Xchanging Solutions Limited

ANNUAL REPORT 2019-20

Shareholder Information

XCHANGING SOLUTIONS LIMITED

Registered office: Kalyani Tech Park - Survey No 1, 6 & 24, Kundanhalli Village, K R PuramHobli, Bangalore – 560066 Tel : +9180 43640000

Registered office till July 31, 2019 - SJR I-Park, Plot No. 13, 14, 15, EPIP Industrial Area, Phase I, Whitefield, Bangalore – 560066

For Corporate reports and Company News, visit our website at: http://www.xchanging.com/investor-relations/xsl-content

STOCK EXCHANGES

Company is Listed on the following stock exchanges (Ticker Symbol: XCHANGING) BSE (Bombay Stock Exchange) NSE (National Stock Exchange of India Limited)

Safe Harbor Statement

Certain statements in this document are forward looking statements which involve a number of risks and uncertainties that could cause actual results to differ materially from those in such forward looking statements. The risks and uncertainties regarding fluctuations in earnings, our ability to manage growth, intense competition in IT services, including those factors which may affect our cost advantage, wage increases in India, our ability to attract and retain highly skilled professionals, time and cost overruns in fixed price, fixed time frame contracts, client concentration, restrictions on immigration, our ability to manage our international operations, reduced demand for technology in our key focus areas, disruptions in telecommunication networks, our ability to successfully complete and integrate potential acquisitions, liability for damages on our service contracts, etc. The Company does not undertake to update any forward-looking statement that may be made from time to time by or on behalf of the Company.

	TABLE OF CONTENTS
1.	Boards’ Report	3
2.	Management Discussion and Analysis	28
3.	Corporate Governance Report	33
4.	Business Responsibility Report	50
5.	Standalone Financial Statements	59
6.	Consolidated Financial Statements	106
7.	Form AOC-1	154
8.	Notice	155

BOARD OF DIRECTORS

Henry D’Souza	-	Independent Director
Nonavinakeri Srinivasaiyengar Rama	-	Independent Director
(“Rama NS”)
Venkatesh Venkatasubba Ramanandashastry Shastry	-	Independent Director
(“Venkatesh Shastry”)
Gidugu Kalpana Tatavarti	-	Non-Executive Director
(“Kalpana Tatavarti”)
Chandrasekhara Rao Boddoju	-	Managing Director and Chief Executive Officer
Shrenik Kumar Champalal	-	Whole Time Director and Chief Financial Officer

COMPANY SECRETARY & COMPLIANCE OFFICER

Aruna Mohandoss Tel +91 804364000 E-mail: [email protected]

STATUTORY AUDITORS

Deloitte Haskins & Sells LLP ASVN Ramana Towers, 52, Venkatnarayana Road, T Nagar, Chennai, 600017, Tamil Nadu, India

REGISTERED OFFICE

REGISTRAR AND TRANSFER AGENT

Kalyani Tech Park - Survey No 1, 6 & 24, Kundanhalli Village, K R Puram, Hobli, Bangalore – 560066, Karnataka Phone : +91 80 43640000 Email : [email protected] Website : www.xchanging.com CIN : L72200KA2002PLC030072

KFin Technologies Private Limited, Selenium Tower B, Plot 31 - 32 Gachibowli, Financial District, Nanakramguda, Hyderabad – 500 032, Telangana Phone : 040-67162222 Fax : 040-23001153 Email : [email protected] Website : www.kfintech.com

Xchanging Solutions Limited

Annual Report 2019-20

LIST OF ALL ANNEXURES

A. BOARDS’ REPORT

Annexure –I Particulars of contract/arrangements with related parties (Form AOC-2)

Annexure – II Secretarial Audit Report (Form MR – 3) Annexure –III Remuneration to Directors / KMP / Employees Annexure–IV Certificate of Non-disqualification of Director Annexure –V Annual Report on CSR activities of the Company

Annexure -VI Conservation of Energy, Research and Development, Technology Absorption, Foreign Exchange Earning and Outgo

Annexure –VII Extract of Annual Return (Form MGT – 9)

B. CORPORATE GOVERNANCE REPORT

Annexure – A Compliance Certificate

Annexure – B Certificate on Corporate Governance Report

Xchanging Solutions Limited

Annual Report 2019-20

BOARDS’ REPORT

Dear Shareholders,

The Board of Directors (“Board”) is pleased to present the Nineteenth Annual Report and the Audited Financial Statement of the Xchanging Solutions Limited (“Company”) for the financial year ended March 31, 2020.

A. FINANCIAL RESULTS

The highlights of standalone and consolidated financial results of the Company for the financial year ended March 31, 2020 and March 31, 2019 are as under:

(INR in Lakhs)

			(INR in Lakhs)	(INR in Lakhs)
PARTICULARS	STANDALONE		CONSOLIDATED
	For the Financial year ended Mar 31, 2020	For the Financial year ended Mar 31, 2019	For the Financial year ended Mar 31, 2020	For the Financial year ended Mar 31, 2019
Total Income	5,838	6,405	19,494	19,865
Total Expenditure	3,205	3,974	13,565	14,185
Profit before Interest, Depreciation and Tax	2,710	2,469	6,073	5,728
Depreciation & Amortization	77	37	144	47
Finance Costs	11	1	13	1
Profit / (Loss) before Tax	2,633	2,431	5,929	5,680
Income Tax (includingdeferred tax)	364	784	459	1,009
Net Profit /(Loss)after Tax	2,269	1,647	5,470	4,671
Other Comprehensive Income/(Expenditure)	3	25	818	293
Total Comprehensive Income/(Expenditure)	2,272	1,672	6,288	4,964
Earnings/(Loss) per share Rs.	2.04	1.48	4.91	4.19

B. REVIEW OF OPERATIONS

During the financial year ended March 31, 2020, the consolidated income of the Company was Rs.19,494/- Lakhs as against Rs. 19,865/- Lakhs during the previous year ended March 31, 2019. At a standalone level, the total income of the Company for the financial year ended March 31, 2020 amounted to Rs.5,838/- Lakhs compared to Rs. 6,405/- Lakhs during the previous year ended March 31, 2019.

C. MANAGEMENT DISCUSSION AND ANALYSIS

Management Discussion and Analysis Report for the financial year ended March 31, 2020 as stipulated under Regulation 34(2)(e) of the SEBI (Listing Obligation and Disclosure Requirements) Regulations, 2015 (“Listing Regulations”) is presented in a separate section and forms an integral part of this Report.

D. DIVIDEND

The Board does not recommend a dividend.

E. TRANSFER TO RESERVES

During the financial year under review, the Company has not transferred any amount to the General Reserve.

F. SUBSIDIARY COMPANIES

Your Company has 3 (three) direct subsidiaries and 2 (two) step down subsidiaries for the financial year ended March 31, 2020.

During the period under review, the Board of the Company had approved reduction of share capital of the Xchanging Solutions (Europe) Limited (“XSEL”), wholly owned subsidiary from £2,664,278 divided into 2,664,278 shares of £1 each, to £1 divided into 1 share of £1 each. Pursuant to Company’s approval, XSEL reduced its share capital to 1 share of £ 1 each on May 15, 2019.

On May 20, 2019, XSEL declared and paid dividend to the Company. The Board of Directors of the Company approved liquidation of XSEL on May 23, 2019 and the liquidation is still under process.

Except as mentioned above, during the financial year ended March 31, 2020 under review, there have been no material changes in the business of the subsidiaries. In terms of Section 129(3) of the Companies Act, 2013 (‘Act’), the Company has prepared a statement containing the salient features of the Financial Statement of subsidiaries in the prescribed Form AOC-1 which is attached to the Financial Statements of the Company.

The Financial Statements of Subsidiary Companies are being uploaded on website of the Company http:// www.xchanging.com/investor-relations/xsl-content for inspection by the shareholders. Any member desirous of obtaining a copy of the said financial statements may write to the Company at its Registered Office. The financial statement including the consolidated financial statement and all other documents required to be attached with this report have been uploaded on to the website of your Company viz. http://www.xchanging.com/investor-relations/xsl-content.

G. RELATED PARTY TRANSACTIONS

All Related Party Transactions are placed before the Audit Committee for approval as per the Related Party Transactions Policy of the Company as approved by the Board. The policy is also uploaded on the website of the Company and can be accessed through the link http://www.xchanging.com/investorrelations/xsl-content. All related party transactions that were entered into during the financial year were on an ‘arm’s length basis’ and were in the ordinary course of business. The disclosure of transactions with the related parties are provided in the notes to the Standalone Financial Statements, forming part of the Annual Report.

Particulars of contracts or arrangements with related parties in the prescribed Form AOC-2, is provided as Annexure – I to this Boards’ Report.

H. AUDITORS

(i) Statutory Auditors and Auditors’ Report

The Shareholders of the Company in the 16[th] AGM of the Company had appointed M/s. Deloitte Haskins & Sells LLP, Chartered Accountants, (Firm Registration No. 117366W/W-100018), (“Deloitte”) as the Statutory Auditors of the Company to hold office from the conclusion of the 16[th] AGM till the conclusion of the 20[th]

Xchanging Solutions Limited

Annual Report 2019-20

Boards’ Report

AGM of the Company subject to ratification of their appointment at every AGM by the shareholders, if required pursuant to the provisions of the Companies Act, 2013. Central Government vide Companies (Amendment) Act, 2017 has amended the provisions of Section 139 of the Act and ratification of appointment of Statutory Auditors in every AGM is no longer required. Therefore, matter relating to ratification of appointment of Deloitte is not required to be placed before the members at the ensuing 19th Annual General Meeting.

The Statutory Auditors had carried out audit of financial statements of the Company for the financial year ended March 31, 2020 pursuant to the provisions of the Act. The reports of Statutory Auditors forms part of the Annual Report. The reports are self-explanatory and does not contain any qualifications, reservations or adverse remarks.

(ii) Secretarial Auditor

Pursuant to the provisions of Section 204 of the Act and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed Mr. Ankush Agarwal (M/s. Ankush Agarwal & Associates, Company Secretaries), to undertake the Secretarial Audit of the Company. Accordingly, in terms of provisions of Section 204(1) of the Act, a Secretarial Audit Report for the financial year ended March 31, 2020 given by the Secretarial Auditor of the Company in prescribed Form MR-3 is provided as Annexure -II .

The Secretarial Audit Report does not contain any qualification, reservation or adverse remark.

(iii) Reporting of Frauds by Auditors

During the year under review, the Statutory Auditors and the Secretarial Auditor have not reported any instances of frauds committed in the Company by its Officers or Employees, to the Audit Committee under Section 143(12) of the Act, therefore no detail is required to be disclosed under Section 134(3)(ca) of the Act.

I. PARTICULARS OF LOANS, GUARANTEES, INVESTMENTS AND SECURITIES

Details of loans, Guarantees and Investments covered under Section 186 of the Act are provided in the notes to financial statements.

J. PUBLIC DEPOSITS

Your Company has neither invited nor accepted any deposits from public within the meaning of Section 73 of the Act read with Companies (Acceptance of Deposits) Rules 2014 during the period under review.

K. EMPLOYEES

(i) Key Managerial Personnel (KMP)

The following have been designated as the Key Managerial Personnel of the Company pursuant to Sections 2(51) and 203 of the Act read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014:

a) Mr. Chandrasekhara Rao Boddoju, Managing Director and Chief Executive Officer
b) Mr. Shrenik Kumar Champalal, Whole Time Director and Chief Financial Officer
c) Mr. Mayank Jain, Company Secretary (resigned w.e.f. October 31, 2019)
d) Ms. Aruna Mohandoss, Company Secretary (appointed w.e.f. November 13, 2019)

(ii) Employees’ Stock Option Plan (ESOP)

During the period under review, no ESOP scheme exists in the Company.

(iii) Particulars of Employees and Related Disclosures

In accordance with the provisions of Section 197(12) of the Act read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, a statement containing the disclosures pertaining to remuneration and other details as required under the Act and the above Rules, are appended to this Report as Annexure III

As per the provisions of Section 136(1) of the Act, the reports and accounts are being sent to the Members of the Company excluding the information regarding employee remuneration as required pursuant to Rule 5(2) and Rule 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014. None of the employees listed in the said information is related to any Director of the Company. Any Member interested in obtaining such information may write an email to the Company Secretary at [email protected] and the same will be furnished on such request.

The Board of Directors affirm that the remuneration paid to employees of the Company is as per the Remuneration Policy of the Company.

L. BOARD AND COMMITTEES

(i) Directors

As on March 31, 2020, the Board of Directors comprises of six directors out of which 2 are Executive Directors, 3 are Independent Directors and 1 is Non-Executive- NonIndependent Director.

Based on the recommendation of the Nomination and Remuneration Committee, Mr. Venkatesh Shastry and Mrs. Rama NS were appointed as the Independent Directors in the last Annual General Meeting.

Mr. Henry D’Souza has been appointed as an Independent Director of the Company for 5 (five) years w.e.f. May 25, 2015. Accordingly, first term of his office gets expired on May 24, 2020. Based on the recommendation of Nomination and Remuneration Committee, re-appointment of Mr. Henry D’Souza as Independent Director for five years w.e.f. May 25, 2020 was approved in the last Annual General Meeting.

Independent Directors are not liable to retire by rotation. Pursuant to the provision of Section 152(6) of the Companies Act, 2013. Mrs. Kalpana Tatavarti, Non-

4 Xchanging Solutions Limited

Annual Report 2019-20

Boards’ Report

Executive Director, being longest in the office, retire by rotation at the ensuing Annual General Meeting and being eligible offer herself for the re-appointment. Your Board of Directors recommend her re -appointment.

All Directors have affirmed that they are not debarred from holding the office of a Director by virtue of any SEBI order or any other such Authority.

Company has taken the certificate from Mr. Ankush Agarwal (M/s. Ankush Agarwal & Associates, Company Secretaries) that none of the directors on the Board of the Company have been debarred or disqualified from being appointed or continuing as directors of companies by the Board/Ministry of Corporate Affairs or any such statutory authority. The Certificate is annexed to this Report as Annexure - IV

Further, in the opinion of the Board, the independent directors fulfill the conditions specified in Listing Regulations and they are independent of the management.

(ii) Board Evaluation

Pursuant to the provisions of Section 134(3)(p) of the Act and Regulation 4 of Listing Regulations, the Board has carried out an annual performance evaluation of its own performance, and the evaluation of the working of its Committees. The manner in which the evaluation has been carried out has been explained in the Corporate Governance Report.

(iii) Remuneration Policy

The remuneration paid to the Directors is in line with the Nomination and Remuneration Policy formulated in accordance with Section 178 of the Act and Regulation 19 of the Listing Regulations (including any statutory modification(s) or re-enactment(s) thereof for the time being in force).

The relevant Policy(ies) have been uploaded on the website of the Company and can be accessed through the link http://www.xchanging.com/investor-relations/xslcontent.

(iv) Board/Committee Composition and Meetings

A calendar of meetings is prepared and circulated in advance to the Directors. The details of composition of Board and Committee and their meetings held during the year are given in the Corporate Governance Report. The intervening gap between the meetings was within the period prescribed under the Act and the Listing Regulations.

(v) Familiarization Programme and Separate Meeting of Independent Director’s

During the financial year ended March 31, 2020, a separate meeting of the Independent Directors of the Company was held on May 23, 2019 without the attendance of Non-Independent Directors and the Management team.

During their meeting held on May 23, 2019, the Independent Directors discussed the matters specified in Schedule IV of the Act and Regulation 25 of the Listing Regulations.

The Nomination and Remuneration Committee of the Company at its meeting held on February 27, 2015 had approved a familiarization programme for Independent Directors of the Company. The Familiarization programme for Independent Directors is available at http:// www.xchanging.com/investor-relations/xsl-content.

(vi) Audit Committee

This Committee comprises the following Directors viz. Mr. Henry D’Souza (Chairman of the Committee), Mr. Venkatesh Shastry, Mrs. Rama NS and Mr. Shrenik Kumar Champalal. The Company Secretary acts as the Secretary to the Committee. Details of the Audit Committee have been provided in Corporate Governance Report.

All the recommendations of the Audit Committee were accepted by the Board.

(vii)Directors’ Responsibility Statement

Pursuant to section 134(5) of the Act, your Directors, based on the representations received from the Management and after due enquiry confirm that:

(a) in the preparation of the annual accounts for the financial year ended March 31, 2020, the applicable accounting standards have been followed along with proper explanation relating to material departures;
(b) the Directors have selected accounting policies and applied them consistently, and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2020 and of the profit of the Company for the financial year ended on that date;
(c) the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and irregularities;
(d) the Directors have prepared the annual accounts on a going concern basis;
(e) the Directors have laid down adequate Internal Financial Controls to be followed by the Company and such Internal Financial Controls were adequate and operating effectively during the financial year ended March 31, 2020; and
(f) the Directors had devised proper systems to ensure compliance with the provisions of all applicable laws

Xchanging Solutions Limited

Annual Report 2019-20

Boards’ Report

and that such systems were adequate and operating effectively throughout the financial year ended March 31, 2020.

M. GOVERNANCE

(i) Corporate Governance

The Company is committed to uphold the highest standards of Corporate Governance and to adhere to the requirements set out by the Securities and Exchange Board of India. A detailed report on Corporate Governance along with the Certificate of Mr. Ankush Agarwal (M/s. Ankush Agarwal & Associates, Company Secretaries), confirming compliance with conditions of Corporate Governance as stipulated under Schedule V of the Listing Regulations forms an integral part of this Report.

(ii) Vigil Mechanism / Whistle Blower Policy

The Company has established a whistle-blower policy and also established a mechanism for directors and employees to report their concerns. The details of the same are explained in the Corporate Governance Report. During the year under review, the Board of Directors based on the recommendation of the Audit Committee has amended the Whistle Blower Policy to inter alia, enable employees to report incidents of leak or suspected leak of unpublished price sensitive information in line with the changes made in the SEBI (Prohibition of Insider Trading) Regulations, 2015. As per the Whistle Blower Policy implemented by the Company, the Employees, Directors, customers, dealers, vendors, suppliers, or any Stakeholders associated with the Company are free to report illegal or unethical behaviour, actual or suspected fraud or violation of the Company’s Codes of Conduct or Corporate Governance Policies or any improper activity to the Chairman of the Audit Committee of the Company. During the year under review, no complaint pertaining to the Company was received under the Whistle Blower Policy. The Vigil Mechanism/Whistle Blower Policy is available at http://www.xchanging.com/investor-relations/ xsl-content.

(iii) Risk Management

The Company has a Risk Management process which provides an integrated approach for managing the risks in various aspects of the business. The detailed framework is provided in the Management Discussion and Analysis Report.

(iv) Internal Financial Controls

Your Company has in place adequate internal financial controls with reference to the financial statements. The internal financial control system of the Company is supplemented with internal audits, regular reviews by the management and checks by external auditors. The Audit Committee ensures adequacy of the system. The Statutory Auditors of the Company also provide their opinion on the internal financial control framework of the Company.

During the year under review, no material or serious observation has been highlighted for inefficiency or inadequacy of such controls.

(v) Disclosure under the Sexual Harassment of Women at the Work Place (Prevention, Prohibition and Redressal) Act, 2013

The Company has in place an Anti-Sexual Harassment Policy in line with the requirements of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. The Internal Complaints Committee (“ICC”) has been set up to redress the complaints received regarding sexual harassment. All employees are covered under this policy.

The following is the summary of the complaints received and disposed-off during the financial year ended March 31, 2020:

a) No. of complaints filed during the financial year: Nil
b) No. of complaints disposed of during the financial year: Nil
c) Number of complaints pending as on end of the financial year: Nil

The Company has complied with provisions relating to the constitution of Internal Complaints Committee under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

N. CORPORATE SOCIAL RESPONSIBILITY INITIATIVES

The Corporate Social Responsibility Committee had formulated and recommended a Corporate Social Responsibility Policy to the Board of the Company which was subsequently adopted and implemented by the Company. The web-link to the CSR Policy is available at http:// www.xchanging.com/investor-relations/xsl-content.

The detailed Annual Report on CSR activities is annexed herewith and marked as Annexure –V.

O. CONSERVATION OF ENERGY, RESEARCH AND DEVELOPMENT, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO

The information as per Section 134(3)(m) of the Act read with Rule 8 of the Companies (Accounts) Rules, 2014 regarding Conservation of Energy, Research & Development, Technology Absorption and Foreign Exchange Earning and Outgo is annexed herewith as Annexure –VI.

BUSINESS RESPONSIBILITY REPORT

P.

Pursuant to Regulation 34(2) of the Listing Regulations read with SEBI Circular No. CIR/CFD/CMD/10/2015 dated November 4, 2015, the Business Responsibility Report describing the initiatives taken by the Company from an environmental, social and governance perspective forms part of this Annual Report.

The Business Responsibility Report forms part of the Annual Report and can also be accessed on the Company’s website at http://www.xchanging.com/investor-relations/xsl-content

6 Xchanging Solutions Limited

Annual Report 2019-20

Boards’ Report

Q. OTHER DISCLOSURES

(i) Share Capital

There was no change in the paid- up share capital of the Company. As on March 31, 2020, the paid -up capital of the Company was Rs. 1,114,037,160/-. This comprises 111,403,716 equity shares of Rs. 10/- each fully paidup.

The Company has not issued any sweat equity shares or equity shares with differential rights during the financial year.

(ii) Promoter holding and Minimum Public shareholding

The promoter holding in the Company was 90.80% as at the year end March 31, 2019 due to open offers in prior years.

During the period under review, Xchanging Technology Services India Private Limited (“XTSI”), one of the Promoter Group Company sold 17,599,461 equity shares (15,839,515 Equity Shares sold on June 10, 2019 and 1,759,946 Equity Shares sold on June 11, 2019) of the Company through offer for sale. With the conclusion of the offer for sale, the shareholding of the Promoter and Promoter Group has been brought down to 75%, maintaining minimum public shareholding to 25% as required under Regulation 38 of SEBI (LODR) Regulations, 2015.

(iii) Statutory Disclosures

None of the Directors of your Company are disqualified as per provision of Section 164(2) of the Act. The Directors of the Company have made necessary disclosures as required under various provisions of the Act and the Listing Regulations.

(iv) Extract of Annual Return

Pursuant to Sub-section 3(a) of Section 134 and Subsection (3) of Section 92 of the Act read with Rule 12(1) of the Companies (Management and Administration) Rules, 2014, an extract of the Annual Return as on March 31, 2020 in Form MGT - 9 is attached herewith as Annexure –VII and forms part of this Report and can also be accessed on the Company’s website at http:// www.xchanging.com/investor-relations/xsl-content

(v) Compliance of Secretarial Standards

During the financial year under review, the Company has complied with applicable Secretarial Standards on Board and General Meetings specified by the Institute of Company Secretaries of India pursuant to Section 118 of the Act.

(vi) Appointment of Independent Director in an unlisted material Subsidiary

Pursuant to Regulation 24 of the Listing Regulations, Mr. Henry D’Souza, Independent Director of the Company has been appointed as Independent Director w.e.f. April 1, 2019 on the Board of Director of Company’s unlisted material subsidiary i.e. Xchanging Solutions (USA) Inc and Xchanging Solutions Singapore Pte Limited.

(vii) Change of Registered Office

The Registered Office of the Company has been changed from “SJR I-Park, Plot No. 13, 14, 15, EPIP Industrial Area, Phase I Whitefield, Bangalore – 560066” to “Kalyani Tech Park - Survey No 1, 6 & 24, Kundanhalli Village, K R Puram Hobli, Bangalore - 560 066” w.e.f. August 1, 2019.

(viii) Responsibility

For Standalone:

The Company’s Board of Directors is responsible for the information included in the Boards’ Report including Annexures to Board’s Report, Management Discussion and Analysis and Corporate Governance Report including annexures thereon

For Consolidated :

The Parent Company’s (Xchanging Solutions Limited) Board of Directors is responsible for the information included in the Boards’ Report including Annexures to the Board’s Report, Management Discussion and Analysis and Corporate Governance Report including annexures thereon

(ix) Material changes and commitments affecting the financial position of the Company

There have been no material changes and commitments affecting the financial position of the Company which have occurred between the end of the financial year to which the financial statements relate and the date of this Report.

(x) Significant and material orders

During the Financial Year 2019-20, there were no significant and material orders passed by the Regulators or Courts or Tribunals impacting the going concern status and the Company’s operations in future. Further, no penalties have been levied by the SEBI or any other regulator during the year under review.

(xi) Listing

Equity Shares of your Company are listed on National Stock Exchange of India Ltd. and BSE Ltd. Your Company has paid required listing fees to Stock Exchanges for FY 2020-21.

(xii) Maintenance of Cost Records

The maintenance of cost records, for the services rendered by the Company, is not required pursuant to Section 148 (1) of the Act read with Rule 3 of the Companies (Cost Records and Audit) Rules, 2014.

(xiii) Chief Executive Officer (CEO) and Chief Financial Officer (CFO) Certificate

In terms of the Listing Regulations, the certificate, as prescribed in Part B of Schedule II of the said Regulations, has been obtained from Mr. Chandrasekhara Rao Boddoju, Managing Director & Chief Executive Officer and Mr. Shrenik Kumar Champalal, Whole Time Director & Chief Financial Officer, for the Financial Year 2019-20 with regard to the Financial Statements and other matters. The said

Xchanging Solutions Limited

Annual Report 2019-20

Boards’ Report

Certificate is attached herewith as Annexure – B and forms part of Corporate Governance Report.

ACKNOWLEDGEMENTS:

Your Directors would like to express their sincere appreciation for the co-operation and assistance received from the Company’s Bankers, Regulatory Bodies and Stakeholders including other business associates who have extended their valuable sustained support and encouragement during the year under review.

Your Directors also wish to place on record their deep sense of gratitude and appreciation for the commitment displayed by

executives, officers and staff at all levels of the Company, resulting in the successful performance of the Company during the year under review. We look forward to your continued support in the future.

For and on behalf of the Board of Directors,

Chandrasekhara Rao Boddoju Shrenik Kumar Champalal Managing Director & Chief Whole Time Director & Executive Officer Chief Financial Officer

Place: Bangalore Date: May 22, 2020

8 Xchanging Solutions Limited

Annual Report 2019-20

ANNEXURE – I TO BOARDS’ REPORT

Form No. AOC-2

(Pursuant to clause (h) of sub-section (3) of section 134 of the Act and Rule 8(2) of the Companies (Accounts) Rules, 2014)

Form for disclosure of particulars of contracts/arrangements entered into by the Company with related parties referred to in subsection (1) of section 188 of the Companies Act, 2013 including certain arm’s length transactions under third proviso thereto.

Details of contracts or arrangements or transactions not at arm’s length basis –
(a) Name(s) of the related party and nature of relationship: Nil
(b) Nature of contracts/arrangements/transactions : Nil
(c) Duration of the contracts / arrangements/transactions: NA
(d) Salient terms of the contracts or arrangements or transactions including the value, if any: NA
(e) Justification for entering such contracts or arrangements or transactions: NA
(f) Date(s) of approval by the Board: NA
(g) Amount paid as advances, if any: NA
(h) Date on which the special resolution was passed in general meeting as required under first proviso to section 188: NA

2. Details of material contracts or arrangement or transactions at arm’s length basis

(a) Name(s) of the related party and nature of relationship: Xchanging Solutions USA Inc, Wholly owned subsidiary of the Company
(b) Nature of contracts / arrangements/transactions: ITeS off-shore Services
(c) Duration of the contracts / arrangements / transactions: Ongoing
(d) Salient terms of the contracts or arrangements or transactions including the value, if any: Xchanging Solutions Limited has been providing ITeS off-shore services to Xchanging Solutions USA Inc as per the terms in the agreement.
(e) Date(s) of approval by the Board, if any: NA
(f) Amount paid as advances, if any: Nil

For and on behalf of the Board of Directors,

Chandrasekhara Rao Boddoju

Managing Director & Chief Executive Officer

Shrenik Kumar Champalal Whole Time Director & Chief Financial Officer

Place: Bangalore Date: May 22, 2020

Xchanging Solutions Limited

Annual Report 2019-20

ANNEXURE – II TO BOARDS’ REPORT

MR-3

Secretarial Audit Report

For the Financial period ended 31st March 2020

[Pursuant to Section 204(1) of the Companies Act, 2013 and Rule No. 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014]

To, The Members, Xchanging Solutions Limited

Kalyani Tech Park, Survey No. 1, 6 & 24, Kundanhalli Village, K R Puram, Hobli, Bangalore, Karnataka – 560 066 CIN: L72200KA2002PLC030072

I have conducted secretarial audit of the compliance of applicable statutory provisions and adherence to good corporate practices by M/s. Xchanging Solutions Limited (hereinafter called “the Company”). The secretarial audit was conducted in a manner that provided me a reasonable basis for evaluating the corporate conducts/statutory compliances and expressing my opinion thereon.

Based on my verification of M/s. Xchanging Solutions Limited’s books, papers, minute books, forms and returns filed and other records maintained by the Company and also the information provided by the Company, its officers and authorized representatives during the conduct of secretarial audit, I hereby report that in my opinion, the Company has, during the audit period covering the financial period ended on 31st March 2020 (Commencing from April 1, 2019 to March 31, 2020), complied with the statutory provisions listed hereunder and also that the Company has proper Board processes and compliance mechanism in place to the extent based on the management representation letter/confirmation received from the management, in the manner and subject to the reporting made hereinafter. The members are requested to read this report along with my letter dated May 21, 2020 annexed to this report as Annexure – A.

I have examined the books, papers, minute books, forms and returns filed and other records maintained by the Company for the financial period ended on 31st March 2020 according to the applicable provisions of:
i) The Companies Act, 2013 (the Act) and the rules made thereunder;
ii) The Securities Contracts (Regulation) Act, 1956 (‘SCRA’) and the rules made thereunder;
iii) The Depositories Act, 1996 and the regulations and bye laws framed thereunder;
iv) Foreign Exchange Management Act, 1999 and the rules and regulations made thereunder to the extent of Foreign Direct Investment, Overseas Direct Investment and External Commercial Borrowings;
v) The following Regulations and Guidelines prescribed under the Securities and Exchange Board of India Act, 1992 (‘SEBI Act):–
- I. The Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011;
- II. The Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015;
- III. The Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2018 (Not applicable to the Company during the Audit period) ;
- IV. The Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014 (Not applicable to the Company during the Audit period) ;
- V. The Securities and Exchange Board of India (Issue and Listing of Debt Securities) Regulations, 2008 (Not applicable to the Company during the Audit period) ;
- VI. The Securities and Exchange Board of India (Buyback of Securities) Regulations, 2018 (Not applicable to the Company during the Audit period);
- VII. The Securities and Exchange Board of India (Registrars to an issue and share transfer agents) Regulations, 1993 regarding the Companies Act and dealing with clients to the extent of securities issued;
- VIII.The Securities and Exchange Board of India (Delisting of Equity Shares) Regulations, 2009 (Not applicable to the Company during the Audit period) ; and
- IX. The Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015.
I, further report that, having regard to the compliance system prevailing in the Company and on examination of the relevant documents and records, on test check basis, management confirmation in pursuance thereof, the Company has complied with Information Technology Act, 2000 and the rules made there under, applicable specifically to the Company and general laws like Labour Laws, Employees Provident Funds Act, Employees State Insurance Act, as applicable to the Company, during the financial year 01 April 2019 to 31 March 2020.

10 Xchanging Solutions Limited

Annual Report 2019-20

Annexure – II to Boards’ Report

I have also examined compliance with the applicable clauses of the following:
i) Secretarial Standards issued by The Institute of Company Secretaries of India, with respect to board and general meetings (hereinafter referred as ‘ Secretarial Standards ’). We noted that the Company is generally regular in complying with the Secretarial Standards; and
ii) The Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (hereinafter referred as “SEBI (LODR) Regulations, 2015” ) and the Listing Agreements entered into by the Company with the National Stock Exchange of India Limited (hereinafter referred as “the NSE” ) and the BSE Limited (hereinafter referred as “The BSE” ) (collectively hereinafter referred as ‘the Stock Exchanges’ ).
During the period under review, to the best of my knowledge and belief and according to the information and explanations given to me, the Company has complied with the provisions of the Acts, Rules, Regulations and Agreements mentioned above, to the extent applicable.
We further report that compliance of applicable financial laws including Direct and Indirect Tax Laws by the Company has not been reviewed in this audit since the same has been subject to review by the Statutory Auditors.
I further report that:
i) The Board of Directors of the Company is duly constituted with proper balance of Executive Directors, Non–Executive Directors and Independent Directors. The Board also has a woman director. The changes in the composition of the Board of Directors that took place during the period under review were carried out in compliance with the provisions of the Act.
ii) Adequate notice is given to all directors to schedule the Board Meetings. Notice of Board meetings was sent at least seven days in advance and system exists for directors to seek and obtain further information and clarifications on the agenda items before the meetings and for their meaningful participation at the meetings. Decisions of Board/Committee were carried through majority. We are informed that there were no dissenting members’ views on any of the matters during the year that were required to be captured and recorded as part of the minutes.
iii) There are adequate systems and processes in the Company commensurate with the size and operations of the Company to monitor and ensure compliance with applicable laws, rules, regulations and guidelines.
iv) I further report that during the audit period the Company had following event which had bearing on the Company’s affairs in pursuance of the above referred laws, rules, regulations, standards, guidelines etc.

Promoters Holding and Minimum Public Shareholding

The promoter holding in the Company was 90.80% as at the YE March 31, 2019 due to open offers in prior years.

The BSE, vide its letter dated April 16, 2019, communicated to the Company that based upon Company’s presentation & submission on “Promoters Holding and Minimum Public Shareholding” and with regards to aforesaid facts, “the Company has time to comply with the requirement of Minimum Public Shareholdings under Regulation 38 of SEBI (LODR) Regulations, 2015 till June 10, 2019. Further, the BSE withdrawn its letters dated October 17, 2018 and November 29, 2018 issued to the Company, in which it had levied fine of Rs. 19,29,300/- on the subject matter and it advised the Company to comply Regulations 38 of SEBI (LODR) Regulations, 2015 by June 10, 2019.

Accordingly, during the period under review, Xchanging Technology Services India Private Limited (“XTSI”), one of the Promoter Group Company sold 17,599,461 equity shares (15,839,515 Equity Shares sold on June 10, 2019 and 1,759,946 Equity Shares sold on June 11, 2019) of the Company through offer for sale. With the conclusion of the offer for sale, the shareholding of the Promoter and Promoter Group has been brought down to 75%, maintaining minimum public shareholding to 25% as required under Regulation 38 of SEBI (LODR) Regulations, 2015.

Note: Due to COVID-19 outbreak worldwide and lockdown imposed by Government of India and respective State Governments since March 24, 2020 till date of this report, we have not been able to do process audit and physical verification of certain books, papers, minute books, forms and returns filed and other records maintained by the Company and same have been verified electronically on emails.

Ankush Agarwal & Associates Company Secretaries

Ankush Agarwal

Proprietor Membership No: F9719 Certificate of Practice No: 14486 UDIN: F009719B000265931

Place: Noida Date: May 21, 2020

Xchanging Solutions Limited

Annual Report 2019-20

Annexure – II to Boards’ Report

Annexure –A to Secretarial Audit Report dated May 21, 2020

To,

The Members, Xchanging Solutions Limited Kalyani Tech Park, Survey No. 1, 6 & 24, Kundanhalli Village, K R Puram, Hobli, Bangalore, Karnataka – 560 066 [CIN: L72200KA2002PLC030072]

My Secretarial Audit Report dated May 21, 2020 is to be read with this letter.

The compliance of provisions of all laws, rules, regulations and standards applicable to Xchanging Solutions Limited (‘the Company ’) is the responsibility of the management of the Company. My examination was limited to the verification of records and procedures on test check basis for the purpose of issue of the Secretarial Audit Report.
Maintenance of secretarial and other records of applicable laws is the responsibility of the management of the Company. My responsibility is to issue Secretarial Audit Report, based on the audit of the relevant records maintained and furnished to us by the Company, along with explanations where so required.
I have followed the audit practices and processes as were appropriate to obtain reasonable assurance about the correctness of the contents of the secretarial records. The verification was done on test basis to ensure that correct facts are reflected in secretarial records. I believe that the processes and practices we followed provide a reasonable basis for the purpose of issue of the Secretarial Audit Report.
I have not verified the correctness and appropriateness of financial records and books of accounts of the Company as it is taken care in the statutory audit.
I have obtained the Management’s representation about the compliance of laws, rules and regulations and happening of events, wherever required.
This Secretarial Audit report is neither an assurance as to the future viability of the Company nor of the efficacy or effectiveness with which the management has conducted the affairs of the Company.

Ankush Agarwal & Associates Company Secretaries

Ankush Agarwal

Proprietor Membership No: F9719 Certificate of Practice No: 14486 UDIN: F009719B000265931

Place: Noida Date: May 21, 2020

Xchanging Solutions Limited

Annual Report 2019-20

ANNEXURE – III TO BOARDS’ REPORT

Remuneration to Directors / KMP / Employees

Details pertaining to Remuneration as required under Section 197(12) of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014

(i) The ratio of the remuneration of each director to the median remuneration of the employees of the Company for the financial year ended:

year ended:
Name & Designation	Ratio
Chandrasekhara Rao Boddoju - Managing Director & Chief Executive Officer	*NA
Shrenik Kumar Champalal - Whole Time Director & Chief Financial Officer	5.14

Did not draw remuneration during FY 19-20.
(ii) The percentage increase in remuneration of each director, Chief Financial Officer, Chief Executive Officer, Company Secretary or Manager, if any, in the financial year ended:

The percentage increase in remuneration of each director, Chief or Manager, if any, in the financial year ended:	Financial Officer, Chief Executive Officer, Company Secretary
Name & Designation	% increase in Remuneration in the financial year ended March 31, 2020
Chandrasekhara Rao Boddoju - Managing Director & Chief Executive Officer	-
Shrenik Kumar Champalal - Whole Time Director & Chief Financial Officer	-
Mayank Jain - Company Secretary (resigned w.e.f. October 31, 2019)	-
Aruna Mohandoss – Company Secretary (appointed w.e.f. November 13, 2019)	-

There is no increase in the remuneration of the Directors. Above said Company Secretaries were appointed or resigned during the year. Since the information is for part of the year, the same is not comparable.

(iii) The percentage increase in the median remuneration of employees in the financial year ended March 31, 2020: 5%
(iv) The number of permanent employees on the rolls of Company: 164
(v) Average percentile increase made in the salaries of employees other than the managerial personnel in the last financial year: Not Applicable as number of employees reduced from 183 to 164 and total salaries (including wages & bonus) from Rs 2,361/Lakhs of the previous year to Rs 1,859/- Lakhs for the current year.
(vi) Comparison with the percentile increase in the managerial remuneration and justification thereof and point out if there are any exceptional circumstances for increase in the managerial remuneration: Not Applicable as there is no increase in the remuneration of the Managerial personnel(s).
(vii) Affirmation that the remuneration is as per the remuneration policy of the Company: Yes, remuneration is as per the remuneration policy of the Company.

For and on behalf of the Board of Directors,

Chandrasekhara Rao Boddoju

Managing Director & Chief Executive Officer

Shrenik Kumar Champalal

Whole Time Director & Chief Financial Officer

Place: Bangalore Date: May 22, 2020

Xchanging Solutions Limited

Annual Report 2019-20

ANNEXURE – IV TO BOARDS’ REPORT

Certificate of Non-disqualification of Director

(Pursuant to Regulation 34(3) and Schedule V Para C clause (10)(i) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015)

To,

The Members, Xchanging Solutions Limited Kalyani Tech Park, Survey No. 1, 6 & 24, Kundanhalli Village, K R Puram, Hobli, Bangalore, Karnataka – 560 066

I have examined the relevant registers, records, forms, returns and disclosures received from the Directors of Xchanging Solutions Limited, having CIN L72200KA2002PLC030072 and having registered office at Kalyani Tech Park, Survey No. 1, 6 & 24, Kundanhalli Village, K R Puram, Hobli,, Bangalore, Karnataka-560 066, (hereinafter referred to as ‘the Company’ ), produced before me by the Company for the purpose of issuing this Certificate, in accordance with Regulation 34(3) read with Schedule V Para-C Sub clause 10(i) of the Securities Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015.

In my opinion and to the best of my information and according to the verifications (including Directors Identification Number (DIN) status at the portal www.mca.gov.in) as considered necessary and explanations furnished to me by the Company & its officers, I hereby certify that none of the Directors on the Board of the Company as stated below for the Financial Year ending on 31st March, 2020 have been debarred or disqualified from being appointed or continuing as Directors of companies by the Securities and Exchange Board of India, Ministry of Corporate Affairs, or any such other Statutory Authority as applicable.

S. No.	Name of Director	DIN	Date of Appointment in Company
1	Mr. HenryD’souza	00276157	29/02/2012
2	Mrs. Gidugu Kalpana Tatavarti	06644105	27/03/2018
3	Mr. Venkatesh Venkatasubba RamanandashastryShastry	08277771	15/11/2018
4	Mrs. Nonavinakeri Srinivasaiyengar Rama	06720033	01/04/2019
5	Mr. Chandrasekhara Rao Boddoju	08185777	09/08/2018
6	Mr. Shrenik Kumar Champalal	08099410	31/03/2018

Ensuring the eligibility for the appointment and continuity of every Director on the Board is the responsibility of the management of the Company. Our responsibility is to express an opinion on these based on our verification. This certificate is neither an assurance as to the future viability of the Company nor of the efficiency or effectiveness with which the management has conducted the affairs of the Company.

Ankush Agarwal & Associates Company Secretaries

Ankush Agarwal

Proprietor Membership No: F9719 Certificate of Practice No: 14486 UDIN: F009719B000263491

Place: Noida Date: May 21, 2020

14 Xchanging Solutions Limited

Annual Report 2019-20

ANNEXURE – V TO BOARDS’ REPORT

Corporate Social Responsibility

Annual

Annual Report of Corporate Social Responsibility (CSR) Activities for the Financial Year ending March 31, 2020:

1. A brief outline of the Company’s CSR Policy, including overview of projects or programs proposed to be undertaken and a reference to the web link to the CSR Policy and projects or programs:

CSR Policy:

Corporate Social Responsibility at Xchanging Solutions Limited originates from the ideology of providing sustainable value to the society. In this direction, the Company has adopted its CSR policy striving for economic and social development that positively impacts the society at large. In doing so build a better, sustainable way of holistic life for the marginalized and underprivileged sections of the society and work towards raising the country’s human development index. Through the small contribution, the Company aspires to improve the quality of life of people at the bottom of pyramid.

CSR Policy of the Company provides the overview of projects or programs which are proposed to be undertaken by the Company.

The CSR Policy of the Company can be accessed at the Company’s website through the link: http://www.xchanging.com/ investor-relations/xsl-content

2. Composition of the CSR Committee

Composition of the CSR Committee
Name	Designation	Role in CSR Committee
HenryD’Souza	Independent Director	Chairman
Venkatesh Shastry	Independent Director	Member
Rama NS	Independent Director	Member
Kalpana Tatavarti	Non-Executive Director	Member
Shrenik Kumar Champalal	Executive Director (Whole Time Director)	Member

3. Average net profit of the Company for last three financial years: Rs 1035.33 lakhs

4. Prescribed CSR Expenditure (two percent of the amount as in item 3 above): Rs 20.70 lakhs

5. Details of CSR spent during the financial year:

a) Total amount to be spent for the financial year: Rs 20.70 Lakhs
b) Amount unspent, if any: Nil
c) Manner in which the amount spent during the financial year is detailed below: (In INR Lakhs)

S. No.	CSR project or activity identified	Sector in which the project is covered	Projects or programmes: i) Local area or other ii) Specify the State or District where the projects or programmes was undertaken	Amount outlay (Budget) project or programmes wise	Amount spent on project or programmes: Subhead:	Cumulative expenditure up to the date of reporting	Amount spent: Direct or through implementing agencies
1.	To provide Education to underprivileged children	Promoting education, including special education	Bangalore, Karnataka	20.70	20.70	20.70	Through a registered trust-U&I Trust for the underprivileged
	Total			20.70	20.70	20.70

1. U&I Trust

U&I is a Trust registered under I.T. Act 1961 having its Registered Office at 8/1, Gover Road, Opp. St. Peter’s Church, Cox Town, Bangalore - 560005, India. U&I is a non-governmental organization that works towards education of 2000+ underprivileged children across 20 cities of 9 states in India.

U&I invests in the education of underprivileged children. It is completely volunteer driven and currently has 2600+ volunteers teaching courses in English and providing tutoring support with a student-teacher ratio of 1:1. U&I manages 59 learning centres across 20 cities of 9 states in India. U&I also runs Child Enrichment Programmes that help with the holistic growth of students and enable them to have better career opportunities. U&I Teach has positively impacted 8000+ underprivileged children.

Xchanging Solutions Limited

Annual Report 2019-20

Annexure – V to Boards’ Report

6. In case the Company has failed to spend the two percent of the average net profit of the last three financial years or any part thereof, the Company shall provide the reasons for not spending the amount in its Board Report : Not Applicable

7. CSR Committee hereby confirms that the implementation and monitoring of CSR policy is in Compliance with CSR objectives and CSR Policy of the Company.

For Xchanging Solutions Limited

Chandrasekhara Rao Boddoju Managing Director & Chief Executive Officer

Henry D’Souza Chairman-CSR Committee

Place : Bangalore Date : May 22, 2020

Xchanging Solutions Limited

Annual Report 2019-20

ANNEXURE – VI TO BOARDS’ REPORT

Conservation of Energy, Research and Development, Technology Absorption, Foreign Exchange Earnings and Outgo –

A. Conservation of Energy

The operations of your Company are not energy intensive. However, adequate measures have been taken to reduce energy efficient computer terminals.

B. Technology Absorption

Your Company has continued its endeavour to develop and absorb advanced technologies for its various offering range to meet the requirements of a globally competitive market and to meet the technology requirements for the future.

C. Foreign Exchange Earnings and Outgo:

Foreign Exchange Earnings and Outgo:	Foreign Exchange Earnings and Outgo:	Foreign Exchange Earnings and Outgo:
(INR in lakhs)
Particulars	March 31, 2020	March 31, 2019
Total Foreign Exchange earnings	3006	3,895
Total foreign Exchange outgo	224	283

Xchanging Solutions Limited

Annual Report 2019-20

ANNEXURE – VII TO BOARDS’ REPORT

EXTRACT OF ANNUAL RETURN FORM MGT -9

(AS ON THE FINANCIAL YEAR ENDED ON March 31, 2020) Pursuant to section 92(3) of the Companies Act, 2013 and rule 12(1) of the Companies (Management and Administration) Rules, 2014

1. REGISTRATION AND OTHER DETAILS OF COMPANY:

i) CIN

ii) Registration Date

iii) Name of the Company

iv) Category / Sub-Category of the Company
v) Address of the Registered office and contact details

vi) Whether listed company Yes / No

vii) Name, Address and Contact details of Registrar and Transfer Agent

: L72200KA2002PLC030072

: February 1, 2002

: Xchanging Solutions Limited

: Company Limited by shares

: Kalyani Tech Park - Survey No 1, 6 & 24 Kundanhalli Village, K R Puram Hobli, Bangalore – 560066 Telephone no.: +91 80 4364 0000 Email id: [email protected]

: Yes

: KFin Technologies Private Limited Selenium Tower B, Plot 31- 32 Gachibowli, Financial District, Nanakramguda, Hyderabad – 500032

2. PRINCIPAL BUSINESS ACTIVITIES OF THE COMPANY

All the business activities contributing 10% or more of the total turnover of the company shall be stated:-	All the business activities contributing 10% or more of the total turnover of the company shall be stated:-	All the business activities contributing 10% or more of the total turnover of the company shall be stated:-	All the business activities contributing 10% or more of the total turnover of the company shall be stated:-
Sr. No.	Name and Description of mainproducts/services	NIC Code of the Product/service	% to total turnover of the company
1.	Computer programming activities	6201	100

3. PARTICULARS OF HOLDING, SUBSIDIARY AND ASSOCIATE COMPANIES

S. No.	Name and address of the company	CIN/ GLN	Holding/subsidiary/ Associate	% of shares held	Applicable Section
1.	XchangingMauritius Limited	NA	Holding	52.07	2(46)
2.	XchangingSolutions(USA)Inc, USA	NA	Subsidiary	100.00	2(87)
3.	Xchanging Solutions (Singapore) Pte Limited, Singapore	NA	Subsidiary	100.00	2(87)
4.	Xchanging Solutions (Europe) Limited, UK (Companyis under Liquidation)	NA	Subsidiary	100.00	2(87)
5.	Xchanging Solutions (Malaysia) Sdn Bhd, Malaysia (Companyis under Liquidation)	NA	Step-down Subsidiary	100.00	2(87)
6.	Nexplicit Infotech India Private Limited (Company is under Liquidation)	U72200 KA2004 PTC047543	Step-down Subsidiary	100.00	2(87)

18 Xchanging Solutions Limited

Annual Report 2019-20

Annexure – VII to Boards’ Report

4. SHARE HOLDING PATTERN (Equity Share Capital Breakup as percentage of Total Equity) a) Category-wise Shareholding

Category of Shareholders	No.of Shares held at the beginning of the year	No.of Shares held at the beginning of the year	No.of Shares held at the beginning of the year	No.of Shares held at the beginning of the year	No. of Shares held at the end of the year	No. of Shares held at the end of the year	No. of Shares held at the end of the year	No. of Shares held at the end of the year	% Change during theyear
	Demat	Physical	Total	% of Total Shares	Demat	Physical	Total	% of Total Shares
A. Promoter
1) Indian
a) Individual/ HUF	0	0	0	0.0	0	0	0	0.00	0.00
b) Central Govt	0	0	0	0.0	0	0	0	0.00	0.00
c) State Govt(s)	0	0	0	0.0	0	0	0	0.00	0.00
d) Bodies Corp	43149461	0	43149461	38.73	25550000	0	25550000	22.93	15.8
e) Banks / FI	0	0	0	0.0	0	0	0	0.00	0.00
f) Any Other	0	0	0	0.0	0	0	0	0.00	0.00
Subtotal(A)(1): -	43149461	0	43149461	38.73	25550000	0	25550000	22.93	-15.80
2) Foreign
g) Individuals (NRI/Foreign Individual)	0	0	0	0.00	0	0	0	0.00	0.00
h) Institutions	0	0	0	0.00	0	0	0	0.00	0.00
i) Bodies Corp.	58002787	0	58002787	52.07	58002787	0	58002787	52.07	0.00
j) Qualified Foreign Investor	0	0	0	0.00	0	0	0	0.00	0.00
k) Any Other	0	0	0	0.00	0	0	0	0.00	0.00
Sub-total (A)(2): -	58002787	0	58002787	52.07	58002787	0	58002787	52.07	0.00
Total shareholding of Promoter (A) = (A1) + (A2)	101152248	0	101152248	90.80	83552787	0	83552787	75.00	15.80
B. Public Shareholding
1. Institutions
a) Mutual Funds	300	0	300	0.00	5330618	0	5330618	4.78	4.78
b) Banks / FI	404112	0	404112	0.36	410655	0	410655	0.37	0.01
c) Central Govt/State Govt	0	0	0	0.00	0	0	0	0.00	0.00
d) Foreign Portfolio Investors	0	0	0	0.00	0	0	0	0.00	0.00
e) Venture Capital Funds	0	0	0	0.00	0	0	0	0.00	0.00
f) Insurance Companies	0	0	0	0.00	0	0	0	0.00	0.00
g) Foreign Institutional Investors	0	0	0	0.00	39100	0	39100	0.04	0.04
h) Foreign Venture Capital Funds	0	0	0	0.00	0	0	0	0.00	0.00
i) Alternate Investment Funds	0	0	0	0.00	0	0	0	0.00	0.00
j) Others (Qualified Institutional Buyer)	0	0	0	0.00	15400	0	15400	0.01	0.01
Sub-total (B)(1)	404412	0	404412	0.36	5795773	0	5795773	5.20	4.84

Xchanging Solutions Limited

Annual Report 2019-20

Annexure – VII to Boards’ Report

Category of Shareholders	No.of Shares held at the beginning of the year	No.of Shares held at the beginning of the year	No.of Shares held at the beginning of the year	No.of Shares held at the beginning of the year	No. of Shares held at the end of the year	No. of Shares held at the end of the year	No. of Shares held at the end of the year	No. of Shares held at the end of the year	% Change during theyear
	Demat	Physical	Total	% of Total Shares	Demat	Physical	Total	% of Total Shares
2. Non-Institutions
a Bodies Corp.	972265	10937	983202	0.88	8878717	10937	8889654	7.98	7.10
b) Individuals
(i) Individual shareholders holding nominal share capital up to Rs. 1 lakhs	3599388	84746	3684134	3.31	4718086	83646	4801732	4.31	1.00
(ii) Individual shareholders holding nominal share capital in excess of Rs 1 lakhs	2094236	0	2094236	1.88	5194950	0	5194950	4.66	2.78
c) Others
Clearing Members	12558	0	12558	0.01	61475	0	61475	0.06	0.05
Foreign Corporate Bodies	3008287	0	3008287	2.70	3008287	0	3008287	2.70	0.00
Foreign Nationals	12437	0	12437	0.01	12437	0	12437	0.01	0.00
Non-resident Indians	23623	5527	29150	0.03	59512	5527	65039	0.06	0.03
NRI non-repatriation	22531	0	22531	0.02	21281	0	21281	0.02	0.00
Overseas corporate bodies	300	0	300	0.00	300	0	300	0.00	0.00
NBFC	100	0	100	0.00	30000	0	30000	0.03	0.03
Trusts	221	0	221	0.00	1	0	1	0.00	0.00
Qualified ForeignInvestor	0	0	0	0.00	0	0	0	0.00	0.00
Sub-total(B)(2)	9745846	101210	9847056	8.84	21955046	100110	22055156	19.80	10.96
Total Public Shareholding (B)=(B) (1)+(B)(2)	10150258	101210	10251468	9.20	27750819	100110	27850929	25.00	15.80
C. Shares held by Custodian for GDRs & ADRs	0	0	0	0.00	0	0	0	0.00	0.00
Grand Total(A+B+C)	111302506	101210	111403716	100.00	111303606	100110	111403716	100.00	0.00

20 Xchanging Solutions Limited

Annual Report 2019-20

Annexure – VII to Boards’ Report

b) Shareholding of Promoters

S. No.	Shareholder’s Name	Shareholder’s Name	Shareholder’s Name	Shareholding at the beginning of theyear	Shareholding at the beginning of theyear	Shareholding at the beginning of theyear	Shareholding at the beginning of theyear	Shareholding at the beginning of theyear	Shareholding at the beginning of theyear	Shareholding at the beginning of theyear	Shareholding at the end of theyear	Shareholding at the end of theyear	Shareholding at the end of theyear	Shareholding at the end of theyear	Shareholding at the end of theyear	Shareholding at the end of theyear	Shareholding at the end of theyear	Shareholding at the end of theyear	Shareholding at the end of theyear	Shareholding at the end of theyear
				No. of Shares		% of total shares of the company			% of shares Pledged/ encumbered to total shares		No. of Shares		% of total shares of the company			% of shares Pledged/ encumbered to total shares			% change in share holding during the year
1	Xchanging Mauritius Limited			58002787		52.07			Nil		58002787		52.07			Nil			Nil
2	Xchanging Technology Services India Private Limited			38948299		34.96			Nil		21348838		19.16			Nil			-15.80
3.	DXC Technology India Private Limited			4201162		3.77			Nil		4201162		3.77			Nil			Nil
c) Change in Promoters’ Shareholding (please specify, if there is no change)
S. No.		Particulars						Shareholding at the beginning of theyear							Cumulative Shareholding during theyear
								No. of shares			% of total shares of the company				No. of shares			% of total shares of the company
1.		XchangingMauritius Limited						58002787			52.07				58002787			52.07
2		Xchanging Technology Services India Private Limited						38948299			34.96				38948299			34.96
		• Sold 15,839,515 Equity Shares on June 10, 2019; and						–			–				23108784			20.76
		• Sold 1,759,946 Equity Shares on June 11, 2019						–			–				21348838			19.16
3		DXC Technology India Private Limited						4201162			3.77				4201162			3.77
d) *Shareholding Pattern of top ten Shareholders (other than Directors, Promoters and Holders of GDRs and ADRs):
S. No.	Name of the Shareholder		Shareholding at the beginning of the Year				Date			Type		Increase/ Decrease in share holding		Reason			Cumulative Shareholding during the Year
			No of Shares		% of total shares of the company												No of Shares			% of total shares of the company
1	ABAKKUS GROWTH FUND-1		0		0.00		30/03/2019			Opening Balance							0			0.00
							14/06/2019			Purchase		3769426		Transfer			3769426			3.38
							08/11/2019			Purchase		5000		Transfer			3774426			3.39
							03/01/2020			Purchase		9458		Transfer			3783884			3.40
							31/01/2020			Sale		-21566		Transfer			3762318			3.38
							31/03/2020			Closing Balance							3762318			3.38
2	RAJASTHAN GLOBAL SECURITIES PRIVATE LIMITED		0		0.00		30/03/2019			Opening Balance							0			0.00
							14/06/2019			Purchase		3210448		Transfer			3210448			2.88
							31/03/2020			Closing Balance							3210448			2.88

Xchanging Solutions Limited

Annual Report 2019-20

Annexure – VII to Boards’ Report

S. No.	Name of the Shareholder	Shareholding at the beginning of the Year	Shareholding at the beginning of the Year	Date	Type	Increase/ Decrease in share holding	Reason	Cumulative Shareholding during the Year	Cumulative Shareholding during the Year
		No of Shares	% of total shares of the company					No of Shares	% of total shares of the company
3	KATRA FINANCE LIMITED	3008287	2.70	30/03/2019	Opening Balance			3008287	2.70
				31/03/2020	Closing Balance			3008287	2.70
4	MISRILALL MINES PRIVATE LIMITED	0	0.00	30/03/2019	Opening Balance			0	0.00
				14/06/2019	Purchase	1800000	Transfer	1800000	1.62
				28/06/2019	Purchase	51000	Transfer	1851000	1.66
				20/03/2020	Purchase	10000	Transfer	1861000	1.67
				31/03/2020	Closing Balance			1861000	1.67
5	EDELWEISS MULTI STRATEGY INVESTMENT TRUST-EDELWE	0	0.00	30/03/2019	Opening Balance			0	0.00
				14/06/2019	Purchase	1100000	Transfer	1100000	0.99
				31/03/2020	Closing Balance			1100000	0.99
6	EUREKA COMMODITY BROKERAGE PVT. LTD.	0	0.00	30/03/2019	Opening Balance			0	0.00
				14/06/2019	Purchase	1193378	Transfer	1193378	1.07
				20/09/2019	Sale	-100000	Transfer	1093378	0.98
				11/10/2019	Purchase	100000	Transfer	1193378	1.07
				01/11/2019	Sale	-150000	Transfer	1043378	0.94
				08/11/2019	Sale	-300000	Transfer	743378	0.67
				31/01/2020	Sale	-6391	Transfer	736987	0.66
				21/02/2020	Sale	-98	Transfer	736889	0.66
				13/03/2020	Sale	-25000	Transfer	711889	0.64
				31/03/2020	Purchase	175000	Transfer	886889	0.80
				31/03/2020	Closing Balance			886889	0.80
7	GLOBE CAPITAL MARKET LIMITED	580203	0.52	30/03/2019	Opening Balance			580203	0.52
				05/04/2019	Sale	-5000	Transfer	575203	0.52
				12/04/2019	Sale	-40	Transfer	575163	0.52
				10/05/2019	Purchase	100	Transfer	575263	0.52
				17/05/2019	Sale	-100	Transfer	575163	0.52
				14/06/2019	Purchase	70853	Transfer	646016	0.58
				14/06/2019	Sale	-9900	Transfer	636116	0.57
				21/06/2019	Sale	-100	Transfer	636016	0.57
				28/06/2019	Purchase	92	Transfer	636108	0.57
				05/07/2019	Purchase	4358	Transfer	640466	0.57

22 Xchanging Solutions Limited

Annual Report 2019-20

Annexure – VII to Boards’ Report

Shareholding at the beginning of the Year	Shareholding at the beginning of the Year	Date	Type	Increase/ Decrease in share holding	Reason	Cumulative Shareholding during the Year	Cumulative Shareholding during the Year
No of Shares	% of total shares of the company					No of Shares	% of total shares of the company
		05/07/2019	Sale	-4358	Transfer	636108	0.57
		12/07/2019	Purchase	801	Transfer	636909	0.57
		12/07/2019	Sale	-4358	Transfer	632551	0.57
		19/07/2019	Purchase	598	Transfer	633149	0.57
		19/07/2019	Sale	-598	Transfer	632551	0.57
		26/07/2019	Purchase	12551	Transfer	645102	0.58
		26/07/2019	Sale	-548	Transfer	644554	0.58
		02/08/2019	Sale	-50	Transfer	644504	0.58
		30/08/2019	Sale	-3749	Transfer	640755	0.58
		06/09/2019	Sale	-301	Transfer	640454	0.57
		13/09/2019	Sale	-2075	Transfer	638379	0.57
		20/09/2019	Purchase	28058	Transfer	666437	0.60
		20/09/2019	Sale	-28305	Transfer	638132	0.57
		27/09/2019	Sale	-28150	Transfer	609982	0.55
		30/09/2019	Sale	-342	Transfer	609640	0.55
		04/10/2019	Purchase	20826	Transfer	630466	0.57
		18/10/2019	Purchase	1607	Transfer	632073	0.57
		25/10/2019	Purchase	1000	Transfer	633073	0.57
		01/11/2019	Purchase	11951	Transfer	645024	0.58
		01/11/2019	Sale	-20109	Transfer	624915	0.56
		08/11/2019	Sale	-24461	Transfer	600454	0.54
		15/11/2019	Purchase	10000	Transfer	610454	0.55
		22/11/2019	Purchase	7193	Transfer	617647	0.55
		29/11/2019	Purchase	6680	Transfer	624327	0.56
		06/12/2019	Purchase	24776	Transfer	649103	0.58
		06/12/2019	Sale	-4676	Transfer	644427	0.58
		13/12/2019	Sale	-82744	Transfer	561683	0.50
		20/12/2019	Purchase	2606	Transfer	564289	0.51
		20/12/2019	Sale	-327	Transfer	563962	0.51
		27/12/2019	Purchase	150	Transfer	564112	0.51
		31/12/2019	Sale	-150	Transfer	563962	0.51
		17/01/2020	Purchase	1000	Transfer	564962	0.51
		24/01/2020	Purchase	4200	Transfer	569162	0.51
		31/01/2020	Sale	-50000	Transfer	519162	0.47
		14/02/2020	Purchase	15264	Transfer	534426	0.48
		21/02/2020	Purchase	5077	Transfer	539503	0.48
		28/02/2020	Purchase	4871	Transfer	544374	0.49
		28/02/2020	Sale	-50	Transfer	544324	0.49
		06/03/2020	Purchase	14022	Transfer	558346	0.50
		13/03/2020	Purchase	400	Transfer	558746	0.50
		20/03/2020	Purchase	877	Transfer	559623	0.50
		27/03/2020	Sale	-2519	Transfer	557104	0.50

Xchanging Solutions Limited

Annual Report 2019-20

Annexure – VII to Boards’ Report

S. No.	Name of the Shareholder	Shareholding at the beginning of the Year	Shareholding at the beginning of the Year	Date	Type	Increase/ Decrease in share holding	Reason	Cumulative Shareholding during the Year	Cumulative Shareholding during the Year
		No of Shares	% of total shares of the company					No of Shares	% of total shares of the company
				31/03/2020	Sale	-3358	Transfer	553746	0.50
				31/03/2020	Closing Balance			553746	0.50
8	ABAKKUS EMERGING OPPORTUNITIES FUND-1	0	0.00	30/03/2019	Opening Balance			0	0.00
				14/06/2019	Purchase	428357	Transfer	428357	0.38
				02/08/2019	Purchase	3543	Transfer	431900	0.39
				06/09/2019	Purchase	8100	Transfer	440000	0.39
				20/03/2020	Purchase	25000	Transfer	465000	0.42
				27/03/2020	Purchase	3000	Transfer	468000	0.42
				31/03/2020	Closing Balance			468000	0.42
9	LIFE INSURANCE CORPORATION OF INDIA	388382	0.35	30/03/2019	Opening Balance			388382	0.35
				31/03/2020	Closing Balance			388382	0.35
10	EUREKA STOCK AND SHARE BROKING SERVICES LIMITED -	0	0.00	30/03/2019	Opening Balance			0	0.00
				30/08/2019	Purchase	120000	Transfer	120000	0.11
				20/09/2019	Sale	-20000	Transfer	100000	0.09
				11/10/2019	Sale	-100000	Transfer	0	0.00
				01/11/2019	Purchase	150000	Transfer	150000	0.13
				08/11/2019	Purchase	300000	Transfer	450000	0.40
				27/12/2019	Purchase	25000	Transfer	475000	0.43
				03/01/2020	Purchase	25000	Transfer	500000	0.45
				14/02/2020	Sale	-25000	Transfer	475000	0.43
				06/03/2020	Purchase	20000	Transfer	495000	0.44
				13/03/2020	Purchase	25000	Transfer	520000	0.47
				27/03/2020	Purchase	183698	Transfer	703698	0.63
				31/03/2020	Purchase	300000	Transfer	1003698	0.90
				31/03/2020	Sale	-673698	Transfer	330000	0.30
				31/03/2020	Closing Balance			330000	0.30

*Increase / (decrease) in shareholding as stated above is based on details of beneficial ownership furnished by the depository

24 Xchanging Solutions Limited

Annual Report 2019-20

Annexure – VII to Boards’ Report

e) Shareholding of Directors and Key Managerial Personnel as on the closure of the Financial Year:

S. No.	Names of Director and Key Managerial Personnel	Shareholding at the beginning & at the end of the year
1.	Henry D’Souza	NIL
2.	Venkatesh Shastry	NIL
3.	Chandrasekhara Rao Boddoju	NIL
4.	Rama NS	NIL
5.	Kalpana Tatavarti	NIL
6.	Shrenik Kumar Champalal	1
7.	Aruna Mohandoss	NIL

5. INDEBTEDNESS

Indebtedness of the Company including interest outstanding/accrued but not due for payment

	Secured Loans excluding deposits	Unsecured Loans	Deposits	Total Indebtedness
Indebtedness at the beginning of the financial year i) Principal Amount ii) Interest due but not paid iii) Interest accrued but not due	2,98,888 - 16,112	- - -	- - -	2,98,888 - 16.112
Total(i+ii+iii)	3,15,000	-	-	3,15,000
Change in Indebtedness during the financial year Principal • Addition • Reduction Interest • Reduction	- 2,98,888 16,112	- - -	- - -	- 2,98,888 16,112
Net Change • Principal • Interest	2,98,888 16,112	- -	- -	2,98,888 16,112
Indebtedness at the end of the financial year i) Principal Amount ii) Interest due but not paid iii) Interest accrued but not due	- - -	- - -	- - -	- - -
Total (i+ii+iii)	-	-	-	-

Xchanging Solutions Limited

Annual Report 2019-20

Annexure – VII to Boards’ Report

6. REMUNERATION OF DIRECTORS AND KEY MANAGERIAL PERSONNEL

REMUNERATION OF DIRECTORS AND KEY MANAGERIAL PERSONNEL	REMUNERATION OF DIRECTORS AND KEY MANAGERIAL PERSONNEL	REMUNERATION OF DIRECTORS AND KEY MANAGERIAL PERSONNEL	REMUNERATION OF DIRECTORS AND KEY MANAGERIAL PERSONNEL	REMUNERATION OF DIRECTORS AND KEY MANAGERIAL PERSONNEL	REMUNERATION OF DIRECTORS AND KEY MANAGERIAL PERSONNEL
A. Remuneration to Managing Director(MD), Whole-time Directors(WTD) and/or Manager (INR in Lakhs)
S. No.	Particulars of Remuneration				Total Amount
		MD	WTD	Manager
1.	Gross salary (a) Salary as per provisions contained in section 17(1) of the Income-tax Act,1961 (b) Value of perquisites u/s17(2) of Income-tax Act,1961 (c) Profits in lieu of salary under section 17(3)of the Income- tax Act, 1961	- - -	47.94 - -	- - -	47.94 - -
2.	Stock Option	-	-	-	-
3.	Sweat Equity	-	-	-	-
4.	Commission • as % of profit • others, specify	- -	- -	- -	- -
5.	Others,please specify	-	-	-	-
6.	Total(A)	-	47.94	-	47.94
	Ceiling as per the Act	It is in accordance with the ceiling as specified under section 197 of the Companies Act, 2013.

B. Remuneration to other directors:

	(INR in Lakhs)	(INR in Lakhs)	(INR in Lakhs)	(INR in Lakhs)	(INR in Lakhs)	(INR in Lakhs)
S. No.	Particulars of Remuneration	Name of Directors
		Henry D Souza	Rama NS	Venkatesh Shastry	Kalpana Tatavarti	Total Amount
1	Independent Directors • Fee for attending board committee meetings • Commission • Others,please specify	10.20	10.20	7.80	N.A	28.20
	Total(1)	10.20	10.20	7.80	N.A	28.20
2	Other Non-Ex ecutiv eDirectors • Fee for attending board committee meetings • Commission • Others,please specify	N.A	N.A	N.A	7.20	7.20
	Total(2)	N.A	N.A	N.A	7.20	7.20
	Total(B)= (1+2)	10.20	10.20	7.80	7.20	35.40
	Total Managerial Remuneration	N.A	N.A	N.A	N.A	N.A
	Overall Ceiling as per the Act	It is in accordance with the ceiling as specified under Companies Act, 2013

26 Xchanging Solutions Limited

Annual Report 2019-20

Annexure – VII to Boards’ Report

C. Remuneration to Key Managerial Personnel Other Than MD/Manager/WTD

S. No.	Particulars of Remuneration	Key Managerial Personnel	Key Managerial Personnel	Key Managerial Personnel	Key Managerial Personnel	Key Managerial Personnel
		CEO#	Company Secretary		CFO#	Total
			Mayank Jain*	Aruna Mohandoss@
1.	Gross salary (a) Salary as per provisions contained in section 17(1) of the Income-tax Act, 1961 (b) Value of perquisites u/s17(2) of Income-tax Act, 1961 (c) Profits in lieu of salary under section17(3) of the Income-tax Act, 1961	- - -	7.74 - -	5.90 - -	- - -	13.64 - -
2.	Stock Option	-	-	-	-	-
3.	Sweat Equity	-	-	-	-	-
4.	Commission • as % of profit • others, specify	-	-	-	-	-
5.	Others,please specify	-	-	-	-	-
6.	Total	-	7.74	5.90	-	13.64

Mr. Mayank Jain resigned as Company Secretary w.e.f. October 31, 2019

@ Ms. Aruna Mohandoss was appointed as Company Secretary w.e.f. November 13, 2019

CEO & CFO being the Executive Directors their remuneration details are mentioned in table 6A above

7. PENALTIES / PUNISHMENT/ COMPOUNDING OF OFFENCES: NIL

Xchanging Solutions Limited

Annual Report 2019-20

MANAGEMENT DISCUSSION AND ANALYSIS

OVERVIEW

Xchanging Solutions Limited was incorporated on February 1, 2002 with operations in India, and an international presence established through subsidiaries in several countries.

DXC Technology Company, ultimate holding company, is listed on New York Stock Exchange, and through its indirect subsidiaries Xchanging (Mauritius) Limited, Xchanging Technologies Services India Private Limited & DXC Technology India Private Limited, owns 75% of the outstanding share capital of the Company.

INDUSTRY STRUCTURE, OVERVIEW AND TRENDS; OPPORTUNITIES, THREATS AND OUTLOOK

The IT-BPM sector grew by 7.7% y-o-y garnering a total revenue of USD 191 billion in FY 2020. IT Services sector garnered the revenue of USD 97 billion (growth of 6.7%). The sector generated exports of over USD 147 billion in revenues in FY 2020, growing at 8.1% from the previous year. [*Source: National Association of Software and Services Companies (NASSCOM)].

India’s IT industry is expected to contribute 10 per cent of India’s GDP by 2025 and India’s digital economy is estimated to reach US$ 1 trillion by 2025. Artificial Intelligence and machine learning will contribute to US$1 trillion to Indian economy by 2035. The global sourcing market in India continues to grow at a higher pace compared to the IT-BPM industry. Indian IT & ITeS companies have set up over 1,000 global delivery centres in about 80 countries across the world. The revenue from digital segment is expected to comprise 38 per cent of the forecasted US$ 350 billion industry revenue by 2025.

IT industry is fueling the growth of start-ups in India, with the presence of around 5,300 tech start-ups in India. India’s highly qualified talent pool of technical graduates is one of the largest in the world, facilitating its emergence as a preferred destination for outsourcing, computer science/information technology accounts for the biggest chunk of India’ fresh engineering talent pool, with more than 98 per cent of the colleges offering this stream. IT industry employees 4.1 million people as of FY19. [* Source: India Brand Equity Foundation (IBEF)]

Investments/ Developments

Indian IT’s core competencies and strengths have attracted significant investments from major countries. The computer software and hardware sector in India attracted cumulative Foreign Direct Investment (FDI) inflows worth US$ 43.58 billion between April 2000 to December 2019, according to data released by the Department of Industrial Policy and Promotion (DIPP).

India is the topmost offshoring destination for IT companies across the world. Having proven its capabilities in delivering both onshore and off-shore services to global clients, emerging technologies now offer an entire new gamut of opportunities for top IT firms in India. The industry is expected to grow to US$ 350 billion by 2025 and BPM is expected to account for US$ 50-55 billion out of the total revenue. [* Source: India Brand Equity Foundation (IBEF)]

Covid-19 & IT Sector

Indian IT services industry is expected to see an adverse impact for a short-term due to COVID-19 outbreak with the sector clocking a lower growth of 3-5 per cent in financial year 2020-21. ICRA previously expected the sector to grow at 6-8 per cent. With the slowdown in growth during the first half of 2020-21, the margins will also be negatively impacted before a likely recovery in the next financial year. The credit outlook for Indian IT companies remains stable led by healthy free cash flows cushioning short-term disruptions with significant liquidity in the form of surplus investments generated out of past cash flows [*Source: ICRA Limited] .

RISKS AND CONCERNS

The Company analyse the nature and extent of risks and consider their likelihood of occurrence and impact; both on an inherent and residual basis, after taking into account mitigating and compensating controls. This allows us to determine how we should manage each risk in order to achieve our strategic objectives.

HOW WE MANAGE RISK

In managing risk we analyse the nature and extent of risks and consider their likelihood and impact, both on an inherent and a residual basis, after taking account of mitigating controls. This allows us to determine how we should manage each risk in order to achieve our strategic objectives.

Strategic risks reflect the potential for a signicant strategic action or a failure to react to developing trends in the market, to have a financial impact on the economic value of our business.
Commercial risks reflect the potential to enter into a critical contract or commercial arrangement which may have an adverse impact on the business.
Operational risks reflect the potential for the failure of a critical process or procedure to have an adverse impact on the business.

28 Xchanging Solutions Limited

Annual Report 2019-20

Management Discussion and Analysis

OVERVIEW OF RISK MANAGEMENT PROCESS

1. Organisation 2. Risk 3. Risk strategic objectives assessment reporting 5. Residual risk 4. Risk 6. Monitoring reporting Mitigating Activity

STRATEGIC RISKS
Risk	Mitigating Actions
Failure to utilise and exploit technology enablement for growth	The rapidly changing nature and impact of technology means that we need to respond to technology trends. Injecting technology enablement into our services and products is core to our growth strategy as we continue to: • Invest in the development of new offerings. • Develop innovative value adding customer solutions. • Utilise our skilled knowledgeable resources. • Review our existing services and products to ensure that they meet our customers’ requirements.
Failure to secure new business from both new and existing customers	There are number of signicant changes in the sectors we operate in and the current economic environment results in pressure on our customers. Failure to secure new business could slow down the growth of the business. Successfully winning new business is managed by: • Investing in innovative services and products for both new and existing customers. • Ensuring utilisation of our technology capabilities and competitive low cost offshore services. • Clearly defined offerings and sales strategies that help us to attract customers. • Continual development of the unified sales strategy which enables selling across business sectors. • Effective performance of sales team.
COMMERCIAL RISKS
Risk	Mitigating Actions
We have a concentration of material contracts with customers in key markets, which may have a significant impact on the Group’s performance.	Our commercial risks continue to be well managed through legal review, delegated authorities and contract monitoring processes. We have a structured service management programme, with dedicated account managers who work closely with our customers utilising performance metrics in order to identify issues early and trigger corrective actions.
OPERATIONAL RISKS
Risk	Mitigating Actions
Our reputation and ultimately our profitability are reliant on successful implementation and delivery of new contracts.	We ensure successful implementation in the following ways: • Detailed implementation and delivery plans with strong management control and oversight. • Use of experienced employees with strong project, change and people management skills in order to ensure successful implementation.

Xchanging Solutions Limited

Annual Report 2019-20

Management Discussion and Analysis

	• Standardised procedures in use for the implementation and delivery of new contracts.
Our customers demand efficient processing and high levels of service to help them achieve their objectives and protect their reputation.	Failure to meet our customers’ expectations and contractual commitments would have a signicant impact upon our reputation and proûtability and could result in unexpected and costly litigation. We consistently work towards ensuring that our service levels are on target ensuring that we meet our customer requirements. Mitigating actions include: • Consistently ensuring that our service levels are on target. • Optimising our cost of delivery through standardisation and simplification. • Investing internally in Group change programmes to improve our shared service centre and support services. • Ongoing contract management. • Building on existing customer relations.
Continuing to retain our key personnel and recruit new talented individuals is fundamental to our success. Our intellectual property is one of our key assets.	Succession plans are in place for senior managers across the business. • We have an established structure for employee performance and development monitoring. • A clear recruitment strategy and graduate recruitment and development programme attracts high-potential employees. • Signicant investment in leadership training programmes underpins our succession plans, and develops our employees.
FINANCIAL RISKS
Risk	Mitigating Actions
The Group’s financial results may be subject to volatility arising from movements in interest rates, foreign exchange rates, liquidity and changes in taxation legislation, policy or tax rates	We continue to manage our financial risks through our established budgeting, forecasting and working capital and treasury controls. This reduces the volatility of our financial results, giving the Board greater medium-term visibility and ensuring we have the required credit facilities in place

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

The Compliance Certification from CEO and CFO provided in Annual Report confirms the adequacy of our internal control system and procedures.

DISCUSSION ON FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE:

A. OVERVIEW

The financial statements of the Company have been prepared in accordance with the Indian Accounting Standards (Ind AS) and comply with the Accounting Standards specified under Section 133 of the Companies Act, 2013, read with rule 7 of the Companies (Accounts) Rules, 2014.

B. RESULTS OF OPERATIONS

1. Review of Operations

During the financial year ended March 31, 2020, the consolidated revenue of your Company was Rs. 18,226 Lakhs against Rs. 18,410 Lakhs during the previous year ended March 31, 2019. Other income of the Company for the current year was Rs. 1,306 Lakhs against Rs. 1,455 Lakhs in the previous year.

The company has only one primary segment viz, Information Technology (IT) services and accordingly the financials relate to this segment.

30 Xchanging Solutions Limited

Annual Report 2019-20

Management Discussion and Analysis

2. Performance

The table below summarizes the consolidated financial performance during the year:

(INR in lakhs)

		(INR in lakhs)
Particulars	For the Financial year ended March 31, 2020	For the Financial year ended March 31, 2019
Total Income	19,494	19,865
Total Expenditure	13,565	14,185
Profit before Interest, Depreciation and Tax	6,073	5,728
Depreciation & Amortization	144	47
Finance Costs	13	1
Profit /(Loss)before Tax	5,929	5,680
Income Tax(includingdeferred tax)	459	1,009
Net Profit /(Loss)after Tax	5,470	4,671
Other Comprehensive Income/(Expenditure)	818	293
Total Comprehensive Income/(Expenditure)	6,288	4,964
Earnings / (Loss) per share Rs.	4.91	4.19

3. Geographic Profile

(INR. in lakhs)

Geographic Profile			(INR. in lakhs)	(INR. in lakhs)
Geography	March 31, 2020		March 31, 2019
	Revenue	%	Revenue	%
Europe	1,345	7.38%	1,790	9.72%
USA	10,209	56.01%	9,692	52.64%
India	1,068	5.86%	1,308	7.10%
Singapore	5,163	28.33%	5,212	28.31%
Rest of the World	441	2.42%	408	2.22%
Total	18,226	100%	18,410	100%

4. Capital Markets

The Capital Market Information relating to the company’s shares such as stock exchanges in which they are listed/traded, trading volume, stock price movements etc., has been provided in the Report on Corporate Governance (under the heading “General Shareholder Information”) which forms part of the Annual Report 2019-2020.

5. Key Financial Ratios

The table below summarizes the key financial ratios along with detailed explanations:

S. No.	Particulars	Standalone	Standalone	Standalone	Reason for Variance
		Mar’ 20,	Mar’ 19	Variance
1	Debtors Turnover	5.24	5.85	-0.61	There is no significant change
2	Current Ratio	4.57	3.33	1.24	Change in ratio is mainly due to receipt of dividend income from wholly owned subsidiary, repayment of loan by fellow subsidiary, reclass of loan to fellow subsidiaries from non- current to current and reduction in current liabilities.
3	OperatingProfit Margin	25.20%	23.64%	1.56%	There is no significant change
4	Net Profit Margin	53.14%	31.65%	21.48%	Variance is mainly due to reversal of earlier years income tax provision and receipt of dividend income from wholly owned subsidiary.
5	Return on Net Worth	10.52%	8.40%	2.12%	Return on Net worth is higher mainly due to increased growth in profit for the period as compared to growth in average net worth.

Xchanging Solutions Limited

Annual Report 2019-20

Management Discussion and Analysis

Note:

(1) Interest Coverage ratio is not relevant for the Company as it has negligible debt during the financial year.
(2) Debt Equity ratio is not relevant for the Company as it has nil debt as at March 31, 2020.
(3) There is no inventory in the Company and hence Inventory Turnover ratio is not applicable.

MATERIAL DEVELOPMENTS IN HUMAN RESOURCES AND EMPLOYEE RELATIONS

Developing Talent

Managing human resources effectively and efficiently plays a critical role in ensuring that a satisfied, motivated work force delivers quality services. It also plays an important role in increasing staff performance and productivity, enhancing an organization’s competitive advantage, and contributing directly to the organizational goals. Satisfied, highly-motivated and loyal employees represent the basis of competitive company. The growth of satisfaction is to be reflected in the increase of productivity, improvement of the products’ quality or rendered services and higher number of innovations.

The Company is highly employee oriented, and the focus is on the development of employees.

Employee Diversity

The Company believes in promoting and nurturing work environment which is conducive to the development and growth of an individual employee, by employing the best HR practices such as performance management, reward and recognition policy, leadership development program, open work culture and effective employee communication.

We are committed to embedding a culture of diversity and inclusion across our Group. This includes ensuring opportunity for all and embraces the positive effect that our diverse workforce brings.

We do not tolerate any form of discrimination, and our employment policies and practices focus on ensuring that all our employment processes are free from unlawful discrimination on any grounds.

Xchanging Solutions Limited has a total of 164 employees on its rolls as of March 31, 2020.

Xchanging Solutions Limited

Annual Report 2019-20

CORPORATE GOVERNANCE REPORT

1. COMPANY’S PHILOSOPHY

The Company is committed to the highest standards of corporate governance in all its activities and related processes. The Company believes that good corporate governance practices enable the management to direct and control the affairs of the Company in an efficient and effective manner and to achieve its goal of maximizing value for its shareholders. The Company believes that good corporate governance lies not merely in drafting a code of corporate governance but in practicing it.

The Company has put in place a good corporate governance policy and confirms its compliance with the applicable regulations of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (“Listing Regulations”) .

2. BOARD OF DIRECTORS:

A. Composition of Board of Directors:

The Board of Directors as on March 31, 2020 comprised of 6 (Six) Directors of which 4 (four) are Non – Executive Directors including two women directors. The Chairman is an Executive Director (Managing Director and CEO) as on March 31, 2020. The number of Independent Directors on the Board is 3 (three). The composition of Board is in conformity with Regulation 17 of the Listing Regulations entered with the Stock Exchanges.

Membership in Board and Sub - Committees of the Directors of the Company as on March 31, 2020 – other than Xchanging Solutions Limited (“the Company”) is as under:

Name of the Director	DIN	Category in the Company	Number of Directorships in other Public Companies1	Number of Directorships in other Public Companies1	Number of Directorships in other Public Companies1	Number of Directorships in other Public Companies1	Number of committee positions held in other public companies2	Number of committee positions held in other public companies2	No. of equity shares held in XSL as on March 31, 2020
			Listed	Name of the Listed Company	Category of Directorship	Unlisted	Chairman	Member
Henry D’Souza	00276157	Non-Executive Independent Director	0	NA	NA	0	0	0	0
Venkatesh Shastry	08277771	Non-Executive Independent Director	0	NA	NA	0	0	0	0
Rama NS	06720033	Non-Executive Independent Director	1	Timken India Limited	Non- Executive Independent Director	0	1	1	0
Kalpana Tatavarti	06644105	Non-Executive Non-Indepen- dent Director	0	NA	NA	0	0	0	0
Chandrasekhara Rao Boddoju	08185777	Executive Director (Managing Director and CEO)	0	NA	NA	0	0	0	0
Shrenik Kumar Champalal	08099410	Executive Director (Whole Time Director and CFO)	0	NA	NA	0	0	0	1

1 Other directorships do not include directorships of private limited companies, foreign companies and companies under Section 8 of the Act.

2 The information pertaining to the chairmanships/memberships of Committees of the Board held by the directors includes only Audit Committee and Stakeholders' Relationship Committee.

None of the Directors of the Company hold directorships in more than twenty (20) companies including in more than ten (10) public companies. In accordance with the Listing Regulations, none of the Directors of the Company hold directorships in more than eight (8) listed companies and independent directorships in more than seven (7) listed companies. The Managing Director of the Company does not hold directorship as an Independent Director in any other listed company. Also, none of the Directors is serving as a member of more than ten (10) committees or as the chairman of more than five (5) committees in accordance with the requirements of the Listing Regulations. None of the Directors are related to each other. Necessary disclosures regarding committee positions in other public companies as at the end of financial year have been made by the Directors.

Xchanging Solutions Limited

Annual Report 2019-20

Corporate Governance Report

B. Number of Board Meetings, Attendance of the Directors at Meetings of the Board and at the Annual General Meeting:

The Board meetings are held at regular intervals to consider, discuss and approve inter alia, the unaudited and audited standalone and consolidated financial results of the Company, to decide on business policy/strategy of the Company, risk management, competitive scenario, etc. The Board/Committee meetings are pre-scheduled and tentative dates of such meetings are informed well in advance to facilitate the Directors to plan their schedule. The Company also provide an option to its Directors to participate at each of the Board/Committee meetings through video conference. The Company adheres to the Secretarial Standards on the Board Meetings as prescribed by the Institute of Company Secretaries of India.

During the financial year ended March 31, 2020, total 4 (four) Board Meetings were held on the following dates – May 23, 2019; August 13, 2019; November 13, 2019 and February 12, 2020. The gap between two meetings did not exceed 120 days. These meetings had good attendance. The last AGM of the Company held on August 13, 2019.

The attendance of the Directors’ at these Meetings is as under:

Director	Category	Number of Board Meetings attended	Leave of Absence Granted	Attendance at the AGM
HenryD’Souza	Independent Director	4	Nil	Yes
Venkatesh Shastry	Independent Director	3	1	Yes
Rama NS	Independent Director	4	Nil	Yes
Kalpana Tatavarti	Non-Executive Director	4	Nil	Yes
Chandrasekhara Rao Boddoju	Executive Director	4	Nil	Yes
Shrenik Kumar Champalal	Executive Director	4	Nil	Yes

C. Meetings of Independent Directors

During the financial ended March 31, 2020, a separate meeting of the Independent Directors of the Company was held on May 23, 2019 without the attendance of Non-Independent Directors and the Management team.

During their meeting held on May 23, 2019, the Independent Directors reviewed the performances of Non-Independent Directors, Chairman and the Board as whole and assessed the flow of information between the Company management and the Board.

D. Directors seeking Appointment/ Re-appointment

Independent Directors are not liable to retire by rotation. Pursuant to the provision of Section 152(6) of the Companies Act, 2013 Mrs. Kalpana Tatavarti, Non-Executive Director, being longest in the office, retire by rotation at the ensuing Annual General Meeting and being eligible offer herself for the reappointment.

All Independent Directors have given declarations that they meet the criteria of independence as laid down under Section 149 of the Act and applicable Regulations of Listing Regulations. Further, they have declared that they are not aware of any circumstance or situation, which exist or may be reasonably anticipated, that could impair or impact their ability to discharge their duties with an objective independent judgment and without any external influence. Further, in the opinion of the Board, all the Independent Directors of the Company, fulfil the conditions specified under the Act and the SEBI Listing Regulations, and are independent of the management.

All Directors have affirmed that they are not debarred from holding the office of a Director by virtue of any SEBI order or any other such Authority.

Code of Conduct

The Board has formulated and adopted a Code of Conduct for all Board Members and Senior Management Personnel of the Company. These Codes have been posted on the Company’s website at http://www.xchanging.com/investor-relations/xslcontent.

Affirmation Report on Compliance of Code of Conduct has been received from the Board Members and Senior Management Personnel of the Company. A declaration to that effect is given in the Compliance Certificate Annexed to the report.

The Code of Conduct for the Board Members of the Company has been amended in line with the provisions of the Companies Act, 2013 ( “Act” ), which includes Code for Independent Directors, which is a guide to professional conduct for Independent Directors of the Company pursuant to section 149(8) and Schedule IV of the Act.

E. Compliance Certification

As required under Regulation 17(8) read with Part B of Schedule II of the Listing Regulations, Mr. Chandrasekhara Rao Boddoju, Managing Director and Chief Executive Director and Mr. Shrenik Kumar Champalal, Whole Time Director and Chief Financial Officer of the Company have certified to the Board regarding the Financial Statements

34 Xchanging Solutions Limited

Annual Report 2019-20

Corporate Governance Report

for the financial year ended March 31, 2020. The Certificate is annexed to this Report as Annexure- A

F. Board Evaluation

As required under the provisions of Section 134(3)(p) of the Act and Regulation 4 of the Listing Regulations, the Board and Committees of the Board have carried out annual evaluation of own performance. The performance evaluation framework is in place and the evaluation questionnaires were circulated to all the members of the Board and Committees for their response to evaluate performance of Board and Committees of the Board. The Board is satisfied with the board evaluation carried out for the year and there is no previous & current year’s observation and action.

The criteria of the evaluation is exercising of responsibilities in the interest of the Company, striving to attend meetings of the Board of Directors and Committees of which he is a member, participating constructively and actively in the meetings of the Board or Committees of the Board etc.

G. Familiarization Programme for Independent Directors

As per Regulation 46(2)(i) of Listing Regulations, the details of programs for familiarization of the Independent Directors with the Company, their roles, rights, responsibility in the Company, nature of the industry in which the Company operates, business model of the Company and related matters are available on the website of the Company at http://www.xchanging.com/ investor-relations/xsl-content.

H. Matrix setting out the skills/expertise/competence of the Board of Directors

The Company’s Board comprises qualified members who bring in required skills, competence and expertise that allow them to make effective contribution to the Board and its Committees. The Directors are committed to ensure that the Company is in compliance with the Corporate Governance. In accordance with Regulation 34(3) read with Part C of Schedule V of SEBI Listing Regulations, below is the summary of core skills/expertise/ competencies identified by the Board of Directors as required in the context of its business(es) and sector(s) for it to function effectively and which are taken into consideration while nominating candidates to serve on the Board of the Company:

Areas	Description
Strategy and planning	Ability to think strategically and identify and critically assess strategic opportunities & threats and develop effective strategies in the context of the strategic objectives of the Company’s relevantpolicies andpriorities.
Governance(including policy)	Developappropriatepolicies & define theparameters.
Finance	Qualifications and experience in accounting and/or finance and the ability to: • Analyze key financial statements; • Critically assess financial viability and performance; • Contribute to strategic financialplanning;
Commercial/Business Development	A broad range of commercial/business development in areas including communications, marketing, branding and business systems, practices and improvement.
Information Technology	Qualification and experience in IT industries.

Director	Areas of expertise	Areas of expertise	Areas of expertise	Areas of expertise	Areas of expertise
	Strategy and planning	Governance (including policy)	Finance	Commercial/ Business Development	Information Technology
Chandrasekhara Rao Boddoju MD & CEO
Shrenik Kumar Champalal WTD & CFO
Henry D’Souza Independent Director
Venkatesh Shastry Independent Director			-
Rama NS Independent Director
Kalpana Tatavarti Non-executive Director			-

Xchanging Solutions Limited

Annual Report 2019-20

Corporate Governance Report

3. POLICY ON APPOINTMENT AND REMUNERATION OF DIRECTORS AND KEY MANAGERIAL PERSONNEL AND OTHER EMPLOYEES:

A. Remuneration Policy

Pursuant to the provisions of Section 178 of the Act, the Company has adopted a Policy for Remuneration of Directors, Key Managerial Personnel and Senior Management, which has been approved by the Board of the Company at its Meeting held on November 7, 2014 and further revised on March 28, 2019 by way of resolution by circulation based on the recommendations made by the Nomination and Remuneration Committee. The Nomination and Remuneration Policy is available at http:// www.xchanging.com/investor-relations/xsl-content.

Appointment

Nomination and Remuneration Committee (“NRC”) determines the criteria of appointment to the Board and is vested with the authority to identify candidates for appointment to the Board of Directors. In evaluating the suitability of a person for appointment / continuing to hold appointment as a Director, the NRC takes into account among others, Board diversity, person’s eligibility, qualification, expertise, track record, general understanding of the business, professional ethics, integrity and other fit and proper criteria’s. Based on recommendation of the NRC, the Board evaluates the candidate(s) and decide on the selection of the appropriate member.

Remuneration

The remuneration of Executive/Non-Executive Directors and KMPs is governed by the external competitive environment, track record, potential, individual performance and performance of the Company as well as industry standards and decided by NRC in accordance to the abovementioned policies. It is proposed by NRC and subsequently approved by the Board.

B. Remuneration to Non-Executive Directors for the financial year ended March 31, 2020

The Non-Executive Independent Directors are paid compensation in the following manner:

Sitting Fees of INR 60,000/- for attending Board and INR 60,000/- for attending Committee Meeting.
None of the Non-Executive Independent Directors have any pecuniary relationship with the Company.
None of the Non-Executive Independent Directors holds any equity shares of the Company.
None of the Non-Executive Independent Directors hold any convertible instruments in the Company.
Payment of reimbursement of expenses incurred by Non-Executive Independent Directors for participation in the Board and other meetings of the Company.

The remuneration and sitting fee paid to the Non-executive directors during the financial year ended March 31, 2020 along with their respective shareholding in the Company are as under:

(INR in Lakhs)

Directors	Sitting Fees paid for the Board and Committee Meetings held during the financial year ended March 31, 2020	Commission for the financial year ended March 31, 2020, provided as payable in the accounts of the Company for the year under review	No. of Equity Shares held as on March 31, 2020
HenryD’Souza	10.20	Nil	Nil
Venkatesh Shastry	7.80	Nil	Nil
Rama NS	10.20	Nil	Nil
Kalpana Tatavarti	7.20	Nil	Nil

C. Remuneration paid/payable to Executive Director (Whole-time Director/Managing Director) for the financial year ended March 31, 2020

Following Remuneration was paid to whole-time director/Managing Director during the financial year ended March 31, 2020. The said remuneration was fixed by the Nomination and Remuneration Committee and subsequently approved by the Board of Directors and Shareholders of the Company.

36 Xchanging Solutions Limited

Annual Report 2019-20

Corporate Governance Report

Desigation of Executive Director	(INR in Lakhs)	(INR in Lakhs)	(INR in Lakhs)	(INR in Lakhs)	(INR in Lakhs)	Contract Period	Shares held as on March 31, 2020
	Salary	Commission	Company’s contribution to Funds	Perquisites & Allowance	Total
Managing Director	-	-	-	-	-	For 3 years with effect from August 9, 2018	-
Whole Time Director	47.94	-	-	-	47.94	For 3 years with effect from March 31, 2018	01

Brief terms of employment and details of remuneration of the Executive Directors are as under:

Sl. No.	Name of the Director	Chandrasekhara Rao Boddoju, Managing Director	Shrenik Kumar Champalal, Whole Time Director
(a)	Salary, benefits, bonuses, stock options, pension etc.	Salary not exceeding INR 36 lakhs per annum. Reimbursement of travel and out of pocket expenses incurred for business purpose of the Company.	Salary not exceeding INR 60 Lacs per annum Reimbursement of travel and out of pocket expenses incurred for business purpose of the Company.
(b)	Details of fixed component and performance linked incentives, alongwith theperformance criteria;	Fixed Salary not exceeding INR 36 lakhs per annum. Not entitled for any performance linked incentives.	Fixed Salary not exceeding INR 60 lakhs per annum. Not entitled for any performance linked incentives.
(c)	Service contracts, notice period, severance fees;	The appointment of Mr. Chandrasekhara Rao Boddoju as Managing Director is for period of 3 years with effect from August 9, 2018.	The appointment of Mr. Shrenik Kumar Champalal as Whole Time Director is for period of 3 years with effect from March 31, 2018.
(d)	Stock option details, their pricing at the time of issue, period over which accrued and period over which exercisable.	NA	NA

4. RISK MANAGEMENT

The Company has a Risk Management process which provides an integrated approach for managing the risks in various aspects of the business. A write-up on the above is provided in the Management Discussion and Analysis Report.

5. COMMITTEES OF THE BOARD

A. Audit Committee

The Audit Committee of the Company is constituted in line with the provisions of Regulations 18 of Listing Regulations read with Section 177 of the Act.
The role, duties and powers of the Audit Committee are as follows:

The role/term of references of the Audit Committee shall include the following:

Oversight of the Company’s financial reporting process and the disclosure of its financial information to ensure that the financial statement is correct, sufficient and credible;
Recommendation for appointment, remuneration and terms of appointment of auditors of the Company
Approval of payment to statutory auditors for any other services rendered by the statutory auditors.
Reviewing with the management, the annual financial statements and auditor’s report thereon before submission to the Board for approval, with particular reference to:
a) Matters required to be included in the Director’s Responsibility Statement to be included in the Boards’ Report in terms of clause (c) of sub-section 3 of section 134 of the Companies Act, 2013
b) Changes, if any, in accounting policies and practices and reasons for the same.
c) Major accounting entries involving estimates based on the exercise of judgement by Management.
d) Significant adjustments made in the financial statements arising out of audit findings.
e) Compliance with listing and other legal requirements relating to financial statements.

Xchanging Solutions Limited

Annual Report 2019-20

Corporate Governance Report

f) Disclosure of any related party transactions.
g) Modified opinion(s) in the draft audit report.
Reviewing, with the Management, the quarterly financial statements before submission to the Board for approval;
Reviewing, with the management, the statement of uses / application of funds raised through an issue (public issue, rights issue, preferential issue, etc.), the statement of funds utilized for purposes other than those stated in the offer document / prospectus / notice and the report submitted by the monitoring agency monitoring the utilisation of proceeds of a public or rights issue, and making appropriate recommendations to the Board to take up steps in this matter.
Review and monitor the auditor’s independence and performance, and effectiveness of audit process;
Approval or any subsequent modification of transactions of the Company with related parties;
Scrutiny of inter-corporate loans and investments;
Valuation of undertakings or assets of the Company, wherever it is necessary;
Evaluation of internal financial controls and risk management systems;
Reviewing, with the Management, performance of statutory and internal auditors, adequacy of the internal control systems;
Reviewing the adequacy of internal audit function, if any, including the structure of the internal audit department, staffing and seniority of the official heading the department, reporting structure coverage and frequency of internal audit;
Discussion with internal auditors of any significant findings and follow up there on;
Reviewing the findings of any internal investigations by the internal auditors into matters where there is suspected fraud or irregularity or a failure of internal control systems of a material nature and reporting the matter to the board;
Discussion with statutory auditors before the audit commences, about the nature and scope of audit as well as postaudit discussion to ascertain any area of concern;
To look into the reasons for substantial defaults in the payment to the depositors, debenture holders, shareholders (in case of non-payment of declared dividends) and creditors;
To review the functioning of the Whistle Blower Mechanism;
Approval of appointment of CFO (i.e., the Whole-time Finance Director or any other person heading the finance function or discharging that function) after assessing the qualifications, experience and background, etc. of the candidate;
Reviewing the utilization of loans and/or advances from/ investment by the Company in the subsidiary exceeding rupees 100 crore or 10% of the asset size of the subsidiary whichever is lower including existing loans/advances/ investments existing as on the date of coming into force of this provision;
Review the compliance with the provisions of the Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015 at least once in a financial year and shall verify that the systems for internal control are adequate and are operating effectively; and
Carrying out any other function as is mentioned in the terms of reference of the Audit Committee.

Audit Committee shall mandatorily review the following information:

management discussion and analysis of financial condition and results of operations;
statement of significant related party transactions (as defined by the Audit Committee), submitted by management;
management letters / letters of internal control weaknesses issued by the statutory auditors;
internal audit reports relating to internal control weaknesses; and
the appointment, removal and terms of remuneration of the chief internal auditor shall be subject to review by the Audit Committee.
Statement of deviations:
a) quarterly statement of deviation(s) including report of monitoring agency if applicable, submitted to stock exchanges in terms of Regulation 32(1) of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015
b) annual statement of funds utilized for purposes other than those stated in the offer document /prospectus /notice in terms of Regulation 32(7) of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015.

The Audit Committee shall have powers, which should include the following:

a) To investigate any activity within its terms of reference.

38 Xchanging Solutions Limited

Annual Report 2019-20

Corporate Governance Report

b) To seek information from any employee.
c) To obtain outside legal or other professional advice.
d) To secure attendance of outsiders with relevant expertise, if it considers necessary.

Composition of the Audit Committee

The composition of the Audit Committee is as follows:

Henry D’Souza
Venkatesh Shastry
Rama NS
Shrenik Kumar Champalal
Mr. Henry D’Souza is the Chairman of the Audit Committee.

Company Secretary acts as the Secretary of the Audit Committee.

During the financial year ended March 31, 2020, 4 (Four) meetings of the Audit Committee were held, the dates being May 23, 2019; August 13, 2019; November 13, 2019 and February 12, 2020.

The attendance for the Audit Committee meetings is as follows:

The attendance for the Audit Committee meetings	is as follows:
Name of the Member of committee	Position	No. of Meetings Attended	Leave of Absencegranted
HenryD’Souza	Chairman	4	Nil
Venkatesh Shastry	Member	3	1
Rama NS	Member	4	Nil
Shrenik Kumar Champalal	Member	4	Nil

The previous Annual General Meeting of the Company was held on August 13, 2019 and the Chairman of the Audit Committee was present at the Annual General Meeting of the Company. All recommendations of the Audit Committee were accepted by the Board.

B. Nomination and Remuneration Committee

The Nomination and Remuneration Committee of the Company is constituted in line with Regulation 19(4) read with Part D of Schedule II of the Listing Regulations read with Section 178 of the Act.
The role, duties, terms of references and powers of the Nomination and Remuneration Committee are as follows:
a) formulation of the criteria for determining qualifications, positive attributes and independence of a director and recommend to the Board of Directors a policy relating to, the remuneration of the directors, key managerial personnel and other employees;
b) formulation of criteria for evaluation of performance of Independent Directors and the Board of Directors;
c) devising a policy on diversity of Board of Directors;
d) Identifying persons who are qualified to become directors and who may be appointed in senior management in accordance with the criteria laid down and recommend to the Board of Director their appointment and removal.
e) whether to extend or continue the term of appointment of the Independent Director, on the basis of the report of performance evaluation of Independent Directors.
f) recommend to the Board, all remuneration, in whatever form, payable to senior management.
g) while formulating the policy under sub-section (3) of Section 178 of the Companies Act, 2013 ensure that—
- (i) the level and composition of remuneration is reasonable and sufficient to attract, retain and motivate directors of the quality required to run the Company successfully;
- (ii) relationship of remuneration to performance is clear and meets appropriate performance benchmarks; and
- (iii) remuneration to directors, key managerial personnel and senior management involves a balance between fixed and incentive pay reflecting short and long-term performance objectives appropriate to the working of the Company and its goals:

The composition of the Nomination & Remuneration Committee is as follows: -

Venkatesh Shastry
Henry D’Souza
Rama NS
Kalpana Tatavarti

Xchanging Solutions Limited

Annual Report 2019-20

Corporate Governance Report

Mr. Venkatesh Shastry is the Chairman of the Nomination & Remuneration Committee.

Company Secretary acts as the Secretary of the Nomination & Remuneration Committee.

During the financial year ended March 31, 2020, 2 (two) meetings of the Nomination and Remuneration Committee were held, the dates being May 23, 2019 and November 13, 2019.

The attendance for the Nomination and Remuneration Committee meetings is as follows:

Name of the Member of committee	Position	No. of Meetings Attended	Leave of Absencegranted
Venkatesh Shastry	Chairman	2	Nil
HenryD’Souza	Member	2	Nil
Rama NS	Member	2	Nil
Kalpana Tatavarti	Member	2	Nil

The previous Annual General Meeting of the Company was held on August 13, 2019 and the Chairman of the Nomination & Remuneration Committee was present at the Annual General Meeting of the Company. All recommendations of the Nomination & Remuneration Committee were accepted by the Board.

Performance evaluation criteria for Independent Directors

The Nomination and Remuneration policy of the Company lays down the criteria for Directors/Key Managerial Personnel appointment and remuneration including criteria for determining qualification, positive attributes, independence of Directors, criteria for performance evaluation of Executive and Non-Executive Directors (including Independent Directors) and other matters as prescribed under the provisions of the Act and the Listing Regulations as well as the performance evaluation criteria for Independent Directors is determined by the Nomination and Remuneration Committee. An indicative list of factors that may be evaluated including but not limited to participation and contribution by a director, commitment, effective deployment of knowledge and expertise, effective management of relationship with stakeholders, integrity and maintenance of confidentiality and independence of behaviour and judgment etc.

C. Stakeholder Relationship Committee

The Stakeholder Relationship Committee of the Company is constituted in line with the provisions of Regulation 20 of the Listing Regulations read with Section 178 of the Act.

The role/term of reference of the Stakeholders Relationship committee shall include the following:

Resolving the grievances of the security holders of the Company including complaints related to transfer/transmission of shares, non-receipt of annual report, non-receipt of declared dividends, issue of new/duplicate certificates, general meetings etc.
Review of measures taken for effective exercise of voting rights by shareholders.
Review of adherence to the service standards adopted by the Company in respect of various services being rendered by the Registrar & Share Transfer Agent.
Review of the various measures and initiatives taken by the Company for reducing the quantum of unclaimed dividends and ensuring timely receipt of dividend warrants/annual reports/statutory notices by the shareholders of the Company.

The composition of the Stakeholders Relationship Committee is as follows:

Henry D’Souza
Venkatesh Shastry
Rama NS
Kalpana Tatavarti
Shrenik Kumar Champalal
Mr. Henry D’Souza is the Chairman of the Stakeholder Relationship Committee.

Company Secretary acts as the Secretary of the Stakeholder Relationship Committee.

During the financial year ended March 31, 2020, 4 (four) meetings of Stakeholders Relationship Committee were held, the dates being May 23, 2019; August 13, 2019; November 13, 2019 and February 12, 2020.

Xchanging Solutions Limited

Annual Report 2019-20

Corporate Governance Report

The attendance for the Stakeholders Relationship Committee meetings is as follows:

Name of the Member of committee	Position	No. of Meetings Attended	Leave of Absencegranted
HenryD’Souza	Chairman	4	Nil
Venkatesh Shastry	Member	3	1
Rama NS	Member	4	Nil
Kalpana Tatavarti	Member	4	Nil
Shrenik Kumar Champalal	Member	4	Nil

During the financial year ended March 31, 2020, 2 (Two) complaints of the shareholders were received and resolved in a timely manner. There are no pending investor complaints as on March 31, 2020.

The previous Annual General Meeting of the Company was held on August 13, 2019 and the Chairman of the Stakeholder Relationship Committee was present at the Annual General Meeting of the Company. All recommendations of the Stakeholder Relationship Committee were accepted by the Board.

Name, designation and address of Compliance Officer

Ms. Aruna Mohandoss

Compliance Officer

Registered office: Kalyani Tech Park Survey No 1, 6 & 24, Kundanhalli Village, K R Puram Hobli, Bangalore – 560066 Tel: +91 804364000

E-mail: [email protected]

D. Corporate Social Responsibility Committee

In compliance with Section 135 of the Act read with the Companies (Corporate Social Responsibility Policy) Rules 2014, the Company has established a Corporate Social Responsibility (CSR) Committee.

The CSR Committee has been entrusted with the responsibility of formulating and recommending to the Board, a Corporate Social Responsibility Policy indicating the activities to be undertaken by the Company as specified in Schedule VII of the Companies Act, 2013, recommending to the Board the amount of expenditure to be incurred on CSR activities and monitoring the Corporate Social Responsibility Policy of the Company from time to time.

The composition of the Corporate Social Responsibility Committee (CSR) is as follows:

Henry D’Souza
Rama NS
Venkatesh Shastry
Kalpana Tatavarti
Shrenik Kumar Champalal
Mr. Henry D’Souza is the Chairman of the Corporate Social Responsibility Committee.

Company Secretary acts as the Secretary of the Corporate Social Responsibility Committee.

During the financial year ended March 31, 2020 , 2 (two) meetings of the CSR Committee were held; the dates being May 23, 2019 and February 12, 2020.

The attendance for the CSR Committee meetings is as follows:

Name of the Member of committee	Position	No. of Meetings Attended	Leave of Absencegranted
HenryD’Souza	Chairman	2	Nil
Venkatesh Shastry	Member	1	1
Rama NS	Member	2	Nil
Kalpana Tatavarti	Member	2	Nil
Shrenik Kumar Champalal	Member	2	Nil

Xchanging Solutions Limited

Annual Report 2019-20

Corporate Governance Report

6. GENERAL BODY MEETINGS

A. Details of Annual General Meetings and Special Resolutions passed

The details of date, time, location and special resolutions at Annual General Meeting (AGM) held in last 3 (three) years are as under:

Date	Time	Venue	Special Resolutions Passed	Directors’ Attendance at AGM
August 13, 2019	10 AM	Kalyani Tech Park- Survey No 1, 6 & 24, Kundanhalli Village, K R Puram Hobli, Bangalore - 560066	1. Approval for re-appointment of Mr. Henry D’Souza as an Independent Director of the Company. 2. Approval for appointment of Mr. Venkatesh Venkatasubba Ramanandashastry Shastry (“Venkatesh Shastry”) as an Independent Director of the Company 3. Approval for appointment of Mrs. Nonavinakeri Srinivasaiyengar Rama (“Rama NS”) as an Independent Director of the Company	1. Henry D’Souza 2. Venkatesh Shastry 3. Rama NS 4. Kalpana Tatavarti 5. Chandrasekhara Rao Boddoju 6. Shrenik Kumar Champalal
September 26, 2018	10 AM	SJR I-Park, Plot No. 13, 14, 15, EPIP Industrial Area, Phase I Whitefield, Bangalore – 560 066	1. Approval for appointment & remuneration of Mr. Shrenik Kumar Champalal as Whole Time Director of the Company. 2. Approval for appointment & remuneration of Mr. Chandrasekhara Rao Boddoju as Managing Director of the Company. 3. Approval for appointment & remuneration of Mr. Ramaswamy Sankaranarayanan Kavalapara as Managing Director (Interim) of the Company. 4. Determine the fees for delivery of any document through a particular mode of delivery to a member.	1. Ashok Kumar Ramanathan 2. Henry D’Souza 3. Kalpana Tatavarti 4. Chandrasekhara Rao Boddoju 5. Shrenik Kumar Champalal
September 13, 2017	10 AM	SJR I-Park, Plot No. 13, 14, 15, EPIP Industrial Area, Phase I Whitefield, Bangalore – 560 066	1. Approval for appointment of Mr. Srikrishna Madhavan as Managing Director of the Company for a period of 3 (three) years.	1. Ashok Kumar Ramanathan 2. Henry D’Souza 3. Srikrishna Madhavan 4. Rekha Murthy

B. Extraordinary General Meeting & Postal Ballot

No Extraordinary General Meeting or postal ballot was conducted during the financial year ended March 31, 2020.

7. DISCLOSURES:

i. There are no materially significant related party transactions of the Company which pose a potential conflict with the interest of the Company. The Related Party Transaction Policy of the Company is available at http://www.xchanging.com/investorrelations/xsl-content
ii. The Material Subsidiary Policy of the Company as approved by the Board of Directors is available at http://www.xchanging.com/ investor-relations/xsl-content

Xchanging Solutions Limited

Annual Report 2019-20

Corporate Governance Report

iii. The Familiarization Programme for Independent Directors as approved by the Nomination and Remuneration Committee of the Company is available at http://www.xchanging.com/investor-relations/xsl-content
iv. The Board of Directors of the Company have adopted the Code of Practices and Procedures for Fair Disclosure of PriceSensitive Information in concurrence with the requirement under SEBI (Prohibition of Insider Trading) Regulations, 2015 and SEBI (Prohibition of Insider Trading) (Amendment) Regulations, 2019; and Revised Code of Conduct for Prevention of Insider Trading. The aforesaid code is available at http://www.xchanging.com/investor-relations/xsl-content.
Details of non-compliance by the Company, penalties, strictures imposed on the Company by Stock Exchanges or SEBI or any Statutory Authority, on any matter related to capital markets, during last three years: BSE Limited and National Stock Exchange of India Limited had levied fine of Rs.5,000/- each for one (1) day delay in filing of the financial results for the quarter ended September 30, 2018. Company had paid said fine.
v. In terms of the provisions of the Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015, your Company has adopted a ‘Code of Conduct to regulate, monitor and report trading by designated persons in listed or proposed to be listed securities’ of your Company (“the Code”). The Code aims at preserving and preventing misuse of unpublished price sensitive information. All Designated Persons (including Directors, Key Managerial Personnel and employees) of your Company are covered under the Code, which provides inter alia for periodical disclosures and obtaining pre-clearances for trading in securities of your Company. The Code is also available at the website of the Company at http:/ /www.xchanging.com/investor-relations/xsl-content.
vi. The Company has received few routine explanations/letters from the stock exchanges and replied accordingly within prescribed time.
vii. In accordance with the requirement of Section 177 of the Act and the Rules made there under and Regulation 22 of the Listing Regulations, the Company has formulated a ‘Vigil Mechanism/Whistle Blower Policy’. No employee/ personnel have been denied access to the Audit Committee. The Vigil Mechanism / Whistle Blower Policy is available on the website of the Company at http://www.xchanging.com/investor-relations/xsl-content.
viii. The Company has not raised funds through preferential allotment or qualified institutions placement during the last year.
ix. The Company has not adopted a treatment different from that prescribed in accounting standards.
x. Company has taken certificate from a Company Secretary in Practice that none of the directors on the Board of the Company have been debarred or disqualified from being appointed or continuing as directors of companies by the Board/Ministry of Corporate Affairs or any such statutory authority. The same certificate is provided in Director’s report forming part of Annual Report.
xi. There are no pecuniary relationships or transactions between Non-Executive Directors and the Company. The Independent Directors are not paid any remuneration other than the sitting fee for attending meetings of the Board and the Committees thereof as approved by the Board.
xii. Details of compliance with mandatory requirements and adoption of non-mandatory requirements of Regulation 34(3) of the Listing Regulations read with Schedule V of the Listing Regulations: The Company has complied with all the mandatory requirements of the Listing Regulations.

The Board has taken cognizance of the discretionary requirements as specified in Part E of Schedule II of Regulation 27(1) of the SEBI Listing Regulations and are being reviewed from time to time which are as follows:

a. Audit Qualifications: During the year under review, there is no audit qualification in your Company’s Financial Statements nor has there been a matter of emphasis made during the year. Your Company continues to adopt best practices to ensure a regime of financial statements with unmodified audit opinion.
b. The Board and separate posts of the Chairperson and the Chief Executive Officer: During the year under review, the Managing Director & Chief Executive Officer of the Company has been appointed as the designated Chairperson of the Board.
c. Reporting of Internal Auditor: The internal control systems of the Company are routinely tested and veried by Internal Auditors and signicant audit observations and follow-up actions are reported to the Audit Committee.
d. Shareholder’s Right: The quarterly results of the Company are published in English newspaper (generally Financial Express) and a local daily (generally Sanjevani) having wide circulation in Bangalore. Further, the quarterly and half yearly results are also posted on the website of the Company at http://www.xchanging.com/investor-relations/xsl-content.

xiii. The Board of Directors have accepted all recommendations of its committees.

xiv. The disclosure of total fees for all services paid by the Company and its subsidiary(ies), on a consolidated basis, to the Statutory Auditor, are provided in notes to the Consolidated Financial Statements, forming part of the Annual Report.
xv. Disclosures in relation to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 are provided in Director’s Report forming part of the Annual Report.

Xchanging Solutions Limited

Annual Report 2019-20

Corporate Governance Report

xvi. The Company has complied with corporate governance requirements specified in regulation 17 to 27 and clauses (b) to (i) of sub-regulation (2) of regulation 46 of Listing Regulations

xvii. The Company does not deal in commodity and hence the disclosure pursuant to SEBI Circular dated November 15, 2018 is not required to be given.

xviii. Disclosure with respect to demat suspense account / unclaimed suspense account-Not Applicable

8. MEANS OF COMMUNICATION:

The quarterly, half yearly and annual financial results of the Company are sent to the Stock Exchanges immediately after they are approved by the Board. These are also published in the prescribed format within 48 hours of the conclusion of the Board Meeting, in which they are considered, generally in all the editions of “The Financial Express” the National English daily, circulating in most parts of India and in “Sanjevani”, the newspapers published in the regional language of the place, where the Company’s registered office of the Company is situated. The details of financial information are also available at http://www.xchanging.com/ investor-relations/xsl-content.

All the official news releases are also published on the Company’s website.

The Company has designated an email id exclusively for its shareholders viz., [email protected] for the purpose of registering complaints by investors.

9. GENERAL SHAREHOLDERS’ INFORMATION:

1. Annual General Meeting

Date and Time : Wednesday, September 23, 2020 and 10:00 A.M. IST Venue* : Kalyani Tech Park. - Survey No 1, 6 & 24, Kundanhalli Village, K R Puram Hobli, Bangalore - 560 066

*Since the Company is conducting 19[th] AGM through VC / OAVM pursuant to the MCA General Circulars numbers 14/2020, 17/2020 & 20/2020 and Circular number SEBI/HO/CFD/CMD1/CIR/P/2020/79 issued by the Securities and Exchange Board of India on May 5, 2020 and, therefore, as such there is no requirement to have a venue for the AGM. For details please refer to the Notice of 19[th] AGM. Accordingly, the deemed venue of AGM shall be Registered Office of the Company.

2. Financial Calendar

The financial calendar of the Company is reproduced below:

Annual General Meeting September 23, 2020 Results for quarter ending June 30, 2020 August 2020 Results for quarter ending September 30, 2020 November 2020 Results for quarter ending December 31, 2020 February 2021 Results for year ending March 31, 2021 May 2021 3. Book closure : September 17, 2020 to September 23, 2020 (both days inclusive) 4. Cut-off Date : September 16, 2020 5. Dividend payment date : NA, since the Company has not declared any dividend

6. Listing on the Stock Exchanges

Equity Shares of the Company are listed on the BSE Limited and the National Stock Exchange of India Limited. Annual Listing fee for the year 2020-2021, has been paid to the above Stock Exchanges.

The annual custodial fee of CDSL for the year 2020-2021 will be paid within prescribed time and invoice from NSDL is yet to be received.

Scrip Code:

NSE : XCHANGING BSE : 532616

7. Market Price Data

The monthly high and low share prices on both the exchanges for a period starting from April 2019 to March 2020 are as below:

44 Xchanging Solutions Limited

Annual Report 2019-20

Corporate Governance Report

Month & Year	Share price of Xchanging Solutions Limited(NSE)	Share price of Xchanging Solutions Limited(NSE)	Share price of Xchanging Solutions Limited(NSE)	Share price of Xchanging Solutions Limited(BSE)	Share price of Xchanging Solutions Limited(BSE)	Share price of Xchanging Solutions Limited(BSE)
	High(Rs.)	Low(Rs.)	Close(Rs.)	High(Rs.)	Low(Rs.)	Close(Rs.)
April 2019	48.35	43.55	45.35	48	43	45.3
May2019	49.5	42.6	47.35	53.45	42.7	45.6
June 2019	56.4	45.05	52.15	55.75	43	52.5
July2019	54.75	47	51.3	64	47.3	50.95
August 2019	55	44.4	52.8	54.5	45.9	53.15
September 2019	58.6	51.1	53.3	56.15	48	53.2
October 2019	57.95	51.3	54.7	56.45	50.35	54.45
November 2019	58.6	50.3	51.75	58.45	51	52.1
December 2019	60.2	50.65	55.8	60.25	51.5	55.7
January2020	64.9	51.9	57.35	65	53.25	57.45
February2020	58.65	47.65	48.15	58.85	47.65	47.9
March 2020	50	24.9	31.85	49	25	31.6

8. Performance of Share Price in Comparison to BSE SENSEX

==> picture [369 x 192] intentionally omitted <==

9. Performance of Share Price in Comparison to NSE NIFTY

==> picture [369 x 193] intentionally omitted <==

Xchanging Solutions Limited

Annual Report 2019-20

Corporate Governance Report

10. Registrars and Transfer Agent:

KFin Technologies Private Limited Selenium Tower B, Plot 31-32, Gachibowli, Financial District, Nanakramguda, Hyderabad – 500 032. Phone : +91 40 6716 2222 Fax +91 40 2300 1153 Email: [email protected] Website: www.kfintech.com

11. Share Transfer System:

Transfer of shares in physical form is processed by the Company’s Registrar and Transfer Agents (RTA) within fifteen days from the date of lodgement, provided the documents therefor are complete in all respects. All requests for transfer/transmission in physical form after they are processed by the RTA are submitted to the Company for approval. As per Regulation 40 of the Listing Regulations, securities of listed companies can be transferred only in dematerialised form w.e.f. April 1, 2019. Shareholders have been intimated that effective April 01, 2019; transfer of shares shall not be processed unless the shares are held in the dematerialized form with the depository. Periodic reminders were sent to the Shareholders, who held the shares in the physical form, to convert them in dematerialised mode to avoid any inconvenience in future regarding the transferability of the shares. Shareholders who wish to understand the procedure for dematerialisation of shares may contact the Company or its RTA or visit the following link:

NSDL website: https://nsdl.co.in/faqs/faq.php

CDSL website: https://www.cdslindia.com/investors/open-demat.aspx

12. Shareholding Pattern

a. Categories of Shareholding as on March 31, 2020

Categories of Shareholding as on March 31, 2020
Category	No. of Shares held	% of shareholding
Promoters	83,552,787	75.00
Banks, FIs, Insurance Companies, Mutual Funds	410,955	0.37
FIIs	-	-
Corporate Bodies	8,889,654	7.98
Indian Public	9,136,776	8.20
NRIs/OCBs/Foreign National/Clearingmember	139,251	0.12
Others	9,274,293	8.32
Grand Total	111,403,716	100.00

b. Distribution of Shareholding as on March 31, 2020

S. No.	No. of shares	No. of shareholders	% of total shareholders	No. of shares	% to equity
1	1 - 5000	16290	97.67	3774542	3.39
2	5001 - 10000	172	1.03	1399605	1.26
3	10001 - 20000	110	0.66	1647575	1.48
4	20001 - 30000	39	0.23	977719	0.88
5	30001 - 40000	18	0.11	661416	0.59
6	40001 - 50000	9	0.05	417933	0.38
7	50001 - 100000	14	0.08	1083745	0.97
8	100001 and above	26	0.16	101441181	91.06
	TOTAL	16678	100.00	111403716	100.00

13. Dematerialisation of shares and liquidity

The Company’s shares are compulsorily traded in the dematerialized form. The Company has arrangements with both National Securities Depository Limited (‘NSDL’) and Central Depository Services Limited (‘CDSL’) for demat facility. As on March 31, 2020, 111,303,606 shares representing 99.91% of the Company’s total shares were held in dematerialized form and the balance 100,110 shares representing 0.09% of the Company’s total shares were in the physical form. The Company’s shares are regularly traded on the National Stock Exchange of India Limited and BSE Limited.

ISIN: INE 692G01013

46 Xchanging Solutions Limited

Annual Report 2019-20

Corporate Governance Report

14. Outstanding GDRs/ADRs/Warrants or any convertible instruments, conversion date and likely impact on equity:

There are no outstanding GDRs/ADRs/Warrants.

15. Plant locations:

In view of the nature of the Company’s business viz., Information Technology (IT) Services; the Company operates from various offices in India and abroad but does not have any manufacturing plant.

16. Address for correspondence:

Shareholders may correspond with the Company at the Registered Office of the Company or at the office of Registrars and Transfer Agent of the Company.

Transfer Agent of the Company.
Registered Office of the Company	Registrars and Transfer Agent of the Company
Xchanging Solutions Limited Kalyani Tech Park - Survey No 1, 6 & 24, Kundanhalli Village, K R Puram Hobli, Bangalore – 560066, Karnataka, India. Phone +91 80 4364 0000 Email: [email protected]	KFin Technologies Private Limited Selenium Tower B, Plot 31 - 32 Gachibowli, Financial District, Nanakramguda, Hyderabad – 500 032 Phone +91 40 6716 2222 Fax +91 40 2300 1153 Email: einw ard.r [email protected] Website: www .kfintech.com

17. No. of shares traded during the Financial Year ended March 31, 2020:

BSE: 13,27,171 Shares

NSE: 125,57,979 Shares

18. Credit Ratings : - Company is not required to take credit rating.

19. Compliance certificate by the Practicing Company Secretary:

The Company has obtained a certificate from the Practicing Company Secretary regarding the compliance of conditions of Corporate Governance as stipulated under Schedule V (E) of the Listing Regulations, which is annexed herewith as Annexure-B

Xchanging Solutions Limited

Annual Report 2019-20

ANNEXURE-A TO CORPORATE GOVERNANCE REPORT

COMPLIANCE CERTIFICATE

To The Board of Directors Xchanging Solutions Limited Bangalore

We, Chandrasekhara Rao Boddoju, Managing Director & Chief Executive Officer and Shrenik Kumar Champalal, Whole Time Director & Chief Financial Officer hereby certify to the Board that;

a. We have reviewed the financial statements and the cash flow statement for the financial year ended March 31, 2020 and that to the best of our knowledge and belief:
(i) These statements do not contain any materially untrue statement or omit any material fact or contain statements that might be misleading;
(ii) These statements together present a true and fair view of the Company’s affairs and are in compliance with existing accounting standards, applicable laws and regulations.
b. There are, to the best of our knowledge and belief, no transactions entered into by the Company during the financial year which are fraudulent, illegal or violative of the Company’s code of conduct.
c. We accept responsibility for establishing and maintaining internal controls for financial reporting and that we have evaluated the effectiveness of the internal control systems of the Company pertaining to financial reporting and we have disclosed to the auditors and the audit committee, deficiencies in the design or operation of such internal controls, if any, of which we are aware and the steps we have taken or propose to take to rectify these deficiencies.
d. We have indicated to the auditors and the Audit Committee:
(i) There are no significant changes in the internal control over financial reporting during the financial year ended March 31, 2020;
(ii) There are no significant changes in accounting policies during the year and that the same have been disclosed in the notes to the financial statements; and
(iii) There have been no instances of significant fraud of which we have become aware and involvement therein of the management or an employee having a significant role in the Company’s internal control over financial reporting.
e. We further declare that all Board Member and senior personnel have affirmed compliance with the code for the current year.

Chandrasekhara Rao Boddoju, Managing Director & Chief Executive Officer

Shrenik Kumar Champalal

Whole Time Director & Chief Financial Officer

Place : Bangalore Date : May 22, 2020

48 Xchanging Solutions Limited

Annual Report 2019-20

ANNEXURE-B TO CORPORATE GOVERNANCE REPORT

CERTIFICATE ON CORPORATE GOVERNANCE REPORT

To, The Members Xchanging Solutions Limited Bangalore

We have examined the compliance of conditions of Corporate Governance by Xchanging Solutions Limited (“the Company”), for the financial year ended March 31, 2020 as stipulated under Regulations 17 to 27 and clauses (b) to (i) of Regulation 46(2) and Para C, D and E of Schedule V to the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (“Listing Regulations”).

The compliance of conditions of Corporate Governance is the responsibility of the management of the Company. Our examination was limited to procedures and implementation thereof, adopted by the Company for ensuring the compliance of the conditions of Corporate Governance. It is neither an audit nor an expression of opinion on the financial statements of the Company.

In our opinion and to the best of our information and according to the explanations given to us, we certify that the Company has complied with the conditions of Corporate Governance as stipulated under Regulations 17 to 27 and clauses (b) to (i) of Regulation 46(2) and Para C, D and E of Schedule V to the Listing Regulations.

We further state that such compliance is neither an assurance as to the future viability of the Company nor the efficiency or effectiveness with which the management has conducted the affairs of the Company.

Ankush Agarwal & Associates Company Secretaries

Ankush Agarwal

Proprietor Membership No: F 9719 Certificate of Practice No: 14486 UDIN: F009719B000263500

Place: Noida Date: May 21, 2020

Xchanging Solutions Limited

Annual Report 2019-20

BUSINESS RESPONSIBILITY REPORT

In accordance with the Regulation 34(2)(f) of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Business Responsibility Report of Xchanging Solutions Limited (“the Company” / “XSL”) for the financial year 2019-20 is presented below.

The Company’s Business Responsibility Report (BRR) is in line with principles of National Voluntary Guidelines (NVGs) on Social, Environmental and Economic Responsibilities of Business released by the Ministry of Corporate Affairs.

The Company’s policy framework includes various codes and policies such as Employees’ Code of Conduct, Corporate Social Responsibility Policy, Whistle Blower Policy, Code for Fair Practices and Procedures for disclosure of Unpublished Price Sensitive Information etc., which are framed to enable the Company to comply with the statutory and regulatory requirements and ensure that its operations are conducted in an ethical, transparent and accountable manner. The disclosures presented in this Report cover the operations of the Company. The Business Responsibility Report of the Company is also available on its website at http:// www.xchanging.com/investor-relations/xsl-content.

SECTION A:

GENERAL INFORMATION ABOUT THE COMPANY

1.	Corporate IdentityNumber(CIN)of the Company	L72200KA2002PLC030072
2.	Name of the Company	XchangingSolutions Limited(“the Company”)
3.	Registered and Corporate office address	Kalyani Tech Park, Survey No. 1, 6 & 24, Kundanhalli Village, K R Puram, Hobli, Bangalore, Karnataka - 560 066
4.	Website	http://www.xchanging.com/investor-relations/xsl-content
5.	E-mail id	[email protected]
6.	Financial Year Reported	April 1, 2019 to March 31, 2020
7.	Sector(s) that the Company is engaged in (industrial activitycode-wise)	Computer programming activities - NIC Code: 6201
8.	List of key products/services that the Company provides	IT Software, IT Hardware & ITES
9.	Total number of locations where business activity is undertaken bythe Company	2 overseas + 2 India locations
(I)	Number of International Locations	2
(II)	Number of National Locations	As at March 31, 2020, the Companyhas 2 Offices in India.
10.	Markets served by the Company	India, USA and Singapore

SECTION B:

FINANCIAL DETAILS OF THE COMPANY

1.	Paid-upCapital	Rs. 111,40,37,160/-(as on March 31, 2020)
2.	Total Turnover	Rs. 5,838/- Lakhs(as on March 31, 2020)
3.	Total Profit after Taxes	Rs. 2,269/- Lakhs(as on March 31, 2020)
4.	Total spending on Corporate Social Responsibility (CSR) as a percentage of Profit after Tax	2% of average net profit of the Company made during the three immediately preceding financial years. Refer Annexure V to the Boards’ Report in the Annual Report.
5.	List of activities in which expenditure in Sr. No. 4 above has been incurred	CSR Activities in the financial year 2019-20 were in the area of education. After school education was provided for community children of Bengaluru. Refer Annexure V to the Boards’ Report in the Annual Report.

50 Xchanging Solutions Limited

Annual Report 2019-20

Business Responsibility Report

SECTION C:

OTHER DETAILS OF THE COMPANY

1.	Does the Company have any Subsidiary Company/ Companies?	Yes, the Company has 3 (three) direct subsidiaries and 2 (Two) step down subsidiaries for the financial year ended March 31, 2020
2.	Do the subsidiary company/companies participate in the Business Responsibility (BR) initiatives of the parent company? If yes, then indicate the number of such subsidiary company(s).	As the BR initiatives of the Company are run at global level, all subsidiaries participate in the BR initiatives.
3.	Do any other entity/entities (e.g. suppliers, distributors etc.) that the Company does business with, participate in the BR initiatives of the Company? If yes, then indicate the percentage of such entity/ entities? [Less than 30%, 30-60%, More than 60%]	No

SECTION D:

BUSINESS RESPONSIBILITY INFORMATION

1. Details of Director/Directors responsible for Business Responsibility

a. Details of the Director responsible for implementation of the Business Responsibility Policy:

The CSR Committee of the Board of Directors is responsible for implementation of BR policies. The members of the CSR Committee are as follows:

S. No.	Name of the Director	DIN Number	Designation
1	Mr. HenryD’Souza	00276157	Independent Director
2	Mr. Venkatesh Shastry	08277771	Independent Director
3	Mrs. Rama NS	06720033	Independent Director
4	Mrs. Kalpana Tatavarti	06644105	Non-Executive Director
5	Mr. Shrenik Kumar Champalal	08099410	Whole Time Director & CFO
Details of the Business Responsibility Head:
1.	DIN(if applicable)	NA
2.	Name	Mr. Lokendra Kumar Sethi
3.	Designation	Head HR – India
4.	Email	Lok endr [email protected]

b. Details of the Business Responsibility Head:

2. Principle-wise as per National Voluntary Guidelines (NVGs) Business Responsibility Policies: NINE PRINCIPLES OF THE NVGS:

The National Voluntary Guidelines on Social, Environmental and Economic Responsibilities of Business (NVGs) released by the Ministry of Corporate Affairs has adopted nine areas of Business Responsibility. These briefly are as follows:

Principle 1	Businesses should conduct andgovern themselves with Ethics, Transparencyand Accountability.
Principle 2	Businesses should provide goods and services that are safe and contribute to sustainability throughout their life cycle.
Principle 3	Businesses shouldpromote the well-beingof all employees.
Principle 4	Businesses should respect the interests of and be responsive towards all stakeholders, especially those who are disadvantaged, vulnerable and marginalized.
Principle 5	Businesses should respect andpromote human rights.
Principle 6	Businesses should respect,protect and make efforts to restore the environment.
Principle 7	Businesses, when engaged in influencing public and regulatory policy, should do so in a responsible manner.
Principle 8	Businesses should support inclusivegrowth and equitable development.
Principle 9	Businesses should engage with and provide value to their customers and consumers in a responsible manner.

Xchanging Solutions Limited

Annual Report 2019-20

Business Responsibility Report

The principle wise responses are given below:

Sl. No	Questions	P1	P2	P3	P4	P5	P6	P7	P8	P9
		Ethics Transpa- rency & Account- ability	Business Lifecycle Sustain- ability	Wellbeing of all employ- ees	Stakeho- lder’s Engage- ment	Human Rights	Protection of Environ- ment	Public Advocacy	Inclusive Growth and equitable develop- ment	Custom- ers’ Value
1	Is there a policy for	Y	Y	Y	Y	Y	Y	N	Y	Y
2	Has the policy been formulated in consultation with the relevant stakeholders?	Y (Refer Note a)	Y (Refer Note a)	Y (Refer Note a)	Y (Refer Note a)	Y (Refer Note a)	Y (Refer Note a)	- -	Y (Refer Note a)	Y (Refer Note a)
3	Does the policy conform to any national/ international standards? If yes, specify?	Y (Refer Note a)	Y (Refer Note a)	Y (Refer Note a)	Y (Refer Note a)	Y (Refer Note a)	Y (Refer Note a)	- -	Y (Refer Note a)	Y (Refer Note a)
4	Has the policy been approved by the Board? If yes, has it been signed by MD/ owner/CEO/ appropriate Board Director?	Y	Y	Y	Y	Y	Y	-	Y	Y
5	Does the Company have a specified committee of the Board/ Director/ Official to oversee the implementation of the policy?	Y	Y	Y	Y	Y	Y	-	Y	Y
6	Indicate the link for the policy to be viewed online	Y (Refer Note b)	Y (Refer Note b)	- (Refer Note c)	Y (Refer Note b)	- (Refer Note c)	- (Refer Note c)	- -	Y (Refer Note b)	- (Refer Note c)
7	Has the policy been formally communicated to all the relevant internal and external stakeholders?	Y	Y	Y	Y	Y	Y	-	Y	Y
8	Does the Company have an in-house structure to implement the policy?	Y	Y	Y	Y	Y	Y	-	Y	Y
9	Does the Company have a grievance redressal mechanism to address stakeholders’ grievances related to the policy?	Y	Y	Y	-	Y	-	-	Y	Y
10	Has the Company carried out independent audit/ evaluation of the working of this policy by an internal or external agency?	Y (Refer Note ‘d’)	Y (Refer Note ‘d’)	Y (Refer Note ‘d’)	Y (Refer Note ‘d’)	Y (Refer Note ‘d’)	Y (Refer Note ‘d’)	- -	Y (Refer Note ‘d’)	Y (Refer Note ‘d’)

# Principle-wise Policies
P1	Ethics, Transparency & Accountability	The Company’s Policy on Code of Conduct for Board Members, Senior Management Personnel and Employees of the Company, Whistle Blower Policy, Code of Conduct for Prevention of Insider Trading, Policy on Sexual Harassment elucidate ethical behaviour, transparencyand accountability.
P2	Business Lifecycle Sustainability	The Company promotes a culture where all efforts are directed towards providing goodqualityand safeproducts to all our customers.
P3	Well-being of all Employees	The Company has various policies to support employee well-being. The important ones include the Policy for prevention of sexual harassment, leave policy, health insurance policy, term insurance policy, policy on maternity benefits for female employees, policy for ensuring safety of women at workplace, policy on training and education of employees.
P4	Stakeholder’s Engagement	The Company’s CSR Policy, Shareholders Grievance Redressal mechanism guide thisprinciple.
P5	Human Rights	The Company’s Policy on Code of Conduct, Whistle Blower mechanism and Policy on Sexual Harassment encourage a work place environment which is free from anykind of human rights violations.
P6	Protection of Environment	The employees of the Company are sensitized to prevent wasteful usage of natural resources and conserve energy.
P7	Public Advocacy	While the Company may share its expertise to help in the formulation of public policy, it does not directly engage in lobbying or advocacy activities and hence, does not have a specific policy for this purpose.

52 Xchanging Solutions Limited

Annual Report 2019-20

Business Responsibility Report

P8	Inclusive Growth and Equitable Development	The CSR Policy which is focussed on the marginalized and vulnerable section of the society including offering scholarship and financial assistance to meritorious students from underprivileged communities/ disabled, to provide MP3 Player for visually challenged students, developing, augmenting and supporting infrastructure in educational institutions, providing mid-day meals to students ofgovernment schools etc.
P9	Customer’s Value	The Code of Conduct, Shareholders Grievance Redressal Mechanism, Whistle Blower Policy etc. which have been laid down shall provide a facility to its customers, shareholders and others to record their grievances/ feedback.

Notes :

a. The policies have been formulated in accordance with the applicable laws and regulations and through appropriate consultation with relevant stakeholders and after considering the best practices adopted by the industry.
b. May include a combination of internal policies of the Company which are accessible to all internal stakeholders and the policies are placed on the Company’s website. The hyperlink is http://www.xchanging.com/investor-relations/xsl-content
c. The policies of the Company are internal documents and are not accessible to the public. The hyperlink is https:// dxc.policytech.com
d. The policies are internally evaluated by various department heads, business heads and the management.

3. Governance related to Business Responsibility :

a. Indicate the frequency with which the Board of Directors, Committee of the Board assesses the BR performance of the Company. Within 3 months, 3-6 months, annually, more than 1 year

The executive directors and senior management of the Company monitor various aspects of social, environmental, governance and economic responsibilities of the Company on a regular basis.

This is first time that BRR is applicable to the Company and first review was done at the Board Meeting held on 22[nd] May, 2020. Going forward it will be annually reviewed by the Board and be reviewed twice by the CSR committee in a year.

b. Does the Company publish a BR or a Sustainability Report? What is the hyperlink for viewing this report? How frequently is it published?

The Company has prepared its first Business Responsibility Report (BRR). The BRR forms part of the Annual Report 201920 and is available on the Company’s website. The hyperlink is: http://www.xchanging.com/investor-relations/xsl-content

SECTION E: PRINCIPLE-WISE PERFORMANCE

PRINCIPLE 1: BUSINESSES SHOULD CONDUCT AND GOVERN THEMSELVES WITH ETHICS, TRANSPARENCY AND ACCOUNTABILITY

1. Does the policy relating to ethics, bribery and corruption cover only the Company? Yes/No. Does it extend to the group/ joint ventures/suppliers/contractors/NGOs/others?

Yes. XSL considers ethical practices as an integral part of good management and is committed to act professionally, fairly and with integrity in all its dealings. The Company has a Policy on Code of Conduct for Board Members, Senior Management Personnel and Employees of the Company, Whistle Blower Policy, Code of Conduct for Prevention of Insider Trading, Policy on Sexual Harassment which governs the conduct of the employees as well as Directors of the Company.

The Whistle Blower Policy specifically covers issues related to ethics, bribery and corruption which has helped it not only gain the tremendous confidence and trust of its stakeholders but also market leadership. The said policy is available on the website of the Company at http://www.xchanging.com/investor-relations/xsl-content .

XSL ensures compliance of ethical standards not only by its employees but also by its vendors, contractors etc. through appropriate clauses in the work contract signed with them.

2. How many stakeholder complaints have been received in the past nancial year and what percentage was satisfactorily resolved by the management? If so, provide details thereof.

Details of the stakeholder complaints received during the financial year 2019-20 and pending as on March 31, 2020 are as under

Sl. No.	Nature of Complaints	No. of complaints received during the Year	No. of complaints resolved	% of complaints resolved
1	Complaints/ queries received from customers	0	0	NA
2	Investor complaints	2	2	100
During financial year 2019-20, no ethics concerns were received from any of the stakeholders.

Xchanging Solutions Limited

Annual Report 2019-20

Business Responsibility Report

PRINCIPLE 2: BUSINESSES SHOULD PROVIDE GOODS AND SERVICES THAT ARE SAFE AND CONTRIBUTE TO SUSTAINABILITY THROUGHOUT THEIR LIFE CYCLE .

1. List upto 3 of your products or services whose design has incorporated social or environmental concerns, risks and/or opportunities

XSL is associated with the Computer programming activities and is not engaged in the business concerning design of products / services that could raise social concerns, economic risks and/or hazardous opportunities. Hence, the said principle may not be strictly applicable to XSL. However, XSL through its Business Policy is contributing positively to the socio-economic development.

2. For each such product, provide the following details in respect of resource use (energy, water, raw material etc.) per unit of product (optional):

a. Reduction during sourcing/production/ distribution achieved since the previous year throughout the value chain?
b. Reduction during usage by consumers (energy, water) has been achieved since the previous year?

The Company’s focus is to maintain the highest standards of safety and sustainability in its services offered in alignment to Company’s goals.

On account of the nature of the services provided, the major resource consumed at the Company is paper. The Company contributes towards sustainable service delivery through paperless transaction. The Company has taken a paper recycling initiative in terms of re-usage of old print outs. The Company also monitor usage of paper consumption. The Company emphasizes on integrating sustainable practices within its value chain (suppliers and customers) through acceptance of payments through Digital/online mode which in turn reduces the paper usage. Vendors are paid through NEFT/RTGS mode.

3. Does the company have procedures in place for sustainable sourcing (including transportation)?

The primary resource consumption of the Company is paper. As mentioned above, the Company monitors usage of paper consumption. The Company emphasizes on integrating sustainable practices within its value chain (suppliers and customers) through acceptance of payments through Digital/online mode which in turn reduces the paper usage. Vendors are paid through NEFT/RTGS mode.

4. Has the company taken any steps to procure goods and services from local & small producers, including communities surrounding their place of work?

The Company has its presence all over India and has a practice of purchasing goods and services required for its operations from local suppliers. The Company is progressing more towards digital transactions.

5. Does the company have a mechanism to recycle products and waste? If yes, what is the percentage of recycling of products and waste (separately as <5%, 5-10%, >10%).

Yes. The Company’s main waste products comprises of paper waste and electronic waste. The Company has taken a paper recycling initiative in terms of re-usage of old print outs. The Company also monitor usage of paper consumption. The Company has a mechanism for responsible disposal of electronic waste in accordance with applicable laws.

PRINCIPLE 3: BUSINESSES SHOULD PROMOTE THE WELL BEING OF ALL EMPLOYEES

1	Total Number of Permanent Employees	164
2	Number of Employees hired on Temporary/ Contractual/Casual Basis	NIL
3	Number of Permanent Women Employees	30
4	Permanent Employees with disabilities	NIL
5	Is there an Employee association that is recognized by management?	The Company does not have any employee association.
6 Percentage of permanent employees that are members of this recognised employee association		Not Applicable

1. Please indicate the number of complaints relating to child labour, forced labour, involuntary labour, sexual harassment in the last financial year and pending, as on the end of the financial year.

Sl. No.	Category	No. of complaints filed during the financial year	No. of complaints pending as at the end of the financialyear
1	Child Labour/Forced Labour, InvoluntaryLabour	Nil	Nil
2	Sexual Harassment	Nil	Nil
3 Discriminatory Employment Practices		Nil	Nil

Xchanging Solutions Limited

Annual Report 2019-20

Business Responsibility Report

2. What percentage of your under mentioned employees were given safety and skill up-gradation training in the last year?

XSL has always believed that its employees are its most valued resource and hence, has always ensured their all-round development through regular training & leadership programs. The Company has given access to all the employees to the DXC Group university which provides various kind of development and leadership program to the employee.

Given below are the details of training imparted during the year:

1	Permanent employees to whom traininghas been imparted	22
2	Total trainingman daysper employee	28
3	Permanent women employees to whom traininghas been imparted	4
4	Casual/Temporary/Contractual Employees to whom traininghas been imparted	NA
5	Employees with Disabilities to whom training has been imparted	NA

For XSL, safety of its employees is of paramount importance and as a good corporate citizen; it is committed to ensuring safety of all its employees at the workplace. Periodic communication and alerts are sent out to employees and awareness sessions are conducted on safety related aspects. Employees including those at branches were given periodic training on basic and advanced fire safety including evacuation drills.

PRINICIPLE 4: BUSINESSES SHOULD RESPECT THE INTERESTS OF, AND BE RESPONSIVE TOWARDS ALL STAKEHOLDERS, ESPECIALLY THOSE WHO ARE DISADVANTAGED, VULNERABLE AND MARGINALISED

1. Has the Company mapped its internal and external stakeholders?

Yes

2. Out of the above, has the Company identified the disadvantaged, vulnerable and marginalised stakeholders?

Yes, XSL has identified the disadvantaged, vulnerable and marginalised stakeholders through community visits, household visits and socio-scientific needs assessments in under-resourced areas. The Company engages with these stakeholders through structured development initiatives, undertaken through its Corporate Social Responsibility (CSR) projects.

3. Are there any special initiatives taken by the company to engage with the disadvantaged, marginalised stakeholders?

XSL as a socially responsible organization, is committed to work for the welfare of the communities around us. The community engagement interventions of the group include:

A. Education scholarship project for the lesser and underprivileged children
B. Career Counselling
C. Aftercare and awareness program for Shelter home children
D. Govt. School transformation project for holistic development
E. Slum adoption for holistic sustainable development
F. Child Resource Center for underprivileged Children
G. Skilling program for the differently-abled youths in BPO, retail and hospitality

The Company’s CSR activities focus on the disadvantaged, vulnerable and marginalised segments of society particularly children, women and the differently abled.

PRINCIPLE 5: BUSINESS SHOULD RESPECT AND PROMOTE HUMAN RIGHTS

1. Does the policy of the Corporation on human rights cover only the company or extend to the group/joint ventures/suppliers/ contractors/NGOs/others?

Respecting and understanding the Human Rights and addressing the potential human rights violation is important responsibility of any organisation. XSL has adopted several policies viz., Code of Conduct, Policy against Sexual Harassment, Whistle Blower Policy, etc., which ensures that there are no violation of human rights in its conduct.

XSL adheres to all statutes which embody the principles of human rights such as non-discrimination, prevention of child labour, prevention of sexual harassment etc. XSL is committed to a work environment in which all individuals are treated with fairness, respect and dignity. Persons not directly connected to the Company viz., an outside vendor, consultant, supplier or client are also expected to comply with principles of human rights in all respects.

2. How many stakeholder complaints have been received in the past financial year and what percent was satisfactorily resolved by the management?

During the year under review, the Company did not receive any complaint in the nature of human rights violation from any stakeholder.

Xchanging Solutions Limited

Annual Report 2019-20

Business Responsibility Report

PRINCIPLE 6: BUSINESSES SHOULD RESPECT, PROTECT, AND MAKE EFFORTS TO RESTORE THE ENVIRONMENT

1. Does the policy relate to Principle 6 cover only the company or extends to the group/joint ventures/suppliers/contractors/ NGOs/others?

The group has a dedicated Environmental Policy that serves as the guideline for developing initiatives for protecting and restoring environment. This policy is applicable across the Company and its subsidiaries for achieving excellence in environmental performance. This policy also applies to the suppliers, contractors and all other partners across the value chain for addressing the global environmental challenges.

In addition, the employees of the Company are sensitized to prevent wasteful usage of natural resources and conserve energy.

2. Does the company have strategies/ initiatives to address global environmental issues such as climate change, global warming, etc?

Yes. The Company strives towards imbibing green sustainable products, processes, policies and practices. We promote cost efficient environment-friendly measures and build awareness and consciousness of our environment among employees. The Company tries to integrate sustainable measures in the day-to-day operations by reduction of paper usage, maintenance of data and records electronically, etc. Various measures are taken to reduce the consumption of electricity by installing energy efficient equipment in our office premises.

3. Does the company identify and assess potential environmental risks?

Yes

4. Does the company have any project related to Clean Development Mechanism? If so, provide details thereof. Also, if Yes, whether any environmental compliance report is filed?

Not Applicable

5. Has the company undertaken any other initiatives on clean technology, energy efficiency, renewable energy, etc.?

XSL promotes ecological sustainability and green initiatives by use of energy efficient resources. The Company also promotes reducing the use of paper communication and encourages use of electronic means of communication which serves towards environmental protection and sustainable growth. XSL has adopted various measures as below:

Sends various notices and documents, including Annual Report, to its shareholders through electronic mode to their registered e-mail addresses.
Has requested shareholders to register their e-mail IDs to get Annual Reports and other communications through e-mail instead of opting in paper mode.
Has provided video conference facilities at most of its offices, thereby facilitating participation in meetings via video conference and avoid commuting and travel. This helps save the fuel on transport as well as time on travel.
Installation of AC controllers in air-conditioning machines in order to save energy and support the go-green initiative.
Continue installing energy efficient servers, thereby causing reduction in carbon footprint.
The Company has initiated installation of LED lights in new and upcoming branches wherever possible
E-waste is disposed off in proper way.

The above actions of the Company will contribute towards saving environment by reduction in usage of resources.

6. Are the emissions/waste generated by the company within the permissible limits given by CPCB/SPCB for the financial year being reported?

Yes

7. Number of show cause/ legal notices received from CPCB/SPCB which are pending (i.e. not resolved to satisfaction) as on end of Financial Year.

None

PRINCIPLE 7: BUSINESSES WHEN ENGAGED IN INFLUENCING PUBLIC AND REGULATORY POLICY, SHOULD DO SO IN A RESPONSIBLE MANNER

1. Is your company a member of any trade and chamber or association? If yes, name only those major ones that your business deals with:

DXC Group as a whole is a member of various industry bodies and trade associations such as NASSCOM, etc.

56 Xchanging Solutions Limited

Annual Report 2019-20

Business Responsibility Report

2. Have you advocated/lobbied through above associations for the advancement or improvement of public good? Yes/No; if yes specify the broad areas (drop box: Governance and Administration, Economic Reforms, Inclusive Development Policies, Energy Security, Water, Food Security, Sustainable Business Principles, Others)

PRINCIPLE 8: BUSINESSES SHOULD SUPPORT INCLUSIVE GROWTH AND EQUITABLE DEVELOPMENT.

1. Does the company have specified programmes/initiatives/projects in pursuit of the policy related to Principle 8? If yes, details thereof.

Yes. XSL and the group undertakes several projects that are focused on social development. In Financial Year 2019-20, the Company promoted inclusive growth by focusing primarily on three social sector areas, namely:

Education

Career Counselling
Community Resource Center project for the underprivileged children
Education scholarship project for the lesser and underprivileged children
Aftercare and awareness program for the shelter home children
Govt. School transformation project for holistic development
Higher Education project for the disabled and the underprivileged students to continue their education
Networked learning centers technology based hub and spoke model

Skilling

Skilling program for the differently-abled youths in BPO, retail and hospitality.
Career development centers to train youth in IT/Non-IT industry
Skilling for women at Indore villages

People and wellness

Conducting blood donation camps
Mobile health units for gynecology checkup of women at rural
Mobile health units for general health checkup at rural
Slum adoption project for holistic sustainable development
Transitional shelter home support for marginalized families

Environment

Providing flood relief kit to the flood-affected families
Lake restoration project
Rain Water Harvesting and awareness program

2. Are the programmes/ projects undertaken through in-house team/ own foundation/ external NGO/ government structures/ any other organisation?

XSL has undertaken its social welfare activities for financial year 2019-20 through external NGO U&I Trust as a CSR initiative.

3. Has the company done any impact assessment of its initiative?

Yes. we have a CSR management committee which monitor and assess the impact of all the CSR spends

4. What is the company’s direct contribution to community development projects- Amount in INR and the details of the projects undertaken?

In financial year 2019-20, XSL had a CSR Budget of Rs.20.70 Lacs and has spent the entire amount on After School education of community children in Bengaluru City.

For more details, please refer to Annexure V of Boards’ Report in this Annual Report.

5. Has the company taken steps to ensure that this community development initiative is successfully adopted by the community?

Yes. Projects are designed based on the assessment of community needs. The Initiatives taken by XSL are regularly monitored through follow-up with the partnering organisations, site visits to monitor the programme, and progress reports for the activities undertaken by the project. Regular interaction with the partnering organisation and the community has helped in ensuring that best practices are adopted and also addressing any challenges for the successful implementation of such initiatives.

Xchanging Solutions Limited

Annual Report 2019-20

Business Responsibility Report

PRINCIPLE 9: BUSINESSES SHOULD ENGAGE WITH AND PROVIDE VALUE TO THEIR CUSTOMERS AND CONSUMERS IN A RESPONSIBLE MANNER

1. What percentage of customer complaints/consumer cases are pending as at the end of the financial year? None

2. Does the company display product information on the product label, over and above what is mandated as per local laws? Yes/No/N.A./Remarks

Not applicable

3. Is there any case filed by any stakeholder against the company regarding unfair trade practices, irresponsible advertising and/or anti-competitive behaviour during the last five years and pending as on end of financial year? None

4. Did the company carry out any consumer survey/ consumer satisfaction trends?

The Company has not carried out any formal consumer survey to map consumer satisfaction.

Xchanging Solutions Limited

Annual Report 2019-20

INDEPENDENT AUDITOR’S REPORT

To the Members of Xchanging Solutions Limited

Report on the Audit of the Standalone Financial Statements

Opinion

We have audited the accompanying standalone financial statements of Xchanging Solutions Limited (“the Company”), which comprise the Balance Sheet as at March 31, 2020, and the Statement of Profit and Loss (including Other Comprehensive Income), the Statement of Cash Flows and the Statement of Changes in Equity for the year then ended, and 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 standalone financial statements give the information required by the Companies Act, 2013 (“the Act”) in the manner so required and give a true and fair view in conformity with the Indian Accounting Standards prescribed under Section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015, as amended, (“Ind AS”) and other accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 2020, and its profit, total comprehensive income, its cash flows and the changes in equity for the year ended on that date.

Basis for Opinion

We conducted our audit of the standalone financial statements in accordance with the Standards on Auditing specified under Section 143(10) of the Act (SAs). Our responsibilities under those Standards are further described in the Auditor’s Responsibility for the Audit of the Standalone Financial Statements Section of our report. We are independent of the Company in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India (ICAI) together with the ethical requirements that are relevant to our audit of the standalone financial statements under the provisions of the Act and the Rules made thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the ICAI’s Code of Ethics. We believe that the audit evidence obtained by us is sufficient and appropriate to provide a basis for our audit opinion on the standalone financial statements.

Emphasis of Matter

We draw attention to Note 3.1 (v) of the standalone financial statements which describes the management assessment of the impact of the outbreak of Covid-19 on revenue, trade receivables including unbilled receivables and investments. The management believes that no adjustment is required in the financial statement as it does not impact the current financial year. However, in view of highly uncertain economic environment and its likely effect on future service revenue due to Covid-19, a definitive assessment of the impact on the subsequent periods is dependent upon circumstances as they evolve. Our opinion is not modified in respect of this matter.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the standalone financial statements of the current period. These matters were addressed in the context of our audit of the standalone financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. We have determined the matters described below to be the key audit matters to be communicated in our report.

Sr. No.	Key Audit Matter	Auditor’s Response
1.	Assessment of impairment on investment in subsidiary Asdescribed in Note 7 of the Standalone Financial statements, the carrying amount of investment in US subsidiary recorded is Rs. 11,224 lakhs. The Company recognized impairment loss of Rs. 6,045 lakhs as at March 31, 2020. The Company identifies whether an impairment indication occurs every year and performs impairment test over investment in subsidiary and compares the carrying amount with the greater of the calculated value-in-use and fair value used to determine whether it is impaired. In estimating the value-in-use, management’s judgment is involved in determining the key assumptions such as sales growth rate, discount rate and terminal growth rate that have a significant impact on the estimated value-in-use. Considering significant degree of judgment in estimating value-in-use and likelihood of management bias, we identified assessment of impairment on investment in subsidiary as a key audit matter.	Principal Audit Procedures We performed the following procedures: • Evaluated the design of internal controls relating to development of key assumptions used in value in use model and tested operating effectiveness of these controls. • gaining an understanding of and assessing the impairment testing process implemented by Management. • verifying the appropriateness of the model used to calculate value in use as per discounted cash flow method. • analysing the consistency of cash flow forecasts with Management’s latest estimates presented to the Board of Directors as part of the budget process. • comparing the cash flow forecasts for financial years 2021 to 2025 with the business plans used for prior year impairment testing. • assessing the methods used to calculate the discount rate applied to the estimated cash flows expected, as well as the terminal growth rate used to project the latest. We also involved our internal valuation specialist in evaluating management’s assessment.

Xchanging Solutions Limited

Annual Report 2019-20

Independent Auditor’s Report

Sr. No. Key Audit Matter Auditor’s Response • prior year expected cash flows to infinity; comparing these rates with market data and external sources and recalculating the rates based on our own data sources.
• assessing sensitivity testing of value in use to a change in the main assumptions used by Management.
2. Evaluation of uncertain tax positions Principal Audit Procedures The Company has material uncertain tax positions • Evaluated the design of internal controls relating to the including matters under dispute which involves uncertain tax positions and tested the operative significant judgment due to existence of multiple effectiveness of these controls. uncertain tax positions leading to disputes / litigations • Obtained details of completed tax assessments and
and there are interpretation of various rules and law. It demands for the year ended March 31, 2020 from the
also involves consideration of on-going disputes and management.
disclosures of related contingencies to determine the • We involved our internal experts to challenge the
possible outcome of these disputes. management’s underlying assumptions in estimating the
Refer Notes 3.1 (ii) and 20 to the Standalone financial tax provision and the possible outcome of the disputes.
statements. • Our internal experts also considered the legal precedence and other rulings in evaluating management’s position on these uncertain tax positions. Additionally, we considered the effect of new information in respect of uncertain tax positions as at April 1, 2019 to evaluate whether any change was required to management’s position on these uncertainties.

Information Other than the Financial Statements and Auditor’s Report Thereon

The Company’s Board of Directors is responsible for the preparation of the other information. The other information comprises the information included in the Boards’ Report including Annexures to Board’s Report, Management Discussion and Analysis Report and Corporate Governance Report including annexures thereon but does not include the standalone financial statements and our auditor’s report thereon.
Our opinion on the standalone financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.
In connection with our audit of the standalone financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the standalone financial statements or our knowledge obtained during the course of our audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

Management’s Responsibility for the Standalone Financial Statements

The Company’s Board of Directors is responsible for the matters stated in Section 134(5) of the Act with respect to the preparation of these standalone financial statements that give a true and fair view of the financial position, financial performance including other comprehensive income, cash flows and changes in equity of the Company in accordance with the Ind AS 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 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 standalone financial statement that give a true and fair view and are free from material misstatement, whether due to fraud or error.

In preparing the standalone 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.

Those Board of Directors are also responsible for overseeing the Company’s financial reporting process.

Auditor’s Responsibility for the Audit of the Standalone Financial Statements

Our objectives are to obtain reasonable assurance about whether the standalone financial statements as a whole are free from

Xchanging Solutions Limited

Annual Report 2019-20

Independent Auditor’s Report

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 standalone 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 standalone 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. Under Section 143(3) (i) of the Act, we are also responsible for expressing our opinion on whether the Company has adequate internal financial controls system in place and the operating effectiveness of such controls.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the 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 auditor’s report to the related disclosures in the standalone financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s 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 standalone financial statements, including the disclosures, and whether the standalone financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

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

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control 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.

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the standalone financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

Report on Other Legal and Regulatory Requirements

As required by Section 143(3) of the Act, based on our audit we report that:
a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit.
b) In our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books.
c) The Balance Sheet, the Statement of Profit and Loss including Other Comprehensive Income, the Statement of Cash Flows and Statement of Changes in Equity dealt with by this Report are in agreement with the books of account.
d) In our opinion, the aforesaid standalone financial statements comply with the Ind AS specified under Section 133 of the Act.
e) On the basis of the written representations received from the directors as on March 31, 2020 taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2020 from being appointed as a director in terms of Section 164(2) of the Act.

Xchanging Solutions Limited

Annual Report 2019-20

Independent Auditor’s Report

f) With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate Report in “Annexure A”.. Our report expresses an unmodified opinion on the adequacy and operating effectiveness of the Company’s internal financial controls over financial reporting.
g) With respect to the other matters to be included in the Auditor’s Report in accordance with the requirements of Section 197(16) of the Act, as amended,

In our opinion and to the best of our information and according to the explanations given to us, the remuneration paid by the Company to its directors during the year is in accordance with the provisions of Section 197 of the Act.

h) With respect to the other matters to be included in the Auditor’s Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, as amended in our opinion and to the best of our information and according to the explanations given to us:
- i. The Company has disclosed the impact of pending litigations on its financial position in its standalone financial statements;
- ii. The Company did not have any material foreseeable losses on long-term contracts including derivative contracts.
- iii. There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Company.
As required by the Companies (Auditor’s Report) Order, 2016 (“the Order”) issued by the Central Government in terms of Section 143(11) of the Act, we give in “Annexure B” a statement on the matters specified in paragraphs 3 and 4 of the Order.

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

Bhavani Balasubramanian

(Partner) (Membership No. 22156) UDIN: 20022156AAAAAM1467

Chennai, May 22, 2020

Xchanging Solutions Limited

Annual Report 2019-20

Independent Auditor’s Report

ANNEXURE “A” TO THE INDEPENDENT AUDITOR’S REPORT

(Referred to in paragraph 1(f) under ‘Report on Other Legal and Regulatory Requirements’ Section of our report of even date)

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

We have audited the internal financial controls over financial reporting of Xchanging Solutions Limited (“the Company”) as of March 31, 2020 in conjunction with our audit of the standalone Ind AS financial statements of the Company for the year ended on that date.

Management’s Responsibility for Internal Financial Controls

The Company’s management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting issued by the Institute of Chartered Accountants of India. These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to company’s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013.

Auditor’s Responsibility

Our responsibility is to express an opinion on the Company’s internal financial controls over financial reporting of the Company based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the “Guidance Note”) issued by the Institute of Chartered Accountants of India and the Standards on Auditing prescribed under Section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Company’s internal financial controls system over financial reporting.

Meaning of Internal Financial Controls over Financial Reporting

A company’s internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal financial control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorisations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorised acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls over Financial Reporting

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

Opinion

In our opinion, to the best of our information and according to the explanations given to us the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting

Xchanging Solutions Limited

Annual Report 2019-20

Independent Auditor’s Report

were operating effectively as at March 31, 2020, based on the criteria for internal financial control over financial reporting established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India.

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

Chennai, May 22, 2020

Bhavani Balasubramanian (Partner) (Membership No. 22156) UDIN: 20022156AAAAAM1467

ANNEXURE “B” TO THE INDEPENDENT AUDITORS’ REPORT

(Referred to in paragraph 2 under ‘Report on Other Legal and Regulatory Requirements’ Section of our report of even date)

(i) In respect of property, plant and equipment :
(a) The Company has maintained proper records showing full particulars, including quantitative details and situation of property, plant and equipment.
(b) The Company has a program of verification of property, plant and equipment to cover all the items in a phased manner over a period of 3 years which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. Pursuant to the program, all property, plant and equipment were physically verified by the Management during the year. According to the information and explanations given to us, no material discrepancies were noticed on such verification.
(c) The Company does not have any immovable properties of freehold land and building. In respect of immovable properties of building that have been taken on lease and disclosed as property, plant and equipment in the standalone financial statements, the lease agreements are in the name of the Company.
(ii) The Company does not have any inventory and hence reporting under clause 3 (ii) of the Order is not applicable.
(iii) In our opinion and according to the information and explanations given to us, the Company has not granted any loans, secured or unsecured, to companies, firms, Limited Liability Partnerships or other parties covered in the register maintained under Section 189 of the Companies Act, 2013.
(iv) The Company has not granted any loans, made investments or provided guarantees and hence reporting under clause 3 (iv) of the Order is not applicable.
(v) The Company has not accepted deposits during the year and does not have any unclaimed deposits as at March 31, 2020 and therefore, the provisions of the clause 3 (v) of the Order is not applicable.
(vi) The maintenance of cost records has not been specified by the Central Government under Section 148(1) of the Companies Act, 2013 for the business activities carried out by the Company. Thus reporting under clause 3 (vi) of the Order is not applicable.
(vii) According to the information and explanations given to us in respect of statutory dues:
(a) The Company has been generally regular in depositing undisputed statutory dues including Provident Fund, Employees’ State Insurance, Income-tax, Goods and Services Tax, cess and other material statutory dues applicable to it with the appropriate authorities.
(b) There were no undisputed amounts payable in respect of Provident Fund, Employees’ State Insurance, Income-tax, Goods and Services Tax, cess and other material statutory dues in arrears as at March 31, 2020 for a period of more than six months from the date they became payable.
(c) Details of dues of Income Tax which have not been deposited as on March 31, 2020 on account of disputes are given below:

Nature of Statute	Nature of dues	Forum where dispute is pending	Period to which amount relates	Amount (Rs. In lakhs)
Income tax Act, 1961	Income Tax	Income Tax Appellate Tribunal	Financial year 2009-10	6
			Financialyear 2012-13	46(*)
			Financialyear 2013-14	493(**)
			Financial year 2014-15	606

(*) Net of Rs. 39 lakhs paid under protest
(**) Net of Rs. 123 lakhs paid under protest

64 Xchanging Solutions Limited

Annual Report 2019-20

Independent Auditor’s Report

(viii) In our opinion and according to the information and explanations given to us, the Company has not defaulted in the repayment of loans or borrowings to banks. The Company has not issued any debentures.
(ix) The Company has not raised moneys by way of initial public offer or further public offer (including debt instruments) or term loans and hence reporting under clause 3 (ix) of the Order is not applicable.
(x) To the best of our knowledge and according to the information and explanations given to us, no fraud by the Company or no material fraud on the Company by its officers or employees has been noticed or reported during the year.
(xi) In our opinion and according to the information and explanations given to us, the Company has paid / provided managerial remuneration in accordance with the requisite approvals mandated by the provisions of Section 197 read with Schedule V to the Companies Act, 2013.
(xii) The Company is not a Nidhi Company and hence reporting under clause 3 (xii) of the Order is not applicable.
(xiii) In our opinion and according to the information and explanations given to us the Company is in compliance with Section 177 and 188 of the Companies Act, 2013, where applicable, for all transactions with the related parties and the details of related party transactions have been disclosed in the standalone financial statements as required by the applicable accounting standards.
(xiv) During the year the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures and hence reporting under clause 3 (xiv) of the Order is not applicable.
(xv) In our opinion and according to the information and explanations given to us, during the year the Company has not entered into any non-cash transactions with its directors or persons connected to its directors and hence provisions of Section 192 of the Companies Act, 2013 are not applicable.
(xvi) The Company is not required to be registered under Section 45-IA of the Reserve Bank of India Act, 1934.

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

Bhavani Balasubramanian (Partner) (Membership No. 22156) UDIN: 20022156AAAAAM1467

Chennai, May 22, 2020

Xchanging Solutions Limited

Annual Report 2019-20

BALANCE SHEET

XCHANGING SOLUTIONS LIMITED BALANCE SHEET AS AT MARCH 31, 2020

XCHANGING SOLUTIONS LIMITED BALANCE SHEET AS AT MARCH 31, 2020	XCHANGING SOLUTIONS LIMITED BALANCE SHEET AS AT MARCH 31, 2020
(All amounts in Rs. Lakhs, unless otherwise stated)
Note	As at As at
	Mar 31, 2020 Mar 31, 2019
ASSETS Non-current assets Property, plant and equipment 4 Right of use assets 5 Other intangible assets 6 Financial assets Investments 7 Loans 8 Deferred tax assets (net) 10 Other non-current assets 11 Total non-current assets Current assets Financial assets Trade receivables 12 Cash and cash equivalents 13 Bank balances other than above 14 Loans 8 Other financial assets 9 Other current assets 11 Total current assets Total assets EQUITY AND LIABILITIES Equity Equity share capital 15 Other equity 16 Total equity Liabilities Non-current liabilities Financial liabilities Lease liabilities 34 Provisions 17 Total non-current liabilities	46 24 176 - 3 5 5,186 5,186 218 1,618 731 873 1,730 1,658 ------------------------------ ------------------------------ 8,090 9,364 ------------------------------ ------------------------------ 815 890 16,515 14,297 17 135 1,400 250 380 424 162 255 ------------------------------ ------------------------------ 19,289 16,251 ------------------------------ ------------------------------ 27,379 25,615 ========================== ========================== 11,140 11,140 11,571 9,299 ------------------------------ ------------------------------ 22,711 20,439 ========================== ========================== 118 - 333 303 ------------------------------ ------------------------------ 451 303 ------------------------------ ------------------------------

66 Xchanging Solutions Limited

Annual Report 2019-20

Balance sheet

(All amounts in Rs. Lakhs, unless otherwise stated)	(All amounts in Rs. Lakhs, unless otherwise stated)
Note	As at As at
	Mar 31, 2020 Mar 31, 2019
Current liabilities Financial liabilities Lease liabilities 34 Trade payables Total outstanding dues of micro enterprises and small enterprises 18 Total outstanding dues of creditors other than micro enterprises and small enterprises 18 Other financial liabilities 19 Provisions 17 Current tax liabilities (net) 20 Other current liabilities 21 Total current liabilities Total liabilities Total equity and liabilities	66 - - 1 604 832 31 10 90 77 3,267 3,647 159 306 ------------------------------ ------------------------------ 4,217 4,873 ------------------------------ ------------------------------ 4,668 5,176 ------------------------------ ------------------------------ 27,379 25,615 ========================== ==========================

See accompanying notes to the financial statements

In terms of our report attached.

For Deloitte Haskins & Sells LLP Chartered Accountants

For and on behalf of the Board of Directors

Bhavani Balasubramanian Partner

Place: Chennai Date: May 22, 2020

Chandrasekhara Rao Boddoju Managing Director and Chief Executive Officer DIN : 08185777

Place: Hyderabad Date: May 22, 2020

Shrenik Kumar Champalal Whole Time Director and Chief Financial Officer DIN : 08099410 Place: Bengaluru Date: May 22, 2020

Aruna Mohandoss

Company Secretary Place: Chennai Date: May 22, 2020

Xchanging Solutions Limited

Annual Report 2019-20

STATEMENT OF PROFIT AND LOSS

XCHANGING SOLUTIONS LIMITED STATEMENT OF PROFIT AND LOSS FOR THE YEAR ENDED MARCH 31, 2020

XCHANGING SOLUTIONS LIMITED STATEMENT OF PROFIT AND LOSS FOR THE YEAR ENDED MARCH 31, 2020	XCHANGING SOLUTIONS LIMITED STATEMENT OF PROFIT AND LOSS FOR THE YEAR ENDED MARCH 31, 2020
(All amounts in Rs. Lakhs, unless otherwise stated)
Note	For the year For the year ended ended
	Mar 31, 2020 Mar 31, 2019
Revenue from operations 22 Other income 23 Total Income Expenses Employee benefits expense 24 Finance costs 25 Depreciation and amortisation expense 26 Other expenses 27 Total expenses Profit before tax Tax expense/ (benefit) Current tax 28 Current tax- for the earlier years Deferred tax 28 Total tax expense Profit for the period Other comprehensive income (i) Items that will not be reclassified to profit or loss - Remeasurements of the defined benefit plans (ii) Income tax relating to items that will not be reclassified to profit or loss Total other comprehensive income Total Comprehensive Income for the period Earnings per Equity Share (of Rs.10 each) 30 Basic- In Rs Diluted- In Rs	4,270 5,203 1,568 1,202 ------------------------------ ------------------------------ 5,838 6,405 ------------------------------ ------------------------------ 2,090 2,584 11 1 77 37 1,027 1,352 ------------------------------ ------------------------------ 3,205 3,974 ------------------------------ ------------------------------ 2,633 2,431 ------------------------------ ------------------------------ 802 737 (579) 15 141 32 ------------------------------ ------------------------------ 364 784 ------------------------------ ------------------------------ 2,269 1,647 ------------------------------ ------------------------------ 4 35 (1) (10) ------------------------------ ------------------------------ 3 25 ------------------------------ ------------------------------ 2,272 1,672 ------------------------------ ------------------------------ 2.04 1.48 2.04 1.48

See accompanying notes to the financial statements

In terms of our report attached.

For Deloitte Haskins & Sells LLP Chartered Accountants

Bhavani Balasubramanian Partner

Place: Chennai Date: May 22, 2020

For and on behalf of the Board of Directors

Chandrasekhara Rao Boddoju Shrenik Kumar Champalal Managing Director and Whole Time Director and Chief Executive Officer Chief Financial Officer DIN : 08185777 DIN : 08099410 Place: Hyderabad Place: Bengaluru Date: May 22, 2020 Date: May 22, 2020

Place: Hyderabad Date: May 22, 2020

Aruna Mohandoss Company Secretary Place: Chennai Date: May 22, 2020

68 Xchanging Solutions Limited

Annual Report 2019-20

XCHANGING SOLUTIONS LIMITED

STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED MARCH 31, 2020

(All amounts in Rs. Lakhs, unless otherwise stated)

a EQUITY SHARE CAPITAL

Balance at April 1, 2018

Balance at April 1, 2018 11,140 Changes in equity share capital during the year - ------------------------------ Balance at March 31, 2019 11,140 -----------------------------Changes in equity share capital during the year - ------------------------------ Balance at March 31, 2020 11,140

b OTHER EQUITY

OTHER EQUITY
Particulars	Reserves & Surplus			Total other equity
	Capital reserve	Security premium	Retained earnings
Balance as of April 1, 2018	57	8,417	(847)	7,627
Profit for the year Other comprehensive income for theyear, net of tax	- -	- -	1,647 25	1,647 25
Balance as of March 31, 2019	57	8,417	825	9,299

Particulars	Reserves & Surplus			Total other equity
	Capital reserve	Security premium	Retained earnings
Balance as of April 1, 2019	57	8,417	825	9,299
Profit for the year Other comprehensive income for theyear, net of tax	- -	- -	2,269 3	2,269 3
Balance as of March 31, 2020	57	8,417	3,097	11,571

See accompanying notes to the financial statements

In terms of our report attached.

For Deloitte Haskins & Sells LLP Chartered Accountants

For and on behalf of the Board of Directors

Bhavani Balasubramanian

Partner

Place: Chennai Date: May 22, 2020

Chandrasekhara Rao Boddoju

Managing Director and Chief Executive Officer DIN : 08185777

Place: Hyderabad Date: May 22, 2020

Shrenik Kumar Champalal

Whole Time Director and Chief Financial Officer DIN : 08099410

Place: Bengaluru Date: May 22, 2020

Aruna Mohandoss

Company Secretary Place: Chennai Date: May 22, 2020

Xchanging Solutions Limited

Annual Report 2019-20

CASH FLOW STATEMENT

XCHANGING SOLUTIONS LIMITED STATEMENT OF CASH FLOWS FOR THE YEAR ENDED MARCH 31, 2020

XCHANGING SOLUTIONS LIMITED STATEMENT OF CASH FLOWS FOR THE YEAR ENDED MARCH 31, 2020	XCHANGING SOLUTIONS LIMITED STATEMENT OF CASH FLOWS FOR THE YEAR ENDED MARCH 31, 2020
(All amounts in Rs. Lakhs, unless otherwise stated)
	For the year For the year ended ended
	Mar 31, 2020 Mar 31, 2019
A. CASH FLOW FROM OPERATING ACTIVITIES Profit before tax 2,633 2,431 Adjustments for: Depreciation and amortisation expense 77 37 Profit on sale of property, plant and equipment (2) (8) Foreign exchange loss - unrealised 27 (56) Interest income (1,031) (292) Dividend income (395) (542) Provision for doubtful advances 13 78 Provision for doubtful debts - 48 Liabilities no longer required written back - (28) Other provisions no longer required written back (115) (284) Finance cost including lease liability (Refer note 34) 11 1 Other non cash adjustments 3 25 ------------------------------ ------------------------------ Operating profit before working capital changes 1,221 1,410 Changes in working capital: Adjustments for (increase) / decrease in operating assets: Trade receivables 56 304 Other current assets 93 (58) Loans & other financial assets and other assets (29) 21 Adjustments for increase / (decrease) in operating liabilities: Trade payables (237) (578) Other financial liabilities and other liabilities (14) 338 Provisions 43 (46) ------------------------------ ------------------------------ Cash generated from operations 1,133 1,391 Taxes paid (net of refunds) (602) (526) ------------------------------ ------------------------------ Net cash generated from operating activities (A) 531 865 ------------------------------ ------------------------------ B. CASH FLOW FROM INVESTING ACTIVITIES Purchase of property, plant and equipment (38) (22) Proceeds from sale of property, plant and equipment 2 8 Dividend income 395 542 Proceeds from loans 250 - Deposits with banks with maturity period more than 3 months but less than 12 months 118 7 Deposits with banks with maturity period more than 12 months - 16 Interest received 1,019 283 ------------------------------ ------------------------------ Net cash generated from investing activities (B) 1,746 834 ------------------------------ ------------------------------

70 Xchanging Solutions Limited

Annual Report 2019-20

Cash Flow Statement

(All amounts in Rs. Lakhs, unless otherwise stated)	(All amounts in Rs. Lakhs, unless otherwise stated)
	For the year For the year ended ended
	Mar 31, 2020 Mar 31, 2019
C. CASH FLOW FROM FINANCING ACTIVITIES Repayment from non-current borrowings Payment of lease liabilities Finance cost including lease liability (Refer note 34) Net cash used in financing activities (C) Net increase in cash and cash equivalents (A + B + C) Cash and cash equivalents at the beginning of the year Cash and cash equivalents at the end of the year Cash on hand Balances with banks: In current accounts Funds in transit Demand deposits (less than 3 months maturity) Effect of exchange differences on balances with banks in foreign currency Net cash and cash equivalents included in note 13 Cash and cash equivalents	(3) (8) (45) - (11) (1) ------------------------------ ------------------------------ (59) (9) ------------------------------ ------------------------------ 2,218 1,690 14,297 12,607 ------------------------------ ------------------------------ 16,515 14,297 ------------------------------ ------------------------------ - - 468 337 133 - 15,930 13,941 (16) 19 ------------------------------ ------------------------------ 16,515 14,297 ------------------------------ ------------------------------ 16,515 14,297 ------------------------------ ------------------------------

Notes:

(1) Figures in brackets indicate cash outflow.

See accompanying notes to the financial statements

In terms of our report attached.

For Deloitte Haskins & Sells LLP Chartered Accountants

For and on behalf of the Board of Directors

Bhavani Balasubramanian Partner

Place: Chennai Date: May 22, 2020

Chandrasekhara Rao Boddoju Managing Director and Chief Executive Officer DIN : 08185777

Place: Hyderabad Date: May 22, 2020

Shrenik Kumar Champalal Whole Time Director and Chief Financial Officer DIN : 08099410 Place: Bengaluru Date: May 22, 2020

Aruna Mohandoss Company Secretary Place: Chennai Date: May 22, 2020

Xchanging Solutions Limited

Annual Report 2019-20

NOTES FORMING PART OF THE FINANCIAL STATEMENTS

XCHANGING SOLUTIONS LIMITED

Notes forming part of the financial statements

(All amounts in Rs. Lakhs, unless otherwise stated)

1. General Information

Xchanging Solutions Limited (‘the Company’), incorporated on February 1, 2002, is an information technology (IT) services provider with operations in India and an international presence established through subsidiaries in USA, Singapore and the UK.

Xchanging Technology Services India Private Limited, (“XTSIPL”) sold 15.80% of its holding in the Company constituting 17,599,461 equity shares (15,839,515 Equity Shares sold on June 10, 2019 and 1,759,946 Equity Shares sold on June 11, 2019) of the Company through Offer for Sale during the year. As a result XTSIPL’s holding in the Company has reduced to 19.16%. Also refer note 40.

2. Significant Accounting Policies

2.1 Basis of preparation and presentation

These financial statements have been prepared in accordance with Indian Accounting Standards (Ind AS) notified under the Companies (Indian Accounting Standards) Rules, 2015 and relevant amendment rules issued thereafter under the historical cost convention on the accrual basis except for certain financial instruments which are measured at fair values at the end of each reporting period as explained in the accounting policies below.

Historical cost is generally based on the fair value of the consideration given in exchange for goods and services.

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date; regardless of whether that price is directly observable or estimated using another valuation technique. In estimating the fair value of an asset or a liability, the Company takes into account the characteristics of the asset or liability if market participants would take those characteristics into account when pricing the asset or liability at the measurement date. Fair value for measurement and/or disclosure purposes in these financial statements is determined on such a basis, except for share-bases payment transactions that are within the scope of lnd AS 102, leasing transactions that are within the scope of Ind AS 17, and measurements that have some similarities to fair value but are not fair value, such as net realisable value in Ind AS 2 or value in use in Ind AS 36.

In addition, for financial reporting purposes, fair value measurements are categorised into Level 1, 2 or 3 based on the degree to which the inputs to the fair value measurements are observable and the significance of the inputs to the fair value measurement in its entirety, which are described as follows:

Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date;
Level 2 inputs are inputs, other than quoted prices included within Level 1, that are observable for the asset or liability, either directly or indirectly; and
Level 3 inputs are unobservable inputs for the asset or liability.

The principal accounting policies are set out below:

2.2 Revenue recognition

Revenue is recognised net of Goods and Services Tax (GST) to the extent that it is probable that economic benefit will flow to the Company and that revenue can be reliably measured. Revenue is recognised upon transfer of control of promised products or services to customers in an amount that reflects the consideration we expect to receive in exchange for those products or services. Arrangements with customers for software related services are either on a fixed-price or on a time-and-material basis.

(i) Revenue on time-and-material contracts are recognised as the related services are performed and revenue from the end of the last invoicing to the reporting date is recognised as unbilled revenue. Revenue from fixed-price where the performance obligations are satisfied over time and where there is no uncertainty as to measurement or collectability of consideration, is recognised 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. Efforts or costs expended have been used to measure progress towards completion as there is a direct relationship between input and productivity. Maintenance revenue is recognised ratably over the term of the underlying maintenance arrangement.
(ii) In arrangements for software development and related services and maintenance services, the Company has applied the guidance in Ind AS 115, Revenue from contract with customer, by applying the revenue recognition criteria for each distinct performance obligation. The arrangements with customers generally meet the criteria for considering software development and related services as distinct performance obligations. For allocating the transaction price, the Company has measured the revenue in respect of each performance obligation of a contract at its relative standalone

72 Xchanging Solutions Limited

Annual Report 2019-20

Notes forming part of the Financial Statements

(All amounts in Rs. Lakhs, unless otherwise stated)

selling price. The price that is regularly charged for an item when sold separately is the best evidence of its standalone selling price. In cases where the company is unable to determine the standalone selling price, the company uses the expected cost plus margin approach in estimating the standalone selling price. For software development and related services, the performance obligations are satisfied as and when the services are rendered since the customer generally obtains control of the work as it progresses.

(iii) Contract modifications are accounted for when additions, deletions or changes are approved either to the contract scope or contract price. The accounting for modifications of contracts involves assessing whether the services added to an existing contract are distinct and whether the pricing is at the standalone selling price. Services added that are not distinct are accounted for on a cumulative catch up basis, while those that are distinct are accounted for prospectively, either as a separate contract, if the additional services are priced at the standalone selling price, or as a termination of the existing contract and creation of a new contract if not priced at the standalone selling price.
(iv) Revenue from licenses where the customer obtains a “right to use” the licenses is recognised at the time the license is made available to the customer. Revenue from licenses where the customer obtains a “right to access” is recognised over the access period. Arrangements to deliver software products generally have three elements: license, implementation and Annual Maintenance Contracts (AMC). The company has applied the principles under Ind AS 115 to account for revenues from these performance obligations. When implementation services are provided in conjunction with the licensing arrangement and the license and implementation 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. In the absence of standalone selling price for implementation, the performance obligation is estimated using the expected cost plus margin approach. Where the license is required to be substantially customized as part of the implementation service the entire arrangement fee for license and implementation is considered to be a single performance obligation and the revenue is recognised using the percentageof-completion method as the implementation is performed. Revenue from support and other services arising due to the sale of software products is recognised as the performance obligations are satisfied. AMC revenue is recognised ratably over the period in which the services are rendered.
(v) Provision for estimated losses, if any, on incomplete contracts are recorded in the period in which such losses become probable based on the current contract estimates.
(vi) Deferred and unearned revenues represent the estimated unearned portion of fees derived from certain fixed-rate service agreements. Unearned revenues for fixed fee contracts are recognised on a pro-rata basis over the term of the underlying service contracts, which are generally one year.
(vii) Unbilled revenue represents costs and earnings in excess of billings as at the balance sheet date.

2.3 Other Income

Interest income from a financial asset is recognised when it is probable that the economic benefits will flow to the Company and the amount of income can be measured reliably. Interest income is accounted on accrual basis. Dividend income is accounted for when the right to receive it is established.

2.4 Leases

As a lessee:

The Company’s lease asset classes primarily consist of leases for buildings. The Company assesses whether a contract contains a lease, at inception of a contract. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. To assess whether a contract conveys the right to control the use of an identified asset, the Company assesses whether: (i) the contract involves the use of an identified asset (ii) the Company has substantially all of the economic benefits from use of the asset through the period of the lease and (iii) the Company has the right to direct the use of the asset.

At the date of commencement of the lease, the Company recognizes a right-of-use asset (“ROU”) and a corresponding lease liability for all lease arrangements in which it is a lessee, except for leases with a term of twelve months or less (short-term leases) and low value leases. For these short-term and low value leases, the Company recognizes the lease payments as an operating expense on a straight-line basis over the term of the lease.

Certain lease arrangements includes the options to extend or terminate the lease before the end of the lease term. ROU assets and lease liabilities includes these options when it is reasonably certain that they will be exercised. The right-of-use assets are initially recognized at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or prior to the commencement date of the lease plus any initial direct costs less any lease incentives. They are subsequently measured at cost less accumulated depreciation and impairment losses.Right-of-use assets are depreciated from the commencement date on a straight-line basis over the shorter of the lease term and useful life of the underlying asset.

Xchanging Solutions Limited

Annual Report 2019-20

Notes forming part of the Financial Statements

(All amounts in Rs. Lakhs, unless otherwise stated)

Right of use assets are evaluated for recoverability whenever events or changes in circumstances indicate that their carrying amounts may not be recoverable. For the purpose of impairment testing, the recoverable amount (i.e. the higher of the fair value less cost to sell and the value-in-use) is determined on an individual asset basis unless the asset does not generate cash flows that are largely independent of those from other assets. In such cases, the recoverable amount is determined for the Cash Generating Unit (CGU) to which the asset belongs.The lease liability is initially measured at amortized cost at the present value of the future lease payments.

The lease payments are discounted using the interest rate implicit in the lease or, if not readily determinable, using the incremental borrowing rates in the country of domicile of these leases. Lease liabilities are remeasured with a corresponding adjustment to the related right of use asset if the Company changes its assessment if whether it will exercise an extension or a termination option.

Lease liability and ROU asset have been separately presented in the Balance Sheet and lease payments have been classified as financing cash flows.

In the comparative period, lease payments and receipts under operating leases are recognised as an expense and income respectively, on a straight line basis in the statement of profit and loss over the lease term except where the lease payments are structured to increase in line with expected general inflation.

Transition to Ind AS 116

Effective April 1, 2019, the Company adopted Ind AS 116 “Leases”, applied to all lease contracts existing on April 1, 2019 using the Simplified approach and accordingly, comparatives for the year ended March 31, 2019 have not been retrospectively adjusted. The adoption of the new standard resulted in recognition of Right-of-Use (ROU) of Rs. 64 and a lease liability of Rs. 64. The effect of this adoption is insignificant on the profit for the period and earnings per share.

2.5 Foreign currencies

(i) Functional and presentation currency

The functional currency of the Company is the Indian rupee.

(ii) Initial recognition:

On initial recognition, all foreign currency transactions are recorded by applying to the foreign currency amount the exchange rate between the reporting currency and the foreign currency at the date of the transaction.

(iii) Subsequent recognition:

All monetary assets and liabilities in foreign currency are restated at the end of accounting period other than those monetary assets which are provided for being doubtful of recovery.

Exchange differences on restatement of all monetary items are recognised in the Statement of Profit and Loss.

2.6 Employee benefits

2.6.1 Retirement benefit costs and termination benefits
Payments to defined contribution retirement benefit plans are recognised as an expense when employees have rendered service entitling them to the contributions.

For defined benefit retirement benefit plans, the cost of providing benefits is determined using the projected unit credit method, with actuarial valuations being carried out at the end of each annual reporting period. Remeasurement, comprising actuarial gains and losses is reflected immediately in the balance sheet with a charge or credit recognised in other comprehensive income in the period in which they occur. Remeasurement recognised in other comprehensive income is reflected immediately in retained earnings and is not reclassified to profit or loss. Past service cost is recognised in profit or loss in the period of a plan amendment. Net interest. is calculated by applying the discount rate at the beginning of the period to the net defined benefit liability or asset. Defined benefit costs are categorised as follows:

service cost (including current service cost, past service cost, as well as gains and losses on curtailments and settlements);
net interest expense or income; and
remeasurement

The Company presents the first two components of defined benefit costs in profit or loss in the line item ‘Employee benefits expense’. Curtailment gains and losses are accounted for as past service costs.

74 Xchanging Solutions Limited

Annual Report 2019-20

Notes forming part of the Financial Statements

(All amounts in Rs. Lakhs, unless otherwise stated)

The retirement benefit obligation recognised in the balance sheet represents the actual deficit or surplus in the Company’s defined benefit plans. Any surplus resulting from this calculation is limited to the present value of any economic benefits available in the form of refunds from the plans or reductions in future contributions to the plans.

A liability for a termination benefit is recognised at the earlier of when the entity can no longer withdraw the offer of the termination benefit and when the entity recognises any related restructuring costs.

2.6.2 Short-term and other long-term employee benefits

A liability is recognised for benefits accruing to employees in respect of wages and salaries and annual leave in the period the related service is rendered at the undiscounted amount of the benefits expected to be paid in exchange for that service.

Liabilities recognised in respect of short-term employee benefits. are measured at the undiscounted amount of the benefits expected to be paid in exchange for that service.

Liabilities recognised in respect of other long-term employee benefits are measured at the present value of the estimated future cash outflows expected to be made by the Company in respect of services provided by employees up to the reporting date.

2.7 Taxation

Income tax expense represents the sum of the tax currently payable and deferred tax.

2.7.1 Current tax

Income tax expense or credit for the period is the tax payable on the current period’s taxable income using the tax rates and tax laws that have been enacted or substantively enacted by the balance sheet date. The Company periodically evaluates positions taken in tax returns with respect to situations in which applicable tax regulation is subject to interpretation. It establishes provisions where appropriate on the basis of amounts expected to be paid to the tax authorities.

2.7.2 Deferred tax

Deferred income tax assets and liabilities are measured using tax rates and tax laws that have been enacted or substantively enacted by the Balance Sheet date and are expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled.The effect of changes in tax rates on deferred income tax assets and liabilities is recognized as income or expense in the period that includes the enactment or the substantive enactment date. A deferred tax asset is recognized to the extent that it is probable that future taxable profit will be available against which the deductible temporary differences and tax losses can be utilised.

Deferred taxes and liabilities are offset when there is a legally enforceable right to offset current tax assets and liabilities and when the deferred tax balances relate to the same taxation authority. Current tax assets and liabilities are offset where the entity has a legally enforceable right to offset and intends either to settle on a net basis, or to realise the asset and settle the liability simultaneously.

2.7.3 Current tax and deferred tax for the year

Current and deferred tax is recognized in profit or loss, except to the extent that it relates to items recognized in other comprehensive income or directly in equity, in which case, the tax is also recognized in other comprehensive income or directly in equity, respectively.

2.8 Property, plant and equipment and depreciation

(i) Property, plant and equipment are stated at cost of acquisition less accumulated depreciation and impairment losses. Cost comprises the purchase price and any directly attributable costs of bringing the assets to their working condition for their intended use.
(ii) Depreciable amount for assets is the cost of an asset, or other amount substituted for cost, less its estimated residual value. Depreciation on Property, plant & equipment has been provided on the straight-line method as per the useful life prescribed in Schedule II to the Companies Act, 2013 except in respect of the following categories of assets, in whose case the life of the assets has been assessed as under based on technical advice, taking into account the nature of the asset, the estimated usage of the asset, the operating conditions of the asset, past history of replacement, anticipated technological changes etc:

Xchanging Solutions Limited

Annual Report 2019-20

Notes forming part of the Financial Statements

(All amounts in Rs. Lakhs, unless otherwise stated)

Category of assets	Estimated useful life
Servers (Computers)	3
Vehicles	2 to 6
Furniture and fixtures	5

(iii) Losses arising from the retirement of, and gains or losses arising from disposal of fixed assets which are carried at cost are recognised in the Statement of Profit and Loss.
(iv) Leasehold improvements are amortised over the period of lease or five years, whichever is lower.
(v) Assets individually costing up to Rupees five thousand are fully depreciated in the year of purchase.

2.9 Intangible Assets and Amortisation

Intangible assets with finite useful lives are stated at cost of acquisition less accumulated amortisation and impairment losses.

Intangible assets are recognised only if it is probable that future economic benefits that are attributable to the asset will flow to the enterprise and the cost of the asset can be measured reliably. An intangible asset is derecognised on disposal, or when no future economic benefits are expected from use or disposal. Gains or losses arising from the retirement or disposal of an intangible asset are determined as the difference between the net disposal proceeds and the carrying amount of the asset and recognised as income or expense in the Statement of Profit and Loss. Intangible assets comprise of computer software which is amortised on straight-line basis over an estimated useful life of one to six years.

The estimated useful life of the intangible assets and the amortisation period are reviewed at the end of each financial year and the amortisation period is revised to reflect the changed pattern, if any.

2.10 Impairment of tangible and intangible assets other than goodwill

The carrying values of tangible and intangible assets at each balance sheet date are reviewed for impairment if any indication of impairment exists. The following intangible assets are tested for impairment each financial year even if there is no indication that the asset is impaired:(a) an intangible asset that is not yet available for use; and (b) an intangible asset that is amortised over a period exceeding ten years from the date when the asset is available for use.

If the carrying amount of the assets exceed the estimated recoverable amount, an impairment is recognised for such excess amount. The impairment loss is recognised as an expense in the Statement of Profit and Loss, unless the asset is carried at revalued amount, in which case any impairment loss of the revalued asset is treated as a revaluation decrease to the extent a revaluation reserve is available for that asset.

The recoverable amount is the greater of the net selling price and their value in use. Value in use is arrived at by discounting the future cash flows to their present value based on an appropriate discount factor.

When there is indication that an impairment loss recognised for an asset (other than a revalued asset) in earlier accounting periods no longer exists or may have decreased, such reversal of impairment loss is recognised in the Statement of Profit and Loss, to the extent the amount was previously charged to the Statement of Profit and Loss. In case of revalued assets such reversal is not recognised.

2.11 Provisions and contingent liabilities

Provisions: A provision is recognised when the Company has a present obligation as a result of past events and it is probable that an outflow of resources will be required to settle the obligation in respect of which a reliable estimate can be made. Provisions (excluding retirement benefits) are not discounted to their present value and are determined based on the best estimate required to settle the obligation at the balance sheet date. These are reviewed at each balance sheet date and adjusted to reflect the current best estimates.

Provisions for onerous contracts (i.e., contracts where the expected unavoidable costs of meeting the obligations under the contract exceed the economic benefits expected to be received under it) are recognised when it is probable that cash outflow of resources embodying economic benefits will be required to settle a present obligation as a result of an obligating event based on a reliable estimate of such obligation.

Contingent liabilities: Contingent liabilities are disclosed when there is a possible obligation arising from past events, the existence of which will be confirmed only by the occurrence or non occurrence of one or more uncertain future events not wholly within the control of the Company or a present obligation that arises from past events where it is either not probable that an outflow of resources will be required to settle or a reliable estimate of the amount cannot be made, is termed as a contingent liability.

2.12 Financial instruments

Financial assets and financial liabilities are recognised when the Company becomes a party to the contractual provisions of the instruments.

76 Xchanging Solutions Limited

Annual Report 2019-20

Notes forming part of the Financial Statements

(All amounts in Rs. Lakhs, unless otherwise stated)

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

2.13 Financial assets

All recognised financial assets are subsequently measured in their entirety at either amortised cost or fair value depending on the classification of the Financial assets.

2.13.1 Classification of financial assets

Financial assets that meet the following conditions are subsequently measured at amortised cost (except for financial assets that are designated at fair value through profit or loss on initial recognition):

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

For the impairment policy on financial assets measured at amortised cost, refer Note 2.13.3

Financial assets that meet the following conditions are subsequently measured at Fair Value Through Other Comprehensive Income (“FVTOCI”) (except for financial assets that are designated as at fair value through profit or loss on initial recognition):

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

Interest income is recognised in profit or loss for FVTOCI financial assets. For the purposes of recognising foreign exchange gains and losses, FVTOCI debt instruments are treated as financial assets measured at amortised cost. Thus, the exchange differences on the amortised cost are recognised in profit or loss and other changes in the fair value of FVTOCI financial assets are recognised in other comprehensive income and accumulated under the heading of ‘Reserve for financial assets through other comprehensive income’. When the investment is disposed of, the cumulative gain or loss previously accumulated in this reserve is reclassified to profit or loss.

For the impairment policy on financial assets at FVTOCI, refer Note 2.13.3

All other financial assets are subsequently measured at fair value.

2.13.2 Financial assets at fair value through profit or loss (FVTPL) Financial assets that do not meet the amortised cost criteria or FVTOCI criteria are measured at FVTPL. In addition, financial assets that meet the amortised cost criteria or the FVTOCI criteria but are designated as at FVTPL are measured at FVTPL.

A financial asset that meets the amortised cost criteria or debt instruments that meet the FVTOCI criteria may be designated as at FVTPL upon initial recognition if such designation eliminates or significantly reduces a measurement or recognition inconsistency that would arise from measuring assets or liabilities or recognising the gains and losses on them on different bases. The Company has not designated any debt instrument as at FVTPL.

Financial assets at FVTPL are measured at fair value at the end of each reporting period, with any gains or losses arising on remeasurement recognised in profit or loss. The net gain or loss recognised in profit or loss incorporates any dividend or interest earned on the financial asset and is included in the ‘Other income’ line item. Dividend on financial assets at FVTPL is recognised when the Company’s right to receive the dividends is established, it is probable that the economic benefits associated with the dividend will flow to the entity, the dividend does not represent a recovery of part of cost of the investment and the amount of dividend can be measured reliably.

2.13.3 Impairment of financial assets

In accordance with Ind AS 109, the Company applies Expected Credit Loss (ECL) model for measurement and recognition of impairment loss on the Financial assets that are initially measured at fair value with subsequent measurement at amortised cost e.g Trade receivables, unbilled revenue etc.

Xchanging Solutions Limited

Annual Report 2019-20

Notes forming part of the Financial Statements

(All amounts in Rs. Lakhs, unless otherwise stated)

The Company follows ‘simplified approach’ for recognition of impairment loss allowance for trade receivables. The application of simplified approach does not require the Company to track changes in credit risk. Rather, it recognises impairment loss allowance based on lifetime ECLs at each reporting date, right from its initial recognition. For recognition of impairment loss on other financial assets and risk exposure, the Company determines whether there has been a significant increase in the credit risk since initial recognition. If credit risk has not increased significantly, twelve month ECL is used to provide for impairment loss. However, if credit risk has increased significantly, lifetime ECL is used. If, in the subsequent period, credit quality of the instrument improves such that there is no longer a significant increase in credit risk since initial recognition, then the entity reverts to recognising impairment loss allowance based on a twelve month ECL.

ECL is the difference between all contractual cash flows that are due to the Company in accordance with the contract and all the cash flows that the entity expects to receive (i.e., all cash shortfalls), discounted at the original Effective Interest Rate (EIR).

Allowance for Trade receivables

The Company follows a ‘simplified approach’ (i.e. based on lifetime ECL) for recognition of impairment loss allowance on Trade receivables. For the purpose of measuring lifetime ECL allowance for trade receivables, the Company estimates irrecoverable amounts based on the ageing of the receivable balances and historical experience. Individual trade receivables are written off when management deems them not to be collectible.

2.13.4 Derecognition of financial assets

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. If the Company neither transfers nor retains substantially all the risks and rewards of ownership and continues to control the transferred asset, the Company recognises its retained interest in the asset and an associated liability for amounts it may have to pay. If the Company retains substantially all the risks and rewards of ownership of a transferred financial asset, the Company continues to recognise the financial asset and also recognises a collateralised borrowing for the proceeds received.

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 is recognised in profit or loss if such gain or loss would have otherwise been recognised in profit or loss on disposal of that financial asset.

2.13.5 Foreign exchange gains and losses

The fair value of financial assets denominated in a foreign currency is determined in that foreign currency and translated at the spot rate at the end of each reporting period. For foreign currency denominated financial assets measured at amortised cost and FVTPL, the exchange differences are recognised in profit or loss.

2.13.6 Investment in subsidiaries

Investment in subsidiaries is carried at cost in the separate financial statements.

2.14 Financial liabilities

Classification as debt

Debt are classified as financial liabilities in accordance with the substance of the contractual arrangements and the definitions of a financial liability

Financial liabilities

2.14.1 Financial liabilities subsequently measured at amortised cost
Financial liabilities that are not held-for-trading and are not designated as at FVTPL, are measured at amortised cost at the end of subsequent accounting periods. The carrying amounts of financial liabilities that are subsequently measured at amortised cost are determined based on the effective interest method. Interest expense that is not capitalised as part of costs of an asset is included in the ‘Finance costs’ line item.
2.14.2 Foreign exchange gains and losses

For financial liabilities that are denominated in a foreign currency and are measured at amortised cost at the end of each reporting period, the foreign exchange gains and losses are determined based on the amortised cost of the instruments and are recognised in profit or loss.

2.14.3 Derecognition of financial liabilities
The Company derecognises financial liabilities when, and only when, the Company’s obligations are discharged, cancelled or have expired, An exchange between with a lender of debt instruments with substantially different

78 Xchanging Solutions Limited

Annual Report 2019-20

Notes forming part of the Financial Statements

(All amounts in Rs. Lakhs, unless otherwise stated)

terms is accounted for as an extinguishment of the original financial liability and the recognition of a new financial liability. Similarly, a substantial modification of the terms of an existing financial liability (whether or not attributable to the financial difficulty of the debtor) is accounted for as an extinguishment of the original financial liability and the recognition of a new financial liability. The difference between the carrying amount of the financial liability derecognised and the consideration paid and payable is recognised in profit or loss.

2.15 Derivative financial instruments

The Company enters into derivative financial instruments to manage its exposure to foreign exchange rate risks through foreign exchange forward contracts. Further details of derivative financial instruments are disclosed in note 32.

Derivatives are initially recognised at fair value at the date the derivative contracts are entered into and are subsequently remeasured to their fair value at the end of each reporting period. The resulting gain or loss is recognised in profit or loss immediately.

2.16 Use of estimates

The preparation of the financial statements in conformity with Ind AS requires the Management to make estimates and assumptions considered in the reported amounts of assets and liabilities (including contingent liabilities) and the reported income and expenses during the period. The Management believes that the estimates used in preparation of the financial statements are prudent and reasonable. Future results could differ due to these estimates and the differences between the actual results and the estimates are recognised in the periods in which the results are known / materialise.

2.17 Cash and cash equivalents (for purposes of Cash Flow Statement)

Cash comprises cash on hand and demand deposits with banks. Cash equivalents are short-term balances (with an original maturity of three months or less from the date of acquisition), highly liquid investments that are readily convertible into known amounts of cash and which are subject to insignificant risk of changes in value.

2.18 Cash flow statement

Cash flows are reported using the indirect method, whereby profit / (loss) before extraordinary items and tax is adjusted for the effects of transactions of non-cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flows from operating, investing and financing activities of the Company are segregated based on the available information.

2.19 Investments

Long-term investments (excluding investment properties), are carried individually at cost less provision for diminution, other than temporary, in the value of such investments. Current investments are carried individually, at fair value. Cost of investments include acquisition charges such as brokerage, fees and duties.

2.20 Segment Reporting

Ind AS 108 establishes standards for the way that public business enterprises report information about operating segments and related disclosures about products and services, geographic areas, and major customers. Based on the ‘management approach’ as defined in Ind AS 108, the Chief Operating Decision Maker (CODM) evaluates the Company’s performance based on an analysis of various performance indicators by business segments and geographic segments.

The accounting policies adopted for segment reporting are in conformity with the accounting policies adopted for the Company. Revenue and expenses have been identified to segments on the basis of their relationship to the operating activities of the segment. Revenue and expenses, which relate to the Company as a whole and are not allocable to segments on a reasonable basis, is included as “Unallocated”. Segment assets includes all the assets except for deferred tax assets which are treated as unallocable.

The dominant source of risk and returns of the enterprise is considered to be the business in which it operates, viz. - Information Technology (IT) Services. The sub businesses are fully aligned to IT Services business of the Company and the same are being viewed by the management as a single business segment. Being a single business segment company, no primary segment information is being provided.

2.21 Earnings per share

Basic earnings per share is calculated by dividing the net profit or loss for the period attributable to equity shareholders by the weighted average number of equity shares outstanding during the period. The weighted average number of equity shares outstanding during the period and for all periods presented is adjusted for events, such as bonus shares, other than the conversion of potential equity shares, that have changed the number of equity shares outstanding, without a corresponding change in resources. For the purpose of calculating diluted earnings per share, the net profit or loss for the period attributable to equity shareholders and the weighted average number of shares outstanding during the period is adjusted for the effects of all dilutive potential equity shares.

Xchanging Solutions Limited

Annual Report 2019-20

Notes forming part of the Financial Statements

(All amounts in Rs. Lakhs, unless otherwise stated)

2.22 Project work expenses

Project work expenses represents amounts charged by sub-contractors. These expenses are recognised on an accrual basis.

2.23 GST input credit

GST input credit is accounted for in the books in the period in which the underlying service received is accounted and when there is reasonable certainty in availing/ utilising the credits.

2.24 Operating Cycle

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

3. Critical accounting judgements and key sources of estimation uncertainty

In the application of the Company’s accounting policies, which are described in note 2, the management of the Company is required to make judgements, estimates and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.

3.1 Critical judgements in applying accounting policies

The following are the critical judgements, apart from those involving estimations, that the management have made in the process of applying the Company’s accounting policies and that have the most significant effect on the amounts recognised in the financial statements.

i) Impairment of investment in subsidiaries- Determining whether investment in subsidiaries is impaired requires an estimation of the value in use of the subsidiaries. The value in use calculation requires the management to estimate the future cash flows expected to arise from the subsidiaries operations and a suitable discount rate in order to calculate present value. Where the actual future cash flows are less than expected, a material impairment loss may arise. No impairment for investment in subsidiaries has been identified during the year.
ii) Income taxes- The Company has tax jurisdiction in India. Significant judgments are involved in determining the provision for income taxes, including the amount expected to be paid or recovered in connection with uncertain tax positions. Also refer to note 28.
iii) Fair value measurements and valuation processes- Derivative financial instruments are measured at fair value and the gratuity liability is measured based on actuarial valuation for financial reporting purposes. In estimating the fair value and actuarial valuation, the Company uses market-observable data to the extent it is available. Where such inputs are not available, the Company engages third party qualified valuers to perform the valuation.
iv) Ind AS 116 requires lessees to determine the lease term as the non-cancellable period of a lease adjusted with any option to extend or terminate the lease, if the use of such option is reasonably certain. The Company makes an assessment on the expected lease term on a lease-by-lease basis and thereby assesses whether it is reasonably certain that any options to extend or terminate the contract will be exercised. In evaluating the lease term, the Company considers factors such as any significant leasehold improvements undertaken over the lease term, costs relating to the termination of the lease and the importance of the underlying asset to Company’s operations taking into account the location of the underlying asset and the availability of suitable alternatives. The lease term in future periods is reassessed to ensure that the lease term reflects the current economic circumstances. Refer note no 2.4
v) Estimation uncertainty relating to COVID-19 outbreak- The Company has considered internal sources of information up to the date of approval of the financial statements in determining the impact on various elements of its financial statements. The Company has used the principles of prudence in applying judgments, estimates and assumptions and based on the current estimates, the Company expects to fully recover the carrying amount of trade receivables including unbilled receivables and investments. The eventual outcome of impact of the global health pandemic may be different from those estimated as on the date of approval of these financial statements.

80 Xchanging Solutions Limited

Annual Report 2019-20

Notes forming part of the Financial Statements

(All amounts in Rs. Lakhs, unless otherwise stated)

	As at As at
	Mar 31, 2020 Mar 31, 2019
4 PROPERTY, PLANT AND EQUIPMENT (Refer note 2.8 and 2.10) (Owned unless specified) Carrying amounts of: Leasehold Improvements Computers Vehicles Office Equipment Furniture and Fittings	10 - 28 15 - - 5 9 3 - --------------------------------- --------------------------------- 46 24 ============================ ============================

Particulars	Leasehold Improvements	Computers	Vehicles	Office Equipment	Furniture and Fittings	Total
Gross carrying value
Balance as at April 1, 2018 Additions Disposals	- - -	1,096 20 (104)	36 - (7)	163 - (4)	10 - -	1,305 20 (115)
Balance as at March 31, 2019	-	1,012	29	159	10	1,210
Additions Disposals	15 -	23 (152)	- (29)	2 (9)	3 -	43 (190)
Balance as at March 31, 2020	15	883	-	152	13	1,063
Accumulated depreciation
Balance as at April 1, 2018 Depreciation expense Eliminated on disposals of assets	- - -	1,085 16 (104)	32 4 (7)	144 10 (4)	10 - -	1,271 30 (115)
Balance as at March 31, 2019	-	997	29	150	10	1,186
Depreciation expense Eliminated on disposals of assets	5 -	10 (152)	- (29)	6 (9)	- -	21 (190)
Balance as at March 31, 2020	5	855	-	147	10	1,017
Carrying value as at March 31, 2020	10	28	-	5	3	46
Carrying value as at March 31, 2019	-	15	-	9	-	24

5 MOVEMENT IN RIGHT OF USE ASSETS:

(Refer note 2.4)

Following are the changes in the carrying value of right of use assets for the year ended March 31, 2020:

Following are the changes in the carrying value of right of use assets for the year ended March 31, 2020:
Particulars	Leasehold Improvements
Balance as at April 1, 2019	-
Reclassified on account of adoption of IND AS 116	64
Additions	165
Depreciation	(53)
Balance as at March 31, 2020	176

The aggregate depreciation expense on ROU assets is included under depreciation and amortization expense in the Statement of Profit and Loss.

Xchanging Solutions Limited

Annual Report 2019-20

Notes forming part of the Financial Statements

(All amounts in Rs. Lakhs, unless otherwise stated)

			As at As at	As at As at
			Mar 31, 2020 Mar 31, 2019
OTHER INTANGIBLE ASSETS (Refer note 2.9 and 2.10) Carrying amounts of: Computer software			3 5 --------------------------------- --------------------------------- 3 5 ============================ ============================
Particulars		Computer software		Total
Gross carrying value
Balance as at April 1, 2018 Additions Disposals		531 8 (477)		531 8 (477)
Balance as at March 31, 2019		62		62
Additions Disposals		1 -		1 -
Balance as at March 31, 2020		63		63
Accumulated amortisation
Balance as at April 1, 2018 Amortisation expense Disposals		527 7 (477)		527 7 (477)
Balance as at March 31, 2019		57		57
Amortisation expense Disposals		3 -		3 -
Balance as at March 31, 2020		60		60
Carrying value as at March 31, 2020		3		3
Carrying value as at March 31, 2019		5		5

	As at As at
	Mar 31, 2020 Mar 31, 2019
INVESTMENTS Non-current Investments in equity instruments Wholly owned Subsidiary Companies : (Unquoted, at cost, unless otherwise stated, fully paid up) (Refer note 2.10, 2.19, 2.13.6 and 3.1.(i)) Xchanging Solutions (Singapore) Pte Limited, Singapore 2,300,000 (2019: 2,300,000) ordinary shares of Singapore$1 each Xchanging Solutions (Europe) Limited, UK 1 (2019: 2,664,278) ordinary shares of GBP 1 each [Refer note 39] (Less): Provision for diminution in value of investment Xchanging Solutions (USA) Inc, USA 9,930,062 (2019: 9,930,062) common stock of US$1 each [Refer note 38] (Less): Provision for diminution in value of investment Aggregate carrying value of unquoted investments Aggregate amount of impairment in value of investments	7 7 2,222 2,222 (2,222) - (2,222) - ----------------------- ----------------------- 11,224 11,224 (6,045) 5,179 (6,045) 5,179 ----------------------- ----------------------- ----------------------- ----------------------- 5,186 5,186 =================== =================== 13,453 13,453 (8,267) (8,267)

82 Xchanging Solutions Limited

Annual Report 2019-20

Notes forming part of the Financial Statements

(All amounts in Rs. Lakhs, unless otherwise stated)

		As at As at
		Mar 31, 2020 Mar 31, 2019
8	LOANS (Refer note 2.13 and 2.16) Unsecured, considered good unless otherwise stated Non-current Loans and advances: Subsidiaries [Refer note 38]: - Considered doubtful (Less): Provision for doubtful loans Fellow subsidiaries [Refer note 33] Current Loans and advances: Fellow subsidiaries [Refer note 33]	17,283 17,283 (17,283) (17,283) 218 1,618 --------------------------------- --------------------------------- 218 1,618 ============================ ============================ 1,400 250 --------------------------------- --------------------------------- 1,400 250 ============================ ============================

Note: As at March 31, 2020, the loans and advances balance of Rs. 17,283 (2019: Rs. 17,283) due from subsidiaries is interest free and repayable on demand. However, management does not have an intention to demand these loans in the next 12 months and hence these have been classified under non-current financial assets. These financial assets are carried at amortised cost.

9 OTHER FINANCIAL ASSETS

(Refer note 2.2, 2.13 and 2.16)

Unsecured considered good unless otherwise stated

Current

Current
Expenses recoverable from fellow subsidiaries [Refer note 33]:
- Subsidiaries	4	-
- Fellow subsidiaries	21	40
Security deposits
- Considered good	170	174
- Considered doubtful	24	21
(Less): Provision for doubtful advances	(24)	(21)
Unbilled revenue	125	131
Interest accrued on loans to fellow subsidiaries [Refer note 33]	15	33
Interest accrued on bank deposits	43	13
Other Loans and advances (includes advances to employees and other receivables)
- Considered good	2	33
- Considered doubtful	17	35
(Less): Provision for doubtful advances	(17)	(35)
	---------------------------------	---------------------------------
	380	424
	============================	============================

Xchanging Solutions Limited

Annual Report 2019-20

Notes forming part of the Financial Statements

(All amounts in Rs. Lakhs, unless otherwise stated)

10 DEFERRED TAX ASSETS (NET)

(Refer note 2.7 and 3.1.(ii))

Details of deferred tax assets and liabilities as at March 31, 2020 comprise of the following:

Particulars	As at April 1, 2019	(Credit)/ Charged to Statement of Profit and Loss	Recognised in Other Comprehen- sive Income	As at March 31, 2020
Deferred Tax Assets Depreciation Provision for gratuity Provision for compensated absences Provision for other employee benefits Provision for doubtful debts Provision for doubtful advances Adjustment for lease Others	187 88 22 19 362 175 - 20	41 9 (6) 4 32 57 (2) 6	- 1 - - - - - -	146 78 28 15 330 118 2 14
Total(A)	873	141	1	731
Deferred Tax Liabilities(B)	-	-	-	-
Deferred Tax Assets (Net) (A)-(B)	873	141	1	731

As at March 31, 2019

As at March 31, 2019
Particulars	As at April 1, 2018	(Credit)/ Charged to Statement of Profit and Loss		Recognised in Other Comprehen- sive Income	As at March 31, 2019
Deferred Tax Assets Depreciation Provision for gratuity Provision for compensated absences Provision for other employee benefits Provision for doubtful debts Provision for doubtful advances Others	209 104 20 64 328 154 36		22 6 (2) 45 (34) (21) 16	- 10 - - - - -	187 88 22 19 362 175 20
Total(A)	915		32	10	873
Deferred Tax Liabilities(B)	-		-	-	-
Deferred Tax Assets (Net) (A)-(B)	915		32	10	873

			As at As at
			Mar 31, 2020 Mar 31, 2019
OTHER ASSETS (Refer note 2.23) Unsecured considered good unless otherwise stated Non-current Prepaid Expenses Advances recoverable in kind Balances with Government Authorities (Service tax & GST) - Considered good - Considered doubtful (Less): Provision for doubtful advances Current Balances with Government Authorities (GST) Prepaid Expenses Other Loans and advances			7 13 1,486 1,466 237 179 429 548 (429) (548) --------------------------------- --------------------------------- 1,730 1,658 ============================ ============================ 78 116 59 108 25 31 --------------------------------- --------------------------------- 162 255 ============================ ============================

11 OTHER ASSETS

84 Xchanging Solutions Limited

Annual Report 2019-20

Notes forming part of the Financial Statements

(All amounts in Rs. Lakhs, unless otherwise stated)

12		As at As at
		Mar 31, 2020 Mar 31, 2019
	TRADE RECEIVABLES (Refer note 2.13, 32 and 33) (Unsecured) Considered good Considered doubtful Less: Provision for doubtful trade receivables	815 890 1,309 1,243 (1,309) (1,243) --------------------------------- --------------------------------- 815 890 ============================ ============================

Note: The credit period ranges from 0 to 30 days. No interest is charged on trade receivables up to the due date. Cumulative balance of customers with more than 5% of total trade receivables amounts to Rs 652 (2019: Rs. 469)

13 14 15	CASH AND CASH EQUIVALENTS (Refer note 2.17) Balances with banks In current accounts 452 356 Funds in transit 133 - In demand deposit accounts (less than 3 months maturity) 15,930 13,941 Cash on hand - - --------------------------------- --------------------------------- Cash and cash equivalent as per statement of cash flow 16,515 14,297 ============================ ============================ OTHER BANK BALANCES Long Term Deposit with maturity more than 3 months but less than 12 months 17 135 --------------------------------- --------------------------------- 17 135 ============================ ============================ Fixed Deposits with Banks include: Rs. 17 (2019: Rs. 135) which are under lien EQUITY SHARE CAPITAL Authorised capital: 125,000,000 (2019: 125,000,000) Equity shares of Rs.10 each 12,500 12,500 Issued, subscribed and paid up capital: 111,403,716 (2019: 111,403,716) Equity shares of Rs.10 each fully paid up 11,140 11,140 --------------------------------- --------------------------------- 11,140 11,140 ============================ ============================ a) Reconciliation of the number of shares and amount outstanding at the beginning and at the end of the reporting year are as given below:	CASH AND CASH EQUIVALENTS (Refer note 2.17) Balances with banks In current accounts 452 356 Funds in transit 133 - In demand deposit accounts (less than 3 months maturity) 15,930 13,941 Cash on hand - - --------------------------------- --------------------------------- Cash and cash equivalent as per statement of cash flow 16,515 14,297 ============================ ============================ OTHER BANK BALANCES Long Term Deposit with maturity more than 3 months but less than 12 months 17 135 --------------------------------- --------------------------------- 17 135 ============================ ============================ Fixed Deposits with Banks include: Rs. 17 (2019: Rs. 135) which are under lien EQUITY SHARE CAPITAL Authorised capital: 125,000,000 (2019: 125,000,000) Equity shares of Rs.10 each 12,500 12,500 Issued, subscribed and paid up capital: 111,403,716 (2019: 111,403,716) Equity shares of Rs.10 each fully paid up 11,140 11,140 --------------------------------- --------------------------------- 11,140 11,140 ============================ ============================ a) Reconciliation of the number of shares and amount outstanding at the beginning and at the end of the reporting year are as given below:
	Equity Shares	As at As at March 31, 2020 January 1, 2019
		Number Amount Number Amount of Shares of Shares
	Shares outstanding at the beginning of the year Add / (Less): Movement during the year	111,403,716 11,140 111,403,716 11,140 - - - -
	Shares outstanding at the end of the year	111,403,716 11,140 111,403,716 11,140

b) Terms/ rights attached to equity shares

The Company has only one class of shares referred to as equity shares having a par value of Rs.10 each. Each shareholder is eligible for one vote per share held. In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the Company after distribution of all preferential amounts, in proportion to their shareholding.

Xchanging Solutions Limited

Annual Report 2019-20

Notes forming part of the Financial Statements

(All amounts in Rs. Lakhs, unless otherwise stated)

c) Details of shares held by the holding company and its subsidiaries:

Number of Shares	As at As at March 31, 2020 March 31, 2019
	Name of Shareholder Number of Shares
Xchanging (Mauritius) Limited, the immediate holding company Xchanging Technology Services India Private Limited, subsidiary of HoldingCompany*	58,002,787 58,002,787 21,348,838 38,948,299
	79,351,625 96,951,086

Xchanging Technology Services India Private Limited acquired 12.03% shares on June 11, 2018 through Manadatory open offer.

d) Details of shares held by each shareholder holding more than 5% shares:

Name of Shareholder	As at March 31, 2020 As at March 31, 2019	As at March 31, 2020 As at March 31, 2019
	Number of Percentage Number of Percentage Shares held Shares held
Xchanging (Mauritius) Limited Xchanging Technology Services India Private Limited	58,002,787 52.07 58,002,787 52.07 21,348,838 19.16 38,948,299 34.96

		As at As at
		Mar 31, 2020 Mar 31, 2019
OTHER EQUITY Capital reserve 57 57 Security premium 8,417 8,417 Retained earnings 3,097 825 --------------------------------- --------------------------------- 11,571 9,299 ============================ ============================ 16.1 Capital reserve Balance at the beginning of the year 57 57 Add / (Less): Movement during the year - - --------------------------------- --------------------------------- Balance at the end of the year 57 57 --------------------------------- --------------------------------- Capital reserve represents waiver of liability by Scandent Holding Mauritius Limited, erstwhile ultimate holding company. 16.2 Security premium Balance at the beginning of the year 8,417 8,417 Add / (Less): Movement during the year - - --------------------------------- --------------------------------- Balance at the end of the year 8,417 8,417 --------------------------------- --------------------------------- Amounts received (on issue of shares) in excess of the par value has been classified as securities premium. 16.3 Retained earnings Balance at the beginning of the year 825 (847) Profit for the year 2,269 1,647 Other comprehensive income arising from remeasurement of defined benefit obligation net of tax 3 25 --------------------------------- --------------------------------- Balance at the end of the year 3,097 825 --------------------------------- ---------------------------------

Retained earnings comprise of the Company’s prior years’ undistributed earnings after taxes.

86 Xchanging Solutions Limited

Annual Report 2019-20

Notes forming part of the Financial Statements

(All amounts in Rs. Lakhs, unless otherwise stated)

17 18		As at As at
		Mar 31, 2020 Mar 31, 2019
	PROVISIONS (Refer note 2.6) Non-current Provision for employee benefits : Provision for compensated absences 84 61 Provision for gratuity [Refer note 31] 249 242 --------------------------------- --------------------------------- 333 303 ============================ ============================ Current Provision for employee benefits : Provision for compensated absences 28 17 Provision for gratuity [Refer note 31] 62 60 --------------------------------- --------------------------------- 90 77 ============================ ============================ TRADE PAYABLES (Refer note 2.14) Total outstanding dues of micro enterprises and small enterprises (Refer Note (ii)) - 1 Total outstanding dues of creditors other than micro enterprises and small enterprises Due to: Subsidiaries [Refer note 33] 98 101 Related parties [Refer note 33] 204 214 Others: Goods & services 228 400 Employee related payables 74 117 --------------------------------- --------------------------------- 604 832 --------------------------------- --------------------------------- 604 833 ============================ ============================ Notes: (i) The credit period ranges from 0 to 90 days. No interest is charged on trade payables up to the due date. The Company has financial risk management policies in place to ensure that all payables are paid within the pre-agreed credit terms.

(ii) On the basis of confirmation obtained from suppliers who have registered themselves under the Micro, Small Medium Enterprise Development Act, 2006 (MSMED Act, 2006) and based on the information available with the Company, the following are the details:

(a)	Principal amount remaining unpaid	-	1
(b)	Interest due thereon remaining unpaid	-	-
(c)	Interest paid by the Company in terms of Section 16 of the Micro, Small and
	Medium Enterprises Development Act, 2006, along-with the amount of the
	payment made to the supplier beyond the appointed day during the period	-	-
(d)	Interest due and payable for the period of delay in making payment (which
	have been paid but beyond the appointed day during the period) but without
	adding interest specified under the Micro, Small and Medium Enterprises Act, 2006	-	-
(e)	Interest accrued and remaining unpaid	-	-
(f)	Interest remaining due and payable even in the succeeding years, until such
	date when the interest dues as above are actually paid to the small enterprises	-	-

Xchanging Solutions Limited 87

Annual Report 2019-20

Notes forming part of the Financial Statements

(All amounts in Rs. Lakhs, unless otherwise stated)

19 20 21 22		As at As at
		Mar 31, 2020 Mar 31, 2019
	OTHER FINANCIAL LIABILITIES (Refer note 2.5 and 2.14) Current maturities of non-current borrowings Payable on purchase of property, plant and equipment Other financial liabilities CURRENT TAX ASSETS AND LIABILITIES (Refer note 2.7 and 3.1.(ii)) Current tax assets Tax refund receivable Current tax liabilities Income tax payable OTHER CURRENT LIABILITIES (Refer note 2.2 and 2.5) Income received in advance (Unearned revenue) - Fellow subsidiaries [Refer note 33] - Others Statutory remittances (Contributions to PF, ESIC, Withholding Taxes, GST etc.) Security deposits Advances from customers	- 3 13 7 18 - --------------------------------- --------------------------------- 31 10 ============================ ============================ 4,202 3,599 --------------------------------- --------------------------------- 4,202 3,599 --------------------------------- --------------------------------- 7,469 7,246 --------------------------------- --------------------------------- 7,469 7,246 --------------------------------- --------------------------------- 3,267 3,647 ============================ ============================ - 49 62 202 29 47 67 - 1 8 --------------------------------- --------------------------------- 159 306 ============================ ============================
		For the year For the year ended ended
		Mar 31, 2020 Mar 31, 2019
	REVENUE FROM OPERATIONS (Refer note 2.2, 29 and 33) Software services	4,270 5,203 --------------------------------- --------------------------------- 4,270 5,203 ============================ ============================

The table below presents disaggregated revenues from contracts with customers for the year ended March 31, 2020 by contract type. The Company believe that this disaggregation best depicts how the nature, amount, timing and uncertainty of our revenues and cashflows are affected by industry, market and other economic factors.

Revenues by contract type	For the year For the year ended ended
	Mar 31, 2020 Mar 31, 2019
T&M and AMC Fixed Price	4,145 4,795 125 408
Total	4,270 5,203

Xchanging Solutions Limited

Annual Report 2019-20

Notes forming part of the Financial Statements

(All amounts in Rs. Lakhs, unless otherwise stated)

The Company has evaluated the impact of COVID-19 resulting from (i) the possibility of constraints to render services (ii) onerous obligations (iii) penalties relating to breaches of service level agreements and (iv) termination or deferment of contracts by customers. The Company has concluded that the impact of COVID-19 is not material based on such evaluation. Due to the nature of the pandemic, the Company will continue to monitor developments to identify significant uncertainties relating to revenue in future periods.

23 24 25		For the year For the year ended ended
		Mar 31, 2020 Mar 31, 2019
	OTHER INCOME (Refer note 2.3 and 2.5) a) Interest Income Interest income earned on financial assets that are not designated as at fair value through profit or loss (at amortised cost): Interest income Bank deposits 834 68 Loans to fellow subsidiaries [Refer note 33] 197 224 --------------------------------- --------------------------------- 1,031 292 --------------------------------- --------------------------------- b) Dividend income Dividends from current investments - 542 Dividends from equity investments 395 - --------------------------------- --------------------------------- 395 542 --------------------------------- --------------------------------- All dividends from mutual funds and dividends from equity investments carried at fair value through P&L recognised for both the years relate to investments held during each reporting period. c) Other non-oper ating income (net ofe xpenses directly attr ib utab le to such income) Other provisions no longer required written back 115 284 Liabilities no longer required written back - 28 Others (aggregate of immaterial items) - 6 --------------------------------- --------------------------------- 115 318 --------------------------------- --------------------------------- d) Other gains and losses Profit on sale of property, plant and equipment (net) 2 8 Profit on redemption of mutual funds - 2 Foreign exchange gain (net) 25 40 --------------------------------- --------------------------------- 27 50 --------------------------------- --------------------------------- (a+b+c+d) 1,568 1,202 ============================ ============================ EMPLOYEE BENEFITS EXPENSE (Refer note 2.6 and 31) Salaries and wages including bonus 1,905 2,361 Contribution to provident and other funds [Refer note 31] 106 118 Gratuity expenses [Refer note 31] 56 70 Staff welfare expenses 23 35 --------------------------------- --------------------------------- 2,090 2,584 ============================ ============================ FINANCE COSTS (Refer note 2.4) Interest expenses on borrowings (not classified as at FVTPL) - 1 Interest expenses on lease liabilities 11 - --------------------------------- --------------------------------- 11 1 ============================ ============================

Xchanging Solutions Limited

Annual Report 2019-20

Notes forming part of the Financial Statements

(All amounts in Rs. Lakhs, unless otherwise stated)

26 27 28		For the year For the year ended ended
		Mar 31, 2020 Mar 31, 2019
	DEPRECIATION AND AMORTISATION EXPENSE (Refer note 2.4, 2.8, 2.9 and 2.16) Depreciation of property, plant and equipment [Refer note 4] 21 30 Depreciation of right of use of assets [Refer note 5] 53 - Amortisation of intangible assets [Refer note 6] 3 7 --------------------------------- --------------------------------- 77 37 ============================ ============================ OTHER EXPENSES (Refer note 2.4, 2.5, 2.11, 2.16 and 2.22) Project work expenses 200 198 Power and fuel 35 42 Rental expenses 15 112 Repairs and maintenance: Computer equipments 134 183 Others 58 65 Insurance 26 26 Rates and taxes 17 11 Communication 164 173 Travelling and conveyance 97 117 Business promotion 18 34 Net Loss on FV changes in current investments carried at FVTPL - 5 Expenditure towards Corporate Social Responsibility (CSR) activities [Refer note 37] 21 20 Legal and professional 63 42 Payments to auditors (Refer Note (i) below) 110 113 Provision for doubtful debts (net) - 48 Provision for doubtful advances 13 78 Directors’ sitting fees 35 29 Miscellaneous expenses 21 56 --------------------------------- --------------------------------- 1,027 1,352 ============================ ============================ Represents lease rentals for short term leases and leases of low value assets Note: (i) Payments to the auditors comprise (net of taxes, where applicable): Statutory audit 58 58 Limited review of quarterly financial results 44 44 Tax audit 6 6 Certifications 2 4 Out-of-pocket expenses - 1 --------------------------------- --------------------------------- Total 110 113 --------------------------------- --------------------------------- Income Taxes (Refer note 2.7 and 3.1.(ii)) 1. Income tax recognised in profit or loss Current tax In respect of current year 802 737 Def erred tax In respect of current year 141 32 --------------------------------- --------------------------------- Total income tax expense /(gain) recognised in the current year 943 769 --------------------------------- ---------------------------------

90 Xchanging Solutions Limited

Annual Report 2019-20

Notes forming part of the Financial Statements

(All amounts in Rs. Lakhs, unless otherwise stated)

For the year
For the year
ended
ended

Mar 31, 2020
Mar 31, 2019

2.
The income tax expense for the year can be reconciled
to the accounting profit/ (loss) as follows:
Profit/ (loss) before tax
2,633
2,431
---------------------------------
---------------------------------
Income tax expense calculated at 25.168% (2019: 29.120%)
663
708
Effect of notional income recognised for taxation
196
226
Effect of change in tax rate (Refer note 41)
86
-
Effect of income that is exempt from taxation
-
(158)
Effect of inadmissible expenses
5
14
Effect of admissible deductions
-
(2)
Others
(7)
(19)
---------------------------------
---------------------------------
Income tax expense recognised in Profit and Loss
943
769
---------------------------------
---------------------------------
The income tax rate used for the above reconciliations is current tax 25.168% (2019: 29.120%) and Deferred tax 25.168%
(2019: 29.120%), these are the corporate tax rate payable by corporate entities in India on taxable profits under the Indian
tax law.

	tax law.
3.	Income tax recognised in other comprehensive income:
	Income tax
	Arising on income and expenses recognised in other comprehensive income:
	Remeasurement of defined benefit obligation	(1)	(10)
		---------------------------------	---------------------------------
	Total	(1)	(10)
		---------------------------------	---------------------------------
	Bifurcation of the income tax recognised in other comprehensive income into:-
	Items that will not be reclassified to profit or loss	(1)	(10)
	Items that may be reclassified to profit or loss	-	-

29 SEGMENT INFORMATION

(Refer note 2.20)

The entire operation of the Company relate only to one segment “Software Services” and hence there are no primary segment to be reported.

The secondary segment information as per Ind AS 108 “Operating Segments” in relation to the geographies is as follows:

	Revenue by location of customers
	Mar 31, 2020 Mar 31, 2019
Europe USA India Rest of the World	1,122 1,552 1,811 1,967 1,068 1,308 269 376 --------------------------------- --------------------------------- 4,270 5,203 ============================ ============================

Balance of customers with more than 10% of total revenue amounts to Rs 2,931 (2019: Rs. 3,378)

	Carrying amount of Addition to Fixed segment assets by Assets/Right of location of the assets use assets
	Mar 31, Mar 31, Mar 31, Mar 31, 2020 2019 2020 2019
Europe USA India Rest of the World	321 226 - - 5,541 6,515 - - 20,718 17,732 209 28 68 269 - -
	26,648 24,742 209 28

Xchanging Solutions Limited

Annual Report 2019-20

Notes forming part of the Financial Statements

(All amounts in Rs. Lakhs, unless otherwise stated)

30		For the year For the year ended ended
		Mar 31, 2020 Mar 31, 2019
	EARNINGS PER SHARE (Refer note 2.21) Basic earnings per share Profit for the year after tax Nominal value per share (Rs.) Weighted average number of equity shares considered for calculating basic earnings per share – (A) Earnings per share – Basic (Rs.) Diluted earnings per share Weighted average number of equity shares considered for calculating diluted earnings per share – (B) Earnings per share – Diluted (Rs.)	2,269 1,647 10 10 111,403,716 111,403,716 --------------------------------- --------------------------------- 2.04 1.48 ============================ ============================ 111,403,716 111,403,716 --------------------------------- --------------------------------- 2.04 1.48 ============================ ============================

31 EMPLOYEE BENEFITS EXPENSE

(Refer note 2.6)

(a) Defined Contribution Plans

Provident Fund and Other Funds: During the year, the Company has recognised Rs. 106 (2019: Rs. 118) in the Statement of Profit and Loss relating to provident fund and other funds, which is included in the ‘Contribution to provident and other funds’.

(b) Defined Benefit Plan

Gratuity (unfunded): The Company provides for gratuity, a defined benefit plan (the “gratuity plan”) covering eligible employees in accordance with the Payment of Gratuity Act, 1972. The gratuity plan provides a lump sum payment to vested employees at retirement or termination of employment based on the respective employee’s last drawn salary and years of employment with the Company.

The Company is exposed to various risks in providing the above gratuity benefit such as: interest rate risk, longetivity risk and salary risk.

Interest risk: A decrease in the bond interest rate will increase the plan liability.

Longevity risk: The present value of the defined benefit plan liability is calculated by reference to the best estimate of the mortality of plan participants both during and after their employment. An increase in the life expectancy of the plan participants will increase the plan’s liability.

Salary risk: The present value of the defined benefit plan liability is calculated by reference to the future salaries of plan participants. As such, an increase in the salary of the plan participants will increase the plan’s liability.

The following tables summarise the components of expense recognised in the Statement of Profit and Loss and amounts recognised in the Balance Sheet for the gratuity plan:

recognised in the Balance Sheet for the gratuity plan:
	As at As at
	Mar 31, 2020 Mar 31, 2019
(i) Movement in Present Value of the Defined benefit obligation Balance at the beginning of the year Current Service Cost Interest Cost Actuarial (Gains) / Losses- Demographic Actuarial (Gains) / Losses- Financial Actuarial (Gains) / Losses- Experience Benefits paid Present Value of Defined benefit obligation at the end of the year	302 357 37 47 19 23 - - 6 (9) (10) (26) (43) (90)
	311 302

92 Xchanging Solutions Limited

Annual Report 2019-20

Notes forming part of the Financial Statements

(All amounts in Rs. Lakhs, unless otherwise stated)

	As at As at
	Mar 31, 2020 Mar 31, 2019
(ii) Assets and Liabilities recognised in the Balance Sheet Present Value of Defined Benefit Obligation Amounts recognised as liability Recognised under: Non-current provisions (Refer note 17) Current provisions (Refer note 17)	311 302
	311 302
	249 242 62 60
	311 302

	For the year For the year ended ended
	Mar 31, 2020 Mar 31, 2019
(iii) Amounts recognised in statement of profit and loss in respect of these defined benefit plans are as follows. Current Service Cost Interest Cost Components of defined benefit costs recognised in profit or loss Remeasurement on the net defined benefit liability: Actuarial (Gain) / Loss due to Demographic Assumption changes Actuarial (Gain) / Loss due to Financial Assumption changes Actuarial (Gain) / Loss due to Experience Components of defined benefit costs recognised in other comprehensive income Total	37 47 19 23
	56 70
	- - 6 (9) (10) (26)
	(4) (35)
	52 35

	As at As at
	Mar 31, 2020 Mar 31, 2019
(iv) Actuarial Assumptions Discount Rate Attrition Rate Increase in Compensation Cost Retirement Age	5.95% 6.95% 20% 20% 6.25% 6.75% 60 60
Particulars	Mar 31, 2020 Mar 31, 2019
(v) Expected Future Cashflows Year 1 Year 2 Year 3 Year 4 Year 5	62 60 54 53 54 46 42 46 36 36

Notes:

(i) The estimates of future salary increases, considered in the actuarial valuation, takes into on account, inflation, seniority, promotions and other relevant factors, such as supply and demand in the employment market.

(ii) The discount rate is based on the prevailing market yields of Indian government securities as at the Balance Sheet date for the estimated term of the obligation.

Xchanging Solutions Limited

Annual Report 2019-20

Notes forming part of the Financial Statements

(All amounts in Rs. Lakhs, unless otherwise stated)

(vi) Sensitivity analysis

Significant actuarial assumptions for the determination of the defined obligation are discount rate and expected salary increase. The sensitivity analyses below have been determined based on reasonably possible changes of the respective assumptions occurring at the end of the reporting period, while holding all other assumptions constant.

The following table summarizes the impact on defined benefit obligation arising due to increase / decrease in key actuarial assumptions by 50 basis points:

As at March 31, 2020

As at March 31, 2020
Defined Benefit Obligation	Discount rate	Rate of Increase in Compensation Cost
Impact of decrease Impact of increase	6 (6)	(6) 6
As at March 31, 2019
Defined Benefit Obligation	Discount rate	Rate of Increase in Compensation Cost
Impact of decrease Impact of increase	6 (5)	(6) 6

Furthermore, in presenting the above sensitivity analysis, the present value of the defined benefit obligation has been calculated using the projected unit credit method at the end of-the reporting period, which is the same as that applied in calculating the defined benefit obligation liability recognised in the balance sheet.

32 FINANCIAL INSTRUMENTS

32.1 Capital management

The Company manages its capital to ensure that it will be able to continue as a going concern while maximising the return to stakeholders through the optimisation of the debt and equity balance.

The capital structure of the Company consists of net debt (borrowings as detailed in note 19) and total equity of the Company.

The Company is not subject to any externally imposed capital requirements.

32.1.1 Debt equity ratio

The debt equity ratio at end of the reporting period was as follows.

Particulars	As at	As at
	Mar 31, 2020	Mar 31, 2019
Debt (i) Net debt Total equity Net debt to equity ratio	- - 22,711 -	3 3 20,439 0.00

(i) Debt is defined as long-term and current maturities (excluding derivative, financial guarantee contracts and contingent consideration), as described in note 19.

(ii) Total equity comprises issued share capital, reserves, retained earnings and other comprehensive income as set out in the statement of changes in equity.

94 Xchanging Solutions Limited

Annual Report 2019-20

Notes forming part of the Financial Statements

(All amounts in Rs. Lakhs, unless otherwise stated)

32.2 Categories of financial instruments

Particulars	As at As at
	Mar 31, 2020 Mar 31, 2019
Financial assets Measured at amor tised cost (a) Cash and bank balances (b) Bank balances other than above (c) Other financial assets at amortised cost Measured at cost Investments Financial liabilities Measured at amor tised cost Lease liabilities Other financial liability at amortised cost	16,515 14,297 17 135 2,813 3,182 5,186 5,186 184 - 635 843

32.3 Financial risk management

The Company is exposed to foreign currency risk, liquidity risk, credit risk and interest risk which may impact the fair value of its financial instruments. The Company has a risk management policy to manage & mitigate these risks. The Company’s risk management policy aims to reduce volatility in financial statements while maintaining balance between providing predictability in the Company’s business plan along with reasonable participation in market movement.

32.4 Market Risk

The Company’s activities expose it primarily to the financial risks of changes in foreign currency exchange rates (see note 32.5).

32.5 Foreign currency risk management

The Company undertakes transactions denominated in foreign currencies; consequently, exposures to exchange rate fluctuations arise.

The carrying amounts of the Company’s foreign currency denominated monetary assets and monetary liabilities at the end of the reporting period are as follows.

end of the reporting period are as follows.
Particulars	Liabilities as at Assets as at
	Mar 31, Mar 31, Mar 31, Mar 31, 2020 2019 2020 2019
GBP USD Others*	133 135 68 126 9 68 1,639 1,936 7 32 14 11
Total	149 235 1,721 2,073

Others include currencies such as SGD,EUR and AUD.

32.5.1 Foreign currency sensitivity analysis

The Company is mainly exposed to the USD and GBP.

The following table details the Company’s sensitivity to a 10% increase and decrease in the Rs. against the relevant foreign currencies. 10% is the sensitivity rate used when reporting foreign currency risk internally to key management personnel and represents management’s assessment of the reasonably possible change in foreign exchange rates. The sensitivity analysis includes only outstanding foreign currency denominated monetary items and adjusts their translation at the period end for a 10% change in foreign currency rates. The sensitivity analysis includes external loans as well as loans to foreign operations within the Company where the denomination of the loan is in a currency other than the functional currency of the lender or the borrower. A positive number below indicates an increase in profit or equity where the Rs. strengthens 10% against the relevant currency. For a 10% weakening of the Rs. against the relevant currency, there would be a comparable impact on the profit or equity, and the balances below would be negative.

Xchanging Solutions Limited

Annual Report 2019-20

Notes forming part of the Financial Statements

	(All amounts in Rs. Lakhs, unless otherwise stated)
Particulars	Impact on profit or Impact on total equity loss for the year as at the end of the reporting period
	Mar 31, Mar 31, Mar 31, Mar 31, 2020 2019 2020 2019
GBP sensitivity Increase by 10% Decrease by 10% USD sensitivity Increase by 10% Decrease by 10% Others sensitivity* Increase by 10% Decrease by 10%	(7) (1) (7) (1) 7 1 7 1 163 187 163 187 (163) (187) (163) (187) 1 (2) 1 (2) (1) 2 (1) 2

Others include currencies such as SGD,EUR and AUD.

In management’s opinion, the sensitivity analysis is unrepresentative of the inherent foreign exchange risk because the exposure at the end of the reporting period does not reflect the exposure during the year. This is mainly attributable to the exposure outstanding on USD receivable and payable in the Company at end of the reporting period.

32.6 Interest rate risk management

The Company is exposed to interest rate risk because the Company lend/ borrow funds at fixed interest rates. There is no exposure to market rate fluctuations.The Companies exposures to interest rates on financial assets and financial liabilities are detailed in the liquidity risk management section of this note.

32.7 Credit risk management

Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the Company. The Company has adopted a policy of only dealing with creditworthy counterparties and obtaining sufficient collateral, where appropriate, as a means of mitigating the risk of financial loss from defaults. The Company uses other publicly available financial information and its own trading records to rate its major customers. The Company’s exposure and the credit ratings of its counterparties are continuously monitored and the aggregate value of transactions concluded is spread amongst approved counterparties. Trade receivables consist of a large number of customers, spread across diverse industries and geographical areas. Ongoing credit evaluation is performed on the financial condition of accounts receivables.The Company does not have significant credit risk exposure to any single counterparty.

The credit risk on liquid funds and derivative financial instruments is limited because the counterparties are banks with high credit-ratings assigned by international credit-rating agencies.

96 Xchanging Solutions Limited

Annual Report 2019-20

Notes forming part of the Financial Statements

(All amounts in Rs. Lakhs, unless otherwise stated)

Provision for expected credit losses

The Company provides for expected credit loss based on the following:

	Category	Category	Description of category	Description of category	Description of category	Description of category	Description of category	Basis for recognition of expected credit lossprovision	Basis for recognition of expected credit lossprovision	Basis for recognition of expected credit lossprovision	Basis for recognition of expected credit lossprovision	Basis for recognition of expected credit lossprovision	Basis for recognition of expected credit lossprovision	Basis for recognition of expected credit lossprovision	Basis for recognition of expected credit lossprovision
								Loans at amortised cost			Other financial assets at amortised cost		Trade receivables
	High quality assets, negligible credit risk		Assets where the counter-party has strong capacity to meet the obligations and where the risk of default is negligible or nil					12-month expected credit losses			12-month expected credit losses		Life-time expected credit losses (simplified approach)
	Standard assets, moderate credit risk		Assets where the probability of default is considered moderate, however counter-party has sufficient capacity to meet the obligations
	Low quality assets, very high credit risk		Assets where there is a high probability of default and is considered as high risk					Life-time expected credit losses			Life-time expected credit losses
	Doubtful assets, credit-impaired		Assets are written off when there is no reasonable expectation of recovery					Asset is written off

Particulars				Category		Asset group			Estimated gross carrying amount at default		Expected probability of default	Expected credit losses			Carrying amount net of impairment provision
March 31, 2020 (a) Expected credit loss for loans and other financial assets at amortised cost
Loss allowance measured at 12 month expected credit losses		Financial assets for which credit risk has not increased significantly since initial recognition		High quality assets, negligible credit risk		Loans at amortised cost			1,618		0%	-			1,618
				High quality assets, negligible credit risk		Other financial assets at amortised cost			58		0%	-			58
				Standard assets, moderate credit risk		Other financial assets at amortised cost			363		12%	42			322
Loss allowance measured at life-time expected credit losses		Financial assets where there is a high probability of default		Low quality assets, very high credit risk		Loans at amortised cost			17,283		100%	17,283			-
(b) Expected credit loss for trade receivables under simplified approach
Ageing					0-30 Days		31-60 Days			61-90 Days	91-180 Days	180+ Days		Total outstanding
Gross carrying amount Expected loss rate Expected credit losses(Loss allowanceprovision)					307 0% -		244 0% -			106 0% -	132 0% -	1,335 98% 1,309		2,124 62% 1,309
Carrying amount of trade receivables (net of impairment)					307		244			106	132	26		815

Xchanging Solutions Limited

Annual Report 2019-20

Notes forming part of the Financial Statements

		(All amounts in Rs. Lakhs, unless otherwise stated)	(All amounts in Rs. Lakhs, unless otherwise stated)	(All amounts in Rs. Lakhs, unless otherwise stated)	(All amounts in Rs. Lakhs, unless otherwise stated)	(All amounts in Rs. Lakhs, unless otherwise stated)	(All amounts in Rs. Lakhs, unless otherwise stated)	(All amounts in Rs. Lakhs, unless otherwise stated)	(All amounts in Rs. Lakhs, unless otherwise stated)	(All amounts in Rs. Lakhs, unless otherwise stated)	(All amounts in Rs. Lakhs, unless otherwise stated)
Particulars		Category		Asset group		Estimated gross carrying amount at default		Expected probability of default	Expected credit losses		Carrying amount net of impairment provision
March 31, 2019 (a) Expected credit loss for loans and other financial assets at amortised cost
Loss allowance measured at 12 month expected credit losses	Financial assets for which credit risk has not increased significantly since initial recognition	High quality assets, negligible credit risk		Loans at amortised cost		1,868		0%	-		1,868
		High quality assets, negligible credit risk		Other financial assets at amortised cost		46		0%	-		46
		Low quality assets, very high credit risk		Other financial assets at amortised cost		434		13%	56		378
Loss allowance measured at life-time expected credit losses	Financial assets where there is a high probability of default	Low quality assets, very high credit risk		Loans at amortised cost		17,283		100%	17,283		-
(b) Expected credit loss for trade receivables under simplified approach
Ageing			0-30 Days		31-60 Days		61-90 Days	91-180 Days	180+ Days	Total outstanding
Gross carrying amount Expected loss rate Expected credit losses (Loss allowance provision)			293 0% -		312 0% -		42 0% -	148 0% -	1,338 93% 1,243	2,133 58% 1,243
Carrying amount of trade receivables (net of impairment)			293		312		42	148	95	890

32.8 Liquidity risk management

The Company manages liquidity risk by maintaining adequate reserves and banking facilities, by continuously monitoring forecast and actual cash flows, and by matching the maturity profiles of financial assets and liabilities.

32.8.1 Liquidity and interest risk tables

The following tables detail the Company’s remaining contractual maturity for its non-derivative financial liabilities with agreed repayment periods. The tables have been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which the Company can be required to pay. The tables include both interest and principal cash flows.

cash flows.
Particulars	Average effective interest rate(%)	Less than 1 year	1-2 years	2 years & above	Total carrying value
March 31, 2020 Non-interest bearing Fixed interest rate instruments March 31, 2019 Non-interest bearing Fixed interest rate instruments	- - - 10.0%	635 -	- -	- -	635 -
		635	-	-	635
		840 3	- -	- -	840 3
		843	-	-	843

98 Xchanging Solutions Limited

Annual Report 2019-20

Notes forming part of the Financial Statements

(All amounts in Rs. Lakhs, unless otherwise stated)

32.9 Fair value measurements Fair value hierarchy

Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date;
Level 2 inputs are inputs, other than quoted prices included within Level 1, that are observable for the asset or liability, either directly or indirectly; and
Level 3 inputs are unobservable inputs for the asset or liability.

There are no financial assets and liabilities measured at fair value as at March 31, 2020 and March 31, 2019

There have been no transfers between Level 1 and Level 2 during the year ended March 31, 2020 and March 31, 2019

Valuation Methodologies

Investments in mutual funds: The Company’s investments consist primarily of investment in debt linked mutual funds. Fair values of investment securities classified as fair value through profit and loss are determined using the closing NAV and are classified as Level 1.

Fair value of financial assets and financial liabilities that are not measured at fair value

The management assessed that fair value of cash and cash equivalents, trade receivables, trade payables, other current financial assets and liabilities approximate their carrying amounts largely due to the short-term maturities of these instruments.

33 Related Party Disclosures

A. Names of related parties and nature of relationship:

Parties where control exists:	Parties where control exists:
Nature of relationship		Names of related parties
(i)	Holding companies:
	Ultimate Holding Company	DXC Technology Company
	Intermediate holding companies	Computer Sciences Corporation, USA (‘CSC, USA’)
		CSC Computer Sciences International Inc.
		Lux 1 Holding Company, Inc.
		CSC Computer Sciences International S.a.r.l.
		DXC Lux 5 S.a.r.l.
		CSC Computer Sciences Holdings S.a.r.l.
		DXC Lux 6 S.a.r.l.
		CSC Computer Sciences International Holdings Limited
		CSC Computer Sciences International Services Limited
		CSC Computer Sciences International Limited
		CSC Computer Sciences International Operations Limited
		Xchanging Holdings Limited
		Xchanging B.V.
	Immediate holding company	Xchanging (Mauritius) Limited, Mauritius (‘XML, Mauritius’)
(ii)	Subsidiary companies	Xchanging Solutions (Europe) Limited, UK (‘XSEL, UK’)
		Xchanging Solutions (Singapore) Pte Limited, Singapore (‘XSSPL,
		Singapore’)
		Xchanging Solutions (USA) Inc, USA (‘XSUI, USA’)
		Xchanging Solutions (Malaysia) Sdn Bhd, Malaysia (‘XSMSB, Malaysia’)
		(Wholly owned subsidiary of Xchanging Solutions (Singapore) Pte Limited)
		Nexplicit Infotech India Private Limited, India (‘NIIPL, India’) (Wholly owned
		subsidiary of Xchanging Solutions (USA) Inc)
(iii)	Key Managerial Personnel (KMP)
	Executive Director &	Shrenik Kumar Champalal
	Chief Financial Officer
	Executive Director &	Chandrasekhara Boddoju Rao
	Chief Executive Officer
	Company Secretary	Mayank Jain (Upto October 31, 2019)
	Company Secretary	Aruna Mohandoss (from November 13, 2019)

Xchanging Solutions Limited

Annual Report 2019-20

Notes forming part of the Financial Statements

(All amounts in Rs. Lakhs, unless otherwise stated)

2) Other Related Parties with whom transactions have taken place during the year: Fellow subsidiaries

Xchanging Builders (India) Private Limited, India (‘XBPL, India’) Xchanging Global Insurance Solutions Ltd., UK (‘XGISL, UK’) Xchanging Technology Services India Private Limited, India (‘XTSIPL, India’) Xchanging UK Limited, UK (‘XUKL, UK’)

DXC Technology India Private Limited, India (previously known as CSC Technologies India Private Limited) (‘DXC, India’) CSC Deutschland GmbH, Germany (‘CSC, Germany’) EIT Services India Private Limited, India (‘EIT, India’) ESIT Canada Enterprise Services Co, Canada (‘ESIT, Canada’) CSC Consulting Inc., USA (‘CSC Consulting, USA’) Enterprise Services LLC, USA (‘Enterprise, USA’) CSC Corp - FSG US, USA (‘CSC Corp, USA’)

MSS-Americas Outsourcing, USA (‘Americas Outsourcing, USA’) Xchanging Pty Limited, Australia (‘Xchanging, Australia’) Service Mesh Inc., USA (‘Service, USA’) (effective from current financial year)

Summary of transactions with related parties is as follows:	Holding companies	Holding companies	Subsidiary companies	Subsidiary companies	Fellow subsidiaries	Fellow subsidiaries	Total	Total
	For the year ended	For the year ended	For the year ended	For the year ended	For the year ended	For the year ended	For the year ended	For the year ended
	March 31, 2020	March 31, 2019	March 31, 2020	March 31, 2019	March 31, 2020	March 31, 2019	March 31, 2020	March 31, 2019
Expenses paid on behalf of the Company:
XSSPL, Singapore	-	-	24	16	-	-	24	16
XUKL, UK	-	-	-	-	35	43	35	43
XTSIPL, India	-	-	-	-	47	25	47	25
DXC, India	-	-	-	-	118	171	118	171
Service, USA	-	-	-	-	3	-	3	-
EIT, India	-	-	-	-	103	46	103	46
Total	-	-	24	16	306	285	330	301
Expenses paid on behalf of the related party:
XTSIPL, India	-	-	-	-	-	2	-	2
NIIPL, India	-	-	3	-	-	-	3	-
Total	-	-	3	-	-	2	3	2
Interest income on loans:
XTSIPL, India	-	-	-	-	108	108	108	108
XBPL, India	-	-	-	-	89	116	89	116
Total	-	-	-	-	197	224	197	224
Revenue:
XSUI, USA	-	-	1,394	1,660	-	-	1,394	1,660
XGISL, UK	-	-	-	-	42	223	42	223
XTSIPL, India	-	-	-	-	60	-	60	-
DXC, India	-	-	-	-	552	598	552	598
ESIT, Canada	-	-	-	-	-	1	-	1
EIT, India	-	-	-	-	30	40	30	40
CSC Consulting, USA	-	-	-	-	16	56	16	56

100 Xchanging Solutions Limited

Annual Report 2019-20

Notes forming part of the Financial Statements

(All amounts in Rs. Lakhs, unless otherwise stated)

Enterprise, USA	-	-	-	-	299	4	299	4
CSC Corp, USA	-	-	-	-	-	13	-	13
Americas Outsourcing, USA	-	-	-	-	103	190	103	190
CSC, Germany	-	-	-	-	-	14	-	14
Total	-	-	1,394	1,660	1,102	1,139	2,496	2,799
Other Income:
XTSIPL, India	-	-	-	-	-	3	-	3
XSEL, UK	-	-	395	-	-	-	395	-
Total	-	-	395	-	-	3	395	3
Purchase of Asets:
EIT, India	-	-	-	-	18	-	18	-
Total	-	-	-	-	18	-	18	-

Note:

(i) Amount below the rounding off norm adopted by the Company i.e. Rs 1 Lakh are not considered above

Summary of balances of related parties is as follows:	Holding companies	Holding companies	Subsidiary companies	Subsidiary companies	Fellow subsidiaries	Fellow subsidiaries	Total	Total
	As at	As at	As at	As at	As at	As at	As at	As at
	March 31, 2020	March 31, 2019	March 31, 2020	March 31, 2019	March 31, 2020	March 31, 2019	March 31, 2020	March 31, 2019
Trade Receivables:
XSUI, USA	-	-	335	289	-	-	335	289
XGISL, UK	-	-	-	-	8	22	8	22
DXC, India	-	-	-	-	42	40	42	40
EIT, India	-	-	-	-	4	48	4	48
CSC Consulting, USA	-	-	-	-	3	27	3	27
Enterprise, USA	-	-	-	-	24	4	24	4
XTSIPL, India	-	-	-	-	6	-	6	-
Americas Outsourcing, USA	-	-	-	-	-	7	-	7
Total	-	-	335	289	87	148	422	437
Trade Payables:
XSSPL, Singapore	-	-	6	16	-	-	6	16
NIIPL, India	-	-	85	85	-	-	85	85
XSEL, UK	-	-	4	-	-	-	4	-
XUKL, UK	-	-	-	-	31	39	31	39
XGISL, UK	-	-	-	-	101	97	101	97
XTSIPL, India	-	-	-	-	4	2	4	2
DXC, India	-	-	-	-	-	18	-	18
Americas Outsourcing, USA (Unearned revenue)	-	-	-	-	-	49	-	49
Xchanging, Australia	-	-	-	-	-	8	-	8
XSUI, USA	-	-	3	-	-	-	3	-
Service, USA	-	-	-	-	3	-	3	-
EIT, India	-	-	-	-	65	50	65	50
Total	-	-	98	101	204	263	302	364

Xchanging Solutions Limited

Annual Report 2019-20

101

Notes forming part of the Financial Statements

(All amounts in Rs. Lakhs, unless otherwise stated)

Expenses Recoverable:

Expenses Recoverable:
XTSIPL, India	-	-	-	-	11	1	11	1
NIIPL, India	-	-	4	-	-	-	4	-
DXC, India	-	-	-	-	10	39	10	39
Total	-	-	4	-	21	40	25	40
Loans and Advances (including interest accrued):
XTSIPL, India	-	-	-	-	908	916	908	916
XSUI, USA	-	-	17,283	17,283	-	-	17,283	17,283
XBPL, India	-	-	-	-	725	985	725	985
Total	-	-	17,283	17,283	1,633	1,901	18,916	19,184
Provision for doubtful advances:
XSUI, USA	-	-	(17,283)	(17,283)	-	-	(17,283)	(17,283)
Total	-	-	(17,283)	(17,283)	-	-	(17,283)	(17,283)

Note:

(i) Amount below the rounding off norm adopted by the Company i.e. Rs 1 Lakh are not considered above

D. Remuneration paid to the key managerial personnel

Particulars	For the year For the year ended ended
	Mar 31, 2020 Mar 31, 2019
Salaries, bonus, etc. Total	62 95
	62 95

Note:

(i) As gratuity and compensated absences provision are computed for all the employees in aggregate, the amounts relating to key managerial personnel cannot be individually identified.

34 LEASES

(Refer note 2.4)

A. Break-up of current and non-current lease liabilities :

The following is the break-up of current and non-current lease liabilities as at March 31, 2020

B.	Particulars As at Mar 31, 2020
	Current lease liabilities 66 Non-current lease liabilities 118
	Total 184
	Movement in Lease liabilities : The following is the movement in lease liabilities during the year ended March 31, 2020
	Particulars As at Mar 31, 2020
	Balance as at April 1, 2019 - Reclassified on account of adoption of IND AS 116 (Refer note 2.4) 64 Additions 165 Finance costs accrued during the period 11 Payment of Lease liabilities (56)
	Balance as at March 31, 2020 184

102 Xchanging Solutions Limited

Annual Report 2019-20

Notes forming part of the Financial Statements

(All amounts in Rs. Lakhs, unless otherwise stated)

C. D. E. F. G.	The table below provides details regarding the contractual maturities of lease liabilities as at March 31, 2020 on an undiscounted basis:	The table below provides details regarding the contractual maturities of lease liabilities as at March 31, 2020 on an undiscounted basis:
	Particulars As at Mar 31, 2020
	Less than one year 77 One to five years 131 More than five years -
	Total 208
	The impact of changes in acounting policy on account of adoption of Ind AS 116 is as follows:
	Particulars Amount in Rs. Lakhs
	Increase in lease liability by 184 Increase in rights of use by 176 Increase in deferred tax assets by 2 Increase in finance cost by 11 Increase in depreciation by 53
	Amounts recognized inprofit or loss:
	Particulars For the year ended Mar 31, 2020
	Interest on lease liabilities 11 Expenses relating to short- term leases 15
	Amounts recognized in statement of cash flows
	Particulars For the year ended Mar 31, 2020
	Total cash outflows for leases 56
	Effective April 1, 2019, the Company adopted Ind AS 116 “Leases”, applied to all lease contracts existing on April 1, 2019 using the Simplified approach and accordingly, comparatives for the year ended March 31, 2019 have not been retrospectively adjusted. The adoption of the new standard resulted in recognition of Right-of-Use (ROU) of Rs. 64 and a lease liability of Rs. 64. The effect of this adoption is insignificant on theprofit for theperiod and earningsper share.
		As at As at
		Mar 31, 2020 Mar 31, 2019
CAPITAL AND OTHER COMMITMENTS (a) Capital Commitments Estimated value of contracts in capital account remaining 4 2 to be executed (net of advances) (b) Other Commitments (i) As at March 31, 2019, Xchanging Solutions (USA) Inc, USA, Company’s wholly owned subsidiary, has negative net assets amounting to Rs. 17,580 (2019: Rs. 18,447). While the subsidiary is confident of generating funds from their operations, the Companyintends to support the shortfall, if any.
		As at As at
		Mar 31, 2020 Mar 31, 2019
CONTINGENT LIABILITIES (Refer note 2.11) (i) Claims against the Company not acknowledged as debts: Income tax matters [Note (b)] Service tax matters [Note (c)]		1,270 1,177 2,359 2,359
		3,629 3,536

Xchanging Solutions Limited

Annual Report 2019-20

103

Notes forming part of the Financial Statements

(All amounts in Rs. Lakhs, unless otherwise stated)

(ii) (a) During the quarter ended March 31, 2016, one of the customers of the Company has disputed its outstanding balance of INR 960 as on March 31, 2016. Arbitration proceeding for this dispute is ongoing. However as a matter of abundant caution, provision has been made for the amounts due.
(b) The above customer has made a claim on the company for the damages incurred by them to the extent of INR 1,821, which has not been accepted by the Company.

Notes:

(a) The above contingent liabilities are possible obligation or present obligation that may (but probably will not) require an outflow of resources.
(b) Represents various income tax demands under appeal.
(c) Represents service tax amount on select categories of transactions relating to financial years 2007-08 to 2011-12 set out in a show cause notice issued by the Commissioner of Service Tax, Bangalore, which is responded by the Company. Based on consultation with legal counsel, the Company has filed a formal reply to the show cause notice.
(d) It is not practicable for the Company to estimate the timings of cash outflows, if any, in respect of the above pending resolution of the respective proceedings.
(e) The Company does not expect any reimbursements in respect of the above contingent liabilities.

37 CORPORATE SOCIAL RESPONSIBILITY (CSR)

As per Sec 135 of the Companies Act, 2013 applicable in the current year, gross amount required to be spent by the Company during the year is Rs 21 (2019: Rs 20) on various CSR initiatives. Amount spent during the year are mentioned below:

Sector in which the project is covered	NGO Name	For the year ended Mar 31, 2020	For the year ended Mar 31, 2019
Education of underprivileged children	U&I Trust	21	-
Promoting education, including special education	The College student & Graduates Association of the Blind	-	5
Promotingeducation, includingspecial education	Samarthanam Trust for the Disabled	-	15
Eradicatinghunger,povertyand malnutrition	The Akshaya Patra Foundation	-	*
Total		21	20

Amount spent is Rs 25,000/-

38 The Company has strategic gross investment amounting to Rs. 11,224 (2019: Rs. 11,224) in Xchanging Solutions (USA) Inc, USA, its wholly owned subsidiary. Based on assessment of diminution in the value of investments, the Company has made a provision of Rs. 6,045 (2019: Rs. 6,045) in prior years considering it to be “a decline other than temporary”. The Company has tested the investments for impairment as at year end using cash flow projections based on financial forecast approved by the management covering a five-year period. The Company considers Xchanging Solutions (USA) Inc as a strategic long term investment and based on future growth projections, in the opinion of the management, the remaining value of the investments is not required to be impaired. Further, the Company has granted loans and advances aggregating to Rs. 17,283 (2019: Rs. 17,283) and the same was provided in prior years considering it to be doubtful of recovery. The company also has receivables (net of payables) from the subsidiary amounting to Rs. 335 (2019: Rs. 289), based on the evaluation of recoverability, the net receivables is considered good and recoverable.

39 The Company has strategic gross investments amounting to Rs. 2,222 (2019: Rs. 2,222) in Xchanging Solutions (Europe) Limited, UK (“XSEL”), its wholly owned subsidiary. Based on assessment of diminution in the value of investments, the Company has made a provision of Rs. 2,222 (2019: Rs. 2,222) in prior years considering it to be “a decline other than temporary”. XSEL reduced its share capital from £2,664,278 (divided into 2,664,278 shares of £ 1 each) to £ 1 (divided into 1 share of £ 1 each) on May 15, 2019. XSEL declared and paid dividend to the Company on May 20, 2019. Board of the Company approved liquidation of XSEL on May 23, 2019 and the liquidation is still under process.

40 Open offer and minimum public shareholding (MPS)

Pursuant to an offer for sale undertaken on June 10, 2019 and June 11, 2019, Xchanging Technology Services India Private Limited, a promoter of the Company, sold 17,599,461 equity share representing 15.8% of the share capital of the Company, thereby increasing the public shareholding to 25%. On completion of the offer for sale on June 11, 2019, the promoter shareholding in the Company is at 75% and the public shareholding is at 25% thereby complying with the minimum public shareholding requirements under Rule 19A of the Securities Contract Regulation Rules, 1957.

104 Xchanging Solutions Limited

Annual Report 2019-20

Notes forming part of the Financial Statements

(All amounts in Rs. Lakhs, unless otherwise stated)

41 The Company has adopted the option of lower tax rate as provided in the Taxation Law Amendment Act, 2019 and the consequent impact on the tax expense has been considered for the year ended March 31, 2020.

42 Transfer Pricing

The Company has carried out international transactions with associated enterprises. The Company appoints independent consultants to conduct a Transfer Pricing Study to determine whether the transactions with associated enterprises undertaken during the period are on an “arms length basis”. For the current year, the transfer pricing study shall be completed within the permissible time under the legislation and adjustments, if any, arising from the transfer pricing study shall be accounted for as and when the study is completed. However, the Management is confident that its international transactions with associated enterprises are at arm’s length so that the aforesaid legislation/transactions will not have any material impact on the financial statements, particularly on the amount of tax expense and that of provision for taxation for the current year.

43 Disclosure as per regulation 34(3) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015

Loans given to subsidiary/ fellow subsidiaries in which directors are interested:

Name of the party	Relationship	Amount outstanding as at March 31, 2020	Maximum balance outstanding during theyear
Xchanging Technology Services India Private Limited Xchanging Builders (India) Private Limited Xchanging Solutions (USA) Inc (effective from current financial year)	Common Director Common Director Common Director	908 (916) 725 (985) 17,283 -	934 (926) 985 (988) 17,283 -

Note: Figures in bracket relate to previous year

For Investment in subsidiaries refer note 7

44 Events after the reporting period

There are no events after the reporting period.

45 Approval of financial statements

The financial statements of the Company have been reviewed and recommended by the Audit Committee to the Board, and approved by the Board of Directors at its meeting held on May 22, 2020.

46 Previous year figures

Previous year figures have been regrouped / reclassified wherever necessary.

For Deloitte Haskins & Sells LLP Chartered Accountants

For and on behalf of the Board of Directors

Bhavani Balasubramanian

Partner

Place: Chennai Date: May 22, 2020

Chandrasekhara Rao Boddoju Managing Director and Chief Executive Officer DIN : 08185777 Place: Hyderabad Date: May 22, 2020

Shrenik Kumar Champalal Whole Time Director and Chief Financial Officer DIN : 08099410 Place: Bengaluru Date: May 22, 2020

Aruna Mohandoss Company Secretary Place: Chennai Date: May 22, 2020

Xchanging Solutions Limited

Annual Report 2019-20

105

INDEPENDENT AUDITOR’S REPORT

TO THE MEMBERS OF XCHANGING SOLUTIONS LIMITED

Report on the Audit of the Consolidated Financial Statements

Opinion

We have audited the accompanying consolidated financial statements of Xchanging Solutions Limited (“the Parent”) and its subsidiaries, (the Parent and its subsidiaries together referred to as “the Group”), which comprise the Consolidated Balance Sheet as at March 31, 2020, and the Consolidated Statement of Profit and Loss (including Other Comprehensive Income), the Consolidated Statement of Cash Flows and the Consolidated Statement of Changes in Equity for the year then ended, and 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 consolidated financial statements give the information required by the Companies Act, 2013 (“the Act”) in the manner so required and give a true and fair view in conformity with the Indian Accounting Standards prescribed under section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015, as amended (‘Ind AS’), and other accounting principles generally accepted in India, of the consolidated state of affairs of the Group as at March 31, 2020, and their consolidated profit, their consolidated total comprehensive income, their consolidated cash flows and their consolidated changes in equity for the year ended on that date.

Basis for Opinion

We conducted our audit of the consolidated financial statements in accordance with the Standards on Auditing specified under section 143 (10) of the Act (SAs). Our responsibilities under those Standards are further described in the Auditor’s Responsibility for the Audit of the Consolidated Financial Statements section of our report. We are independent of the Group in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India (ICAI) together with the ethical requirements that are relevant to our audit of the consolidated financial statements under the provisions of the Act and the Rules made thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the ICAI’s Code of Ethics. We believe that the audit evidence obtained by us is sufficient and appropriate to provide a basis for our audit opinion on the consolidated financial statements.

Emphasis of Matter

We draw attention to Note 3.1 (v) of the consolidated financial statements which describes the management assessment of the impact of the outbreak of Covid-19 on revenue, trade receivables including unbilled receivables and investments. The management believes that no adjustment is required in the financial statement as it does not impact the current financial year. However, in view of highly uncertain economic environment and its likely effect on future service revenue due to Covid-19, a definitive assessment of the impact on the subsequent periods is dependent upon circumstances as they evolve. Our opinion is not modified in respect of this matter.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the consolidated financial statements of the current period. These matters were addressed in the context of our audit of the consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. We have determined the matters described below to be the key audit matters to be communicated in our report.

Sr. No.	Key Audit Matter	Auditor’s Response
1	Evaluation of uncertain tax positions The Group has material uncertain tax positions including matters under dispute which involves significant judgment due to existence of multiple uncertain tax positions leading to disputes / litigations and there are interpretation of various rules and law. It also involves consideration of on-going disputes and disclosures of related contingencies to determine the possible outcome of these disputes Refer Notes 3.1 (ii) and 20 of the Consolidated financial statements.	Principal Audit Procedures We performed the following substantive procedures: • Evaluated the design of internal controls relating to the uncertain tax positions and tested the operative effectiveness of these controls. • Obtained details of completed tax assessments and demands for the year ended March 31, 2020 from the management. • We involved our internal experts to challenge the management’s underlying assumptions in estimating the tax provision and the possible outcome of the disputes. • Our internal experts also considered the legal precedence and other rulings in evaluating management’s position on these uncertain tax positions. Additionally, we considered the effect of new information in respect of uncertain tax positions as at April 1, 2019 to evaluate whether any change was required to management’s position on these uncertainties.

106 Xchanging Solutions Limited

Annual Report 2019-20

Independent Auditor’s Report

Information Other than the Financial Statements and Auditor’s Report Thereon

The Parent’s Board of Directors is responsible for the preparation of other information. The other information comprises the information included in the Boards’ Report including Annexures to the Board’s Report, Management Discussion and Analysis Report and Corporate Governance Report including annexures thereon but does not include the consolidated financial statements and our auditor’s report thereon.
Our opinion on the consolidated financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.
In connection with our audit of the consolidated financial statements, our responsibility is to read the other information, consider whether the other information is materially inconsistent with the consolidated financial statements or our knowledge obtained during the course of our audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

Management’s Responsibility for the Consolidated Financial Statements

The Parent’s Board of Directors is responsible for the matters stated in section 134(5) of the Act with respect to the preparation of these consolidated financial statements that give a true and fair view of the consolidated financial position, consolidated financial performance including other comprehensive income, consolidated cash flows and consolidated changes in equity of the Group in accordance with the Ind AS and other accounting principles generally accepted in India. The respective Board of Directors of the companies included in the Group are responsible for maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Group and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error, which have been used for the purpose of preparation of the consolidated financial statements by the Directors of the Parent, as aforesaid.

In preparing the consolidated financial statements, the respective Board of Directors of the companies included in the Group are responsible for assessing the ability of the Group to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the management either intends to liquidate or cease operations, or has no realistic alternative but to do so.

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

Auditor’s Responsibility for the Audit of the Consolidated Financial Statements

Our objectives are to obtain reasonable assurance about whether the consolidated 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 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 consolidated financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
Obtain an understanding of internal financial control relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under section 143(3)(i) of the Act, we are also responsible for expressing our opinion on whether the Parent has adequate internal financial controls system in place and the operating effectiveness of such controls.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the 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 to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the consolidated 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 auditor’s

Xchanging Solutions Limited

Annual Report 2019-20

107

Independent Auditor’s Report

report. However, future events or conditions may cause the Group to cease to continue as a going concern.

Evaluate the overall presentation, structure and content of the consolidated financial statements, including the disclosures, and whether the consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
Obtain sufficient appropriate audit evidence regarding the financial information of the subsidiaries within the Group to express an opinion on the consolidated financial statements. We remain solely responsible for our audit opinion.

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

We communicate with those charged with governance of the Parent and such other entities included in the consolidated 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, including any significant deficiencies in internal control that we identify during our audit.

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the consolidated financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

Other Matter

(a) We did not audit the financial information of three subsidiaries, whose financial information reflect total assets of Rs. 153 Lakhs as at March 31, 2020, total revenues of Nil and net cash outflows amounting to Rs. 396 lakhs for the year ended on that date, as considered in the consolidated financial statements. These financial information are unaudited and have been furnished to us by the Management and our opinion on the consolidated financial statements, in so far as it relates to the amounts and disclosures included in respect of these subsidiaries, is based solely on such unaudited financial information. In our opinion and according to the information and explanations given to us by the Management, these financial information are not material to the Group.

Our opinion on the consolidated financial statements above and our report on Other Legal and Regulatory Requirements below, is not modified in respect of the above matter with respect to the financial information certified by the Management.

Report on Other Legal and Regulatory Requirements

As required by Section 143(3) of the Act, based on our audit and on the consideration of the financial information of the subsidiaries referred to in the Other Matter section above we report that:
a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit of the aforesaid consolidated financial statements.
b) In our opinion, proper books of account as required by law relating to preparation of the aforesaid consolidated financial statements have been kept so far as it appears from our examination of those books.
c) The Consolidated Balance Sheet, the Consolidated Statement of Profit and Loss including Other Comprehensive Income, the Consolidated Statement of Cash Flows and the Consolidated Statement of Changes in Equity dealt with by this Report are in agreement with the relevant books of account maintained for the purpose of preparation of the consolidated financial statements.
d) In our opinion, the aforesaid consolidated financial statements comply with the Ind AS specified under Section 133 of the Act.
e) On the basis of the written representations received from the directors of the Parent as on March 31, 2020 taken on record by the Board of Directors of the Company, none of the directors of the Parent Company is disqualified as on March 31, 2020 from being appointed as a director in terms of Section 164 (2) of the Act.
f) With respect to the adequacy of the internal financial controls over financial reporting and the operating effectiveness of such controls, refer to our separate Report in “Annexure A” which is based on the auditors’ reports of the Parent. Our report expresses an unmodified opinion on the adequacy and operating effectiveness of internal financial controls over financial reporting.
g) With respect to the other matters to be included in the Auditor’s Report in accordance with the requirements of section 197(16) of the Act, as amended,

108 Xchanging Solutions Limited

Annual Report 2019-20

Independent Auditor’s Report

In our opinion and to the best of our information and according to the explanations given to us, the remuneration paid by the Parent to its directors during the year is in accordance with the provisions of section 197 of the Act.

h) With respect to the other matters to be included in the Auditor’s Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, as amended in our opinion and to the best of our information and according to the explanations given to us:
i) The consolidated financial statements disclose the impact of pending litigations on the consolidated financial position of the Group.
ii) The Group did not have any material foreseeable losses on long-term contracts including derivative contracts.
iii) There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Parent.

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

Bhavani Balasubramanian

(Partner) (Membership No. 22156) UDIN: 20022156AAAAAN5312

Chennai, May 22, 2020

Xchanging Solutions Limited

Annual Report 2019-20

109

Independent Auditor’s Report

ANNEXURE “A” TO THE INDEPENDENT AUDITOR’S REPORT

(Referred to in paragraph 1(f) under ‘Report on Other Legal and Regulatory Requirements’ section of our report of even date)

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

In conjunction with our audit of the consolidated Ind AS financial statements of the Company as of and for the year ended March 31, 2020, we have audited the internal financial controls over financial reporting of Xchanging Solutions Limited (hereinafter referred to as “Parent”), as of that date.

Management’s Responsibility for Internal Financial Controls

The Board of Directors of the Parent, is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India (“the ICAI)”. These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to the Parent’s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013.

Auditor’s Responsibility

Our responsibility is to express an opinion on the Parent’s internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the “Guidance Note”) issued by the Institute of Chartered Accountants of India and the Standards on Auditing, prescribed under Section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.

We believe that the audit evidence we have obtained, is sufficient and appropriate to provide a basis for our audit opinion on the Parent’s internal financial controls system over financial reporting.

Meaning of Internal Financial Controls Over Financial Reporting

Inherent Limitations of Internal Financial Controls Over Financial Reporting

110 Xchanging Solutions Limited

Annual Report 2019-20

Independent Auditor’s Report

Opinion

In our opinion to the best of our information and according to the explanations given to us, the Parent has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at March 31, 2020, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India.

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

Bhavani Balasubramanian

(Partner) (Membership No. 22156) UDIN: 20022156AAAAAN5312

Chennai, May 22, 2020

Xchanging Solutions Limited

Annual Report 2019-20

111

CONSOLIDATED BALANCE SHEET

XCHANGING SOLUTIONS LIMITED CONSOLIDATED BALANCE SHEET AS AT MARCH 31, 2020

(All amounts in Rs. Lakhs, unless otherwise stated)

Note

As at
As at

Mar 31, 2020
Mar 31, 2019

ASSETS
Non-current assets
Property, plant and equipment
4
Right of use assets
5
Other intangible assets
6
Goodwill on consolidation
7
Financial assets
Loans
8
Other financial assets
9
Deferred tax assets (net)
10
Other non-current assets
11
Total non-current assets
Current assets
Financial assets
Trade receivables
12
Cash and cash equivalents
13
Bank balances other than above
14
Loans
8
Other financial assets
9
Other current assets
11
Total current assets
Total assets
EQUITY AND LIABILITIES
Equity
Equity share capital
15
Other equity
16
Total equity
Liabilities
Non-current liabilities
Financial liabilities
Lease liabilities
34
Provisions
17
Total non-current liabilities

48
31
221
-
3
5
15,841
15,841
218
1,618
-
10
338
754
1,730
1,658
------------------------------
------------------------------
18,399
19,917
------------------------------
------------------------------
2,071
2,877
32,588
25,691
117
247
1,400
250
2,548
2,093
170
258
------------------------------
------------------------------
38,894
31,416
------------------------------
------------------------------
57,293
51,333
==========================
==========================
11,140
11,140
38,470
32,182
------------------------------
------------------------------
49,610
43,322
------------------------------
------------------------------
118
-
333
303
------------------------------
------------------------------
451
303
------------------------------
------------------------------

112 Xchanging Solutions Limited

Annual Report 2019-20

Consolidated Balance sheet

(All amounts in Rs. Lakhs, unless otherwise stated)

Note

As at
As at

Mar 31, 2020
Mar 31, 2019

Current liabilities
Financial liabilities
Lease liabilities
34
Trade payables
Total outstanding dues of micro enterprises and small enterprises
18
Total outstanding dues of creditors other than micro enterprises
and small enterprises
18
Other financial liabilities
19
Provisions
17
Current tax liabilities (net)
20
Other current liabilities
21
Total current liabilities
Total liabilities
Total equity and liabilities

113
-
-
1
3,199
3,130
31
10
90
77
3,487
4,001
312
489
------------------------------
------------------------------
7,232
7,708
------------------------------
------------------------------
7,683
8,011
------------------------------
------------------------------
57,293
51,333
==========================
==========================

See accompanying notes to the consolidated financial statements

In terms of our report attached.

For Deloitte Haskins & Sells LLP Chartered Accountants

For and on behalf of the Board of Directors

Bhavani Balasubramanian Partner

Place: Chennai Date: May 22, 2020

Chandrasekhara Rao Boddoju

Managing Director and Chief Executive Officer DIN : 08185777 Place: Hyderabad Date: May 22, 2020

Shrenik Kumar Champalal

Whole Time Director and Chief Financial Officer DIN : 08099410 Place: Bengaluru Date: May 22, 2020

Aruna Mohandoss

Company Secretary Place: Chennai Date: May 22, 2020

Xchanging Solutions Limited

Annual Report 2019-20

113

CONSOLIDATED STATEMENT OF PROFIT AND LOSS

XCHANGING SOLUTIONS LIMITED

CONSOLIDATED STATEMENT OF PROFIT AND LOSS FOR THE YEAR ENDED MARCH 31, 2020

(All amounts in Rs. Lakhs, unless otherwise stated)

Note

For the year
For the year
ended
ended

Mar 31, 2020
Mar 31, 2019

Revenue from operations
22
18,226
18,410
Other income
23
1,268
1,455
------------------------------
------------------------------
Total Income
19,494
19,865
------------------------------
------------------------------
Expenses
Employee benefits expense
24
7,634
8,825
Finance costs
25
13
1
Depreciation and amortisation expense
26
144
47
Other expenses
27
5,774
5,312
------------------------------
------------------------------
Total expenses
13,565
14,185
------------------------------
------------------------------
Profit before tax
5,929
5,680
------------------------------
------------------------------
Tax expense/ (benefit)
Current tax
28
1,114
962
Current tax- for the earlier years
(796)
15
Deferred tax
28
141
32
------------------------------
------------------------------
Total tax expense
459
1,009
------------------------------
------------------------------
Profit for the period
5,470
4,671
------------------------------
------------------------------
Other comprehensive income
(A) (i)
Items that will not be reclassified to profit or loss
- Remeasurements of the defined benefit plans
4
35
(ii) Income tax relating to items that will not be reclassified to profit or loss
(1)
(10)
(B) (i)
Items that may be reclassified to profit or loss
- Exchange differences in translating the financial statements of foreign operations
1,089
378
(ii) Income tax relating to items that may be reclassified to profit or loss
(274)
(110)
------------------------------
------------------------------
Total other comprehensive income
818
293
------------------------------
------------------------------
Total Comprehensive Income for the period
6,288
4,964
------------------------------
------------------------------
Earnings per Equity Share (of Rs.10 each)
30
Basic- In Rs
4.91
4.19
Diluted- In Rs
4.91
4.19

See accompanying notes to the consolidated financial statements

In terms of our report attached.

For Deloitte Haskins & Sells LLP

For and on behalf of the Board of Directors

Chartered Accountants

Bhavani Balasubramanian

Partner

Place: Chennai Date: May 22, 2020

Chandrasekhara Rao Boddoju Shrenik Kumar Champalal

Managing Director and Whole Time Director and Chief Executive Officer Chief Financial Officer DIN : 08185777 DIN : 08099410 Place: Hyderabad Place: Bengaluru Date: May 22, 2020 Date: May 22, 2020

Place: Hyderabad Date: May 22, 2020

Aruna Mohandoss

Company Secretary Place: Chennai Date: May 22, 2020

114 Xchanging Solutions Limited

Annual Report 2019-20

XCHANGING SOLUTIONS LIMITED

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED MARCH 31, 2020

(All amounts in Rs. Lakhs, unless otherwise stated)

a EQUITY SHARE CAPITAL

Balance at April 1, 2018 11,140 Changes in equity share capital during the year - --------------------------------- Balance at March 31, 2019 11,140 --------------------------------Changes in equity share capital during the year - --------------------------------- Balance at March 31, 2020 11,140 ---------------------------------

b OTHER EQUITY

OTHER EQUITY
Particulars	Reserves & Surplus			Items of other comprehensive income	Total other equity
	Capital reserve	Securities premium	Retained earnings	Foreign currency translation reserve
Balance as of April 1, 2018	361	8,417	18,394	46	27,218
Profit for the year Other comprehensive income for the year, net of tax	- -	- -	4,671 25	- 268	4,671 293
Balance as of March 31, 2019	361	8,417	23,090	314	32,182

Particulars	Reserves & Surplus			Items of other comprehensive income	Total other equity
	Capital reserve	Securities premium	Retained earnings	Foreign currency translation reserve
Balance as of April 1, 2019	361	8,417	23,090	314	32,182
Profit for the year Other comprehensive income for the year, net of tax	- -	- -	5,470 3	- 815	5,470 818
Balance as of March 31, 2020	361	8,417	28,563	1,129	38,470

See accompanying notes to the consolidated financial statements

In terms of our report attached.

For Deloitte Haskins & Sells LLP Chartered Accountants

For and on behalf of the Board of Directors

Bhavani Balasubramanian Partner

Place: Chennai Date: May 22, 2020

Chandrasekhara Rao Boddoju Managing Director and Chief Executive Officer DIN : 08185777

Place: Hyderabad Date: May 22, 2020

Shrenik Kumar Champalal Whole Time Director and Chief Financial Officer DIN : 08099410 Place: Bengaluru Date: May 22, 2020

Aruna Mohandoss Company Secretary Place: Chennai Date: May 22, 2020

Xchanging Solutions Limited

Annual Report 2019-20

115

CONSOLIDATED CASH FLOW STATEMENT

XCHANGING SOLUTIONS LIMITED CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE YEAR ENDED MARCH 31, 2020

XCHANGING SOLUTIONS LIMITED CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE YEAR ENDED MARCH 31, 2020	XCHANGING SOLUTIONS LIMITED CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE YEAR ENDED MARCH 31, 2020
(All amounts in Rs. Lakhs, unless otherwise stated)
	For the year For the year ended ended
	Mar 31, 2020 Mar 31, 2019
A. CASH FLOW FROM OPERATING ACTIVITIES Profit before tax 5,929 5,680 Adjustments for: Depreciation and amortisation expense 144 47 Profit on sale of property, plant and equipment (2) (8) Foreign exchange loss - unrealised 74 (36) Interest income (1,042) (298) Dividend income - (542) Provision for doubtful advances 13 78 Provision for doubtful debts - 7 Liabilities no longer required written back - (211) Other provisions no longer required written back (120) (315) Bad debts written off - 41 Finance cost including lease liability (Refer note 34) 13 1 Other non cash adjustments 3 25 --------------------------------- --------------------------------- Operating profit before working capital changes 5,012 4,469 Changes in working capital: Adjustments for (increase) / decrease in operating assets: Trade receivables 889 329 Other current assets 183 41 Loans & other financial assets and other assets (470) 981 Adjustments for increase / (decrease) in operating liabilities: Trade payables (177) (446) Other financial liabilities and other liabilities (47) 144 Provisions 43 (46) --------------------------------- --------------------------------- Cash generated from operations 5,433 5,472 Taxes paid (net of refunds) (859) (658) --------------------------------- --------------------------------- Net cash generated from operating activities (A) 4,574 4,814 --------------------------------- --------------------------------- B. CASH FLOW FROM INVESTING ACTIVITIES Purchase of property, plant and equipment (40) (28) Proceeds from sale of property, plant and equipment 2 8 Dividend income - 542 Proceeds from loans 250 - Deposits with banks with maturity period more than 3 months but less than 12 months 130 258 Deposits with banks with maturity period more than 12 months - 16 Interest received 1,029 289 --------------------------------- --------------------------------- Net cash generated from investing activities (B) 1,371 1,085 --------------------------------- ---------------------------------

116 Xchanging Solutions Limited

Annual Report 2019-20

Consolidated Cash Flow Statement

(All amounts in Rs. Lakhs, unless otherwise stated)

For the year
For the year
ended
ended

Mar 31, 2020
Mar 31, 2019

C.
CASH FLOW FROM FINANCING ACTIVITIES
Repayment from non-current borrowings
Payment of lease liabilities
Finance cost including lease liability (Refer note 34)
Net cash used in financing activities (C)
Net increase in cash and cash equivalents (A + B + C)
Cash and cash equivalents at the beginning of the year
Effect of exchange differences on balances with banks in foreign currency
Cash and cash equivalents at the end of the year
Cash on hand
Balances with banks:
In current accounts
Funds in transit
Demand deposits (less than 3 months maturity)
Effect of exchange differences on balances with banks in foreign currency
Net cash and cash equivalents included in note 13
Cash and cash equivalents

(3)
(8)
(107)
-
(13)
(1)
---------------------------------
---------------------------------
(123)
(9)
---------------------------------
---------------------------------
5,822
5,890
25,691
19,503
1,075
298
---------------------------------
---------------------------------
32,588
25,691
---------------------------------
---------------------------------
-
-
16,486
11,739
133
-
15,930
13,941
39
11
---------------------------------
---------------------------------
32,588
25,691
---------------------------------
---------------------------------
32,588
25,691
---------------------------------
---------------------------------

Notes:

(1) Figures in brackets indicate cash outflow.

See accompanying notes to the consolidated financial statements

In terms of our report attached.

For Deloitte Haskins & Sells LLP Chartered Accountants

For and on behalf of the Board of Directors

Bhavani Balasubramanian Partner

Place: Chennai Date: May 22, 2020

Aruna Mohandoss Company Secretary Place: Chennai Date: May 22, 2020

Xchanging Solutions Limited

Annual Report 2019-20

117

NOTES FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS

XCHANGING SOLUTIONS LIMITED

Notes forming part of the consolidated financial statements

(All amounts in Rs. Lakhs, unless otherwise stated)

1. General Information

2. Significant Accounting Policies

2.1 Basis of preparation and presentation

These consolidated financial statements relating to Xchanging Solutions Limited (‘the Company’) and its subsidiaries (together ‘the Group’) have been prepared in accordance with Indian Accounting Standards (Ind AS) notified under the Companies (Indian Accounting Standards) Rules, 2015 and relevant amendment rules issued thereafter under the historical cost convention on the accrual basis except for certain financial instruments which are measured at fair values at the end of each reporting period as explained in the accounting policies below.

Historical cost is generally based on the fair value of the consideration given in exchange for goods and services.

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date; regardless of whether that price is directly observable or estimated using another valuation technique. In estimating the fair value of an asset or a liability, the Group takes into account the characteristics of the asset or liability if market participants would take those characteristics into account when pricing the asset or liability at the measurement date. Fair value for measurement and/or disclosure purposes in these consolidated financial statements is determined on such a basis, except for share-bases payment transactions that are within the scope of lnd AS 102, leasing transactions that are within the scope of Ind AS 17, and measurements that have some similarities to fair value but are not fair value, such as net realisable value in Ind AS 2 or value in use in Ind AS 36.

Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date;
Level 2 inputs are inputs, other than quoted prices included within Level 1, that are observable for the asset or liability, either directly or indirectly; and
Level 3 inputs are unobservable inputs for the asset or liability.

The principal accounting policies are set out below:

2.2 Basis of consolidation

2.2.1 Subsidiaries

(A) Subsidiaries are all entities (including structured entities) over which the Company has control. The group controls an entity when the group is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power to direct the relevant activities of the entity. Subsidiaries are fully consolidated from the date on which control is transferred to the group. They are deconsolidated from the date that control ceases.

The acquisition method of accounting is used to account for business combinations by the group.

The consolidated financial statements of the Group have been prepared based on a line-by-line consolidation of the balance sheet, statement of profit and loss and cash flow statement of the Company and its subsidiaries as at and for the year ended March 31, 2020. All inter-company transactions and balances between the entities included in the consolidated financial statements have been eliminated.

The excess of cost to the Company of its investments in subsidiaries, over its proportionate share in equity of the subsidiaries at the date of acquisition is recognised in the consolidated financial statements as Goodwill and disclosed under Intangible Assets. In case the cost of investment in subsidiaries is less than the proportionate share in equity of the subsidiaries at the date of acquisition, the difference is treated as Capital Reserve and disclosed under Reserves and Surplus or netted off against Goodwill, as may be the case.

118 Xchanging Solutions Limited

Annual Report 2019-20

Notes forming part of the Consolidated Financial Statements

(All amounts in Rs. Lakhs, unless otherwise stated)

The consolidated financial statements have been prepared using uniform accounting policies for like transactions and other events in similar circumstances and are presented to the extent possible in the same manner as the Company’s separate financial statements.

(B) Subsidiaries considered in the consolidated financial statements are given below:

Name of the subsidiary	Country of	Ownership	Interest
	incorporation
Direct subsidiaries:		2020	2019
Xchanging Solutions (Singapore) Pte Limited	Singapore	100%	100%
Xchanging Solutions (Europe) Limited	United Kingdom	100%	100%
Xchanging Solutions (USA) Inc	USA	100%	100%
Step-down subsidiaries:
Nexplicit Infotech India Private Limited	India	100%	100%
(Wholly owned subsidiary of Xchanging Solutions
(USA) Inc)
Xchanging Solutions (Malaysia) Sdn Bhd	Malaysia	100%	100%
(Wholly owned subsidiary of Xchanging Solutions
(Singapore) Pte Limited)

2.3 Goodwill arising on consolidation

Goodwill arising on consolidation is carried at the value determined at the date of acquisition of the subsidiary. Goodwill arising on consolidation is not amortised, but is tested for impairment at every balance sheet date.

2.4 Revenue recognition

Revenue is recognised net of Goods and Services Tax (GST) to the extent that it is probable that economic benefit will flow to the Group and that revenue can be reliably measured. Revenue is recognised upon transfer of control of promised products or services to customers in an amount that reflects the consideration we expect to receive in exchange for those products or services. Arrangements with customers for software related services are either on a fixed-price or on a timeand-material basis.

(i) Revenue on Time and Material contracts (“T&M”) are recognised as the related services are performed and revenue from the end of the last invoicing to the reporting date is recognised as unbilled revenue. Revenue from fixed-price where the performance obligations are satisfied over time and where there is no uncertainty as to measurement or collectability of consideration, is recognised 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. Efforts or costs expended have been used to measure progress towards completion as there is a direct relationship between input and productivity. Maintenance revenue is recognised ratably over the term of the underlying maintenance arrangement.
(ii) In arrangements for software development and related services and maintenance services, the Group has applied the guidance in Ind AS 115, Revenue from contract with customer, by applying the revenue recognition criteria for each distinct performance obligation. The arrangements with customers generally meet the criteria for considering software development and related services as distinct performance obligations. For allocating the transaction price, the Group has measured the revenue in respect of each performance obligation of a contract at its relative standalone selling price. The price that is regularly charged for an item when sold separately is the best evidence of its standalone selling price. In cases where the Group is unable to determine the standalone selling price, the Group uses the expected cost plus margin approach in estimating the standalone selling price. For software development and related services, the performance obligations are satisfied as and when the services are rendered since the customer generally obtains control of the work as it progresses.
(iii) Contract modifications are accounted for when additions, deletions or changes are approved either to the contract scope or contract price. The accounting for modifications of contracts involves assessing whether the services added to an existing contract are distinct and whether the pricing is at the standalone selling price. Services added that are not distinct are accounted for on a cumulative catch up basis, while those that are distinct are accounted for prospectively, either as a separate contract, if the additional services are priced at the standalone selling price, or as a termination of the existing contract and creation of a new contract if not priced at the standalone selling price.
(iv) Revenue from licenses where the customer obtains a “right to use” the licenses is recognised at the time the license is made available to the customer. Revenue from licenses where the customer obtains a “right to access” is recognised

Xchanging Solutions Limited

Annual Report 2019-20

119

Notes forming part of the Consolidated Financial Statements

(All amounts in Rs. Lakhs, unless otherwise stated)

over the access period. Arrangements to deliver software products generally have three elements: license, implementation and Annual Maintenance Contracts (AMC). The Group has applied the principles under Ind AS 115 to account for revenues from these performance obligations. When implementation services are provided in conjunction with the licensing arrangement and the license and implementation 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. In the absence of standalone selling price for implementation, the performance obligation is estimated using the expected cost plus margin approach. Where the license is required to be substantially customized as part of the implementation service the entire arrangement fee for license and implementation is considered to be a single performance obligation and the revenue is recognised using the percentageof-completion method as the implementation is performed. Revenue from support and other services arising due to the sale of software products is recognised as the performance obligations are satisfied. AMC revenue is recognised ratably over the period in which the services are rendered.

(v) Provision for estimated losses, if any, on incomplete contracts are recorded in the period in which such losses become probable based on the current contract estimates.
(vi) Deferred and unearned revenues represent the estimated unearned portion of fees derived from certain fixed-rate service agreements. Unearned revenues for fixed fee contracts are recognised on a pro-rata basis over the term of the underlying service contracts, which are generally one year.
(vii) Unbilled revenue represents costs and earnings in excess of billings as at the balance sheet date.

2.5 Other Income

Interest income from a financial asset is recognised when it is probable that the economic benefits will flow to the Group and the amount of income can be measured reliably. Interest income is accounted on accrual basis. Dividend income is accounted for when the right to receive it is established.

2.6 Leases

As a lessee:

The Group’s lease asset classes primarily consist of leases for buildings. The Group assesses whether a contract contains a lease, at inception of a contract. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. To assess whether a contract conveys the right to control the use of an identified asset, the Group assesses whether: (i) the contract involves the use of an identified asset (ii) the Group has substantially all of the economic benefits from use of the asset through the period of the lease and (iii) the Group has the right to direct the use of the asset.

At the date of commencement of the lease, the Group recognizes a right-of-use asset (“ROU”) and a corresponding lease liability for all lease arrangements in which it is a lessee, except for leases with a term of twelve months or less (short-term leases) and low value leases. For these short-term and low value leases, the Group recognizes the lease payments as an operating expense on a straight-line basis over the term of the lease.

The lease liability is initially measured at amortized cost at the present value of the future lease payments. The lease payments are discounted using the interest rate implicit in the lease or, if not readily determinable, using the incremental borrowing rates in the country of domicile of these leases. Lease liabilities are remeasured with a corresponding adjustment to the related right of use asset if the Group changes its assessment if whether it will exercise an extension or a termination option.

Lease liability and ROU asset have been separately presented in the Balance Sheet and lease payments have been classified as financing cash flows.

120 Xchanging Solutions Limited

Annual Report 2019-20

Notes forming part of the Consolidated Financial Statements

(All amounts in Rs. Lakhs, unless otherwise stated)

Transition to Ind AS 116

Effective April 1, 2019, the Group adopted Ind AS 116 “Leases”, applied to all lease contracts existing on April 1, 2019 using the Simplified approach and accordingly, comparatives for the year ended March 31, 2019 have not been retrospectively adjusted. The adoption of the new standard resulted in recognition of Right-of-Use (ROU) of Rs. 169 and a lease liability of Rs. 169. The effect of this adoption is insignificant on the profit for the period and earnings per share.

2.7 Foreign currencies

(i) Functional and presentation currency

The functional currency of Xchanging Solutions Limited and Nexplicit Infotech India Private Limited is the Indian rupee. The functional currencies of Xchanging Solutions (Singapore) Pte Limited, Xchanging Solutions (Europe) Limited, Xchanging Solutions (USA) Inc and Xchanging Solutions (Malaysia) Sdn Bhd are the respective local currencies. These financial statements are presented in Indian rupee.

(ii) Initial recognition:

(iii) Subsequent recognition:

As at the reporting date, non-monetary items which are carried in terms of historical cost denominated in a foreign currency are reported using the exchange rate at the date of the transaction. All non-monetary items which are carried at fair value or other similar valuation denominated in a foreign currency are reported using the exchange rates that existed when the values were determined.All monetary assets and liabilities in foreign currency are restated at the end of accounting period other than those monetary assets which are provided for being doubtful of recovery.Exchange differences on restatement of all monetary items are recognised in the Statement of Profit and Loss.

(iv) Translation of foreign operations:

For the purposes of presenting these consolidated financial statements, the assets and liabilities of the Group’s foreign operations are translated into Indian Rupees using exchange rates prevailing at the end of each reporting period. Income and expense items are translated at the average exchange rates for the period, unless exchange rates fluctuate significantly during that period, in which case the exchange rates at the dates of the transactions are used. Exchange differences arising, if any, are recognised in other comprehensive income and accumulated in equity (and attributed to non-controlling interests as appropriate).

On the disposal of a foreign operation, the cumulative amount of the exchange differences which have been deferred and which relate to that operation are recognised as income or as expense in the same period in which the gain or loss on disposal is recognised.

2.8 Employee benefits

2.8.1 Retirement benefit costs and termination benefits

Payments to defined contribution retirement benefit plans are recognised as an expense when employees have rendered service entitling them to the contributions.

service cost (including current service cost, past service cost, as well as gains and losses on curtailments and settlements);
net interest expense or income; and

Xchanging Solutions Limited

Annual Report 2019-20

121

Notes forming part of the Consolidated Financial Statements

(All amounts in Rs. Lakhs, unless otherwise stated)

remeasurement
- The Group presents the first two components of defined benefit costs in profit or loss in the line item ‘Employee benefits expense’. Curtailment gains and losses are accounted for as past service costs.The retirement benefit obligation recognised in the balance sheet represents the actual deficit or surplus in the Group’s defined benefit plans. Any surplus resulting from this calculation is limited to the present value of any economic benefits available in the form of refunds from the plans or reductions in future contributions to the plans.
- A liability for a termination benefit is recognised at the earlier of when the entity can no longer withdraw the offer of the termination benefit and when the entity recognises any related restructuring costs.
2.8.2 Short-term and other long-term employee benefits

Liabilities recognised in respect of short-term employee benefits. are measured at the undiscounted amount of the benefits expected to be paid in exchange for that service.

Liabilities recognised in respect of other long-term employee benefits are measured at the present value of the estimated future cash outflows expected to be made by the Group in respect of services provided by employees up to the reporting date.

2.9 Taxation

Income tax expense represents the sum of the tax currently payable and deferred tax.

2.9.1 Current tax

Income tax expense or credit for the period is the tax payable on the current period’s taxable income using the tax rates and tax laws that have been enacted or substantively enacted by the balance sheet date. The Group periodically evaluates positions taken in tax returns with respect to situations in which applicable tax regulation is subject to interpretation. It establishes provisions where appropriate on the basis of amounts expected to be paid to the tax authorities.

2.9.2 Deferred tax

Deferred income tax assets and liabilities are recognized for all temporary difference arising between the tax bases of assets and liabilities and their carrying amounts in the consolidated financial statements. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realised.Deferred income tax assets and liabilities are measured using tax rates and tax laws that have been enacted or substantively enacted by the Balance Sheet date and are expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled.

The effect of changes in tax rates on deferred income tax assets and liabilities is recognized as income or expense in the period that includes the enactment or the substantive enactment date. A deferred tax asset is recognized to the extent that it is probable that future taxable profit will be available against which the deductible temporary differences and tax losses can be utilised.

2.9.3 Current tax and deferred tax for the year

2.10 Property, plant and equipment and depreciation

(i) Property, plant and equipment are stated at cost of acquisition less accumulated depreciation and impairment losses. Cost comprises the purchase price and any directly attributable costs of bringing the assets to their working condition for their intended use.
(ii) Depreciable amount for assets is the cost of an asset, or other amount substituted for cost, less its estimated residual value. Depreciation on Property, plant & equipment has been provided on the straight-line method as per the useful life prescribed in Schedule II to the Companies Act, 2013 except in respect of the following categories of assets, in whose case the life of the assets has been assessed as under based on technical advice, taking into account the nature of the asset, the estimated usage of the asset, the operating conditions of the asset, past history of replacement,

122 Xchanging Solutions Limited

Annual Report 2019-20

Notes forming part of the Consolidated Financial Statements

(All amounts in Rs. Lakhs, unless otherwise stated)

anticipated technological changes etc:

Category of assets	Estimated useful life
Servers (Computers)	2 to 4
Vehicles	2 to 6
Office equipment	3 to 5
Furniture and fixtures	5 to10

(iii) Losses arising from the retirement of, and gains or losses arising from disposal of fixed assets which are carried at cost are recognised in the Statement of Profit and Loss.
(iv) Leasehold improvements are amortised over the period of lease or five years, whichever is lower.
(v) Assets individually costing up to Rupees five thousand are fully depreciated in the year of purchase.

2.11 Intangible Assets and Amortisation

Intangible assets with finite useful lives are stated at cost of acquisition less accumulated amortisation and impairment losses.

(i) Goodwill arising on acquisition is the difference between the cost of an acquired business and the aggregate of the fair value of that entity’s identifiable assets and liabilities and the same is amortised on a straight-line basis over its economic life or the period defined in the Court scheme.
(ii) Computer software is amortised over an estimated useful life of one to six years.
(iii) The estimated useful life of the intangible assets and the amortisation period are reviewed at the end of each financial year and the amortisation period is revised to reflect the changed pattern, if any.

2.12 Impairment of tangible and intangible assets other than goodwill

2.13 Provisions and contingent liabilities

Provisions: A provision is recognised when the Group has a present obligation as a result of past events and it is probable that an outflow of resources will be required to settle the obligation in respect of which a reliable estimate can be made. Provisions (excluding retirement benefits) are not discounted to their present value and are determined based on the best estimate required to settle the obligation at the balance sheet date. These are reviewed at each balance sheet date and adjusted to reflect the current best estimates.

Xchanging Solutions Limited

Annual Report 2019-20

123

Notes forming part of the Consolidated Financial Statements

(All amounts in Rs. Lakhs, unless otherwise stated)

Contingent liabilities: Contingent liabilities are disclosed when there is a possible obligation arising from past events, the existence of which will be confirmed only by the occurrence or non occurrence of one or more uncertain future events not wholly within the control of the Group or a present obligation that arises from past events where it is either not probable that an outflow of resources will be required to settle or a reliable estimate of the amount cannot be made, is termed as a contingent liability.

2.14 Financial instruments

Financial assets and financial liabilities are recognised when the Group becomes a party to the contractual provisions of the instruments.

2.15 Financial assets

All recognised financial assets are subsequently measured in their entirety at either amortised cost or fair value depending on the classification of the Financial assets.

2.15.1 Classification of financial assets

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

For the impairment policy on financial assets measured at amortised cost, refer Note 2.15.3

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

For the impairment policy on financial assets at FVTOCI, refer Note 2.15.3All other financial assets are subsequently measured at fair value.

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

Financial assets that do not meet the amortised cost criteria or FVTOCI criteria are measured at FVTPL. In addition, financial assets that meet the amortised cost criteria or the FVTOCI criteria but are designated as at FVTPL are measured at FVTPL.

A financial asset that meets the amortised cost criteria or debt instruments that meet the FVTOCI criteria may be designated as at FVTPL upon initial recognition if such designation eliminates or significantly reduces a measurement or recognition inconsistency that would arise from measuring assets or liabilities or recognising the gains and losses on them on different bases. The Group has not designated any debt instrument as at FVTPL.

124 Xchanging Solutions Limited

Annual Report 2019-20

Notes forming part of the Consolidated Financial Statements

(All amounts in Rs. Lakhs, unless otherwise stated)

item. Dividend on financial assets at FVTPL is recognised when the Group’s right to receive the dividends is established, it is probable that the economic benefits associated with the dividend will flow to the entity, the dividend does not represent a recovery of part of cost of the investment and the amount of dividend can be measured reliably.

2.15.3 Impairment of financial assets

In accordance with Ind AS 109, the Group applies Expected Credit Loss (ECL) model for measurement and recognition of impairment loss on the Financial assets that are initially measured at fair value with subsequent measurement at amortised cost e.g Trade receivables, unbilled revenue etc.

The Group follows ‘simplified approach’ for recognition of impairment loss allowance for trade receivables. The application of simplified approach does not require the Group to track changes in credit risk. Rather, it recognises impairment loss allowance based on lifetime ECLs at each reporting date, right from its initial recognition. For recognition of impairment loss on other financial assets and risk exposure, the Group determines whether there has been a significant increase in the credit risk since initial recognition. If credit risk has not increased significantly, twelve month ECL is used to provide for impairment loss. However, if credit risk has increased significantly, lifetime ECL is used. If, in the subsequent period, credit quality of the instrument improves such that there is no longer a significant increase in credit risk since initial recognition, then the entity reverts to recognising impairment loss allowance based on a twelve month ECL.

ECL is the difference between all contractual cash flows that are due to the Group in accordance with the contract and all the cash flows that the entity expects to receive (i.e., all cash shortfalls), discounted at the original Effective Interest Rate (EIR).

Allowance for Trade receivables

The Group follows a ‘simplified approach’ (i.e. based on lifetime ECL) for recognition of impairment loss allowance on Trade receivables (including lease receivables). For the purpose of measuring lifetime ECL allowance for trade receivables, the Group estimates irrecoverable amounts based on the ageing of the receivable balances and historical experience. Further, a large number of minor receivables are grouped into homogeneous groups and assessed for impairment collectively. Individual trade receivables are written off when management deems them not to be collectible.

2.15.4 Derecognition of financial assets

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. If the Group neither transfers nor retains substantially all the risks and rewards of ownership and continues to control the transferred asset, the Group recognises its retained interest in the asset and an associated liability for amounts it may have to pay. If the Group retains substantially all the risks and rewards of ownership of a transferred financial asset, the Group continues to recognise the financial asset and also recognises a collateralised borrowing for the proceeds received.

2.15.5 Foreign exchange gains and losses

2.16 Financial liabilities

Classification as debt

Debt are classified as financial liabilities in accordance with the substance of the contractual arrangements and the definitions of a financial liability

Financial liabilities

2.16.1 Financial liabilities subsequently measured at amortised cost

Financial liabilities that are not held-for-trading and are not designated as at FVTPL, are measured at amortised cost at the end of subsequent accounting periods. The carrying amounts of financial liabilities that are subsequently measured at amortised cost are determined based on the effective interest method. Interest expense that is not capitalised as part of costs of an asset is included in the ‘Finance costs’ line item.

Xchanging Solutions Limited

Annual Report 2019-20

125

Notes forming part of the Consolidated Financial Statements

(All amounts in Rs. Lakhs, unless otherwise stated)

2.16.2 Foreign exchange gains and losses

2.16.3 Derecognition of financial liabilities

The Group derecognises financial liabilities when, and only when, the Group’s obligations are discharged, cancelled or have expired, An exchange between with a lender of debt instruments with substantially different terms is accounted for as an extinguishment of the original financial liability and the recognition of a new financial liability. Similarly, a substantial modification of the terms of an existing financial liability (whether or not attributable to the financial difficulty of the debtor) is accounted for as an extinguishment of the original financial liability and the recognition of a new financial liability. The difference between the carrying amount of the financial liability derecognised and the consideration paid and payable is recognised in profit or loss.

2.17 Derivative financial instruments

The Group enters into derivative financial instruments to manage its exposure to foreign exchange rate risks through foreign exchange forward contracts. Further details of derivative financial instruments are disclosed in note 32.

2.18 Use of estimates

The preparation of the consolidated financial statements in conformity with Ind AS requires the Management to make estimates and assumptions considered in the reported amounts of assets and liabilities (including contingent liabilities) and the reported income and expenses during the period. The Management believes that the estimates used in preparation of the consolidated financial statements are prudent and reasonable. Future results could differ due to these estimates and the differences between the actual results and the estimates are recognised in the periods in which the results are known / materialise.

2.19 Cash and cash equivalents (for purposes of Cash Flow Statement)

2.20 Cash flow statement

Cash flows are reported using the indirect method, whereby profit / (loss) before extraordinary items and tax is adjusted for the effects of transactions of non-cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flows from operating, investing and financing activities of the Group are segregated based on the available information.

2.21 Segment Reporting

The accounting policies adopted for segment reporting are in conformity with the accounting policies adopted for the Group. Revenue and expenses have been identified to segments on the basis of their relationship to the operating activities of the segment. Revenue and expenses, which relate to the Group as a whole and are not allocable to segments on a reasonable basis, is included as “Unallocated”. Segment assets includes all the assets except for deferred tax assets which are treated as unallocable.

The dominant source of risk and returns of the enterprise is considered to be the business in which it operates, viz. - Information Technology (IT) Services. The sub businesses are fully aligned to IT Services business of the Group and the same are being viewed by the management as a single business segment. Being a single business segment Group, no primary segment information is being provided.

2.22 Earnings per share

126 Xchanging Solutions Limited

Annual Report 2019-20

Notes forming part of the Consolidated Financial Statements

(All amounts in Rs. Lakhs, unless otherwise stated)

shares outstanding during the period and for all periods presented is adjusted for events, such as bonus shares, other than the conversion of potential equity shares, that have changed the number of equity shares outstanding, without a corresponding change in resources. For the purpose of calculating diluted earnings per share, the net profit or loss for the period attributable to equity shareholders and the weighted average number of shares outstanding during the period is adjusted for the effects of all dilutive potential equity shares.

2.23 Project work expenses

Project work expenses represents amounts charged by sub-contractors. These expenses are recognised on an accrual basis.

2.24 GST input credit

GST input credit is accounted for in the books in the period in which the underlying service received is accounted and when there is reasonable certainty in availing/ utilising the credits.

2.25 Operating Cycle

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

3. Critical accounting judgements and key sources of estimation uncertainty

In the application of the Group’s accounting policies, which are described in note 2, the management of the Company is required to make judgements, estimates and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

3.1 Critical judgements in applying accounting policies

The following are the critical judgements, apart from those involving estimations, that the management have made in the process of applying the Group’s accounting policies and that have the most significant effect on the amounts recognised in the consolidated financial statements.

i) Impairment of goodwill- Determining whether goodwill is impaired requires an estimation of the value in use of the cash-generating units to which goodwill has been allocated. The value in use calculation requires the directors to estimate the future cash flows expected to arise from the cash-generating unit and a suitable discount rate in order to calculate present value. Where the actual future cash flows are less than expected, a material impairment loss may arise. No impairment for goodwill has been identified during the year.
ii) Income taxes- The Group’s three major tax jurisdictions are India, Singapore and the United States of America, though the Group also files tax returns in other foreign jurisdictions. Significant judgments are involved in determining the provision for income taxes, including the amount expected to be paid or recovered in connection with uncertain tax positions. Also refer to note 28.
iii) Fair value measurements and valuation processes- Derivative financial instruments are measured at fair value and the gratuity liability is measured based on actuarial valuation for financial reporting purposes. In estimating the fair value and actuarial valuation, the Group uses market-observable data to the extent it is available. Where such inputs are not available, the Group engages third party qualified valuers to perform the valuation.
iv) Ind AS 116 requires lessees to determine the lease term as the non-cancellable period of a lease adjusted with any option to extend or terminate the lease, if the use of such option is reasonably certain. The Group makes an assessment on the expected lease term on a lease-by-lease basis and thereby assesses whether it is reasonably certain that any options to extend or terminate the contract will be exercised. In evaluating the lease term, the Group considers factors such as any significant leasehold improvements undertaken over the lease term, costs relating to the termination of the lease and the importance of the underlying asset to Group’s operations taking into account the location of the underlying asset and the availability of suitable alternatives. The lease term in future periods is reassessed to ensure that the lease term reflects the current economic circumstances. Refer note no 2.6
v) Estimation uncertainty relating to COVID-19 outbreak- The Group has considered internal sources of information up to the date of approval of the financial statements in determining the impact on various elements of its financial statements. The Group has used the principles of prudence in applying judgments, estimates and assumptions and based on the

Xchanging Solutions Limited

Annual Report 2019-20

127

Notes forming part of the Consolidated Financial Statements

(All amounts in Rs. Lakhs, unless otherwise stated)

current estimates, the Group expects to fully recover the carrying amount of trade receivables including unbilled receivables. The eventual outcome of impact of the global health pandemic may be different from those estimated as on the date of approval of these financial statements.

	As at As at
	Mar 31, 2020 Mar 31, 2019
4 PROPERTY, PLANT AND EQUIPMENT (Refer note 2.10 and 2.12) (Owned unless specified) Carrying amounts of: Leasehold Improvements Computers Vehicles Office Equipment Furniture and Fittings	10 - 30 22 - - 5 9 3 - --------------------------------- --------------------------------- 48 31 ============================ ============================

48 31 ============================ ============================	48 31 ============================ ============================	48 31 ============================ ============================	48 31 ============================ ============================	48 31 ============================ ============================	48 31 ============================ ============================	48 31 ============================ ============================
The changes in the carrying value for the year ended March 31, 2020
Particulars	Leasehold Improvements	Computers	Vehicles	Office Equipment	Furniture and Fittings	Total
Gross carrying value
Balance as at April 1, 2018 Additions Disposals Translation	- - - -	1,220 26 (104) 3	35 - (7) -	173 - (4) -	10 - - -	1,438 26 (115) 3
Balance as at March 31, 2019	-	1,145	28	169	10	1,352
Additions Disposals Translation	15 - -	25 (242) 5	- (28) -	2 (20) -	3 - -	45 (290) 5
Balance as at March 31, 2020	15	933	-	151	13	1,112
Accumulated depreciation
Balance as at April 1, 2018 Depreciation expense Eliminated on disposals of assets Translation	- - - -	1,198 26 (104) 3	31 4 (7) -	154 10 (4) -	10 - - -	1,393 40 (115) 3
Balance as at March 31, 2019	-	1,123	28	160	10	1,321
Depreciation expense Eliminated on disposals of assets Translation	5 - -	17 (242) 5	- (28) -	6 (20) -	- - -	28 (290) 5
Balance as at March 31, 2020	5	903	-	146	10	1,064
Carrying value as at March 31, 2020	10	30	-	5	3	48
Carrying value as at March 31, 2019	-	22	-	9	-	31

128 Xchanging Solutions Limited

Annual Report 2019-20

Notes forming part of the Consolidated Financial Statements

(All amounts in Rs. Lakhs, unless otherwise stated)

5 MOVEMENT IN RIGHT OF USE ASSETS:

(Refer note 2.6)

Following are the changes in the carrying value of right of use assets for the year ended March 31, 2020:

Particulars	Leasehold
	Improvements
Balance as at April 1, 2019	-
Reclassified on account of adoption of IND AS 116	169
Additions	165
Depreciation	(113)
Balance as at March 31, 2020	221

The aggregate depreciation expense on ROU assets is included under depreciation and amortization expense in the Statement of Profit and Loss.

		As at As at	As at As at	As at As at
		Mar 31, 2020 Mar 31, 2019
6	OTHER INTANGIBLE ASSETS (Refer note 2.11 and 2.12) Carrying amounts of: Computer software	3 5 --------------------------------- --------------------------------- 3 5 ============================ ============================
	Particulars		Computer software	Total
	Gross carrying value
	Balance as at April 1, 2018 Additions Disposals Translation		56 8 - -	56 8 - -
	Balance as at March 31, 2019		64	64
	Additions Disposals Translation		1 (1) -	1 (1) -
	Balance as at March 31, 2020		64	64
	Accumulated amortisation
	Balance as at April 1, 2018 Amortisation expense Disposals Translation		52 7 - -	52 7 - -
	Balance as at March 31, 2019		59	59
	Amortisation expense Disposals Translation		3 (1) -	3 (1) -
	Balance as at March 31, 2020		61	61
	Carrying value as at March 31, 2020		3	3
	Carrying value as at March 31, 2019		5	5

Xchanging Solutions Limited 129

Annual Report 2019-20

Notes forming part of the Consolidated Financial Statements

(All amounts in Rs. Lakhs, unless otherwise stated)

	As at As at	As at As at
	Mar 31, 2020 Mar 31, 2019
GOODWILL ON CONSOLIDATION (Refer note 2.3, 2.11 and 3.1.(i)) Carrying amounts of: Cost Accumulated impairment losses	15,841 15,841 - - --------------------------------- --------------------------------- 15,841 15,841 ============================ ============================
Particulars	As at	As at
	Mar 31, 2020	Mar 31, 2019
Cost
Balance at the beginning of year Additions Derecognised	15,841 - -	15,841 - -
Balance at the end ofyear	15,841	15,841
Accumulated impairment losses
Balance at the beginning of year Impairment losses recognised in theyear	- -	- -
Balance at the end ofyear	-	-
Net block at the end of the year	15,841	15,841

7.1 Allocation of goodwill to cash-generating units

The entire goodwill is allocated to Information Technology services (CGU).

The recoverable amount of this CGU is determined based on a value in use calculation which uses cash flow projections based on financial forecast approved by the management covering a five-year period, and a discount rate of 11% p.a. (2019: 13% p.a.).

Cash flow projections during the forecast period are based on the expected gross margins. The cash flows beyond that five-year period have been extrapolated using a terminal growth rate of 1% p.a. (2019: 1% p.a.). The management believes that any reasonably possible change in the key assumptions on which recoverable amount is based would not cause the aggregate carrying amount to exceed the aggregate recoverable amount of the cash-generating unit.

As of March 31, 2020, the estimated recoverable amount of the CGU exceeded its carrying amount, hence impairment is not triggered. The key assumptions used for the calculations are as follows:

(1) EBIT margin: Average gross margins achieved in the prior periods before the forecast period.

(2) Discount rate: Discount rate is based on the Weighted Average Cost of Capital (WACC) of the Company. These estimates are likely to differ from future actual results of operations and cash flows.

8

	As at As at
	Mar 31, 2020 Mar 31, 2019
LOANS (Refer note 2.15 and 2.18) Carring amount of : Unsecured, considered good unless otherwise stated Non-current Loans to fellow subsidiaries [Refer note 33] Current Loans to fellow subsidiaries [Refer note 33]	218 1,618 --------------------------------- --------------------------------- 218 1,618 ============================ ============================ 1,400 250 --------------------------------- --------------------------------- 1,400 250 ============================ ============================

130 Xchanging Solutions Limited

Annual Report 2019-20

Notes forming part of the Consolidated Financial Statements

(All amounts in Rs. Lakhs, unless otherwise stated)

9		As at As at
		Mar 31, 2020 Mar 31, 2019
	OTHER FINANCIAL ASSETS (Refer note 2.4, 2.15 and 2.18) Unsecured considered good unless otherwise stated Non-current Security deposits Current Expenses recoverable from fellow subsidiaries [Refer note 33]: Security deposits - Considered good - Considered doubtful (Less): Provision for doubtful advances Unbilled revenue Interest accrued on loans to fellow subsidiaries [Refer note 33] Interest accrued on bank deposits Other Loans and advances (includes government grant, advances to employees and other receivables) - Considered good - Considered doubtful (Less): Provision for doubtful advances	- 10 --------------------------------- --------------------------------- - 10 ============================ ============================ 21 40 192 186 24 21 (24) (21) 2,217 1,782 15 33 44 13 59 39 17 35 (17) (35) --------------------------------- --------------------------------- 2,548 2,093 ============================ ============================

10 DEFERRED TAX ASSETS (NET)

[Refer note 2.9 and 3.1.(ii)]

Details of deferred tax assets and liabilities as at March 31, 2020 comprise of the following:

Particulars	As at Apr 1, 2019	(Credit)/ Charged to Statement of Profit and Loss	Recognised in Other Comprehensive Income	As at Mar 31, 2020
Deferred Tax Assets Depreciation Provision for gratuity Provision for compensated absences Provision for other employee benefits Provision for doubtful debts Provision for doubtful advances Adjustment for lease Exchange differences in translating the financial statements of foreign operations Others	187 88 22 19 362 175 - 63 20	41 9 (6) 4 32 57 (2) - 6	- 1 - - - - - - -	146 78 28 15 330 118 2 63 14
Total(A)	936	141	1	794
Deferred Tax Liabilities
Exchange differences in translating the financial statements of foreign operations	(182)	-	274	(456)
Total(B)	(182)	-	274	(456)
Deferred Tax Assets (Net) (A)-(B)	754	141	275	338

Xchanging Solutions Limited

Annual Report 2019-20

131

Notes forming part of the Consolidated Financial Statements

(All amounts in Rs. Lakhs, unless otherwise stated)

As at March 31, 2019

	As at March 31, 2019
10.1 11	Particulars	As at Apr 1, 2018	(Credit)/ Charged to Statement of Profit and Loss		Recognised in Other Comprehensive Income	As at Mar 31, 2019
	Deferred Tax Assets Depreciation Provision for gratuity Provision for compensated absences Provision for other employee benefits Provision for doubtful debts Provision for doubtful advances Exchange differences in translating the financial statements of foreign operations Others	209 104 20 64 328 154 63 36	22 6 (2) 45 (34) (21) - 16		- 10 - - - - - -	187 88 22 19 362 175 63 20
	Total(A)	978	32		10	936
	Deferred Tax Liabilities
	Exchange differences in translating the financial statements of foreign operations	(72)	-		110	(182)
	Total(B)	(72)	-		110	(182)
	Deferred Tax Assets (Net) (A)-(B)	906	32		120	754
	Unrecognised taxable temporary differences associated with investments and interests
	Particulars			As at As at
				Mar 31, 2020 Mar 31, 2019
	Taxable temporary differences in relation to investments in subsidiaries for which deferred tax liabilities have not been recognised are attributable to the following: - foreign subsidiaries Total OTHER ASSETS (Refer note 2.24) Unsecured considered good unless otherwise stated Non-current Prepaid Expenses Advances recoverable in kind Balances with Government Authorities (Service tax & GST) - Considered good - Considered doubtful (Less): Provision for doubtful advances Current Balances with Government Authorities (GST) Prepaid Expenses Other Loans and advances			457 280 --------------------------------- --------------------------------- 457 280 ============================ ============================ 7 13 1,486 1,466 237 179 429 548 (429) (548) --------------------------------- --------------------------------- 1,730 1,658 ============================ ============================ 78 116 67 111 25 31 --------------------------------- --------------------------------- 170 258 ============================ ============================

132 Xchanging Solutions Limited

Annual Report 2019-20

Notes forming part of the Consolidated Financial Statements

(All amounts in Rs. Lakhs, unless otherwise stated)

12		As at As at
		Mar 31, 2020 Mar 31, 2019
	TRADE RECEIVABLES (Refer note 2.15, 32 and 33) (Unsecured) Considered good Considered doubtful Less: Provision for doubtful trade receivables	2,071 2,877 1,309 1,271 (1,309) (1,271) --------------------------------- --------------------------------- 2,071 2,877 ============================ ============================

Note:

The credit period ranges from 0 to 45 days. No interest is charged on trade receivables up to the due date. Cumulative balance of customers with more than 5% of total trade receivables amounts to Rs 1,211 (2019: Rs 1,533)

13	CASH AND CASH EQUIVALENTS
	(Refer note 2.19)
	Balances with banks
	In current accounts	16,525	11,750
	Funds in transit	133	-
	In demand deposit accounts (less than 3 months maturity)	15,930	13,941
	Cash on hand	-	-
		---------------------------------	---------------------------------
	Cash and cash equivalent as per consolidated statement of cash flow	32,588	25,691
		============================	============================
14	OTHER BANK BALANCES
	Long Term Deposit with maturity more than 3 months but less than 12 months	117	247
		---------------------------------	---------------------------------
		117	247
		============================	============================
	Fixed Deposits with Banks include:
	Rs. 117 (2019: Rs. 136) which are under lien
15	EQUITY SHARE CAPITAL
	Authorised capital:
	125,000,000 (2019: 125,000,000) Equity shares of Rs.10 each	12,500	12,500
	Issued, subscribed and paid up capital:
	111,403,716 (2019: 111,403,716) Equity shares of Rs.10 each fully paid up	11,140	11,140
		---------------------------------	---------------------------------
		11,140	11,140
		============================	============================

a) Reconciliation of the number of shares and amount outstanding at the beginning and at the end of the reporting year are as given below:

year are as given below:
	As at As at
	Mar 31, 2020 Mar 31, 2019
Equity Shares	Number of Amount Number of Amount Shares Shares
Shares outstanding at the beginning of the year Add /(Less): Movement duringtheyear	111,403,716 11,140 111,403,716 11,140 - - - -
Shares outstanding at the end of the year	111,403,716 11,140 111,403,716 11,140

b) Terms/ rights attached to equity shares

Xchanging Solutions Limited

Annual Report 2019-20

133

Notes forming part of the Consolidated Financial Statements

(All amounts in Rs. Lakhs, unless otherwise stated)

c) Details of shares held by the holding company and its subsidiaries:

Name of Shareholder	As at As at Mar 31, 2020 Mar 31, 2019
	Number Number of Shares of Shares
Xchanging (Mauritius) Limited, the immediate holding company Xchanging Technology Services India Private Limited, subsidiary of Holding Company*	58,002,787 58,002,787 21,348,838 38,948,299
	79,351,625 96,951,086

*Xchanging Technology Services India Private Limited acquired 12.03% shares on June 11, 2018 through Manadatory open offer.

d) Details of shares held by each shareholder holding more than 5% shares:

16 16.1		As at As at	As at As at
		Mar 31, 2020 Mar 31, 2019
	Name of Shareholder	Number of Percentage Number of Percentage Shares held Shares held
	Xchanging (Mauritius) Limited XchangingTechnologyServices India Private Limited	58,002,787 21,348,838	52.07 58,002,787 52.07 19.16 38,948,299 34.96

			As at As at
			Mar 31, 2020 Mar 31, 2019
	OTHER EQUITY Capital reserve 361 361 Security premium 8,417 8,417 Foreign currency translation reserve 1,129 314 Retained earnings 28,563 23,090 --------------------------------- --------------------------------- 38,470 32,182 ============================ ============================ Capital reser ve Balance at the beginning of the year 361 361 Add / (Less): Movement during the year - - --------------------------------- --------------------------------- Balance at the end of the year 361 361 --------------------------------- --------------------------------- Capital reserve represents waiver of liability by Scandent Holding Mauritius Limited, erstwhile ultimate holding company. Security premium Balance at the beginning of the year 8,417 8,417 Add / (Less): Movement during the year - - --------------------------------- --------------------------------- Balance at the end of the year 8,417 8,417 --------------------------------- --------------------------------- Amounts received (on issue of shares) in excess of the par value has been classified as securities premium. Foreign currenc y translation reser ve Balance at the beginning of the year 314 46 Add: Exchange difference arising on translating the foreign operations net of income tax 815 268 --------------------------------- --------------------------------- Balance at the end of the year 1,129 314 ============================ ============================
16.2
16.3

Exchange differences relating to the translation of the results and net assets of the Group’s foreign operations from their functional currencies to the Group’s presentation currency (i.e. Rs.) are recognised directly in other comprehensive income and accumulated in the foreign currency translation reserve. Exchange differences previously accumulated in the foreign currency translation reserve are reclassified to profit or loss on the disposal of the foreign operation.

134 Xchanging Solutions Limited

Annual Report 2019-20

Notes forming part of the Consolidated Financial Statements

(All amounts in Rs. Lakhs, unless otherwise stated)

16.4 17 18			As at As at
			Mar 31, 2020 Mar 31, 2019
		Retained earnings Balance at the beginning of the year 23,090 18,394 Profit for the year 5,470 4,671 Other comprehensive income arising from remeasurement of defined benefit obligation net of tax 3 25 --------------------------------- --------------------------------- Balance at the end of the year 28,563 23,090 --------------------------------- --------------------------------- Retained earnings comprise of the Company’s prior years’ undistributed earnings after taxes. PROVISIONS (Refer note 2.8) Non-current Provision for employee benefits : Provision for compensated absences 84 61 Provision for gratuity [Refer note 31] 249 242 --------------------------------- --------------------------------- 333 303 ============================ ============================ Current Provision for employee benefits : Provision for compensated absences 28 17 Provision for gratuity [Refer note 31] 62 60 --------------------------------- --------------------------------- 90 77 ============================ ============================ TRADE PAYABLES (Refer note 2.16) Total outstanding dues of micro enterprises and small enterprises (Refer Note (ii)) - 1 Total outstanding dues of creditors other than micro enterprises and small enterprises Due to Related parties [Refer note 33] 2,187 1,666 Others: Goods & services 936 1,346 Employee related payables 76 118 --------------------------------- --------------------------------- 3,199 3,130 --------------------------------- --------------------------------- 3,199 3,131 ============================ ============================ Notes: (i) The credit period ranges from 0 to 90 days. No interest is charged on trade payables up to the due date. The Group has financial risk management policies in place to ensure that all payables are paid within the pre-agreed credit terms. (ii) On the basis of confirmation obtained from suppliers who have registered themselves under the Micro, Small Medium Enterprise Development Act, 2006 (MSMED Act, 2006) and based on the information available with the Company, the following are the details: (a) Principal amount remaining unpaid - 1 (b) Interest due thereon remaining unpaid - - (c) Interest paid by the Company in terms of Section 16 of the Micro, Small and - - Medium Enterprises Development Act, 2006, along-with the amount of the payment made to the supplier beyond the appointed day during the period (d) Interest due and payable for the period of delay in making payment (which have been paid but beyond the appointed day during the period) but without adding interest specified under the Micro, Small and Medium Enterprises Act, 2006 - - (e) Interest accrued and remaining unpaid - - (f) Interest remaining due and payable even in the succeeding years, until such date when the interest dues as above are actually paid to the small enterprises - -

Xchanging Solutions Limited

Annual Report 2019-20

135

Notes forming part of the Consolidated Financial Statements

(All amounts in Rs. Lakhs, unless otherwise stated)

19 20 21 22		As at As at
		Mar 31, 2020 Mar 31, 2019
	OTHER FINANCIAL LIABILITIES (Refer note 2.7 and 2.16) Current maturities of non-current borrowings Payable on purchase of property, plant and equipment Other financial liabilities CURRENT TAX ASSETS AND LIABILITIES (Refer note 2.9 and 3.1.(ii)) Current tax assets Tax refund receivable Current tax liabilities Income tax payable OTHER CURRENT LIABILITIES (Refer note 2.4 and 2.7) Income received in advance (Unearned revenue) - Fellow subsidiaries [Refer note 33] - Others Statutory remittances (Contributions to PF, ESIC, Withholding Taxes, GST etc.) Security deposits Advances from customers	- 3 13 7 18 - --------------------------------- --------------------------------- 31 10 ============================ ============================ 4,615 3,731 --------------------------------- --------------------------------- 4,615 3,731 --------------------------------- --------------------------------- 8,102 7,732 --------------------------------- --------------------------------- 8,102 7,732 --------------------------------- --------------------------------- 3,487 4,001 ============================ ============================ - 49 62 225 139 205 67 - 44 10 --------------------------------- --------------------------------- 312 489 ============================ ============================
		For the year For the year ended ended
		Mar 31, 2020 Mar 31, 2019
	REVENUE FROM OPERATIONS (Refer note 2.4, 29 and 33) Software services	18,226 18,410 --------------------------------- --------------------------------- 18,226 18,410 ============================ ============================

and cashflows are affected byindustry, market and other economic factors.
	For the year For the year ended ended
	Mar 31, 2020 Mar 31, 2019
T&M and AMC Fixed Price	16,456 16,303 1,770 2,107
Total	18,226 18,410

The Group has evaluated the impact of COVID-19 resulting from (i) the possibility of constraints to render services (ii) onerous obligations (iii) penalties relating to breaches of service level agreements and (iv) termination or deferment of contracts by customers. The Group has concluded that the impact of COVID-19 is not material based on such evaluation. Due to the nature of the pandemic, the Group will continue to monitor developments to identify significant uncertainties relating to revenue in future periods.

136 Xchanging Solutions Limited

Annual Report 2019-20

Notes forming part of the Consolidated Financial Statements

(All amounts in Rs. Lakhs, unless otherwise stated)

23 24 25 26		For the year For the year ended ended
		Mar 31, 2020 Mar 31, 2019
	OTHER INCOME (Refer note 2.5 and 2.7) a) Interest Income (at amor tised cost) Interest income earned on financial assets that are not designated as at fair value through profit or loss: Bank deposits 845 74 Loans to fellow subsidiaries [Refer note 33] 197 224 --------------------------------- --------------------------------- 1,042 298 --------------------------------- --------------------------------- b) Dividend income Dividends from mutual funds - 542 All dividends from mutual funds carried at fair value through P&L recognised for both the years relate to investments held during each reporting period. c) Other non-oper ating income (net ofe xpenses directly attr ib utab le to such income) Other provisions no longer required written back 120 315 Liabilities no longer required written back - 211 Others (aggregate of immaterial items) 24 35 --------------------------------- --------------------------------- 144 561 --------------------------------- --------------------------------- d) Other gains and losses Profit on sale of property, plant and equipment (net) 2 8 Profit on redemption of mutual funds - 2 Foreign exchange gain (net) 80 44 --------------------------------- --------------------------------- 82 54 --------------------------------- --------------------------------- (a+b+c+d) 1,268 1,455 --------------------------------- --------------------------------- EMPLOYEE BENEFITS EXPENSE (Refer note 2.8 and 31) Salaries and wages including bonus 6,788 Less: Towards government grant (Refer note 43 ) (48) 6,740 7,896 --------------------------------- Contribution to provident and other funds [Refer note 31] 206 248 Gratuity expenses [Refer note 31] 56 70 Staff welfare expenses 632 611 --------------------------------- --------------------------------- 7,634 8,825 ============================ ============================ FINANCE COSTS (Refer note 2.6) Interest expenses on borrowings (not classified as at FVTPL) - 1 Interest expenses on lease liabilities 13 - --------------------------------- --------------------------------- 13 1 ============================ ============================ DEPRECIATION AND AMORTISATION EXPENSE (Refer note 2.6, 2.10, 2.11 and 2.18) Depreciation of property, plant and equipment [Refer note 4] 28 40 Depreciation of right of use of assets [Refer note 5] 113 - Amortisation of intangible assets [Refer note 6] 3 7 --------------------------------- --------------------------------- 144 47 ============================ ============================

Xchanging Solutions Limited 137

Annual Report 2019-20

Notes forming part of the Consolidated Financial Statements

(All amounts in Rs. Lakhs, unless otherwise stated)

27 28		For the year For the year ended ended
		Mar 31, 2020 Mar 31, 2019
	OTHER EXPENSES (Refer note 2.6, 2.7, 2.13, 2.18 and 2.23) Project work expenses 4,483 3,874 Power and fuel 35 42 Rental expenses 19 177 Repairs and maintenance: Computer equipments 170 190 Others 58 66 Insurance 55 60 Rates and taxes 17 12 Communication 199 216 Travelling and conveyance 118 178 Business promotion 18 46 Training and development 1 1 Net Loss on FV changes in current investments carried at FVTPL - 5 Expenditure towards Corporate Social Responsibility (CSR) activities [Refer note 37] 21 20 Legal and professional 365 57 Payments to auditors (Refer Note (i) below) 120 128 Provision for doubtful debts (net) - 7 Bad debts written off - 41 Provision for doubtful advances 13 78 Directors’ sitting fees 41 29 Miscellaneous expenses 41 85 --------------------------------- --------------------------------- 5,774 5,312 ============================ ============================ Represents lease rentals for short term leases and leases of low value assets Note: (i) Payments to the auditors comprise (net of taxes, where applicable): Statutory audit 68 73 Limited review of quarterly financial results 44 44 Tax audit 6 6 Certifications 2 4 Out-of-pocket expenses - 1 --------------------------------- --------------------------------- 120 128 ============================ ============================ INCOME TAXES (Refer note 2.9 and 3.1.(ii)) 1. Income tax recognised in profit or loss Current tax In respect of current year 1,114 962 Def erred tax In respect of current year 141 32 --------------------------------- --------------------------------- Total income tax expense /(gain) recognised in the current year 1,255 994 ============================ ============================

138 Xchanging Solutions Limited

Annual Report 2019-20

Notes forming part of the Consolidated Financial Statements

(All amounts in Rs. Lakhs, unless otherwise stated)

For the year
For the year
ended
ended

Mar 31, 2020
Mar 31, 2019

2.
The income tax expense for the year can be reconciled to the
accounting profit as follows:
Profit before tax
5,929
5,680
---------------------------------
---------------------------------
Income tax expense calculated at 25.168% (2019: 29.120%)
1,492
1,654
Effect of notional income recognised for taxation
196
226
Effect of income that is exempt from taxation
118
(170)
Effect of inadmissible expenses
-
14
Effect of change in tax rate (Refer note 39)
(190)
(290)
Effect of depreciation taken in returns
(118)
-
Effect of carry forward loss adjustment
(229)
(424)
Effect of admissible deductions
-
(2)
Others
(14)
(14)
---------------------------------
---------------------------------
Income tax expense recognised in Profit and Loss
1,255
994
---------------------------------
---------------------------------
The income tax rate used for the above reconciliations is current tax 25.168% (2019: 29.120%) and Deferred tax 25.168%
(2019: 29.120%), these are the corporate tax rate payable by corporate entities in India on taxable profits under the Indian
tax law.
3.
Income tax recognised in other comprehensive income:
Income tax
Arising on income and expenses recognised in other comprehensive income:
Remeasurement of defined benefit obligation
(1)
(10)
Exchange differences in translating the financial statements of foreign operations
-
-
---------------------------------
---------------------------------
Total
(1)
(10)
---------------------------------
---------------------------------
Deferred tax
Arising on income and expenses recognised in other comprehensive income:
Remeasurement of defined benefit obligation
-
-
Exchange differences in translating the financial statements of foreign operations
(274)
(110)
---------------------------------
---------------------------------
Total
(274)
(110)
---------------------------------
---------------------------------
Total income tax recognised in other comprehensive income
(275)
(120)
---------------------------------
---------------------------------
Bifurcation of the income tax recognised in other comprehensive income into:-
Items that will not be reclassified to profit or loss
(1)
(10)
Items that may be reclassified to profit or loss
(274)
(110)

29 SEGMENT INFORMATION

(Refer note 2.21)

The entire operation of the Company relate only to one segment “Software Services” and hence there are no primary segment to be reported.

The secondary segment information as per Ind AS 108 “Operating Segments” in relation to the geographies is as follows:

	Revenue by location of customers
	Mar 31, 2020 Mar 31, 2019
Europe USA India Singapore Rest of the World	1,345 1,790 10,209 9,692 1,068 1,308 5,163 5,212 441 408 --------------------------------- --------------------------------- 18,226 18,410 --------------------------------- ---------------------------------

Xchanging Solutions Limited 139

Annual Report 2019-20

Notes forming part of the Consolidated Financial Statements

(All amounts in Rs. Lakhs, unless otherwise stated)

Balance of customers with more than 10% of total revenue amounts to Rs 10,654 (2019: Rs. 7,380)

	Carrying amount of Addition to Fixed segment assets by Assets/Right of location of the assets use assets	Carrying amount of Addition to Fixed segment assets by Assets/Right of location of the assets use assets
	Mar 31, 2020	Mar 31, Mar 31, Mar 31, 2019 2020 2019
Europe USA India Rest of the World	340 12,858 20,829 22,927	623 - - 10,591 - - 17,745 209 28 21,620 2 6
	56,955	50,579 211 34

		For the year For the year ended ended
		Mar 31, 2020 Mar 31, 2019
EARNINGS PER SHARE (Refer note 2.22) Basic earnings per share Profit for the year after tax Nominal value per share (Rs.) Weighted average number of equity shares considered for calculating basic earnings per share – (A) Earnings per share – Basic (Rs.) Diluted earnings per share Weighted average number of equity shares considered for calculating diluted earnings per share – (B) Earnings per share – Diluted (Rs.)		5,470 4,671 10 10 111,403,716 111,403,716 --------------------------------- --------------------------------- 4.91 4.19 --------------------------------- --------------------------------- 111,403,716 111,403,716 --------------------------------- --------------------------------- 4.91 4.19 --------------------------------- ---------------------------------

31 EMPLOYEE BENEFITS EXPENSE

(Refer note 2.8)

(a) Defined Contribution Plans

Provident Fund and Other Funds: During the year, the Group has recognised Rs. 206 (2019: Rs. 248) in the Statement of Profit and Loss relating to provident fund and other funds, which is included in the ‘Contribution to provident and other funds’.

(b) Defined Benefit Plan

Gratuity (unfunded): The Group provides for gratuity, a defined benefit plan (the “gratuity plan”) covering eligible employees in accordance with the Payment of Gratuity Act, 1972. The gratuity plan provides a lump sum payment to vested employees at retirement or termination of employment based on the respective employee’s last drawn salary and years of employment with the Group.

The Group is exposed to various risks in providing the above gratuity benefit such as: interest rate risk, longetivity risk and salary risk.

Interest risk: A decrease in the bond interest rate will increase the plan liability.

140 Xchanging Solutions Limited

Annual Report 2019-20

Notes forming part of the Consolidated Financial Statements

(All amounts in Rs. Lakhs, unless otherwise stated)

The following tables summarise the components of expense recognised in the Statement of Profit and Loss and amounts recognised in the Balance Sheet for the gratuity plan:

	As at As at
	Mar 31, 2020 Mar 31, 2019
(i) Movement in Present Value of the Defined benefit obligation Balance at the beginning of the year Current Service Cost Interest Cost Actuarial (Gains) / Losses- Demographic Actuarial (Gains) / Losses- Financial Actuarial (Gains) / Losses- Experience Benefits paid Present Value of Defined benefit obligation at the end of the year (ii) Assets and Liabilities recognised in the Balance Sheet Present Value of Defined Benefit Obligation Amounts recognised as liability Recognised under: Non-current provisions (Refer note 17) Current provisions (Refer note 17)	302 357 37 47 19 23 - - 6 (9) (10) (26) (43) (90)
	311 302
	311 302
	311 302
	249 242 62 60
	311 302

	For the year For the year ended ended
	Mar 31, 2020 Mar 31, 2019
(iii) Amounts recognised in statement of profit and loss in respect of these defined benefit plans are as follows. Current Service Cost Interest Cost Components of defined benefit costs recognised in profit or loss Remeasurement on the net defined benefit liability: Actuarial (Gain) / Loss due to Demographic Assumption changes Actuarial (Gain) / Loss due to Financial Assumption changes Actuarial (Gain) / Loss due to Experience Components of defined benefit costs recognised in other comprehensive income Total	37 47 19 23
	56 70
	- - 6 (9) (10) (26)
	(4) (35)
	52 35

	As at As at
	Mar 31, 2020 Mar 31, 2019
(iv) Actuarial Assumptions Discount Rate Attrition Rate Increase in Compensation Cost Retirement Age (v) Expected Future Cashflows	5.95% 6.95% 20% 20% 6.25% 6.75% 60 60
Particulars	March 31, 2020 March 31, 2019
Year 1 Year 2 Year 3 Year 4 Year 5	62 60 54 53 54 46 42 46 36 36

Xchanging Solutions Limited

Annual Report 2019-20

141

Notes forming part of the Consolidated Financial Statements

(All amounts in Rs. Lakhs, unless otherwise stated)

Notes:

(i) The estimates of future salary increases, considered in the actuarial valuation, takes into on account, inflation, seniority, promotions and other relevant factors, such as supply and demand in the employment market.
(ii) The discount rate is based on the prevailing market yields of Indian government securities as at the Balance Sheet date for the estimated term of the obligation.

(vi) Sensitivity analysis

The following table summarizes the impact on defined benefit obligation arising due to increase / decrease in key actuarial assumptions by 50 basis points:

As at March 31, 2020

As at March 31, 2020
Defined Benefit Obligation	Discount rate	Rate of Increase in Compensation Cost
Impact of decrease Impact of increase	6 (6)	(6) 6
As at March 31, 2019
Defined Benefit Obligation	Discount rate	Rate of Increase in Compensation Cost
Impact of decrease Impact of increase	6 (5)	(6) 6

The sensitivity analysis presented above may not be representative of the actual change in the defined benefit obligation as it is unlikely that the change in assumptions would occur in isolation of one another as some of the assumptions may be correlated. Furthermore, in presenting the above sensitivity analysis, the present value of the defined benefit obligation has been calculated using the projected unit credit method at the end of-the reporting period, which is the same as that applied in calculating the defined benefit obligation liability recognised in the balance sheet.

32 FINANCIAL INSTRUMENTS

32.1 Capital management

The Group manages its capital to ensure that it will be able to continue as a going concern while maximising the return to stakeholders through the optimisation of the debt and equity balance.The capital structure of the Group consists of net debt (borrowings as detailed in note 19) and total equity of the Group.The Group is not subject to any externally imposed capital requirements.

32.1.1 Debt equity ratio

The debt equity ratio at end of the reporting period was as follows.

Particulars	As at As at
	Mar 31, 2020 Mar 31, 2019
Debt (i) Net debt Total equity Net debt to equity ratio	- 3 - 3 49,610 43,322 - 0.00

(i) Debt is defined as long-term and current maturities (excluding derivative, financial guarantee contracts and contingent consideration), as described in note 19.

(ii) Total equity comprises issued share capital, reserves, retained earnings and other comprehensive income as set out in the statement of changes in equity.

142 Xchanging Solutions Limited

Annual Report 2019-20

Notes forming part of the Consolidated Financial Statements

(All amounts in Rs. Lakhs, unless otherwise stated)

32.2		Particulars	As at As at
			Mar 31, 2020 Mar 31, 2019
		Categories of financial instruments Financial assets Measured at amor tised cost (a) Cash and bank balances (b) Bank balances other than above (c) Other financial assets at amortised cost Financial liabilities Measured at amor tised cost Lease liabilities Other financial liability at amortised cost	32,588 25,691 117 247 6,237 6,848 231 - 3,230 3,141

32.3 Financial risk management

The Group is exposed to foreign currency risk, liquidity risk, credit risk and interest risk which may impact the fair value of its financial instruments. The Group has a risk management policy to manage & mitigate these risks. The Group’s risk management policy aims to reduce volatility in consolidated financial statements while maintaining balance between providing predictability in the Group’s business plan along with reasonable participation in market movement.

32.4 Market Risk

The Group’s activities expose it primarily to the financial risks of changes in foreign currency exchange rates (see note 32.5).

32.5 Foreign currency risk management

The Group undertakes transactions denominated in foreign currencies; consequently, exposures to exchange rate fluctuations arise.

The carrying amounts of the Group’s foreign currency denominated monetary assets and monetary liabilities at the end of the reporting period are as follows.

of the reporting period are as follows.
Particulars	Liabilities as at Assets as at
	Mar 31, Mar 31, Mar 31, Mar 31, 2020 2019 2020 2019
GBP USD Others*	152 170 68 523 1,643 1,739 15,650 12,117 1,174 960 5,654 4,608
Total	2,969 2,869 21,372 17,248

Others include currencies such as SGD,EUR,MYR, AUD, VND and NZD.

32.5.1 Foreign currency sensitivity analysis

The Group is mainly exposed to the USD and GBP.

The following table details the Group’s sensitivity to a 10% increase and decrease in the Rs. against the relevant foreign currencies. 10% is the sensitivity rate used when reporting foreign currency risk internally to key management personnel and represents management’s assessment of the reasonably possible change in foreign exchange rates. The sensitivity analysis includes only outstanding foreign currency denominated monetary items and adjusts their translation at the period end for a 10% change in foreign currency rates. The sensitivity analysis includes external loans as well as loans to foreign operations within the Group where the denomination of the loan is in a currency other than the functional currency of the lender or the borrower. A positive number below indicates an increase in profit or equity where the Rs. strengthens 10% against the relevant currency. For a 10% weakening of the Rs. against the relevant currency, there would be a comparable impact on the profit or equity, and the balances below would be negative.

Xchanging Solutions Limited

Annual Report 2019-20

143

Notes forming part of the Consolidated Financial Statements

(All amounts in Rs. Lakhs, unless otherwise stated)

Particulars	Impact on profit or Impact on total equity as loss for the year at the end of the reporting period
	Mar 31, Mar 31, Mar 31, Mar 31, 2020 2019 2020 2019
GBP sensitivity Increase by 10% Decrease by 10% USD sensitivity Increase by 10% Decrease by 10% Others sensitivity* Increase by 10% Decrease by 10%	(8) 35 (8) 35 8 (35) 8 (35) 1,401 1,038 1,401 1,038 (1,401) (1,038) (1,401) (1,038) 448 365 448 365 (448) (365) (448) (365)

Others include currencies such as SGD,EUR,MYR, AUD, VND and NZD.

32.6 Interest rate risk management

The Group is exposed to interest rate risk because the Group lend/ borrow funds at fixed interest rates. There is no exposure to market rate fluctuations.The Group’s exposures to interest rates on financial assets and financial liabilities are detailed in the liquidity risk management section of this note.

32.7 Credit risk management

Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the Group. The Group has adopted a policy of only dealing with creditworthy counterparties and obtaining sufficient collateral, where appropriate, as a means of mitigating the risk of financial loss from defaults. The Group uses other publicly available financial information and its own trading records to rate its major customers. The Group’s exposure and the credit ratings of its counterparties are continuously monitored and the aggregate value of transactions concluded is spread amongst approved counterparties. Trade receivables consist of a large number of customers, spread across diverse industries and geographical areas. Ongoing credit evaluation is performed on the financial condition of accounts receivables.The Group does not have significant credit risk exposure to any single counterparty.

The credit risk on liquid funds and derivative financial instruments is limited because the counterparties are banks with high credit-ratings assigned by international credit-rating agencies.

Provision for expected credit losses

The Group provides for expected credit loss based on the following:

Category	Description of category	Basis for recognition of expected credit lossprovision	Basis for recognition of expected credit lossprovision	Basis for recognition of expected credit lossprovision
		Loans at amortised cost	Other financial assets at amortised cost	Trade receivables
High quality assets, negligible credit risk	Assets where the counter-party has strong capacity to meet the obligations and where the risk of default is negligible or nil	12-month expected credit losses	12-month expected credit losses	Life-time expected credit losses(simplified approach)
Standard assets, moderate credit risk	Assets where the probability of default is considered moderate, however counter-party has sufficient capacity to meet the obligations
Low quality assets, very high credit risk	Assets where there is a high probability of default and is considered as high risk	Life-time expected credit losses	Life-time expected credit losses
Doubtful assets, credit-impaired	Assets are written off when there is no reasonable expectation of recovery	Asset is written off

144 Xchanging Solutions Limited

Annual Report 2019-20

Notes forming part of the Consolidated Financial Statements

		(All amounts in Rs. Lakhs, unless otherwise stated)	(All amounts in Rs. Lakhs, unless otherwise stated)	(All amounts in Rs. Lakhs, unless otherwise stated)	(All amounts in Rs. Lakhs, unless otherwise stated)	(All amounts in Rs. Lakhs, unless otherwise stated)	(All amounts in Rs. Lakhs, unless otherwise stated)	(All amounts in Rs. Lakhs, unless otherwise stated)	(All amounts in Rs. Lakhs, unless otherwise stated)	(All amounts in Rs. Lakhs, unless otherwise stated)	(All amounts in Rs. Lakhs, unless otherwise stated)	(All amounts in Rs. Lakhs, unless otherwise stated)
Particulars		Category		Asset group		Estimated gross carrying amount at default		Expected probability of default		Expected credit losses		Carrying amount net of impairment provision
March 31, 2020 (a) Expected credit loss for loans and other financial assets at amortised cost
Loss allowance measured at 12 month expected credit losses	Financial assets for which credit risk has not increased significantly since initial recognition	High quality assets, negligible credit risk		Loans at amortised cost		1,618		0%		-		1,618
		High quality assets, negligible credit risk		Other financial assets at amortised cost		80		0%		-		80
		Standard assets, moderate credit risk		Other financial assets at amortised cost		2,509		2%		42		2,468
(b) Expected credit loss for trade receivables under simplified approach
Ageing			0-30 Days		31-60 Days		61-90 Days		91-180 Days	180+ Days	Total outstanding
Gross carrying amount Expected loss rate Expected credit losses(Loss allowanceprovision)			1,422 0% -		339 0% -		147 0% -		122 0% -	1,350 97% 1,309	3,380 39% 1,309
Carrying amount of trade receivables (net of impairment)			1,422		339		147		122	41	2,071

Particulars		Category		Asset group		Estimated gross carrying amount at default		Expected probability of default		Expected credit losses		Carrying amount net of impairment provision
March 31, 2019 (a) Expected credit loss for loans and other financial assets at amortised cost
Loss allowance measured at 12 month expected credit losses	Financial assets for which credit risk has not increased significantly since initial recognition	High quality assets, negligible credit risk		Loans at amortised cost		1,868		0%		-		1,868
		High quality assets, negligible credit risk		Other financial assets at amortised cost		86		0%		-		86
		Standard assets, moderate credit risk		Other financial assets at amortised cost		2,073		3%		56		2,017

Xchanging Solutions Limited

Annual Report 2019-20

145

Notes forming part of the Consolidated Financial Statements

(All amounts in Rs. Lakhs, unless otherwise stated)

(b) Expected credit loss for trade receivables under simplified approach

(b) Expected credit loss for trade receivables under simplified approach
Ageing	0-30 Days	31-60 Days	61-90 Days	91-180 Days	180+ Days	Total outstanding
Gross carrying amount Expected loss rate Expected credit losses (Loss allowance provision)	1,435 0% -	579 0% -	134 0% -	628 0% -	1,372 93% 1,271	4,148 31% 1,271
Carrying amount of trade receivables (net of impairment)	1,435	579	134	628	101	2,877

32.8 Liquidity risk management

The Group manages liquidity risk by maintaining adequate reserves and banking facilities, by continuously monitoring forecast and actual cash flows, and by matching the maturity profiles of financial assets and liabilities.

32.8.1 Liquidity and interest risk tables

The following tables detail the Group’s remaining contractual maturity for its non-derivative financial liabilities with agreed repayment periods. The tables have been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which the Group can be required to pay. The tables include both interest and principal cash flows.

Particulars	Average effective interest rate(%)	Less than 1 year	1-2 years	2 years & above	Total carrying value
March 31, 2020 Non-interest bearing Fixed interest rate instruments March 31, 2019 Non-interest bearing Fixed interest rate instruments	- - - 10.0%	3,230 -	- -	- -	3,230 -
		3,230	-	-	3,230
		3,138 3	- -	- -	3,138 3
		3,141	-	-	3,141

32.9 Fair value measurements

Fair value hierarchy

Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date;
Level 2 inputs are inputs, other than quoted prices included within Level 1, that are observable for the asset or liability, either directly or indirectly; and
Level 3 inputs are unobservable inputs for the asset or liability.

There are no financial assets and liabilities measured at fair value as at March 31, 2020 and March 31, 2019

There have been no transfers between Level 1 and Level 2 during the year ended March 31, 2020 and March 31, 2019

Valuation Methodologies

Investments in mutual funds: The Group’s investments consist primarily of investment in debt linked mutual funds. Fair values of investment securities classified as fair value through profit and loss are determined using the closing NAV and are classified as Level 1.

Fair value of financial assets and financial liabilities that are not measured at fair value

The management assessed that fair value of cash and cash equivalents, trade receivables, trade payables, other current assets and liabilities approximate their carrying amounts largely due to the short-term maturities of these instruments.

146 Xchanging Solutions Limited

Annual Report 2019-20

Notes forming part of the Consolidated Financial Statements

(All amounts in Rs. Lakhs, unless otherwise stated)

33 RELATED PARTY DISCLOSURES

A. Names of related parties and nature of relationship:
1) Parties where control exists:

Parties where control exists:	Parties where control exists:
Nature of relationship		Names of related parties
(i)	Holding companies:
	Ultimate Holding Company	DXC Technology Company
	Intermediate holding companies	Computer Sciences Corporation, USA (‘CSC, USA’)
		CSC Computer Sciences International Inc.
		Lux 1 Holding Company, Inc.
		CSC Computer Sciences International S.a.r.l.
		DXC Lux 5 S.a.r.l.
		CSC Computer Sciences Holdings S.a.r.l.
		DXC Lux 6 S.a.r.l.
		CSC Computer Sciences International Holdings Limited
		CSC Computer Sciences International Services Limited
		CSC Computer Sciences International Limited
		CSC Computer Sciences International Operations Limited
		Xchanging Holdings Limited
		Xchanging B.V.
	Immediate holding company	Xchanging (Mauritius) Limited, Mauritius (‘XML, Mauritius’)
(ii)	Key Managerial Personnel (KMP)
	Executive Director & Chief Financial Officer	Shrenik Kumar Champalal
	Executive Director & Chief Executive Officer	Chandrasekhara Boddoju Rao
	Company Secretary	Mayank Jain (Upto October 31, 2019)
	Company Secretary	Aruna Mohandoss (from November 13, 2019)

2) Other Related Parties with whom transactions have taken place during the year: Fellow subsidiaries Xchanging Systems and Service Inc., USA (‘XSSI, USA’) Xchanging Global Insurance Solutions Ltd., UK (‘XGISL, UK’) Xchanging Technology Services India Private Limited, India (‘XTSIPL, India’) Xchanging UK Limited, UK (‘XUKL, UK’) Xchanging Asia Pacific Sdn Bhd, Malaysia (‘XAPSB, Malaysia’) Xchanging Procurement Services Limited, UK (‘XPSL, UK’) Xchanging Builders (India) Private Limited, India (‘XBPL, India’) Xchanging (SEA) Pte. Limited, Singapore (‘XSPL, Singapore’) DXC Technology India Private Limited, India (previously known as CSC Technologies India Private Limited) (‘DXC, India’) CSC Deutschland GmbH, Germany (‘CSC, Germany’) CSC Technology Singapore Pte. Ltd (‘CSC, Singapore’) DXC Technology Services Vietnam Co, Vietnam (‘DXC, Vietnam’) EIT Services India Private Limited, India (‘EIT, India’) E Services Singapore Pte.Ltd, Singapore (‘E - Services, Singapore’) Ins-Sure Services Limited, UK (‘Ins-Sure, UK’) ESIT Canada Enterprise Services Co, Canada (‘ESIT, Canada’) CSC Consulting Inc., USA (‘CSC Consulting, USA’) Enterprise Services LLC, USA (‘Enterprise, USA’) CSC Corp - FSG US, USA (‘CSC Corp, USA’) MSS-Americas Outsourcing, USA (‘Americas Outsourcing, USA’) CSC Japan LLC, Japan (‘CSC, Japan’) Xchanging Pty Limited, Australia (‘Xchanging, Australia’) Service Mesh Inc., USA (‘Service, USA’) (effective from current financial year) Enterprise Services New Zealand, New Zealand (‘Enterprise Services, New Zealand’) (effective from current financial year)

Xchanging Solutions Limited

Annual Report 2019-20

147

Notes forming part of the Consolidated Financial Statements

	(All amounts in Rs. Lakhs, unless otherwise stated)	(All amounts in Rs. Lakhs, unless otherwise stated)	(All amounts in Rs. Lakhs, unless otherwise stated)	(All amounts in Rs. Lakhs, unless otherwise stated)	(All amounts in Rs. Lakhs, unless otherwise stated)	(All amounts in Rs. Lakhs, unless otherwise stated)
Summary of transactions with related parties is as follows:	Holding companies		Fellow subsidiaries		Total
	For the year ended	For the year ended	For the year ended	For the year ended	For the year ended	For the year ended
	March 31, 2020	March 31, 2019	March 31, 2020	March 31, 2019	March 31, 2020	March 31, 2019
Expenses paid on behalf of the Group:
XUKL, UK	-	-	55	84	55	84
XTSIPL, India	-	-	1,527	734	1,527	734
XSSI, USA	-	-	-	5	-	5
DXC, India	-	-	118	171	118	171
CSC, Singapore	-	-	891	655	891	655
XAPSB, Malaysia	-	-	-	56	-	56
XSPL, Singapore	-	-	-	17	-	17
DXC, Vietnam	-	-	308	104	308	104
E - Services, Singapore	-	-	201	-	201	-
Enterprise, USA	-	-	271	-	271	-
Service, USA	-	-	28	-	28	-
Enterprise Services, New Zealand	-	-	10	-	10	-
EIT, India	-	-	103	46	103	46
Total	-	-	3,512	1,872	3,512	1,872
Expenses paid on behalf of the related party:
XSPL, Singapore	-	-	-	88	-	88
CSC, Singapore	-	-	19	-	19	-
XTSIPL, India	-	-	335	337	335	337
XAPSB, Malaysia	-	-	-	323	-	323
CSC, USA	3	-	-	-	3	-
XPSL, UK	-	-	-	1	-	1
Total	3	-	354	749	357	749
Interest income on loans:
XTSIPL, India	-	-	108	108	108	108
XBPL, India	-	-	89	116	89	116
Total	-	-	197	224	197	224
Revenue:
XGISL, UK	-	-	42	223	42	223
XAPSB, Malaysia	-	-	172	27	172	27
XTSIPL, India	-	-	60	-	60	-
DXC, India	-	-	552	598	552	598
CSC, Germany	-	-	-	14	-	14
CSC, Singapore	-	-	920	528	920	528
E - Services, Singapore	-	-	207	92	207	92
Ins-Sure, UK	-	-	223	240	223	240
ESIT, Canada	-	-	-	1	-	1
EIT, India	-	-	30	40	30	40

148 Xchanging Solutions Limited

Annual Report 2019-20

Notes forming part of the Consolidated Financial Statements

(All amounts in Rs. Lakhs, unless otherwise stated)

CSC Consulting, USA	-	-	16	56	16	56
Enterprise, USA	-	-	430	4	430	4
CSC Corp, USA	-	-	120	157	120	157
Americas Outsourcing, USA	-	-	103	190	103	190
CSC, Japan	-	-	-	6	-	6
XSPL, Singapore	-	-	-	1	-	1
Total	-	-	2,875	2,177	2,875	2,177
Other Income:
XTSIPL, India	-	-	-	3	-	3
Total	-	-	-	3	-	3
Purchase of Asets:
EIT, India	-	-	18	-	18	-
Total	-	-	18	-	18	-
Note: (i) Amount below the rounding off norm adopted by the Group i.e. Rs 1 Lakh are not considered above
Summary ofbalances of related parties is as follows:	Holding companies		Fellow subsidiaries		Total
	As at	As at	As at	As at	As at	As at
	March 31, 2020	March 31, 2019	March 31, 2020	March 31, 2019	March 31, 2020	March 31, 2019
Trade Receivables:
XAPSB, Malaysia	-	-	15	387	15	387
XGISL, UK	-	-	8	22	8	22
XTSIPL, India	-	-	104	124	104	124
DXC, India	-	-	42	40	42	40
CSC, Singapore	-	-	72	281	72	281
Ins-Sure, UK	-	-	19	75	19	75
EIT, India	-	-	4	48	4	48
CSC Consulting, USA	-	-	3	27	3	27
Enterprise, USA	-	-	299	4	299	4
Americas Outsourcing, USA	-	-	-	7	-	7
CSC Corp, USA	-	-	11	25	11	25
CSC, Japan	-	-	-	6	-	6
E - Services, Singapore	-	-	15	67	15	67
Total	-	-	592	1,113	592	1,113
Trade Payables:
XUKL, UK	-	-	50	39	50	39
XGISL, UK	-	-	101	97	101	97
XTSIPL, India	-	-	411	152	411	152
XAPSB, Malaysia	-	-	-	55	-	55
DXC, India	-	-	-	18	-	18
CSC, Singapore	-	-	318	302	318	302
CSC, USA	873	855	-	-	873	855
Xchanging, Australia	-	-	-	8	-	8
EIT, India	-	-	65	50	65	50

Xchanging Solutions Limited

Annual Report 2019-20

149

Notes forming part of the Consolidated Financial Statements

(All amounts in Rs. Lakhs, unless otherwise stated)	(All amounts in Rs. Lakhs, unless otherwise stated)	(All amounts in Rs. Lakhs, unless otherwise stated)	(All amounts in Rs. Lakhs, unless otherwise stated)	(All amounts in Rs. Lakhs, unless otherwise stated)	(All amounts in Rs. Lakhs, unless otherwise stated)	(All amounts in Rs. Lakhs, unless otherwise stated)
Americas Outsourcing, USA(Unearned revenue)	-	-	-	49	-	49
E - Services, Singapore	-	-	222	-	222	-
Enterprise, USA	-	-	72	-	72	-
Service, USA	-	-	7	-	7	-
Enterprise Services, New Zealand	-	-	10	-	10	-
DXC, Vietnam	-	-	58	90	58	90
Total	873	855	1,314	860	2,187	1,715
Expenses Recoverable:
XTSIPL, India	-	-	11	1	11	1
DXC, India	-	-	10	39	10	39
Total	-	-	21	40	21	40
Loans and Advances (including interest accrued):
XTSIPL, India	-	-	908	916	908	916
XBPL, India	-	-	725	985	725	985
Total	-	-	1,633	1,901	1,633	1,901

Note:

(i) Amount below the rounding off norm adopted by the Group i.e. Rs 1 Lakh are not considered above

D. Remuneration paid to the key managerial personnel

Particulars	For the year For the year ended ended
	Mar 31, 2020 Mar 31, 2019
Salaries, bonus, etc. Total	62 95
	62 95

Note:

(i) As gratuity and compensated absences provision are computed for all the employees in aggregate, the amounts relating to key managerial personnel cannot be individually identified.

34 LEASES

(Refer note 2.6)

LEASES (Refer note 2.6)
	As at
	Mar 31, 2020
A. Break-up of current and non-current lease liabilities : The following is the break-up of current and non-current lease liabilities as at March 31, 2020 Current lease liabilities Non-current lease liabilities Total	113 118 --------------------------- 231 ==================
	As at
	Mar 31, 2020
B. Movement in Lease liabilities : The following is the movement in lease liabilities during the year ended March 31, 2020 Balance as at April 1, 2019 Reclassified on account of adoption of IND AS 116 (Refer note 2.4) Additions Finance costs accrued during the period Payment of Lease liabilities Translation difference Balance as at March 31, 2020	- 169 165 13 (120) 4 --------------------------- 231 ==================

150 Xchanging Solutions Limited

Annual Report 2019-20

Notes forming part of the Consolidated Financial Statements

(All amounts in Rs. Lakhs, unless otherwise stated)

			As at
			Mar 31, 2020
C. The table below provides details regarding the contractual maturities of lease liabilities as at March 31, 2020 on an undiscounted basis: Less than one year 125 One to five years 131 More than five years - --------------------------- Total 256 ==================
			Amount in
			Rs. Lakhs
D. The impact of changes in acounting policy on account of adoption of Ind AS 116 is as follows: Increase in lease liability by Increase in rights of use by Increase in deferred tax assets by Increase in finance cost by Increase in depreciation by			231 221 2 13 113
		For theyear ended
		Mar 31, 2020
E. Amounts recognized in profit or loss: Interest on lease liabilities Expenses relating to short- term leases		13 19
		For theyear ended
		Mar 31, 2020
F. Amounts recognized in statement of cash flows Total cash outflows for leases 120 G. Effective April 1, 2019, the Group adopted Ind AS 116 “Leases”, applied to all lease contracts existing on April 1, 2019 using the Simplified approach and accordingly, comparatives for the year ended March 31, 2019 have not been retrospectively adjusted. The adoption of the new standard resulted in recognition of Right-of-Use (ROU) of Rs. 169 and a lease liability of Rs. 169. The effect of this adoption is insignificant on theprofit for theperiod and earningsper share.
	As at As at
	Mar 31, 2020 Mar 31, 2019
CAPITAL AND OTHER COMMITMENTS (a) Capital Commitments Estimated value of contracts in capital account remaining to be executed (net of CONTINGENT LIABILITIES (Refer note 2.13) (i) Claims against the Company not acknowledged as debts: Income tax matters [Note (b)] Service tax matters [Note (c)]	advances) 4 2 1,270 1,177 2,359 2,359
	3,629 3,536

(ii) (a) During the quarter ended March 31, 2016, one of the customers of the Company has disputed its outstanding balance of INR 960 as on March 31, 2016. Arbitration proceeding for this dispute is ongoing. However as a matter of abundant caution, provision has been made for the amounts due.

(b) The above customer has made a claim on the company for the damages incurred by them to the extent of INR 1,821, which has not been accepted by the Company.

Notes:

(a) The above contingent liabilities are possible obligation or present obligation that may (but probably will not) require an outflow of resources.

(b) Represents various income tax demands under appeal.

Xchanging Solutions Limited

Annual Report 2019-20

151

Notes forming part of the Consolidated Financial Statements

(All amounts in Rs. Lakhs, unless otherwise stated)

(c) Represents service tax amount on select categories of transactions relating to financial years 2007-08 to 2011-12 set out in a show cause notice issued by the Commissioner of Service Tax, Bangalore, which is responded by the Company. Based on consultation with legal counsel, the Company has filed a formal reply to the show cause notice.
(d) It is not practicable for the Group to estimate the timings of cash outflows, if any, in respect of the above pending resolution of the respective proceedings.
(e) The Group does not expect any reimbursements in respect of the above contingent liabilities.

37 CORPORATE SOCIAL RESPONSIBILITY (CSR)

As per Sec 135 of the Companies Act, 2013 applicable in the current year, gross amount required to be spent by the Company during the year is Rs 21 (2019: Rs 20) on various CSR initiatives. Amount spent during the year are mentioned below:	As per Sec 135 of the Companies Act, 2013 applicable in the current year, gross amount required to be spent by the Company during the year is Rs 21 (2019: Rs 20) on various CSR initiatives. Amount spent during the year are mentioned below:	As per Sec 135 of the Companies Act, 2013 applicable in the current year, gross amount required to be spent by the Company during the year is Rs 21 (2019: Rs 20) on various CSR initiatives. Amount spent during the year are mentioned below:	As per Sec 135 of the Companies Act, 2013 applicable in the current year, gross amount required to be spent by the Company during the year is Rs 21 (2019: Rs 20) on various CSR initiatives. Amount spent during the year are mentioned below:
Sector in which the project is covered Particulars For the For the
		year ended Mar 31, 2020	year ended Mar 31, 2019
Education of underprivileged children	U&I Trust	21	-
Promoting education, including special education	The College student & Graduates Association of the Blind	-	5
Promotingeducation, includingspecial education	Samarthanam Trust for the Disabled	-	15
Promotingeducation, includingspecial education	BHUMI	-	-
Eradicatinghunger,povertyand malnutrition	The Akshaya Patra Foundation	-	*
Total * Amount spent is Rs 25,000/-		21	20

38 Open offer and minimum public shareholding (MPS)

39 The Company has adopted the option of lower tax rate as provided in the Taxation Law Amendment Act, 2019 and the consequent impact on the tax expense has been considered for the year ended March 31, 2020.

40 Transfer Pricing

The Group has carried out international transactions with associated enterprises. The Group appoints independent consultants to conduct a Transfer Pricing Study to determine whether the transactions with associated enterprises undertaken during the period are on an “arms length basis”. For the current period, the transfer pricing study shall be completed within the permissible time under the legislation and adjustments, if any, arising from the transfer pricing study shall be accounted for as and when the study is completed. However, the Management is confident that its international transactions with associated enterprises and within its subsidiaries are at arm’s length so that the aforesaid legislation/transactions will not have any material impact on the consolidated financial statements, particularly on the amount of tax expense and that of provision for taxation for the current period.

41 Additional information as required by Paragraph 2 of the General Instructions for Preparation of Consolidated Financial Statements to Schedule III to the Companies Act, 2013

Entity	Net assets, i.e., total assets minus total liabilities	Net assets, i.e., total assets minus total liabilities	Share in profit/(loss) for the year ended March 31, 2020	Share in profit/(loss) for the year ended March 31, 2020	Share in other comprehensive income for the year ended March 31, 2020	Share in other comprehensive income for the year ended March 31, 2020	Share in total other comprehensive income for the year ended March 31, 2020	Share in total other comprehensive income for the year ended March 31, 2020
	As % of consolidated net assets	Amount	As % of consolidated profit or loss	Amount	As % of consolidated other comprehensive income	Amount	As % of consolidated total other comprehensive income	Amount
Xchanging Solutions Limited* Indian Subsidiar ies Nexplicit Infotech India Private Limited	124% 0%	(60,732) (93)	41% 0%	2,269 (6)	818 -	100% -	3,087 -	100% -

152 Xchanging Solutions Limited

Annual Report 2019-20

Notes forming part of the Consolidated Financial Statements

(All amounts in Rs. Lakhs, unless otherwise stated)

Entity	Net assets, i.e., total assets minus total liabilities	Net assets, i.e., total assets minus total liabilities	Share in profit/(loss) for the year ended March 31, 2020	Share in profit/(loss) for the year ended March 31, 2020	Share in other comprehensive income for the year ended March 31, 2020	Share in other comprehensive income for the year ended March 31, 2020	Share in total other comprehensive income for the year ended March 31, 2020	Share in total other comprehensive income for the year ended March 31, 2020
	As % of consolidated net assets	Amount	As % of consolidated profit or loss	Amount	As % of consolidated other comprehensive income	Amount	As % of consolidated total other comprehensive income	Amount
F oreign Subsidiar ies Xchanging Solutions (Europe) Limited Xchanging Solutions (Singapore) Pte Limited Xchanging Solutions (Malaysia) Sdn Bhd XchangingSolutions (USA) Inc	0% 11% 0% (36%)	(3) (5,493) (51) 17,580	-7% 22% - 44%	(396) 1,206 - 2,397	- - - -	- - - -	- - - -	- - - -
Total	100%	(48,792)	100%	5,470	818	100%	3,087	100%

Includes elimination adjustments also.

42 Disclosure as per regulation 34(3) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015

Loans given to fellow subsidiaries in which directors are interested:

Name of the party	Relationship	Amount outstanding as at March 31, 2020	Maximum balance outstanding during theyear
Xchanging Technology Services India Private Limited	Common Director	908 (916)	934 (926)
Xchanging Builders (India) Private Limited	Common Director	725 (985)	985 (988)

Note: Figures in bracket relate to previous year

43 During the year, SGD 1 has been received on account of Job support scheme announced by the Singapore government. Payout for this assistance has been received in 2020.

44 Events after the reporting period

There are no events after the reporting period.

45 Approval of financial statements

The financial statements of the Group have been reviewed and recommended by the Audit Committee to the Board, and approved by the Board of Directors at its meeting held on May 22, 2020.

46 Previous year figures

Previous year figures have been regrouped / reclassified wherever necessary.

For Deloitte Haskins & Sells LLP Chartered Accountants

For and on behalf of the Board of Directors

Bhavani Balasubramanian

Partner

Place: Chennai Date: May 22, 2020

Chandrasekhara Rao Boddoju Managing Director and Chief Executive Officer DIN : 08185777 Place: Hyderabad Date: May 22, 2020

Shrenik Kumar Champalal

Whole Time Director and Chief Financial Officer DIN : 08099410 Place: Bengaluru Date: May 22, 2020

Aruna Mohandoss

Company Secretary Place: Chennai Date: May 22, 2020

Xchanging Solutions Limited

Annual Report 2019-20

153

FORM AOC – 1

FORM AOC – 1

Pursuant to first proviso to Sub-section (3) of Section 129 read with rule 5 of Companies (Accounts) Rules, 2018

Statement containing salient features of the financial statements of subsidiaries/associates companies/joint ventures as included in the consolidated Financial Statement

Part – “A”: Subsidiaries

Part – “A”: Subsidiaries	Part – “A”: Subsidiaries	Part – “A”: Subsidiaries	Part – “A”: Subsidiaries	Part – “A”: Subsidiaries
(INR in Lakhs)
S. No.	Particulars	Xchanging Solution Europe Ltd.*	Xchanging Solutions (USA) Inc.	Xchanging Solutions Singapore Pte Ltd.
1.	Date since when subsidiarywas acquired	March 31, 2004	July2, 2004	March 31, 2004
2.	Reporting period	April 1, 2019- March 31, 2020
3.	Reportingcurrency	1 GBP= 93.53	1$= 75.63	1 SGD= 53.09
4.	Share Capital	0.001	7,509.86	1,222.50
5.	Reserves & Surplus	3.93	(25,109.59)	4,283.08
6.	Total Assets	3.93	13,011.86	7,069.23
7.	Total Current Liabilities	-	1,926.76	1,565.16
8.	Investments	-	20.70	62.48
9.	Turnover	0	10,547.60	5,797.56
10.	Profit(Loss)before Taxation	(0.75)	2,435.19	1,472.94
11.	Provision for taxation	-	(138.74)	233.88
12.	Profit after taxation	(0.75)	2,573.93	1,239.07
13.	Proposed dividend	-	-	-
14.	Extent of shareholding (in percentage)	100%	100%	100%

Note:

The Company is under liquidation.

Nexplicit Infotech India Private Limited and Xchanging Solutions (Malaysia) Sdn Bhd are the step-down subsidiaries of the Company. Both entities are under liquidation.

154 Xchanging Solutions Limited

Annual Report 2019-20

NOTICE OF ANNUAL GENERAL MEETING

Notice is hereby given that the 19th Annual General Meeting ( “AGM” ) of the members of Xchanging Solutions Limited ( “the Company” ) will be held on Wednesday, September 23, 2020 at 10:00 A.M. IST through Video Conferencing / Other Audio Visual Means ( “VC” / ”OAVM” ) to transact the following business:

ORDINARY BUSINESS

To receive, consider and adopt:
a. the Audited Financial Statements of the Company for the financial year ended March 31, 2020, together with the Reports of the Board of Directors and the Auditors thereon; and
b. the Audited Consolidated Financial Statements of the Company for the financial year ended March 31, 2020, together with the Report of the Auditors thereon.
To appoint a Director in place of Mrs. Gidugu Kalpana Tatavarti (DIN 06644105), who retires by rotation and being eligible, offers herself for re-appointment.

By Order of the Board of Directors For Xchanging Solutions Limited Sd/- Place : Bangalore Aruna Mohandoss Date : May 22, 2020 Company Secretary Membership No: A24023

Registered office: -

Kalyani Tech Park - Survey No 1, 6 & 24, Kundanhalli Village, K R Puram Hobli, Bangalore – 560066

NOTES:

In view of the outbreak of the COVID-19 pandemic and restrictions on the movements apart from social distancing at several places in the country and pursuant to Ministry of Corporate Affairs ( “MCA” ) General Circular numbers 20/ 2020, 14/2020, 17/2020 ( “MCA Circulars” ) and Circular number SEBI/HO/CFD/CMD1/CIR/P/2020/79 issued by the Securities and Exchange Board of India ( “SEBI Circular” ) (hereinafter collectively referred to as “the Circulars” ), companies are allowed to hold AGM through VC/OVAM for the calendar year 2020 without the physical presence of members at a common venue. Hence, in compliance with the Circulars, the 19[th] Annual General Meeting ( “AGM” ) of the Company is being held through VC. The deemed venue for the AGM shall be Registered Office of the Company.
In terms of the MCA Circulars since the physical attendance of Members has been dispensed with, there is no requirement of appointment of proxies. Accordingly, the facility of appointment of proxies by Members under Section 105 of the Companies Act, 2013 ( “The Act” ) will not be available for the AGM. However, in pursuance of Section 112 and Section 113 of the Act, representatives of the Members may be appointed for the purpose of voting through remote e- Voting, for participation in the AGM through VC/OAVM Facility and e-Voting during the AGM.
Institutional/Corporate Shareholders (i.e. other than individuals/HUF, NRI, etc) are required to send a scanned copy (PDF/JPEG Format) of its Board Resolution or governing

body Resolution/Authorisation etc., authorising its representative to attend the AGM through VC/OAVM Facility on its behalf and to vote through remote e-voting. The said Resolution/Authorization shall be sent to the Scrutinizer by email through their registered email address to [email protected] with copies marked to the Company at [email protected] and to its Registrars and Transfer Agents( “RTA” ) at [email protected].

In terms of the applicable provisions of the Act, SEBI (Listing Obligations & Disclosure Requirements) Regulations 2015 ( “SEBI Listing Regulations” ) read with the MCA Circulars and SEBI Circular, the Annual Report including Notice of the AGM of the Company will also be available on the website of the Company at http://www.xchanging.com/investor-relations/ xsl-content. The same can also be accessed from the websites of the Stock Exchanges i.e. BSE Limited and National Stock Exchange of India Limited at www.bseindia.com and www.nseindia.com respectively and on the website of e-voting agency M/s KFin Technologies Private Limited ( “KFin Technologies” ) at https:// evoting.karvy.com/
Since the AGM will be held through VC/OAVM Facility, the Attendance Slip, Proxy Form and Route Map are not annexed to the Notice.
Company has appointed KFin Technologies, RTA of the Company, to provide Video Conferencing Facility for the AGM and to act as the attendant enablers for conducting the AGM.
Pursuant to the provisions of the MCA Circulars on convening AGM through VC/OVAM:
a. Members can attend the meeting through log in credentials provided to them to connect to Video Conference. Physical attendance of the Members at the Meeting venue is not required.
b. Appointment of proxy to attend and cast vote on behalf of the member is not available.
c. Body Corporates are entitled to appoint authorised representatives to attend the AGM through VC/OAVM and participate thereat and cast their votes through e-voting.
The Members may join the AGM through VC/ OAVM Facility by following the procedure mentioned herein below in the Notice which shall be kept open for the Members from 9:45 A.M. IST i.e. 15 (Fifteen) minutes before the time scheduled to start the AGM and the Company may close the window for joining the VC/OAVM Facility after expiry of 15 (Fifteen) minutes from the scheduled time to start the AGM.
Members may note that the VC/OAVM facility, provided by KFin Technologies, allows participation of at-least 1,000 Members on a first-come-first-served basis ( “FIFO” ). The large shareholders (i.e. shareholders holding 2% or more shareholding), promoters, institutional investors, directors, key managerial personnel, the Chairpersons of the Audit Committee, Nomination and Remuneration Committee and Stakeholders Relationship Committee, auditors, etc. can attend the AGM without any restriction on account of FIFO principle.
The attendance of the Members (members logins) attending the AGM through VC/ OAVM Facility shall be counted for the

Xchanging Solutions Limited

Annual Report 2019-20

155

Notice of Annual General Meeting

purpose of reckoning the quorum under Section 103 of the Act.

11. Remote e-Voting: Pursuant to the provisions of Section 108 of the Companies Act, 2013 read with Rule 20 of the Companies (Management and Administration) Rules, 2014, as amended, Secretarial Standard on General Meetings ( “SS-2” ) issued by the Institute of Company Secretaries of India ( “ICSI” ) and Regulation 44 of the SEBI Listing Regulations, as amended, and the MCA Circulars, the Company is providing facility of remote e-voting to its Members through e-Voting agency ‘KFin Technologies’.

The Remote e-voting period commences on September 20, 2020 (9:00 A.M. IST) and ends on September 22, 2020 (5:00 P.M. IST). During this period, Members of the Company, holding shares either in physical form or in dematerialized form, as on the Cut-off date of Wednesday, September 16, 2020, may cast their votes electronically.

12. Voting at the e-AGM: Members who could not vote through remote e-voting may avail the e-voting system provided at the time of the meeting:

a. The e-Voting “Thumb sign” on the left hand corner of the video screen shall be activated upon instructions of the chairman during the e-AGM proceedings. Shareholders shall click on the same to take them to the “instapoll” page.
b. Members to click on the “Instapoll” icon to reach the resolution page and follow the instructions to vote on the resolutions.
c. Only those shareholders, who are present in the e-AGM and have not casted their vote on the Resolutions through remote e-Voting and are otherwise not barred from doing so, shall be eligible to vote through e-Voting system available during the e-AGM.
In case of joint holders attending the AGM, the Member whose name appears as the first holder in the order of names as per the Register of Members of the Company will be entitled to vote.
Voting rights shall be reckoned on the paid-up value of shares registered in the name of member/beneficial owners (in case of electronic shareholding) as on the Cut-off date i.e. Wednesday, September 16, 2020 .
The SEBI has mandated the submission of Permanent Account Number ( “PAN” ) by every participant in securities market. Members holding shares in electronic form are, therefore, requested to submit PAN to their Depository Participants with whom they are maintaining their demat accounts. Members holding shares in physical form can submit their PAN details to the Company/Registrar and Share Transfer Agent.
Securities of listed companies would be transferred in dematerialised form only w.e.f. April 1, 2019. In view of the same, Members holding shares in physical form are requested to convert their holdings to dematerialized form to eliminate all risks associated with physical shares and for ease of portfolio management. Members can contact the Company’s RTA for assistance in this regard.
Relevant details in respect of the Director seeking re-

appointment at the AGM, in terms of Regulations 26(4) and 36(3) of the SEBI Listing Regulations and Clause 1.2.5 of SS– 2 issued by ICSI are also annexed to this notice as Annexure I .

The Register of Members and Share Transfer Books of the Company will remain closed from Thursday, September 17, 2020 to Wednesday, September 23, 2020 (both days inclusive) for the purposes of the AGM.
Mr. Ankush Agarwal, Practicing Company Secretary (C.P. No. 14486), has been appointed as the Scrutinizer for providing facility to the Members of the Company to scrutinize the remote e-voting process and casting vote through the e-voting system during the AGM in a fair and transparent manner.
The Scrutinizer shall, immediately after the conclusion of voting at the AGM, first count the votes cast during the AGM, thereafter unblock the votes cast through remote e-voting and make, not later than 48 hours of conclusion of the AGM, a consolidated Scrutinizer’s Report of the total votes cast in favour or against, if any, to the Chairman or a person authorised by him in writing, who shall countersign the same. The resolutions, if passed by requisite majority, shall be deemed to have been passed on the date of the AGM i.e. September 23, 2020.
The Results declared alongwith the report of the Scrutinizer shall be placed on the website of the Company at http:// www.xchanging.com/investor-relations/xsl-content and on the website of KFin Technologies at https://evoting.karvy.com, immediately after the declaration of result by the Chairman or any person authorized by him in writing and the same shall be communicated to BSE Limited and National Stock Exchange of India Limited.
The Register of Directors and Key Managerial Personnel and their shareholding, maintained under Section 170 of the Act, and the Register of Contracts or Arrangements in which the directors are interested, maintained under Section 189 of the Act, will be available electronically for inspection by the members during the AGM.
The Company has designated an exclusive Email ID [email protected] for redressal of shareholders complaints/grievances. For any investor related queries, you are requested to please write to us at the above Email ID.

Procedure for obtaining the Annual Report, AGM notice and e-voting instructions by the shareholders whose email addresses are not registered with the depositories or with RTA on physical folios:

On account of threat posed by COVID-19 and in terms of the MCA and SEBI Circulars, the Company has sent the Annual Report, Notice of AGM and e-Voting instructions only in electronic form to the registered email addresses of the shareholders. Therefore, those shareholders who have not yet registered their email address are requested to get their email addresses registered by following the procedure given below:

Those shareholders who have registered/not registered their mail address and mobile number including address and bank details may please contact and validate/update their details with the Depository Participant in case of shares held in

156 Xchanging Solutions Limited

Annual Report 2019-20

Notice of Annual General Meeting

electronic form and with the Company’s Registrar and Share Transfer Agent, M/s. KFin Technologies Private Limited, in case the shares held in physical form.

Shareholders who have not registered their mail address and in consequence the Annual Report, Notice of AGM and e- voting notice could not be serviced, may temporarily get their email address and mobile number provided with the Company’s Registrar and Share Transfer Agent, KFin Technologies Private Limited, by clicking the link: https:// ris.kfintech.com/email_registration for sending the same. Shareholders are requested to follow the process as guided to capture the email address and mobile number for sending the soft copy of the notice and e-voting instructions along with the User ID and Password. In case of any queries, shareholder may write to [email protected].
Shareholders may visit the website of the company http:// www.xchanging.com/investor-relations/xsl-content or the website of the Registrar and Transfer Agent at https:// evoting.karvy.com for downloading the Annual Report and Notice of the AGM.
Alternatively member may send an e-mail request at the email id [email protected] along with scanned copy of the signed copy of the request letter providing the email address, mobile number, self-attested PAN copy and Client Master copy in case of electronic folio and copy of share certificate in case of physical folio for sending the Annual report, Notice of AGM and the e-voting instructions.

Instructions for the Members for attending the AGM through Video Conference:

Member will be provided with a facility to attend the AGM through video conferencing platform provided by M/s KFin Technologies Private Limited. Members may access the same at https://emeetings.kfintech.com/ under shareholders/ members login by using the remote evoting credentials. The link for AGM will be available in shareholder/members login where the EVENT and the name of the company can be selected. Please note that the members who do not have the User ID and Password for e-Voting or have forgotten the User ID and Password may retrieve the same by following the remote e-Voting instructions mentioned in the notice.
Members are encouraged to join the Meeting through Laptops with Google Chrome for better experience.
Further Members will be required to allow Camera, if any, and hence use Internet with a good speed to avoid any disturbance during the meeting.
Please note that Participants Connecting from Mobile Devices or Tablets or through Laptop connecting via Mobile Hotspot may experience Audio/Video loss due to Fluctuation in their respective network. It is therefore recommended to use Stable Wi-Fi or LAN Connection to mitigate any kind of aforesaid glitches.
Shareholders who would like to express their views/ask questions during the meeting may log into https:// emeetings.kfintech.com/ may post their queries/views/ questions in the window provided by mentioning the name, demat account number/folio number, email id, mobile number.

Please note that, members questions will be answered only, the shareholder continue to hold the shares as of cut-off date benpos.

Due to limitations of transmission and coordination during the Q&A session, the company may dispense with the speaker registration during the AGM conference.
Shareholder who wish to register as speakers are requested to visit https://emeetings.kfintech.com/ and click on ‘Speaker Registration’ during this period. The speaker registration shall commence on September 20, 2020 (9:00 A.M. IST) and ends on September 22, 2020 (5:00 P.M. IST). Members are requested to remember the same and wait for their turn to be called by the Chairman/ Company Secretary of the meeting during the Q&A Session. Due to limitations of transmission and coordination during the AGM, the Company may have to dispense with or curtail the Speaker Session, hence members are encouraged to send their queries/views/ questions in advance.

Instructions for members for e-Voting during the AGM session:

Only those Members/ shareholders, who will be present in the AGM through Video Conference facility and have not casted their vote through remote e-Voting are eligible to vote through e-Voting in the AGM.
However, members who have voted through Remote e-Voting will be eligible to attend the AGM.

Instructions for members for Remote e-Voting

I) Remote e-voting: In compliance with the provisions of Section 108 of the Companies Act, 2013, read with Rule 20 of the Companies (Management and Administration) Rules, 2014, as amended, Secretarial Standard on General Meetings ( “SS-2” ) issued by the Institute of Company Secretaries of India ( “ICSI” ) and the provisions of Regulation 44 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Members are provided with the facility to cast their vote electronically, through the e-voting services provided by KFin Technologies Private Limited (Formerly known as Karvy Fintech Private Limited) (KFin Technologies) on all resolutions set forth in this Notice, from a place other than the venue of the Meeting (Remote e-voting).
(A) In case a Member receives an email from KFin Technologies [for Members whose email IDs are registered with the Company/Depository Participants (s)]:
- i. Launch internet browser by typing the URL: https:// evoting.karvy.com.
- ii. Enter the login credentials (i.e. User ID and password). In case of physical folio, User ID will be EVEN (E-Voting Event Number) xxxx followed by folio number. In case of Demat account, User ID will be your DP ID and Client ID. However, if you are already registered with KFin Technologies for e- voting, you can use your existing User ID and password for casting your vote.
- iii. After entering these details appropriately, click on

Xchanging Solutions Limited

Annual Report 2019-20

157

Notice of Annual General Meeting

“LOGIN”.

iv. You will now reach password change Menu wherein you are required to mandatorily change your password. The new password shall comprise of minimum 8 characters with at least one upper case (A- Z), one lower case (a-z), one numeric value (09) and a special character (@,#,$, etc.,). The system will prompt you to change your password and update your contact details like mobile number, email ID etc. on first login. You may also enter a secret question and answer of your choice to retrieve your password in case you forget it. It is strongly recommended that you do not share your password with any other person and that you take utmost care to keep your password confidential.
v. You need to login again with the new credentials.
vi. On successful login, the system will prompt you to select the “EVENT” i.e., ‘Name of the Company”
vii. On the voting page, enter the number of shares (which represents the number of votes) as on the Cut-off Date under “FOR/AGAINST” or alternatively, you may partially enter any number in “FOR” and partially “AGAINST” but the total number in “FOR/ AGAINST” taken together shall not exceed your total shareholding as mentioned herein above. You may also choose the option ABSTAIN. If the Member does not indicate either “FOR” or “AGAINST” it will be treated as “ABSTAIN” and the shares held will not be counted under either head.
viii. Members holding multiple folios/demat accounts shall choose the voting process separately for each folio/demat accounts.
ix. Voting has to be done for each item of the notice separately. In case you do not desire to cast your vote on any specific item, it will be treated as abstained.
x. You may then cast your vote by selecting an appropriate option and click on “Submit”.
xi. A confirmation box will be displayed. Click “OK” to confirm else “CANCEL” to modify. Once you have voted on the resolution(s), you will not be allowed to modify your vote. During the voting period, Members can login any number of times till they have voted on the Resolution(s).
xii. Corporate/Institutional Members (i.e. other than Individuals, HUF, NRI etc.) are also required to send scanned certified true copy (PDF Format) of the Board Resolution/Authority Letter etc., together with attested specimen signature(s) of the duly authorised representative(s), to the Scrutinizer at email [email protected] with a copy marked to [email protected]. The scanned image of the above mentioned documents should be in the naming format “ Corporate Name_Event No.”

OTHER INSTRUCTIONS

a. In case of any query and/or grievance, in respect of voting by electronic means, Members may refer to the Help & Frequently

Asked Questions (FAQs) and E-voting user manual available at the download section of https://evoting.karvy.com (KFin Technologies Website) or contact Mr. Anandan K, Manager, (Unit: Xchanging Solutions Limited) of KFin Technologies Private Limited (formerly known as Karvy Fintech Private Limited), Selenium Tower B, Plot 31-32, Gachibowli, Financial District, Nanakramguda, Hyderabad - 500 032 or at [email protected] or phone no. 040 – 6716 1500 or call KFinTechnologies’s toll free No. 1-800-34-54-001 for any further clarifications.

b. You can also update your mobile number and e-mail id in the user profile to get e- voting confirmation.
c. The Remote e-voting period commences on September 20, 2020 (9:00 A.M. IST) and ends on September 22, 2020 (5:00 P.M. IST). During this period, Members of the Company, holding shares either in physical form or in dematerialized form, as on the Cut-off date of September 16, 2020, may cast their votes electronically. A person who is not a Member as on the Cut-off date should treat this Notice for information purposes only. The remote e-voting module shall be disabled for voting thereafter. Once the vote on a resolution(s) is cast by the Member, the Member shall not be allowed to change it subsequently.
d. The voting rights of Members shall be in proportion to their share of the paid up equity share capital of the Company as on the Cut-off date i.e. September 16, 2020.
e. In case a person has become a Member of the Company after dispatch of AGM Notice but on or before the Cut-off date for e- voting i.e., September 16, 2020, he/she may obtain the User ID and Password in the manner as mentioned below :
i. If the mobile number of the member is registered against Folio No./ DP ID Client ID, the member may send SMS: MYEPWD E-Voting Event Number+Folio No. or DP ID Client ID to 9212993399

Example for NSDL: MYEPWD IN12345612345678

Example for CDSL: MYEPWD 1402345612345678 Example for Physical: MYEPWD XXXX1234567890

ii. If e-mail address or mobile number of the member is registered against Folio No. / DP ID Client ID, then on the home page of https://evoting.kfintech.com, the member may click “Forgot Password” and enter Folio No. or DP ID Client ID and PAN to generate a password.
iii. Member may call KFinTechnologies’s toll free number 1800-3454-001.

By Order of the Board of Directors For Xchanging Solutions Limited Sd/- Place : Bangalore Aruna Mohandoss Date : May 22, 2020 Company Secretary Membership No: A24023

Registered office: -

Kalyani Tech Park - Survey No 1, 6 & 24, Kundanhalli Village, K R Puram Hobli, Bangalore – 560066

158 Xchanging Solutions Limited

Annual Report 2019-20

Notice of Annual General Meeting

ANNEXURE - I TO THE NOTICE OF AGM

Details of Directors seeking re-appointment furnished pursuant to Regulation 36 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 and Clause 1.2.5 of the Secretarial Standard-2.

Name of the Director	Gidugu Kalpana Tatavarti
DIN	06644105
Designation	Non-Executive Non-Independent Director
Date of Birth	30 July 1966
Age	54 years
Nationality	Indian
Date of First Appointment on the Board	27 March 2018
Qualifications	Bachelor of Arts in English Literature and Diploma in Marketing and Sales
Profile	Kalpana Tatavarti brings diverse experience of over 20 years spanning Marketing, Sales and Leadership Development. She is Founder of Parity Consulting and Training operating since May 2016, a boutique diversity and inclusion firm. The firm partners with organizations in building safe and inclusive workplaces. The firm is also empaneled with the Ministry of Women and Child Development as a service provider for conducting training on Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. She sits as an External Committee for organisations on their POSH Committee. Kalpana is also a certified Executive coach from the Coaching Foundation of India, besides being certified in psychometric instruments such as MBTI, FIRO- B, DISC and the EQi 2.0, she is also certified in Transactional Analysis. As an Angel Investor, she invests in early stage startups. She is a founder of Manasvini, an NGO that provides interest free micro credit to women in economically disadvantaged areas of urban cities to encourage their economic/business aspirations.
Last Remuneration drawn	-
Remuneration to be paid	-
Number of Board Meetings attended during FY 2019-20	4 Board Meetings
Directorships held in other Companies as on March 31, 2020	1. Parity Consulting and Training Private Limited 2. Manasvini Women Empowerment Foundation
Relationship with other Directors, Key Managerial Personnel	Nil
Memberships/Chairmanships of Committees of other companies	Nil
Number of Stock Options	NA
Number of Shares held in the Company	-

Xchanging Solutions Limited

Annual Report 2019-20

159

If undelivered please return to: XCHANGING SOLUTIONS LIMITED CIN: L72200KA2002PLC030072 Kalyani Tech Park - Survey No 1, 6 & 24, Kundanhalli Village, K R Puram Hobli, Bangalore – 560066

AI assistant

Xchanging Solutions Limited — Annual Report 2020

62004_rns_2020-08-29_79cd5631-a786-4d0f-981b-b437a8b4d951.pdf

Xchanging Solutions Limited

Shareholder Information

XCHANGING SOLUTIONS LIMITED

STOCK EXCHANGES

Safe Harbor Statement

TABLE OF CONTENTS

BOARD OF DIRECTORS

COMPANY SECRETARY & COMPLIANCE OFFICER

STATUTORY AUDITORS

REGISTERED OFFICE

REGISTRAR AND TRANSFER AGENT

A. BOARDS’ REPORT

B. CORPORATE GOVERNANCE REPORT

Dear Shareholders,

A. FINANCIAL RESULTS

(INR in Lakhs)

B. REVIEW OF OPERATIONS

C. MANAGEMENT DISCUSSION AND ANALYSIS

D. DIVIDEND

E. TRANSFER TO RESERVES

F. SUBSIDIARY COMPANIES

G.

RELATED PARTY TRANSACTIONS

H. AUDITORS

(i) Statutory Auditors and Auditors’ Report

(ii) Secretarial Auditor

(iii) Reporting of Frauds by Auditors

I. PARTICULARS OF LOANS, GUARANTEES, INVESTMENTS AND SECURITIES

J. PUBLIC DEPOSITS

K. EMPLOYEES

(i) Key Managerial Personnel (KMP)

(ii) Employees’ Stock Option Plan (ESOP)

(iii) Particulars of Employees and Related Disclosures

L. BOARD AND COMMITTEES

(i) Directors

(ii) Board Evaluation

(iii) Remuneration Policy

(iv) Board/Committee Composition and Meetings

(v) Familiarization Programme and Separate Meeting of Independent Director’s

(vi) Audit Committee

(vii)Directors’ Responsibility Statement

M. GOVERNANCE

(i) Corporate Governance

(ii) Vigil Mechanism / Whistle Blower Policy

(iii) Risk Management

(iv) Internal Financial Controls

N. CORPORATE SOCIAL RESPONSIBILITY INITIATIVES

O. CONSERVATION OF ENERGY, RESEARCH AND DEVELOPMENT, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO

BUSINESS RESPONSIBILITY REPORT

P.

Q. OTHER DISCLOSURES

(i) Share Capital

(ii) Promoter holding and Minimum Public shareholding

(iii) Statutory Disclosures

(iv) Extract of Annual Return

(v) Compliance of Secretarial Standards

(vi) Appointment of Independent Director in an unlisted material Subsidiary

(vii) Change of Registered Office

(viii) Responsibility

For Standalone:

For Consolidated :

(ix) Material changes and commitments affecting the financial position of the Company

(xiii) Chief Executive Officer (CEO) and Chief Financial Officer (CFO) Certificate

ACKNOWLEDGEMENTS:

For and on behalf of the Board of Directors,

Form No. AOC-2

(Pursuant to clause (h) of sub-section (3) of section 134 of the Act and Rule 8(2) of the Companies (Accounts) Rules, 2014)

For and on behalf of the Board of Directors,

Chandrasekhara Rao Boddoju

MR-3

Secretarial Audit Report

To, The Members, Xchanging Solutions Limited

Promoters Holding and Minimum Public Shareholding

Ankush Agarwal & Associates Company Secretaries

Ankush Agarwal

Annexure –A to Secretarial Audit Report dated May 21, 2020

To,

Xchanging Solutions Limited Annual Report 2020