Subsidiary Financials 2017-18...management either intends to liquidate the Company or to cease...

Subsidiary Financials 2017-18

CONTENT

Name of subsidiary PageSubsidiaries (held directly) IndianAPTOnline Limited 1MP Online Limited 2C-Edge Technologies Limited 3MahaOnline Limited 4TCS e-Serve International Limited 5TCS Foundation 6

ForeignTata Consultancy Services (Africa) (PTY) Ltd. 7Tata Consultancy Services Asia Pacific Pte Ltd. 8TCS FNS Pty Limited 9Tata Consultancy Services Belgium S.A. 10Tata Consultancy Services Deutschland GmbH 11Tata Consultancy Services Sverige AB 12Tata Consultancy Services Netherlands BV 13TCS Iberoamerica SA 14Tata Consultancy Services Qatar S .S.C. 15Diligenta Limited 16CMC Americas Inc. 17Tata America International Corporation 18Tata Consultancy Services Canada Inc. 19

Subsidiaries (held indirectly) ForeignTata Consultancy Services (South Africa) (PTY) Ltd. 20TCS Financial Solutions Australia Pty Limited 21TCS Financial Solutions Australia Holdings Pty Limited 22TCS Financial Solutions Beijing Co., Ltd. 23Tata Consultancy Services Malaysia Sdn Bhd 24Tata Consultancy Services (China) Co., Ltd. 25Tata Consultancy Services (Thailand) Limited 26PT Tata Consultancy Services Indonesia 27

Name of subsidiary PageTata Consultancy Services (Philippines) Inc. 28Tata Consultancy Services Japan Ltd. 29TCS Italia SRL 30Tata Consultancy Services Luxembourg S.A. 31Tata Consultancy Services Osterreich GmbH 32Tata Consultancy Services Danmark ApS 33TCS France S.A 34Tata Consultancy Services Switzerland Ltd. 35Tata Consultancy Services De Espana S.A. 36Tata Consultancy Services Portugal Unipessoal Limitada 37Tata Consultancy Services Saudi Arabia 38TCS Uruguay S.A. 39TCS Solution Center S.A. 40Tata Consultancy Services Argentina S.A. 41Tata Consultancy Services Do Brasil Ltda 42Tata Consultancy Services De Mexico S.A., De C.V. 43MGDC S.C. 44TCS Inversiones Chile Limitada 45Tata Consultancy Services Chile S.A. 46TATASOLUTION CENTER S.A. 47Technology Outsourcing S.A.C. 48TCS e-Serve America, Inc. 49CMC eBiz Inc. 50

APTOnline LIMITED

(CIN: U75142TG2002PLC039671 )

FINANCIAL STATEMENTSFor the year ended

31 March 2018

APTOnline Limited 1.1

FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2018

CONTENT PAGE

Independent Auditors’ Report 1.2

Balance Sheet 1.8

Statement of Profit and Loss 1.9

Statement of Cash Flows 1.10

Statement of Changes In Equity 1.11

Notes forming part of the Financial Statements 1.12

1.2 APTOnline Limited


INDEPENDENT AUDITOR’S REPORT

TO THE MEMBERS OF APTONLINE LIMITED

Report on the Audit of the Ind AS Financial StatementsWe have audited the accompanying Ind AS financial statements of APTOnline Limited (“the Company”), which comprise the Balance Sheet as at 31 March 2018, the Statement of Profit and Loss, the Statement of Changes in Equity and the Statement of Cash Flows for the year then ended, and summary of the significant accounting policies and other explanatory information (hereinafter referred to as “the Ind AS financial statements”).

Management’s Responsibility for the Ind AS Financial StatementsThe Company’s Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (“the Act”) with respect to the preparation of these Ind AS financial statements that give a true and fair view of the state of affairs, profit/loss and other comprehensive income, changes in equity and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) prescribed under Section 133 of the Act.

This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding 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 Ind AS financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

In preparing the 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.

Auditor’s ResponsibilityOur responsibility is to express an opinion on these Ind AS financial statements based on our audit.

We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made thereunder.

We conducted our audit of the Ind AS financial statements in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the Ind AS financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the Ind AS financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the Ind AS financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company’s preparation of the Ind AS financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Company’s Board of Directors, as well as evaluating the overall presentation of the Ind AS financial statements.

We are also responsible to 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 entity’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in the auditor’s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify the opinion. Our conclusions are based on the audit evidence obtained up to the date of the auditor’s report. However, future events or conditions may cause an entity to cease to continue as a going concern.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Ind AS financial statements.


OpinionIn our opinion and to the best of our information and according to the explanations given to us, the aforesaid Ind AS financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India of the state of affairs of the Company as at 31 March 2018, its profit and other comprehensive income, its changes in equity and its cash flows for the year ended on that date.

Other MatterCorresponding figures for the year ended 31 March 2017 have been audited by another auditor who expressed an unmodified opinion dated 11 April 2017 on the Ind AS financial statements of the Company for the year ended 31 March 2017.

Our opinion on the Ind AS financial statements is not modified in respect of the above matter.

Report on Other Legal and Regulatory Requirements1. 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 A” a statement on the matters specified in paragraphs 3 and 4 of the Order.

2. As required by Section 143(3) of the Act, 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, the Statement of Changes in Equity and the Statement of Cash Flows dealt with by this Report are in agreement with the books of account.

(d) In our opinion, the aforesaid Ind AS financial statements comply with the Indian Accounting Standards prescribed under Section 133 of the Act.

(e) On the basis of the written representations received from the directors as on 31 March 2018 taken on record by the Board of Directors, none of the directors is disqualified as on 31 March 2018 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 with reference to financial statements of the Company and the operating effectiveness of such controls, refer to our separate Report in “Annexure B”.

(g) 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, 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 Ind AS financial statements - Refer Note 29 to the Ind AS financial statements;

ii. The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses;

iii. There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Company; and

iv. The disclosures regarding details of specified bank notes held and transacted during 8 November 2016 to 30 December 2016 has not been made since the requirement does not pertain to financial year ended 31 March 2018.

For B S R & Co. LLPChartered Accountants Firm’s Registration No: 101248W/W-100022

Balajirao PothanaPartner

Mumbai Membership No: 12263213 April 2018



ANNEXURE A TO THE INDEPENDENT AUDITOR’S REPORT

With reference to the Annexure A referred to in the Independent Auditor’s Report to the members of the Company on the Ind AS financial statements for the year ended 31 March 2018, we report the following:

(i) (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets.

(b) The Company has a regular programme of physical verification of its fixed assets by which all fixed assets are verified every year. In our opinion, this periodicity of physical verification is reasonable having regard to the size of the Company and the nature of its assets. Pursuant to the programme, all fixed assets were verified during the year by the management and no material discrepancies were noticed on such verification during the year.

(c) According to the information and explanations given to us and on the basis of our examination of the records of the Company, the Company does not hold any immovable properties. Accordingly, paragraph 3(i)(c) of the Order is not applicable to the Company.

(ii) The inventory has been physically verified by the management during the year. In our opinion, the frequency of such verification is reasonable. The Company has maintained proper records of inventory. The discrepancies noticed on verification between the physical stock and the book records were not material.

(iii) 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 Act. Accordingly, the paragraphs 3(iii) (a), (b) and (c) of the Order are not applicable to the Company.

(iv) In our opinion and according to the information and explanations given to us, the Company has not granted any loans or provided any guarantees or securities to the parties covered under Section 185 and 186 of the Act during the year.

(v) The Company has not accepted any deposits from the public within the meaning of the directives issued by the Reserve Bank of India, provisions of Section 73 to 76 of the Act, any other relevant provisions of the Act and the relevant rules framed thereunder.

(vi) According to the information and explanations given to us, the Central Government has not prescribed the maintenance of cost records under Section 148 of the Act for any of the services rendered by the Company.

(vii) (a) According to the information and explanations given to us and on the basis of our examination of the records of the Company, amounts deducted/ accrued in the books of account in respect of undisputed statutory dues including Provident fund, Employees’ State Insurance, Income-tax, Sales tax, Service tax, Goods and Services tax, Value added tax, Cess and other material statutory dues have generally been regularly deposited during the year by the Company with the appropriate authorities. As explained to us, the Company did not have any dues on account of duty of Customs and duty of Excise.

According to the information and explanations given to us, no undisputed amounts payable in respect of Provident fund, Employees’ State Insurance, Income-tax, Sales tax, Service tax, Goods and Services tax, Value added tax, Cess and other material statutory dues were in arrears as at 31 March 2018, for a period of more than six months from the date they became payable.

(b) According to the information and explanations given to us, there are no dues of Income-tax or Sales tax or Service tax or Goods and Services tax or Value added tax which have not been deposited by the Company on account of disputes, except for the following:

Name of the statute Nature of the dues

Amount under dispute

(Rs in lakhs)

Amount paid under protest (Rs

in lakhs)

Period to which the amount relates

Forum where dispute is pending

Andhra Pradesh General

Sales Tax Act, 1957

Sales tax 2.30 2.30 2002-03 to 2004-05

Appellate Tribunal, Hyderabad

Andhra Pradesh Value Added Tax,

2005

VAT (including penalty)

16.46 11.49 2005-06 to 2011-12 Appellate Tribunal, Hyderabad


(viii) According to the information and explanations given to us, the Company did not have any loans or borrowings from any financial institution, bank or government or any outstanding debentures during the year.

(ix) In our opinion and according to the information and explanations given to us, the Company did not raise any money by way of initial public offer or further public offer (including debt instruments) and term loans during the year. Accordingly, paragraph 3(ix) of the Order is not applicable to the Company.

(x) To the best of our knowledge and according to the information and explanations given to us, no material fraud by the Company or on the Company by its officers or employees has been noticed or reported during the course of our audit.

(xi) In our opinion and according to the information and explanations given to us and based on examination of the records of the Company, 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 Act.

(xii) According to the information and explanations given to us, in our opinion, the Company is not a Nidhi Company as prescribed under Section 406 of the Act.

(xiii) According to the information and explanations given to us and based on our examination of the records of the Company, all transactions with the related parties are in compliance with Sections 177 and 188 of the Act, where applicable, and details of such transactions have been disclosed in the Ind AS financial statements as required by the applicable accounting standards.

(xiv) According to the information and explanations given to us and based on our examination of the records of the Company, the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year. Accordingly, paragraph 3(xiv) of the Order is not applicable to the Company.

(xv) According to the information and explanations given to us and based on our examination of the records of the Company, the Company has not entered into non-cash transactions with directors or persons connected with him. Accordingly, paragraph 3(xv) of the Order is not applicable to the Company.

(xvi) According to the information and explanation given to us, the Company is not required to be registered under section 45-IA of the Reserve Bank of India Act 1934. Accordingly, paragraph 3(xvi) of the Order is not applicable to the Company.

For B S R & Co. LLP Chartered Accountants Firm’s Registration No: 101248W/W-100022

Balajirao PothanaMumbai Partner13 April 2018 Membership No:122632



ANNEXURE B TO THE INDEPENDENT AUDITOR’S REPORT

(Referred to in paragraph 2(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 APTOnline Limited (“the Company”) as of 31 March 2018 in conjunction with our audit of the Ind AS financial statements of the Company for the year ended on that date.

Management’s Responsibility for Internal Financial ControlsThe 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 (“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 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 Act.

Auditor’s ResponsibilityOur responsibility is to express an opinion on the Company’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”) and the Standards on Auditing, issued by ICAI and deemed to be prescribed under Section 143(10) of the Act, to the extent applicable to an audit of internal financial controls, both applicable to an audit of Internal Financial Controls and, both issued by ICAI. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls 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 control 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 Ind AS 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 ReportingA 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 ReportingBecause 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.

OpinionIn our opinion, the Company 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 31 March 2018, 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 issued by the ICAI.

For B S R & Co. LLP Chartered Accountants Firm’s Registration No: 101248W/W-100022

Balajirao PothanaMumbai Partner13 April 2018 Membership No:122632



Balance Sheet(` lakhs)

Note As at March 31, 2018

As at March 31, 2017

ASSETS Non-current assets (a) Property, plant and equipment 3 443.49 897.93 (b) Intangible assets 4 7.38 17.34 (c) Income-tax assets (net) 502.71 536.49 (d) Deferred tax assets (net) 15 112.10 - (e) Other non-current assets 11(A) 6.77 - Total non-current assets 1,072.45 1,451.76 Current assets (a) Inventories 5 29.87 26.02 (b) Financial assets (i) Investments 6 1,502.11 4,500.93 (ii) Trade receivables 7 6,774.35 9,590.24 (iii) Unbilled revenue 166.60 76.88 (iv) Cash and cash equivalents 8 5,376.69 2,904.12 (v) Loans 9 1,208.28 8.12 (vi) Other financial assets 10 424.40 278.97 (c) Other current assets 11(B) 341.94 230.72 Total current assets 15,824.24 17,616.00 TOTAL ASSETS 16,896.69 19,067.76 EQUITY AND LIABILITIES Equity (a) Share capital 12 177.00 177.00 (b) Other equity 13 7,594.91 6,397.12 Total Equity 7,771.91 6,574.12 Non-current liabilities (a) Deferred tax liabilities 15 - 86.20 (b) Employee benefit obligations 14(A) - 23.37 Total non-current liabilities 109.57 Current liabilities (a) Financial liabilities (i) Trade payables 16 3,746.25 6,197.26 (ii) Other financial liabilities 17 4,247.06 5,292.47 (b) Unearned and deferred revenue 148.12 135.54 (c) Employee benefit obligations 14(B) 66.06 49.19 (d Income-tax liabilities(net) 28 79.01 70.90 (e) Other current liabilities 18 838.28 638.71 Total current liabilities 9,124.78 12,384.07 TOTAL EQUITY AND LIABILITIES 16,896.69 19,067.76 NOTES FORMING PART OF THE FINANCIALS STATEMENTS 1-38

As per our report of even date attached. For and on behalf of the Board of Directors of APTOnline Limited

For B S R & Co. LLP Chartered AccountantsFirm’s registration number : 101248W/W-100022

Balajirao Pothana Ajoyendra Mukherjee V.Rajanna Partner Director DirectorMembership number : 122632 DIN:00350269 DIN:01280277

Place: Mumbai Date: April 13, 2018


Statement of Profit and Loss (` lakhs)

Note Year ended March 31, 2018

Year ended March 31, 2017

I. Revenue from operations 19 14,362.00 14,648.59II. Other income 20 349.03 225.27III. TOTAL REVENUE 14,711.03 14,873.86IV. Expenses (a) Direct costs 21 7,293.83 7,758.57 (b) Purchases of stock-in-trade 22 441.31 414.90 (c) Changes in inventories of stock-in-trade 23 (3.85) 11.36 (d) Employee benefit expenses 24 1,926.33 1,704.10 (e) Finance costs 25 16.44 0.04 (f) Depreciation and amortisation 3&4 552.95 791.12 (g) Other expenses 26 818.14 1,038.80 TOTAL EXPENSES 11,045.15 11,718.89V. PROFIT BEFORE TAX 3,665.88 3,154.97VI. Tax expense: (a) Current tax 28 1,458.89 1,265.92 (b) Deferred tax 28 (200.27) (152.89) Total expense 1,258.61 1,113.03VII. PROFIT FOR THE YEAR 2,407.26 2,041.94VIII. OTHER COMPREHESIVE INCOME/(LOSS) (A) (i) Items that will not be reclassified subsequently to profit or loss: (a) Remeasurement of defined employee benefit plans 6.77 (8.79) (ii) Income-tax on items that will not be reclassified subsequently to

profit or loss: (1.97) 3.04

TOTAL OTHER COMPEHENSIVE INCOME/ (LOSS) NET OF TAXES 4.80 (5.75)IX. TOTAL COMPREHENSIVE INCOME FOR THE YEAR 2,412.06 2,036.19X. Earnings per equity share :- Basic and diluted (`) 27 136.00 115.36 Face value per equity share (`) 10 each

XI. NOTES FORMING PART OF THE FINANCIAL STATEMENTS 1-38



Balajirao Pothana Ajoyendra Mukherjee V.Rajanna Partner Director DirectorMembership number : 122632 DIN:00350269 DIN:01280277Place: Mumbai Date: April 13, 2018



Statement of Cash Flows(` lakhs)



I. CASH FLOWS FROM OPERATING ACTIVITIES Profit before tax 3,665.88 3,154.97 Adjustments to reconcile profit and loss to net cash provided by operating activities: Depreciation and amortisation 552.94 791.12 Net Gain on sale of investments carried at fair value through profit and loss (335.99) (223.52) (Gain) on disposal of property, plant and equipment (2.23) (1.75) Bad debts and advances written off, allowance for doubtful trade receivables

and advances (net)279.79 72.84

Interest income on fixed deposits and intercorporate deposits (10.81) - Operating profit before working capital changes 4,149.58 3,793.66 Net Change in: Trade receivables 2,536.08 (357.26) Unbilled revenue (89.72) 45.49 Loans (118.15) 75.85 Other financial assets (135.69) (256.03) Inventories (3.84) 11.36 Trade payables (2,451.00) 2,453.71 Employee benefit obligations 0.28 (5.19) Other liabilities (833.25) (197.67) Cash generated from operations 3,054.29 5,563.92 Taxes paid ( net of refunds) (1,417.00) (1,457.18) Net cash provided by operating activities 1,637.29 4,106.74 II. CASH FLOWS FROM INVESTING ACTIVITIES Payments to acquire financial assets (22,000.00) (19,400.00) Proceeds from redemption of investments carried at fair value through profit 25,334.80 18,126.36 Inter-corporate deposits placed (1,200.00) - Interest Received on Deposits 1.08 - Payment for Purchase of property, plant and equipment (81.70) (14.52) Purchase of intangible assets (6.88) (20.29) Proceeds from disposal of property, plant and equipment 2.27 2.94 Net cash used in investing activities 2,049.57 (1,305.51)III. CASH FLOWS FROM FINANCING ACTIVITIES Dividend paid (including tax on dividend) (1,214.29) (2,130.33) Net cash used in financing activities (1,214.29) (2,130.33) Net change in cash and cash equivalents 2,472.57 670.90 Cash and cash equivalents at the beginning of the year 2,904.12 2,233.22 Cash and cash equivalents at the end of the year (refer Note 8) 5,376.69 2,904.12 Notes: (a) The above Cash Flow Statement has been prepared under the “Indirect Method”

as setout in the Indian Accounting Standard (Ind AS-7) - Statement of Cash Flow. (b) Cash and Cash Equivalents comprises of Balance with Banks - Current Accounts 2,876.69 2,904.12 - Deposit with Bank with maturity less than 3 months 2,500.00 - Cash and cash equivalents in Cash Flow Statement 5,376.69 2,904.12

IV. NOTES FORMING PART OF THE FINANCIAL STATEMENTS 1-38

As per our report of even date attached. For and on behalf of the Board of Directors of APTOnline LimitedFor B S R & Co. LLP Chartered AccountantsFirm’s registration number : 101248W/W-100022



Statement of Changes in EquityA) EQUITY SHARE CAPITAL

(` lakhs)

Balance as at April 1, 2016 Change in equity share capital during the year

Balance as at March 31, 2017

177 - 177

(` lakhs)

Balance as at April 1, 2017 Change in equity share capital during the year

Balance as at March 31, 2018

177 - 177

B) OTHER EQUITY(` lakhs)

General reserve Capital redemption reserve

Retained earnings

Total Equity

Balance as at April 1, 2016 566.93 280.00 5,644.34 6,491.27Profit for the year - - 2,041.93 2,041.93Other comprehensive income - - (5.75) (5.75)Total comprehensive income 566.93 280.00 7,680.52 8,527.45Dividend (including tax on dividend) - - (2,130.33) (2,130.33)

Balance as at March 31, 2017 566.93 280.00 5,550.19 6,397.12

Balance as at April 1, 2017 566.93 280.00 5,550.19 6,397.12Profit for the year - - 2,407.28 2,407.28Other comprehensive income - - 4.80 4.80Total comprehensive income 566.93 280.00 7,962.27 8,809.20Dividend (including tax on dividend) - - (1,214.29) (1,214.29)

Balance as at March 31, 2018 566.93 280.00 6,747.98 7,594.91

C) NOTES FORMING PART OF THE FINANCIALS STATEMENTS 1-38






Notes forming part of the Financial Statements

1. CORPORATE INFORMATION

APTOnline Limited (“formerly APOnline Limited”) was incorporated on September 25, 2002 and is jointly promoted by Tata Consultancy Services Limited (TCS) and Andhra Pradesh Technology Services Limited (APTS), a corporation wholly owned by the Government of Andhra Pradesh (GOAP). The Company carries on the business of development, maintenance and management of the APONLINE portal for providing web-based services by Government to citizen, Government to business and other portfolio services of Government.

The state of Telangana was carved out of the State of Andhra Pradesh, pursuant to Andhra Pradesh Reorganisation Act, 2014. Presently, the Company continues to serve both the states of Telangana and Andhra Pradesh.

The Company is unlisted public limited company incorporated and domiciled in India. The address of its registered office is Kohinoor e-Park, Plot no.1, Jubilee Gardens, Cyberabad, and Hyderabad-500084.

The name of the Company has been changed from APOnline Limited to APTOnline Limited with effect from April 2, 2016

The financial statements for the year ended March 31, 2018 were approved by the Board of Directors and authorised for issue on April 13, 2018.

2. SIGNIFICANT ACCOUNTING POLICIES

a) Statement of compliance These financial statements have been prepared in accordance with Indian Accounting Standards as notified under

the Companies (Indian Accounting Standards) Rules, 2015 read with Section 133 of the Companies Act, 2013 and Companies (Indian Accounting Standards) amendment rules, 2016 and other relevant provisions of the act.

b) Basis of preparation These financial statements have been prepared on the historical cost basis, except for certain financial instruments,

defined benefit assets and liabilities that have been disclosed at fair values at the end of each reporting period, as explained in the accounting policies below.

c) Use of estimates and judgments

The preparation of financial statements in conformity with the recognition and measurement principles of Ind AS requires management to make estimates and assumptions that affect the reported balances of assets and liabilities, disclosures of contingent liabilities at the date of the financial statements and the reported amounts of income and expenses for the periods presented.

Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised prospectively in the period in which the estimates are revised and future periods are affected.

Key source of estimation of uncertainty at the date of the financial statements, which may cause a material adjustment to the carrying amounts of assets and liabilities within the next financial year, is in respect of useful lives of property, plant and equipment, valuation of deferred tax assets and provisions and contingent liabilities.

Fair value measurement of financial instruments

When the fair value of financial assets and financial liabilities recorded in the balance sheet cannot be measured based on quoted prices in active markets, their fair value is measured using valuation techniques including the Discounted Cash Flow model. The inputs to these models are taken from observable markets where possible, but where this is not feasible, a degree of judgement is required in establishing fair values. Judgements include considerations of inputs such as liquidity risk, credit risk and volatility. Changes in assumptions about these factors could affect the reported fair value of financial instruments.

Valuation of deferred tax assets

The Company reviews the carrying amount of deferred tax assets at the end of each reporting period. The policy for the same has been explained under Note 2 (f).

Useful lives of property, plant and equipment

The Company reviews the useful life of property, plant and equipment at the end of each reporting period. This reassessment may result in change in depreciation expense in future periods.



Provisions

A provision is recognised when the Company has a present obligation as a result of past event and it is probable than 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 and compensated absences) are not discounted to its present value and are determined based on 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. Contingent liabilities are not recognised in the financial statements. A contingent asset is neither recognised nor disclosed in the financial statements.

Defined benefit plan

The cost of the defined benefit gratuity plan and the present value of the gratuity obligation are determined using actuarial valuations. An actuarial valuation involves making various assumptions that may differ from actual developments in the future. These include the determination of the discount rate, future salary increases and mortality rates. Due to the complexities involved in the valuation and its long-term nature, a defined benefit obligation is highly sensitive to changes in these assumptions. All assumptions are reviewed at each reporting date.

d) Revenue recognition

Information Technology and Consultancy Services

Service charges on collection of utility bills on behalf of government departments/private parties have been recognised in the books on accrual basis on execution of the collection transaction.

Software development, Data Center Maintenance and web hosting charges and Ion services have been recognised on the basis of invoices raised for services rendered. The unearned web hosting charges and franchisee fees are carried forward to the next financial year.

Service charges on wage disbursement on behalf of government departments have been recognised in the books on accrual basis on disbursements.

Service charge for technical support has been recognized on accrual basis on the basis of deployment of personnel.

Service of equipment and Software licenses

Sale of equipment’s, stationery and software licenses are recognised on transfer of risk and rewards less applicable taxes and duties.

All revenues are recognised only when collectability of the resulting receivable is reasonably assured, and are reported net of discounts, indirect and Service taxes.

Unbilled Revenue

Unbilled revenue represents value of work executed billed subsequent to the Balance Sheet date and is valued at contract price.

e) Cost recognition

Costs and expenses are recognised when incurred and have been classified according to their primary nature.

The costs of the company are broadly categorised in direct costs, employee benefit expenses, purchases of stock-in-trade and depreciation and amortisation and other expenses. Direct costs include service charges and manpower supply. Employee costs include employee compensation, allowances paid, contribution to various funds and staff welfare expenses. Other expenses majorly include Lease rentals, Facility charges, travelling and conveyance, Legal and professional fees, internet connectivity charges, allowances for doubtful trade receivables and miscellaneous expenses.

f) Income taxes

Income-tax expense comprises current tax expense and the net change in the deferred tax asset or liability during the year. Current and deferred tax are recognised in statement of profit and loss, except when they relate to items that are recognised in other comprehensive income or directly in equity, in which case, the current and deferred tax are also recognised in other comprehensive income or directly in equity, respectively.




Current income taxes

The current income-tax expense includes income taxes payable by the Company.

Advance taxes and provisions for current income taxes are presented in the balance sheet after offsetting advance tax paid and income-tax provision pertaining to the same assessment year.

Deferred income taxes

Deferred income tax is recognised using the balance sheet approach. Deferred income tax assets and liabilities are recognised for deductible and taxable temporary differences arising between the tax base of assets and liabilities and their carrying amount, except when the deferred income-tax arises from the initial recognition of goodwill or an asset or liability in a transaction that is not a business combination and affects neither accounting nor taxable profit or loss at the time of the transaction.

Deferred income-tax asset are recognised to the extent that it is probable that taxable profit will be available against which the deductible temporary differences and the carry forward of unused tax credits and unused tax losses can be utilised.

The carrying amount of deferred income tax assets and labilities are reviewed at each reporting date and are reduced or increased as the case may be.

Deferred tax assets and liabilities are measured using substantively enacted tax rates expected to apply to taxable income in the years in which the temporary differences are expected to be received or settled.

Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax labilities and assets and the Company can settle current tax labilities and assets on a net basis or there tax assets and labilities will be realised simultaneously.

The Company recognises interest levied and penalties related to income tax assessments in income tax expenses

Deferred tax assets include Minimum Alternative Tax (MAT) paid in accordance with the tax laws in India, which is likely to give future economic benefits in the form of availability of set off against future income tax liability. Accordingly, MAT is recognised as deferred tax asset in the balance sheet when the asset can be measured reliably and it is probable that the future economic benefit associated with the asset will be realised.

g) Financial instruments

Financial assets and liabilities are recognised when the Company becomes a party to the contractual provisions of the instrument. Financial assets and 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 measured on initial recognition of financial asset or financial liability.

Cash and cash equivalents

Cash and cash equivalents 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.

Financial assets at amortised cost

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

Financial assets at fair value through other comprehensive income

Financial assets are measured at fair value through other comprehensive income if these financial assets are held within a business model whose objective is achieved by both collecting contractual cash flows on specified dates that are solely payments of principal and interest on the principal amount outstanding and selling financial assets.



Financial assets at fair value through profit or loss

Financial assets are measured at fair value through profit or loss unless it is measured at amortised cost or at fair value through other comprehensive income on initial recognition. The transaction costs directly attributable to the acquisition of financial assets and liabilities at fair value through profit or loss are immediately recognised in statement of profit and loss.

Financial Liabilities

Financial liabilities are measured at amortised cost using the effective interest method.

h) Property, plant and equipment

Property, plant and equipment are stated at cost, less accumulated depreciation (other than freehold land) and impairment loss, if any.

Cost of an item of property, plant and equipment comprises of its purchase price including non-refundable taxes, after deducting trade discount and any directly attributable cost of bringing the item to its working condition for its intended use.

Depreciation is provided for property, plant and equipment on a straight line basis so as to expense the cost over their estimated useful lives. The estimated useful lives (based on evaluation), residual values and depreciation method are reviewed at the end of each reporting period, with the effect of any changes in estimate accounted for on a prospective basis.

The estimated useful lives are as mentioned below:

Asset Useful life

Computer equipment 4 years

Vehicles 4 years

Office equipment 5 years

Furniture and fixtures 5 years

i) Intangible assets: Intangible assets are measured at cost less accumulated amortisation. Intangible assets are amortised over their estimated useful life on straight line method as follows:

Asset Useful life

Computer software 2 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.

j) Employee benefits

Employee benefits include provident fund, employee state insurance scheme, gratuity and compensated absences.

Defined contribution plans

The Company’s contribution to provident fund and employee state insurance scheme is considered as defined contribution plan and is charged as an expense based on the amount of contribution required to be made and when the employees entitling them to such benefits render services.

Defined benefit plans

For defined benefit plans, the cost of providing benefits is determined using the Projected Unit Credit Method, with actuarial valuations being carried out at the date of each balance sheet date. Actuarial gains and losses are recognised in full in the other comprehensive income for the period in which they occur. Past service cost both vested and unvested is recognised as an expense at the earlier of (a) when the plan amendment or curtailment occurs; and (b) when the entity recognises related restructuring costs or termination benefits.




The retirement benefit obligations recognised in the balance sheet represents the present value of the defined benefit obligations reduced by the fair value of scheme assets. Any asset resulting from this calculation is limited to the present value of available refunds and reductions in future contributions to the scheme.

Compensated absences

Compensated absences which are not expected to occur within twelve months after the end of the period in which the employee renders the related services are recognised as an actuarially determined liability at the present value of the defined benefit obligation at the balance sheet date.

Other short-term employee benefits

Other short-term employee benefits, including performance incentives expected to be paid in exchange for the services rendered by employees, are recognised during the period when the employee renders the service.

k) Inventories

Inventories are valued at the lower of cost on First In Fist Out (FIFO) basis and the net realisable value after providing for obsolescence and other losses, where considered necessary.

l) Leases – operating lease

Lease arrangements where the risks and rewards incidental to ownership of an asset substantially vest with the lessor are recognised as operating leases. Lease rentals under operating leases are recognised in the statement of profit and loss on a straight- line basis, over the lease term, unless the lease agreement explicitly states that increase is on account of inflation.

m) Earnings per share

Basic earnings per share are computed by dividing profit or loss attributable to equity shareholders of the Company by the weighted average number of equity shares outstanding during the period. The Company did not have any potentially dilutive securities in any of the periods presented.

n) Impairment

i) Financial assets (other than at fair value)

The Company assesses at each date of balance sheet whether a financial asset or a group of financial assets is impaired. Ind AS 109 requires expected credit losses to be measured through a loss allowance. The company recognises lifetime expected losses for all contract assets and / or all trade receivables that do not constitute a financing transaction using a practical expedient. For all other financial assets, expected credit losses are measured at an amount equal to the 12-month expected credit losses or at an amount equal to the life time expected credit losses if the credit risk on the financial asset has increased significantly since initial recognition.

ii) Non-financial assets

Property, plant and equipment and intangible assets with finite life are reviewed at each reporting date to determine whether there is any indication of impairment. If any such indication exists, the recoverable amount (i.e. 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.

If the recoverable amount of an asset (or CGU) is estimated to be less than its carrying amount, the carrying amount of the asset (or CGU) is reduced to its recoverable amount. An impairment loss is recognised in the statement of profit and loss.



3. PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment consists of the following: (` lakhs)

Description Computer equipment

Vehicles Office equipment

Furniture and

fixtures

Total

2017-18Cost as at April 1, 2017 4,296.75 29.39 0.70 0.15 4,326.99Additions 61.64 20.06 - - 81.70Disposals (0.36) (13.98) - - (14.34)Gross block as at March 31, 2018 4,358.03 35.47 0.70 0.15 4,394.35

Accumulated depreciation as at April 1, 2017 (3,408.08) (20.13) (0.70) (0.15) (3,429.06)Depreciation for the year (531.70) (4.40) - - (536.10)On disposals 0.32 13.98 - - 14.30Accumulated depreciation as at March 31, 2018 (3,939.46) (10.55) (0.70) (0.15) (3,950.86)

Net carrying amount as at March 31, 2018 418.57 24.92 - - 443.492016-17Cost as at April 1, 2016 4,222.53 21.78 0.70 0.15 4,245.16Additions 76.56 7.61 - - 84.17Disposals (2.34) - - - (2.34)Gross block as at March 31, 2017 4,296.75 29.39 0.70 0.15 4,326.99

Accumulated depreciation as at April 1, 2016 (2,656.21) (16.20) (0.69) (0.15) (2,673.25)Depreciation for the year (753.03) (3.93) (0.01) - (756.97)On disposals 1.16 - - - 1.16Accumulated depreciation as at March 31, 2017 (3,408.08) (20.13) (0.70) (0.15) (3,429.06)

Net carrying amount as at March 31, 2017 888.67 9.26 - - 897.93

4. INTANGIBLE ASSETS

Intangible assets consists of the following: (` lakhs)

Description Computer Software TotalCost as at April 1, 2017 171.34 171.34Additions 6.88 6.88Deletions - -Gross block as at March 31, 2018 178.22 178.22 Accumulated amortisation as at April 1, 2017 (154.00) (154.00)Amortisation for the year (16.84) (16.84)On deletions - -Accumulated amortisation as at March 31, 2018 (170.84) (170.84)Net carrying amount as at March 31, 2018 7.38 7.38Cost as at April 1, 2016 151.05 151.05Additions 20.29 20.29Deletions - -Gross block as at March 31, 2017 171.34 171.34

Accumulated amortisation as at April 1, 2016 (119.85) (119.85)Amortisation for the year (34.15) (34.15)On deletions - -Accumulated amortisation as at March 31, 2017 (154.00) (154.00)Net carrying amount as at March 31, 2017 17.34 17.34




5. INVENTORIES Inventories consists of the following: (` lakhs)



Hardware, stationery, etc. 29.87 26.0229.87 26.02

Inventories are carried at lower of cost and net realisable value

6. INVESTMENTS (` lakhs)



Quantity ` Quantity `

Current

Investment carried at fair value through profit and Loss

Mutual funds (unquoted)

Tata liquid fund direct plan - growth - - 110,047.00 3,300.93

UTI-Liquid Cash Plan-Institutional-Direct Plan-Growth - - 48,357.00 1,200.00

Tata money market fund direct plan - growth 2,738.37 1,502.11 - - 1,502.11 4500.93

7. TRADE RECEIVABLES (UNSECURED) Trade receivables consists of the following (` lakhs)



CurrentConsidered good 6,774.35 9,590.24Considered doubtful 359.70 220.68Less: Allowance for doubtful receivables (359.70) (220.68)

6,774.35 9,590.24

8. CASH AND CASH EQUIVALENTS

Cash and cash equivalents consists of the following:

(` lakhs)As at

March 31, 2018 As at

March 31, 2017Balances with banks- in current accounts 2,876.69 2,904.12- In deposit accounts 2,500.00 -

5,376.69 2,904.12



9. LOANS

Loans consists of the following: (` lakhs)



Unsecured, considered goodCurrent

Inter-corporate deposits 1,200.00 -Loans and advances to employees 8.28 8.12

1,208.28 8.12

10. OTHER FINANCIAL ASSETS

Other financial assets consists of the following: (` lakhs)



CurrentSecurity deposits 42.94 47.94Other Advances 371.73 231.03Accrued interest 9.73 -

424.40 278.97

11. OTHER ASSETS

Other assets consists of the following: (` lakhs)



(A) Non Current Prepaid expenses 6.77 -

6.77 -(B) Current Considered good Prepaid expenses 51.86 63.40 Balance with LIC of India - Gratuity fund 17.84 - Advance to suppliers 1.13 6.65 Indirect tax recoverable 271.11 160.67 Considered doubtful Advance to suppliers 8.99 8.99 Less: Allowance on doubtful assets (8.99) (8.99)

341.94 230.72




12. SHARE CAPITAL

The authorised, issued, subscribed and fully paid-up share capital comprises of equity shares having a par value of ` 10 each and redeemable preference shares of ` 10 each

(` lakhs)As at

March 31, 2018 As at

March 31, 2017 Authorised (i) Equity shares 30,00,000 of ` 10 each with voting rights (March 31, 2017:

30,00,000 equity shares of ` 10 each)300.00 300.00

(ii) Redeemable preference shares of ` 10 each (March 31, 2017: 30,00,000 preference shares of ` 10 each)

300.00 300.00

600.00 600.00 Issued, Subscribed and Fully paid-up 17,70,000 equity shares of ` 10 each

(March 31, 2017: 17,70,000 equity shares of ` 10 each)177.00 177.00

177.00 177.00 (a) Details of shares held by the holding company Tata Consultancy Services Limited 1,575,300 1,575,300

1,575,300 1,575,300

(b) Details of shares held by share holders holding more than 5% of a class of shares

(` lakhs)Name of shareholder As at 31 March, 2018 As at 31 March, 2017

Number of shares held

% holding in that class of

shares

Number of shares held

% holding in that class of

sharesEquity shares Tata Consultancy Services Limited 1,575,300 89 1,575,300 89 Andhra Pradesh Technology Services Limited 194,700 11 194,700 11 Total 1,770,000 100 1,770,000 100

(c) Reconciliation of the number of shares and amount outstanding at the beginning and at the end of the year:

As at 31 March, 2018 As at 31 March, 2017Number of

sharesAmount in `

lakhsNumber of

shares Amount in `

lakhsEquity shares Opening balance 1,770,000 177.00 1,770,000 177.00 Issued during the year - - - - Closing balance 1,770,000 177.00 1,770,000 177.00

(d) Rights, preferences and restrictions attached to the equity shares

The Company has one class of equity shares having a face value of ` 10 each. Each holder of equity share is entitled to one vote per share held and carry a right to dividend. The dividend proposed by the Board of Directors is subject to the approval of the share holders in the ensuing Annual General Meeting, except in case of interim dividend. In the event of liquidation, the equity share holders are eligible to receive the remaining assets of the Company after distribution all preferential amounts, in proportion to their share holding.



13. OTHER EQUITY

(` lakhs)As at

March 31, 2018As at

March 31, 2017(a) Capital redemption reserve Opening balance 280.00 280.00 Movement - - Closing balance 280.00 280.00(b) General reserve Opening balance 566.93 566.93 Transfer from retained earnings - - Closing balance 566.93 566.93(c) Retained earnings (i) Opening balance 5,550.19 5,644.34 (ii) Profit for the year 2,407.28 2,041.93 (iii) Other comprehensive income arising from remeasurement of defined

employee benefit plans, net of income tax4.80 (5.75)

7,962.27 7,680.52Less: Appropriations (i) Dividend on equity shares (1,008.90) (1,770.00) (ii) Tax on dividend (205.39) (360.33)

6,747.98 5,550.19 7,594.91 6,397.12

14. EMPLOYEE BENEFIT OBLIGATIONS Employee benefit obligations consists of the following: (` lakhs)



(A) Non-current Gratuity liability (refer Note 32(i)) - 6.23 Compensated absences (refer Note 32(ii)) - 17.14

- 23.37(B) Current Compensated absences (refer Note 32(ii)) 66.06 49.19

66.06 49.19

15. DEFERRED TAX BALANCES (` lakhs)



Deferred tax liabilitiesEmployee benefits 5.19 -Depreciation 46.46 193.52Investment 0.62 0.32

52.27 193.84 Deferred tax assetsProvision for doubtful debts & Advances 102.12 79.49Employee benefits 56.07 28.15Others 6.18 - 164.37 107.64Net deferred tax liabilities/(assets) (112.10) 86.20




16. TRADE PAYABLES Trade payables consists of the following: (` lakhs)



(a) Dues of Micro and small enterprises (Refer Note 35)(b) Others 3,746.25 6,197.26

3,746.25 6,197.26

17. OTHER FINANCIAL LIABILITIES Other financial liabilities consists of the following: (` lakhs)



Current (a) Capital creditors - 28.09 (b) Amount collected on behalf of * - Government departments 3,029.35 3,983.45 - Non-government departments 35.37 31.17 (c) Amount received from franchisees 307.04 332.80 (d) Security deposits received 875.30 916.96

4,247.06 5,292.47

* Amount collected on behalf of government and non-government includes collection of utility bills, ration card charges, government taxes, etc.

18. OTHER LIABILITIES Other liabilities consists of the following: (` lakhs)



Current(a) Advance received from customers 349.48 524.78 (b) Indirect tax payable and other statutory liabilities 488.80 113.93

838.28 638.71

19. REVENUE FROM OPERATIONS Revenue from operations consists of the following: (` lakhs)

For the year ended

March 31, 2018

For the year ended

March 31, 2017A) Information technology and consultancy services (a) Transaction revenue 3,927.32 4,687.46 (b) Wage disbursement (refer Note 34) 1,192.37 3,725.32 (c) Software development services and maintenance 3,203.93 2,730.06 (d) Man power supply 886.57 675.42 (e) Data centre establishment and maintenance 332.59 287.57 (f) Franchisee fees 277.12 246.56 (g) ION Services 3,559.57 1,407.49 (h) Aadhaar authentication 367.18 218.76 (i) Others 127.28 113.42 13,873.93 14,092.06



For the year ended

March 31, 2018

For the year ended

March 31, 2017REVENUE FROM OPERATIONS ContinuedB) Sale of products (a) Hardware 40.04 164.93 (b) Software 103.80 117.67 (c) Stationery 344.09 270.48

487.93 553.08 C) Other operating income 0.15 3.45 0.15 3.45

14,362.01 14,648.59

20. OTHER INCOME Other income consists of the following: (` lakhs)

For the year ended

March 31, 2018

For the year ended

March 31, 2017(a) Gain on sale of investments carried at fair value through profit and loss 335.99 223.52 (b) Interest income on fixed deposits and inter-corporate deposits 10.81 -(c) Gain on disposal of property, plant and equipment 2.23 1.75 349.03 225.27

21. DIRECT COSTS Direct costs consists of the following: (` lakhs)

For the year ended

March 31, 2018

For the year ended

March 31, 2017(a) Service charges - service delivery points 5,618.96 6,183.04 (b) Man power supply 1,674.87 1,575.53

7,293.83 7,758.57

22. PURCHASE OF STOCK-IN-TRADE Purchase of stock-in-trade consists of the following: (` lakhs)

For the year ended

March 31, 2018

For the year ended

March 31, 2017(a) Hardware 60.26 121.65(b) Software 86.81 90.22(C) Stationery 294.26 203.03

441.33 414.90

(` lakhs)




23. CHANGES IN INVENTORIES OF STOCK-IN-TRADE (` lakhs)

For the year ended

March 31, 2018

For the year ended

March 31, 2017Inventories at the end of the year: Stock-in-trade (a) Hardware, stationery, etc. 29.87 26.02

29.87 26.02

Inventories at the beginning of the year: Stock-in-trade (a) Hardware, stationery, etc. 26.03 37.38

26.03 37.38

Net (increase) / decrease (3.84) 11.36

24. EMPLOYEE BENEFIT EXPENSES

Employee benefit expense consists of the following: (` lakhs) For the year

ended March 31, 2018

For the year ended

March 31, 2017(a) Salaries, incentives and allowances 1,775.28 1,572.95 (b) Contributions to provident and other funds 77.39 75.94(c) Contributions to ESIC 12.98 8.83(d) Staff welfare expenses 60.67 46.38

1,926.32 1,704.10

25. FINANCE COSTS

Finance costs consists of the following: (` lakhs)For the year

ended March 31, 2018

For the year ended

March 31, 2017(a) Interest on payment of income-tax 16.44 0.04

16.44 0.04

26. OTHER OPERATING EXPENSES

Other operating expenses consists of the following: (` lakhs)For the Year

endedMarch 31, 2018

For the Year ended

March 31, 2017(a) Consumables 0.93 0.59(b) Lease rentals (refer Note 36) 40.49 39.50(c) Facility charges 45.60 40.23(d) Repairs and maintenance - Others 19.35 18.44(e) Rates and taxes 32.39 24.92(f) Internet connectivity charges 88.03 87.32(g) Travelling and conveyance 37.25 31.69



For the Year ended

March 31, 2018

For the Year ended

March 31, 2017OTHER OPERATING EXPENSES Continued(h) Printing and stationery 42.29 41.40(i) Business promotion expenses 10.94 3.21(j) Legal and professional fees 63.59 56.48(k) Corporate Social Responsibility (Refer Note 37) 75.73 67.52(l) Payments to auditors (Refer Note below) 4.10 5.50(m) Software maintenance charges 8.66 7.84(n) Impairment loss allowance on trade receivables and advances 139.01 72.84(o) Contractual compensation (refer Note 34) 140.78 489.66(p) Miscellaneous expenses 69.00 56.66

818.14 1,038.80 Note Payments to auditors comprises (net of service tax): As auditors - statutory audit 4.10 5.00 For taxation matters - 0.50 4.10 5.50

27. EARNINGS PER SHARE (EPS) (` lakhs)

For the Year ended

March 31, 2018

For the Year ended

March 31, 2017Profit for the year 2,407.27 2,041.93Amount available for equity shareholders 2,407.27 2,041.93Weighted average number equity shares 1,770,000 1,770,000Total weighted average number of equity shares 1,770,000 1,770,000

Earning per share basic and diluted (`) 136.00 115.36Face value per equity share (`) 10.00 10.00

28. INCOME TAX EXPENSE The major component of income-tax expense for the year are as under : (` lakhs)

For the Year ended

March 31, 2018

For the Year ended March

31, 2017(i) Income tax recognised in the Statement of Profit and Loss Current Tax: In respect of current year 1,458.89 1,265.92 Adjustments in respect of prior years - - Deferred Tax: In respect of current year (200.27) (152.89) Income tax recognised in the Statement of Profit and Loss 1,258.62 1,113.03 (ii) Income tax expense recognised in Other Comprehensive Income (OCI) Deferred tax on remeasurement of defined employee benefit plans (1.97) 3.04 Total income tax expense recognised (1.97) 3.04

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




(` lakhs)

For the Year ended

March 31, 2018

For the Year ended

March 31, 2017Profit before tax 3,665.88 3,154.97 Indian Statutory income tax rate 34.608% 34.608% Expected Income tax expense 1,268.69 1,091.87 Tax effect of adjustments to reconcile expected income tax expense to

reported income tax expense: Tax pertaining to prior years (41.12) - Disallowance U/s 37 1) CSR Expenses 13.10 23.37 2) Interest on delayed payment of tax 5.69 0.02 3) Others (net) 12.26 (2.23)Tax expense as per the Statement of Profit and Loss 1,258.62 1,113.03

Significant components of net deferred tax assets and liabilities for the year ended March 31, 2018 are as follows:(` lakhs)

Opening balance

Recognised / reversed

through profit or loss

Recognised /Reversed

through other comprehensive

income

Closing balance

Deferred tax assets / (liabilities) in relation to:Property, plant and equipment (193.52) 147.05 - (46.47)Provision for Employee Benefits 28.15 22.73 (1.97) 48.91Provision for doubtful debts 79.49 22.64 - 102.13Others (0.32) 7.85 - 7.53Net deferred tax assets / (liabilities) (86.20) 200.27 (1.97) 112.10

Significant components of net deferred tax assets and liabilities for the year ended March 31, 2017 are as follows:(` lakhs)

Opening balance

Recognised / reversed

through profit or loss

Recognised /Reversed

through other comprehensive

income

Closing balance

Deferred tax assets / (liabilities) in relation to:Property, plant and equipment (318.97) 125.45 - (193.52)Provision for Employee Benefits 23.86 1.25 3.04 28.15Provision for doubtful receivables 54.28 25.21 - 79.49Others (1.30) 0.98 - (0.32)Net deferred tax assets / (liabilities) (242.13) 152.89 3.04 (86.20)



29. CONTINGENT LIABILITIES

(` lakhs) As at

March 31,2018 As at

March 31, 2017Income tax demands(see (b) below) (i) Claims against the Company not acknowledged as debt - disputed sales

tax liability18.76 29.85

(ii) Estimated amount of contracts remaining to be executed on capital account

23.61 -

30. FINANCIAL INSTRUMENTS The significant accounting policies, including the criteria for recognition, the basis of measurement and the basis on which

income and expenses are recognised, in respect of each class of financial asset, financial liability and equity instrument are disclosed in note 2(g) to the financial statements(a) Financial assets & liabilities

The carrying value of financial instruments by categories as of March 31, 2018 is as follows: (` lakhs)

Fair value through profit

or loss

Amortised cost Total carrying value

Financial assets: Cash and cash equivalents - 5,376.69 5,376.69 Trade receivables - 6,774.35 6,774.35 Investments 1,502.11 - 1,502.11 Unbilled revenue - 166.60 166.60 Loans - 1,208.28 1,208.28 Other financial assets - 424.40 424.40Total 1,502.11 13,950.32 15,452.43

Financial liabilities: Trade payables - 3,746.25 3,746.25 Other financial liabilities - 4,247.06 4,247.06Total - 7,993.31 7,993.31

The carrying value of financial instruments by categories as of March 31, 2017 is as follows:(` lakhs)

Fair value through profit

or loss

Amortised cost Total carrying value

Financial assets: Cash and cash equivalents - 2,904.12 2,904.12 Trade receivables - 9,590.24 9,590.24 Investments 4,500.93 - 4,500.93 Unbilled revenue - 76.88 76.88 Loans - 8.12 8.12 Other financial assets - 278.97 278.97Total 4,500.93 12,858.33 17,359.26Financial liabilities: Trade payables - 6,197.26 6,197.26 Other financial liabilities - 5,292.47 5,292.47Total - 11,489.73 11,489.73




(b) Fair value hierarchy

Table summarizes financial assets and liabilities measured at fair value on a recurring basis Level 1 — Inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 2 — Inputs are other than quoted prices included within Level 1 that are observable for the asset or liability,

either directly (i.e. as prices) or indirectly (i.e. derived from prices). Level 3 — Inputs are not based on observable market data (unobservable inputs). Fair values are determined in whole or

in part using a valuation model based on assumptions that are neither supported by prices from observable current market transactions in the same instrument nor are they based on available market data.

The following table summarisesfinancial assets measured at fair value on arecurring basis (` lakhs)

As of March 31, 2018 Level 1 Level 2 Level 3 Total

Financial assets:

Investment in unquoted mutual fund units 1,502.11 - - 1,502.11Total 1,502.11 - - 1,502.11

(` lakhs)

As of March 31, 2017 Level 1 Level 2 Level 3 Total

Financial assets:

Mutual fund 4,500.93 - - 4,500.93

Total 4,500.93 - - 4,500.93

(c) Financial risk management

The Company is exposed primarily to credit, liquidity and price risks, which may adversely impact the fair value of its financial instruments. The Company has a risk management policy which covers risks associated with the financial assets and liabilities. The focus of the risk management committee is to assess the unpredictability of the financial environment and to mitigate potential adverse effects on the financial performance of the Company.

i) Market risk

Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices. Such changes in the values of financial instruments may result from changes in the foreign currency exchange rates, interest rates, credit, liquidity and other market changes.

a) Interest rate risk The Company investments are primarily in fixed rate interest bearing investments. Hence the company is not

significantly exposed to interest rate risk. ii) Credit risk Credit risk is the risk of financial loss arising from counterparty failure to repay or service debt according to

the contractual terms or obligations. Credit risk encompasses of both, the direct risk of default and the risk of deterioration of creditworthiness as well as concentration of risks. Credit risk is controlled by analysing credit limits and creditworthiness of customers on a continuous basis to whom the credit has been granted after obtaining necessary approvals for credit.

Financial instruments that are subject to concentrations of credit risk principally consist of trade receivables, unbilled revenue, investments including inter corporate deposits and other financial assets. Corporate deposits of ` 1,200 Lakhs as of March 31,2018, are with a financial institution having a high credit-rating assigned by credit-rating agencies. None of the other financial instruments of the Company result in material concentration of credit risk.



Exposure to credit risk The carrying amount of financial assets represents the maximum credit exposure. The maximum exposure to

credit risk was ` 15452.43 Lakhs and ` 17,359.26 Lakhs as on March 31, 2018 and 2017, respectively, being the total of the carrying amount of investment in mutual funds, balances with banks, trade receivables, unbilled revenue, loans and other financial assets.

The Company exposure to customers is diversified. Apart from Rural Development Department for state of Telangana and state of Andhra Pradesh Rs.1145.50 lakhs and APPSC Rs.812.58 lakhs and Department of post-Telangana Rs.1243.64 lakhs, no other customer contributes to more than 10% of outstanding accounts receivable and unbilled revenue as of March 31, 2018 and 2017.

Geographic concentration of credit risk The Company has a geographic concentration of trade receivables, net of allowances and unbilled revenue in India. iii) Liquidity risk Liquidity risk refers to the risk that the Company cannot meet its financial obligations. The objective of liquidity risk

management is to maintain sufficient liquidity and ensure that funds are available for use as per requirements. The Company consistently generates sufficient cash flows from operations to meet its financial obligations as and

when they fall due. The tables below provide details regarding the contractual maturities of significant financial liabilities as of:

(` lakhs) Due in 1st

YearDue in 2nd

YearDue in 3rd

YearDue in 4th

YearDue in 5th

YearTotal

March 31, 2018Trade payables 3,746.25 - - - 3,746.25Other financial liabilities 4,247.06 - - - 4,247.06

Total 7,993.31 - - - 7,993.31

(` lakhs) Due in 1st

YearDue in 2nd

YearDue in 3rd

YearDue in 4th

YearDue in 5th

YearTotal

March 31, 2017Trade payables 6,197.26 - - - - 6,197.26Other financial liabilities 5,292.47 - - - - 5,292.47

Total 11,489.73 - - - - 11,489.73

iv) Other price risks

The fair value of investment in mutual funds is ` 1,502.11 Lakhs and ` 4,500.93 Lakhs as on March 31, 2018 and March 31, 2017 respectively.The Company is exposed to price risks arising from investment in mutual funds. The investments are made in acceptable funds, while optimizing the returns.

31. RELATED PARTY DISCLOSURE Ultimate Holding Company Tata Sons Limited

Holding Company Tata Consultancy Services Limited Significant Share holder Andhra Pradesh Technology Services Limited (APTS)

Key Management Personnel (KMP) Mr. Satish Kumar Elaprolu w.e.f Sep 02, 2015




Fellow Subsidiaries with whom the Company has transactions C-Edge Technologies Tata AIA Life Insurance Co Ltd Tata Tele Services Ltd TCS Foundation Note: Details of related parties as identified by the management (` lakhs)

Transaction with related parties for the Year ended March 31, 2018

Tata Consultancy

Services

C-Edge Technologies

Tata AIA Life

Insurance Co Ltd

Tata Tele Services

Ltd

TCS Foundation

Total

Revenue from sale of services and licencesOther incomePurchases of goods and services (including reimbursement)Dividend paidAllowances / (write back) for doubtful accounts receivables and a Rent expenseCorporate social responsibility

601.53-

3,429.76897.92

-18.63

-

-0.15

-----

0.06-

-----

3.69-

2.88----

--

----

44.17

605.280.15

3,432.64897.92

-18.6344.17

Note : This includes remuneration of ̀ 51 Lakhs paid to Key Management Personnel. (` lakhs)Transaction with related parties for the Year ended March 31, 2017

Tata Consultancy

Services

C-Edge Technologies

Tata AIA Life

Insurance Co Ltd

Tata Tele Services

Ltd

TCS Foundation

Total

Revenue from sale of services and licencesOther incomePurchases of goods and services (including reimbursement)Dividend paidRent expenseCorporate social responsibility

515.45-

1,638.971,575.30

18.75-

-0.26

----

0.13-

----

6.16-

11.39---

--

---

67.52

521.740.26

1,650.361,575.30

18.7567.52

Note : This includes remuneration of ̀ 48.50 Lakhs paid to Key Management Personnel. (` lakhs)Balances with related parties as at March 31, 2018 Tata

Consultancy Services

C-Edge Technologies

Tata AIA Life

Insurance Co Ltd

Tata Tele Services

Ltd

TCS Foundation

Total

Trade receivables and unbilled revenue (net) 225.71 - 0.05 - - 225.76Balances with related parties as at March 31, 2017 Tata


C-Edge Technologies

Tata AIA Life

Insurance Co Ltd

Tata Tele Services

Ltd

TCS Foundation

Total

Trade receivables and unbilled revenue (net) 179.79 0.08 0.01 - - 179.88Balances with related parties as at March 31, 2018 Tata


C-Edge Technologies

Tata AIA Life

Insurance Co Ltd

Tata Tele Services

Ltd

TCS Foundation

Total

Trade payables 1,237.89 - 0.43 0.28 - 1,238.60Balances with related parties as at March 31, 2017 Tata


C-Edge Technologies

Tata AIA Life

Insurance Co Ltd

Tata Tele Services

Ltd

TCS Foundation

Total

Trade payables 1,542.81 10.00 0.34 0.90 - 1,554.05



32. DEFINED BENEFIT PLANS The Company offers its employees defined benefit plans in the form of a gratuity scheme. The following table sets out the funded status of the defined benefit schemes and the amount recognised in the financial

statements. The estimate of future salary increase considered in actuarial valuation takes account of inflation, seniority, promotion and

other relevant factors such as supply and demand factors in the employment market. (` lakhs)

For the year ended

March 31, 2018

For the year ended

March 31, 2017Change in defined benefit obligations (“DBO”) during the yearPresent value of DBO at beginning of the yearCurrent service costInterest costBenefit Paid during the YearActuarial losses

80.1815.84

5.41 (1.62) (6.19)

55.4512.29

4.30 (3.69)11.82

Present value of DBO at the end of the yearsChange in fair value of assets during the yearPlan assets at beginning of the year Expected return on plan assets Actual company contributions Actuarial (loss)

93.62

73.955.58

33.55-

80.17

32.575.55

39.50-

Benefits paid (1.62) (3.68)Fair value of plan assets at the end of the year 111.46 73.94

(` lakhs) As at March 31, 2018 As at March 31, 2017

Funded status:Surplus of plan assets over obligations 17.84 (6.23)Category of assets:Insurance managed funds 111.46 73.94

Net periodic gratuity cost included in employee cost consists of the following components: (` lakhs)

As atMarch 31, 2018

As atMarch 31, 2017

Components of expenseCurrent service costNet interest on net defined benefit liability / (asset)

15.840.42

12.291.77

Net periodic gratuity cost 16.26 14.06Actual return on plan assets 0.59 3.03

Remeasurement of the net defined benefit liability/(asset): (` lakhs)

As at March 31, 2018 As at March 31, 2017

Actuarial (gains) and losses arising from changes in demographic assumptions.Actuarial (gains) and losses arising from changes in financial assumptions.Actuarial (gains) and losses arising from changes in experience adjustments.

3.72 (19.59)

9.68

2.060.019.74

Remeasurement of the net defined benefit liability (6.19) 11.81

Remeasurement - return on plan assets excluding amount included in interest income (0.58) (3.02)Total (6.77) 8.79




The assumptions used in according for the defined benefit plan are set out below:

For the year ended March 31, 2018

For the year ended March 31, 2017

Actuarial assumptionsDiscount rateSalary escalation rateAttrition ratei) If Services < = 5 yearsii) If Services > 5 years

7.75%6.00%

20.47%7.30%

Indian Assured Lives Mortality (2006-08)

6.75%7.00%

26.71%9.20%

Indian Assured Lives Mortality (2006-08)

Mortality Rate

The Company is expected to contribute ` 15.42 lakhs to the defined benefit plan obligation for the year ending March 31, 2019.

Remeasurement loss of defined employee benefit plan in other comprehensive income for the fiscals 2018 and 2017 are ` (6.77) lakhs and ` 8.79 lakhs respectively.

The significant actuarial assumptions for the determination of the defined benefit obligations are discount rate and expected salary increase. The sensitivity analysis 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.

If the discount rate increases by 0.50%, the defined benefit obligations would decrease by ̀ 3.98 lakhs as of March 31, 2018 and a corresponding decrease of 0.5% will result in increase of ` 4.31 lakhs.

If the salary escalation rate increases by 0.50%, the defined benefit obligations would increase by ` 4.36 lakhs as of March 31, 2018 and a corresponding decrease of 0.5% will result in decrease of ` 4.06 lakhs.

The sensitivity analysis presented above may not be representative of the actual change in the defined benefit obligations as it is unlikely that the change in assumptions would occur in isolation of one another as some of the assumption may be correlated.

Furthermore, in presenting the above sensitivity analysis, the present value of the defined benefit obligations 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.

Each year an Asset - Liability matching study is performed in which the consequences of the strategic investment policies are analysed in terms of risk and return profiles. Investment and contribution policies are integrated within this study.

The defined benefit obligations shall mature after year ended March 31, 2018 as follows:

(` lakhs)

Year ending March 31, Defined benefit obligations2019 6.692020 7.042021 7.752022 7.952023 7.92

Thereafter 39.95

Defined contribution plans

The Company makes contribution towards provident fund for qualifying employees. Under the plans, the Company is required to contribute a specified percentage of the payroll costs to fund the benefits. The Company recognised ` 77.39 lakhs and ` 75.94 lakhs towards contribution provident fund and family pension fund in fiscals 2018 and 2017 respectively. The contributions payable to these plans by the Company are at rates specified in the rules of the schemes.



33. SEGMENT INFORMATION

Operating segments are defined as components of an enterprise for which discrete financial information is available that is evaluated regularly by the chief operating decision maker for assessing the Company’s performance and allocating the resources based on an analysis of various performance indicators by business segments and geographic segments.

The Company is mainly engaged in the business of providing IT enabled services to various departments of Govt. of Andhra Pradesh and Govt. of Telangana which constitute a single business segment. These activities are conducted only in one geographic segment viz India. Therefore, the disclosure requirements of the Ind AS 108 “Segment Reporting” are not applicable.

34. DISCLOSURES REQUIRED UNDER SECTION 22 OF THE MICRO, SMALL AND MEDIUM ENTERPRISES DEVELOPMENT ACT, 2006

Dues to Micro and Small Enterprises have been determined to the extent such parties have been identified on the basis of information collected by the Management. The Company has not received any memorandum (as required to be filed by the suppliers with notified authority under the Micro, Small and Medium Enterprises Development Act, 2006) from vendor claiming the status as micro or small enterprises, hence no disclosures have been made.

35. LEASES

Details of leasing arrangements - as lessee

The Company has entered into operating lease arrangements. The lease agreements are cancellable and are for a period of 1- 9 years.

(` lakhs)

Particulars As at March 31,2018 As at March 31,2017Lease payments recognised in the statement of profit and loss 40.43 39.50

36. CORPORATE SOCIAL RESPONSIBILITY The Company has contributed an amount of ` 44.16 Lakhs to TCS Foundation and ` 31.56 Lakhs to Rotary Club of Banjara

Hills (2016-17 - ` 67.52 Lakhs) towards Corporate Social Responsibility. A. Gross amount required to be spent by the Company during the year 2017-18 Rs 75,72,957 B. Amount spent during the year on : (` lakhs)

Particulars In cash* Yet to be paid in cash

Total

i. Construction/Acquisition of any assets ii. Purpose other than (i) above

-7,573

--

-7,573

7,573 - 7,573

* Represent actual outflow

Subsidiary Financials 2017-18...management either intends to liquidate the Company or to cease...

Documents

Transcript of Subsidiary Financials 2017-18...management either intends to liquidate the Company or to cease...