	12.40	6.63
17. Oth<r curCt lmancial a,sots (r<for note 30)
	Asat	As at	As at
	O<mb<r31,2018	Ocbcr 31, 2017	Mant, 31, 2018
	In r Mi11i<	Inf Million	Inf Milli<
**Fair value of derivative, designated and efective as he<gi<1g instrunl S **
Fo,wrd cont,acls receivable	49.55	163.33	42 75
Advancos lo supplir, Unsecu,cd, considcrnd doub1ful Less: lmpainncrll of CUt!en\ financal assets	0.81 {0.81)	0.81 (0.81)	° {0.81)
Deposit v,11, !mancial ins!1h,hons (rele, note 38)	160 00	M0.35	S9� 35
Add· Interest acc,ued bul no! due on OposH ..,u, hnao,c,al msti!ut,ons	!8 77	6.�6	2065
Deposit l'lh fmancial ms1�uhons {Carried al amortised cos1)	796.77	546.91	1,016.00
SEIS lnccn�ve rnccivablc		44,13
Unbilled rnvcnuc	2.146.21	2.044.63	1.699.50
	2 996,53	2 799.20	2 7S8.25
18. Othercurre,,t as�cts
	As"'	•••	As at
	Oocembcr 31, 2018	O<C<r 31, 2017	March 31, 218
	Inf Mi1fio<1	Inf Million	Inf Million
Advances to $Upption (Unsoure, considered good)
Adoances recoverable in cash or lio,d or !o, value !o he rnceived	46028	422.9	561.68
Otrnr adsances (Unsecured, considered go I
VAT rnccivable (net)	29.84	47.29	74.42
Sc,vicc 1ax and GST receivable {net) (Refer note 3)	973.5	833.33	927.31
	1,003.40	880,62	1,001.73
	1,<63.68	1.303.5	1,563.41

(This space 1s mlen!1onally loft bl.wk)

29 of 37

Persistent Systems Limited

Notes forming part of <><>ndCflSCd consolidat1'd financial st.atemm,t,;

1!1. Non..::umml financial liabilities : Borrowings {rcfor note 30)

1!1. Non..umml financial liabilities : Borrowings {rcfor note 30)
	As at	Asa1	A{ at
	Dec<mbcr 31, 2018	Dec<mbcr 31, 2017	March31,2018
	Inf Million	Inf Million	Inf Million
Uns«ured Borowings carri<d at amrtised cost
Tc,m loans
lnd,an ,upce loan hor oUmo	17.91	22 49	21.13
ln!e,csl aceued bul no! due on tcm, loans	0.12	0.87	0.78
	18,03	23.36	21.91
Less· Cwuml matrily of lor,g.tc,m bonovngs trnnsferted to oU,cr cnen1 fnar1c,al liabilities (Refer nole 22)	(4 56)	(4.56)	(4.56}
less: Cunenl matunly of intetcsl acciucd bul nol due on le1m loan banslcued to 0U1c1 cuuenl l,nancial liabil,�es	(0.12)	(0 67)	(0.78)
(Refer note 22)
	{4.70)	(6.451	(5.36)
	13.33	17.91	16.55

The te,m loans Imm Govemment departments have O,c follov.<ng tc!ll\$ and cond,tions

Loan I • arnow,li"O 1<> f 6.82 ,n1fl,on (Co<rc6pondmg period� 9.55 mi!l,on/ Previous YMI f 8.19 milhon) v,(h intcrcs1 pay,,b!c @2% per annum o<rnran\ecd by a bank gua,anlce by U1e Com1iany aod icpayable ill ten equal semi annual installmems over a penod o! fwe years commencing !rom Ma,ch 2016

Loan II. arnountin9 to f 11.09 nU�ion (Correspond,ng period f 12.94 mimonl Previous year t 12.94 mil1on) v.<th l!llerest payaMc@ 3% per""'""'' rer,ayable m ten equal a,mual installments ovc, o pc,iod o! te,1 yeaeo comrnencinn !rom S<>p1ember 2015

20. Non curront liabi1i1ios : Provisions

	Asal	As at	As at
	De<cmbcr 31, 2016	De<cmbcr 31, 2017	Match 31, 2018
	Inf Million	ln fMillion	1n f Million
Provision for employee bone Ms
· Gra\uely	14.52	17.07	16 36
· l.ono ��•vice nw,ds	15395	141.85	143.37
	168.47	158.92	159,TS
21. Trad< payables (refer note 30)
	As at	As al	As al
	Occcmbor 31, 2018	De<cmbcr 31, 2017	Ma,ch 31, 2018
	Inf Million	Inf Million	1n f Million
lrade payables fo, goods ,md se,vkes	1,645 25	1,506 38	1,673.06
	1 645.25	1 606.36	1 673.08
22, Othor currnnt linancial liabitilins (refer noh, 30)
	As at	As at	Asa!
	Oe<nmber 31, 2018	Ocembo,31,2017	March 31, 2018
	Inf Million	lnfMiHioo	tn, Million
Cap,tal crndHors	50.78	23.39	3236
Cunen1 ma1urit ol lor,g-term borrovngs (rnler nole 19) Curren1 maturity of interest on lono·lerm bouovngs {1e(c1 note 19) Accrued employe< liabihtics	4 58 0.12 371.27	4.58 0.87 436 19	4.58 "" 357 02
Unpaid d,vjdcnd'	2.11	"'	1.41
ott,m liabil,ties	0.46	0.42	0.18
	429.32	466.93	396.33

' Unpaid d,vidend is crnd1led lo Investor Education and Protect.on Fund as and when due

23.0lli<>r cum,nt liabiti1ies

	As at	As al	As al
	D<ember 31, 2018	Oecc,mber 31, 2017	March 31, 2018
	Inf Mill!on	ln f Million	ln f Million
Uneamed revenue	1,034 OB	926.14	921.10
Advance from customers	25.28	25.83	25.38
Other payables
· Statuto,yl1ab1l,bes	263.90	262.61	251 49
- Other habil1ties'	12.55	4.12	3.05
	1,335.61	1,219.30	1 201.02

'Includes grant of { �.50 million ieceivcd dunno 11,e nine mon\hs ended Deccmbe< 31, 2018, !rom Biotechnology lndust,y Rcsearcl, Ass;s\ance Council (BIRAC) purs1rnn1 lo an agu,emc�,t dated March 12, 2018. The amount logcttrn, 'MU, additional g1an\s to be received over 3 years 1,orn BIRAC and Group·s share as presc,ibcd in the agree men! is lo be spen1 as per u,e said ag,cemen1

24. Curr<>n! liabilities: P,ovisions

	As at	As at	As at
	D<cmber 31, 2018	December 31, 2017	March 31, 2016
	Inf Mi!liOfl	Inf Million	In, Million
P,ovision for employee benefits
·Gmluity	84.50	(18 35)	(44.77)
. Leave encashmen1	536.72	459 95	468.73
. Long se,viee awrds	15.80	23.88	22.31
· OU,e, employee benefits	1.080.31	985.40	1.153 22
	1 717.33	1 4S0.88	1 599.49

/Tlirs space 1s mten/,onally 18 blank)

30 of 37

Persistent Systems Limited

Notes forming part of condensed consolidated financial stat<lments

25. Revenue from operations (net)

	For the quarer ended	For the quarer ended	For th nin	monhs ened	For the year enOd
	Decembr 31, 2016	De<embr 31, 2017	Decembr 31, 2016	Decembr 31, 2017	March 31, 2016
	If Million	Inf MIiiion	Inf Million	Inf Million	lnfMill!on
Software services	6,473.38	7,196.49	24,240.52	21,608.01	29,440.6
Sofware licenses	169.11	722 41	1,100.35	1,203.5	89.43
	6 642.49	7 916.90	**25 3 40 .6 7 **	22 611.57	30 337.03

26. Other Income

	For the quarer ended	For the quarer ended		For the nin	months ened	For the year ended
	Decembr 31, 2018	Decembr	31, 2017	Decembr 31, 2016	Decembr 31, 2017	Marh 31, 2018
	tnlMilHon	Inf Million		ln"Million	Inf Million	Inf MIHon
lnleresl income
On financial assets carried at amo1tised cst	26.10		12.13	46.45	35 24	47.87
On others	30.58		29.17	142.81	77.24	113.67
Foreign exchange gain (net)			49.63		43.77	566.31
Profit on sale of foced assets(nt)	1.01		0.74	2.52	1.87	2.40
Dividend income frm 1nvestn1ents	54 32		41 85	138 20	129 23	171.25
Profit on sale of investments (net)	74.95		45.07	266.52	174 60	166 84
Net gain/(!oss) arising on finanaal assets designated as at FVPL	27.76		(57 42)	{67.93)	(72.5)	(16.92)
Excess provision in respect of earlier perod/ years	1.84		4 54	21.91	4 33	18.19
written back
Advances written back			0.01		23.76	23.76
Miscellaneous income	13.37		67.04	40.11	66 51	59.64
	229.93		192.76	592.69	897.01	1191.01

27. Personnel expenses

	For the quarter ended	For the quarter ended	For the nin	months ended	For the year ended
	Decembr 3 1, 2018	Decembr 31, 2017	December 31, 2018	December 31, 2017	March 31, 2018
	Inf Million	lnlMillion	In lMimon	lnlMHlion	lnl Million
27 .1 Employee benefits expense
Salaries, wages and bonus	4,606.19	4,474.76	13,466.44	13,009.62	17,190 37
Contribution to provident and other funds	97.30	101.75	283.88	280.46	346.56
Gratuity expenses	37.93	47.49	117.61	129.56	167 76
Defmed contribution to other funds	52.34	46 71	155.26	86.30	158.08
Staff welfare and benefits	115.57	116.47	366.67	321.85	449.67
Employee stock compensation expenses				3.60	380
	4,909.33	4,787.18	14,390.0	13,831.81	18,316.46
27 .2 Cost of professionals	905.69	775.55	2,627 62	2,313.95	3,180.63
	5 615.22	6 562.73	17 017.68	16,145.76	**21,497.0 9 **

31 of 37

Persistent Systems Limited

Notes rormin[g p] art of condensed consolidated financial statements

1. Other ex[p] enses

	for thequarter ended	for thequarter ended	for the nine	months ended		For theyear ended
	December 31, 2018	December 31, 2017	December 31, 2018	December 31,	2017	March 31, 2018
	Inf Million	Inf Million	Inf Million	Inf Million		Inf Million
Travellingand corweyance	203 28	193.15	709.05	641.65		867.92
Electricityexpenses(net}	30 95	30 04	88.98		81.17	104.49
Interet link expenses	959	16.66	49.09		47.91	66.46
Comnlllnica!ion expenses	21 60	23 40	74 74		94 84	119.86
Recruitment expenses	29.19	17.07	70.39		66.50	83.43
Trainingand seminars	6.96	786	19.98		15.14	24.25
Royaltyexpenses	11 26	1639	39.49		50.75	60.46
Pu1cl1ase of software licenses and support expenses	306.92	19565	1,168 63	690.21		933.39
Bad debts	0.76	(0.94)	· 71 04	39.28		183.97
Provision for doubtful receivables/(provision for doubtful receivables	16.12	6.17	(10.22)	(16.75)		(151 38)
written back) (net)
Rent	115 82	115 57	353 29	341.99		448.52
Insurance	6'9	4 65	17 45		18.10	24.05
Rates and taxes	20 79	23 88	50.43		90.16	115.42
Legal andprofessional fees	135.35	127 61	455.07	344.69		500.35
Repairs and maintenance
• Plan\ and Machinery	30.16	34 63	88 84		90.74	11616
• B11ildings	5'1	6 35	23.25		19.50	27.69
• Others	339	7 09	14.60		16.66	20 77
Sellingand mar�elingexpenses	(1.38}	5.27	27.43		27.62	36 09
Advertisement, conference and sponsorshrpfees	33.43	16 38	78 19		52.79	11651
Discount allowed	21.90	13. 10	61.66		37.62	11 78
Computer consumables	2"	282	6.15		5.02	7.67
Aud1lors· remuneration	4.16	5.49	12.17		12.43	14 62
Donations	20 98	18.21	57 67		56.40	78 10
Books. memberships, s11bscript1ons	22 79	19.90	61.97		54.27	73.27
Foreign exchange loss(net)	240.90		184.60
Directors· siltingfees	115	0.67	3.75		2.92	3.90
Directors' cmmission	361	2.40	10 62		6 77	9.74
Impairment or non current investments	13.94	12.92	13.94		29.02	26 96
Miscellaneous expenses	47.44	58.61	165,55	171 85		22801
	1 365,00	961.00	3,967.80	3 089.25 ..~ ....		4,152.68

(This space is intentionally left blank}

32 of 37

Persistent Systems Limited

Notes forming part of condensed consolidated financial statements

29. Earnings per share

29. Earnings per share
								For the quarer ended			For the nine	montfls ended	For the year ended
------------------------°"		- '	- ' -		" _ b _			, _ , _ , _ _ 2 _ 0_1s	December	31, 2017	D<cember 31, 2016	Dcember 31, 2017	March 31, 2018
Numerator for Basic and Diluted EPS
NetProfitaltertax(!nf Million)	(A)							917.17		916 70	2,672 0	2.493.82	3,230.88
Denominator for BasicEPS
Weight&d average number o! equity shares	(8)						80.000.000		**80.00.0 **		60.00.000	80,00,000	80,00.000
Denominator for Diluted EPS
Number of equity shares	{C)						f0,000.000		80.00.000		80.00.00	80.00.000	80,00,00
Baslc Earnings per shar of face value of I 10 each (In I)	(NB}							11.46		11.46	33.40	31.17	40.39
Diluted Earings per share of face value of I 10 each (ln I)	(NC)							11.46		11.46	33.40	31.17	40.39
								For the quarer ended			For the nine	months ended	For tile year ended
Number of shares considered as basic weigllted average shares outstandingfrcalculatingbas;c EPS	December 31, 2018 80.000.000								D<mber 31, 2011 80.00.000		Decembr 31, 2018 80.00.000	December 31, 2011 80,00,000	March 31, 2018 80,00,000
Number of shares considered as weighted average shares and							80,00.000		80.00.000		80,00.000	80,00,000	80,00,000
potential shares oulstanding tor calcula!mg Diluted EPS
			(This					space ts itent1onally left blank)

33 of 37

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:

The carrying values and fair values of fn	ancial instrumen	t by categories are as f	ollows:
							Inf million I
Financial assets/ financial liabilities	Basis of	As at December	31, 2018	As at December	31, 2017	As at March 31, 2018		Fair value
	measurement	Carrino value	Fair value	Carr in� value	Fair value	Car in, value	Fairva!ue	hierarchy
Assets:
Investments in associates	Equity
	accounting
Investments in equity instruments. preferred	Fa;r value	208.08	208.08	78.1<	75.14	77 . .U	77_4	Level 3
stock and convertible notes
Investments in bonds'	Amorised cost	2.045.41	2.009.01	t049.95	1.054.09	1.146.11	1.139.71
Investments in mutual funds	Fa;r value	8.999,04	8,999.04	6.905.55	6.905.55	7.573.80	7.573.80	Level 1
Loans	Amortised cost	169.65	169.65	145.46	�45.45	149.36	149.36
Deposit with banks and fnancial insMulions	Amorised cost	2.650.91	2,650.91	1.563.14	1.563.14	2.122.27	2,122.27
Cash and cash equivalents (including	Amorised cost	1.434.45	1,434.45	1.783.00	1.783.00	1.345.13	1,3<5.13
unpaid dividend)
Trade receivables (net)	Amorised cost	4.726.66	4.726.66	5,005.07	5.005.07	4,847.40	4.847.40
Unbilled revenue	Amortised cost	2.148.21	2,148.21	2,044.83	2.044.83	1.699.50	i,699.50
Forward contracts receivable	Fair value	49.55	49.55	163.33	163.33	42.75	42.75	Level 2
Other current financial assets				44.13	.4.13
Total		22,431.96	22,395.56	18,780.60	18.784.74	19,003.76	18,997.36
Liabilities:
Borrowings (including accrued interest)	Amortised cost	18.03	18.03	23.36	23.35	21.91	21.91
Trade payables Other financial liabilities (excluding	Amorised cost Amorised cost	1.645.25 424.62	1,645.25 <24.52	1.506.38 451.48	1.505.38 461.&8	1,673.08 390.97	1,673.08 390.9i
borrowings)
Total		2,087.90	2,087.90	1,991.22	1,991.22	2,085.96	2,085.96

• Fair value includes interest accrued

Fair value hierarchy:

The fair value hierarchy 1s based on inputs to valuation technioues that are used to measure fair value !hat are either observable or unobservable and co:-1s1sls of the following lhree levels

Level 1 - Inputs are quoted prices (unadJusted) ,n actrve markets for identical assets or 1iabilrt1es.

Level 2 - Inputs are other than quoted pnces included within Level 1 that are observable for the asset or lrability. either directly (1.e. as pnces) or 1nd1rectly (i.e. derived from prices).

Level 3 - Inputs are not based on observable market data (unobservable inpu1s). Fair values are determined in whole or 1n part us1,ig a valuation model based on assumptrons 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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34 of 37

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35 of 37

Persistent Systems Limited

Notes forming part of condensed consolidated financial statements

1. On July 02, 2015, the Company, through its wholly owned subsidiary Persistent Systems lnc., 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 USO 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 ls payable.

2. 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 Ni! as on the date of acquisition. The contingent consideration would be recorded, as and when the contingency is resolved and the consideration is payable.

3. 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.

35.

• a) 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.

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 t148.50 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:

			tin Million
	Particulars		Totl
Current Assets
		-
Cash and & cash equivalents			0.35
Non-current assets
Propery, Plant and Equipment			0.08
Intangible assets under development			148.67
Current liabilities
			--
Trade and other payables			0.35
Net asset			148.75

The gain on bargain purchase arising on acquisition Is t 0.25 million.

• c) Net cash outflow on acquisition of subsidiaries

et cash outflow on acquisition of subsidiaries
Pariculars	Amount inf million
Consideration paid/ oavable in cash	148.50
Less: cash and cash eauivalent balances aruired	_(0_35)
	148.15

• d) Revenue of Herald is Nil. The loss included is � 9.52 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 nine months ended December 31, 2018 for the Group.

36 of 37

Persistent Systems Limited Notes forming part of condensed consolidated financial statements

1. 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 off 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 201112 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 !imitation. 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 December 31, 2018, the pending litigations in respect of direct taxes amount to f 256.96 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� 165.51 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.

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

2. As reported in the previous quarter, Persistent Systems Limited ("the Parent Company") has deposits of '1 430 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, the first deposit being due on 28th January 2019. In August 2018, credit rating agency, has significantly downgraded the IL& FS Group's rating. As d December 31, 2018, there have been no defaults in payment of interest on the aforesaid deposits. At this stage, it is difficult to estimate the ultimate probable loss if any. Accordingly, the management of the Parent Company believes that there is no immediate need to recognize any impairment on the above deposits as of December 31, 2018. The Parent Company will continue to monitor the developments in this matter for the purpose of determining the financial reporting impact, if any.

3. Previous periods' / year's figures have been regrouped where necessary to conform to current period's classification for segment disclosure.

4. The financial statements are presented in Z million and decimal thereof except for per share information or as otherwise stated.

/This space is intentionally left blank)

37 of 37

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

Te!: +91 20 6624 4600 Fax: +91 20 6624 4605

Deloitte Haskins & Sells LLP

INDEPENDENT AUDITORS' REPORT

TO THE BOARD OF DIRECTORS OF PERSISTENT SYSTEMS LIMITED

Report on the Audit of the Interim Standalone Condensed Financial Statements

Opinion

We have audited the accompanying standalone interim condensed financial statements ("the Condensed Financial Statements") of Persistent Systems Limited (the Company), which comprise the Condensed Balance Sheet as at 31 December 2018, the Condensed Statement of Profit and Loss for the quarter and nine months ended on that date, the Condensed Statement of Changes in Equity and the Condensed Statement of Cash Flows for the nine months period 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 December 2018, profit for the quarter and nine months ended on that date, changes in equity and its cash flows for the nine months period then ended.

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 independence 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.

Emphasis of Matter

We draw attention to Note 32 to the Condensed Financial Statements, relating to the deposits of Rs 430 million in Infrastructure Leasing & Financial Services Group as at 31 December 2018, whose rating was significantly downgraded by credit rating agency - ICRA in August 2018. No provision against these deposits is considered necessary by the management as at 31 December 2018 for the reasons stated in the said note.

Regd. Office: lndiabulls Finance Centre, Tower 3, 27"' - 32"' Floor, Senapati Bapat Marg, Elph1nstone Road (West), Mumbai 400 013, Maharashtra, India. (LLP Identification No. MB-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 skepticism 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.

Deloitte Haskins & Sells LLP

• 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 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.

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.

We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

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

Place: Pune Date: 28 January 2019

Per&lstentSystems Limited

CONDENSED BALANCE Sf-lEET AS AT DECEMBER 31, 2018

	Noles	Ar	As at	'"'
ASSETS		December 31, 2018 Int Million	December 31, 2017 Int Million	Mrci\ 31, 2018 tn, Million
Non-current assets
Property, Plant and Equipment Cap�al wOl1·i·pro9rnss	,.,	2.185.11 7.82	2,330.0 30.50	2,323.88 7.32
Other Intangible assels	52	97.44	136.39	117A8
lnlang;blc asse!s under development		43.00	2.77	7.44
Financial asscls		2,333.37	2,507.72	2,45.12
- 1nves!men1s	6	7,104 62	5,124.56	5,504.85
- Loans	7	111.07	1.091.64	945.81
.{)!her non cuncnl f,nanciar assets	8	29.78	323.63	37.43
**Defcncd 1ax assets (net) **	9	41.76		31.68
Other non-cunenl assets	,0	74.72	60.65	64.00
		9,&95.32	9 108.40	9,039.119
Curr'nt asscls Financial asse!s
- Investments . Trade1cceiablcs - Gash am! cash equivalents • other ban� balances - loans • OIiier currenl f,nanciaf asse!s O!hcr current assets	"""""""	7,352.25 2,226.58 597 ?3 1,638.16 9.14 2,200.70 1,316.09	5,532.19 3,981.24 444 9:l 666.62 3.87 1,519.31 1,161.49	5,916.31 3,425.07 30� '7 876.62 4A7 1.847.70 1,374.62
		15,420.23	13,329.65	13 750.06
TOTAL		25,115.55	22,436.05	�.?Z89.95
EQUIT AD LIAILITIES
EQUIT
Equily share capial Oher equily		800.0 800.00 800.0 ---->'>·='°c'c'c'-----c 19.392c.Os7c_ ____ ano7c'c2oM c 22,700.68 20,192.01 20,532.04
LI!LfflES
Nnt tlabll�ic& Financial liabHilfes
. Borrowings Provsions **Deferred 1ax l.bifilics(ncl) **	""'	13.33 153.95	17.91 141.85 14.74	16.55 143.37
		167.28	174.50	159.92
Cu!Tnl UablUtks Financial !ilbi! es - Trade payables((dues of micr and smll en!errises: Nil(Conesponding period/ Prevousyear. Nil))	20	80.45	701.15	716.73
- Other financial liabiliies Other current liabMics Provisions Curentlax**liabiliies(net) **	" 22"	127.02 658.9 620.71 0.45 2,247.59	260.08 452.12 514.16 123.95 2,071.48	290.86 52.83 428.03 9.54 2 097.99
TOTA		25115.55	22 438.05	22 789.95
Summa of signif,an1 accounting polics	3

The accompanying notes are an Inte[g] ral[p] art of the condensed financial slatemen!s. As[p] er our 1e[p] or1 of even date

For O<,loit!e Haskins & Sells LLP ICA! Firm re[g] istration no. 117366WIW-100018 Chaflered Ac ountants Place: Pune Date: January 28, 2019

For and on behalf oftM Board of Directors of Persistent S[ys] tems Limited

==> picture [210 x 126] intentionally omitted <==

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

,
Dr. Anand Desh [p] ande -· .:......-Kf/in Umrootkar ��?
Chairman and Mana [g] in [g ] Director Director
Sunll Sa �f'. [p] re ['"'][}�]
Executive Director af\d
Chief Financial Officer
Place: Pune
Date: Janua [ry ] 28, 2019
----- End of picture text -----

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PersJatentS stems Limited

CONDENSED STATEMENT or PROFIT AND LOSS FOR THE QUARTER AND NINE MONTHS ENDED DECEMBER 31, 2018

	Notes	fo< the	quarter ended	For the nine months ended	For the nine months ended	For the year ended
		December 31, 7018	December 31, 2017	December 31, 201B	Oecr.mber 31,2017	March 31, 20HI
		In, Million	ln r Million	Int Million	Inf Million	Inf Million
Income
Revenue from ope,a1mns (nel) Olher income Total income (A)	" 25	4,879 75 222.9"5 5,102.70	4,300.09 ;,52 12 4,552.21	14.435 913 782.33 15,218.29	12,947.44 993.57 13.941.01	17,327.49 1,276.82 )8,604.31
Expenses
Employee bcndits expense Cost of pwlessional� finance cosls	26.1 26 2	2,4<13.Sll 583.23 0.12	2,252 99 512.4?. 0"	7,022.71 1,646.15 0.39	6.637.48 1,b71.ll0 **0.47 **	8,740.66 2,133.03 0.62
Dcprecia1ion and amort,,alion expense 0111er expenses Total expenses (B)	5.3"	113 47 1.051 86 4,192.26	128. Hl 609 67 3,503.41!_.. ___	344.55 2.782.4?. 11,796.27	414.99 1,976.73 10,701.47	537.81 2.640.03 14,052.15
Profit lloforo bl<: (A B)		910.44	1,048.81	3,422.07	3,239.54	4,552.16
Tax expense
Current tax Tax crcd1! in respect or ear1,er years Deferred tax charge/ (credi1) Total ta:< expense		23� 00 49.09 16.34 300.43	284.92 (3.99) (9.44) 271.49	!)81.50 49.09 po GO) 991.99	877.20 {3.99) !26.31) 64G.98	1,175.90 (3.99) !40.9�- 1.130.99
Ne( profit for the period/ year (C)	-------- 610.01		777.32	.:.i ,430.08	2,392.56	3,421.17
Other comprehonsi�e income
Items that wilf not be reclassified to profit and loss (0) • f<:emeasuremen1s of the defined benefil Jiabililies I (asse1) (no( of tax)		(211.Cl�)	12.04	(54.12)	72.13	104.97
Uems !hat may be reclassified to profit and Joss (E)		(28.65)	12.04	{54.12)	71. 13	104.-97
. Effcc!ive portion of cash flow hedge (ne1 of tax)		351.15	27.40	52 6(l	{131.70)	(191.81)
		351.15	27.40	52,86	(131.70)	!191.81)
l otal other comprehensive income for the periodIyear (DJ+ {E)		322,50	39.44	(1.26)	{59.57)	(86.84)
Total comprehensive income for the period I year (CJ + (0) + (E)		9_32,51	816.76	2,428.6?	2,332.99	3,334.33
Earni11gs per equity share	28
[Nominal value of share '10 (Corresponding period/
previous year: f10}]
Basic {ln t)		7.63	9.72	30.38	29.91	42.76
D�uled (In')		7.63	9.72	30.38	29.91	42 76
summary of significant accounling policies	3
The 11ccompanyiflg notes are an integral part of the condot"lscd	financial slatemen1s

As per our report of even date

For Deloitte Haskins & Sctls LLP !CAI nm1 registration no.117366WIW-100018 Chartered Accountants

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

Place: Pune Date: January 28, 2019

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Or. Anand Deshpande Kiran Umrootkar
Chainnan ·and Managfng Director Director
Sunil Sapre ---1; ."-1JY
Executive Director and
Chief Financial Officer
Place; Pune
Dale: January 28, 2019
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Persistent Systems Limited

CASH FLOW STATEMENT FOR THE NINE MONTHS ENDED DECEMBER 31, 2018

		For the nine months	ended	For the year ended
		DecemOr31, 2018	Oecemoor31, 2017	March31, 2018
		In" Mllt!on	In" MIilion	In" MIiiion
Cash flows from operating activities
Profit before tax		3,422.07	3,239.54	4,552.16
Adjustments for
Interest income		{193.85)	(134.71)	(191.80)
Finance cost		0.39	0.47	0.62
Dividend income		{349.69)	{191.29)	(259.73)
Depreciation and amortization expense		344.55	414.99	537.81
Amortization of !ease premium		0.44	0.44	0.58
Unrealised exchange loss/ (gain) (net)		72.01	(97.63)	(177.50)
Exchange (gain) / loss on derivative contracts		74.58	46.06	76.73
Exchange (gain}/ loss on translation of foreign		66.16	(74.31)	(111.75)
currency cash and cash equivalen1s
Donations in kirtd		1.40	0.16	0.16
Bad debts		23.55	35.97	157.62
Prov1s1ort for doub!lul debts {net)/ (Provision		(8.09)	(29.77)	(146.42)
for doubtful debts wnlten back} (net)
Employee stock compensation expenses			2.23	223
Remeasurements of !1'8 defined beneft liabilities/ (asset) (before tax effects)		(79.66)	101.26	146.57
Advances written back			(17.56)	(17.56)
(Gain)/ loss on ra,r valuation of assets designated as at FVPL		67.93	72.54	16.92
(Profit} on sale o! investments (net)		(266.52)	(174.60)	(186.84)
(Profit) on sale of fixed assets {net)		{2.27}	(1.94)	(2.47)
Oporatlng profit before working capital changes		3,170.78	3,193.87	4,399.53
Movements In working capltal
(Increase)/ Decrease in non-current and current loans		2.95	3.81	0,70
(Increase)/ Decrease in other non current assets		(10.72)	7.70	(3.18)
(Increase)/ Decrease in other current financial assets		(643.51)	(176.70)	(156.58)
{Increase)/ Decrease in other current assets		58.53	(640.28)	(853.41)
{Increase)/ Decrease in trade receivables		1,073.50	882.35	1,477.87
Increase I (Decrease) in trade payables ald current liabilities		53.55	{217.71)	(92.85)
Increase / (Decrease} in provisions		203.26	(7.70)	(92.33)
Oporat!ng profit after working capllat changes		3,908.34	3,045.34	4,679.75
Direct taxes paid {net or refunds)		(1,103.92)	(784.20)	(1,119.68)
Net cash generated from operating activities	(/)	2,804.42	2,261.14 ---=��------'�·'�'�'�·'�
Cash flows from Investing activities
Payment towards capi1af expenditure (including in1angible assets)		(218.66)	(177.60)	(232.81)
Proceeds from sale of fixed assets		2.27	2.05	2.94
Purctiase of bonds		(908.90)	(495.74)	(595.43)
Proceeds rrom sale/ maturity of bonds		50.00
Investments in mutual funds		(16,937.29)	(9,913.09)	(15,502.22)
Proceeds rrom sale I maturity of mutual funds		15,712.64	9,303.53	14,290.26
lrwestmenls in bank deposits having original maturity over three months		(3,183.29)	(18.90)	{225.12)
Maturity of bank deposits having orig;nal matu11ty over three months (including		2,285.66	(405.35)	42.26
Investments in deposit "th fnancial institutions		(300.00)	15.42	(595.35)
Maturity of deposit with financial institutions		550.35
Inter corporate deposits (made) I refunded		133.06	(616.52)	(429.37)
Interest received		276.12	67.77	124.91
Dividend received		349.69	191.29	259.73
Net cash generated from I (used In) Investing acl!vllles	(Bl	{2,186.35} {2,047.14) -�==�----�"� �"�·'=) -----=
Cash nows from financing activ!tles
(Repayment of) long term borrowngs		(3.22}	(3.22}	{4.58)
Specific pro1ect related grant received		4.50
Dividend paid		(239.30)	(239.72)	(799.79)
Tax on dividend paid		(20.18}	(48.86)	(150.23)
Interest paid		(1.05}	(1.13}	(1 37)
Net cash generated from/ (used In) financing activities	(259.25) {292.93) )CI-----�=�----�==�----�)'�"�·'=)

3 of 34

Persistent Systems Limited

CASH FLOW STATEMENT FOR THE NINE MONTHS ENDED DECEMBER 31 2018

	For the nine months	andad	For the year ended
	Decembr 31, 2018	Decembr 31, 2017	March 31, 2018
	In, MIiiion	In, MIiiion	In, MIiiion
Net (decrease)/ increase in cash and cash equivalents (A + B + CJ	358.82	(78.93)	(256.10)
Cash and cash equivalents at the beginning of the period/ year	306.68	451.03	451 03
Effect of exchange differences on translation of foreign currency	(66.16)	74.31	111.75
cash and cash equivalents
Cuh and cash equivalents at the and of the pariod/year	599.34	446.41	306.68
Components of cash and cash equivalents
Cash on hand {refer note 13)	0.15	0.13	0.11
Balances wth banks
On current accounts# (refer note 13)	267.06	258.68	158.58
On saving accounts (refer note 13)	0.43	0.60	0.75
On Exchange Earners Foreign Currency accounts (refer note 13)	323.55	185.52	145.83
On unpaid dividend accounts' (refer note 14)	2.11	1.48	**1.41 **
Cheques on hand {refer note 13)	6.04
Cash and cash equ!valents	599.34	446.41	306.68

# Out of lhe cash arid cash equivalent balance as at Decembar 31, 2018, the Company can utilise t 2.98 million only towards research end development activities specified in the loan /grant agreement. There were no s11ch restrictions for utilisation of the cash and cash equivalent balance as at December 31. 2017 and March 31, 2018

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

Summary of slgruficant accounting policies - Refer note 3

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

As per our report of even date

For Deloitte Haskins & Sells LLP !CAI Firm registration no. 117366W/W-100018 Chartered Accountants

For and on be hair of the Board of Directors of Persistent Systums Llmlted

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Place: Puna
Date: January 28, 2019
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-<�-->
Dr. Anand Deshpande Klran Umrootkar
Chairman and Managing Director
Sunll Sapre
Executive Director and
Chief Financial Officer
Place: Pune
Date: January 28, 2019
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Persistent Systems Limited

CONDENSED STATEMENT OF CHANGES IN EQUITY FOR THE NINE MONTHS ENDED DECEMBER 31, 2018

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A. Equity share capital
(Refer note 4)
tin f Million
Balance as at April 1, 2018 Changes in equity share capital during Balance as at December 31, 2018
the period
800.00 . 800.00
tin, Million
Balance as at April 1, 2017 Changes in equity share capital during Balance as at December 31, 2017
the period
800.00 . 800.00
lln 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
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Persistent Systems Limited

CONDENSED STATEMENT OF CHANGES IN EQUITY FOR THE NINE MONTHS ENDED DECEMBER 31, 2018

B. Other equity

B. Other equity
								Inf Ml lllon
Partlculars	Securities premium reserve	Reserves General reserve	and sure1us Share options outstanding reserve		Retained ear nings	Item!of 2tter comere!enslve I Efective portion of cash fow hedaes	Total
Balance as at April 1, 2018	1,336.70	9,296.47	90.52		8,991.72	16.63		19,732.04
Net profit for the period					2.430.08			2.430.08
Other comprehensive income for the period					(54. 12)	52.86		{1.26)
Dividend					(240.00)			(240.00)
Tax on dividend					(20.18)			(20.18}
Adiustmenls towards emolovees stock ootions		10.64	110.64
Balance as at December 31, 2018	1 336,70	9,307.11	79.88		11 107.60	69.49		21,900.68
							(	Inf MIiiion )
Pariculars	Securltles premium resere	BH!DH General resere	!Os !llCY! Share options outstanding reserve		Retained earnings	Items Qf ot!er £2! [f fD!l!f Income Efective porion of cash flow hedaes	Total
Balance as at Aril 1, 2017	1,336.70	7,827.60	187.12		7.784.28	208.44		17,344.14
Net profit for the period					2,392.5			2,392.5
Other comprehensive income for !he period					72.13	(131.70)		(59.57)
Dividend					(240.00)			(240.00)
Tax on dividend					(48.8)			(48.86)
Employee stock compensaton expenses			2.23					2.23
Employee st ock compensa1ion expenses of subsidiaries			1.57					1.57
Adiuslmeflls towards emolovees stock ootons		50.32	150.32	I
Balance as at December 31, 2017	1 336.70	7 877.92	140.60		9960.11	76.74		19.392.07
							On f MIiiion)
						Items of other
Pariculars	Securities premium reserve	BH!D!§ General resere	lDQ §![! Share options outstanding reserve		Retained earnings	£2!lt !D!h'! I Efective porion of cash flow hedaas	Total
Balance as at April 1, 2017	1,336.70	7,827.60	187.12		7,784.28	208.44		17,344.14
Net profit for the year					3,421.17			3.421.17
Other comprehensive income for the year					104.97	(191.81)		(86.84)
D1v1dend					(800.00)			(800.00)
Tax on dividend					(150.23)			(150.23)
Transfer to general reserve		1,368.47			(1,368.47)
Employee stock compensation expenses			2.23					2.23
Employee stock compensation expenses of subsidiaries			1.57					1
Adiustments towards employees stock options		100.40	1100.401
Balance at March 31, 2018	1 336.70	9 296.47	90.52		8 991.72	16.63		19 732.04

Summary of significant accou nting pol1c1es • Refer note 3

The accompanying notes are an integral part or the condensed f1nanc1al statements.

As per our report of even date

For Deloitte Haskins Sells LLP o. 117366W/W-100016 Hemani Partner Member ip no 038019

Place: Puna Da1e January 28. 2019

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For and on behalf of the Board of Direc tors of
Persistent Systems Limited
Dr. Anand Deshpande Klran Umrootkar
Chairman and Managing Director Director
Sunn Sapre -1<�vY
Executive Director and
Chief Fina ncial Officer
Place. Puna
Date January 28, 2019
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6 of 34
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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

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. 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.

ii. Income taxes

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

iii. Property, plant and equipment

Property, plant and equipment represent a significant proportion of the asset base of the Company. The charge in respect of depreciation is derived after determining an estimate of an 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 determined by management at the time the asset is acquired and reviewed periodically. The lives are based on historical experience with similar assets as well as anticipation of future events, which may impact their life, such as changes ln 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 . . r·� . 61:' Sysr,t . (f . .J ;:.,re· ") /' ;J \"-�··/�[E] 'Z_f)uni""'"'" =" ''' /:,/

7 of 34

Persistent Systems Limited

Notes forming part of condensed financial statements

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

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

(c) Intangible assets

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

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

Research and development cost

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

• technical feasibility of completing the intangible asset so that it will be available for use or sale; its intention to complete the asset;

• its ability to use or sell the asset;

• how the asset will generate probable future economic benefits:

• the availability of adequate resources to complete the development and to use or sell the asset; and the ability to measure reliably the expenditure attributable to the intangible asset during development.

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

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

(d) Depreciation and amortization

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

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

Assets	Useful lives
Buildings•	25 years
Computers Computers - Servers and networks" Office equipments	3 years 3 years 5 years
Plant and equipment* Plant and equipment (Windmill)'	5 years 20 years
Plant and equipment (Solar Energy Systemr	10 years
Furniture and fixtures"	5 years
Vehicles*	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 t 5,000 are fully depreciated in the year of acquisition�

8 of 34

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

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 tenns give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding are subsequently measured at amortized cost using the effective interest rate method. The change in measurements are recognized as finance income in the statement of profit and loss.

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

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

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

Any financial asset which does not meet the criteria for categorization as financial asset at amortized cost or 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.

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 or loss.

of34

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 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 -"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.

Derecognition

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 derecognised 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 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 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.

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.

An impairment loss is recognized wherever the carrying amount of an asset exceeds 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.

(f) 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.

10 of 34

Persistent Systems Limited Notes forming part of condensed financial statements

(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.

(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 se,vices 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 se,vices 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 ls no uncertainty as to measurement or collectability of consideration, is recognized as per the percentage-of-completion method. When there is uncertainty as to measurement or ultimate collectability, revenue recognition is postponed until such uncertainty is resolved.

Revenue from licenses where the customer obtains a "right to use" the licenses is recognized at the time the license is made available to the customer. Revenue from licenses where the customer obtains a "right to access" is recognized over the access period.

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

When support se,vices 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 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.

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

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

The Company collects Goods and 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

Interest income is recognized on a time proportion basis taking into account the carrying amount and the effective interest rate. Interest Jo.come is included under the head 'Other income' in the statement of profit and loss.

//

1 of 34

Persistent Systems Limited Notes forming part of condensed financial statements

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

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

Exchange differences

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

Translation of foreign operations

The 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/ year when the contributions are due. The Company has no obligation, other than the contribution payable to the provident fund.

(ii) Gratuity

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

(iii) Superannuation

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

12of34

Persistent Systems Limited

Notes forming part of condensed financial statements

(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-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 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 term benefits to all eligible employees, as per Company'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.

(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 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 profil/ loss at the time of transaction. Deferred tax assets are recognized for all deductible temporary differences, the carry forward of unused tax credits and any unused tax losses, except deferred tax assets arising from initial recognition of goodwill or an asset or liability in a transaction that is not a business combination and, affects neither accounting nor taxable profil/ 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 is recognized in the period / year in which the temporary differences originate.

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

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

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

Minimum alternate tax (MAT) paid in a period / year is charged to the statement of profit and loss as current tax. MAT credit available is recognized as an asset only to the extent that there is convincing evidence that the Company will pay normal income tax during the period, i.e., the period for which MAT credit is allowed to be carried forward. In the 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.

(m) Segment reporting

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

of 34

Persistent Systems Limited

Notes forming part of condensed financial statements

with the unconsolidated financial statements.

(n) Earnings per share (EPS)

Basic earnings per share are calculated by dividing the net profit for the period I 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 Company.

For the purpose of calculating diluted earnings per share, the net profit for the period I year attributable to the equity

shareholders and the weighted average number of equity shares outstanding during the period I year, are adjusted for the effects of all dilutive potential equity shares.

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

(o) Provisions

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

(p) Contingent liabilities

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

(q) Cash and cash equivalents

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

(r) Employee stock compensation expenses

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

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

The expense or credit recognized in the statement of profit and loss for a period / 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 otherwise beneficial to the employee as measured at the date of modification. The employee stock option expenses in respect of the employees of the subsidiaries are charged to the respective subsidiary. /\ :)./SIG (This space is intentionally left blank) · 1t ;t "' Pu I' 140!34 . r · '7:� , c\, - ( .;(/--) '" .,_ e

Persistent Systems Limited

Notes forming part of condensed financial statements

4. Share capital

	As at	As at	As at
	December 31,	December 31,	March 31,
	2018	2017	2018
	In< Million	In<Million	In<Million
Authorized shares (No. in million)
200 (Previous period/ year: 200) equity shares of<	2,000.00	2,000.00	2.000.00
10 each
	2,000.00	2,000.00	2 000.00
Issued, subscribed and fully paid-up shares (No.
in million)
80 (Previous period/ year: 80) equity shares of< 10	800.00	800.00	800.00
each
Issued, subscribed and fully paid-up share capitl	800.00	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)	(In Million)
		As at		As at	As at
	December 31, 2018		December 31, 2017		March 31,	2018
	No. of shares	Amount	No. of shares	Amount	No. of shares	Amount
Number of shares	80.00	800.00	80.00	800.00	80.00	800.00
at the beginning of
the eriod_I_ear
Number of shares	80.00	800.00	80.00	800.00	80.00	800.00
at the end of the

b) Terms/ rights attached to equity shares

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

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	For the period of	For the period of
	five years ended	five years ended	five years ended
	December 31, 2018	December 31, 2017	March 31, 2018
	No in Million	No in Million	No in Million
Equity shares allotted on March 12, 2015	40.00	40.00	40.00
as fully paid bonus shares by capitalization
of securities premium � 400.00 million

{This space is intentionally left blank)

15of34

Persistent Systems Limited

Notes forming part of condensed financial statements

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

Name of the shareholder"		As at	As	at	As at
	December 31, 2018		December 31, 2017		March 31,	2018
	No. in	% Holding	No. in	% Holding	No.in	%
	million		million		million	Holding
Dr. Anand Deshpande	22.95	28.69	22.93	28.66	22.93	28.66
jointly with Mrs. Sonali
Anand Deshpande
Saif Advisors Mauritius	1.30	1.62	4.27	5.33	3.70	4.62
Limited

• 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.

(This space is intentionally left blank.)

16 of 34

Persistent Systems Limited

Notes forming part of condensed financial statements

5.1 Property, Plant and Equipment

5.1 Proper, Plant and Equipment
									(In? Million)
	Freehold land	Buildings*	Computers	Oce equipments	Plant and equipment	Leasehold improvements	Furiture and fxtures	Vehicles	Total
Gross block (At cost)
As at April 1, 2018	206.92	2,386.97	1,632.30	53.48	1,377.70	21.12	511.29	4.73	6,194.51
Additions		0.07	119.06	1.40	13.41		3.19	4.66	141.79
Dispsals As at December 31, 2018	206.92	2,387.04	38.75 1,712.61	1.81 53.07	19.6 1,371.47	21.12	0.47 514.01	0.95 8.4	61.62 6,274.68
Depreciation and impairent
As at April 1, 2018		868.36	1,395.62	47.67	1,080.85	15.43	458.28	4.42	3,870.63
Charge for te prio Dispsals As at Decembr 31, 2018		72.53 940.89	121.47 38.75 1,478.3	2.42 1.81 48.28	63.02 19.6 1,124.23	2.08 17.51	18.56 0.47 476.37	0.48 0.95 3.95	280.56 61.62 4,089.57
Net block
As at Deember 31, 2018	206.92	1,446.15	234.27	4.79	247.24	3.61	37.6	4.49	2,185.11
As at March 31, 2018	206.92	1,518.61	236.68	5.81	296.85	5.69	53.01	0.31	2,323.88
									In ?Million
	Freehold land	Buildings*	Computers	Office equipments	Plant and equipment	Leasehold improvement	Furiture and fxtures	Vehicles	Total
Gross block (At cost) As at April 1, 2017	206.92	2,366.57	1,565.38	52.09	1,358.96	21.12	50.10	4.73	6,075.87
Additions		12.10	112.03	2.30	17.90		6.96		151.29
Dispsals As at December 31, 2017	206.92	2,378.67	74.60 1,602.81	0.85 53.5	5.66 1,371.20	21.12	507.06	4.73	81.11 6,146.05
Depreciation and impairent As at April 1, 2017		772.59	1,290.21	4.8	1,018.03	12.67	432.22	4.21	3,574.77
Charge fr te perio Dispsals As at Decembr 31, 2017		72.11 844.70	149.82 74.60 1,365.43	2.90 0.74 47.00	67.26 5.66 1,079.63	2.08 14.75	19.89 452.11	0.16 4.37	314.22 81.00 3,807.99
Net block
As at Deembr 31, 2017	206.92	1,533.97	237.38	6.5	291.57	6.37	54.95	0.36	2,338.06

� Note: Building includes those constructed on leasehold land:

a) Gross block as on December 31, 2018 { 1,454.10 million (Corresponding period { 1,445.80 million/ Previous year { 1,454.10 million)

b) Depreciation charge for the period { 44.41 million (Corresponding period Z 43.98 million I Previous year { 58.45 million)

c) Accumulated depreciation as on December 31, 2018 Z 425.46 million (Corresponding period Z 366.58 million/ Previous year { 381.05 million) d) Net book value as on December 31, 2018 { 1,028.64 million (Corresponding period Z 1,079.22 million/ Previous year t 1, 073.05 million)

(This space is intentionally left blank) 17of34

Persistent Systems Limited

Notes forming part of condensed financial statements

5.1 Property, Plant and Equipment

5.1Property, Plant and Equipment
	Frehold land	Buildings	Computers	Oice equipments	Plant and equipment	Leasehold improvements	Furrture and fxtures	Vehicles	(Inf Million) Total
Gross block (At cost)
AsatApri!1,2017 Addiions	20.92	2,366.57 20.40	1,565.38 156.27	52.09 2.44	1,358.96 45.74	21.12	500.10 11.n	4.73	6,075.87 236.62
Dispsals			89.35	1.05	27.00		0.58		117.98
As at March31, 2018	206.92	2,386.97	1,632.30	53.4	1,377.70	21.12	511.29	4.73	6,194.51
Depreciation and impairent
As at April1, 2017 Charge fr the year Dispsals		772.59 95.77	1,290.21 194.76 89.35	4.8 3.77 0.94	1,018.03 89.46 26.64	12.67 2.76	432.22 26.6 0.58	4.21 0.21	3,574.77 413.37 117.51
As at March31, 2018		868.36	1,395.62	47.67	1,080.85	15.43	45.28	4.42	3,870.63
Net block
Aat March31, 2018 A aMarch31, 2017	206.92 206.92	1,518.61 1,593.98	236.68 275.17	5.81 7.25	296.85 340.93	5.69 8.4	53.01 67.88	0.31 0.52	2,323.88 2,501.10

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18of34

Persistent Systems Limited

Notes forming part of condensed ffnanc1al statements

6.2 othar lntanglb!o assets
			Inf MIiiion
	Sofare Acquired contractual		Total
		rights
Gross block
AsatApri11,2018	660.92	261.74	922.66
Additions	43.95		43.95
As at December 31, 2018	704.87	281.74	966.61
Amorization and Impairment
As at April 1, 2018	543.44	261.74	805.18
Charge fr the period	63.99		63.99
As at December 31, 2018	607.43	261.74	869.17
Net block
As at December 31, 2016	97.44		97.44
As at March 31, 2018	117.48		117.48

			In, MIiiion
	SofareAcquired contractual		Total
		rights
Gross block
As at April 1, 2017	641.04	261.74	902.78
Additions	15.12		15.12
As at December 31, 2017	666.16	261.74	917.90
Amorization and Impairment
As at April 1, 2017	431.42	249.32	680.74
Charge for the period	88.35	12.42	100.77
As at December 31, 2017	619.77	261.74	781.61
Net block
As at December 31, 2017	136.39		136.39
			In, MIiiion
	SofareAcquired contractual		Total
		rights
Gross block
As at April 1, 2017	641.04	261.74	902.78
Additions	19.88		19.88
As at March 31, 2018	660.92	261.74	922.66
Amortization and Impairment
AsatApril1,2017	431.42	249.32	680 74
Chargeforthe year	112.02	12.42	124.44
As al March 31, 2018	643.44	261.74	806.18
Net block
As al March 31, 2018	117.46		117.48
As al March 31, 2017	209.62	12.42	222.04

6,3 Depreciation and amortization

6,3 Depreciation and amorization
						In, MIiiion
	For the	quarer endod	For tho nine months endod			For the yoar endod
	December 31, 2018	December 31, 2017	December 31, 2018	December	31, 2017	March 31, 2018
On Property, Plant and Equipment	91.73	100.02	280.56		314.22
On o!her intangible assets	21.74	28.16	63.99		100.77
	113.47	128.16	344.56		414.99

19of34

Persistent Systems Limited

Notes rorm!ng part or condensed llnanclaf statements

6. Non•current financial assets : Investments {refer note 29)

	Asal	Asat	Asal
	December 31, 2018	December 31, 2017	March 31, 2018
	In, MIilion	11, MIilion	In, MIiiion
Investments carried at cost
Unquoted Investments
Investments In equity Instruments
- In wholly owned subsidiar companies
Persis!enl Sys!ems, Inc. (Refer no1e 30)
402 million (Cor1esponding period/ Previous year 402 million) shares of USO 0.10 each, fully paid up	2,478.01	2,478.01	2,478.01
	2 478.01	2 478.01	2 478.01
Persistent Systems Ple Ud
0.50 million (Corresponding period/ Previous year. 0.50 million) shares of SGD 1 each. fully paid up	15.50	15.50	15.50
	15.50	15.50	15.50
Persistent Systems France SAS
1 50 million (Corresponding period/ Previous year: 1 50 million} shares of EUR 1 each, fl1lly paid up	97.47	97.47	97.47
	97-47	97.47	97.47
Pers1shmt Systems Malaysia Sdn. Shd
5.45 milhon (Correspom!in( period/Previous yoar: 5.45 million) shares of MYR 1 each, fully paid up	102.25	102.25	102.25
	102.25	102.25	102.25
Persistent Systems Germany GmbH
8.525 million {Correspondin( period/ Previous year: 0.025 million) shares of EUR 1 each, fully paid up	713.19	2.02	2.02
	713.19	2.02	2.02
-In associates
Klisma e•Serv1ces Private Limited {Holding 50% {Corresponding period/Previous year; 50% ))
0.005 mllion (Corresponding period I Previous year: 0.005 million) shares of, 10 each, fully paid up	0.05	0.05	0.05
Less lmpiirmen1	**(0.05) **	(0.05)	**(0.05) **
Total Investments carried at coat (A)	3,406.42	2,695.25	2,695.25
Investments carred at amorised cost
Quoted lnvostmonts
In bonds	1,971.37	1,012.78	1,112.47
(Mar!et value f 2.009.01 mition (Corresponding period t 1,054.09 million/ Previous year , 1 ,139,71 million)]
Add: ln!eres! accrued on bonds	74.04	37.17	33.64
Total investments carried at amortised cost (B)	2,045.41	1,049.95	1,146.11
Designated as fair value through profit and Ion
Quotod Investments
• Investments ln mutual funds
Fair value of long term mu1ual funds (Refer Nole 6a)	1,646.79	1,373.36	1,657.49
	1,646.79	1,373.36	1,657.49
Unquoted lnveatmenta
-Othen•
Alt1zon Systems Private Limited
3,766 eqt1ity shares (Correspondins period I Previous year: 3.766 equity shares} of, 10 each, fully paid up	6.00	6.00	6.0
	6.00	6.00	6.00
Total investments carred at fair value (C)	1,652.79	1 379.36	1,663.49
Total Investments (A) + (8) + (C)	7,104.62	5 124.56	5 504.85
Aggregate provision for diminution In valuo of Investments	0.05	0.05	0.05
Aggregate amount of quoted Investments	3,692.20	2,423.31	2,803.60
Aggregate amount of unquoted lnvestmentl	3,412.47	2,701.30	2.701.30

• Investments, where the Company does nol have joint·conlrol or significant influence including si1ua1ions where such joint-con1rol or significant innuence is in!anded to be 1emporary, are classified as "investments in others"

(This space is mlen/ional/y Jett blank)

20 of 34

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	Asat	As at
	December 31, 2018	December 31, 2017	March 31, 2018
	Inf Million	Inf Million	Inf Million
lCICI Prudential Mutual Fund	534.72	594.49	66.16
Kotak Mutual Fund	286.82	180.31	214.02
HDFC Mutual Fund	200.85	158.38	191.64
Aditya Birla Sun Life Mutual Fund	186.42	105.35	157.98
UTI Mutual Fund	155.83	57.98	89.43
Ais Mutual Fund	100.00
SBI Mutual Fund	63.25	116.39	177.65
Reliance Mutual Fund	56.61	52.84	53.81
DHFL Pramerica Mutual Fund	31.18
DSP Mutual Fund	31.11
IDFC Mutual Fund		107.62	108.80
	1,646.79	1,373.36	1,657.49

21 of 34

Persistent Systems L1m1ted

Notes forming part of condansod financial atatomonts

_7._Non-curront f!nanclal assets : Loans (rofer nol8 2)
	As at	As at	As at
	December 31, 2018	December 31, 2017	March 31, 2018
	In r MHion	Int Mlll!on	tn r Million
Cared at amorised cost
Loan to r!ated paries
Unsecured, considered good
- Persistent Systems. Inc		313.48	130.34
- Persistent Systems Germany GmbH		649.55	686.84
Add: Interest accrued but not due on loan		13.66	13.35
		976.69	830.53
Security deposit
Unsecured, considered good	111.07	115.12	115 28
Unsecured, considered doubtful		2.19	2.19
	111.07	117.31	117.47
Less· lmpa11menl		2.19	2.19
	111.07	115.12	115.28
Othor loans and advances
Inter corporate deposits
Unsecured, considered good		0.03
Unsecured, considered doubtful	0.58	0.58	0.58
	0.58	0.61	0.58
Less: 1mpairmen1	**(0.58) **	**(0.58) **	**(0.58) **
		0.oJ
	111.07	1,091.84	945.81

8. Other non[.] current financial a&sets (rof&r note 29)

	As al	Asat	As at
	Decamber31, 2018	December 31, 2017	March 31, 2018
	In r MIiiion	In r MIiiion	In r MIiiion
Non,current bank balances (Refer nole 14)	24.99	1.53	1.53
Add: Interest accrued but not due on non·curren1 bank deposits	4.79	0.18	0.21
Non.currant deposits wth banks (Carried al amorlised cost)	29.78	1.71	1.74
D&posi1 wth fnancial institutions		300.00	35.00
Add: Interest accrued but not due on deposit wilh fJnancial instil11lions		21.92	0.69
Non.current deposits wth financial insti\ulions (Carried al amortised cost)		321.92	35.69
	29.78	323.63	37.43

9. Deferred tax auets (net)
	Asat	Asat	As at
	Docomber 31, 2018	December 31, 2017	Marh 31, 2018
	In r MIIUon	In r Mlllton	1n t MIiiion
Deferred tax UablllUos
Differences in book values and 1ax base values of block of Property, Plan1 and Equipment and olhe1 in1angible	44.54	68.37	63.50
assets
Capilal gains (net)	75.28	98.94	117.36
Olhers	37.33	40.61	8.80
	157.15	207.92	189.66
Deferred tax a&aet&
Provision for leave encashmenl	65.80	56.13	54.35
Prov1s1on for long service awards	59.32	57.36	57.34
Proviskn for doubtful debts	25.51	67.18	27.75
Tax credit	48.28	12.51	73.17
Others			8.73
	198.91	193.18	221.34
Deferrod tax (llabll!Ues) / assets {net)	41.76	(14.74)	31.66
10. Other non current assets
	A&at	Asat	A&at
	Docambor 31, 2018	December 31, 2017	March 31, 2016
	Int Million	In, MIiiion	Int MIIUon
Capi1al advances (Unsecured. considered good)		7.53
Advances recoverable in cash or kind or for value to be received	74.72	53.12	64.00
	74.72	60.65	64.00

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22 of 34

Persistent Systems L1m1ted

Notes forming part of condensed f!nanc!al statemants

11. Current financial assets : Investments (refer note 29)

		As at	As at	As at
		December 31, 2018	Decembar 31, 2017	March 31, 2018
		Int MIiiion	ln l Mllllon	In r MUlion
Designated as fair value through profit and loss
- Quoted Investments
Investments In mutual funds
Fair value or curren1 mutual funds {Refer Nole 11a)		7,352.25	5,532.19	5,916.31
		7 352.25	5532.19	5 916.31
Total carring amount of lnveatments		7,352.25	5 532.19	5 916.31
Aggregate amount of quoted Investment$		7,352.25	5,532.19	5,916.31
	(T/is_space_is_inlenlionall /l blenk)_

23 of 34

Persistent Systems Limited

Notes forming part of condensed financial stat ements

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

	Asat	As at	As at
	December 31, 2018	December 31, 2017	March 31, 2018
	Inf Million	Inf Million	Inf Million
UT! Mutual Fund	1,133.60	712.37	823.08
Aditya Birla Sun Life Mutual Fund	1,074.98	888.59	845.88
L&T Mutual Fund	1,004.83	725.37	749.22
Axis Mutual Fund	894.64	494.64	743.70
IClCl Prudential Mutual Fund	795.56	220.41	275.33
Tata Mutual Fund	704.22	691.56	817.81
DSP Mutual Fund	475.05		50.39
HDFC Mutual Fund	439.11	509.56	174.66
SB! Mutual Fund	338.53		50.24
Sundaram Mutual Fund	237.93		10.15
Kotak Mutual Fund	230.67	163.79	300.42
IOFC Mutual Fund	23.13	463.50	349.3
OHFL Pramerica Mutual Fund		366.45	441.6
Reliance Mutual Fund		295.95	190.45
	7,352.25	5,532.19	5,916.31

(Th;s space is intentionally left blank)

24 of 34

Persistent Systems Ltmited

Notes forming part of condensed flnanclal statements

12. Trade receivables (refer note 29)

	As at	As at	As at
	December31, 2018	December31, 2017	March31, 2018
	In, Mllllon	in, MIIUon	In, Mltllon
Outstanding for a period exceeding six months from the date they are due for payment
Unsecured. considered good		11.41	14.52
Unsecured, considered doubtful	72.99	194.12	80.20
	72.99	205.53	94.72
Less : Allowancefrcredit loss	(72.99)	!194. 12)	(80.20!
		11.41	14.52
Others
Unsecured, considered good	2.226.58	3,969.83	3,410.55
Unsecured, considered doubtful
	2,226.68	3,969.83	3,410.66
Less : Allowance for credit loss
	2 226.68	3,969.83	3.410.66
	2 226.68	3 981.24	3 425.07

13. Cash and cash equlva!l:mts (refer note 29)

	As at	Asat	As at
	December31, 2018	December31, 2017	March31, 2018
	In, MUen	In, Mlltlon	In, M!111on
Casti and cash equivalents as presented ln cash flow statement
Cash on hand	0.15	0.13	0 11
Balances with banks
On current accounts·	267.06	258.68	158.58
On saving accounts	0.43	0.60	0.75
On Exchange Earner's Foreign Currency accounts	323.55	185 52	145.83
Cheques on hand	6.04
	697.23	444.93	306.27

'Out of the cash and cash equivalent balance as at December 31, 2018, the Company can utilise � 2.98 million only towards research a11d development activities specified in the loan /grant agreement. There were no such restrictions for utilisation of the cash and cash equivalent balance as at December 31, 2017 a11d March 31, 2018

1. Other bank balances (refer note 29)

14. Other bank balances (refer note29)
	As at	As at	As at
	December31, 2018	December31, 2017	March31, 2018
	In, Million	In, Mllllon	In, MHon
Short tenn bank deposits•	1644.66	567.66	747.03
Add:Interest accrued but not due on deposits with banks	21.17	119.19	129.92
Deposi!s with banks (Carried at amortised cost)	1,666.83	686.86	876.96
Less: Deposit with maturity mre than twelve months from the Balance Sheet dale	(24.99)	{1 .53)	(1.53}
disclosed under non-current financial assets (Refer nole 8)
Less: Interest accrued but not due on non.current deposits wilh banks (Refer note 8)	**(4.79) **	(0.18)	(0.21)
	1636.06	686.14	875.21
Balances with banks On unpaid dividend accounts··	2.11	1.48	**1 .41 **
	1638.16	686.62	876.62

• Out of tna balance, fixed deposi!s of , 86.65 million {Corresponding period · t 62.56 million I Previous year t 63.78 million} have been earmarked against bank guarantees availed by the Company.

" The Company can utilize these balances only towards selllement of the respective unpaid dividend.

(This space is intentionally Jeff blank)

25 of 34

Persistent Systems Lilmted

Notes ronnlng part of condensed flnanclal statements

16. Current flnanclal assets: Loans (refer note 29)

	As at	Asal	As at
	December31, 2018	December31, 2017	March31, 2018
	Inf MIiiion	Inf MIiiion	Inf MIiiion
Carred at amorised cost
Loan to related parties
Unsecured. considered doubtul
• Klisma a.services Private Limited	27.43	27.43	27.43
	27.43	27.43	27.43
Less: Impairment	\27.43)	**(27.43) **	(27.43(
Security deposits
Unsecured. considered good	9.14	3.87	4.47
	914	3.87	4.47
	9.14	3.87	4.47
16.Other current flnanclal assets (refer note29)
	Asal	Asal	Asat
	December31, 2018	December31, 2017	March31, 2018
	Inf Mllllon	Inf M!mon	Inf MIiiion
Fair value of dervatives designated and efective as hedging Instruments
Forward contracts receivable	49.55	163.33	42.75
Advances to related paries (Unsecured, considered good)
Persistent Systems, Inc	61 30	64.07	67.27
Persistent Systems Pie ltd	0.14		0. 15
Persistent Systems France SAS	4.10	2.99	34
Persistent Systems Malaysia Sdn Bhd	0.05	O.Q1	0.29
Persistent Systems Lanka (Priva1e) Limited	2.38	1.77	1.95
Persistent Systems Israel ltd	0.14		0.03
Persist0t Systems Mexico, S.A. de C.V	0.47	0.22	0.40
Akshat Corporation		0.13	0.05
Persistent Systems Germany GmbH	4.72	1.54
Persistent Telecom Solutions Inc	4.42
	77.72	70 73	73.48
Advances to related paries (Unsecured, considered doubtful)
Klisma a-Services Private Limited	0.81	0.81	0.81
Less: lmpamnent of current financial assets	(0.81)	(0.81)	(0.81)
Deposit with 1manc1a1 1ns1ttutions (refer note32)	780.00	540.35	995.35
Add: Interest accrued but not due on deposit with financial 1nst1tu1ions	18.77	6.56	20.65
Current deposits with financial institutions {Carried at amortised cost)	798.77	646 .91	1 016 .0 0
SEIS Incentive receivable		44.13
Unbilled revenue	1,354.74	694.21	715.47
	2 280.78	1 619.31	1 847 70
17.Other current assets
	Asal	As at	As at
	December31, 2018	December31, 2017	March31, 2018
	Inf MIiiion	Inf MIiiion	Inf MIiiion
Advances to suppUers (Unsecured, considered good)
Advances recoverable m cash or kind or for value to be received	306.75	283.33	360.47
Other advances (Unsecured, considered good)
VAT receivable (net) Serice tax and GST receivable {net) (refer note31)	37.13 972.21	47.29 830.87	,f09 967.06
	**1,009.3 4 **	878.16	1 01416
	1 3 16.0 9	1161.49	1 374.62

26 of 34

Persistent Systems Limited

Notes forming part of condensed ffnancral statements

1. Non.current financial llablHtles : Borrowings (refer note 29)

	As at	Asat	As at
	December 31, 2018	December 31, 2017	March 31, 2018
	In" Mllllon	In" MIiiion	In" MIiiion
Unsecured Borrowings carried at amorised cost
Term loans
Indian rupee loan from others	17.91	22.49	21.13
Interest accrued but not due on term loans	0.12	0.87	0.78
	18.03	23.36	21.91
Less: Current maturity of long-term borowings transferred to other current financial	(4.58)	(4.58)	(4.58)
liabilities (Refer note 21)
Less: Current maturity of Interest accrued but not due on term loan transferred to other	(0.12)	(0.87)	(0.78)
current financial liabilities (Refer note 21)
	(4.70)	(5.45)	(5.36)
	13,33	17.91	18.55

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

Loan I - amounting tot 6.82 mUlion (Corresponding period;! 9.55 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 II - amounting to ;! 11.09 million (Corresponding period;!: 12.94 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 l!abllltles: Provisions

	As at	As at	As at
	December 31, 2018	December 31, 2017	March 31, 2018
	In" Mllllon	In" Mllllon	In"M!Ulon
Provision for employee benefts
- Long service awards	153.95	141.85	143,37
	153,95	141.85	143.37

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27 of 34

Persistent Systems Limited

Notes forming part of condensed financial statements

20. Trade payables (refer note 29)

		As at	As at	As at
		December 31, 2018	December 31, 2017	March 31, 2018
		In, Million	Inf Million	Inf Million
Trade payables for goods and services (refer note	30)	840.45	701.15	716.73
		840.45	701.15	716.73

21. Other current financial liabilities (refer note 29)

	As at	As at	As at
	December 31, 2018	December 31, 2017	March 31, 2018
	Inf Mllllon	In,MIIHon	Inf MIiiion
Capital creditors	35.94	23.39	32.36
Current maturity of long term.borrowings (refer note 18)	4.58	4.58	4.58
Current maturity of interest on long-term borrowings (refer note18)	0.12	0.87	0.78
Accrued employee habi!ities	76.70	72.98	71.42
Unpaid dividend •	2.11	1.48	1.41
Other liabilities	0.47	0.42	0.18
Advance from related paries (Unsecured, considered good)
Persistent Systems Pte Ltd		0.01
Persistent Systems Germany GmbH	6.94
Aepona limited	0.16	0.04	0.44
Persistent Systems Israel Ltd.		0.01
Persistent Telecom Solutions Inc.		176.30	179.69
	7.10	176.36	180.13
	127.02	280.08	290.86

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

22. Other current liabilities

	As at	As at	As at
	December 31, 2018	December 31, 2017	March 31, 2018
	Inf MIiiion	Inf Million	Inf Million
Unearned revenue	151.09	124.01	137.56
Advance from customers	328.10	166.95	241.10
Other payables
- Statutory liabilities	168.08	156.92	181.13
- Other liabilities•	11.69	4.24	3.04
	658.96	452.12	562.83

• Includes grant of , 4.50 million received during the nine months ended December 31, 2018, from Biotechnology Industry Research Assistance Council {B!RAC) pursuant to an agreement dated March 12, 2018. The amount together with additional grants to be received over 3 years from BIRAC and Company's share as prescribed in the agreement is to be spent as per the said agreement.

23. Current liabilities : Provisions

	Asat	As at	As at
	December 31, 2018	December 31, 2017	March 31, 2018
	In, Million	Inf Million	Inf Million
Provision for employee benefts
- Gratuity	83.84	(19.34)	(45.92)
• leave encashment	188.32	162.19	157.04
· long service awards	15.80	23.88	22.31
- Other employee benefits	332.75	347.45	294.60
	620.71	514.18	428.03

28 of 34

Persistent Systems Limited Notes fonn!ng part of condensed flnanclal statements

24, Revenue from operations (net) (refer note 30)

	For the	quarer ended	For the nine months ended	For the nine months ended	For the year ended
	December31, 2018	December31, 2017	December31, 2018	December31, 2017	March31, 2018
	In , M111lon	In f Mllllon	In , MIiiion	In , MH!on	Inf MIiiion
Software services	4,806.46	4,263.39	14,176.66	12.752.03	17,065.63
Sof!ware licenses	73.29	36.70	259.30	195.41	261.86
	4 879.76	4 300.09	14 436.96	12 947.44	17 327.49

25. Other Income

25.Other Income
	For the	quarer ended	For the nine months ended		For the year ended
	December31, 2018	December31, 2011	December31, 2018	December31, 2017	March31, 2018
	Inf Mllllon	Inf MIiiion	1n, MIiiion	Inf MIiiion	In, MIiiion
Interest income
On financial assets c arried at amrtised cost	24.18	12.09	42.57	35.11	47.12
on others	29.31	38.19	151.28	99.60	144.48
Foreign exchange gain (net)		77.22		474.95	596.02
Profit on sale of fixed assets (net)	0.99	0.81	2.27	1.94	**2.47 **
Dividend income from investments	54.31	80.16	349.69	191.29	259.73
Profit on sale of investinents (net)	74.95	45.07	288.52	174.60	186.84
Net gain/(!oss) arising on financial assets designated as at FVPL	27.76	(57.42)	{87.93)	(72.54)	{18.92)
Advances written back				17.56	17.56
Miscellaneous income	11.45	56.00	35.93	71.0	41.52
	222.95	252.12	782.33	993.57	1 276.82

26. Personnel expenses

26.Personnel expenses
	For the	quarer ended		For the nine months ended		For the year ended
	December31, 2018	December	31, 2017	December31, 2018	December31, 2017	March31, 2018
	In, MIHlon	Inf MIiiion		In, Mllllon	In, MIiiion	Inf MIiiion
26,1Employee benefits expense
Salaries, wages and bonus	2,221.03		2,028.61	6,347.18	5,98315	7,863.97
Contribution to provident and other funds	83.70		77.69	241.14	227.98	304.60
Gratuity expenses	36.47		46.33	113,73	126.47	163.94
Defined contribution to other funds	10.42		10.24	31.00	31.14	41.26
Staf welfare and benefits	91.96		90.12	289.66	266.51	364.66
Employee stock compensation expenses					2.23	2.23
	2 443.58		_2_262.99	7 022.71	6 637.48	8 740.66
26.2Cost of proresslonals
- Related parties (refer note30)	499.15		460.40	1.407.83	1,502.24	1,894.75
- Others	84.08		52.02	238.32	169.58	238.28
	583.23		612.42	1 646.15	1 671.80	2,133.03
	3 026.81		2 765.41	8 666.86	8 309.26	10 873.69

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29 of 34

Persistent Systems Limited

Notes forming part of condensed financial statements

1. Other e11penses

	For the	quarter ended	For the nine months ended	For the nine months ended	For the year ended
	December 31, 2018	December 31, 2017	December 31, 2018	December 31, 2017	March 31, 2018
	In , MUon	In , MIiiion	In, MIiiion	In, Million	In, MIiiion
Travelling and conveyance	69.68	70.96	246.53	237.70	321.25
Electricity expenses (net)	26.29	23.69	74.25	65.53	85.54
Internet link expenses	3.63	10.68	30.81	33.38	46.24
Communication e1penses	15.02	11.68	52.20	59.87	75.90
Recruitment expenses	9.15	4.30	35.19	23.80	27.11
Training and seminars	3.28	2.66	7.91	6.24	11.52
PUchase of software licenses and suppor expanses	159.57	102. 17	495.06	352.98	484.07
Bad debts		(0.22)	23.55	35.97	157.62
Provision for doubtful debts/ (provision for doubtful debts written	5.75	7.43	(8.09)	(29.77)	{146.42)
back) {net}
Rent	62.75	60.02	185.28	182.26	242.75
Insurance	4.47	4.10	13.09	13.79	18.01
Rates and taxes	22.59	21.36	35.48	71.98	77.78
Legal and profess1ona\ fees	47.31	40.32	164.02	145.34	207.86
Repairs and maintenance
• Plant and Machinery	27.26	26.88	78.26	77.53	104.73
• Buildings	5.09	5.97	21.93	18.25	26.28
• 01hers	3.05	5.67	13.60	14.89	20.09
Selling and marketing expenses	354.97	148.39	951.85	469.53	614.69
Advertisement. conference and sponsorship fees	8.48	2.82	15.23	9.91	14.71
Computer cnsumables	1.67	2.24	4.60	3.92	5.63
Auditors' remuneration	2.65	2.56	6.39	6.30	8.Q7
Donations	20.98	18.10	57.67	56.31	78.02
Books. memberships, subscriptions	7.28	4.17	16.66	11.03	14 77
Foreign exchange loss (net)	151.27		146.44
Directors' silting fees	1.15	0.67	3.75	2.92	3.90
Directors' commission	3.61	2.40	10.62	6.77	9.74
Miscellaneous expenses	34.91	30.65	100. 14	100.30	130.17
	1,051.86	609,67	2 782.42	1 976.73	2,640.03

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30 of 34

Persistent Systems Limited

Notes fonnlng part of condensed llnanclal statements

Persistent Systems Limited Notes fonlng par of condensed llnanclal statements
28. Earings per share
		For the	quarer ended	For the nine	months ended		For the year ended
		December 31, 2018	December 31, 2017	December 31, 2018	December 31,	2017	March 31, 2018
Nymeratoc[or B!I£ !D9 Q!uted EPS
Net Profit after tax {In , Million)	(A)	610.01	777.32	2,430.08	2,392.56		3,421.17
Denominator for Basl£ EPS
Weighted average number of equity shares	(Bl	80.000.000	80.000,000	80.000.000	80.000,000		80,000.000
Denoml) ortorDIutedEPS
Number of equity shares	(Ci	80,000,000	80.000.000	80,000,000	80,000,000		80,000.000
Basic Earings per share of face valueof,10 each (In')	(ABJ	7.63	9.72	30.38		29.91	42.76
DIiuted Earings per share ol lace value of , 10 each(In')	(NC)	7.63	9.72	30.38		29.91	42.76
		For the	quarer ended	For the nine	months ended		For the year ended
		December 31, 2018	December 31, 2017	December 31, 2018	December 31,	2017	March 31, 2018
Number of shares considered as basic weighted average shares		80,000,000	80,000,000	80,000,000	80,000,000		80,000,000
outstanding for calculating Basic EPS
Number of shares considered as weighted average shares and		80,000,000	80,000,000	80,000,000	80,000,000		80.000.000
potential shares outstanding for calculating Diluted EPS

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31 of 34

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:

													(Inf million)
Financial asset/ fnancial liabilies I		Basis of measurement I	I	As at Decembr Carring value I		31, 2018 Fair value	I	As a Decembr Caring value l		31, 2017 Fair value	I I	As a March 31, 2018 Caring value Fair value -		I	Fair value hierrchy l
	Asset: Investments in subsidiaries and assoiates	Cos 1		3.406.42		3,406.42		2,695.25		2,695.25	I	2,695.25	2.695.25
	Investments in equity instruments	Fair value		6.00		6.00		6.00		6.00		6.00	6.00	Leve! 3
	Investments in bonds*	Amorised cost		2,045.41		2,009.01		1,049.95		1,054.09		1,146.11	1,139.71
	Investments in mutual funds	Fair value		8.999.04		8,999.04		6,905.55		6,905.55		7,573.80	7.573.80	Leve! 1
	Lons	Amortised cst		120.21		120.21		1,095.71		1,095.71	i	950.28	950.28
	Deposit wth banks and fnancial instituions	Amorised cst		2.464.60		2,464.60		1,555.68		1.555.68		1,928.64	1,928.64
	Cash and csh equivalents (including unpaid	Amortised cost		599.34		599.34		446.41		446.41		306.68	306.68
	dividend)
	Trade recivables	Amorised cost		2,226.58		2,226.58		3,981.24		3,981.24		3,425.07	3,425.07
	Forard contracs receivable	Fair value		49.55		49.55		163.33		163.33		42.75	42.75	Leve! 2
	Unbilled revenue	Amorised cost		1,354-74		1,354.74		694.21		694.21		715.47	715.47
	Other current financial assets	Amorised cst		77.72		77.72		114.86		114.86		73.48	73.48
	Totl			21,349.61		21,313.21		18,708.19	I	18,712.33		18,863.53	18,857.13
	Liabilities:
	Borrowings {including acrued interest)	Amorised cst		18.03		18.03		23.36		23.36		21.91	21.91
	Trade payables and deferred payment liabilities	Amorised cst		840.45		840.45		701.15		701.15		716.73	716.73
	Other fnancial liabilities (exduding borrowngs)	Amorised cost		122.32	I	122.32		274.63	I	274.63	I	285.50	285.50
I	Tol	i	I	980.80	I	980.80	I	999.14	I	999.14	I	1,024.14	1,024.14	.	J

• Fair va!ue 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 induded within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices). Level 3 - Inputs 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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32 of 34

Persistent Systems Limited

No!e5 fonn!ng part of condensed financial statements

30. (i) Signi!icant n,la1ed party trans�ctions

30. (i) Signi!icant nla1ed party trans�ctions
								(Inf MIiiion)
	Namo or 1he mlated party and naum, ol re1�1ionship	For \he quar1<r			ended	For1he nine	moMh ended	For the year ended
		December 31,		December 31,		December 31,	December 31,	March	31,
Sale o! software scivices	Subsidiaries	2011			2017	2011	2017	2011
	Pc!lstcnl Sytems, Inc. Total	1,320.95 1 320.95			1.102.16 1102.16	3,914.01 3,914.01	3,043.18 3 043.18	4,199.30 4,199.30
Cost o1 professionals {e�cluding reimbu,sement ol	Subsidiaries
cxponses)
	Pcrsislcn! Sv, lcms, Inc.		3B9.34		414.10	1,110.SB	1,265.65	1,59$.83
R . b , 1 ·----------<","',s',s,0. - c,,------------+-----''"'"'·c"+--�4c 14c·1----'"1c1c0·c 50+--�·c"c'c•c•+---'"' ='c'·c•4 eim ursemon o eKpenses M
Purchase of Software Selling and marketing eKpenses	Poi,iston1 Sy!ems. lnr Total Subsidiares Pmsistent Sytems, !nc. Total Subsidiaries		0.51 0.51			2.74 2.74	15.50 15,50		15.46 15,41 8.21 8.21
	Pm&is!cnt Sytems, Inc. To1al		316.21 316,21		147.11 147.11	863.20 863.20	459.95 459.U5		604.01 604.01
Loans given	Subsidiaries
	Pcrtistont Sytems, !nc. Porsislcnt Sylcms Gmmany GmbH Total						617,25 617.25		617.27 617.27
Conversion of loan to equHy	Subsidiaries
	Pers!sfon! Systems Gurmnny GmbH Total		711.17 711,17		,-	711,17 711.17
Commission received on corporate guaranlee	Subsidiaries
	Potssten1 Svstcms, Inc. Total		0.47 0.47		0.06 0.06	1.25 1.25	0.17 0.17		1.B5 1.65
Travelling and �onveyance	Subsidiaries
Persistent Svtems, Inc. 1.5B 1.58 ,,,",-,- c,c,--.,-,, ----·-··--·-----4':":�·,"c"-,"-, ------------if----�=+­					1.01 1,01	4.0) 4.U	2.U 2.14		2.16 Z.H
	Pers!stenl Sy1cms. Inc. Total				13.32 U.32	1.07 1.07	13.32 13.32		17.24 17.24
Repayment of intercorporate deposits#	Subsldiuies
	Pcis!stenl Svtcms. Inc. Total					133.64 133.64			167.90 187.90

# Tlrnsc lrnnsactlons are disclosed a1 lhe exch»noo r.,tos prov .. ing on the dato of lmnsacimn.

(ii) Significant outstanding balances

(ii) Significant outstanding balances
				(In rMiUlon)
	Name ol the related 1arty and nature of relationship	Asat December 31, December 31, f-�-�cc-���c-=�-��=-i Match 31,
		2018	2017	2018
Trade receivables	Subsidiaries
	�s!cn1 Sys1cms. Inc. Total	&2.63 542.63	1,365.55 1,365.55	677,07 677.07
Trade payabk5 Advance$ given {eKcludlng Interest accrued I Persistent Sys!ems. Inc. Tolal Subsidiary 307.90 374.92 307.90 374.92 266.94 286.94 1--··---------------+---------- -------+-------1------+-------l
	Persistent Systems. Inc	61.30		67.27
	To!al	61.30		67.27
Investments	Subsidiaries
	Persisten! Systems, Inc. �ncludill{ share app1catio money pending allolmcnt)	2,478.01	2,478.01	2,478.01
loans given	Total Subsidiary	2,478.01	2 478.01	2 471.01
	Porsislent Systems, Inc.		313.46	130.34
	Persstent Sytems Germany Gmbti Total		649.55 963.03	68.84 817.18

(ill) Guarantee given on behalf ol subsidiary

Pms!slcnt Systems Lid has given a ouaran1ce or S 15,170,000 on behalf of Pc1sistcnt Systems Inc. (Previous period: S 15,170,000 I l)!cvious year: S 15,170,000)

(n>is space is inteo/iona!ly/eft blank)

33 of 34

Persistent Systems Limited

Notes forming part of condensed financial statements

1. 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 of i!' 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 �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 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 of 1< 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 December 31, 2018, the pending litigations in respect of direct taxes amount to f 256.96 million and in respect of indirect taxes amount to 1< 30.40 million (excluding the show cause received from Commissioner of Service Tax on May 29, 2017 of 1< 165.51 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.

1. As reported in the previous quarter, the Company has deposits of r 430 million with tt,e 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, the first deposit being due on 28th January 2019. In August 2018, credit rating agency, has significantly downgraded the IL& FS Group's rating. As of December 31, 2018, there have been no defaults in payment of interest on the aforesaid deposits. At this stage, it is difficult to estimate the ultimate probable loss if any. Accordingly, the management of the Company believes that there is no immediate need to recognize any impairment on the above deposits as of December 31, 2018. The Company will continue to monitor the developments in this matter for the purpose of detennining the financial reporting impact, if any.

2. The financial statements are presented in 1< million and decimal thereof except for per share infonnation or as otherwise stated.

34 of 34