BIRLASOFT LIMITED

SUBSIDIARIES
ANNUAL REPORT
2019-20
Contents
1 Birlasoft (UK) Limited 1
2 Birlasoft Solutions Limited 8
3 Birlasoft Solutions France 13
4 Birlasoft Solutions GmbH 21
5 Birlasoft GmbH 30
6 Birlasoft Solutions Inc. 33
7 Birlasoft Consulting Inc. 44
8 Birlasoft Computer Corporation 54
9 Birlasoft Inc. 63
10 Enablepath LLC 71
11 Birlasoft Technologies Canada Corporation 77
12 Birlasoft Solutions Mexico S.A. DE C.V. 84
13 Birlasoft Solutions Ltda. 89
14 Birlasoft Sdn. Bhd. 94
15 Birlasoft Solutions ME FZE 101
 Birlasoft (UK) Limited

Birlasoft (UK) Limited

Registered Office: 4th Floor, 53 - 54 Grosvenor Street, London, W1K 3HU.

Strategic Report Report of the Directors

FOR THE YEAR ENDED 31 MARCH 2020 FOR THE YEAR ENDED 31 MARCH 2020

The directors present their strategic report for the year ended 31 March 2020. The directors present their report with the financial statements of the company for the year ended
31 March 2020.
REVIEW OF BUSINESS
PRINCIPAL ACTIVITY
The revenue for the year amounted to £7,266,764 (2019 - £9,786,925).
The principal activity of the company in the year under review was that of specialised computer-
The directors of the company are satisfied with the performance of the company. related consulting and custom programming solutions.

There is an decrease in the revenue due to the change in the practice of the company to raise invoices DIVIDENDS
from UK company on the Swiss entity. There is drop in the revenue due to completion of certain
projects which gave revenue during last financial year. We have though added few new customers No dividends will be distributed for the year ended 31 March 2020.
in the current financial year. The management are aware of the market conditions and have worked
on strategies and plans for the upcoming year, undertaken branding initiatives and are looking to DIRECTORS
forge strategic business partnerships as well. The company continued its focus on offshore model of
delivery and provide solution based delivery to its clients.
The directors shown below have held office during the whole of the period from 1 April 2019 to the
date of this report.
PRINCIPAL RISKS AND UNCERTAINTIES
C K Birla
The company provides specialised computer-related consulting and custom programming solutions
to customers located throughout the world.
Mrs A Birla
Birlasoft has morphed itself into a solutions oriented company and is engaged in providing architecture
led digital transformation services for businesses in the new economy. In addition to e-procurement S S Kejriwal
and digital marketplaces, Birlasoft also focuses on other digital systems including enterprise portals,
content management, wireless enablement, CRM, enterprise application integration and Managed A K Ladha
application support services.
Other changes in directors holding office are as follows:
The company has main risks with regards to retention of employee’s, immigration policies, labour
laws changes, competition in the market, credit risk etc. The board reviews and agrees policies for A Lahiri - resigned 31 May 2019
managing each of these risks and they are summarised below.
B R Adavikolanu - appointed 17 June 2019
Employee retention risk:
DIRECTORS’ RESPONSIBILITIES STATEMENT
Better role/profile alignment, ensuring good utilisation of employees, better & competitive pay,
employee friendly HR policies, etc. The directors are responsible for preparing the Strategic Report, the Report of the Directors and the
financial statements in accordance with applicable law and regulations.
Immigration & Labour laws Risk:
Company law requires the directors to prepare financial statements for each financial year. Under that
Company fulfils the customer requirement by providing resources through local hire and getting law the directors have elected to prepare the financial statements in accordance with United Kingdom
people from outside EU. Getting people from outside EU region gives competitive advantage and Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law).
is also a cost effective model. With the recent changes in the immigration and labour Laws, getting Under company law the directors must not approve the financial statements unless they are satisfied
people from outside EU region is no longer beneficial as compared to local hire. Company has that they give a true and fair view of the state of affairs of the company and of the profit or loss of the
therefore adopted a policy of hiring from the local market as compared to getting people from company for that period. In preparing these financial statements, the directors are required to:
outside EU region in order to meet customer requirement and managing competition.
−− select suitable accounting policies and then apply them consistently;
Interest rate risk:
−− make judgements and accounting estimates that are reasonable and prudent;
The company finances its operations through a mixture of retained profits, cash balances, Invoice
financing facility and balances with group undertakings. −− prepare the financial statements on the going concern basis unless it is inappropriate to presume
that the company will continue in business.
Foreign currency Risk:
The directors are responsible for keeping adequate accounting records that are sufficient to show and
Company’s transactions are mainly in sterling & US Dollars and Euros which exposes the Company to explain the company’s transactions and disclose with reasonable accuracy at any time the financial
foreign exchange fluctuation. The Company does not hedge any currency exposures. position of the company and enable them to ensure that the financial statements comply with the
Companies Act 2006. They are also responsible for safeguarding the assets of the company and
Credit Risk: hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

The company manages its credit risk by thorough credit checks and rigorous debt collection STATEMENT AS TO DISCLOSURE OF INFORMATION TO AUDITORS
procedures.
So far as the directors are aware, there is no relevant audit information (as defined by Section 418
ON BEHALF OF THE BOARD: of the Companies Act 2006) of which the company’s auditors are unaware, and each director has
taken all the steps that he or she ought to have taken as a director in order to make himself or herself
aware of any relevant audit information and to establish that the company’s auditors are aware of that
information.
B R Adavikolanu - Director
6 May 2020 AUDITORS

The auditors, Butler & Co LLP, will be proposed for re-appointment at the forthcoming Annual
General Meeting.

ON BEHALF OF THE BOARD:

B R Adavikolanu - Director
6 May 2020

BIRLASOFT LIMITED (Subsidiaries Annual Report 2019-20) 1

Report of the Independent Auditors to the Members of
Birlasoft (UK) Limited
Opinion Opinions on other matters prescribed by the Companies Act 2006

We have audited the financial statements of Birlasoft (UK) Limited (the ‘company’) for the year ended In our opinion, based on the work undertaken in the course of the audit:
31 March 2020 which comprise the Income Statement, Other Comprehensive Income, Balance Sheet,
Statement of Changes in Equity, Cash Flow Statement and Notes to the Cash Flow Statement, Notes −− the information given in the Strategic Report and the Report of the Directors for the financial
to the Financial Statements, including a summary of significant accounting policies. The financial year for which the financial statements are prepared is consistent with the financial statements;
reporting framework that has been applied in their preparation is applicable law and United Kingdom and
Accounting Standards, including Financial Reporting Standard 102 ‘The Financial Reporting
Standard applicable in the UK and Republic of Ireland’ (United Kingdom Generally Accepted
−− the Strategic Report and the Report of the Directors have been prepared in accordance with
Accounting Practice).
applicable legal requirements.

In our opinion the financial statements:

Matters on which we are required to report by exception

−− give a true and fair view of the state of the company’s affairs as at 31 March 2020 and of its profit
In the light of the knowledge and understanding of the company and its environment obtained in
for the year then ended;
the course of the audit, we have not identified material misstatements in the Strategic Report or the
Report of the Directors.
−− have been properly prepared in accordance with United Kingdom Generally Accepted Accounting
Practice; and
We have nothing to report in respect of the following matters where the Companies Act 2006 requires
us to report to you if, in our opinion:
−− have been prepared in accordance with the requirements of the Companies Act 2006.
−− adequate accounting records have not been kept, or returns adequate for our audit have not
Basis for opinion been received from branches not visited by us; or

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) −− the financial statements are not in agreement with the accounting records and returns; or
and applicable law. Our responsibilities under those standards are further described in the Auditors’
responsibilities for the audit of the financial statements section of our report. We are independent of
−− certain disclosures of directors’ remuneration specified by law are not made; or
the company in accordance with the ethical requirements that are relevant to our audit of the financial
statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical
responsibilities in accordance with these requirements. We believe that the audit evidence we have −− we have not received all the information and explanations we require for our audit.
obtained is sufficient and appropriate to provide a basis for our opinion.
Responsibilities of directors
The impact of uncertainties due to the COVID19 pandemic on our audit
As explained more fully in the Directors’ Responsibilities Statement set out on page four, the directors
Uncertainties related to the effects of COVID19 are relevant to understanding our audit of the financial are responsible for the preparation of the financial statements and for being satisfied that they give
statements. All audits assess and challenge the reasonableness of estimates made by the directors, a true and fair view, and for such internal control as the directors determine necessary to enable the
and related disclosures and the appropriateness of the going concern basis of preparation of the preparation of financial statements that are free from material misstatement, whether due to fraud
financial statements. All of these depend on assessments of the future economic environment and or error.
the company’s future property and performance.
In preparing the financial statements, the directors are responsible for assessing the company’s
COVID19 is one of the most significant public health, social and economic event and at the date ability to continue as a going concern, disclosing, as applicable, matters related to going concern
of this report its effects are subject to unprecedented levels of uncertainty of outcomes, with the and using the going concern basis of accounting unless the directors either intend to liquidate the
full range of possible effects unknown. We applied a standardise firm-wide approach in response company or to cease operations, or have no realistic alternative but to do so.
to that uncertainty when assessing the company’s future prospects and performance. However, no
audit should be expected to predict the unknowable factors or all possible future implications for the Auditors’ responsibilities for the audit of the financial statements
company and this is particularly the case in relation to COVID19.
Our objectives are to obtain reasonable assurance about whether the financial statements as a
Conclusions relating to going concern whole are free from material misstatement, whether due to fraud or error, and to issue a Report of
the Auditors that includes our opinion. Reasonable assurance is a high level of assurance, but is
We have nothing to report in respect of the following matters in relation to which the ISAs (UK) require not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material
us to report to you where: 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 financial statements.
−− the directors’ use of the going concern basis of accounting in the preparation of the financial
statements is not appropriate; or
A further description of our responsibilities for the audit of the financial statements is located on
the Financial Reporting Council’s website at www.frc.org.uk/auditorsresponsibilities. This description
−− the directors have not disclosed in the financial statements any identified material uncertainties
forms part of our Report of the Auditors.
that may cast significant doubt about the company’s ability to continue to adopt the going
concern basis of accounting for a period of at least twelve months from the date when the
financial statements are authorised for issue. Use of our report

However, as we cannot predict all future events or conditions and as subsequent events may result in This report is made solely to the company’s members, as a body, in accordance with Chapter 3 of Part
outcomes that are inconsistent with judgements that were reasonable at the time they were made, 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the
the absence of reference to a material uncertainty in this auditor’s report is not a guarantee that the company’s members those matters we are required to state to them in a Report of the Auditors and
company will continue in operation. for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility
to anyone other than the company and the company’s members as a body, for our audit work, for this
report, or for the opinions we have formed.
Other information

Sanjeev Phadke (Senior Statutory Auditor)

The directors are responsible for the other information. The other information comprises the
for and on behalf of Butler & Co LLP
information in the Strategic Report and the Report of the Directors, but does not include the financial
Chartered Accountants & Statutory Auditor
statements and our Report of the Auditors thereon.
Third Floor
126-134 Baker Street
Our opinion on the financial statements does not cover the other information and, except to the London
extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion W1U 6UE
thereon.
6 May 2020
In connection with our audit of the financial statements, our responsibility is to read the other
information and, in doing so, consider whether the other information is materially inconsistent with
the financial statements or our knowledge obtained in the audit or otherwise appears to be materially
misstated. If we identify such material inconsistencies or apparent material misstatements, we
are required to determine whether there is a material misstatement in the financial statements
or a material misstatement of the other information. 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.

BIRLASOFT LIMITED (Subsidiaries Annual Report 2019-20) 2

 Birlasoft (UK) Limited

Income Statement Statement of Changes in Equity

For the year ended 31 March 2020 For the year ended 31 March 2020

2020 2019 Called up Retained Total

share capital earnings equity
Notes £ £
TURNOVER 3 7,266,764 9,786,925 £ £ £

Cost of sales 5,838,200 7,402,501 Balance at 1 April 2018 150,000 1,278,871 1,428,871

GROSS PROFIT 1,428,564 2,384,424 Changes in equity

Administrative expenses 1,478,579 1,448,671 Total comprehensive income - 747,593 747,593

(50,015) 935,753 Balance at 31 March 2019 150,000 2,026,464 2,176,464

Other operating income 448,714 4,395 Changes in equity

OPERATING PROFIT 5 398,699 940,148 Total comprehensive income - 285,429 285,429

Interest receivable and 3,029 2,851 Balance at 31 March 2020 150,000 2,311,893 2,461,893
similar income

401,728 942,999

Amounts written 6 19,863 -

off investments Cash Flow Statement
For the year ended 31 March 2020
381,865 942,999
2020 2019
Interest payable and 7 11,573 13,334
similar expenses Notes £ £
PROFIT BEFORE TAXATION 370,292 929,665 Cash flows from
operating activities
Tax on profit 8 84,863 182,072
Cash generated 1 1,852,856 411,510
PROFIT FOR THE 285,429 747,593 from operations
FINANCIAL YEAR
Interest paid (11,573) (13,334)

Other Comprehensive Income Tax paid (182,072) (91,166)

For the year ended 31 March 2020
Net cash from 1,659,211 307,010
2020 2019
operating activities
Notes £ £
Cash flows from investing activities
PROFIT FOR THE YEAR 285,429 747,593
Purchase of tangible fixed assets (4,830) -
OTHER COMPREHENSIVE - -
Interest received 3,029 2,851
INCOME
Net cash from investing activities (1,801) 2,851
TOTAL COMPREHENSIVE 285,429 747,593
Increase in cash and 1,657,410 309,861
INCOME FOR THE YEAR
cash equivalents

Balance Sheet

Cash and cash equivalents at
beginning of year
2 1,199,574 889,713
31 MARCH 2020

2020 2019 Cash and cash equivalents at 2 2,856,984 1,199,574

end of year
Notes £ £ £ £

FIXED ASSETS

Tangible assets 9 11,189 10,438

Investments 10 - 19,863

11,189 30,301

CURRENT ASSETS

Debtors 11 1,723,845 2,482,552

Cash at bank 2,856,984 1,199,574

and in hand

4,580,829 3,682,126

CREDITORS

Amounts falling due 12 2,130,125 1,535,963

within one year

NET CURRENT ASSETS 2,450,704 2,146,163

TOTAL ASSETS LESS

CURRENT LIABILITIES 2,461,893 2,176,464

CAPITAL AND RESERVES

Called up share capital 13 150,000 150,000

Retained earnings 14 2,311,893 2,026,464

SHAREHOLDERS’ FUNDS 2,461,893 2,176,464

The financial statements were authorised for issue by the Board of Directors and authorised for issue
on 6 May 2020 and were signed on its behalf by:

B R Adavikolanu - Director

BIRLASOFT LIMITED (Subsidiaries Annual Report 2019-20) 3

Notes to the Cash Flow Statement company is exempt under Section 400 of the Companies Act 2006 from the requirements to
prepare consolidated financial statements as it and its subsidiary undertaking are included
For the year ended 31 March 2020
by full consolidation in the consolidated financial statements of its parent, Birlasoft Limited
(Erstwhile KPIT Technologies Limited).
1. RECONCILIATION OF PROFIT BEFORE TAXATION TO CASH GENERATED FROM
OPERATIONS
Critical accounting judgements and key sources of estimation uncertainty
2020 2019
The preparation of the financial statements requires the directors to make significant
£ £ judgements and estimates. These estimates and judgements are continually reviewed and are
Profit before taxation 370,292 929,665 based on experience and other factors including expectations of future events that are believed
to be reasonable under the circumstances.
Depreciation charges 4,079 4,153
The areas of judgement and estimates applied by the directors are not considered sufficiently
Increase/(Decrease) in group creditors 318,605 (782,215)
significant to require disclosure in these financial statements.
(Increase)/Decrease in group debtors 316,098 -
Turnover
Amounts w/off investment in subsidiary 19,863 -

Finance costs 11,573 13,334 Turnover is measured at the fair value of the consideration received or receivable, excluding
discounts, rebates, value added tax and other sales taxes.
Finance income (3,029) (2,851)

1,037,481 162,086 Tangible fixed assets

Decrease in trade and other debtors 442,609 342,882 Depreciation is provided at the following annual rates in order to write off each asset over its
Increase/(decrease) in trade and 372,766 (93,458) estimated useful life.
other creditors
Plant and machinery - 4 years on cost
Cash generated from operations 1,852,856 411,510
Computer equipment - 4 years on cost

Investments in subsidiaries
2. CASH AND CASH EQUIVALENTS
Investments in subsidiary undertakings are recognised at cost less any provision for
The amounts disclosed on the Cash Flow Statement in respect of cash and cash equivalents impairment.
are in respect of these Balance Sheet amounts:
Financial instruments
Year ended 31 March 2020

31/3/20 1/4/19 The company only enters into basic financial instrument transactions that result in the
recognition of financial assets and liabilities like trade and other debtors and creditors, accrued
£ £ expenses and related parties balances.
Cash and cash equivalents 2,856,984 1,199,574
Debt instruments that are payable or receivable within one year. typically trade debtors and
Year ended 31 March 2019 creditors. are measured, initially and subsequently, at the undiscounted amount of the cash or
other consideration expected to be paid or received.
31/3/19 1/4/18

£ £ Financial assets that are measured at cost and amortised cost are assessed at the end of each
reporting period for objective evidence of impairment. If objective evidence of impairment is
Cash and cash equivalents 1,199,574 1,126,863 found. an impairment loss is recognised in the statement of comprehensive income.
Bank overdrafts - (237,150)
For financial assets measured at cost less impairment, the impairment loss is measured as the
1,199,574 889,713 difference between an asset’s carrying amount and best estimate of the recoverable amount.
which is an approximation of the amount that the company would receive for the asset if it were
to be sold at the reporting dale.

3. ANALYSIS OF CHANGES IN NET FUNDS Financial assets and liabilities are offset and the net amount reported in the statement of financial
position when there is an enforceable right to set off the recognised amounts and there is an
At 1/4/19 Cash flow At 31/3/20 intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
£ £ £
Taxation
Net cash
Cash at bank and in hand 1,199,574 1,657,410 2,856,984 Taxation for the year comprises current and deferred tax. Tax is recognised in the Income
Statement, except to the extent that it relates to items recognised in other comprehensive
1,199,574 1,657,410 2,856,984
income or directly in equity.
Total 1,199,574 1,657,410 2,856,984
Current or deferred taxation assets and liabilities are not discounted.

Current tax is recognised at the amount of tax payable using the tax rates and laws that have
Notes to the Financial Statements been enacted or substantively enacted by the balance sheet date.
For the year ended 31 March 2020
Deferred tax
1. STATUTORY INFORMATION
Deferred tax is recognised in respect of all timing differences that have originated but not
Birlasoft (UK) Limited is a private company, limited by shares, registered in England and Wales. reversed at the balance sheet date.
The company’s registered number and registered office address can be found on the Company
Information page. Timing differences arise from the inclusion of income and expenses in tax assessments in
periods different from those in which they are recognised in financial statements. Deferred tax is
The presentation currency of the financial statements is the Pound Sterling (£). measured using tax rates and laws that have been enacted or substantively enacted by the year
end and that are expected to apply to the reversal of the timing difference.
2. ACCOUNTING POLICIES
Unrelieved tax losses and other deferred tax assets are recognised only to the extent that it is
probable that they will be recovered against the reversal of deferred tax liabilities or other future
Basis of preparing the financial statements taxable profits.

These financial statements have been prepared in accordance with Financial Reporting Standard Foreign currencies
102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” and the
Companies Act 2006. The financial statements have been prepared under the historical cost
convention. Assets and liabilities in foreign currencies are translated into sterling at the rates of exchange
ruling at the balance sheet date. Transactions in foreign currencies are translated into sterling
at the rate of exchange ruling at the date of transaction. Exchange differences are taken into
Preparation of consolidated financial statements account in arriving at the operating result.

The financial statements contain information about Birlasoft (UK) Limited as an individual
company and do not contain consolidated financial information as the parent of a group. The

BIRLASOFT LIMITED (Subsidiaries Annual Report 2019-20) 4

 Birlasoft (UK) Limited

Hire purchase and leasing commitments 6. AMOUNTS WRITTEN OFF INVESTMENTS

2020 2019
Rentals paid under operating leases are charged to profit or loss on a straight line basis over the
period of the lease. £ £

Amounts written off investment

Pension costs and other post-retirement benefits
in subsidiary 19,863 -

The company operates a defined contribution pension scheme. Contributions payable to the
company’s pension scheme are charged to profit or loss in the period to which they relate.
7. INTEREST PAYABLE AND SIMILAR EXPENSES
Going concern
2020 2019
The financial statements have been prepared on a going concern basis on the assumption £ £
that the company will continue to trade in the foreseeable future. The Company Directors
having made appropriate enquiries consider that adequate resources exist for the Company to Bank interest 11,573 13,334
continue in operational existence for the foreseeable future and with the continued support of
the company’s shareholder, the company will be able to meet its liabilities as they fall due for
payment. Therefore, the directors are of the opinion that it is appropriate to adopt the going
concern basis in preparing the financial statements. 8. TAXATION

Analysis of the tax charge

Since the financial year end, there are uncertainties relating to COVID19 pandemic which may
impact on recoverability of the investments and debtors. No provisions have been made in the The tax charge on the profit for the year was as follows:
financial statements in respect of these uncertainties.
2020 2019
3. TURNOVER £ £

Current tax: UK corporation tax 84,863 182,072

The turnover and profit before taxation are attributable to the one principal activity of the company.
An analysis of turnover by geographical market is given below: Tax on profit 84,863 182,072
2020 2019 Reconciliation of total tax charge included in profit and loss
£ £ The tax assessed for the year is higher than the standard rate of corporation tax in the UK.
The difference is explained below:
United Kingdom 4,249,968 5,463,180
2020 2019
Rest of the world 3,016,796 4,323,745
£ £
7,266,764 9,786,925
Profit before tax 370,292 929,665

Profit multiplied by the standard rate

of corporation tax in the UK
4. EMPLOYEES AND DIRECTORS of 19% (2019 - 19%) 70,355 176,636
2020 2019 Effects of:
£ £ Expenses not deductible for tax purposes 14,740 4,756

Wages and salaries 2,056,143 1,772,441 Capital allowances in excess of depreciation (232) -

Social security costs 204,577 194,885 Depreciation in excess of capital allowances - 680

Other pension costs 25,341 20,539 Total tax charge 84,863 182,072

2,286,061 1,987,865

The average number of employees during the year was as follows: 9. TANGIBLE FIXED ASSETS
2020 2019 Computer equipment
£ £ £
Administrative staff 7 7 COST
Consultants 20 18 At 1 April 2019 47,542
27 25 Additions 4,830
2020 2019 Disposals (21,103)
£ £ At 31 March 2020 31,269
Directors’ remuneration 50,000 50,000 DEPRECIATION

At 1 April 2019 37,104

Charge for year 4,079

5. OPERATING PROFIT
Eliminated on disposal (21,103)
The operating profit is stated after charging/(crediting): At 31 March 2020 20,080
NET BOOK VALUE
2020 2019
At 31 March 2020 11,189

£ £ At 31 March 2019 10,438

Other operating leases 44,888 46,840

Depreciation - owned assets 4,079 4,153

Auditors’ remuneration 11,220 12,000

Foreign exchange differences (92,978) (104,454)

2020 2019

£ £

Auditors remuneration - 8,750 8,750

Audit of financial statements

Auditors remuneration - 2,470 3,250

Non -audit services

BIRLASOFT LIMITED (Subsidiaries Annual Report 2019-20) 5

10. FIXED ASSET INVESTMENTS 14. RESERVES
Shares in group
undertakings Retained earnings

£ £

COST At 1 April 2019 2,026,464

At 1 April 2019 and 31 March 2020 19,863 Profit for the year 285,429

PROVISIONS At 31 March 2020 2,311,893

Provision for year 19,863

At 31 March 2020 19,863 15. RELATED PARTY DISCLOSURES

NET BOOK VALUE
During the year ended 31 March 2020, the company was charged £2,639,879 (2019: £1,599,710)
At 31 March 2020 - by Birlasoft Limited, a holding company of Birlasoft Inc., in connection with work done by
them on the projects won by Birlasoft UK at their offshore development centre in India and
At 31 March 2019 19,863
administrative support provided by them in India. During the year ended 31 March 2020, the
company was charged £Nil (2019: £2,507,780) by Birlasoft Limited, a holding company of
The company’s investments at the Balance Sheet date in the share capital of companies Birlasoft Inc., in connection with work done by them on the projects won by Birlasoft Switzerland
include the following: entity at their offshore development centre in India and administrative support provided by them
in India. During the year ended 31 March 2020, the company charged £Nil (2019: £3,323,367)
Birlasoft GmbH on Birlasoft Swiss entity against providing services to execute the projects won by Birlasoft Swiss
entity. At the year end the company owed to Birlasoft Limited, the sum of £541,984 (2019:
Registered office: Kapellenstrabe 47, 65830 Kriftel Germany £754,364).

Nature of business: Non Trading % The company charged Birlasoft Limited £11,148 (2019: £7,838) for providing the services of
its employees to execute contracts of Birlasoft India. The company was also charged £25,506
(2019: £64,559) by Birlasoft Limited, for providing the services of its employees to execute
Class of shares: holding
contracts of Birlasoft. At the year end, the company was owed £9,161 (2019: £8,710) by Birlasoft
Ordinary 100.00
Germany, the 100% subsidiary of Birlasoft UK. The company charged Birlasoft Inc. £712,718
2020 2019 (2019: £280,452) for providing the services of its employees to execute contracts of Birlasoft
Inc The company was also charged £49,985 (2019: £64,681) by Birlasoft Inc for execution of
£ £ projects of the company.
Aggregate capital and reserves (10,299) (7,783)
During the year ended 31 March 2020, the company charged Birlasoft Malaysia, a subsidiary
Loss for the year (2,291) (4,845) of Birlasoft Limited, £92,221 (2019: £36,402) for providing the services to the employees to
execute contracts of Birlasoft Limited.

During the year ended 31 March 2020, Birlasoft Limited, a holding company, charged Birlasoft
11. DEBTORS: AMOUNTS FALLING DUE WITHIN ONE YEAR Limited (Netherlands), a branch of Birlasoft (UK) Limited, Euros 1,083,850 (£959,300) (2019:
£Nil) for providing services from India to execute projects undertaken by the branch.
2020 2019

£ £ During the year ended 31 March 2020, the company charged £360,864 (2019: £Nil) to Birlasoft
Solutions Limited , £32,449 (2019: £Nil) to Birlasoft Solutions France, £106,469 (2019:
Trade debtors 818,949 724,117 £Nil) to Biralsoft Solutions GmbH and £1,007 (2019: £Nil) Birlasoft Solutions ME FZE Dubai
Amounts owed by group undertakings 588,199 904,297 for providing the services of its employees to execute contracts of those companies.Birlasoft
Solutions Limited, Birlasoft Solutions France, Biralsoft Solutions GmbH and Biralsoft Solutions
Other debtors 16,434 24,430 ME FZE Dubai are fellow subsidiaries of Birlasoft (UK) Limited.

Accrued income 298,442 823,884

During the year, the company charged £243,009 to Birlasoft Limited (Netherlands Branch) for
Prepayments 1,821 5,824 the liabilities and costs incurred on behalf of the branch.

1,723,845 2,482,552

16. ULTIMATE CONTROLLING PARTY

12. CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR
In the opinion of the directors, the immediate parent company is Birlasoft Inc., a company
2020 2019 incorporated in the United States of America. Copies of the report and financial statements for
Birlasoft Inc. may be obtained from 399 Thornall Street, 8th Floor, Edison NJ 08837, USA.
£ £

Trade creditors 13,099 1,416 The directors consider the company’s ultimate holding company and controlling party to be
Birlasoft Limited which is incorporated in India. Copies of that company’s financial statements
Amounts owed to group undertakings 1,196,571 877,966
are available from 35 & 36, Rajiv Gandhi Infotech Park, Phase - I, MIDC, Hinjawadi, Pune -
Tax 84,863 182,072 411057, Maharshtra, India.

Social security and other taxes 100,975 65,273

VAT 143,784 30,092

Accruals and deferred income 239,652 -

Accrued expenses 351,181 379,144

2,130,125 1,535,963

13. CALLED UP SHARE CAPITAL

Allotted, issued and fully paid:

Number: Class: Nominal value 2020 2019

£ £
150,000 Ordinary £1.00 150,000 150,000

BIRLASOFT LIMITED (Subsidiaries Annual Report 2019-20) 6

 Birlasoft (UK) Limited

Trading and Profit and Loss Account

For the year ended 31 March 2020

2020 2019 2020 2019

£ £ £ £ £ £ £ £

Turnover Seminars and conference - 8,291

Sales 7,250,572 9,786,925 Staff recruitment - 8,100

Other income 16,192 - Legal fees 29,891 19,328

7,266,764 9,786,925 Auditors’ remuneration 11,220 12,000

Cost of sales Foreign exchange differences (92,978) (104,454)

Purchases 2,567,155 4,172,171 Advertising 23,253 52,068

Wages 1,017,247 831,508 Entertainment 14,094 25,030

Social security 92,265 77,461 Bad debts 12,072 -

Pensions 5,871 5,920 1,469,517 1,441,679

Other direct costs 1,118,225 199,167 410,790 949,991

Sub contractors 1,037,437 2,116,274 Finance costs

5,838,200 7,402,501 Bank charges` 4,983 2,839

GROSS PROFIT 1,428,564 2,384,424 Bank interest 11,573 13,334

Other income 16,556 16,173

Sundry receipts 448,714 4,395 394,234 933,818

Deposit account interest 3,029 2,851 Depreciation

451,743 7,246 Computer equipment 4,079 4,153

1,880,307 2,391,670 390,155 929,665

Expenditure Amounts written off investments

Directors’ salaries 50,000 50,000 Amounts written 19,863 -

off investment in subsidiary
Directors’ social security 5,709 5,737
NET PROFIT 370,292 929,665
Wages 988,896 890,933

Social security 106,603 111,687

Pensions 19,470 14,619

Rent 44,888 46,840

Insurance 5,877 3,965

Telephone 25,792 36,656

Post and stationery 2,511 3,686

Travelling 150,607 220,366

Repairs and renewals 8 598

Staff Welfare 20,093 17,886

Medical insurance 7,895 5,311

Sundry expenses (3) 1

ESOP Expenses 43,619 13,028

Subscriptions - 3

BIRLASOFT LIMITED (Subsidiaries Annual Report 2019-20) 7

Birlasoft Solutions Limited
Registered Office : 400 Thames Valley Park Drive, Thames Valley, Park Reading Berkshire Reading,
RG6 1PT, United Kingdom.

Report of the Directors AUDITORS

For the year ended 31 March 2020 The auditors, Butler & Co LLP, will be proposed for re-appointment at the forthcoming Annual
General Meeting.
The directors present their report with the financial statements of the company for the year ended
31 March 2020. This report has been prepared in accordance with the provisions of Part 15 of the Companies Act 2006
relating to small companies.
CHANGE OF NAME
ON BEHALF OF THE BOARD:
The company passed a special resolution on 1 June 2019 changing its name from KPIT Infosystems
Limited to Birlasoft Solutions Limited.

PRINCIPAL ACTIVITY
11 May 2020 B R Adavikolanu - Director
The principal activity of the company during the period was IT enabled services, operating in
conjunction with Birlasoft Limited, the parent company which is registered in India.

DIRECTORS
Report of the Independent Auditors to the Members of
D Kapoor has held office during the whole of the period from 1 April 2019 to the date of this report. Birlasoft Solutions Limited
Other changes in directors holding office are as follows: Opinion

R Gupta - resigned 31 January 2020 We have audited the financial statements of Birlasoft Solutions Ltd (the ‘company’) for the year
ended 31 March 2020 which comprise the Income Statement, Balance Sheet and Notes to the
A Lahiri - resigned 31 May 2019 Financial Statements, including a summary of significant accounting policies. The financial reporting
framework that has been applied in their preparation is applicable law and United Kingdom Accounting
B R Adavikolanu - appointed 1 June 2019 Standards, including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable
in the UK and Republic of Ireland’ (United Kingdom Generally Accepted Accounting Practice).
S Kulkarni - appointed 31 January 2020
In our opinion the financial statements:
FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES
-- give a true and fair view of the state of the company’s affairs as at 31 March 2020 and of its loss
for the year then ended;
The company’s financial instruments comprise cash and liquid resources, various items such as trade
debtors, trade creditors etc that arise directly from its operations. The main purpose of these financial
instruments is to raise finance for the company’s operations. It is, and has been throughout the period -- have been properly prepared in accordance with United Kingdom Generally Accepted Accounting
under review, the company’s policy that no trading in financial instruments shall be undertaken. The Practice; and
main risks arising from the company’s financial instruments are liquidity risk, interest rate risk, credit
risk, and market risk. -- have been prepared in accordance with the requirements of the Companies Act 2006.

Liquidity risk Basis for opinion

The company has to manage the financial risk by ensuring sufficient liquidity is available to meet We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK))
foreseeable needs and to invest cash assets safely and profitably. and applicable law. Our responsibilities under those standards are further described in the Auditors’
responsibilities for the audit of the financial statements section of our report. We are independent of
Credit risk the company in accordance with the ethical requirements that are relevant to our audit of the financial
statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical
responsibilities in accordance with these requirements. We believe that the audit evidence we have
The company financial asset is cash. It is exposed to credit risk in respect of its cash balances as it uses
obtained is sufficient and appropriate to provide a basis for our opinion.
only one financial institution in the UK.

The impact of uncertainties due to the COVID19 pandemic on our audit

Foreign exchange risk management

Uncertainties related to the effects of COVID19 are relevant to understanding our audit of the financial
Foreign currency transaction exposures arising on internal and external trade flows are partially
statements. All audits assess and challenge the reasonableness of estimates made by the directors,
hedged. The company’s objective is to minimise the exposure of overseas trade to transaction risk
and related disclosures and the appropriateness of the going concern basis of preparation of the
by matching local currency income with local currency costs where possible, as well as maintaining
financial statements. All of these depend on assessments of the future economic environment and
multi-currency accounts to minimise conversions.
the company’s future prospects and performance.

DIRECTORS’ RESPONSIBILITIES STATEMENT

COVID19 is one of the most significant public health, social and economic event and at the date of
this report its effects are subject to unprecedented levels of uncertainty of outcomes, with the full
The directors are responsible for preparing the Report of the Directors and the financial statements in range of possible effects unknown. We applied a standardised firm-wide approach in response to
accordance with applicable law and regulations. that uncertainty when assessing the company’s future prospects and performance. However, no audit
should be expected to predict the unknowable factors or all possible future implications for the
Company law requires the directors to prepare financial statements for each financial year. Under that company and this is particularly the case in relation to COVID19.
law the directors have elected to prepare the financial statements in accordance with United Kingdom
Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Conclusions relating to going concern
Under company law the directors must not approve the financial statements unless they are satisfied
that they give a true and fair view of the state of affairs of the company and of the profit or loss of the
We have nothing to report in respect of the following matters in relation to which the ISAs (UK) require
company for that period. In preparing these financial statements, the directors are required to:
us to report to you where:

-- select suitable accounting policies and then apply them consistently;

-- the directors’ use of the going concern basis of accounting in the preparation of the financial
statements is not appropriate; or
-- make judgements and accounting estimates that are reasonable and prudent;
-- the directors have not disclosed in the financial statements any identified material uncertainties
The directors are responsible for keeping adequate accounting records that are sufficient to show and that may cast significant doubt about the company’s ability to continue to adopt the going
explain the company’s transactions and disclose with reasonable accuracy at any time the financial concern basis of accounting for a period of at least twelve months from the date when the
position of the company and enable them to ensure that the financial statements comply with the financial statements are authorised for issue.
Companies Act 2006. They are also responsible for safeguarding the assets of the company and
hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
However, as we cannot predict all future events or conditions and as subsequent events may result in
outcomes that are inconsistent with judgements that were reasonable at the time they were made,
STATEMENT AS TO DISCLOSURE OF INFORMATION TO AUDITORS the absence of reference to a material uncertainty in this auditor’s report is not a guarantee that the
company continue in operation.
So far as the directors are aware, there is no relevant audit information (as defined by Section 418 of
the Companies Act 2006) of which the company’s auditors are unaware, and each director has taken
all the steps that he ought to have taken as a director in order to make himself aware of any relevant
audit information and to establish that the company’s auditors are aware of that information.

BIRLASOFT LIMITED (Subsidiaries Annual Report 2019-20) 8

 Birlasoft Solutions Limited

Other information Income Statement

For the year ended 31 March 2020
The directors are responsible for the other information. The other information comprises the
information in the Report of the Directors, but does not include the financial statements and our Year ended Period
Report of the Auditors thereon. 31/3/20 18/4/18
to
Our opinion on the financial statements does not cover the other information and, except to the 31/3/20
extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion Notes £ £
thereon.
TURNOVER 3 9,161,307 3,555,237
In connection with our audit of the financial statements, our responsibility is to read the other
Cost of sales 7,927,825 3,071,76
information and, in doing so, consider whether the other information is materially inconsistent with
the financial statements or our knowledge obtained in the audit or otherwise appears to be materially GROSS PROFIT 1,233,482 483,474
misstated. If we identify such material inconsistencies or apparent material misstatements, we
are required to determine whether there is a material misstatement in the financial statements Administrative expenses 1,372,922 249,195
or a material misstatement of the other information. If, based on the work we have performed, we
(139,440) 234,279
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. Other operating income 100 283,480

Opinions on other matters prescribed by the Companies Act 2006 OPERATING (LOSS)/PROFIT 5 (139,340) 517,759

Interest payable and 6 362,589 114,692

In our opinion, based on the work undertaken in the course of the audit: similar expenses
-- the information given in the Report of the Directors for the financial year for which the financial (LOSS)/PROFIT BEFORE (501,929) 403,067
statements are prepared is consistent with the financial statements; and TAXATION
-- the Report of the Directors has been prepared in accordance with applicable legal Tax on (loss)/profit 7 - 76,676
requirements.
(LOSS)/PROFIT FOR THE (501,929) 326,391
FINANCIAL YEAR
Matters on which we are required to report by exception

In the light of the knowledge and understanding of the company and its environment obtained in the
course of the audit, we have not identified material misstatements in the Report of the Directors.
Balance Sheet
We have nothing to report in respect of the following matters where the Companies Act 2006 requires For the year ended 31 March 2020
us to report to you if, in our opinion:
2020 2019
-- adequate accounting records have not been kept, or returns adequate for our audit have not
Notes £ £ £ £
been received from branches not visited by us; or
FIXED ASSETS
-- the financial statements are not in agreement with the accounting records and returns; or
Tangible assets 8 2,750 1,947
-- certain disclosures of directors’ remuneration specified by law are not made; or
Investments 9 8,027,329 8,027,329
-- we have not received all the information and explanations we require for our audit; or
8,030,079 8,029,276
-- the directors were not entitled to prepare the financial statements in accordance with the small
companies regime and take advantage of the small companies’ exemption from the requirement CURRENT ASSETS
to prepare a Strategic Report or in preparing the Report of the Directors.
Debtors 10 7,575,340 8,395,879
Responsibilities of directors Cash at bank 1,060,407 839,315

As explained more fully in the Directors’ Responsibilities Statement set out on pages two and three, 8,635,747 9,235,194
the directors are responsible for the preparation of the financial statements and for being satisfied
CREDITORS
that they give a true and fair view, and for such internal control as the directors determine necessary
to enable the preparation of financial statements that are free from material misstatement, whether Amounts falling due 11 5,677,986 5,691,904
due to fraud or error. within one year

NET CURRENT ASSETS 2,957,761 3,543,290

In preparing the financial statements, the directors are responsible for assessing the company’s
ability to continue as a going concern, disclosing, as applicable, matters related to going concern TOTAL ASSETS LESS 10,987,840 11,572,566
and using the going concern basis of accounting unless the directors either intend to liquidate the CURRENT LIABILITIES
company or to cease operations, or have no realistic alternative but to do so.
CREDITORS
Auditors’ responsibilities for the audit of the financial statements Amounts falling due after 12 (10,662,781) (10,745,578)
more than one year
Our objectives are to obtain reasonable assurance about whether the financial statements as a
whole are free from material misstatement, whether due to fraud or error, and to issue a Report of PROVISIONS FOR 13 (597) (597)
the Auditors that includes our opinion. Reasonable assurance is a high level of assurance, but is LIABILITIES
not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material
NET ASSETS 324,462 826,391
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 CAPITAL AND RESERVES
decisions of users taken on the basis of these financial statements.
Called up share capital 14 500,000 500,000
A further description of our responsibilities for the audit of the financial statements is located on Retained earnings 15 (175,538) 326,391
the Financial Reporting Council’s website at www.frc.org.uk/auditorsresponsibilities. This description
forms part of our Report of the Auditors. SHAREHOLDERS’ FUNDS 324,462 826,391

Use of our report The financial statements have been prepared in accordance with the provisions applicable to
companies subject to the small companies regime.
This report is made solely to the company’s members, as a body, in accordance with Chapter 3 of Part
16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the The financial statements were authorised for issue by the Board of Directors and authorised for issue
company’s members those matters we are required to state to them in a Report of the Auditors and on 11 May 2020 and were signed on its behalf by:
for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility
to anyone other than the company and the company’s members as a body, for our audit work, for this
report, or for the opinions we have formed.
S Phadke (Senior Statutory Auditor)
B R Adavikolanu - Director
for and on behalf of Butler & Co LLP
Chartered Accountants & Statutory Auditor
Third Floor
126-134 Baker Street
London
W1U 6UE

11 May 2020

BIRLASOFT LIMITED (Subsidiaries Annual Report 2019-20) 9

Notes to the Financial Statements For financial assets measured at cost less impairment, the impairment loss is measured as the
difference between an asset’s carrying amount and best estimate of the recoverable amount.
For the year ended 31 March 2020
which is an approximation of the amount that the company would receive for the asset if it were
to be sold at the reporting dale.
1. STATUTORY INFORMATION
Financial assets and liabilities are offset and the net amount reported in the statement of financial
Birlasoft Solutions Ltd is a private company, limited by shares, registered in England and Wales. position when there is an enforceable right to set off the recognised amounts and there is an
The company’s registered number and registered office address can be found on the Company intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
Information page.
Taxation
The presentation currency of the financial statements is the Pound Sterling (£).
Taxation for the year comprises current and deferred tax. Tax is recognised in the Income
2. ACCOUNTING POLICIES Statement, except to the extent that it relates to items recognised in other comprehensive
income or directly in equity.
Basis of preparing the financial statements
Current or deferred taxation assets and liabilities are not discounted.
These financial statements have been prepared in accordance with Financial Reporting Standard
102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” including Current tax is recognised at the amount of tax payable using the tax rates and laws that have
the provisions of Section 1A “Small Entities” and the Companies Act 2006. The financial been enacted or substantively enacted by the balance sheet date.
statements have been prepared under the historical cost convention.
Deferred tax
Going Concern
Deferred tax is recognised in respect of all timing differences that have originated but not
The financial statements have been prepared on a going concern basis on the assumption reversed at the balance sheet date.
that the company will continue to trade in the foreseeable future. The Company Directors
having made appropriate enquiries consider that adequate resources exist for the Company to
Timing differences arise from the inclusion of income and expenses in tax assessments in
continue in operational existence for the foreseeable future and with the continued support of
periods different from those in which they are recognised in financial statements. Deferred tax is
the company’s shareholder, the company will be able to meet its liabilities as they fall due for
measured using tax rates and laws that have been enacted or substantively enacted by the year
payment.
end and that are expected to apply to the reversal of the timing difference.

The parent company, Birlasoft Limited, has agreed to invest in the company, by way of an
Unrelieved tax losses and other deferred tax assets are recognised only to the extent that it is
additional capital contribution, an amount not exceeding £8.50m. The amount will be provided
probable that they will be recovered against the reversal of deferred tax liabilities or other future
as and when required by the company. Therefore, the directors are of the opinion that it is
taxable profits.
appropriate to adopt the going concern basis in preparing the financial statements.

Hire purchase and leasing commitments

Since the financial year end, there are uncertainties relating to COVID19 pandemic which may
impact on recoverability of the investments and debtors. No provisions have been made in the
financial statements. Rentals paid under operating leases are charged to profit or loss on a straight line basis over
the period of the lease.
Preparation of consolidated financial statements

3. TURNOVER
The financial statements contain information about Birlasoft Solutions Ltd as an individual
company and do not contain consolidated financial information as the parent of a group. The
company is exempt under Section 399(2A) of the Companies Act 2006 from the requirements The turnover and loss (2019 - profit) before taxation are attributable to the one principal activity
to prepare consolidated financial statements. of the company.

Critical accounting judgements and key sources of estimation uncertainty An analysis of turnover by geographical market is given below:

Year ended Period 18/4/18

The preparation of the financial statements requires the directors to make significant 31/3/20 to 31/3/19
judgements and estimates. These estimates and judgements are continually reviewed and are
based on experience and other factors including expectations of future events that are believed £ £
to be reasonable under the circumstances.
United Kingdom 6,715,124 2,527,744
The areas of judgement and estimates applied by the directors are not considered sufficiently Europe 1,509,336 770,778
significant to require disclosure in these financial statements.
United States of America 936,847 256,715
Turnover 9,161,307 3,555,237

Turnover represents amounts receivable for services provided net of VAT. Revenue on perpetual
software licences is recognised on approval by the customer providing there are no unfulfilled 4. EMPLOYEES AND DIRECTORS
obligations.
Year ended Period 18/4/18
Revenue for software services is recognised on the basis of services rendered. In case of time 31/3/20 to 31/3/19
& material contracts, invoices are raised on the basis of customer approved timesheets. In case £ £
of fixed price projects, invoices are raised for prescribed milestones achieved on the basis of Wages and salaries 1,609,565 682,220
acceptance / sign-off received from customer.
Social security costs 127,994 68,338
Tangible fixed assets
1,737,559 750,558

Depreciation is provided at the following annual rate in order to write off each asset over its The average number of employees during the year was as follows:
estimated useful life.
IT support 23 20
Fixtures and fittings -33.33% on reducing balance Administration 4 4

27 24
Investments in subsidiaries

Investments in subsidiary undertakings are recognised at cost.

5. OPERATING (LOSS)/PROFIT

Financial instruments The operating loss (2019 - operating profit) is stated after charging/(crediting):

Year ended Period 18/4/18

The company only enters into basic financial instrument transactions that result in the 31/3/20 to 31/3/19
recognition of financial assets and liabilities like trade and other debtors and creditors, accrued £ £
expenses and related parties balances.
Depreciation - owned assets 1,487 776
Debt instruments that are payable or receivable within one year. typically trade debtors and
Auditors’ remuneration 5,500 5,500
creditors. are measured, initially and subsequently, at the undiscounted amount of the cash or
other consideration expected to be paid or received. Foreign exchange differences 631,781 (283,480)

Financial assets that are measured at cost and amortised cost are assessed at the end of each
reporting period for objective evidence of impairment. If objective evidence of impairment is
found. an impairment loss is recognised in the statement of comprehensive income.

BIRLASOFT LIMITED (Subsidiaries Annual Report 2019-20) 10

 Birlasoft Solutions Limited

6. INTEREST PAYABLE AND SIMILAR EXPENSES 10. DEBTORS: AMOUNTS FALLING DUE WITHIN ONE YEAR
Year ended Period 18/4/18 2020 2019
31/3/20 to 31/3/19 £ £
£ £
Trade debtors 3,735,784 4,706,303
Interest on late paid tax 103 -
Amounts owed by 3,525,762 2,768,342
Interest payable 362,486 114,692 group undertakings
362,589 114,692 Other debtors 313,794 921,234

7,575,340 8,395,879
7. TAXATION
11. CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR
Analysis of the tax charge
2020 2019
The tax charge on the loss for the year was as follows: £ £
Year ended Period 18/4/18 Amounts owed to 4,929,209 4,063,912
31/3/20 to 31/3/19 group undertakings
£ £
Taxation and social security 267,459 407,240
Current tax:
UK corporation tax - 76,676 Other creditors 481,318 1,220,752
Tax on (loss)/profit - 76,676 5,677,986 5,691,904

8. TANGIBLE FIXED ASSETS 12. CREDITORS: AMOUNTS FALLING DUE AFTER MORE THAN ONE YEAR
Plant and 2020 2019
machinery etc £ £
£
Amounts owed to 10,662,781 10,745,578
COST group undertakings
At 1 April 2019 11,880
Birlasoft Solutions Inc (formerly KPIT Infosystems USA) have given a loan to Birlasoft Solutions
Additions 2,290 Limited on 4 December 2018, for its investment capital requirements. Birlasoft Solutions
Limited shall be liable to pay interest at 6 months LIBOR on the amount due within 15 days of
At 31 March 2020 14,170 end of each financial year of Birlasoft Limited India. Birlasoft Solutions Limited shall repay the
entire loan within a period not exceeding thirty-six (36) months from the date the loan is given.
DEPRECIATION

At 1 April 2019 9,933 The loan balance outstanding at the end of the period is £8,808,183.
Charge for year 1,487
Birlasoft Solutions France (formerly KPIT Technologies France) have given a loan to Birlasoft
At 31 March 2020 11,420 Solutions Limited on 17 December 2018, for its working g capital requirements. Birlasoft
Solutions Limited shall be liable to pay interest at 6 months LIBOR on the amount due within
NET BOOK VALUE 15 days of end of each financial year of Birlasoft Limited India. Birlasoft Solutions Limited shall
repay the entire loan within a period not exceeding thirty-six (36) months from the date the
At 31 March 2020 2,750
loan is given.
At 31 March 2019 1,947
The loan balance outstanding at the end of the period is £1,854,598.

9. FIXED ASSET INVESTMENTS

13. PROVISIONS FOR LIABILITIES
Shares in group
undertakings 2020 2019
£ £ £
COST Deferred tax 597 597
At 1 April 2019 and 31 March 2020 8,027,329 Deferred tax
£
NET BOOK VALUE
Balance at 1 April 2019 597
At 31 March 2020 8,027,329
Balance at 31 March 2020 597
At 31 March 2019 8,027,329

The company’s investments at the Balance Sheet date in the share capital of companies include 14. CALLED UP SHARE CAPITAL
the following:
Allotted, issued and fully paid:

Birlasoft Solutions GmbH (formerly KPIT Solutions GmbH) Number: Class: Nominal 2020 2019
Registered office: Detmolder Str. 235 - 33605 Bielefeld value: £ £
Nature of business: IT services
500,000 Ordinary 1 500,000 500,000
Class of shares: %
Ordinary holding
15. RESERVES
100.00
2020 2019 Retained earnings
£ £ £

Aggregate capital and reserves (97,610) 252,616 At 1 April 2019 326,391

Loss for the year/period (351,300) (360,482) Deficit for the year (501,929)

At 31 March 2020 (175,538)
Birlasoft Solutions Limited is acting as a ‘Guarantor’. As per the agreement the guarantor shall
pay all such amounts payable by Birlasoft Solutions Gmbh (formerly KPIT Solutions GmbH) as
though the guarantor instead of Birlasoft Solutions Gmbh (formerly KPIT Solutions GmbH was 16. RELATED PARTY DISCLOSURES
expressed to be the principal debtor.
The company has taken advantage of exemption, under the terms of Financial Reporting
Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland’,
not to disclose related party transactions with wholly owned subsidiaries within the group, other
than those described in (Note. 12].

BIRLASOFT LIMITED (Subsidiaries Annual Report 2019-20) 11

17. ULTIMATE CONTROLLING PARTY

The ultimate controlling party and ultimate and immediate parent company is Birlasoft Limited,
a company registered in India.

Birlasoft Limited is the parent undertaking of the only group for which consolidated financial
statements are prepared. These financial statements may be obtained by the public from
Birlasoft Limited India, Plot 35 & 6, Rajiv Gandhi InfoTech Park, Hinjewadi, Pune - 411 057,
India.

Trading and Profit and Loss Account

For the year ended 31 March 2020

Year ended Period 18/4/18

31/3/20 to 31/3/19

£ £ £ £

Sales 9,161,307 3,555,237

Cost of sales

Purchases 5,334,176 1,911,612

Wages 1,181,997 577,243

Social security 117,855 58,907

Sub contractors 1,293,797 524,001

7,927,825 3,071,763

GROSS PROFIT 1,233,482 483,474

Other income

Sundry receipts 100 -

Exchange gains - 283,480

100 283,480

1,233,582 766,954

Expenditure

Wages 427,568 104,977

Social security 10,139 9,431

Rent 27,990 13,923

Insurance 5,954 -

Office expenses 5,551 55

Advertising 25,646 -

Travelling 148,989 68,393

Repairs and 3,038 -

renewals

Staff welfare 817 1,668

Recruitment - 6,992
expenses

Sundry expenses 80 1,206

Accountancy - 2,650

Subscriptions 26,026 -

Professional fees 5,774 33,544

Legal fees 1,714 -

Auditors’ 5,500 5,500

remuneration

Foreign
exchange losses 631,781 -

Bad debts 44,537 -

1,371,104 248,339

(137,522) 518,615

Finance costs

Bank charges 331 80

Interest on 103 -
late paid tax

Interest payable 362,486 114,692

362,920 114,772

Depreciation

Fixtures and 1,487 776

fittings

NET (LOSS)/ (501,929) 403,067

PROFIT

BIRLASOFT LIMITED (Subsidiaries Annual Report 2019-20) 12

 Birlasoft Solutions France

Birlasoft Solutions France

(Formerly KPIT Technologies France)
Registered Office: 19 boulevard Malesherbes 75008 Paris, France.

Board’s Report Auditors’ report on the financial statements

As at 31 March 2020
Dear Shareholders,
Dear Shareholders,
Your Board of Directors is pleased to present their Fourteenth report on the operations of the Company
together with the audited accounts for the financial year ended March 31, 2020. Opinion

Financial Results In compliance with the engagement entrusted to us by your annual general meeting, we have audited
the accompanying financial statements of Birlasoft Solutions France S.A.S. for the year ended March
Particulars 2019-20 2018-19
31, 2020. These financial statements were approved by the Board of Directors on April 17, 2020 based
Euro Euro
on the information available at that date and in the evolving context of the Covid-19 pandemic.
Total Income 4,584,813 3,843,283
In our opinion, the financial statements give a true and fair view of the assets and liabilities and of the
Net Profit / (Loss) for the year 498,065 367,672 financial position of the Company as at 31 March 2020 and of the results of its operations for the year
then ended in accordance with French accounting principles.

Basis for Opinion

Operations

Audit Framework
During the year under review, the total income of the Company increased by 19.29% resulting in
increase of net profit by 35.47 %.
We conducted our audit in accordance with professional standards applicable in France. We believe
that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
Name Change
opinion.

During the year under review, the name of the Company was changed from KPIT Technologies France
Our responsibilities under those standards are further described in the Statutory Auditor’
to Birlasoft Solutions France.
Responsibilities for the Audit of the Financial Statements section of our report.

Change in Management
Independence

During the year under review, Mr. Dharmander Kapoor was appointed as a Director and Mr. Anjan
We conducted our audit engagement in compliance with independence rules applicable to us, for the
Lahiri & Mr. Rajeev Gupta, Directors of the Company resigned from their positions. Further, Mr.
period from 1st April 2019 to the date of our report and specifically we did not provide any prohibited
Shreeranganath Kulkarni is also appointed as a Director w.e.f. April 16, 2020.
non-audit services referred to in the French Code of ethics (code de déontologie) for statutory
auditors.
Audit
Justification of Assessments
The Company is required by the local laws to have an independent audit firm to audit the books of
accounts of the Company and to issue a report to the shareholders. Therefore, the Company appointed
In accordance with the requirements of articles L.823-9 and R.823-7of the French Commercial
KPMG S.A. as auditors to conduct the audit and the audit report issued by the auditors is attached with
Code (“Code de commerce”) relating to the justification of our assessments, we inform you that the
the accounts of the Company.
most important assessments made by us according to our professional judgment focused on the
appropriateness of the accounting principles used and the presentation of financial statements taken
For and on behalf of the Board of Directors as a whole.
Birlasoft Solutions France
These matters were addressed in the context of our audit of the financial statements as a whole,
approved in the context described above, and in forming our opinion thereon, and we do not provide
London Venkatarama Bheemeshwar Rao Adavikolanu
a separate opinion on specific items of the financial statements.
May 11, 2020 Director

Specific Verifications

We have also performed, in accordance with professional standards applicable in France, the specific
verifications required by French laws and regulations.

We have no matters to report as to the fair presentation and the consistency with the financial
statements of the information given in the documents with respect to the financial position and the
financial statements provided to Shareholders.

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

Management is responsible for the preparation and fair presentation of thefinancial statements
in accordance with French accounting principles and for such internal control as management
determines is necessary to enable the preparation of financial statements that 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 it is expected to liquidate the Company or
to cease operations.

The financial statements were approved by the Board of Directors.

Statutory Auditor’s Responsibilities for the Audit of the Financial Statements

Our role is to issue a report on the financial statements. Our objective is to obtain reasonable assurance
about whether the financial statements as a whole are free from material misstatement. Reasonable
assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance
with professional standards 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
financial statements.

As specified in Article L.823-10-1 of the French Commercial Code (code de commerce), our statutory
audit does not include assurance on the viability of the Company or the quality of management of the
affairs of the Company.

BIRLASOFT LIMITED (Subsidiaries Annual Report 2019-20) 13

As part of an audit conducted in accordance with professional standards applicable in France, the
statutory auditor exercises professional judgment throughout the audit and furthermore:
Balance Sheet
As at 31 March 2020

• Identifies and assesses the risks of material misstatement of the financial statements, whether
(Amount in Euro)
due to fraud or error, designs and performs audit procedures responsive to those risks, and
obtains audit evidence considered to be sufficient and appropriate to provide a basis for his Current Year Past Year
opinion. The risk of not detecting a material misstatement resulting from fraud is higher than 31 March 2020 31 March
for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, 2019
misrepresentations, or the override of internal control. Brut Depr.& Net Net

ASSETS
• Obtains an understanding of internal control relevant to the audit in order to design audit
procedures that are appropriate in the circumstances, but not for the purpose of expressing an Fixed assets
opinion on the effectiveness of the internal control.
Concessions, patents and similar rights 23 000,00 23 000,00
• Evaluates the appropriateness of accounting policies used and the reasonableness of accounting
Other tangible fixed assets 45 729,38 43 522,49 2 206,89 9 455,69
estimates and related disclosures made by management in the financial statements.
Loans 2 077 500,01 2 077 500,01 2 370 607,05
• Assesses the appropriateness of management’s use of the going concern basis of accounting
Other fixed assets 9 230,80 9 230,80 18 511,66
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 TOTAL (I) 2 155 460,19 66 522,49 2 088 937,70 2 398 574,40
going concern. This assessment is based on the audit evidence obtained up to the date of his
audit report. However, future events or conditions may cause the Company to cease to continue Current assets
as a going concern. If the statutory auditor concludes that a material uncertainty exists, there
is a requirement to draw attention in the audit report to the related disclosures in the financial Trade and related accounts 3 888 796,42 3 888 796,42 1 086 836,98
statements or, if such disclosures are not provided or inadequate, to modify the opinion Other receivables
expressed therein.
- Debtors suppliers 36 004,12 36 004,12 976,32
• Evaluates the overall presentation of the financial statements and assesses whether these
- State, turnover tax 3 911,95 3 911,95 11 675,31
statements represent the underlying transactions and events in a manner that achieves fair
presentation. - Other 1 132,73 1 132,73 486,13

Cash 1 172 275,41 1 172 275,41 989 924,51

Amiens, on the 11 May 2020
Prepaid expenses 1 055 846,68 1 055 846,68 38 533,72

TOTAL (II) 6 157 967,31 6 157 967,31 2 128 432,97

Charges to be spread over

several periods (III)

Premium for redemption of bonds (IV)

Unrealized exchange losses (V)

TOTAL ASSETS (0 à V) 8 313 427,50 66 522,49 8 246 905,01 4 527 007,37

BIRLASOFT LIMITED (Subsidiaries Annual Report 2019-20) 14

 Birlasoft Solutions France

Equity and Liabilities Income Statement

As at 31 March 2020 As at 31 March 2020

(Amount in Euro) (Amount in Euro)

31 March 2020 31 March 2019 Past Variation

Current Year Year in 12
Shareholders’ equity 31 March 2020 31 March months
2019 (12/12)
Share capital ( paid-up capital : 100 000,00 ) 100 000,00 100 000,00
France Export Total Total Variation
Legal reserve 14 987,32 14 987,32
Sales of 2 095 340,56 2 389 102,39 4 484 442,95 3 748 766,71 735 676
Retained (profits / losses) brought forward merger 2 637 298,73 2 269 626,62
manufactured services
Net income or loss of the tax year 498 065,26 367 672,11
Net turnover 2 095 340,56 2 389 102,39 4 484 442,95 3 748 766,71 735 676
TOTAL(I) 3 250 351,31 2 752 286,05
Recaptures on
TOTAL(II) deprecations and 98 244,00 91 972,41 6 272
reserves, expense
Provisions for liabilities and charges transfer

TOTAL (III) Other operating income 2 126,41 2 544,01 -418

Loans and debts Total operating income 4 584 813,36 3 843 283,13 741 530

- Bank overdrafts 898,71 Other purchases and

external expenses 2 640 315,79 2 375 586,92 264 729
Other financial borrowing and debts
Taxes and assimilated
Trade notes and related accounts payable 1 782 767,66 1 357 922,43
payments 19 168,23 33 241,41 -14 073
Tax payable and social liabilities
Salaries and wages
- Staff 106 426,60 92 705,44 expenses 865 463,67 730 803,62 134 660

- Payroll taxes 138 577,41 65 855,80 Social security expenses 400 825,17 316 026,08 84 799

- State, profit tax 142 145,00 20 255,00 Operating allowances

on fixed assets : 2 669,35 11 149,67 -8 480
- State, turnover tax 535 180,42 140 341,56 depreciation allowances

- Other taxes 6 908,29 21 673,88 Other expenses 497,86 107,95 390

Other debts 99 889,41 19 743,46 Total operating

expenses 3 928 940,07 3 466 915,65 462 025
Prepaid income 2 183 760,20 56 223,75
OPERATING RESULT 655 873,29 376 367,48 279 506
TOTAL(IV) 4 996 553,70 1 774 721,32
Other holdings and
TOTAL LIABILITIES (I à V) 8 246 905,01 4 527 007,37
capitalized receivables 69 447,07 51 559,07 17 888

Profits on foreign
exchange 34,18 3 715,45 -3 681

Total financial income 69 481,25 55 274,52 14 207

Interests and
assimilated expenses 6 440,00 1 385,00 5 055

Loss on foreign
exchange 11 128,83 35,15 11 093

Total financial
expenses 17 568,83 1 420,15 16 148

FINANCIAL RESULT 51 912,42 53 854,37 -1 942

Ordinary result
before tax 707 785,71 430 221,85 277 564

Extraordinary
capital gains 2 000,00 714,94 1 286

Total extraordinary
income 2 000,00 714,94 1 286

Extraordinary operating
losses 108,36 -108

Extraordinary capital
losses 6 798,45 457,32 6 341

Total extraordinary
expenses 6 798,45 565,68 6 233

EXTRAORDINARY
RESULT -4 798,45 149,26 -4 947

Income tax 204 922,00 62 699,00 142 223

Total Income 4 656 294,61 3 899 272,59 757 022

Total expenses 4 158 229,35 3 531 600,48 626 629

NET RESULT 498 065,26 367 672,11 130 393

BIRLASOFT LIMITED (Subsidiaries Annual Report 2019-20) 15

Balance Sheet - Assets Balance Sheet - Equity and Liabilities
As at 31 March 2020 As at 31 March 2020

(Amount in Euro) (Amount in Euro)

Current Year Past Year 31 March 2020 31 March 2019

31 March 2020 31 March
2019 Shareholders’ equity
Brut Depr.& Net Net
Share capital ( paid-up capital : 100 000,00 ) 100 000,00 100 000,00
Fixed assets
Share capital 100 000,00 100 000,00
Concessions, patents and similar rights 23 000,00 23 000,00
Legal reserve 14 987,32 14 987,32
CONCESS.BREVETS LICENCES 23 000,00 23 000,00 23 000,00
Legal Reserves 14 987,32 14 987,32
AMORT.CONC.BREVETS LICENCE 23 000,00 -23 000,00 -23 000,00
Retained (profits / losses) brought forward merger 2 637 298,73 2 269 626,62
Other tangible fixed assets 45 729,38 43 522,49 2 206,89 9 455,69
Profit or loss carried forward 2 637 298,73 2 269 626,62
Others installation and fiting 11 872,91
Net income or loss of the tax year 498 065,26 367 672,11
Office and computer equipement 29 929,88 29 929,88 27 710,88
TOTAL(I) 3 250 351,31 2 752 286,05
Office equipment 15 799,50 15 799,50 15 799,50
TOTAL(II)
Amortisation of others instal -4 840,62
Provisions for liabilities and charges
Amortisation of office and comput 27 968,30 -27 968,30 -27 112,74
TOTAL (III)
AMORT. MOBILIER 15 554,19 -15 554,19 -13 974,24
Loans and debts
Loans 2 077 500,01 2 077 500,01 2 370 607,05
- Bank overdrafts 898,71
AUTRES PRETS 350 000,00
Bank SG 898,71
LOAN UK 1 2 000 000,00 2 000 000,00 2 000 000,00
Other financial borrowing and debts
INT COUR/PRETS 3 107,04
Trade notes and related accounts payable 1 782 767,66 1 357 922,43
INT COURUS PRET UK 77 500,01 77 500,01 17 500,01
Suppliers and related accounts 1 603 754,17 1 266 355,19
Other fixed assets 9 230,80 9 230,80 18 511,66
Sup - invoices to be received 17 530,42 44 506,85
Deposit 9 230,80 9 230,80 18 511,66
Ceedit note KPINDE UNBILLED 161 483,07 47 060,39
TOTAL (I) 2 155 460,19 66 522,49 2 088 937,70 2 398 574,40
Tax payable and social liabilities
Current assets
- Staff 106 426,60 92 705,44
Trade and related accounts 3 888 796,42 3 888 796,42 1 086 836,98
Staff remuneration payable 21 708,89
Customers and related accounts 3 630 916,78 3 630 916,78 886 244,08
Accrued paid holidays 67 930,49 38 247,03
Customers - Invoices to be issued 257 879,64 257 879,64 200 592,90
Accrued salary 33 582,07 29 705,79
Other receivables
Accrued paid RTT 4 914,04 3 043,73
- Debtors suppliers 36 004,12 36 004,12 976,32
- Payroll taxes 138 577,41 65 855,80
Suppliers and related accounts - 36 004,12 36 004,12 976,32
Social security 62 676,00 16 447,00
- State, turnover tax 3 911,95 3 911,95 11 675,31
Others social agencies (capimmec) 11 830,60 6 449,55
TVA DED/ ACH PREST IMM 20% 3 875,31
Others social agencies (prévoyanc 7 994,51 2 256,42
VAT - deductible 990,26 990,26 382,23
Others social agencies (mutuelle) 3 127,53
VAT acc on invoice to be recei 2 921,69 2 921,69 7 417,77
Acc soc charge on paid holida 33 965,24 19 123,52
- Other 1 132,73 1 132,73 486,13
Social agencies - Accrued amounts 16 791,04 14 852,92
Others debtors 863,42 863,42
Other accrued social agencies 2 863,00 2 077,00
NDF ASHISH MUDDALKAR 486,13
Acc soc charge on paid RTT 2 457,02 1 521,86
NDF SURESH VEMULAPALLI 269,31 269,31
- State, profit tax 142 145,00 20 255,00
Cash 1 172 275,41 1 172 275,41 989 924,51
Income tax 142 145,00 20 255,00
Bank SG 1 995,59
- State, turnover tax 535 180,42 140 341,56
Bank HSBC 1 172 275,41 1 172 275,41 987 928,92
Turnover tax VAT payable 13 619,00 39 449,00
Prepaid expenses 1 055 846,68 1 055 846,68 38 533,72
TVA coll 20% 514 188,92 73 102,14
Prepaid expenses 5 417,90 5 417,90 1 988,28
TVA COLL / ACH PREST IMM 2 3 875,31
Prepaid expenses ss traitance 590,40 590,40 36 545,44
VAT Accrued on customers not yet 7 372,50 23 915,11
PREPAID EXPENSES POC 1 049 838,38 1 049 838,38
- Other taxes 6 908,29 21 673,88
TOTAL (II) 6 157 967,31 6 157 967,31 2 128 432,97
Withdrawal at source 6 170,29 3 435,88
Charges to be spread over several periods (III)
Others taxes Accrued amount payab 738,00 18 238,00
Premium for redemption of bonds (IV)
Other debts 99 889,41 19 743,46
Unrealized exchange losses (V)
Customers and related accounts - 93 151,55 7 200,00
TOTAL ASSETS (0 à V) 8 313 427,50 66 522,49 8 246 905,01 4 527 007,37

BIRLASOFT LIMITED (Subsidiaries Annual Report 2019-20) 16

 Birlasoft Solutions France

(Amount in Euro)
Income Statement
As at 31 March 2020
31 March 2020 31 March 2019 (Amount in Euro)

NDF CAROLE BRUN 10,20 1 273,14 Past Variation

Current Year Year in 12
NDF SUDHIR BHISE 1 509,00 31 March 2020 31 March months
2019 (12/12)
NDF VIRAL JESALPURA 2 104,92
France Export Total Total Variation
NDF RIHAM LOTFY 90,00
Sales of 2 095 340,56 2 389 102,39 4 484 442,95 3 748 766,71 735 676
NDF MASKATI Abbas 1 647,40 1 500,00
manufactured services
NDF Pawan Kr.Mishra 1 433,00 1 419,00
Sales of services 20% 1 194 997,19 1 194 997,19 1 242 979,94 -47 982
NDF NEHA AGARWAL 832,80
PRESTATION LEGRAND 20% 895 640,97 895 640,97 700 642,91 194 998
NDF TULJAPURKAR 5 413,60
Sales 0 % 2 153 187,82 2 153 187,82 1 688 530,47 464 657
NDF BAKSHI SALMAN 1 500,00
Frais refacturation 20% 4 702,40 4 702,40 69 413,06 -64 711
NDF UMESH KULKARNI 486,46
Recharging cost 0 % 1 544,77 -1 544
NDF SPANDAN KONDEPUDI 61,80
Recharging cost inde 235 914,57 235 914,57 45 655,56 190 259
Prepaid income 2 183 760,20 56 223,75
Net turnover 2 095 340,56 2 389 102,39 4 484 442,95 3 748 766,71 735 676
Deferred income ss traitance 1 144,02 56 223,75
Recaptures on deprecations and 98 244,00 91 972,41 6 272
Deferred income POC 2 182 616,18 reserves, expense transfer

TOTAL(IV) 4 996 553,70 1 774 721,32 Orther avantage salaries 8 244,00 91 972,41 6 272

TOTAL LIABILITIES (I à V) 8 246 905,01 4 527 007,37 Other operating income 2 126,41 2 544,01 -418

Others current income 2 126,41 2 544,01 -418

Total operating income 4 584 813,36 3 843 283,13 741 530

Other purchases and external expenses 2 640 315,79 2 375 586,92 264 729

Operationnal subcontracting - KP 2 147 237,73 1 808 043,55 339 194

EXPENSES KPIT INDE 4 702,40 70 957,83 -66 255

EXPENSES KPUK 537,00 -537

EXPENSES KPIT USA 48 136,91 46 006,35 2 130

FOURN.NON STOCK.(ELECT.) 167,14 577,14 -410

Non invetory materials and sup 1 081,95 730,43 351

Non inventory materials 238,41 314,25 -76

Administrative furniture and mate 599,39 455,70 144

SOUS TRAITANCE KPIT UK 36 661,78 13 888,83 22 773

G & A COSTS KPIT INDIA 62 193,00 38 048,80 24 145

Rent and rental charges(offices) 53 742,02 67 210,18 -13 468

Other rent costs 1 693,91 9 710,90 -8 017

Maintenance and repairs 1 170,00 4 635,00 -3 465

Insurance 1 005,27 1 254,9 -249

Employe interim 19 240,23 -19 240

Fees 44 475,97 44 752,50 -277

Others fees 5 877,28 4 977,0 900

HONORAIRES OPENMIX GRISI 17 625,00 70 500,00 -52 875

Auditor Fees 8 274,36 8 331,60 -57

Lawyer Fees 27 740,88 19 022,50 8 718

Other fees 5,88 6,85 -1

Legal publications 464,66 464

Other transports 700,15 1 198,33 -498

Travel, external missions 148 087,19 117 998,35 30 089

Missions 175,45 -175

Postal and telecommunications 692,39 626,11 66

Costs mobil SFR 464,61 -464

FRAIS INTERNET 16 154,47 12 929,86 3 225

Bank and similar services 11 587,65 12 992,61 -1 405

Taxes and assimilated payments 19 168,23 33 241,41 -14 073

Taxes on wages and salaries (taxe 397,00 4 791,00 -4 394

Taxes on wages and salaries (form 4 934,23 3 466,41 1 468

Others taxes (taxe professionnell 13 837,00 8 883,00 4 954

WHITHOLDING TAX EGYPT MALA 16 101,00 -16 101

Salaries and wages expenses 865 463,67 730 803,62 134 660

Wages and salaries 722 109,10 612 822,84 109 287

BIRLASOFT LIMITED (Subsidiaries Annual Report 2019-20) 17

Holiday pay - accruals 29 683,44 -6 870,69 36 553 Appendices
As at 31 March 2020
RTT pay accruals 1 870,30 -769,72 2 639

Other salaries 41 650,00 -41 650 In the balance sheet before distribution for the financial year ended 31/03/2020 of which the total
is 8 246 905,01 Euros .
Other avantages 4 502,26 3 441,89 1 061

AVANTAGE EN NATURE LOGEMEN 103 422,29 91 972,41 11 450 And to the profit and loss account for the year showing a profit of 498 065,26 Euros, presented in
list form.
Accrued bonus VPI 10 551,28 -18 118,11 28 669

PROV PRIME RETENTION -6 675,00 6 675,00 -13 350

The financial year has a duration of 12 months, covering the period from 01/04/2020 to
31/03/2020.
Social security expenses 400 825,17 316 026,08 84 799
The following notes and tables form an integral part of the annual accounts.
Social security 214 624,19 186 391,78 28 233

Others social contributions (capi 86 190,89 76 061,94 10 129 The previous financial year had a duration of 12 months covering the period from 01/04/2018 to
31/03/2019.
Others social contributions (asse 34 505,01 28 988,43 5 517

Others social contributions (prev 10 695,45 9 560,67 1 135 1- HIGHLIGHTS OF THE YEAR

Others social contributions (mutu 20 107,99 13 736,91 6 371

1.1 COVID-19 CRISIS
Accrued soc contr / paid RTT 935,16 -384,86 1 319
Operations began to be affected by COVID-19 in the first quarter of the financial year 2020/2021,
Accrued soc contr / paid holid 14 841,73 -3 435,34 18 276 with few projects in progress, which will offset, if any, the negative impact on its financial
Accrued soc contrib 5 275,60 -9 058,98 14 333
statements as at March 31, 2021.

PROV CH/PRIME DE RETENTION -3 337,50 3 337,50 -6 674 At the date of the accounts closing of the financial statements at March 31, 2020 of the company,
the management is not aware of significant uncertainties which calls into question the valuation
Other benefits costs 2 794,40 2 992,1 -198
of assets recorded in the company’s balance sheet and the capacity of the entity to continue its
Indèmnité de repas 10 471,50 7 378,38 3 093 exploitation.

Other staff cost 1 703,75 1 170,03 533 The Company closely monitors any significant changes in economic conditions.
AUTRES DEPENSES DE PERSONN 2 017,00 44,50 1 973
2- ACCOUNTING POLICIES AND RULES
CICE -757,00 757

Operating allowances on fixed assets 2 669,35 11 149,67 -8 480 The general accounting conventions have been applied in accordance with the principle of
: depreciation allowances prudence, in line with the basic assumptions:

Depreciation of intangible off 5 238,88 -5 238 - going concern basis,

Depreciation of tangible assets 2 669,35 5 910,79 -3 241
- consistency of accounting policies from one year to the next,
Other expenses 497,86 107,95 390

Other current operating charges 497,86 86,72 411 - independence of financial years,

Diff de change commerciale 21,23 -21 and in accordance with the general rules for the preparation and presentation of annual financial
statements in compliance with the ANC 2014-03 accounting regulation.
Total operating expenses 3 928 940,07 3 466 915,65 462 025

OPERATING RESULT 655 873,29 376 367,48 279 506 The basic method used for the valuation of items recorded in the accounts is the historical cost
method.
Other holdings and capitalized receivables 69 447,07 51 559,07 17 888

PROD.DES AUTRES IMMO FINAN 69 447,07 51 559,07 17 888 The main methods used are as follows:

Profits on foreign exchange 34,18 3 715,45 -3 681

2.1 INTANGIBLE AND TANGIBLE FIXED ASSETS
Exchange gains 34,18 3 715,45 -3 681
Tangible fixed assets are valued at their acquisition or production cost, taking into account
Total financial income 69 481,25 55 274,52 14 207
the costs necessary to bring these assets into a usable condition, and after deducting trade
Interests and assimilated expenses 6 440,00 1 385,00 5 055 discounts, rebates and payment discounts obtained.

INTEREST WHITHOLDING EGYPT 6 440,00 1 385,00 5 055 Interest on borrowings specific to the production of fixed assets is not included in the cost of
production of these fixed assets.
Loss on foreign exchange 11 128,83 35,15 11 093

Foreing exchanges losses 11 128,83 35,15 11 093 Depreciation is calculated on a straight-line or declining balance basis over the expected useful
life of the asset:
Total financial expenses 17 568,83 1 420,15 16 148

FINANCIAL RESULT 51 912,42 53 854,37 -1 942

Ordinary result before tax 707 785,71 430 221,85 277 564 Computer programs 3 years

Extraordinary capital gains 2 000,00 714,94 1 286 Fixings, fittings, installations 8 to 10 years

EXCEPT PRODTS CESS ELEM AC 2 000,00 714,94 1 286 Office and computer equipment 3 years

Total extraordinary income 2 000,00 714,94 1 286 Furniture 10 years

Extraordinary operating losses 108,36 -108 Deposit and suretyship NA

EXCEPT DONS LIBERALITES 108,36 -108

Extraordinary capital losses 6 798,45 457,32 6 341

2.2 FINANCIAL FIXED ASSETS AND MARKETABLE SECURITIES
net value sold assets 6 798,45 457,32 6 341

Total extraordinary expenses 6 798,45 565,68 6 233 The gross value is the purchase cost excluding incidental expenses. When the inventory value is
lower than the gross value, an impairment loss is recognized for the amount of the difference.
EXTRAORDINARY RESULT -4 798,45 149,26 -4 947

Income tax 204 922,00 62 699,00 142 223 2.3 RECEIVABLES AND PAYABLES

Income tax 204 922,00 62 699,00 142 223

Receivables and payables are valued at their nominal value. Depreciation is applied when the
Total Income 4 656 294,61 3 899 272,59 757 022 inventory value is lower than the book value.

Total expenses 4 158 229,35 3 531 600,4 626 629

NET RESULT 498 065,26 367 672,11 130 393

BIRLASOFT LIMITED (Subsidiaries Annual Report 2019-20) 18

 Birlasoft Solutions France

3- ADDITIONAL INFORMATION RELATING TO THE BALANCE SHEET STATE OF DEBTS Gross Up to Between 1 More than
AND INCOME STATEMENT amount one year and 5 years 5 years

3.1 STATEMENT OF FIXED ASSETS AND DEPRECIATION Borrowings and debts with
credit institutions :

State of fixed assets - up to one year 899 899

Gross value of Increases Acquisitions, Suppliers and related accounts 1 782 768 1 782 768
fixed assets at Re-evaluation Creations,
the beginning during the item-to-item Personnel and related accounts 106 427 106 427
of the year year transfers
Social security and other social agencies 138 577 138 577
Other intangible assets 23,000
State and other public authorities :
Other facilities, fixtures and fittings 11,873
- Income Taxes 142 045 142 045
Office equipment, computers, furniture 43,510 2,219
- V.A.T 535 180 535 180
TOTAL 55,383 2,219
- Other taxes and duties 6 908 6 908
Loans and other financial assets 67,792
Other debts 99 889 99 889
TOTAL 2,389,119 67,792
Deferred income 2 183 760 2 183 760
GRAND TOTAL 2,467,502 70,011
GRAND TOTAL 4 996 554 4 996 554

Decreases By cession Gross Value Statutory
3.3 Income and credit notes receivable
By transfer or de- Fixed Assets revaluation
from item comissioning end of Original Amount of income and assets receivable Amount
to item the year Value end included in the following balance sheet items incl. VAT
of the year
Other financial fixed assets 77 500
Other intangible assets 23,000
Trade receivables and related accounts 257 880
Other facilities, fixtures and fittings 11,873
TOTAL 335 380
Office equipment, computers, furniture 45,729

TOTAL 11,873 45,729

3.4 Accrued expenses and credit notes to be established
Loans and other financial assets 370,180 2,086,731
Amount of accrued expenses and credit notes to be Amount
established included in the following balance sheet items incl. VAT

TOTAL 370,180 2,086,731 Trade payables and related accounts 179 013

GRAND TOTAL 382,053 2,155,460 Tax and social security liabilities 178 241

TOTAL 357 254

Depreciation statements

Situations and movements during the year 3.5 Prepaid expenses and income

Beginning of Endowments Outgoing End of Charges Products

fiscal year fiscal year items Revival fiscal year
Operating expenses / Income 1.055.847 2.183.760
Other intangible assets 23,000 23,000
TOTAL 1.055.847 2.183.760
Other facilities, fixtures and fittings 4,841 234 5,074
Prepaid expenses correspond to services invoiced by suppliers but not yet performed. Deferred income corresponds to
Office equipment, computers, furniture 41,087 2,436 43,522 services invoiced but not yet performed.

TOTAL 45,928 2,670 5,074 43,522 3.6 Composition of share capital

GRAND TOTAL 68,928 2,670 5,074 66,522 Number Nominal

value

shares making up the share capital at the 100 000 1,00

Breakdown of depreciation Movements affecting the
beginning of the financial year
charges for the year derogatory depreciation
shares making up the share capital at the 100 000 1,00
Straight-line Degressive Exception. Endowments Revivals
end of the financial year
Other facilities,
fixtures and fittings 234
3.7 Breakdown of net sales
Office equipment,
computers, furniture 2,436 Breakdown by sector of activity Amount

TOTAL 2,670 Services 4 484 443

GRAND TOTAL 2,670 TOTAL 4 484 443

3.2 MATURITY OF RECEIVABLES AND PAYABLES Breakdown by geographic market Amount

RECEIVABLES STATEMENT Gross Up to Over France 2 095 341

amount one year a year
Foreign 2 389 102
Loans 2 077 500 77 500 2 000 000
TOTAL 4 484 443
Other financial fixed assets 9 231 9 231

Other trade receivables 3 888 796 3 888 796 4- FINANCIAL LIABILITIES AND OTHER INFORMATION

- V.A.T 3 912 3 912

4.1 Intra-group benefits
Miscellaneous debtors 37 137 37 137
The company BIRLASOFT Limited invoices a subcontracting service to the company BIRLASOFT
Prepaid expenses 1 055 847 1 055 847 SOLUTIONS France SAS for the IT development carried out in India. The rate of invoicing is 65% of
the turnover before tax.
GRAND TOTAL 7 072 423 5 063 192 2 009 231

Repayment of loans during the year 350 000 Subcontracting services provided by other Group subsidiaries are invoiced using the Cost+ 5%
method.

BIRLASOFT LIMITED (Subsidiaries Annual Report 2019-20) 19

4.2 Fees paid to the Statutory Auditors

The Statutory Auditors’ fees amounted to €7,500 excluding VAT in respect of their legal assignment.

4.3 Average number of employees

Salaried employees Personnel made

available to the company

Executives 10

Employees 1

TOTAL 11

4.4 Commitments in respect of pensions, retirement and similar commitments

Commitments Senior staff Others Provisions

Retirement indemnities and 53 060,01

other benefits for active employees

TOTAL 53 060,01

They are calculated on the basis of the “Syntec” collective bargaining agreement, changes in
remuneration and demographics at 31 March 2020 with a discount rate of 1.42%, including social
security charges.

4.5 Revenue recognition

Revenues are recognized using the percentage-of-completion method with revenue recognized
based on the billable stage of completion.

4.6 Identity of the parent company consolidating the company’s accounts

BIRLASOFT Limited
Plot N° 35/36
Rajiv Gandhi Infotech Park
Phase 1, MIDC Hinjawadi
Pune - 411057 India.

BIRLASOFT LIMITED (Subsidiaries Annual Report 2019-20) 20

 Birlasoft Solutions Gmbh

Birlasoft Solutions GmbH

(Formerly KPIT Solutions GmbH)
Registered Office: Detmolder Straße 235 33605 Bielefeld, Germany.

Board’s Report The size-related exemptions set out in §§ 267, 276, 288 and 274a of the Handelsgesetzbuch
(HGB — German Commercial Code) were applied in preparing the annual financial statements.
Dear Shareholders,
Our engagement to prepare the annual financial statements comprised all activities necessary
Your Board of Directors is pleased to present herewith the report of the Directors on the operations of in order to prepare the annual financial statements legally required by the commercial law,
the Company together with the accounts for the financial year ended on March 31, 2020. comprising the balance sheet, income statement and notes to the financial statements, on
the basis of the accounting record as well as the information obtained by us on recognition,
Financial Results presentation and measurement issues and the accounting policies required to be applied,
including preparation of the closing entries.
Particulars 2019–20 2018–19
(EURO) (EURO) As the preparation of a report on the preparation of the annual financial statements was agreed,
but the concrete nature and scope of our reporting were not expressly defined in the agreements
Total Income 12,604,395 8,601,097
governing our engagement, we have reported on the scope and results of our act/vibes in
Net Profit / (Loss) for the period (401,069) (422,304) accordance with customary professional standards with the meaning of the Verlautbarungen der
Bundessteuerberaterkammer zu den Grundsätzen für die Erstellung von Jahresabschlüssen”
(Pronouncement by the German Federal Chamber of Tax Advisers on the Principles for the
Operations
Preparation of Annual Financial Statements) dated 12/13 April 2010.

During the year under review, total income of the Company was increased by 46.54% but due to
On acceptance of the engagement it is received an assurance from our client that the documents
increase in cost the company incurred losses.
and explanations necessary for the performance of the engagement would be provided to us
in full.
Name Change
General Engagement Terms
During the year under review, the name of Company was changed from KPIT Solutions GmbH to
Birlasoft Solutions GmbH.
The Allgemeine Geschaftsbedingungen für Steuerberater und Steuerberatungsgesellschaft
(General Engagement Terms for Tax Consultants) attached to this report, are decisive for the
Management realization of the engagement and our responsibility, including those to third parties.

Mr. Venkatarama Bheemeshwar Rao Adavikolanu is the Managing Director of the Company. 1.2 Performance of the engagement

Audit In the course of the preparation of the annual financial statements and in our reporting on
these preparation activities, we have compiled with the relevant standards of the legislation
The Company is not required by the local laws to have an independent audit firm to issue a report to regulating our profession and our professional obligations, including the principles of
the shareholders on the financial statements. No audit opinion has been sought in respect of these independence, diligence, confidentiality and personal professional responsibility (§ 57 of the
financial statements. The accounts are prepared from the internally prepared management accounts Steuerberatungsgesetz/StBerG —German Tax Advisory Services Act).
of the Company. The same management accounts are audited in order for the Group Auditors to give
an audit opinion in relation to the group accounts i.e. consolidated accounts of Birlasoft Limited, the Irrespective of the nature of our engagement, preparation of the annual financial statements
parent company. Hence, no separate audit report is given in respect of the Company. comprises the activities necessary In order to prepare the balance sheet and income statements
required by law, as well as the notes to the financial statements and additional components
For and on behalf of the Board of Directors of the financial statements, on the basis of the accounting records as well as the reformation
Birlasoft Solutions GmbH obtained by us on the accounting policies to be applied, including preparation of the closing
envies.

We informed our client about statutory deadlines governing the preparation. adoption and
London Venkatarama Bheemeshwar Rao Adavikolanu publication of the annual financial statements.
April 24, 2020 Managing Director
We observed the principles of costeffectiveness and materiality when preparing the annual
financial statements.

1. Acceptance of the engagement Under the terms of the engagement issued to us, we complied with the statutory provisions for
the preparation of annual financial statements and German Accepted Accounting Principles,
1.1 Client and definition of the engagement Compiance with other statutory provisions and the detection and clarification of criminal
offences, and of administrative offences outside the accounting system, were not the subject
The management of of our engagement.

Birlasoft Solutions GmbH, Representation letter

Bielefeld
hereinafter also abbreviated to “Birlasoft Solut”-or “Company” - The company provided us in writing, as requested, with the standard professional representation
letter in respect of the accounting records, vouchers and inventory records as well as the
engaged us to prepare the annual financial statements as at 31 March 2020 on the basis of the information provided to us which we have stored in our files.
accounting records that we prepared, as well as the additional vouchers provided to us, which
we have not audited in accordance with the terms of our engagement, taking into account the 2. Basis of preparation of the annual financial statements
information provided to us in accordance with the statutory requirements and in accordance with
the instructions by the client within this framework to exercise existing accounting options. We 2.1 Accounting records and inventory records, information provided
performed this engagement to prepare the annual financial statements with no assessments
from March to April 2020 in our office in Munich.
The company is required by § 238 of the Handelsgesetzbuch (HGB — German Commercial
Code) to keep accounting records.
Our engagement to prepare the annual financial statements did not comprise any activities over
and above the engagement type and thus no extended responsibilities as tax advisory firm.
The accounting was prepared using our IT systems. In accordance with a certificate issued by
Ernst & Young GmbH on 13 March 2019, the DATEV eG - Kanzlei-Rechnungswesen’ accounting
The duty to prepare the annual financial statements was the responsibility of the management software used for this purpose satisfies the requirements for proper financial accounting and
of the company that engaged us to prepare the financial statements which was required to preparation of the annual financial statements.
decide on the exercise of all accounting options and legislative provisions related to preparation
of the financial statements.
The asset accounting was prepared using our IT systems. In connection with a certificate issued
by Ernst & Young GmbH on 15 February 2016 on the audit of the propriety of the ‘Kanzlei-
We informed our client about those matters that resulted in options and obtained from the Rechnungswesen’ software,the DATEV eG “Anlagenbuchführung” asset accounting software
client decisions relating to the exercise of material and formal accounting options (recognition, used for this purpose satisfies the requirements for proper asset accounting.
measurement and presentation options) and of management judgement.
There were no significant organisational changes In the procedures used in the accounting
This also applied to the decisions to be taken by our client in respect of the application of system.
simplified preparation and publication options relating to the annual financial statements for
small and medium-sized companies.
The management nominated the following persons as information providers:

The company is a small corporation according to the size classes set out in § 267 of the
−− Mr. Ashish Satija
Handelsgesetzbuch (HGB — German Commercial Code).
−− Ms. Astrid Bethke

−− Ms. Tania Husemann

BIRLASOFT LIMITED (Subsidiaries Annual Report 2019-20) 21

 All requested information, explanations and documentary evidence were readily provided by the 3.2 Tax position
management and the persons nominated as information providers.
Responsible tax office: Bielefeld-Innenstadt
2.2 Decisions on the exercise of options
Tax no.: 305/5845/0843
The necessary decisions concerning the exercise of material and formal accounting options
(recognition, measurement and presentation options, as well as management judgement) do By virtue of its activities. the entity is subject to corporate income tax, trade tax and VAT.
not form part of the preparation of the annual financial statements. However, we made our client
aware of the exercise of material and formal accounting options (recognition, measurement
The tax returns up to and including 2018 were filed with the tax office.The assessment notices
and presentation options, as well as management judgement) obtained our client’s decisions
were issued subject to review by a subsequent tax audit in accordance with § 164 of the
on these matters and exercised the options in the course of preparing the financial statements
Abgabenordnung (AO — German Tax Code).
exactly as directed by the business owner or the management.

3.3 Economic Position

The same applied to decisions on the application of simplified preparation and publication
options relating to annual financial statements for smal and medium-sized companies.
3.3.1 Net assets
In addition, we informed our client about statutory deadines governing the preparation, adoption
and publication of the annual financial statements. The presentation of the company’s net assets derived from the balance sheet as at 31 March
2020 is shown in the following compared with the previous balance sheet date:
2.3 Findings on the basis of preparation of the annual financial statements Balance at Balance at Changes In comp.
31/03/2020 31/03/2019 to prior year
The annual financial statements were prepared using our IT systems. In accordance with a TEUR % TEUR % TEUR %
certificate issued by Ernst & Young GmbH on 15 February 2016, the DATEV eG, Nuremberg,
‘Kanzlei-Rechnungswesen’ accounting software used for this purpose satisfies the requirements ASSETS
for proper financial accounting and preparation of the annual financial statements. Intangible fixed
assets 3.7 0.0 8.2 0.2 -4.5 -54.9
We agreed any entries arising during the course of our annual financial statement preparation
with the management of our client. The closing entries were prepared by the date of completion Tangible fixed
of our activities. The classification of the annual financial statements complies with the assets 9.6 0.1 14.1 0.3 -4.5 -31.9
provisions of the Handelsgesetzbuch (HGB — German Commercial Code), and in particular with
Inventories 280.2 3.5 340.9 8.3 -60.7 -17.8
the provisions of if 266 and 275 of the HOB).
Receivables 3,377.7 42.5 3316.4 80.7 61.3 1.8
Changes in fixed assets are properly recorded in an inventory record.
Other property 345.7 4.3 393.4 9.6 -47.7 -12.1
The applicable measurement provisions of Commercial Law were observed in compliance with Cash funds/
the going concern assumption. The measurement policies applied to the preceding annual securities 3803.2 47.8 0.2 0.0 3,803.0 -
financial statements were retained.
Prepaid expenses 23.9 0.3 37.9 0.9 -14.0 -36.9
Adequate provisions and valuation allowances were recognised to take account of all risks Deficit not covered
existing at the balance sheet date that were identifiable by the date of preparation of the annual by equity 110.3 1.4 0. 0 0 .0 1 10.3 -
financial statements. Any such risks arising alter the balance sheet date are disclosed in the
notes to the financial statements. Total Assets 7,954.2 100.0 4,111.1 100.0 3.843.1 93.5

The notes to the financial statements contain the prescribed explanations on individual items of
the income statement — it not already disclosed on the face of the income statement — as well Balance at Balance at Changes In comp.
as the other obligatory disclosures correctly and in full. 31/03/2020 31/03/2019 to prior year
TEUR % TEUR % TEUR %
The individual items of the balance sheet and the income statement are presented in detail in
LIABILITIES
the explanatory section.
Equity 0.0 0.0 290.8 7.1 -290.8 -100.0
Reference is made to more detailed explanations in the notes to the financial statements.
Provisions 556.8 7.0 1,632.9 39.7 -1,076.1 -65.9
3. Legal and economic position Liabilities to Banks 0.0 0.0 24.2 0.6 -24.2 -100.0

Trade payables 1,079.0 13.6 1,143.7 27.8 -64.7 -5.7

3.1 Legal position
Liabilities to
Company name: Birlasoft Solutions GmbH
affiliated companies 5,748.7 72.3 0.0 0.0 5,748.7 -
Legal form: GmbH
Other payables 267.2 3.4 342.0 8.3 -74.8 -21.9
Date of formation: 05/08/2003
Deferred income 302.5 3.8 677.5 16.5 -375.0 -55.4
Registered office: Bielefeld
Total Liabilities 7,954.2 100.0 4,111.1 100.0 3,843.1 93.5
Address: Do: Detmolder Str. 235
33605 Bielefeld
Supplementary information on asset and capital structure ratios:
Entered in commercial register: Handelsregister
EUR Fiscal Year Previous Year
Register court: Bielefeld Value Value
No. of register court: HRB 39769 Key figures concerning
Partnership agreement: Valid in the version dated 21 May 2019 the financial situation

Financial year: 01 April to 31 March Fixed assets 13.268.00 22,269.00

Purpose of the company: Trade with hardware and software, production and Balance sheet total 7,843,879.66 4,111,140.78
implementation of software as well as similar business.
The company can deal with all transactions, which are Ratio of fixed assets to
sufficient to comply with the company purpose. The total assets (%) (%) 0.17 0.54
company can found branches and subsidiaries.
Inventories 280,158.80 340,940.13
Subscribed capital: 25,000.00
Balance sheet total 7,843,879.66 4,111,140.78
Shareholder: KPIT Infosystems Limited, Hurst (GB)
Ratio of Inventories to
Management, representation: Mr. Markus Waidelich. sole power of representation total assets (%) (%) 3.67 8.29
Mr. Venkatarama Bheemeshwar Rao Adavikolanu,
sole power of representation Equity -110,283.21 290.786.16

Power of attorney: Mr. Amit Avinash Shave Balance sheet total 7,843,879.66 4,111,140.78
Significant changes in the
legal position after the were not applicable
closing date:

BIRLASOFT LIMITED (Subsidiaries Annual Report 2019-20) 22

 Birlasoft Solutions Gmbh

EUR Fiscal Year Previous Year downs. valuation allowances, and provisions, these were based on the documents and
Value Value information provided without any assessment of their accuracy.

Equity ratio (%) -1.41 7.07 Although we do not assess the vouchers and accounting records in the course of the preparation
with no assessments in accordance with the terms of our engagement, we draw ow client’s
Equity -110,283.21 290,786.16
attention to evident inaccuracies in the documents provided that become apparent to us as
Fixed assets 13,288.00 22,269.00 professional practitioners in the course of porforming the engagement, make suggestions as to
how they can be corrected and monitor that they are implemented appropriately in the annual
Equity to fixed assets financial statements.
ratio (%) (%) -831.20 1,305.79
5. Comments regarding the vouchers, accounting records and inventory records provided
3.3.2 Results of operations
Comments on the accounting records maintained by ourselves as well as on the vouchers
The results of operations changed as follows compared with the previous year: provided are not necessary in the case of our engagement to prepare the annual financial
statements with no assessments because no matters requiring comment were identified.
01/04/2019 to 01/04/2018 to Changes In comp.
31/03/2020 31/03/2019 to prior year
TEUR % TEUR % TEUR % 6. Results of work and attestation report

Sales 12548.3 100.0 8,390.6 100.0 4,157.7 49.6 The attestation report on the annual financial statements prepared by ourselves does not
contain any additions.
+- Changes in
inventories -60.8 -0.5 301.9 3.6 -362.7 -120.1
Wo did not raise any material objections to certain carrying amounts advocated by the chant or
+ Other operating to the accounting.
income 56.1 0.4 210.5 2.5 -154.4 -73.3

- Cost of materials 8155.2 73.0 4,741.0 56.5 4,414.2 93.1 7. Notes on the items In the balance sheet and profit and loss account

Personnel A. Fixed assets

- expenses 2.405.3 19.2 3.037.1 36.2 431.8 -20.8 I. Intangible fixed assets
Depreciation, 1. Purchased concessions,
- amortisation and Industrial and similar rights
write-downs 107 0.1 24.8 0.3 -14.1 -56.9 and assets and licences
- Other operating in such rights and assets EUR 3,712
expenses 1.360.8 10.8 1,508.2 18.0 -147.4 -9.8 (31/03/2019: EUR 8,164

+ Nat financial 2019/2020 01-03/2017

income 1.5 0.0 0.0 0.0 1.5 - EUR EUR

- Net financial costs 12.4 0.1 1.9 0.0 10.5 552.6 Computer software 3,712 8.164

- Income tax
expenses 0.0 0.0 0.2 0.0 -0.2 -100.0
II. Tangible fixed assets
Profit after tax -399.3 -3.2 410.1 4.9 10.8 2.6
1. Other equipment, operating
- Other taxes 1.7 0.0 12.2 0.1 -10.5 -86.1 and office equipment EUR 9,556.009
(31/03/2019: EUR 14.106.00)
Net Income/loss -401.1 -3.2 422.3 -5.0 21.2 5.0
2019/2020 01-03/2017
Supplementary information on profitability and productivity: EUR EUR

EUR Fiscal Year Previous Year Operating and office equipment 1,534.00 1,810.00
Value Value Other transportation resources 1.00 1.00
Key figures concerning Operating equipment 189.00 1,235.00
the profit situation
Office equipment 4,250.00 4,636.00
Net income/Net loss -401.069.37 -422.304.46
Office fittings 911.00 1,433.00
Sales 12548,341 34 8,390.557.79
Improvements 2,394.00 3,132.00
Return on sales (%) 4.20 -5.03
Assets (collective item) 277.00 1 858.00
Personnel expenses 2.405.340.14 3.037,092.56

Gross revenue
for the period 12.487,559.94 8,692.497.92 B. Current assets
Ratio of personnel I. Inventories
expenses (%) 19.26 34.94
1. Work in progress EUR 280,158.80
Cost of materials 9,155,211.55 4,740,980.56 (31/03/2019: EUR 340,940.13)
Gross revalue 2019/2020 01-03/2017
for the period 12,487,559.94 8,692,497.92 EUR EUR
Ratio of cost of Services in progress (inventories) 51070.25 340,940.13
materials (%) 73.31 54.54
Unbilled Revenue (India Team) 108,420.40 0.00
4. Nature and scope of the preparation work Unbolted Revenue (India Team) POC 120 668 15 0.00

Unless documented In this report on the preparation of the annual financial statements, we 280158.60 34096 .13
documented the nature, scope and results of the individual preparation activities performed
during of our engagement in our working papers.
II. Receivables and other assets
The subject of the preparation with no assessments COMpnses the preparation of the balance
1. Trade receivables EUR 3,019,339.82
sheet and income statement, as well as of the notes to the financial statements and additional
31/03/2019: EUR 3,316,427.79)
components of the financial statements, on the basis of the accounting records and the
accounting policies required to be applied. Our engagement to prepare the annual financial 2019/2020 01-03/2017
statements in accordance with the legal requirements on the basis of the documents provided. EUR EUR
taking into account the information received and the closing entries prepared, did not extend
to the assessment of the appropriateness and function of internal controls and of whether the Spec valuate allowances rec due w/in ty -156,289.95 0.00
accounting records have been properly compiled. In particular. the assessment of the stock-
taking records, of correct application of the accrual and matching principle, and of recognition Trade receivables 3,531,781.20 3,314,236.40
and measurement did not fall within the scope of out engagement. Doubtful receivables 2.191.39 2,191.39

If closing entries were prepared, e.g. the calculation of depreciation, amortisation and write- Contra acc 1451-1497 allotd to rec. acc -358.342.82 0.00

3.019.339.82 3,316,427.79

BIRLASOFT LIMITED (Subsidiaries Annual Report 2019-20) 23

2. Receivables from affiliated companies EUR 358,342.82 A. Equity
(31/034019:EUR 0.00)
I. Subscribed capital EUR 25,000.00
2019/2020 01-03/2017 (31/03/2019:EUR 25,000.00)
EUR EUR
2019/2020 01-03/2017
Trade rec. affiliated companies 358,34.82 0.00 EUR EUR

Subsribed capital 25,000.00 25,000.00

3. Other assets EUR 345,701.87

(31/034019:EUR 393.397.13)
II. Retained profits brought forward EUR 265,786.16
2019/2020 01-03/2017 (31/03/2019:EUR 688,090.12)
EUR EUR
2019/2020 01-03/2017
Verrechnungskonto OP Ausglerch 2,056.66 0.00 EUR EUR

Other assets 2,820.70 0.00 Rotained profits bet apprprtn not profit 265,786.16 688,090.12

Clewing Acc. CrecktCard 3,649.23 0.00

Rec. other shareholders due Win 1 y 388.32 0.00 III. Net loss for the financial year EUR -401,069.37
(31/03/2019:EUR -422,304.46)
Rcvtits, health insurance funds MG 4,721.36 4,721.36
2019/2020 01-03/2017
Security deposits 19,949.07 28,574.07 EUR EUR
ReeeiVables from employees (payroll) 1,342.18 0.00 Net loss for the financial year -401.062.37 422 304.46
Receivables from trade tax overpaymts 25,660.00 32,075.00 Deficit not covered EUR 110.283.21
Reclaimed corporate income tax 82,540.30 98,280.90 (31/03/2019:EUR 0.00)

Deductible input tax 2,641.75 7,533.40 2019/2020 01-03/2017

EUR EUR
Deductible input tax. 7% 1,693.43 9,698.04
Deficit not covered 110.283.21 0.00
Dedctbl input tax on infra-EU acqsm 1.19 0.00
Book equity EUR 0.00
Dedctbl input tax on Infra-EU acqstn 19% 24.63 0.00 (31/03/2019:EUR 290,786.16)

Deductible input tax, 19% 378,683.89 663,293.20

Dedctbl inpt tax sec 13b UStG 19% 1,759,520.86 14,232.66 B. Provisions

Items in transit 0.00 81.44 1. Other provisions EUR 556,810.19

(31/03/2019:EUR 1,632,942.90)
Trade payables 128,328.82 63,991.38
2019/2020 01-03/2017
Social sec habits due wAn 1 year 175.83 0.00 EUR EUR
VAT on infra-EU acquisitions -1.19 0.00 Provisions for personnel expenses 89,645.00 79,378.00
VAT on intra•EU acquisitions. 19% -24.63 0.00 Other provisions 200,674.82 79,822.00
VAT, 19% -1,263,480.85 -1361,825.47 Cost provision (BIB) 90,925.38 0.00
VAT prepayments 705,654.63 779,690.24 Provision BTB-cost (POC) 106,187.97 0.00
VAT prepayments 1/11 157,405.00 67,284.00 Provisions for maintenance deferred 3 IA 35,633.32 35.633.32
VAT under section 131, UStG, 19% -1,759,520.86 -14,232.66 Proven warrantee (contra acc 4790) 0.00 41,700.00
VAT, previous year 91 471.55 -0.43 Provsns expold loss exectry meets 3,300.00 3,300.00
345 701.87 393,397.1$ Provsns period-end closing/ writ costs 30,443.70 10,000.00

Provsns int. expns s. 249(2) I-1GB ov 0.00 1,383,109.58

II. Cash-in-hand, central bank balancos, 556,810.19 1,632,942.90
bank balances and chequos EUR 3.903.200.06
(31/03/2019: EUR 211.70)

2019/2020 01-03/2017 C. Liabilities

EUR EUR
1. Liabilities to banks EUR 0.00
Cash-in-hand 7.71 120.64 (31/03/2019: EUR 24,245.73)

Kassa (NOmberg) 91.16 91.16 - of which due within one year

EUR 0.00 (EUR 24,245.73)
Bank 3 3,803,102.09 0.00
2019/2020 01-03/2017
3,803,200.96 211. 70 EUR EUR

Bank 3 0.00 24,245.73

C. Prepaid expenses EUR 23.807.39
(31/03/2019: EUR 37,895.03
2. Payments received on account of orders EUR 80,000.00
2019/2020 01-03/2017 (31/03/2019: EUR 0.00)
EUR EUR
- of which due within ono year
Prepaid expenses 23,807.39 37,895.03 EUR 80,000.00 (EUR 0.00)

2019/2020 01-03/2017
EUR EUR
D. Del kit not covered by equity EUR 110,283.21
(31/03/2019:EUR 0.00) Payments rcvd orders 19% VAT (habit) 80,000.00 0.00
2019/2020 01-03/2017
EUR EUR
3. Trade payables EUR 998,976.60
Deficit not covered by equity 110,283.21 0.00 (31/03/2019: EUR 1,143,671.41)
Total Assets EUR 7,954,162.87 - of which duo within one yoar
(31/03/2019:EUR 4.111,140.78) EUR 998,976.50
(EUR 1,143,671.41)

BIRLASOFT LIMITED (Subsidiaries Annual Report 2019-20) 24

 Birlasoft Solutions Gmbh

2019/2020 01-03/2017 2. Decrease in finished goods

EUR EUR Inventories and work In progress EUR 60,781.40
(01-03/2017:EUR -301,940.13)
Trade payables 6,747,704.93 1,143,671.41
2019/2020 01/03/2017
Contra acc 1625-1658 if allctd pybls acc -5.748,728.43 0.00 EUR EUR
995175.50 1.14%671.41 Inventory changes —services in progress 45,774.25 -301.940.13
Change in Unbilled Revenue (India Team) 227,223.80 0.00

Change in Unbilled Rev. (India Team) POC -120,668.15 0.00

4. Liabilities to affiliated companies EUR 5,748,728.43
(31/03/2019: EUR 0.00) 60.781.40 -101,940.13
of which due within one year
EUR 5,748,728.43 (EUR 0.00)
3. Gross revenue for the parted EUR 12,487,669.94
2019/2020 01-03/2017 (01-03/2017:EUR 8,692,497.92)
EUR EUR

Trade payables affiliated componies 5,748,728.43 0.00

4. Other operating income

a) Income from disposal of Items of fixed

5. Other liabilities EUR 267 82.04 assets and from reveral of write-downs of
(31/02/2019: EUR 342,029.14) items of fixed assets EUR 3,400.00
(01-03/2017:EUR 0.00)
- of which taxes
EUR 89.720.12 (EUR 316,497.20) 2019/2020 01-03/2017
EUR EUR
- of which social security
EUR 19.660.30 (EUR 12,826.58) Revenue from sales of Ingbl fxd assets 3,400.00 0.00
- of which duo within one year b) Income from reversalof provisions EUR 41,700.00
EUR 267.182.04 (EUR 342,029.14) (31/03/2019: EUR 13.320.00)
2019/2020 01-03/2017 2019/2020 01-03/2017
EUR EUR EUR EUR
Trade receivables 150,197.59 8,924.41 Income from reversal of provisions 41,700.00 13,320.00
Other liabilities 5,000.00 0.00

Liabilities from taxes and levies 58,788.19 283,162.55 c) Miscellaneous other operating income EUR 10,953.86
(01-03/2017:EUR 197,218.83)
Payroll liabilities 0.00 1,147.47
2019/2020 01-03/2017
Wage and church tax payablos 30,931.93 33.33485
EUR EUR
Social security liabilities 3,707.25 1,140.30
- of which currency translation gains
Habits for amounts w/heid fr employees 2.604.03 2,633.48 EUR 573.01 (EUR 0.00)

Liablts fr cap.-forming payment air. 0.00 50.38 2019/2020 01-03/2017

EUR EUR
Expctd contrb. owed social secur. funds 15,953.05 11,635.92
Prior - period income 2,737.66 0.00

Currency translation gains 573.01 0.00

D. Deforred Income EUR 302,465.71
(31/03/2019: EUR 677.465.44) 3,310.67 0.00

2019/2020 01-03/2017 Cur. transl. gains (not a. 256a HGB) 142.93 0.00
EUR EUR
Other income 12,326.91 1,359.08
Deferred income 392,465.71 677,465.44
Income from remission of liabilities 0.00 20,349.44
Total Equity and Liabilities EUR 7,954,162.87
Insurance recoveries/compensation paymts 0.00 9,655.62
(31/03/2019: EUR 4,111,140.78)
Refunds MG 1,349.60 0.00

Allocated other non-cash benefits 0.00 1,000.00

1. Sales EUR 12,548,341.34
(01-03/2017: EUR 8,390,557.79) Other operating income -80,000.00 0.00
2019/2020 01/03/2017 AlIctd.oth.n-c bnfts provsn cm, 19% VAT 73,730.22 164,854.69
EUR EUR
Allocated other non-cash bnfts, no VAT 93.53 0.00
Income from real estate 0.00 20,656.00
10,953.86 197,218.83
Tents and lease Income VAT-exempt 0.00 4,375.00

Revenue 376,576.58 0.00

5. Cost of materials
Revenue for Cost Reimbursment 5,323.54 0.00
a) Cost of raw materials. consumables and
Tax -exemt other sent. s. 18b USIG 797,997.66 0.00 supplies and of purchased
merchandise EUR 822,982.09
Revenues sent, udr. section 13b US* 4,623,668.62 744,576.65
(01-03/2017: EUR 1.781,991.81)
Export Sales • US11 42,276.61 0.00
2019/2020 01-03/2017
Revenue, 19% VAT 1.091.039.12 2,578,441.23 EUR EUR

Revenue, 19% VAT 5,531,501.30 4,809,260.72 Cost of merchandise, 19% input lax 812,528.69 1,680,061.42

Revenue, 19% VAT 29,311.70 248,218.37 Cost of merchandise. 19% input tax 10,548.15 201,936.69

Commission revenue. 19% VAT 0.00 8,082.07 Cash discounts received, 19% input I. -90.75 -5.30

Sales allowances, 19% VAT -9.542.00 0.00 822,982.09 1,781,991.81

Cash discounts granted, 19% VAT 0.00 437.16 b) Cost of purchased services EUR 8,332,229.46
(01-03/2017:EUR 2.958,988.75)
Cash disc rev other services s. 18b UStG 60,188.21 0.00
2019/2020 01-03/2017
Rebates granted 0.00 -22,614.99 EUR EUR

Purchased services -1,325,738.54 2,958,988.75

Adj. 8713-Cost on IFRS-POC Advance 106.187.97 0.00

BIRLASOFT LIMITED (Subsidiaries Annual Report 2019-20) 25

 STB-Cost according to Unbilled Revenue 134,388.83 0.00 Incidental rental:lease exp. (SBI) 23,207.43 0.00

Purchased services KPGE11 333,341.05 0.00 Gas. electricity. water 7,565.86 7,726.73

Purchased services • UK21 250.566.87 0.00 Cleaning 4,756.12 7,402.75

InterCoCost - FR11 603.68 0.00 Other occupancy costs 0.00 228.79

Serv. suppi foreign contr. 19% Lt. NAT 8,391,783.19 0.00 178 397.03 164,647.98

Purchased services - V612 273,149.68 0.00 b) Insurance premiums, fees and contributions EUR 8,439.90
(01-03/2017:EUR 21,760.29)
Purchased services - US13 91,004.25 0.00
2019/2020 01-03/2017
Purchased services - US11 76,942.68 0.00 EUR EUR
8,332,229.46 2,958,988.75 Disabled persons equalisation levy 0.00 5.280.00

insurance premiums 1,485.73 7,392.27

6. Personnel expenses Contributions 4.922.17 7,906.52
a) Wages and salaries EUR 2,062065.66 Late filing penalties: admin. fines 32.00 1,181.50
(01 -03/2017: EUR 2,629,434.94)
6.499.90 21260.29
2019/2020 01-03/2017
EUR EUR e) Cost of third-party repairs and maintenance EUR 24,818,48
(01-0312017:EUR 46,768.06)
Wages and salaries 64,265.64 32,865.69
2019/2020 01.03/2017
Wages 17,770.56 8,282.36 EUR EUR
Salaries 1,797,144.89 1,740,435.46 Repairs(maintenance operaVolfice equine) 35.88 24,720.21
Paid employee bonI 64,129.53 192,710.46 Hardware! software maintenance expenses 2,670.14 44.097.92
Other repairs and maintenance 62.39 0.00
Vertriebsprovisionen 42801.55 101,905.27
21.8.121218 46,768.06
Managing directors salaries 0.00 366,767.54
d) Vehicle fleet expenses EUR 292,193.25
Volunt. social bnfts subj to wage tax 84,182.00 194,378.51 (01-03/2017:EUR 518,139.13)

Non-cash brill/ sow marg. pan-t workers -11,950.70 -8,998.35 2019/2020 01-03/2017
EUR EUR
Capital-forming payments 0.00 1,088.00
Motor vehicle insurance 28,484.15 51,534.42
Travel expn reim bnmnt-home:workplc 3,556.95 0.00
Current motor vehicle operat. costs 35.575.98 109,270.36
Wages for marginal part-time wok 162.00 0.00
Motor vehicle repairs 25,507.64 52.801.28
Flat-rate tax on casual labour wages 3.24 0.00
Garage rent 601.27 0.00
2,062 06996 2,629,434.94
Operating leases (motor vehicles) 194,063.05 264,083.06
b) Social security, post-employment and
other employee benefit costs EUR 343,274,40 Other motor vehicle expenses 2,825.19 5,950.28
(01-03/2017:EUR 407,657.62)
Third-pony vehicle expenses 5,135.97 34,499.73
- of which in respect of old age pensions
EUR 1,831.68 (EUR 5,988.82) 292,193.25 518,139.13

2019/2020 01-0/2017 e) Advertising and travel expenses EUR 128,449.10

EUR EUR (0I-03/2017:EUR 477,124.81)

Statutory social security expenses 338,280.12 381,108.05 2019/2020 01-03/2017

EUR EUR
Contrb. to occup. healthlsalety agency 0.00 12,829.43
Advertising costs 2,001.98 81,773.32
Vol. social belts not subj to wage Ix 3,162.68 7,731.32
Gilts, deductible, without 37b EStG 73.70 2,305.90
Cost of old age pensions 1,657.08 3,632.53
Corporate hospitality expenses 347.41 6,036.27
Flat-rate tax for insurance premiums 174.60 2,356.29
Entertainment expenses 3.241.26 11,643.92
343 274.48 407,657.6R
Expns Ern dedctblly (non-de:kW Mn) 0.00 8,038.98

Small gifts 3.142.59 39.42

7. Depreciation, amortisation and write-downs
Nondeductible entertain. expenses 926.85 4,990.25
a) Amortisation and write-downs of
intangible fixed assets and Brooinung Mitarbeiter -152.87 0.00
depreciation and write downs of Employee travel expenses 36,342.66 -29,704.86
tangible fixed assets EUR 10,742.20
(014312017:EUR 24,770.56) Employee travel expnses, cost of travel 40508.54 104.265.46

2019/2020 01-03/2017 Employee tray. expn, addni substnc costs 17,715.36 52,826.05
EUR EUR
Employee tray. expn. accommodation costs 22201.62 234 910.10
Amortisation of intrigbl fixed assets 4,452.00 4,921.50
126449.10 477,121161
Depreciation of tangible fixed assets 4,709.20 7,172.50
I) Selling and distribution expenses EUR 0.00
Immediate write down of tangible assets 0.00 11,093.56 (01-03/2017:EUR 7,430.40)

Write down of assets (collective item) 1.581.00 1,583.00 2019/2020 01-03/2017

EUR EUR
10,742.22 24,770.56
Outgoing freight Warranty expenses 0.00 230.40

0.00 7,200.00
8. Other operating expenses
0.00 7,430.00
a) Occupancy costs EUR 178,397.03
(01-03/2017: EUR 164,647.98) g) Miscellaneous operating costs EUR 510,825.45
(01-03/2017: EUR 272.328.05)
2019/2020 01-03/2017
EUR EUR 2019/2020 01-03/2017
EUR EUR
Occupancy Costs 0.00 34.31
Other expenses 18,782.60 0.00
Rent (immovable property) 142,867.62 149,255.40

BIRLASOFT LIMITED (Subsidiaries Annual Report 2019-20) 26

 Birlasoft Solutions Gmbh

Operating leases fr technical equipment 43,44836 67,254.94 11. Texas on income EUR 0.00
(01-03/2017:EUR 193.01)
Other operating expenses 86,454.22 0.00
2019/2020 01-03/2017
120,292.14 0.00 EUR EUR
Postage 1,046.52 3,327.51 Backperefunds trado tax pr yrs. s 4/5 0.00 193.01
Telephone 39,979.74 60,291.82 12. Not income/net loss after tax EUR $39,343.07
Fax and Internet costs 382.37 1,078.99 (0143/2017:EUR -410.077.42)

Office supplies 477.29 6,703.31

Newspapers, books (specialist lit.) 141.48 4,256.48 13. Other taxes EUR 1726.30
(01-0312017:EUR 12.227.04)
Training costs 3,073.08 10.800.74
2019/2020 01-03/2017
Legal and consulting costs 95,430.19 71,539.96 EUR EUR

Bookkeeping costs 52,894.39 32,219.04 Motor vehicle tax 1726.30 12,227.04

Period-end closing and audit costs 24,375.80 12,525.65

2019/2020 01-03/2017 14. Net loss for the financial year EUR 401,069.37
EUR EUR (01-03/2017:EUR 422.304.46)

Expansions for licences, concessions 12,039.95 0.00 2019/2020 01-03/2017

EUR EUR
Operating leases fr op./office equipment 399.06 0.00
Net loss for the financial year 421,069.37 422,32,J4 4
incidental monetary transaction costs 10,420.97 2,329.61

Operating supplies 1.084.51 0.00

Tools and minor equipment 102.38 0.00

8. Enclosures
510,825.45 272,328.05
Attestation report
h) Losses on write-downs or on disposal of
current assets end transfers to valuation
Attestation report on preparation by the tax advisory firm.
allowances on receivables EUR 166,289.95
(01-03/2017:EUR 0.00)
In accordance with the terms of our engagement. we have prepared the following annual
2019/2020 01-03/2017 financial statements comprising the balance sheet, income statement and notes to the financial
EUR EUR statements of the company
Transfer spec. valuatn allovmc rcvbls 156,289.95 0.00
Birlasoft Solutions GmbH for the financial year from 01 April 2019 to 31 March 2020 in
I) Miscellaneous other operating expenses EUR 85,365.20 accordance with the provisions of German Commercial Law.
(01-03/2017:EUR 0.00)
The basis of preparation was the accounting records maintained by us and the additional
-of which currency translation losses
vouchers and inventory records provided to us, which we have not audited in accordance with the
EUR 0.03 (EUR 0.00)
terms of our engagement, as well as the information provided to us.
2019/2020 01.03/2017
EUR EUR The accounting records and the preparation of the inventory records and the annual financial
statements in accordance with the provisions of German Commercial Law are the responsibility
Prior-perlod expenses 66,365.17 0.00 of the company’s management.
Currency translation losses 0.03 0.00
We have performed our engagement in accordance with the “Verlautbarung der
65,365.20 0.00 Bundessteuerberaterkammor zu den Grundsätzen fur die Erstellung von Jahresabschlussen”
(Pronouncement by the German Federal Chamber of Tax Advisers on the principles for the
preparation of annual financial statements). This engagement comprises the preparation of the
9. Other Interest and balance sheet and income statement, as well as the notes to the financial statements, on the
similar Income EUR 1,508.00 basis of the accounting records, the inventory records and the accounting policies required lo
(01-03/2017: EUR 0.00) be applied.

2019/2020 01-03/2017
Munich, 24 April 2020
EUR EUR

Other interest and similar income 49.00 0.00 Aulinger + Schlotmann

Steuerberatungsgesellschaft mbH
interest income s. 233a AO, taxable 1.459.00 0.00

1508.00 0.00

[Original German version signed by:)

10. Interest and similar expenses EUR 12,392.62 Philipp Schlotmann
(01-0312017: EUR 1.878.76) Wirtschaltsprufer [German Public Auditor]
Steuerberater[Certified Tax Advisor]
-of which from affiliated companies
EUR 11,909.76 (EUR 0.00)

2019/2020 01-03/2017
EUR EUR

Int. expns. sec 233a AO, non-deductible 0.00 444.00

Intexpnsa.234-237 AO. non-deductible 0.00 192.00

Interest on rcyblat payables accounts 57.86 1,242.76

Interest expense on long-term debt 425.00 0.00

interest exp. to affiliated comp. 11,909.76 0.00

12,392.62 1,8176

BIRLASOFT LIMITED (Subsidiaries Annual Report 2019-20) 27

Balance Sheet Profit and loss account
as 31 March 2020 as 31 March 2020

Financial year Prior year Financial year Prior year

EUR EUR EUR
EUR EUR EUR
1. Sales 12,548,341.34 8,390,557.79
A. Fixed assets
2. Decrease in finished goods -60,781.40 301,940.13
I. Intangible fixed assets inventories and work in progress
1. Purchased concessions, 3. Gross revenue for the period 12,487,559.94 8,692,497.92
industrial and similar rights
and assets and licences in 3,712.00 8,164.00 4. Other operating income 56,053.86 210,538.83
such rights and assets
5. Cost of materials
II. Tangible fixed assets
a) Cost of raw materials, -822,982.09 -1,781,991.81
1.Other equipment, operating consumables and supplies
and office equipment 9,556.00 14,105.00 and of purchased merchandise

III. Long-term financial assets b) Cost of purchased services -8,332,229.46 -2,958,988.75

1. Other loans 0.00 0.00 -9,155,211.55 -4,740,980.56

B. Current assets 6. Personnel expenses

I.Inventories a) Wages and salaries -2,062,065.66 -2,629,434.94

1.Work in progress 280,158.80 340,940.13 b) Social security,

post-employment and other
II.Receivables and other assets employee benefit costs -343,274.48 -407,657.62
1.Trade receivables 3,019,339.82 3,316,427.79

2.Receivables from 358,342.82 0.00 - of which in respect of -2,405,340.14 -3,037,092.56

affiliated companies old age pensions EUR -1,831.68
(EUR -5,988.82)
3.Other assets 345,701.87 393,397.13
7. Depreciation, amortisation
3,723,384.51 3,709,824.92 and write-downs Amortisation and
write-downs of intangible fixed assets
III.Cash-in-hand, central and depreciation and write downs of
bank balances, bank balances 3,803,200.96 211.70 tangible fixed assets -10,742.20 -24,770.56
and cheques
8. Other operating expenses -1,360,778.36 -1,508,198.72
C. Prepaid expenses 23,867.39 37,895.03
9. Other interest and similar income 1,508.00 0.00
D. Deficit not covered by equity 110,283.21 0.00
10. Interest and similar expenses -12,392.62 -1,878.76
7,954,162.87 4,111,140.78 -of which from affiliated companies
EUR -11,909.76 (EUR 0.00)

11. Taxes on income 0.00 -193.01

Equity and liabilities
12. Net income/net loss after tax -399,343.07 -410,077.42
Financial year Prior year
13. Other taxes -1,726.30 -12,227.04
EUR EUR EUR
14. Net loss for the financial year -401,069.37 -422,304.46
A. Equity

I. Subscribed capital 25,000.00 25,000.00

II. Retained profits

brought forward 265,786.16 688,090.62

III. Net loss for the financial year 401,069.37- 422,304.46-

Deficit not covered 110,283.21 0.00

Book equity 0.00 290,786.16

B. Provisions

1. Provisions for taxes 0.00 0.00

2. Other provisions 556,810.19 1,632,942.90

556,810.19 1,632,942.90

C. Liabilities

1. Liabilities to banks 0.00 24,245.73

2. Payments received on
account of orders 80,000.00 0.00

3. Trade payables 998,976.50 1,143,671.41

4. Liabilities to affiliated
companies 5,748,728.43 0.00

5. Other liabilities 267,182.04 342,029.14

7,094,886.97 1,509,946.28

- of which taxes
EUR 89,720.12 (EUR 316,497.20)

-of which social security

EUR 19,660.30 (EUR 12,826.58)

D. Deferred income 302,465.71 677,465.44

7,954,162.87 4,111,140.78

BIRLASOFT LIMITED (Subsidiaries Annual Report 2019-20) 28

 Birlasoft Solutions Gmbh

Fixed Assets Schedule

as 31 March 2020

01/04/2019 Additions 31/03/2020 01/04/2019 Financial year 31/03/2020 31/03/2020 31/03/2019

EUR EUR EUR EUR EUR EUR EUR EUR

Fixed assets

I. Intangible fixed assets

Purchased concessions,
industrial and similar rights
and assets and licences
in such rights and assets 32,582.13 0.00 32,582.13 24,418.13 4,452.00 28,870.13 3,712.00 8,164.00

Total intangible fixed assets 32,582.13 0.00 32,582.13 24,418.13 4,452.00 28,870.13 3,712.00 8,164.00

II.Tangible fixed assets

Other equipment,
operating and office
equipment 96,507.14 1,741.20 98,248.34 82,402.14 6,290.20 88,692.34 9,556.00 14,105.00

Total tangible fixed assets 96,507.14 1,741.20 98,248.34 82,402.14 6,290.20 88,692.34 9,556.00 14,105.00

III.Long-term financial assets

Other loans 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00

Total fixed assets 129,089.27 1,741.20 130,830.47 106,820.27 10,742.20 117,562.47 13,268.00 22,269.00

Notes
Balance sheet disclosures
General information about the annual financial statements
Disclosure on remaining maturity comments
Information identifying the company according to the registry court
latalthes we a remainng term ot up to ono year amount to EUR 7,094,886.97 (prior year: EUR
Company name according to Birlasoft Solutions GmbH
registry court: Disclosures on liabilities to shareholders

Registered company address Bielefeld Liablilles to &sot starelsOlders amount to EUR 250.566.87 (prior yoar: EUR Pm).
according to registry court:
Other disclosures
Registry entry: Handelsregister
Average number of employees during the financial year
Registry court: Bielefeld
The average number of employees duenig the finercial year amounts to 31.5.
Registry court number: HRB 39769
Signature ot management
Disclosures on accounting policies
Bielefeld,24 April 2020
Accounting policies

Purchased intangible assets were recognised at cost; finite-lived intangible assets are amortised.
Markus Wakteich Venkatarma Bheemeshwar Rao Adavilkolanu
Tangible assets were recognised at cost; finite-lived tangible assets are depreciated. (Managing Director) (Managing Director)

Depreciation and amortisation is charged using the straight line method on the basis of the
expected useful life of the assets.

If necessary, the applicable lower value was recognised at the reporting date.

Inventories were recognised at cost. Any lower current values at the reporting date were recognised.

The measurement of receivables and securities reflects all identifiable risks.

The other provisions were recognised for all further uncertain liabilities.
They reflect all identifiable risks.

Liabilities are recognised at their settlement amount.

The annual financial statements include foreign currency items translated into EUR

Foreign currency receivables and liabilities are measured with the average spot exchange rate
on the balance sheet date. The rate on the date of the transaction is recognized, as far as it was
lower for receivables or higher for liabilities.

Accounting policies that have changed as against the prior year

The accounting policies previously applied were largely taken over in the annual
financial statements.

There was no fundamental change in accounting policies compared with the prior year.

BIRLASOFT LIMITED (Subsidiaries Annual Report 2019-20) 29

Birlasoft GmbH
Registered Office: Kapellenstrabe 47, 65830 Kriftel, Germany.

Board’s Report Balance Sheet

As at 31 March 2020
Dear Shareholders,
(Amount in EURO)
Your Board of Directors is pleased to present herewith the report of the Directors on the operations of
the Company together with the accounts for the financial year ended on March 31, 2020. ASSETS

Financial year Previous Year

Financial Results EUR EUR EUR
Particulars 2019-20 2018-19 A.Current assets
(EURO) (EURO)
I. Receivables and other assets
Total Income 648 NIL
1. Other assets 79,943 0,00
Net Profit / (Loss) for the year (2,589) (5,632)
II. Cash-in-hand, central bank balances,
Operations bank balances and cheques 250,24 5.144,58

During the year under review, the Company has generated income of EUR 648 and incurred a loss BDeficit not covered by equity 11.636,02 9.047,08
of EUR 2,589.
12.685,69 14.191,66

Audit
EQUITY AND LIABILITIES

The Company is not required by the local laws to have an independent audit firm to issue a report to A.Equity
the shareholders on the financial statements. No audit opinion has been sought in respect of these
financial statements. The accounts are prepared from the internally prepared management accounts I. Subscribed capital 25.000,00 25.000,00
of the Company. The same management accounts are audited in order for the Group Auditors to give II. Net accumulated losses 36.636,02- 34.047,08-
an audit opinion in relation to the group accounts i.e. consolidated accounts of Birlasoft (UK) Limited, of which accumulated losses brought forward
the parent company. Hence, no separate audit report is given in respect of the Company. EUR 34.047,08- (EUR 28.414,91-)
For and on behalf of the Board of Directors Deficit not covered 11.636,02 9.047,08
Birlasoft GmbH
Book equity 0,00 0,00

B.Provisions
London Ashish Satija 1. Other provisions 2.300,00 3.550,00
April 5, 2020 Managing Director
C. Liabilities

1. Trade payables of which due within one year

EUR 119,00 (EUR 476,00) 119,00 476,00

2. Other liabilities 10.266,69 10.165,66

10.385,69 10.641,66

of which to shareholders
EUR 10.266,69 (EUR 10.165,66)
of which due within one year
EUR 10.266,69 (EUR 10.165,66)

12.685,69 14.191,66

BIRLASOFT LIMITED (Subsidiaries Annual Report 2019-20) 30

 Birlasoft GmbH

Balance Sheet Accounts Income Statement

As at 31 March 2020 From 01.04.2019 to 31.03.2020

(Amount in EURO) (Amount in EURO)

Financial year Previous Year

ASSETS
EUR EUR
Financial year Previous Year
1. Other operating income
Account Description EUR EUR EUR
a) Miscellaneous other operating income 648,28 0,00
Other assets
2. Other operating expenses
1570 Deductible input tax 799,43 0,00
a) Occupancy costs 1.200,00 1.428,00
Cash-in-hand, central bank balances,
bank balances and cheques b) Insurance premiums, fees
and contributions 96,69 268,44
1210 Commerzbank #224710400 250,24 5.144,58
c) Miscellaneous operating costs 1.839,50 3.834,93
Deficit not covered by equity
3.136,19 5.531,37
Equity deficit 11.636,02 9.047,08
3. Interest and similar expenses 101,03 100,80
Total assets 12.685,69 14.191,66
4. Net income/net loss after tax 2.588,94- 5.632,17-
EQUITY AND LIABILITIES
5. Net loss for the financial year 2.588,94 5.632,17
800 Subscribed capital 25.000,00 25.000,00
6. Accumulated losses brought forward 34.047,08 28.414,91
Net accumulated losses
7. Net accumulated losses 36.636,02 34.047,08
Net accumulated losses 36.636,02- 34.047,08-

of which accumulated losses brought forward

EUR 34.047,08- (EUR 28.414,91-)

2868 Accumulated losses brought forward

Deficit not covered

Equity deficit 11.636,02 9.047,08

Other provisions

970 Other provisions 500,00 1.750,00

977 Provsns period-end 1.800,00 1.800,00

closing/ audit costs

2.300,00 3.550,00

Trade payables

1610 Trade pybls, no sep. rec./pybls accntng 119,00 476,00

of which due within one year EUR 119,00

(EUR 476,00)

1610 Trade pybls, no sep. rec./pybls accntng

Other liabilities

731 Liablts shrehldr/p.(due within 1 year) 10.266,69 10.165,66

of which to shareholders
EUR 10.266,69 (EUR 10.165,66)

731 Liablts shrehldr/p.(due within 1 year)

of which due within one year EUR 10.266,69

(EUR 10.165,66)

731 Liablts shrehldr/p.(due within 1 year)

Total equity and liabilities 12.685,69 14.191,66

BIRLASOFT LIMITED (Subsidiaries Annual Report 2019-20) 31

Income Statement Accounts Attestation report on the preparation by the
From 01.04.2019 to 31.03.2020
Wirtschaftsprüfungsgesellschaft
(Amount in EURO)

Financial year Previous Year (German Public Audit Firm)

EUR EUR
In accordance with the terms of our engagement, we have prepared the above annual financial
Miscellaneous other operating income statements - comprising the balance sheet, income statement - of the company
2700 Other income 648,28 0,00
Birlasoft GmbH
Occupancy costs

4210 Rent (immovable property) 1.200,00 1.428,00 For the financial year from 01. April 2019 to 31. March 2020 in accordance with the provisions of
German commercial law. Basis for the preparation of these documents were the accounting records
Insurance premiums, fees and contributions maintained by us and the other vouchers and inventory records presented to us, which we have
not audited in accordance with the terms of our engagement, and the information provided to us.
4380 Contributions 96,69 268,44 The bookkeeping system and the preparation of the inventory records and the annual financial
statements in accordance with the provisions of German commercial law are the responsibility of the
Miscellaneous operating costs
management of the company.
4950 Legal and consulting costs 401,18 0,00
This engagement comprises the preparation of the balance sheet, income statement on the basis of
4955 Bookkeeping costs 999,37 1.646,55 the bookkeeping system and the inventory records, as well as of the accounting policies required to
4957 Period-end closing and audit costs 0,00 1.568,96- be applied.

4970 Incidental monetary transaction costs 438,95 619,42

1.839,50 3.834,93
Kriftel, den 5. April 2020
Interest and similar expenses
Klug & Engelhard GmbH
2114 Interest on shareholder loans 101,03 100,80
Wirtschaftsprüfungsgesellschaft
Net loss for the financial year Steuerberatungsgesellschaft

Net loss for the financial year 2.588,94 5.632,17

Accumulated losses brought forward

2868 Accumulated losses brought forward 34.047,08 28.414,91

Net accumulated losses

Net accumulated losses 36.636,02 34.047,08

BIRLASOFT LIMITED (Subsidiaries Annual Report 2019-20) 32

 Birlasoft Solutions Inc.

Birlasoft Solutions Inc.

(Formerly KPIT Infosystems Incorporated)
Registered Office: 399, Thornall Street, 8th Floor, Edison, New Jersey – 08837, USA.

Board’s Report Balance Sheet

As at 31 March 2020
Dear Shareholders, (Amount in USD)

Note 31 March 2020 31 March 2019

Your Board of Directors is pleased to present herewith the Nineteenth report of the Directors on the
operations of the Company together with the accounts for the financial year ended March 31, 2020. ASSETS

Financial Results Non-current assets

Particulars 2019-20 2018-19 Property, plant and equipment 2A 542,457 577,708

USD USD
(Million) (Million) Right-of-use assets 2B 1,645,176 -

Total Income 168.38 216.11 Other Intangible assets 2C 3,521 14,363

Net Profit / (Loss) for the year 4.52 6.34 Financial assets

Investments 3 39,568,832 39,568,832

Operations
Loans 4 11,200,197 17,596,529
During the year under review, income of the Company decreased by 22.09% resulting in decrease in Income tax assets (net) 1,920,352 1,851,222
net profit by 28.71%.
Deferred tax assets 5 1,460,229 847,875
Board of Directors Other non-current assets 6 30,792 4,183

During the year, Mr. Anjan Lahiri and Mr. Pawan Sharma ceased to be the Directors, and Mr. Dharmander 56,371,556 60,460,712
Kapoor and Mr. Prasad Thrikutam were the Directors of the Company.
Current assets

Audit Financial assets

Trade receivables 7 36,161,966 48,822,953

The Company is not required by the local laws to have an independent audit firm to issue a report to
the shareholders on the financial statements. No audit opinion has been sought in respect of these Cash and cash equivalents 8 7,083,038 14,812,288
financial statements. The accounts are prepared from the internally prepared management accounts
of the Company. The same management accounts are audited in order for the Group Auditors to give Loans 9 574,540 210,282
an audit opinion in relation to the group accounts i.e. consolidated accounts of Birlasoft Limited, the
Unbilled revenue 13,142,170 4,034,688
parent company. Hence, no separate audit report is given in respect of the Company.
Other financial assets 10 - 180
For and on behalf of the Board of Directors
Birlasoft Solutions Inc. Other current assets 11 15,81,947 880,902

5,85,43,661 68,761,293

TOTAL 114,915,217 129,222,006

Faridabad Dharmander Kapoor EQUITY AND LIABILITIES

May 20, 2020 Director
Equity

Equity share capital 12 55,709,854 55,709,854

Other equity 8,510,383 3,989,895

64,220,237 59,699,749

Non-current liabilities

Financial liabilities

Borrowings 13 3,900,000 3,900,000

Lease liabilities 14 1,032,540 -

Provisions 15 1,588,898 1,812,367

6,521,438 5,712,367

Current liabilities

Financial liabilities

Short-term borrowings 16 - -

Trade payables 16 36,666,072 38,506,706

Lease liabilities 17 680,084 -

Other 18 3,961,087 23,242,638

Other current liabilities 19 1,794,975 614,675

Provisions 20 346,365 517,335

Current income tax liabilities (net) 724,959 928,536

44,173,542 63,809,890

TOTAL 114,915,217 129,222,006

Significant accounting policies 1

Notes referred to above form an 2 - 28

integral part of the consolidated
financial statements

For and on behalf of the Board of Directors

Birlasoft Solutions Inc.
(Erstwhile KPIT Infosystems Incorporated)

Faridabad Dharmander Kapoor

May 20, 2020 Director

BIRLASOFT LIMITED (Subsidiaries Annual Report 2019-20) 33

Statement of Profit and Loss Statement of Changes in equity
for the year ended on 31 March 2020 for the year ended on 31 March 2020

(Amount in USD) (Amount in USD)

Note 31 March 2020 31 March 2019 A Equity share capital Amount

Revenue from operations 21 167,725,975 213,407,303 Balance as at 1 April 2018 5,57,09,854

Other income 22 650,509 2,701,473 Changes in equity share capital during 2018-19 -

Total income 168,376,484 216,108,776 Balance as at 31 March 2019 5,57,09,854

Expenses Changes in equity share capital during 2019-20 -

Employee benefits expense 23 58,543,568 84,891,794 Balance as at 31 March 2020 5,57,09,854

Finance costs 24 69,249 12,322

Depreciation and amortization 2 1,008,401 521,564 B Other equity

Other expenses 25 103,865,773 124,067,990 Reserves & surplus Total

Total expenses 163,486,991 209,493,670 Capital General Retained

Reserve Reserve earnings
Profit before tax 4,889,493 6,615,106
Balance as on 01 April 2018 31,780 (33,965,293) 31,590,285 (2,343,228)
Tax expenses
Profit for the year - - 6,333,123 6,333,123
Current tax 981,359 920,659
Other comprehensive income - - - -
Deferred tax (612,354) (638,676)
Total comprehensive income for the year - - 6,333,123 6,333,123
Total tax expense 369,005 281,983
Balance as on 31 March 2019 31,780 (33,965,293) 37,923,408 3,989,895
Profit for the year 4,520,488 6,333,123
Balance as on 01 April 2019 31,780 (33,965,293) 37,923,408 3,989,895
Other comprehensive income - -
Profit for the year - - 4,520,488 4,520,488
Total comprehensive income 4,520,488 6,333,123
Other comprehensive income - - - -
Significant accounting policies 1
Total comprehensive income for the year - - 4,520,488 4,520,488
Notes referred to above 2 - 28
iform an integral part Balance as on 31 March 2020 31,780 (33,965,293) 42,443,896 8,510,383
of the consolidated
financial statements Retained earnings represents the amount that can be distributed by the Company to its equity
shareholders considering the requirements of Companies Act, 2013.

For and on behalf of the Board of Directors
Birlasoft Solutions Inc. For and on behalf of the Board of Directors
(Erstwhile KPIT Infosystems Incorporated) Birlasoft Solutions Inc.
(Erstwhile KPIT Infosystems Incorporated)

Faridabad Dharmander Kapoor

May 20, 2020 Director Faridabad Dharmander Kapoor
May 20, 2020 Director

BIRLASOFT LIMITED (Subsidiaries Annual Report 2019-20) 34

 Birlasoft Solutions Inc.

Cash Flow Statement Notes forming part of the Financial Statements

For the year ended on 31 March 2020 For the year ended on 31 March 2020
(Amount in USD)
Company Overview
PARTICULARS 31 Mar 2020 31 Mar 2019
A] CASH FLOW FROM OPERATING ACTIVITIES Birlasoft Solutions Incorporated (Erstwhile KPIT Infosystems Incorporated) is a company incorporated
in the state of New Jersey, USA. The Company is a wholly owned subsidiary of Birlasoft Limited
Profit / (Loss) for the period 4,520,488 6,333,123 (Erstwhile KPIT Technologies Limited).
Adjustments for
The Company provides Software Development, Global IT Consulting and Product Engineering
Income tax expense 369,005 281,983 Solutions to its clients, predominantly in Automotive & Transportation, Manufacturing and Energy
Profit/Loss on sale of Plant, (93) 1,660 & Utilities verticals.
property and equipment (net)
1 Significant accounting policies
Depreciation / Amortization 1,008,401 521,564
Interest expense 69,249 12,322 1.1 Basis of preparation of financial statements
Interest income (319,489) (260,354)
The financial statements are prepared in accordance with the Indian Accounting Standards
Bad debts written off 1,301,133 32,704 (“Ind-AS”) as specified under Section 133 of the Companies Act, 2013 read with the Rule 3 of
Provision for doubtful debts, (197,082) 173,128 the Companies (Indian Accounting Standards) Rules, 2015 and Companies (Indian Accounting
unbilled revenue and advances (net) Standards) Amendment Rules, 2016 and the provisions of Companies Act, 2013. The financial
statements are presented in US Dollars (“USD”), unless otherwise stated.
Unrealised foreign exchange Loss (3,214) (5,026)

Operating Profit before working capital changes 6,748,398 7,091,104 Accounting policies have been consistently applied except where a newly issued accounting
standard is initially adopted or a revision to an existing accounting standard requires a change in
Adjustments for changes in working capital: the accounting policy hitherto in use.
Trade receivables and unbilled revenue 2,449,454 (5,192,314)
These financial statements have been prepared on the historical cost basis, except for certain
Loans, other financials assets and other assets 190,594 (12,592,447) financial instruments which are measured at fair values at the end of each reporting period, as
Trade Payables (1,840,634) (7,053,944) 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
Other financial liabilities, other liabilities (18,627,301) 9,274,664 received to sell an asset or paid to transfer a liability in an orderly transaction between market
and provisions participants at the measurement date.
Cash generated from operations (11,079,489) (8,472,937)
1.2 Current–non-current classification
Taxes Paid (1,254,066) (236,461)
Net cash from operating activities (A) (12,333,555) (8,709,398) All assets and liabilities are classified into current and non-current.
B]CASH FLOW FROM INVESTING ACTIVITIES
Assets
Purchase of Plant, property and Equipments (228,665) (130,448)
Proceeds from Sale of Fixed Assets 93 (1,660) An asset is classified as current when it satisfies any of the following criteria:

Loan (given to) / repaid by related parties 5,113,826 10,653,175

a. it is expected to be realized in, or is intended for sale or consumption in, the Company’s
Interest received 319,849 660,260 normal operating cycle;
Net Cash from /(used in) investing activities(B) 5,205,103 11,181,327
b. it is held primarily for the purpose of being traded;
C]CASH FLOW FROM FINANCING ACTIVITIES
Proceeds from Working Capital loan (Net) - (4,212,487) c. it is expected to be realized within 12 months after the reporting date; or

Repayment of lease liabilities (732,101) -

d. it is cash or cash equivalent unless it is restricted from being exchanged or used to settle a
Loan (given to) / repaid by related parties 131,611 1,591,512 liability for at least 12 months after the reporting date.
Interest and finance charges paid (308) (59,492)
Current assets include the current portion of non-current financial assets. All other assets are
Net cash from /(used in) financing activities(C) (600,798) (2,680,467) classified as non-current.
Net Increase / (decrease ) in cash (7,729,250) (208,538)
and cash equivalents (A + B + C) Liabilities

Cash & cash equivalents at close of the year 7,083,038 14,812,288

A liability is classified as current when it satisfies any of the following criteria:
(refer note 1 below)
Cash & cash equivalents at beginning of the year 14,812,288 15,020,827 a. it is expected to be settled in the Company’s normal operating cycle;
(refer note 1 below)
Cash surplus / (deficit) for the year (7,729,250) (208,539) b. it is held primarily for the purpose of being traded;

Note 1:
c. it is due to be settled within 12 months after the reporting date; or
Cash and cash equivalents include:
Cash on hand 771 787 d. the Company does not have an unconditional right to defer settlement of the liability for
at least 12 months after the reporting date. Terms of a liability that could, at the option of
Cheques on hand 1,037,204 655,567 the counterparty result in its settlement by the issue of equity instruments do not affect its
classification.
Balance with banks
- In current accounts 6,045,063 14,155,934 Current liabilities include current portion of non-current financial liabilities. All other liabilities
are classified as non-current.
Total Cash and cash equivalents 7,083,038 14,812,288

Cash and cash equivalents at the end of the year 7,083,038 14,812,288 Operating cycle
Note 2:
Operating cycle is the time between the acquisition of assets for processing and their realization
Figures in brackets represent outflows of cash and cash equivalents. in cash or cash equivalents. The operating cycle of the Company is less than twelve months.
Note 3:
1.3 Revenue recognition
The above Cash Flow Statement has been prepared under the indirect method as set out in the
Indian Accounting Standard (Ind-AS) 7 Statement of Cash Flows.
Effective 1 April 2018, the Company adopted Ind AS 115 “Revenue from Contracts with
Customers”. The following is a summary of new and/or revised significant accounting policies
For and on behalf of the Board of Directors related to revenue recognition. The effect on adoption of Ind AS 115 was insignificant.
Birlasoft Solutions Inc.
(Erstwhile KPIT Infosystems Incorporated) 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 of those goods
or services.
Faridabad Dharmander Kapoor
May 20, 2020 Director
Arrangements with customers for software related services are either on a fixed-price or on a
time-and-material basis.

BIRLASOFT LIMITED (Subsidiaries Annual Report 2019-20) 35

 Revenue on time and material contracts are recognised as the related services are performed In case of internally generated intangibles, costs incurred during the research phase of a project
and revenue from the last invoicing to the reporting date is recognised as unbilled revenue. are expensed when incurred. Development activities involve a plan or design for the production
Revenue from fixed price contracts where the performance obligations are satisfied over time of new or substantially improved products or processes. Development expenditure is capitalized
and there is no uncertainty as to measurement or collectability of consideration, is recognized only if development costs can be measured reliably, the product or process is technically and
as per the percentage-of-completion method. When there is uncertainty as to measurement commercially feasible, future economic benefits are probable, and the Company intends to and
or ultimate collectability, revenue recognition is postponed until such uncertainty is resolved. has sufficient resources to complete development and to use or sell the asset. The expenditure
Efforts or costs expended have been used to measure progress towards completion as there capitalized includes the cost of materials, direct labour, overhead costs that are directly
is a direct relationship between input and productivity. Maintenance revenue is recognized attributable to preparing the asset for its intended use, and directly attributable borrowing costs
ratably over the term of the underlying maintenance arrangement. Revenue from client training, (in the same manner as in the case of property, plant and equipment). Other development
support and other services arising due to the sale of software products is recognized as the expenditure is recognized in the Statement of Profit and Loss as incurred.
services are performed.
Intangible fixed assets are derecognized on disposal or when no future economic benefits
Revenues in excess of invoicing are classified as contract assets (unbilled revenue) while are expected from its use and subsequent disposal or when the economic benefits are not
invoicing in excess of revenues are classified as contract liabilities (Advance Billing). measurable.

For software development and related services, the performance obligations are satisfied as 1.7 Depreciation and amortization
and when the services are rendered since the customer generally obtains control of the work
as it progresses. In arrangements for engineering services and the sale of its related licenses Depreciation on property, plant and equipment is provided on the straight-line method over the
and products, the Company has applied the guidance in Ind AS 115, ‘Revenue from contract useful lives of the assets. The estimated useful lives are as follows:
with customer’, by applying the revenue recognition criteria for each distinct performance
obligation. The arrangements with customers generally meet the criteria for considering Type of asset Useful life
software development and related services as distinct performance obligations. For allocating (No. of years)
the transaction price, the Company 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 Plant and equipment(1) 4
for an item when sold separately is the best evidence of its standalone selling price. In cases Office Equipment(1) 10
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. Furniture and fixtures(1) 8

Revenue from licenses where the customer obtains a “right to use” the license is recognized (1) For these class of assets, based on internal assessment, the useful lives as given above are
at the time the license is made available to the customer. Revenue from licenses where the believed to best represent the period over which the assets are expected to be used. Hence
customer obtains a “right to access” is recognized over the access period. Arrangements the useful lives for these assets are different from the useful lives as prescribed under Part
to deliver software products generally have three elements: license, implementation and C of Schedule II of the Companies Act 2013.
Annual Technical Services(ATS). The Company has applied the principles under Ind AS 115 to
account for revenues from these performance obligations. When implementation services are Leasehold land and vehicles taken on lease are amortized over the period of the lease.
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
Perpetual software licenses are amortized over 4 years. However, time-based software licenses
contracts are allocated to each performance obligation of the contract based on their relative
are amortized over the license period.
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 The estimated useful life of an identifiable intangible asset is based on a number of factors
entire arrangement fee for license and implementation is considered to be a single performance including the effects of obsolescence, demand, competition, and other economic factors (such
obligation and the revenue is recognized using the percentage-of-completion method as the as the stability of the industry, and known technological advances), and the level of maintenance
implementation is performed. Revenue from client training, support and other services arising expenditures required to obtain the expected future cash flows from the asset.
due to the sale of software products is recognized as the performance obligations are satisfied.
ATS revenue is recognized ratably over the period in which the services are rendered. Revenue Depreciation and amortisation methods, useful lives and residual values are reviewed at the end
from sale of third party licenses is recognised only when the sale is completed by passing of each financial year and adjusted if appropriate.
ownership.
1.8 Impairment
Deferred contract costs are incremental costs of obtaining a contract which are recognised as
assets and amortized over the term of the contract. a. Financial assets

The Company accounts for volume and / or trade discounts to customers as a reduction of The Company assesses at each date of Balance Sheet whether a financial asset or a Company of
revenue. Also, when the level of discount varies with increases in levels of revenue transactions, financial assets is impaired. Ind AS 109 requires expected credit losses to be measured through
the company recognizes the liability based on its estimate of the customer’s future purchases. a loss allowance. The Company recognizes loss allowances using the expected credit loss
The company recognizes changes in the estimated amount of obligations for discounts in the (ECL) model for the financial assets which are not fair valued through profit or loss. Expected
period in which the change occurs. The discounts are passed on to the customer either as direct credit losses are measured at an amount equal to the 12-month ECL, unless there has been a
payments or as a reduction of payments due from the customer. significant increase in credit risk from initial recognition in which case those are measured at
lifetime ECL. The amount of expected credit losses (or reversal) that is required to adjust the loss
Revenue from sale of goods is recognised upon actual delivery of goods along with transfer of allowance at the reporting date to the amount that is required to be recognized is recognized as
significant risks and rewards to the customers. an impairment gain or loss in Statement of Profit or Loss.

Expenses reimbursed by customers during the project execution are recorded as a reduction to b. Non- financial assets
associated costs.
i. Property, plant and equipment and intangible assets
The Company presents revenues net of indirect tax in its Statement of Profit and Loss.
The management periodically assesses using, external and internal sources, whether there is an
1.4 Borrowing costs indication that an asset may be impaired. Impairment loss is recognized when the carrying value
of an asset exceeds its recoverable amount. The recoverable amount is higher of the asset’s fair
Borrowing costs that are directly attributable to the acquisition, construction or production of value less cost of disposal and value in use. For the purpose of impairment testing, assets are
a qualifying asset are capitalized as part of cost of that asset. All other borrowing costs are grouped together into the smallest group of assets (cash generating unit or CGU) that generates
charged to the Statement of Profit and Loss. cash inflows from continuing use that are largely independent of the cash inflows of other assets
or CGUs.
The exchange differences arising from foreign currency borrowings, to the extent that they are
regarded as an adjustment to interest costs, are regrouped from other exchange differences to Intangible assets which are not yet available for use are tested for impairment annually. Other
finance costs. assets (tangible and intangible) are reviewed at each reporting date to determine if there is
any indication of impairment. For assets in respect of which any such indication exists and for
intangible assets mandatorily tested annually for impairment, the asset’s recoverable amount
1.5 Property, plant and equipment
is estimated.

Property, plant and equipment are carried at cost of acquisition or construction less accumulated
If at the balance sheet date there is an indication that a previously assessed impairment loss
depreciation and/or accumulated impairment loss, if any. The cost of an item of property, plant
no longer exists or has decreased, the assets or CGU’s recoverable amount is estimated.
and equipment comprises its purchase price, including import duties and other non-refundable
For assets other than goodwill, the impairment loss is reversed to the extent that the asset’s
taxes or levies and any directly attributable cost of bringing the asset to its working condition
carrying amount does not exceed the carrying amount that would have been determined, net
for its intended use; any trade discounts and rebates are deducted in arriving at the purchase
of depreciation or amortization, if no impairment loss had been recognized. Such a reversal is
price. If significant parts of an item of property, plant and equipment have different useful
recognized in the Statement of Profit and Loss.
lives , than they are accounted for as separate items (major components) of property, plant and
equipment. The cost and related accumulated depreciation are eliminated from the financial
statements upon sale or retirement of the asset and the resultant gains or losses are recognized 1.9 Leases
in the Statement of Profit and Loss Assets under construction are disclosed as capital work-in-
progress. The Group has primarily leased rental offices premises.

1.6 Intangible assets “The Ministry of Corporate Affiairs (MCA) notified IND AS 116 , the new lease accounting
standard on March 30 2019 and came into force with effect from April 01 2019. IND AS 116 has
Intangible assets are stated at cost less accumulated amortization and accumulated impairment, replaced the guidance in IND AS 17 ”Leases”. The effect of initially applying this standard is
if any.  recognised at date of initial application (i.e. April 01 2019). Ind AS 116 sets out the principles

BIRLASOFT LIMITED (Subsidiaries Annual Report 2019-20) 36

 Birlasoft Solutions Inc.

for the recognition, measurement, presentation and disclosure of leases for both lessees enactment date. A deferred income tax asset is recognized to the extent that it is probable that
and lessors. It introduces a single, on-balance sheet lease accounting model for lessees. future taxable profit will be available against which the deductible temporary differences and
The Group has applied IND AS 116 using the modified retrospective approach as tax losses can be utilized. Deferred income taxes are not provided on the undistributed earnings
per C5(b) of the standard. Accordingly the group has not restated the comparative of subsidiaries and branches where it is expected that the earnings of the subsidiary or branch
information, i.e. comparative information continues to be reported under IND AS will not be distributed in the foreseeable future. The company offsets current tax assets and
17. Refer note 1.9 Significant accounting policy in the annual report of the company current tax liabilities, where it has a legally enforceable right to set off the recognized amounts
for the year ended March 31 2019 for lease accounting policy as per IND AS 17. and where it intends either to settle on a net basis, or to realize the asset and settle the liability
The impact of adoption of this accounting standard is significant “ simultaneously.

At the inception of contract the Group assesses wheather the contract is , or contains a lease. A 1.13 Provisions, Contingent liabilities and Contingent assets
contract is, or contains, a lease if the contract involves use of an identified asset and conveys the
right to control the use of asset for period of time in exchange for consideration i.e. customer The Company recognizes provisions only when it has a present legal or constructive obligation
has right to : as a result of a past event, it is probable that an outflow of resources embodying economic
- Obtains substantially all the economic benefits from using the asset and benefits will be required to settle the obligation and when a reliable estimate of the amount of
- direct the use of asset the obligation can be made.

1. As a lessee Provisions are determined by discounting the expected future cash flows at a pre-tax rate that
reflects current market assessments of the time value of money and the risks specific to the
The Group recognises the right of use of asset and right of use of liability at the commencement liability.
date of lease. The right of use of asset is initially measured at cost , which comprise of present
value of future liabilty (lease rent payouts), any payment made at or before commencement No provision is recognized for –
date any inital direct cost incurred and an estimate of cost to dismantle or remove an
underlying asset or to restore an asset less any lease incentive received The lease liabilty
a. Any possible obligation that arises from past events and the existence of which will be
is initially measured at present value of lease payments that is not paid at commencement
confirmed only by the occurrence or non-occurrence of one or more uncertain future events
date discounted at implicit rate mentioned in lease or incremental borrowing rate. The
not wholly within the control of the Company; or
Group generally uses incremental borrowing rate as discount rate. The right-of-use assets is
depreciated using the straight-line method from the commencement date over the useful
life of right-of-use asset. The lease liability is subsequently measured at amortised cost using b. Present obligations that arise from past events but are not recognized because-
effective interest method. It is remeasured to reflect any lease modifications or reassessments.
The Group presents its right of use of assets in property plant and euipments and lease liabilties 1) It is not probable that an outflow of resources embodying economic benefits will be required
in financial liabilities in th e statement of financial position.” to settle the obligation; or

2. Extension and termination of lease 2) A reliable estimate of the amount of obligation cannot be made.

The Group determines the lease term as the non-cancellable period of a lease, together with Such obligations are disclosed as contingent liabilities. These are assessed continually and only
both periods covered by an option to extend the lease if the Group is reasonably certain to that part of the obligation for which an outflow of resources embodying economic benefits is
exercise that option; and periods covered by an option to terminate the lease if the Group is probable, is provided for, except in the extremely rare circumstances where no reliable estimate
reasonably certain not to exercise that option. In assessing whether the Group is reasonably can be made.
certain to exercise an option to extend a lease, or not to exercise an option to terminate a lease, it
considers all relevant facts and circumstances that create an economic incentive for the Group to Contingent assets are not recognized in the financial statements since this may result in the
exercise the option to extend the lease, or not to exercise the option to terminate the lease. The recognition of income that may never be realized.
Group revises the lease term if there is a change in the non-cancellable period of a lease.”
Provisions for onerous contracts are recognized when the expected benefits to be derived by the
3. Short term leases and low value asset. Company from a contract are lower than the unavoidable costs of meeting the future obligations
under the contract. The provision is measured at the present value of the lower of the expected
The Group has elected not to recognise right of use of assets and lease liabilities for short-term cost of terminating the contract and the expected net cost of continuing with the contract. Before
leases that have lease term of 12 months or less and leases of low value assets. The Group a provision is established the Company recognizes any impairment loss on the assets associated
recognises the lease payments associated with these leases as an expense on a straight- line with that contract.
basis over lease term.”
1.14 Cash and cash equivalents
4. Impairment testing for right of use of assets
Cash and cash equivalent in the balance sheet comprise cash at banks and on hand and
Right of use of assets are tested for are tested for impairment whenever there is any indication short-term deposits with an original maturity of three months or less, which are subject to an
that their carrying amount is not recoverable. Impairment loss ,if any ,is recognised in statement insignificant risk of changes in value. For the purpose of the standalone statement of cash flows,
of profit and loss.” cash and cash equivalents consist of cash and short-term deposits, as defined above, net of
outstanding bank overdrafts (if any) as they are considered an integral part of the Company’s
1.10 Foreign currency transactions cash management.

Transactions in foreign currencies are recorded at the exchange rates prevailing on the date 1.15 Employee stock option
of the transaction. Monetary items are translated into the functional currency at the year-end
rates. The exchange differences so determined and also the realized exchange differences are In respect of stock options granted by the parent company, pursuant to the Group’s Employee
recognized in the Statement of Profit and Loss. Stock Option Scheme, the Company recognizes employee compensation expense, using the
grant date fair value in accordance with Ind-AS 102 - Share Based Payment, on straight line
1.11 Employee benefits basis over the period over which the employees would become unconditionally entitled to apply
for the shares.
Compensated absences
1.16 Financial instruments
The employees of certain locations can carry-forward a portion of the unutilized accrued
compensated absences and utilize it in future service periods or receive cash compensation a. Initial recognition
on termination of employment. Since the compensated absences do not fall due wholly within
twelve months after the end of the period in which the employees render the related service and Financial assets and liabilities are recognized when the Company becomes a party to the
are also not expected to be utilized wholly within twelve months after the end of such period, contractual provisions of the instrument. Financial assets and liabilities are initially measured
the benefit is classified as a long-term employee benefit. The Company records an obligation at fair value, except for trade receivables which are initially measured at transaction price.
for such compensated absences in the period in which the employee renders the services that Transaction costs that are directly attributable to the acquisition or issue of financial assets and
increase this entitlement. The obligation is measured on the basis of independent actuarial financial liabilities (other than financial assets and financial liabilities at fair value through profit
valuation using the projected unit credit method. or loss) are added to or deducted from the fair value measured on initial recognition of financial
asset or financial liability.
1.12 Income taxes
b. Subsequent measurement
Income tax expense comprises current and deferred income tax. Income tax expense is
recognized in the Statement of Profit and Loss except to the extent that it relates to items i) Non-derivative financial instruments
recognized directly in equity, in which case it is recognized in other comprehensive income.
Current income tax for current and prior periods is recognized at the amount expected to be Financial assets carried at amortized cost
paid to or recovered from the tax authorities, using the tax rates and tax laws that have been
enacted or substantively enacted by the Balance Sheet date. Deferred income tax assets and
A financial asset is subsequently measured at amortized cost if it is held within a business model
liabilities are recognized for all temporary differences arising between the tax bases of assets
whose objective is to hold the asset in order to collect contractual cash flows and the contractual
and liabilities and their carrying amounts in the financial statements.
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.
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
Financial assets at fair value through other comprehensive income
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 A financial asset is subsequently measured at fair value through other comprehensive income

BIRLASOFT LIMITED (Subsidiaries Annual Report 2019-20) 37

 if it is held within a business model whose objective is achieved by both collecting contractual For all other financial instruments the carrying amount approximates fair value due to short
cash flows and selling financial assets and the contractual terms of the financial asset give maturity of those instruments.
rise on specified dates to cash flows that are solely payments of principal and interest on the
principal amount outstanding. Fair value measurements

Financial assets at fair value through profit or loss The Company measures financial instruments, such as, derivatives and investments in mutual
funds at fair value at each balance sheet date.
A financial asset which is not classified in any of the above categories are subsequently fair
valued through profit or loss. 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. The fair value
However, in cases where the Company has made an irrevocable election for particular investments measurement is based on the presumption that the transaction to sell the asset or transfer the
in equity instruments that would otherwise be measured at fair value through profit or loss, the liability takes place either:
subsequent changes in fair value are recognized in other comprehensive income.
a. In the principal market for the asset or liability, or
Financial liabilities
b. In the absence of a principal market, in the most advantageous market for the asset or
Financial liabilities are subsequently carried at amortized cost using the effective interest liability
method, except for contingent consideration recognized in a business combination which
is subsequently measured at fair value through profit and loss. For trade and other payables The principal or the most advantageous market must be accessible by the Company.
maturing within one year from the balance sheet date, the carrying amounts approximate fair The fair value of an asset or a liability is measured using the assumptions that market participants
value due to the short maturity of these instruments. would use when pricing the asset or liability, assuming that market participants act in their
economic best interest.
c. Derecognition of financial instruments
A fair value measurement of a non-financial asset takes into account a market participant’s
The Company derecognizes a financial asset when the contractual rights to the cash flows ability to generate economic benefits by using the asset in its highest and best use or by selling
from the financial asset expire or it transfers the financial asset and the transfer qualifies it to another market participant that would use the asset in its highest and best use.
for derecognition under Ind-AS 109. A financial liability (or a part of a financial liability) is
derecognized from the Company’s balance sheet when the obligation specified in the contract The Company uses valuation techniques that are appropriate in the circumstances and for which
is discharged or cancelled or expires. sufficient data are available to measure fair value, maximizing the use of relevant observable
inputs and minimizing the use of unobservable inputs.
d. Fair value of financial instruments

The company uses discounted cash flow analysis method for the fair value of its financial
instruments. The method of assessing fair value result in general approximation of value and
such value may never actually be realized.

2A Property, plant and equipment

Changes in the carrying amount of property, plant and equipment (Amount in USD)

Plant and Office Furniture Leasehold Total

equipment equipment and fixtures improvement

Gross carrying amount as at 1 April 2018 1,515,158 112,301 434,278 183,008 2,244,745

Additions 193,066 4,147 17,850 - 215,063

Disposal/Retirements/Derecognition 124,451 8,511 25,128 - 158,090

Gross carrying amount as at 31 March 2019 1,583,773 107,937 427,000 183,008 2,301,718

Accumulated depreciation as at 1 April 2018 10,34,002 59,825 2,92,756 1,05,737 14,92,320

Depreciation for the period 254,681 11,085 46,131 18,999 330,896

Disposal/Retirements/Derecognition 84,766 1,637 12,804 - 99,206

Accumulated depreciation as at 31 March 2019 1,203,917 69,274 326,083 124,736 1,724,010

Carrying amount as at 1 April 2018 481,156 52,476 141,522 77,271 752,425

Carrying amount as at 31 March 2019 379,856 38,663 100,917 58,272 577,708

Gross carrying amount as at 1 April 2019 1,583,773 107,937 427,000 183,008 2,301,718

Additions 124,024 17,668 89,344 - 231,035

Disposal/Retirements/Derecognition 3,364 - - - 3,364

Gross carrying amount as at 31 March 2020 1,704,432 125,605 516,344 183,008 2,529,389

Accumulated depreciation as at 1 April 2019 1,203,917 69,274 326,083 124,736 1,724,010

Depreciation for the period 183,888 10,991 50,039 18,998 263,916

Disposal/Retirements/Derecognition 993 - - - 993

Accumulated depreciation as at 31 March 2020 1,386,811 80,264 376,122 143,734 1,986,932

Carrying amount as at 1 April 2019 379,856 38,663 100,917 58,272 577,708

Carrying amount as at 31 March 2020 317,621 45,340 140,222 39,274 542,457

BIRLASOFT LIMITED (Subsidiaries Annual Report 2019-20) 38

 Birlasoft Solutions Inc.

(Amount in USD) (Amount in USD)

2B Right-of-use assets 31 March 2020 31 March 2019
Office Premises Total 4 Non current Loans
ROU asset created on adoption of 2,172,317 2,172,316.58 (Unsecured, considered good
Ind AS 116 as at 01 April 2019 unless otherwise stated)
Additions 2,06,502 2,06,502 Loans Receivable from related parties
(Refer note 26) -
Foreign exchange translation - -
Considered good - Unsecured
Disposal/retirements/derecognition - -
-Loan to Sparta Consulting Inc., USA - 5,050,000
Gross carrying amount
-Loan to Birlasoft Solutions Limited
as at 31 March 2020 2,378,819 2,378,819
(Formerly KPIT Infosystems Limited (UK)) 10,350,000 11,850,000
Accumulated depreciation
-Loan to Birlasoft Solutions Ltda
as at 01 April 2019 - -
(Formerly KPIT Technologies
Depreciation 7,33,643 7,33,643 Solucoes Em Informatica Ltda) 800,000 650,000

Foreign exchange translation - - Loans Receivable from other than

related parties -
Disposal/retirements/derecognition - - Considered good - Unsecured
Accumulated depreciation - Security deposits 50,197 46,529
as at 31 March 2020 7,33,643 7,33,643
11,200,197 17,596,529
Carrying amount as at 31 March 2019 2,172,317 -

Carrying amount as at 31 March 2020 1,645,176 1,645,176

31 March 2020 31 March 2019

5 Deferred tax assets

2C Other intangible assets
-Provision for doubtful debts and advances 126,361 120,244
Changes in the carrying amount of other intangible assets
-Provision for leave encashment 447,267 613,233
Internally Other than Total
Generated Internally -Provision for Onerous contract - 110,538
Generated
-Accrued Expenses 438,947 -
Product
-Accrued Payroll 603,848 -
Development Software
Cost -Lease Liabilities 450,936 -
Gross carrying amount as at 1 April 2018 282,606 645,955 928,561 -Others 146,090 151,475
Additions 15,370 - 15,370 2,213,449 995,490
Disposal/Retirements/Derecognition 47,613 - 47,613 Deferred tax liabilities
Gross carrying amount as at 31 March 2019 250,363 645,955 896,318 -Prepaid Expenses 128,852 81,171
Accumulated depreciation as at 1 April 2018 82,668 619,013 701,681 -Provision for depreciation 69,113 55,229
Depreciation for the period 172,110 18,560 190,670 -Interest on loan - Intercompany - 11,215
Disposal/Retirements/Derecognition 10,396 - 10,396 -Interest payable 82,909 -
Accumulated depreciation as at 31 March 2019 244,382 637,573 881,955 -Provision for doubtful debts 39,170 -
Carrying amount as at 1 April 2018 199,938 26,942 226,880 -Right Of Use Assets 4,33,177 -
Carrying amount as at 31 March 2019 5,981 8,382 14,363 753,220 147,615
Gross carrying amount as at 1 April 2019 250,363 645,955 896,318 Net deferred tax asset 1,460,229 847,875
Additions - - -

Disposal/Retirements/Derecognition - - - 31 March 2020 31 March 2019

Gross carrying amount as at 31 March 2020 250,363 645,955 896,318 6 Other non-current assets
Accumulated depreciation as at 1 April 2019 244,382 637,573 881,955 (Unsecured, considered good unless
otherwise stated)
Depreciation for the period 2,873 7,969 10,842
Prepaid expenses 1,370 4,183
Disposal/Retirements/Derecognition - - -
Contract Fulfillment Cost 29,422 -
Accumulated depreciation as at 31 March 2020 247,255 645,542 892,797
30,792 4,183
Carrying amount as at 1 April 2019 5,981 8,382 14,363

Carrying amount as at 31 March 2020 3,108 413 3,521

31 March 2020 31 March 2019

7 Trade receivables
31 March 2020 31 March 2019
Trade Receivables considered
3 Non current investments good - Unsecured 36,161,966 49,541,124

Investments in equity instruments of Trade Receivables - credit impaired 331,143 -

subsidiaries (at cost)
36,493,109 49,541,124
KPIT Technologies Solucoes
EM Informatica LTDA 1,470,000 1,470,000 Less: Allowances for bad and 331,143 718,171
doubtful trade receivables
(1,121,145 (Previous Year 1,121,145)
Equity Shares of Brazilian Reas 1 36,161,966 48,822,953
each fully paid up)

Investment in shares of 38,098,832 38,098,832

Sparta Consulting Inc., USA

(1,000 (Previous Year 1,000) Shares of

the common stock without par
value fully paid up)

39,568,832 39,568,832

BIRLASOFT LIMITED (Subsidiaries Annual Report 2019-20) 39

 (Amount in USD) (Amount in USD)

31 March 2020 31 March 2019 31 March 2020 31 March 2019

14 Lease non-current liabilities

8 Cash and cash equivalents
Lease liabilities 1,032,540 -
- Cash on hand 771 787
1,032,540 -
- Cheques on hand 1,037,204 655,567

Balances with banks

31 March 2020 31 March 2019
- In current accounts 6,045,063 14,155,934
15 Non current Provisions
70,83,038 14,812,288
Provision for employee benefits

- Compensated Absences 1,588,898 1,812,367

31 March 2020 31 March 2019
1,588,898 1,812,367
9 Current Loans

Loans Receivable from related parties

(Refer note 26) - 31 March 2020 31 March 2019
Considered good - Unsecured
16 Trade payables
- Loan to Sparta Consulting Inc., USA - 63,826
Total outstanding dues of trade payables 36,666,072 38,506,706
-Loan to Birlasoft Solutions Limited 525,117 128,071
(Formerly KPIT Infosystems Limited (UK)) 36,666,072 38,506,706

-Loan to KPIT Technologies 12,830 4,623

SOLUCOES EM INFORMATICA Ltd
31 March 2020 31 March 2019
-Loan to Birlasoft Solutions Mexico 29,591 -
17 Lease current liabilities
S.A. DE C.V.
Lease liabilities 680,084 -
Loans Receivable from other than
related parties 680,084 -
Considered good - Unsecured

- Security deposits 7,002 13,762

31 March 2020 31 March 2019
574,540 210,282
18 Other current financial liabilities

Current maturities of long term debt:

31 March 2020 31 March 2019
- Loan from Birlasoft Technologies 223,123 91,512
10 Other current financials assets Canada Corporation (Erstwhile KPIT
Technologies Corporation, Canada)
(Unsecured, considered good
unless otherwise stated) Other than trade payables :
Interest accrued on Fixed Deposit - 180 Accrued employee costs 2,774,404 3,097,296
- 180 Payable to related parties (Refer Note 27) 9,41,331 20,044,884

Security deposits 22,229 8,946

31 March 2020 31 March 2019 3,961,087 23,242,638
11 Other current assets

(Unsecured, considered good unless 31 March 2020 31 March 2019

otherwise stated)
19 Other current liabilities
Employee advances 191,457 150,845
Unearned revenue 1,502,245 2,18,620
Advance to suppliers 360,708 61,912
Statutory remittances 292,730 3,96,055
Prepaid expenses 643,694 405,674
1,794,975 614,675
Contract Fulfillment Cost 3,392 -

Balances with statutory authorities 82,475 62,363

31 March 2020 31 March 2019
Others 300,221 200,108
20 Current provisions
1,581,947 880,902
Provision for employee benefit

- Compensated Absences 346,365 517,335

31 March 2020 31 March 2019
346,365 517,335
12 Share capital

Authorised:
31 March 2020 31 March 2019
100,000 shares common stock without par value
21 Revenue from operations
Issued subscribed and fully paid up:
Software services 167,725,975 213,407,303
12,467 (Previous year 12,467) shares of 55,709,854 55,709,854
common stock without par value fully paid up 167,725,975 21,34,07,303

55,709,854 55,709,854

31 March 2020 31 March 2019

13 Non current borrowings

Loans from related parties

- Loan from Birlasoft Technologies 3,900,000 3,900,000

Canada Corporation (Erstwhile KPIT
Technologies Corporation, Canada)

39,00,000 39,00,000

BIRLASOFT LIMITED (Subsidiaries Annual Report 2019-20) 40

 Birlasoft Solutions Inc.

(Amount in USD) 26 Contingent liabilities and Commitments

31 March 2020 31 March 2019 The Company has no contingent liabilities and commitments as at 31 March 2020.

22 Other income
27 Related party disclosures
Interest income 319,489 260,354
A. Name of the related party and nature of relationship where control exists:
Profit on sale of fixed assets (net) 93 -
Relationship Name of related party
Provision for doubtful debts, 197,082 -
unbilled revenue and advances (net) Holding Company Birlasoft Limited, India (Erstwhile KPIT Technologies Limited)

Foreign exchange gain (net) 26,086 - Subsidiary Companies Birlasoft Consulting Inc. USA
(Direct holding) Birlasoft Solutions Ltda
Other non operating income 107,759 2,441,119
(erstwhile KPIT Technologies Solucoes em Informatica LTDA)
(net of expenses directly attributable
to such income) (including Birlasoft Solutions Mexico S.A. DE C.V.
miscellaneous income) (Erstwhile KPIT Infosystems Mexico S.A. DE C.V.)
650,509 2,701,473 Fellow Subsidiary Companies Birlasoft Technologies Canada Corporation
(Erstwhile KPIT Technologies Corporation)
Birlasoft Solutions France
31 March 2020 31 March 2019 (Erstwhile KPIT Technologies France SAS)
23 Employee benefits expense Birlasoft Computer Corporation
(Erstwhile SYSTIME Computer Corporation),USA
Salaries, wages and incentives 58,487,906 84,802,823
Birlasoft Solutions GmbH (erstwhile KPIT Solutions GmbH)
Staff welfare expenses 55,662 88,971
Birlasoft Solutions ME FZE.
58,543,568 84,891,794 (erstwhile KPIT Infosystems ME FZE.)
Birlasoft Solutions Limited
(ers,twhile KPIT Infosystems Limited),UK
31 March 2020 31 March 2019
Birlasoft (UK) Limited
24 Finance costs
Entities jointly controlled by KPIT (Shanghai) Software Technology Co. Limited, China
Interest expense 308 12,322 a Group having joint control (w.e.f. 01 January 2019 upto 31 January 2020)

Interest on lease liabilities 68,941 - over the reporting entity KPIT Technologies Netherlands B.V
(w.e.f. 01 January 2019 upto 31 January 2020)
69,249 12,322
KPIT Technologies (UK) Limited
(w.e.f. 01 January 2019 upto 31 January 2020)

31 March 2020 31 March 2019 KPIT Infosystems Limited Filial UK, Sweden
(w.e.f. 01 January 2019 upto 31 January 2020)
25 Other expenses
KPIT Technologies Inc., USA
Travel and overseas expenses (net) 4,237,402 4,645,823 (w.e.f. 01 January 2019 upto 31 January 2020)

Transport and conveyance (net) 710,905 827,880 KPIT Technologies GK, Japan
(w.e.f. 01 January 2019 upto 31 January 2020)
Cost of service delivery (net) 76,937,311 91,854,567
KPIT Technologies GmbH, Germany
Cost of professional sub-contracting (net) 15,480,787 16,043,634 (w.e.f. 01 January 2019 upto 31 January 2020)

Recruitment and training expenses 112,446 247,603 KPIT Technologies Limited, India
(Erstwhile KPIT Engineering Limited)
Power and fuel 50,903 41,000 (w.e.f. 01 January 2019 upto 31 January 2020)
Rent 77,150 952,187 MicroFuzzy Industrie-Elektronic GmbH
(w.e.f. 01 January 2019 upto 31 January 2020)
Repairs and maintenance

- plant & equipment 137,446 70,473

- others 80,625 38,100

Insurance 202,652 171,950

Rates & taxes 128,829 187,992

Communication expenses (net) 866,474 1369,387

Legal and professional fees 1,419,262 4,268,806

Marketing expenses 1,623,228 2,343,756

Loss on sale of fixed assets(net) - 1,660

Foreign exchange loss (net) - 27,217

Printing & stationery 13,202 14,205

Bad debts written off 1,301,133 32,704

Provision for doubtful debts, - 173,128

unbilled revenue and advances (net)

Miscellaneous expenses (net) 486,018 755,918

103,865,773 124,067,990

Note:

(i) Certain expenses are net of recoveries/reimbursements from customers.

BIRLASOFT LIMITED (Subsidiaries Annual Report 2019-20) 41

B. Transactions with related parties
No. Name of related party FY 2019-20 FY 2018-19
No. Name of related party FY 2019-20 FY 2018-19
Amount of Balance as Amount of Balance
Amount of Balance as Amount of Balance
transactions on transactions as on
transactions on transactions as on
during 31 Mar 20 during 31 Mar 19
during 31 Mar 20 during 31 Mar 19
the year Debit/Credit the year Debit/Credit
the year Debit/Credit the year Debit/Credit
(USD) (USD) (USD) (USD)
(USD) (USD) (USD) (USD)
11 KPIT Technologies (UK) Ltd
1 Birlasoft Limied, India
(Erstwhile KPIT Technologies Sale of Software Services NIL NA 81,596 124,657
Limited)
Reimbursement of expenses NIL NA
NA NIL
Sale of Software Services 12,258 1,131 54,606 3,584 20,439
Advance received (net) NIL 20,439
Software service charges 56,194,798 (13,303,542) 67,595,682 (11,706,186)
Software service charges NIL NA 897,747 (298,326)
Advance taken (net) (379,092) (332,151)
12 KPIT Infosystems Limited
Guarantee Fees (571,200)
(50,000) (50,000) (116,142) Filial UK, Sweden
Reimbursement of expenses (net) (30,538) 28,714 Sale of Software Services NIL NA 501 1,154
2 Birlasoft Consulting Inc. USA Software service charges NIL NA 563 NIL
Sale of Software Services 4,023,535 3,33,594 5,127,484 2,828,165 13 Birlasoft Solutions Ltda
(erstwhile KPIT Technologies
Software service charges 6,071,766 (1,460,815) 3,354,661 (2,285,276)
Solucoes em Informatica LTDA)
Repayment of loan (including interest) 5,050,000 11,243,347
NIL 5,113,826 Software service charges 785,897 (71,036) 864,971 (77,536)
Interest income 25,809 2,07,955
Loans taken 150,000 650,000
Investment in equity NIL 38,098,832 NIL 38,098,832 812,830 654,623
Interest Received 19,515 812,830
Advance given (net) (79,205) (8,959)
31,260 (388,325) Interest Income 27,722 4,623
Reimbursement of expenses (net) (50,638) (3,325,819)
Investment in equity NIL 1,470,000 NIL 1,470,000
3 KPIT Technologies Netherlands B.V.
14 Birlasoft Solutions
Software service charges NIL NA 256,877 (92,713) Mexico S.A. DE C.V.
(Erstwhile KPIT Infosystems
Sale of Software Services NIL NA 11,984 9,500 Mexico S.A. DE C.V.)
4 Birlasoft Technologies Loans taken 29,533 NIL NIL
Canada Corporation 29,591
(Erstwhile KPIT Interest Income 58 NIL NIL
Technologies Corporation)
15 KPIT Technologies GmbH,
Loan Received NIL 1,500,000 (3,991,512) Germany
(4,123,123) (3,991,512)
Interest expenses 131,611 91,512 Software service charges NIL NA 970,274 (203,998)

Advance received (net)

(877) 8,065 Sale of Software Services NIL NA 135,953 309,911
38,029 4,340
Reimbursement of expenses 34,751 12,456 16 Birlasoft Solutions GmbH
(erstwhile KPIT Solutions GmbH)
Sale of Software Services 480,373 92,911 741,765 180,374
Sale of Software Services 40,984 84,765 17,630 43,818
Software service charges 988,688 (334,992) 423,729 (255,426)
Software service charges 46,513 (88,436) NIL (41,862)
5 Birlasoft Solutions France
17 MicroFuzzy Industrie-Elektronic
Sale of Software Services 54,221 (39,878) 52,446 46,214 GmbH
Software service charges 65,201 (21,454) 38,258 (24,136) Software service charges NIL NA 375,980 (172,348)
6 Birlasoft Computer Corporation Sale of Software Services NIL NA 1,244 1,244
(Erstwhile SYSTIME
Computer Corporation), USA 18 Birlasoft Solutions Limited,UK

Software service charges 12,440,437 (12,343,530) 14,600,849 (16,091,565) Software service charges 7,87,380 (35,358) 332,545 (331,791)

Sale of Software Services 3,753,972 3,728,738 2,540,702 1,513,600 Sale of Software Services 13,987 6,393 30,509 NIL

Advance received (net) 161,144 595,665 Advance received (net) 41,343 41,343 NIL NIL
445,978 243,931
Reimbursement of expenses (net) 2,755,378 6,997 Loan given NIL 13,850,000

7 KPIT (Shanghai) Software Repayment of loan 1,500,000 10,875,117 2,000,000 11,978,071
Technology Co. Limited, China
Interest Income 397,046 128,071
Sale of Software Services NIL NA 1,178 1,489
19 KPIT Technologies Inc., USA
Software service charges NIL NA 225,859 (52,922)
Software service charges 3,224,793 NA 3,032,923 (3,032,923)
Reimbursement of expenses (net) NIL NA NIL NIL
Sale of Software Services 117,124 NA 3,853,903 17,043,788
8 Birlasoft Solutions ME FZE., Dubai
Investment in equity NIL NA 1,00,81,511 NIL
Software service charges 21,509 NIL NIL NIL
Advance received (net) (8,364,787) NA (21,197,119) )
NA (19,809,126)
9 Birlasoft Solutions ME FZE.
Reimbursement of expenses 2,197,006 3,198,438
(Australia Branch)
20 KPIT Technologies GK, Japan
Sale of Software Services 7,365 7,596 232 232
Software service charges NIL NA 25,590 (25,590)
Software service charges 378 2,709 7,588 3,939
Sale of Software Services NIL NA 103,758 115,063
10 Birlasoft Solutions ME FZE.
(Korea Branch)

Software service charges NIL NIL 182,267 (22,193)

Sale of Software Services NIL 158 158 158

BIRLASOFT LIMITED (Subsidiaries Annual Report 2019-20) 42

 Birlasoft Solutions Inc.

No. Name of related party FY 2019-20 FY 2018-19

Amount of Balance as Amount of Balance
transactions on transactions as on
during 31 Mar 20 during 31 Mar 19
the year Debit/Credit the year Debit/Credit
(USD) (USD) (USD) (USD)

21 Birlasoft Inc., US

Reimbursement of expenses (125,163) (14,541) NIL NIL

Sale of Software Services NIL 144,000 NIL NIL

22 KPIT Technologies Limited, India

(Erstwhile KPIT Engineering Limited)

Software service charges NIL NA 336,762 (345,975)

23 KPIT Technologies Holding Inc (US)

Sale of Investment in equity of NIL NA 10,081,511 NIL

KPIT Technologies Inc.

24 Birlasoft (UK) Limited, Netherland

Software service charges 46,459 (45,989) NIL NIL

28 Events after the reporting period

There are no events that have occurred after the reporting period which requires disclosure.

For and on behalf of the Board of Directors

Birlasoft Solutions Inc.
(Erstwhile KPIT Infosystems Incorporated)

Faridabad Dharmander Kapoor

20 May 2020 Director

BIRLASOFT LIMITED (Subsidiaries Annual Report 2019-20) 43

Birlasoft Consulting Inc.
(Formerly Sparta Consulting Inc.)
Registered Office: 111 Woodmere Road, Suite 200 Folsom, California 95630, United States of
America.

Board’s Report Balance Sheet

As at 31 March 2020
Dear Shareholders,
(Amount in USD)
Your Board of Directors is pleased to present herewith the report of the Directors on the operations of
Note 31 March 2020 31 March 2019
the Company together with the accounts for the financial year ended March 31, 2020.
ASSETS
Financial Results
Non-current assets
Particulars 2019-20 2018-19
USD USD Property, plant and equipment 2A 62,063 1,03,517
(Million) (Million)
Right-of-use assets 2B 98,250 -
Total Income 47.66 79.57
Other intangible assets 2C 99,743 376,964
Net Profit / (Loss) for the year (2.61) 3.29
Financial assets
Operations Loans 3 16,057 16,196

During the year under review, the total income of the Company has decreased by 40.10% resulting in Income tax assets (net) 95,960 -
net loss of USD 2.61 million.
Deferred tax assets 4 1,150,118 1,116,625

Name Change Other non current asset 5 808,084 -

2,330,275 1,613,302
During the year under review, the name of the Company changed from Sparta Consulting Inc. to
Birlasoft Consulting Inc. Current assets

Financial assets
Change in Board of Directors
Trade receivables 5 9,563,344 18,196,181
During the year under review, Mr. Anjan Lahiri, Mr. Pawan Sharma ceased to be the Directors and Mr.
Prasad Thrikutam was appointed as a Director w.e.f. May 24, 2019. Cash and cash equivalents 6 1,776,008 7,244,998

Loans 7 41,361 422,052

Audit
Unbilled revenue 487,947 1,096,998
The Company is not required by the local laws to have an independent audit firm to issue a report to Other current assets 8 260,834 142,326
the shareholders on the financial statements. No audit opinion has been sought in respect of these
financial statements. The accounts are prepared from the internally prepared management accounts 12,129,494 27,102,555
of the Company. The same management accounts are audited in order for the Group Auditors to give
TOTAL 14,459,769 28,715,857
an audit opinion in relation to the group accounts i.e. consolidated accounts of Birlasoft Limited, the
parent company. Hence, no separate audit report is given in respect of the Company. EQUITY AND LIABILITIES

For and on behalf of the Board of Directors Equity

Birlasoft Consulting Inc.
Equity share capital 9 5,105,200 5,105,200

Other equity 1,268,850 3,878,759

Faridabad Dharmander Kapoor
May 20, 2020 Director 6,374,050 8,983,959

Non-current liabilities

Financial liabilities

Borrowings 10 - 5,050,000

Lease liabilities 11 620 -

Provisions 12 589,692 803,357

590,312 5,853,357

Current liabilities

Financial liabilities

Trade payables 13 5,179,902 11,550,390

Lease liabilities 14 106,238 -

Other 15 871,616 1,276,259

Other current liabilities 16 293,714 333,980

Provisions 17 164,288 267,671

Current income tax liabilities (net) 879,649 450,241

7,495,407 13,878,541

TOTAL 14,459,769 28,715,857

Significant accounting policies 1

Notes referred to above 2-25

financial statements
form an integral part of the
financial statement

For and on behalf of the Board of Directors

Birlasoft Consulting Inc.

Faridabad Dharmander Kapoor

May 20, 2020 Director

BIRLASOFT LIMITED (Subsidiaries Annual Report 2019-20) 44

 Birlasoft Consulting Inc.

Statement of Profit and Loss Statement of Changes in Equity

For the year ended on 31 March 2020 For the year ended on 31 March 2020

(Amount in USD) (Amount in USD)

Note 31 March 2020 31 March 2019 A Equity share capital

Revenue from operations Balance as at 1 April 2018 5,105,200

Sale of services 18 47,592,099 79,521,850 Changes in equity share capital during 2018-19 -

Other income 19 63,487 49,226 Balance as at 31 March 2019 5,105,200

Total income 47,655,586 79,571,076 Changes in equity share capital during 2019-20 -

Expenses Balance as at 31 March 2020 5,105,200

Employee benefits expense 20 19,834,251 32,850,018 B Other equity

Finance costs 21 31,271 207,957 Particulars Retained Total

earnings
Depreciation and amortization 2 436,640 889,329
Balance as on 01 April 2018 588,691 588,691
Other expenses 22 29,664,667 41,738,180
Profit for the year 3,290,068 3,290,068
Total expenses 49,966,829 75,685,484
Other comprehensive income - -
Profit/(Loss) before tax (2,311,243) 3,885,592
Total comprehensive income for the year 3,290,068 3,290,068
Tax expense
Balance as on 31 March 2019 3,878,759 3,878,759
Current tax 332,158 578,995
Balance as on 01 April 2019 3,878,759 3,878,759
Deferred tax (33,492) 16,529
Profit for the year (2,609,909) (2,609,909)
Total tax expense 298,666 595,524
Other comprehensive income -
Profit/(Loss) for the year (2,609,909) 3,290,068
Total comprehensive loss for the year (2,609,909) (2,609,909)
Other comprehensive income - -
Balance as on 31 March 2020 1,268,850 1,268,850
Total comprehensive (2,609,909) 3,290,068
income/(loss)
Retained earnings represents the amount that can be distributed by the Company to its equity
Significant accounting policies 1 shareholders considering the requirements of Companies Act, 2013.

Notes referred to above form an 2-25 For and on behalf of the Board of Directors
integral part of the financial Birlasoft Consulting Inc.
statements

Faridabad Dharmander Kapoor
For and on behalf of the Board of Directors
May 20, 2020
Birlasoft Consulting Inc.

Faridabad Dharmander Kapoor

May 20, 2020 Director

BIRLASOFT LIMITED (Subsidiaries Annual Report 2019-20) 45

Statement of Cash Flows Notes forming part of the Financial Statements
For the year ended on 31 March 2020 For the year ended on 31 March 2020
(Amount in USD)
Company Overview:
PARTICULARS 31 March 2020 31 March 2019

A] CASH FLOW FROM OPERATING ACTIVITIES Birlasoft Consulting Inc. is a Company incorporated in the state of California, USA. The Company
is a wholly owned subsidiary of Birlasoft Solutions Incorporated, USA and ultimate holding
Profit/(Loss) for the period (2,609,909) 3,290,068
company is KPIT Technologies Limited.
Adjustments for
The Company is engaged in the business of providing pre-packaged, industry-specific SAP
Gain on sale of Property,plant and Equipment (net) (300) - software solutions and IT services.
Provision for doubful debts 1,481,118 526,580
1. Significant Accounting Policies:
Bad debts written off 237,552 -

Income tax expense 298,666 595,524 1.1 Basis for preparation of financial statements:

Depreciation / Amortization 436,640 889,329 The standalone financial statements are prepared in accordance with the Indian Accounting
Standards (“Ind-AS”) as specified under Section 133 of the Companies Act, 2013 read with the
Interest expense 31,271 207,957
Rule 3 of the Companies (Indian Accounting Standards) Rules, 2015 and Companies (Indian
Interest income (63,187) (49,226) Accounting Standards) Amendment Rules, 2016 and the provisions of Companies Act, 2013.
The standalone financial statements are presented in millions of Indian rupees rounded off to
Operating Profit before working capital changes (188,149) 5,460,232 two decimal places, except per share information, unless otherwise stated.
Adjustments for changes in working capital:
Accounting policies have been consistently applied except where a newly issued accounting
Trade receivables and unbilled revenue 7,523,218 (717,677) standard is initially adopted or a revision to an existing accounting standard requires a change in
the accounting policy hitherto in use.
Loans, other financials assets and other assets (545,762) 6,918,787

Trade Payables (6,366,725) 2,738,985 These financial statements have been prepared on the historical cost basis, except business
combination under common control, accounting for share based payments, defined benefit
Other financial liabilities, other liabilities and provisions (761,957) (18,736,414) obligations, purchase consideration in business combinations and certain financial instruments,
which are measured at fair values at the end of each reporting period, as explained in the
Cash generated from operations (339,375) (4,336,087)
accounting policies below.
Taxes Paid 1,290 (31,414)
1.2 Revenue recognition
Net cash from operating activities (A) (338,085) (4,367,501)
Effective 1 April 2018, the Company adopted Ind AS 115 “Revenue from Contracts with
Customers”. The following is a summary of new and/or revised significant accounting policies
B]CASH FLOW FROM INVESTING ACTIVITIES related to revenue recognition. The effect on adoption of Ind AS 115 was insignificant.
Purchase of Property, plant and equipment (3,506) (3,174)
Revenue is recognised upon transfer of control of promised products or services to customers
Proceeds from Sale of Property, plants and equipment 300 - in an amount that reflects the consideration we expect to receive in exchange of those goods
or services.
Interest received 63,187 49,226

Net Cash from /( used in ) investing ) activities (B 59,981 46,052 Arrangements with customers for software related services are either on a fixed-price or on a
time-and-material basis.

C]CASH FLOW FROM FINANCING ACTIVITIES

Revenue on time and material contracts are recognised as the related services are performed and
Proceeds from Long term loan from other than banks - 50,50,000 revenue from the last invoicing to the reporting date is recognised as unbilled revenue. Revenue
from fixed price contracts where the performance obligations are satisfied over time and there
Repayment of Long term loan from other than banks (50,50,000) - is no uncertainty as to measurement or collectability of consideration, is recognized as per the
percentage-of-completion method. When there is uncertainty as to measurement or ultimate
Repayment of Lease liabilities (1,15,077) -
collectability, revenue recognition is postponed until such uncertainty is resolved. Efforts or
Interest and finance charges paid (25,809) (2,07,956) costs expended have been used to measure progress towards completion as there is a direct
relationship between input and productivity. Maintenance revenue is recognized ratably over the
Net cash from /(used in) financing activities (C) (51,90,886) 48,42,044 term of the underlying maintenance arrangement. Revenue from client training, support and other
services arising due to the sale of software products is recognized as the services are performed.
Net Increase / (decrease ) in cash and (54,68,990) 5,20,595
cash equivalents (A + B + C) Revenues in excess of invoicing are classified as contract assets (unbilled revenue) while
Cash & cash equivalents at close of the year 17,76,008 72,44,998 invoicing in excess of revenues are classified as contract liabilities (Advance Billing)
(refer note 1 below)
For software development and related services, the performance obligations are satisfied as
Cash & cash equivalents at beginning of 72,44,998 67,24,403 and when the services are rendered since the customer generally obtains control of the work
the year (refer note 1 below) as it progresses. In arrangements for engineering services and the sale of its related licenses
and products, the Company has applied the guidance in Ind AS 115, ‘Revenue from contract
Cash surplus / (deficit) for the year (54,68,990) 5,20,595
with customer’, by applying the revenue recognition criteria for each distinct performance
Note 1: obligation. The arrangements with customers generally meet the criteria for considering
software development and related services as distinct performance obligations. For allocating
Cash and cash equivalents include: the transaction price, the Company 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
Cheques in Hand 6,72,094 35,10,278
for an item when sold separately is the best evidence of its standalone selling price. In cases
Balance with banks 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.
- In current accounts 11,03,914 37,34,720

Total Cash and cash equivalents 17,76,008 72,44,998 1.3 Current-non current classification

All assets and liabilities are classified into current and non-current.
Note 2:
Assets
Figures in brackets represent outflows of cash and cash equivalents.

Note 3: An asset is classified as current when it satisfies any of the following criteria:

The above Cash Flow Statement has been prepared under the indirect method as set out in the a. It is expected to be realised in, or is intended for sale or consumption in, the Company’s
Indian Accounting Standard (Ind-AS) 7 Statement of Cash Flows. normal operating cycle;

For and on behalf of the Board of Directors b. It is held primarily for the purpose of being traded;
Birlasoft Consulting Inc.
c. It is expected to be realised within 12 months after the reporting date; or

Faridabad Dharmander Kapoor d. It is cash or cash equivalent unless it is restricted from being exchanged or used to settle a
May 20, 2020 Director liability for atleast 12 months after the reporting date.

Current assets include the current portion of non-current financial assets. All other assets are

BIRLASOFT LIMITED (Subsidiaries Annual Report 2019-20) 46

 Birlasoft Consulting Inc.

classified as non-current. Improvements to leased premises are amortized over the remaining non-cancellable period of
lease.
Liability
1.8 Impairment
A liability is classified as current when it satisfies any of the following criteria:
a. Financial assets
a. It is expected to be settled in the Company’s normal operating cycle;
The Company assesses at each date of Balance Sheet whether a financial asset or a group of
b. It is held primarily for the purpose of being traded; financial assets is impaired. Ind AS 109 requires expected credit losses to be measured through
a loss allowance. The Company recognizes loss allowances using the expected credit loss
(ECL) model for the financial assets which are not fair valued through profit or loss. Expected
c. It is due to be settled within 12 months after the reporting date; or
credit losses are measured at an amount equal to the 12-month ECL, unless there has been a
significant increase in credit risk from initial recognition in which case those are measured at
d. The Company does not have an unconditional right to defer settlement of the liability for lifetime ECL. The amount of expected credit losses (or reversal) that is required to adjust the loss
at least 12 months after the reporting date. Terms of a liability that could, at the option of allowance at the reporting date to the amount that is required to be recognized is recognized as
the counterparty, result in its settlement by the issue of equity instruments do not affect its an impairment gain or loss in Statement of Profit or Loss.
classification.
b. Non- financial assets
Current liabilities include current portion of non-current financial liabilities. All other liabilities
are classified as non-current.
i. Property, plant and equipment and intangible assets

Operating cycle
The management periodically assesses using, external and internal sources, whether there is an
indication that an asset may be impaired. Impairment loss is recognized when the carrying value
Operating cycle is the time between the acquisition of assets for processing and their realization of an asset exceeds its recoverable amount. The recoverable amount is higher of the asset’s fair
in cash or cash equivalents. The operating cycle of the Company is less than twelve months. value less cost of disposal and value in use. For the purpose of impairment testing, assets are
grouped together into the smallest group of assets (cash generating unit or CGU) that generates
1.4 Borrowing Costs: cash inflows from continuing use that are largely independent of the cash inflows of other assets
or CGUs.
Borrowing costs that are directly attributable to the acquisition, construction or production of
a qualifying asset are capitalized as part of cost of that asset. All other borrowing costs are Intangible assets which are not yet available for use are tested for impairment annually. Other
charged to the Statement of Profit and Loss. assets (tangible and intangible) are reviewed at each reporting date to determine if there is
any indication of impairment. For assets in respect of which any such indication exists and for
The exchange differences arising from foreign currency borrowings, to the extent that they are intangible assets mandatorily tested annually for impairment, the asset’s recoverable amount
regarded as an adjustment to interest costs, are regrouped from other exchange differences to is estimated.
finance costs.
If at the balance sheet date there is an indication that a previously assessed impairment loss
1.5 Property, plant and equipment no longer exists or has decreased, the assets or CGU’s recoverable amount is estimated.
For assets other than goodwill, the impairment loss is reversed to the extent that the asset’s
carrying amount does not exceed the carrying amount that would have been determined, net
Property, plant and equipment are carried at cost of acquisition or construction less accumulated
of depreciation or amortization, if no impairment loss had been recognized. Such a reversal is
depreciation and/or accumulated impairment loss, if any. The cost of an item of property, plant
recognized in the Statement of Profit and Loss.
and equipment comprises its purchase price, including import duties and other non-refundable
taxes or levies and any directly attributable cost of bringing the asset to its working condition for
its intended use; any trade discounts and rebates are deducted in arriving at the purchase price. ii. Goodwill
Assets under construction are disclosed as capital work-in-progress.
CGUs to which goodwill has been allocated are tested for impairment annually, or more
1.6 Intangible assets frequently when there is indication for impairment. If the recoverable amount of a CGU is less
than its carrying amount, the impairment loss is allocated first to reduce the carrying amount of
any goodwill allocated to the unit and then to the other assets of the unit pro-rata on the basis of
Intangible assets are stated at cost less accumulated amortization and accumulated impairment,
the carrying amount of each asset in the unit. 
if any.

1.9 Income taxes

In case of internally generated intangibles, costs incurred during the research phase of a project
are expensed when incurred. Development activities involve a plan or design for the production
of new or substantially improved products or processes. Development expenditure is capitalized The Company is a part of a tax consolidation group consisting of KPIT Infosystems Incorporated
only if development costs can be measured reliably, the product or process is technically and (the holding company or the parent entity), the Company. The tax-consolidated group
commercially feasible, future economic benefits are probable, and the Company intends to prepares a single consolidated annual tax return, and the parent entity records the ultimate
and has sufficient resources to complete development and to use the asset. The expenditure tax obligations. Based on the contractual arrangements between Company and the holding
capitalized includes the cost of materials, direct labour, overhead costs that are directly company, receivables/payables on account of current tax are settled between the companies.
attributable to preparing the asset for its intended use, and directly attributable borrowing costs
(in the same manner as in the case of property, plant and equipment). Other development Income tax expense comprises current and deferred income tax. Income tax expense is
expenditure is recognized in the Statement of Profit and Loss as incurred. recognized in the statement of profit and loss except to the extent that it relates to items
recognized directly in equity, in which case it is recognized in other comprehensive income.
Intangible fixed assets are derecognized on disposal or when no future economic benefits Current income tax for current and prior periods is recognized at the amount expected to be paid
are expected from its use and subsequent disposal or when the economic benefits are not to or recovered from the tax authorities, using the tax rates and tax laws that have been enacted
measurable. or substantively enacted by the balance sheet date. Deferred income tax assets and liabilities are
recognized for all temporary differences arising between the tax bases of assets and liabilities
and their carrying amounts in the financial statements.
1.7 Depreciation and amortization

Deferred income tax assets and liabilities are measured using tax rates and tax laws that have
Depreciation on property, plant and equipment is provided on the straight-line method over the
been enacted or substantively enacted by the balance sheet date and are expected to apply to
useful lives of the assets. The estimated useful lives are as follows:
taxable income in the years in which those temporary differences are expected to be recovered
Type of asset Useful life or settled. The effect of changes in tax rates on deferred income tax assets and liabilities is
(No. of years) recognized as income or expense in the period that includes the enactment or the substantive
enactment date. A deferred income tax asset is recognized to the extent that it is probable that
Plant and equipment(1) 4 future taxable profit will be available against which the deductible temporary differences and
tax losses can be utilized. The company offsets current tax assets and current tax liabilities,
Office Equipment (1)
10
where it has a legally enforceable right to set off the recognized amounts and where it intends
Furniture and fixtures(1) 8 either to settle on a net basis, or to realize the asset and settle the liability simultaneously.

(1)
For these class of assets, based on internal assessment, the useful lives as given above are 1.10 Leases
believed to best represent the period over which the assets are expected to be used. Hence the
useful lives for these assets are different from the useful lives as prescribed under Part C of The Company has primarily leased rental offices premises.
Schedule II of the Companies Act 2013.
The Ministry of Corporate Affiairs (MCA) notified IND AS 116, the new lease accounting
The estimated useful life of an identifiable intangible asset is based on a number of factors standard on March 30 2019 and came into force with effect from April 01 2019. IND AS 116 has
including the effects of obsolescence, demand, competition, and other economic factors (such replaced the guidance in IND AS 17 ”Leases”.The effect of initially applying this standard is
as the stability of the industry, and known technological advances), and the level of maintenance recognised at date of initial application (i.e. April 01 2019). Ind AS 116 sets out the principles
expenditures required to obtain the expected future cash flows from the asset. for the recognition, measurement, presentation and disclosure of leases for both lessees
and lessors. It introduces a single, on-balance sheet lease accounting model for lessees.
Perpetual software licenses are amortized over 4 years. However, time-based software licenses The Company has applied INDAS 116 using the modified retrospective approach
are amortized over the license period. as per C5(b) of the standard.Accordingly the group has not restated the comparative
information, i.e. comparative information continues to be reported under IND AS
17. Refer note 1.9 Significant accounting policy in the annual report of the company
Capitalized development costs are amortized over a period of 3 to 4 years.
for the year ended March 31 2019 for lease accounting policy as per IND AS 17.

BIRLASOFT LIMITED (Subsidiaries Annual Report 2019-20) 47

 The impact of adoption of this accounting standard is significant. the period in which the employee renders the related service.

At the inception of contract the Company assesses wheather the contract is , or contains a lease. A Compensated absences
contract is, or contains, a lease if the contract involves use of an identified asset and conveys the right
to control the use of asset for period of time in exchange for consideration i.e. customer has right to : The employees can carry-forward a portion of the unutilised accrued compensated absences and
- Obtains substantially all the economic benefits from using the asset and utilise it in future service periods or receive cash compensation on termination of employment.
- direct the use of asset Since the compensated absences do not fall due wholly within twelve months after the end
of the period in which the employees render the related service and are also not expected to
1. As a lessee be utilized wholly within twelve months after the end of such period, the benefit is classified
as a long-term employee benefit. The Company records an obligation for such compensated
The Company recognises the right of use of asset and right of use of liability at the absences in the period in which the employee renders the services that increase this entitlement.
commencement date of lease. The right of use of asset is initially measured at cost , which The obligation is measured on the basis of independent actuarial valuation using the projected
comprise of present value of future liabilty (lease rent payouts), any payment made at or unit credit method.
before commencement date any inital direct cost incurred and an estimate of cost to dismantle
or remove an underlying asset or to restore an asset less any lease incentive received. 1.14 Provisions, Contingent Liabilities and Contingent Assets:
The lease liabilty is initially measured at present value of lease payments that is not paid at
commencement date discounted at implicit rate mentioned in lease or incremental borrowing The Company recognizes provisions only when it has a present legal or constructive obligation
rate. The Company generally uses incremental borrowing rate as discount rate. The right-of-use as a result of a past event, it is probable that an outflow of resources embodying economic
assets is depreciated using the straight-line method from the commencement date over the useful benefits will be required to settle the obligation and when a reliable estimate of the amount of
life of right-of-use asset. The lease liability is subsequently measured at amortised cost using the obligation can be made.
effective interest method. It is remeasured to reflect any lease modifications or reassessments.
The Company presents its right of use of assets in property plant and euipments and lease
No provision is recognized for –
liabilties in financial liabilities in the statement of financial position.

a. Any possible obligation that arises from past events and the existence of which will be
2. Extension and termination of lease
confirmed only by the occurrence or non-occurrence of one or more uncertain future events
not wholly within the control of the Company; or
The Company determines the lease term as the non-cancellable period of a lease, together with
both periods covered by an option to extend the lease if the Company is reasonably certain to
b. Present obligations that arise from past events but are not recognized because-
exercise that option; and periods covered by an option to terminate the lease if the Company is
reasonably certain not to exercise that option. In assessing whether the Company is reasonably
certain to exercise an option to extend a lease, or not to exercise an option to terminate a lease, 1) It is not probable that an outflow of resources embodying economic benefits will be
it considers all relevant facts and circumstances that create an economic incentive for the required to settle the obligation; or
Company to exercise the option to extend the lease, or not to exercise the option to terminate
the lease. The Company revises the lease term if there is a change in the non-cancellable period 2) A reliable estimate of the amount of obligation cannot be made.
of a lease.
Such obligations are disclosed as contingent liabilities. These are assessed continually and only
3. Short term leases and low value assets that part of the obligation for which an outflow of resources embodying economic benefits is
probable, is provided for, except in the extremely rare circumstances where no reliable estimate
The Company has elected not to recognise right of use of assets and lease liabilities for short- can be made.
term leases that have lease term of 12 months or less and leases of low value assets. The
Company recognises the lease payments associated with these leases as an expense on a Contingent assets are not recognized in the financial statements since this may result in the
straight- line basis over lease term. recognition of income that may never be realized.

4. Impairment testing for right of use of assets Provisions for onerous contracts are recognized when the expected benefits to be derived by the
Company from a contract are lower than the unavoidable costs of meeting the future obligations
Right of use of assets are tested for are tested for impairment whenever there is any indication under the contract. The provision is measured at the present value of the lower of the expected
that their carrying amount is not recoverable.Impairment loss, if any, is recognised in statement cost of terminating the contract and the expected net cost of continuing with the contract. Before
of profit and loss. a provision is established the Company recognizes any impairment loss on the assets associated
with that contract.
1.11 Earnings per share
Warranty
Basic earnings per share are computed by dividing the profit for the year after tax by the weighted
average number of equity shares outstanding during the year. Diluted earnings per share is The Company has an obligation by way of warranty to maintain the software during the period
computed by dividing the net profit after tax for the year by the weighted average number of of warranty, as per the contractual requirements, for certain products/licenses. Costs associated
equity shares outstanding during the year as adjusted for the effects of all dilutive potential with such sale are accrued at the time when related revenues are recorded and included in cost
equity shares except where the results are anti-dilutive. of service delivery. The Company estimates such cost based on historical experience and the
estimates are reviewed periodically for material changes in the assumptions.
1.12 Foreign currency transactions
1.15 Cash and cash equivalents
Transactions in foreign currencies are recorded at the exchange rates prevailing on the date
of the transaction. Monetary items are translated into the functional currency at the year-end Cash and cash equivalent in the balance sheet comprise cash at banks and on hand and
rates. The exchange differences so determined and also the realized exchange differences are short-term deposits with an original maturity of three months or less, which are subject to an
recognized in the Statement of Profit and Loss. insignificant risk of changes in value.For the purpose of the standalone statement of cash flows,
cash and cash equivalents consist of cash and short-term deposits, as defined above, net of
outstanding bank overdrafts (if any) as they are considered an integral part of the Company’s
1.13 Employee benefits
cash management.

i) Post-employment benefit plans

1.16 Research and development:

Defined benefit plan

Costs incurred during the research phase of a project are expensed when incurred. Costs
incurred in the development phase are recognized as an intangible asset in accordance with
The Company’s gratuity scheme is a defined benefit plan. For defined benefit plans, the cost policy defined.
of providing benefits is determined using the Projected Unit Credit Method, with independent
actuarial valuations being carried out at each Balance Sheet date. Remeasurement of net
1.17 Financial Instrument
defined benefit liability, which comprise actuarial gains and losses, the return on plan assets
(excluding interest) and the effects of asset ceiling (if any, excluding interest) are recognized
in Other Comprehensive Income for the period in which they occur. Net interest expense and a. Initial recognition
other expenses related to defined benefit plans are recognized in Statement of Profit and Loss.
Past service cost is recognized immediately to the extent that the benefits are already vested or Financial assets and liabilities are recognized when the Company becomes a party to the
amortized on a straight-line basis over the average period until the benefits become vested. contractual provisions of the instrument. Financial assets and liabilities are initially measured
at fair value, except for trade receivables which are initially measured at transaction price.
The retirement benefit obligation recognized in the Balance Sheet represents the present value Transaction costs that are directly attributable to the acquisition or issue of financial assets and
of the defined benefit obligation as adjusted for unrecognized past service cost, and as reduced financial liabilities (other than financial assets and financial liabilities at fair value through profit
by the fair value of scheme assets, if any. Any asset resulting from this calculation is limited to or loss) are added to or deducted from the fair value measured on initial recognition of financial
the present value of available refunds and reductions in future contributions to the scheme. asset or financial liability.

Defined contribution plan b. Subsequent measurement

A defined contribution plan is a post-employment benefit plan under which an entity pays i) Non-derivative financial instruments
specified contributions to a separate entity and has no obligation to pay any further amounts.
The Company makes specified monthly contributions towards employee provident fund to Financial assets carried at amortized cost
Government administered provident fund scheme which is a defined contribution plan. The
Company’s contribution is recognized as an expense in the Statement of Profit and Loss during A financial asset is subsequently measured at amortized cost if it is held within a business model

BIRLASOFT LIMITED (Subsidiaries Annual Report 2019-20) 48

 Birlasoft Consulting Inc.

whose objective is to hold the asset in order to collect contractual cash flows and the contractual latest valuation by agreeing the information in the valuation computation to contracts
terms of the financial asset give rise on specified dates to cash flows that are solely payments of and other relevant documents. A change in fair value of assets and liabilities is also
principal and interest on the principal amount outstanding. compared with relevant external sources to determine whether the change is reasonable.
For the purpose of fair value disclosures, the Company has determined classes of assets and
Financial assets at fair value through other comprehensive income liabilities on the basis of the nature, characteristics and risks of the asset or liability and the level
of the fair value hierarchy as explained above.
A financial asset is subsequently measured at fair value through Other Comprehensive Income
if it is held within a business model whose objective is achieved by both collecting contractual Cash and cash equivalents
cash flows and selling financial assets 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 Cash and cash equivalent in the balance sheet comprise cash at banks and on hand and
principal amount outstanding. short-term deposits with an original maturity of three months or less, which are subject to an
insignificant risk of changes in value.For the purpose of the standalone statement of cash flows,
Financial assets at fair value through profit or loss cash and cash equivalents consist of cash and short-term deposits, as defined above, net of
outstanding bank overdrafts (if any) as they are considered an integral part of the Company’s
A financial asset which is not classified in any of the above categories are subsequently fair cash management.
valued through profit or loss.
1.18 Employee stock option
However, in cases where the Company has made an irrevocable election for particular investments
in equity instruments that would otherwise be measured at fair value through profit or loss, the In respect of stock options granted by the parent company, pursuant to the Group’s Employee
subsequent changes in fair value are recognized in Other Comprehensive Income. Stock Option Scheme, the Company recognizes employee compensation expense, using the
grant date fair value in accordance with Ind-AS 102 - Share Based Payment, on straight line
Financial liabilities basis over the period over which the employees would become unconditionally entitled to apply
for the shares.
Financial liabilities are subsequently carried at amortized cost using the effective interest
method, except for contingent consideration recognized in a business combination which 1.19 Critical accounting estimates
is subsequently measured at fair value through profit and loss. For trade and other payables
maturing within one year from the balance sheet date, the carrying amounts approximate fair a. Revenue recognition
value due to the short maturity of these instruments.
The Company uses the percentage-of-completion method in accounting for its fixed-price
c. Derecognition of financial instruments contracts. Use of the percentage-of-completion method requires the Company to estimate the
efforts or costs expended to date as a proportion of the total efforts or costs to be expended.
The Company derecognizes a financial asset when the contractual rights to the cash flows Efforts or costs expended have been used to measure progress towards completion as there is
from the financial asset expire or it transfers the financial asset and the transfer qualifies a direct relationship between input and productivity. Provisions for estimated losses, if any, on
for derecognition under Ind-AS 109. A financial liability (or a part of a financial liability) is uncompleted contracts are recorded in the period in which such losses become probable based
derecognized from the Company’s Balance Sheet when the obligation specified in the contract on the expected contract estimates at the reporting date.
is discharged or cancelled or expires.
b. Impairment of goodwill
d. Fair value of financial instruments
Goodwill is tested for impairment on an annual basis and when ever there is an indication that
The Company uses discounted cash flow analysis method for the fair value of its financial the recoverable amount of a cash generating unit is less than its carrying amount based on a
instruments except for employee stock options (ESOP) , where Black and Scholes options number of factors including operating results, business plans, future cash flows and economic
pricing model is used. The method of assessing fair value results in general approximation of conditions. The recoverable amount of cash generating units is determined based on higher
value and such value may never actually be realized. of value-in-use and fair value less cost to sell. The goodwill impairment test is performed at
the level of the cash-generating unit or groups of cash-generating units which are benefiting
from the synergies of the acquisition and which represents the lowest level at which goodwill is
For all other financial instruments the carrying amount approximates fair value due to short monitored for internal management purposes.
maturity of those instruments.
c. Income tax
Fair value measurements
Significant judgments are involved in determining the provision for income taxes, including
The Company measures financial instruments, such as, derivatives and investments in mutual amount expected to be paid/recovered for uncertain tax positions.
funds at fair value at each balance sheet date. 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. The fair value measurement is based on the presumption that the
transaction to sell the asset or transfer the liability takes place either:

a. In the principal market for the asset or liability, or

b. In the absence of a principal market, in the most advantageous market for the asset or
liability

The principal or the most advantageous market must be accessible by the Company.
The fair value of an asset or a liability is measured using the assumptions that market participants
would use when pricing the asset or liability, assuming that market participants act in their economic
best interest. A fair value measurement of a non-financial asset takes into account a market
participant’s ability to generate economic benefits by using the asset in its highest and best use
or by selling it to another market participant that would use the asset in its highest and best use.
The Company uses valuation techniques that are appropriate in the circumstances
and for which sufficient data are available to measure fair value, maximizing the
use of relevant observable inputs and minimizing the use of unobservable inputs.
All assets and liabilities for which fair value is measured are categorized
within the fair value hierarchy, described as follows, based on the lowest
level input that is significant to the fair value measurement as a whole:
a. Level 1 — Quoted (unadjusted) market prices in active markets for identical assets or liabilities
b. Level 2 — Valuation techniques for which the lowest level input that is
significant to the fair value measurement is directly or indirectly observable
c. Level 3 — Valuation techniques for which the lowest level input that is significant to the fair
value measurement is unobservable.

For assets and liabilities that are recognised in the Standalone Financial Statements on a
recurring basis, the Company determines whether transfers have occurred between levels
in the hierarchy by re-assessing categorization (based on the lowest level input that is
significant to the fair value measurement as a whole) at the end of each reporting period.
The Company’s finance team determines the policies and procedures for both recurring fair value
measurement, such as derivative instruments and unquoted financial assets measured at fair
value, and for non-recurring measurement, such as assets held for distribution in discontinued
operations. The team comprises of the head of the treasury operation and chief finance officer.
External valuers are involved for valuation of significant assets and liabilities.
Involvement of external valuers is decided on the basis of nature of transaction
and complexity involved. Selection criteria include market knowledge,
reputation, independence and whether professional standards are maintained.
At each reporting date, the finance team analyses the movements in the values of assets
and liabilities which are required to be remeasured or re-assessed as per the Company’s
accounting policies. For this analysis, the team verifies the major inputs applied in the

BIRLASOFT LIMITED (Subsidiaries Annual Report 2019-20) 49

Notes forming part of the Financial Statements
For the year ended on 31 March 2020

(Amount in USD)

2A Property, plant and equipment

Changes in the carrying amount of property, plant and equipment

Leasehold Plant and Furniture Office Total

improvements equipment and Fixtures Equipments

Gross carrying amount as at 1 April 2018 32,643 376,769 127,206 752,047 1,288,666

Other additions - 1,200 1,693 261 3,154

Disposal/retirements/derecognition - 824 - - 824

Gross carrying amount as at 31 March 2019 32,643 377,145 128,899 752,308 1,290,996

Accumulated depreciation as at 1 April 2018 32,643 330,394 106,711 662,119 1,131,866

Depreciation - 29,453 9,415 17,568 56,436

Disposal/retirements/derecognition - 824 - - 824

Accumulated depreciation as at 31 March 2019 32,643 359,023 116,126 679,687 1,187,478

Carrying amount as at 1 April 2018 - 46,375 20,495 89,928 156,800

Carrying amount as at 31 March 2019 - 18,122 12,773 72,621 103,518

Gross carrying amount as at 1 April 2019 32,643 377,145 128,899 752,308 1,290,995

Other additions - - - - -

Disposal/retirements/derecognition - - 3,506 - 3,506

Gross carrying amount as at 31 March 2020 32,643 377,145 125,393 752,308 1,287,488

Accumulated depreciation as at 1 April 2019 32,643 359,023 116,126 679,687 1,187,479

Depreciation - 16,427 7,446 17,580 41,453

Disposal/retirements/derecognition - - 3,506 - 3,506

Accumulated depreciation as at 31 March 2020 32,643 375,450 120,065 697,267 1,225,425

Carrying amount as at 1 April 2019 - 18,122 12,773 72,621 103,516

Carrying amount as at 31 March 2020 - 1,694 5,328 55,041 62,063

2B Right-of-use assets 2C Other intangible assets

Office Premises Total Changes in the carrying amount of other intangible assets

ROU asset created on adoption of 216,215 216,215 Internally Other than Total
Ind AS 116 as at 01 April 2019 Generated Internally
Generated
Additions - -
Product Software
Foreign exchange translation - - Development
Disposal/retirements/derecognition - - Cost

Gross carrying amount Gross carrying amount as at 1 April 2018 3,729,737 215,385 3,945,122
as at 31 March 2020 216,215 216,215 Other additions 20 - 20
Accumulated depreciation Disposal/retirements/derecognition - - -
as at 01 April 2019 - -
Gross carrying amount as at 31 March 2019 3,729,757 215,385 3,945,142
Depreciation 117,965 117,965
Accumulated depreciation as at 1 April 2018 2,520,203 215,081 2,735,284
Foreign exchange translation - -
Depreciation 832,671 222 832,893
Disposal/retirements/derecognition - -
Disposal/retirements/derecognition - - -
Accumulated depreciation
as at 31 March 2020 117,965 117,965 Accumulated depreciation as at 31 March 2019 3,352,874 215,303 3,568,177

Carrying amount as at 31 March 2019 - - Carrying amount as at 1 April 2018 1,209,534 304 1,209,838

Carrying amount as at 31 March 2020 98,250 98,250 Carrying amount as at 31 March 2019 376,883 82 376,965

Gross carrying amount as at 1 April 2019 3,729,757 215,385 3,945,142

Other additions - - -

Disposal/retirements/derecognition - - -

Gross carrying amount as at 31 March 2020 3,729,757 2,15,385 3,945,142

Accumulated depreciation as at 1 April 2019 3,352,874 215,303 3,568,177

Depreciation 277,146 76 277,222

Disposal/retirements/derecognition - - -

Accumulated depreciation as at 31 March 2020 3,630,020 215,379 3,845,399

Carrying amount as at 1 April 2019 376,883 82 376,965

Carrying amount as at 31 March 2020 99,737 6 99,743

BIRLASOFT LIMITED (Subsidiaries Annual Report 2019-20) 50

 Birlasoft Consulting Inc.

Notes forming part of the Financial Statements (Amount in USD)

For the year ended on 31 March 2020
31 March 2020 31 March 2019
(Amount in USD) 8 Other current assets
31 Mar 2020 31 Mar 2019 (Unsecured, considered good unless
otherwise stated)
3 Loans
Employee advances 24,159 5,667
Loans Receivable from other than
related parties - Advance to suppliers 102,299 86,699
Considered good - Unsecured
Prepaid expenses 29,522 17,138
Security deposits 16,057 16,196
Contract Fulfillment Cost 93,168 -
16,057 16,196
Balances with statutory authorities 2,850 2,850

Others 8,836 29,972

4 Deferred tax assets
260,834 142,326
Deferred tax assets

-Provision for depreciation 317,189 403,312

9 Share capital
-Provision for doubtful debts and advances 613,348 229,332
Authorised:
-Provision for leave encashment 143,960 277,306
1000 Shares common stock without par value
-Accrued Payroll 153,583 39,006
Issued subscribed and fully paid up:
-Accrued Expenses 62,000 1,12,585
1000 (Previous year 1000) Shares of the 5,105,200 5,105,200
-Payable to Subcontractor 4,606 19,007 common stock without par value fully paid
-Lease Liabilities 22,440 - 5,105,200 5,105,200
-Others - 38,132

1,317,126 1,118,680 10 Non current borrowings

Deferred tax liabilities Loans and advances from related parties
-Prepaid Expenses 4,137 2,055 (Unsecured)

-Provision for doubtful debts 142,239 - Loan from Birlasoft Solutions Inc. - 5,050,000
(Formerly known as KPIT Infosystems
-Right Of Use Assets 20,633 - Incorporated, USA

167,009 2,055 - 5,050,000

Net deferred tax asset 1,150,118 1,116,625 11 Lease non-current liabilities

Lease liabilities 620 -

5 Other non Current Asset 620 -

Contract Fulfillment Cost 808,084 -

808,084 - 12 Non current provisions

Provision for employee benefits

5 Trade receivables - Compensated Absences 589,692 803,357

Trade Receivables considered good -Unsecured 9,563,344 18,196,181 589,692 803,357

Trade Receivables - credit impaired 2,243,377 842,078

11,806,721 19,038,259 13 Trade payables

Less: Allowance for bad and 2,243,377 842,078 Trade payables 5,179,902 11,550,390
doubtful trade receivables
5,179,902 11,550,390
9,563,344 18,196,181

14 Lease current liabilities

6 Cash and cash equivalents
Lease liabilities 106,238 -
Cash and cash equivalents
106,238 -
Cheques in hand 672,094 3,510,278

Balances with banks

15 Other current financial liabilities
- In current accounts 1,103,914 3,734,720
Current maturities of long term debt
1,776,008 7,244,998 (Refer Note 21)

From Birlasoft Solutions Inc.(Formerly known - 63,826

as KPIT Infosystems Incorporated, USA)
7 Current loans and advances
Other than trade payables :
Loans Receivable from other
than related parties Accrued employee costs 863,523 1,212,433
Considered good - Unsecured
Payable to related parties ( Refer Note 24) 8,093 -
- Security deposits 10,101 30,780
871,616 1,276,259
- Other receivables 31,260 391,272

41,361 422,052
16 Other current liabilities

Unearned revenue 128,384 149,693

Statutory remittances 165,330 184,287

293,714 333,980

BIRLASOFT LIMITED (Subsidiaries Annual Report 2019-20) 51

 24 Related party transactions:
(Amount in USD)

31 March 2020 31 March 2019 A. Relationship with parent and other subsidiaries
17 Current provisions Relationship Name of related party

Provision for employee benefit Ultimate Holding Company Birlasoft Limited, India
(Erstwhile known as KPIT Technologies Limited)
- Compensated Absences 164,288 267,671
Holding Company Birlasoft Solutions Inc.
164,288 267,671 (Erstwhile Known as KPIT Infosystems Incorporated)
Fellow Subsidiary Birlasoft Technologies Canada Corporation
Companies (Erstwhile Known as KPIT Technologies Corporation, Canada)
18 Revenue from Operations
Birlasoft Computer Corporation, USA
Software services 47,592,099 79,521,850 (Erstwhile known SYSTIME Computer Corporation)

47,592,099 79,521,850 Birlasoft Solutions GmbH (erstwhile KPIT Solutions GmbH)

Birlasoft Solutions Ltda
(erstwhile KPIT Technologies Solucoes em Informatica LTDA)
19 Other income
Birlasoft Solutions Limited,UK
Interest income - 213 (erstwhile KPIT Infosystems Limited)

Profit on sale of asset 300 - Birlasoft Solutions France

(erstwhile KPIT Technologies France SAS)
Other non operating income (net of expenses 63,187 49,013 Entities jointly controlled
directly attributable to such income) KPIT (Shanghai) Software Technology Co. Limited, China
by a Group having joint (w.e.f. 01 January 2019 upto 31 January 2020)
(including miscellaneous income) control over the reporting
entity KPIT Technologies (UK) Ltd
63,487 49,226
(w.e.f. 01 January 2019 upto 31 January 2020)
KPIT Technologies GmbH, Germany
20 Employee benefits expense (w.e.f. 01 January 2019 upto 31 January 2020)
KPIT Infosystems Limited Filial UK, Sweden
Salaries, wages and incentives 19,786,648 32,781,883
(w.e.f. 01 January 2019 upto 31 January 2020)
Staff welfare expenses 47,603 68,135 KPIT Technologies Limited, India
19,834,251 32,850,018 (Erstwhile KPIT Engineering Limited)
(w.e.f. 01 January 2019 upto 31 January 2020)
MicroFuzzy Industrie-Elektronic GmbH
21 Finance costs (w.e.f. 01 January 2019 upto 31 January 2020)

Interest expense 25,809 207,957 KPIT Technologies Inc,USA

(w.e.f. 01 January 2019 upto 31 January 2020)
Interest on lease liabilities 5,462 -
KPIT Technologies GK,Japan
31,271 207,957 (w.e.f. 01 January 2019 upto 31 January 2020)

(Amount in USD)
22 Other expenses B. Transactions with related parties
Travel and overseas expenses (net) 1,938,805 5,189,699 No. Name of the related party FY 2019-20 FY 2018-19
Transport and conveyance (net) 274,818 534,535 Amount of Balance as Amount of Balance as
Cost of service delivery (net) 15,278,601 17,935,639 transaction at 31 Mar transaction at 31 Mar
2019-20 2020 2018-19 2019
Cost of professional sub-contracting (net) 10,042,809 16,060,519 (USD) (USD) (USD) (USD)

Recruitment and training expenses 18,213 102,660 1 Birlasoft Limited (Erstwhile KPIT
Technologies Limited, India)
Power and fuel - 7,123
Software service charges 13,233,140 22,226,085 (35,33,900)
Rent 7,834 137,630 (8,093) 1,096,513
Advance received (net) (22,800) 26,321
Repairs and maintenance -
Reimbursement of expenses (11,667) (1,106,243) -1,096,513
- plant & equipment 2,196 8,418
2 Birlasoft Technologies Canada
- others 3,139 2,624 Corporation (Erstwhile KPIT
Rates & taxes 14,522 21,747 Technologies Corporation, Canada)

Communication expenses (net) 100,987 140,000 Software service charges NIL NIL 183,777 (15,389)

Legal and professional fees 221,037 614,889 Sale of software services 52,784 22,230 87,255 16,695

Marketing expenses - 246,618 Repayment of loan (including interest) NIL NIL 778,930
NIL NIL
Foreign exchange loss (Net) 2,796 4,396 Interest expense NIL 7,700

Printing & stationery 3,577 32,688 3 Birlasoft Solutions Incorporated,

USA
Bad debts written off 237,552 -
Sale of software services 6,071,766 1,460,815 1,702,034 7,51,900
Provision for doubtful debts, 1,481,118 526,580
unbilled revenue and advances (net) Software service charges 5,510,279 (1,215,076)

Miscellaneous expenses (net) 36,663 172,415 Advance received (net) 79,205 4,757,899
31,260 7,060,392
29,664,667 41,738,180 Reimbursement of expenses 50,638 2,682,393

Repayment of loan (including interest) 5,050,000 386,059

NIL (16,149,219)
Interest expense 25,809 399,218
23 Contingent liabilities: 4 Birlasoft Computer Corporation,
USA
The Company has no liabilities of contingent nature outstanding as at 31 March 2020.
Reimbursement of expenses 107,414
NIL (98,138) (96,013)
NIL 96,013
Advance received (net) (200) NIL

Sale of software services 1,463,980 203,655 1,225,711 48,376

Software service charges 16,741 (17,866) 491,811 (17,775)

BIRLASOFT LIMITED (Subsidiaries Annual Report 2019-20) 52

 Birlasoft Consulting Inc.

(Amount in USD)

No. Name of the related party FY 2019-20 FY 2018-19

Amount of Balance as Amount of Balance as

transaction at 31 Mar transaction at 31 Mar
2019-20 2020 2018-19 2019
(USD) (USD) (USD) (USD)

5 Birlasoft Inc, USA

Software service charges NIL (2,994) NIL NIL

Advance received (net) NIL NIL

NIL NIL
Reimbursement of expenses (4,679) NIL

6 KPIT (Shanghai) Software

Technology Co. Limited, China

Software service charges NIL NA 32,936 (5,363)

7 KPIT Technologies (UK) Ltd

Software service charges NIL NA 4,863 6,891

NA NIL
Sale of software services NIL NA 1,092,761 NIL

8 KPIT Infosystems Limited Filial UK,

Sweden

Sale of software services NIL NA 11,648 11,648

9 Birlasoft Solutions Ltda

Software service charges NIL NIL 138,437 (11,109)

10 KPIT Technologies GmbH, Germany

Software service charges NIL NA 16,512 (7,515)

Sale of software services NIL NA 11,735 9,895

11 KPIT Technologies France

Sale of software services NIL NIL 144,981 144,981

12 MicroFuzzy Industrie-
Elektronic GmbH

Software service charges NIL NA 594,890 (160,158)

13 KPIT Technologies Inc.

Sale of software services NIL NA NIL NIL

Reimbursement of expenses 38,056 NIL

Advance received (net) 2,997,864 NIL

14 Birlasoft Solutions Limited,UK

(erstwhile KPIT
Infosystems Limited)

Software service charges 65,544 NIL NIL NIL

15 Birlasoft Solutions GmbH

(erstwhile KPIT Solutions GmbH)

Sale of software services 293,819 300,918 NIL NIL

25 Events after the reporting period

For and on behalf of the Board of Directors
Birlasoft Consulting Inc.

Faridabad Dharmander Kapoor

May 20, 2020 Director

BIRLASOFT LIMITED (Subsidiaries Annual Report 2019-20) 53

Birlasoft Computer Corporation
(Formerly Systime Computer Corporation, USA.)
Registered Office: 399, Thornall Street, 8th Floor, Edison, New Jersey 08837, USA.

Board’s Report Balance Sheet

As at 31 March 2020
Dear Shareholders,
(Amount in USD)
Your Board of Directors is pleased to present herewith the report of the Directors on the operations of Note 31 March 2020 31 March 2019
the Company together with the accounts for the financial year ended March 31, 2020.
ASSETS
Financial Results
Non-current assets
Particulars 2019-20 2018-19
Property, plant and equipment 2A 365 607
USD USD
(Million) (Million) Intangible fixed assets 2B - 270,940
Total Income 37.97 38.56 Financial assets
Net Profit / (Loss) for the year (0.21) 0.25 Investments 3 1 1

Operations Income tax assets (net) 377,989 583,836

Deferred tax assets 4 631,551 289,099

During the year under review, total income of the Company has declined by 1.53% and the Company
has incurred losses. Other non-current assets 5 524 -

1,010,430 1,144,482
Change in Board of Directors
Current assets
During the year, Mr. Dharmander Kapoor and Mr. Roopinder Singh were appointed as the Directors, and Financial assets
Mr. Anjan Lahiri, Mr. Pawan Sharma & Mr. Rajeev Gupta ceased to be the Directors of the Company.
Trade receivables 6 19,071,010 23,263,559
Audit
Cash and cash equivalents 7 2,067,591 1,704,808

The Company is not required by the local laws to have an independent audit firm to issue a report to Loans 8 750 -
the shareholders on the financial statements. No audit opinion has been sought in respect of these
financial statements. The accounts are prepared from the internally prepared management accounts Unbilled revenue 782,256 375,955
of the Company. The same management accounts are audited in order for the Group Auditors to give Other current assets 9 52,775 52,669
an audit opinion in relation to the group accounts i.e. consolidated accounts of Birlasoft Limited, the
parent company. Hence, no separate audit report is given in respect of the Company. 21,974,382 25,396,991

TOTAL ASSETS 22,984,812 26,541,473

For and on behalf of the Board of Directors
Birlasoft Computer Corporation EQUITY AND LIABILITIES

Equity

Equity share capital 10 110,000 110,00

New Jersey Roopinder Singh
May 20, 2020 Director Other equity 13,296,806 13,508,148

13,406,806 13,618,148

Liabilities

Non-current liabilities

Provisions 11 879,594 261,620

879,594 261,620

Current liabilities

Financial liabilities

Trade payables 12 5,793,945 8,119,763

Other financial liabilities 13 1,698,508 1,521,244

Other current liabilities 14 1,016,451 2,034,690

Provisions 15 169,055 986,008

Income tax liabilities (net) 20,453 -

8,698,412 12,661,705

TOTAL EQUITY AND 22,984,812 26,541,473

LIABILITIES

Significant accounting policies 1

Notes referred to above 2-22

form an integral part of the
financial statements

For and on behalf of the Board of Directors of

Birlasoft Computer Corporation, USA
(Erstwhile Known as SYSTIME Computer Corporation, USA)

Dharmander Kapoor Roopinder Singh

Director Director

Place: Faridabad Place: New Jersey

Date: 20 May 2020 Date: 20 May 2020

BIRLASOFT LIMITED (Subsidiaries Annual Report 2019-20) 54

 Birlasoft Computer Corporation

Statement of Profit and Loss Statement of Cash Flows

For the year ended on 31 March 2020 For the year ended on 31 March 2020

(Amount in USD) (Amount in USD)

Note 31 March 2020 31 March 2019 PARTICULARS 31 March 2020 31 March 2019

Revenue from operations 16 37,840,589 38,284,199 A] CASH FLOW FROM OPERATING ACTIVITIES

Other income 17 128,045 279,132 Profit for the period (211,342) 249,830

Total income 37,968,634 38,563,331 Adjustments for

Expenses Income tax expense (122,413) (49,315)

Employee benefits expense 18 18,456,909 19,762,763 Unrealised Forex Gain/(Loss)

Finance cost 19 1 - Profit/Loss on sale of Property Plant and (71,762) -

Equipment (net)
Depreciation and amortization 2 45,270 88,191
Profit/Loss on sale of Shares - 2,49,250
Other expenses 20 19,800,209 18,511,861
Depreciation / Amortization 45,270 88,191
Total expenses 38,302,389 38,362,815
Interest expense 1 -
Profit before tax (333,755) 200,516
Bad debts written off 21,983 -
Tax expenses
Provision for doubtful debts, (32,583) 19,471
Current tax 220,040 (83,690) unbilled revenue and advances (net)
Deferred tax (benefit)/Charge (342,453) 34,375 Interest income (1,115) (3)
Total tax expense (122,413) (49,315) Operating Profit before working capital changes (371,961) 557,424
Profit for the year (211,342) 249,831 Adjustments for changes in working capital:
Other comprehensive income - - Trade receivables and unbilled revenue 37,96,848 (8,011,309)
Total comprehensive (211,342) 249,831 Loans, other financials assets and other assets (108) 1,058,041
income for the year
Trade Payables (2,325,818) 3,749,969
Significant accounting policies 1
Other non-current assets (524) -

Notes referred to above form 2-22 Other financial liabilities, other liabilities (10,39,954) 1,601,748
an integral part of the and provisions
financial statements
Cash generated from operations 58,483 (1,044,127)
For and on behalf of the Board of Directors of Taxes Paid 6,260 (301,380)
Birlasoft Computer Corporation, USA
(Erstwhile Known as SYSTIME Computer Corporation, USA) Net cash from operating activities (A) 64,743 (1,345,507)

B] CASH FLOW FROM INVESTING ACTIVITIES
Dharmander Kapoor Roopinder Singh
Purchase of Property Plant and Equipment - (118,458)
Director Director
Proceeds from Sale of Property Plant 297,674 -
Place: Faridabad Place: New Jersey and Equipment
Date: 20 May 2020 Date: 20 May 2020
Sale of investments - (248,750)

Loans given to related parties (750) -

Interest received 1,115 3

Interest and finance charges paid 1 -

Net Cash from /(used in) investing activities (B) 298,040 (367,205)

Net Increase / (decrease ) 362,783 (1,712,712)

in cash and cash equivalents (A + B)

Cash & cash equivalents at close of the year 2,067,591 1,704,808

(refer note 1 below)

Cash & cash equivalents at beginning 17,04,808 34,17,520

of the year (refer note 1 below)

Cash surplus / (deficit) for the year 362,783 (1,712,712)

Note 1:

Cash and cash equivalents include:

Cheques in Hand 118,206 -

Balance with banks

- In current accounts 1,949,385 1,704,808

Total Cash and cash equivalents 2,067,591 1,704,808

Note 2:
Figures in brackets represent outflows of cash and cash equivalents.
Note 3:
The above Cash Flow Statement has been prepared under the indirect method as set out in the
Indian Accounting Standard (Ind-AS) 7 Statement of Cash Flows.

For and on behalf of the Board of Directors of

Birlasoft Computer Corporation, USA
(Erstwhile Known as SYSTIME Computer Corporation, USA)

Dharmander Kapoor Roopinder Singh

Director Director

Place: Faridabad Place: New Jersey

Date: 20 May 2020 Date: 20 May 2020

BIRLASOFT LIMITED (Subsidiaries Annual Report 2019-20) 55

Statement of changes in equity Notes forming part of the financial statements for the year
For the year ended on 31 March 2020
(Amount in USD) ended on 31 March 2020
A Equity share capital Amount Company Overview:
Balance as at 31 March 2018 110,000
Birlasoft Computer Corporation, USA (Erstwhile Known as SYSTIME Computer Corporation,
Changes in equity share capital during 2018-19 - USA) is a Company incorporated in California on January 21, 1997. The Company is a wholly
owned subsidiary of Birlasoft Limited (Erstwhile KPIT Technologies Limited, India).
Balance as at 31 March 2019 110,000

Changes in equity share capital during 2019 - The Company is engaged in the business of providing software consultancy services in the
areas of Enterprise Resource Planning, Customer Relationship Management, Supply Chain
Balance as at 31 December 2019 110,000 Management, Business Intelligence, Business Integration, Human Resource Management,
Infrastructure Management Services and Strategic Sourcing.

B Other equity 1. Significant Accounting Policies:

Particulars Retained earnings Total
1.1 Basis for preparation of financial statements:
Balance as on 31 March 2018 13,258,317 13,258,317
“The standalone financial statements are prepared in accordance with the Indian Accounting
Profit for the year 249,831 249,831
Standards (“”Ind-AS””) as specified under Section 133 of the Companies Act, 2013 read with
Other comprehensive income - - the Rule 3 of the Companies (Indian Accounting Standards) Rules, 2015 and Companies (Indian
Accounting Standards) Amendment Rules, 2016 and the provisions of Companies Act, 2013.
Total comprehensive income for the year 249,831 249,831 The standalone financial statements are presented in US Dollar (“USD”),unless otherwise
stated.”
Balance as on 31 March 2019 13,508,148 13,508,148

Profit for the year (211,342) (211,342 Accounting policies have been consistently applied except where a newly issued accounting
standard is initially adopted or a revision to an existing accounting standard requires a change in
Other comprehensive income - - the accounting policy hitherto in use.
Total comprehensive income for the year (211,342) (211,342)
Use of estimates
Balance as on 31 March 2020 13,296,806 13,296,806

Retained earnings represents the amount that can be distributed by the Company to its equity The preparation of financial statements requires the management of the Company to make
shareholders considering the requirements of Companies Act, 2013. judgments, estimates and assumptions that affect the reported balances of assets and liabilities
and disclosures relating to the contingent liabilities as at the date of the financial statements
and reported amounts of income and expenditure during the year. Actual results could differ
Note 3:
from estimates. Differences between actual results and estimates are recognized in the year in
The above Cash Flow Statement has been prepared under the indirect method as set out in the
which the results are known / materialized.
Indian Accounting Standard (Ind-AS) 7 Statement of Cash Flows.

For and on behalf of the Board of Directors of Critical accounting estimates

Birlasoft Computer Corporation, USA
(Erstwhile Known as SYSTIME Computer Corporation, USA) a. Revenue recognition

The Company uses the percentage-of-completion method in accounting for its fixed-price
Dharmander Kapoor Roopinder Singh contracts. Use of the percentage-of-completion method requires the Company to estimate the
Director Director efforts or costs expended to date as a proportion of the total efforts or costs to be expended.
Efforts or costs expended have been used to measure progress towards completion as there is
Place: Faridabad Place: New Jersey a direct relationship between input and productivity. Provisions for estimated losses, if any, on
Date: 20 May 2020 Date: 20 May 2020 uncompleted contracts are recorded in the period in which such losses become probable based
on the expected contract estimates at the reporting date.

1.2 Current-non current classification

All assets and liabilities are classified into current and non-current.

Assets

An asset is classified as current when it satisfies any of the following criteria:

a. It is expected to be realised in, or is intended for sale or consumption in, the Company’s
normal operating cycle;

b. It is held primarily for the purpose of being traded;

c. It is expected to be realised within 12 months after the reporting date; or

d. It is cash or cash equivalent unless it is restricted from being exchanged or used to settle a
liability for atleast 12 months after the reporting date.

Current assets include the current portion of non-current financial assets. All other assets are
classified as non-current.

Liability

A liability is classified as current when it satisfies any of the following criteria:

a. It is expected to be settled in the Company’s normal operating cycle;

b. It is held primarily for the purpose of being traded;

c. It is due to be settled within 12 months after the reporting date; or

d. The Company does not have an unconditional right to defer settlement of the liability for
at least 12 months after the reporting date. Terms of a liability that could, at the option of
the counterparty, result in its settlement by the issue of equity instruments do not affect its
classification.

Current liabilities include current portion of non-current financial liabilities. All other liabilities
are classified as non-current.

BIRLASOFT LIMITED (Subsidiaries Annual Report 2019-20) 56

 Birlasoft Computer Corporation

Operating cycle 1.4 Borrowing Costs:

Operating cycle is the time between the acquisition of assets for processing and their realization Borrowing costs that are directly attributable to the acquisition, construction or production of
in cash or cash equivalents. The operating cycle of the Company is less than twelve months. a qualifying asset are capitalized as part of cost of that asset. All other borrowing costs are
charged to the Statement of Profit and Loss.
1.3 Revenue recognition:
The exchange differences arising from foreign currency borrowings, to the extent that they are
The Entity earns revenue primarily from providing IT services, consulting and business solutions. regarded as an adjustment to interest costs, are regrouped from other exchange differences to
The Company offers a consulting-led, integrated portfolio of IT. finance costs.

Revenue is recognised upon transfer of control of promised products or services to customers 1.5 Property, plant and equipment
in an amount that reflects the consideration which the entity expects to receive in exchange for
those products or services. Property, plant and equipment are carried at cost of acquisition or construction less accumulated
depreciation and/or accumulated impairment loss, if any. The cost of an item of property, plant
- Revenue from time and material and job contracts is recognised on output basis measured by and equipment comprises its purchase price, including import duties and other non-refundable
units delivered, efforts expended, number of transactions processed, etc. taxes or levies and any directly attributable cost of bringing the asset to its working condition for
its intended use; any trade discounts and rebates are deducted in arriving at the purchase price.
If significant parts of an item of property, plant and equipment have different useful lives , than
Revenue related to fixed price maintenance and support services contracts where the Company
they are accounted for as separate items (major components) of property, plant and equipment.
is standing ready to provide services is recognised based on time elapsed mode and revenue is
The cost and related accumulated depreciation are eliminated from the standalone financial
straight lined over the period of performance.
statements upon sale or retirement of the asset and the resultant gains or losses are recognized
in the Statement of Profit and Loss. Assets under construction are disclosed as capital work-
In respect of other fixed-price contracts, revenue is recognised using percentage-of-completion in-progress.
method (‘POC method’) of accounting with contract costs incurred/ efforts expended
determining the degree of completion of the performance obligation. Revenue from third party
1.6 Intangible assets
software is recognised upfront at the point in time when software is delivered to the customer,
such revenue is recognised on net basis when the entity is acting as an agent.
Intangible assets are stated at cost less accumulated amortization and accumulated impairment,
if any. 
Revenue is measured based on the transaction price, which is the consideration, adjusted for
volume discounts, service level credits, performance bonuses, price concessions and incentives,
if any, as specified in the contract with the customer. Expenses reimbursed by customers during In case of internally generated intangibles, costs incurred during the research phase of a project
the project execution are recorded as reduction to associated costs. Revenue also excludes are expensed when incurred. Development activities involve a plan or design for the production
taxes collected from customers. of new or substantially improved products or processes. Development expenditure is capitalized
only if development costs can be measured reliably, the product or process is technically and
commercially feasible, future economic benefits are probable, and the Company intends to and
Contract assets are recognised when there is excess of revenue earned over billings on contracts.
has sufficient resources to complete development and to use or sell the asset. The expenditure
Contract assets are classified as unbilled revenue (only act of invoicing is pending) when there
capitalized includes the cost of materials, direct labour, overhead costs that are directly
is unconditional right to receive cash, and only passage of time is required, as per contractual
attributable to preparing the asset for its intended use, and directly attributable borrowing costs
terms.
(in the same manner as in the case of property, plant and equipment). Other development
expenditure is recognized in the Statement of Profit and Loss as incurred.
Unearned revenue (“contract liability”) is recognised when there is billings in excess of
revenues.
Intangible fixed assets are derecognized on disposal or when no future economic benefits
are expected from its use and subsequent disposal or when the economic benefits are not
The billing schedules agreed with customers include periodic performance based payments measurable
and / or milestone based progress payments. Invoices are payable within contractually agreed
credit period.
1.7 Depreciation and amortization

In accordance with Ind AS 37, the entity recognises an onerous contract provision when the
Depreciation on property, plant and equipment is provided on the straight-line method over the
unavoidable costs of meeting the obligations under a contract exceed the economic benefits
useful lives of the assets. The estimated useful lives are as follows:
to be received.

Contracts are subject to modification to account for changes in contract specification and
requirements. The entity reviews modification to contract in conjunction with the original Type of asset Useful life
contract, basis which the transaction price could be allocated to a new performance obligation, Number of years
or transaction price of an existing obligation could undergo a change. In the event transaction
price is revised for existing obligation, a cumulative adjustment is accounted for. Plant and equipment (1) 4

Office Equipment (1) 10

The entity disaggregates revenue from contracts with customers by geography and business
verticals. Furniture and fixtures (1) 8

Use of significant judgements in revenue recognition For these class of assets, based on internal assessment, the useful lives as given above are
believed to best represent the period over which the assets are expected to be used. Hence
The entity’s contracts with customers could include promises to transfer multiple products and the useful lives for these assets are different from the useful lives as prescribed under Part C of
services to a customer. The entity assesses the products / services promised in a contract and Schedule II of the Companies Act 2013.
identifies distinct performance obligations in the contract. Identification of distinct performance
obligation involves judgement to determine the deliverables and the ability of the customer to Perpetual software licenses are amortized over 4 years. However, time-based software licenses
benefit independently from such deliverables. are amortized over the license period.

Judgement is also required to determine the transaction price for the contract. The transaction Capitalized development costs are amortized over a period of 3 years.
price could be either a fixed amount of customer consideration or variable consideration
with elements such as volume discounts, service level credits, performance bonuses, price The estimated useful life of an identifiable intangible asset is based on a number of factors
concessions and incentives. The transaction price is also adjusted for the effects of the time including the effects of obsolescence, demand, competition, and other economic factors (such
value of money if the contract includes a significant financing component. Any consideration as the stability of the industry, and known technological advances), and the level of maintenance
payable to the customer is adjusted to the transaction price, unless it is a payment for a distinct expenditures required to obtain the expected future cash flows from the asset.
product or service from the customer. The estimated amount of variable consideration is
adjusted in the transaction price only to the extent that it is highly probable that a significant
Improvements to leased premises are amortized over the remaining non-cancellable period of
reversal in the amount of cumulative revenue recognised will not occur and is reassessed at
the lease.
the end of each reporting period. The entity allocates the elements of variable considerations
to all the performance obligations of the contract unless there is observable evidence that they
pertain to one or more distinct performance obligations. Depreciation and amortisation methods, useful lives and residual values are reviewed at the end
of each financial year and adjusted if appropriate.
The entity uses judgement to determine an appropriate standalone selling price for a
performance obligation. The entity allocates the transaction price to each performance 1.8 Impairment
obligation on the basis of the relative stand-alone selling price of each distinct product or
service promised in the contract. Where standalone selling price is not observable, the entity a. Financial assets
uses the expected cost plus margin approach to allocate the transaction price to each distinct
performance obligation. The Company assesses at each date of Balance Sheet whether a financial asset or a Company of
financial assets is impaired. Ind AS 109 requires expected credit losses to be measured through
The entity exercises judgment in determining whether the performance obligation is satisfied a loss allowance. The Company recognizes loss allowances using the expected credit loss
at a point in time or over a period of time. The entity considers indicators such as how customer (ECL) model for the financial assets which are not fair valued through profit or loss. Expected
consumes benefits as services are rendered or who controls the asset as it is being created or credit losses are measured at an amount equal to the 12-month ECL, unless there has been a
existence of enforceable right to payment for performance to date and alternate use of such significant increase in credit risk from initial recognition in which case those are measured at
product or service, transfer of significant risks and rewards to the customer, acceptance of lifetime ECL. The amount of expected credit losses (or reversal) that is required to adjust the loss
delivery by the customer, etc. allowance at the reporting date to the amount that is required to be recognized is recognized as
an impairment gain or loss in Statement of Profit or Loss.

BIRLASOFT LIMITED (Subsidiaries Annual Report 2019-20) 57

b. Non- financial assets recognises the lease payments associated with these leases as an expense on a straight- line
basis over lease term.
i. Property, plant and equipment and intangible assets
d. Impairment testing for right of use of assets
The management periodically assesses using, external and internal sources, whether there is an
indication that an asset may be impaired. Impairment loss is recognized when the carrying value Right of use of assets are tested for are tested for impairment whenever there is any indication
of an asset exceeds its recoverable amount. The recoverable amount is higher of the asset’s fair that their carrying amount is not recoverable. Impairment loss ,if any ,is recognised in statement
value less cost of disposal and value in use. For the purpose of impairment testing, assets are of profit and loss.
grouped together into the smallest group of assets (cash generating unit or CGU) that generates
cash inflows from continuing use that are largely independent of the cash inflows of other assets 1.10 Earnings per share
or CGUs.
Basic earnings per share are computed by dividing the profit for the year after tax by the weighted
Intangible assets which are not yet available for use are tested for impairment annually. Other average number of equity shares outstanding during the year. Diluted earnings per share is
assets (tangible and intangible) are reviewed at each reporting date to determine if there is computed by dividing the net profit after tax for the year by the weighted average number of
any indication of impairment. For assets in respect of which any such indication exists and for equity shares outstanding during the year as adjusted for the effects of all dilutive potential
intangible assets mandatorily tested annually for impairment, the asset’s recoverable amount equity shares except where the results are anti-dilutive.
is estimated.
1.11 Foreign currency transactions
If at the balance sheet date there is an indication that a previously assessed impairment loss
no longer exists or has decreased, the assets or CGU’s recoverable amount is estimated.
Transactions in foreign currencies are translated to the functional currency of the Company
For assets other than goodwill, the impairment loss is reversed to the extent that the asset’s
at the exchange rates prevailing on the date of the transaction. Monetary items denominated
carrying amount does not exceed the carrying amount that would have been determined, net
in foreign currencies are translated into the functional currency at the year-end rates. The
of depreciation or amortization, if no impairment loss had been recognized. Such a reversal is
exchange differences so determined and also the realized exchange differences are recognized
recognized in the Statement of Profit and Loss.
in the Statement of Profit and Loss. Non-monetary items denominated in foreign currencies and
measured at fair value are translated into the functional currency at the exchange rate prevalent
1.9 Leases at the date when the fair value was determined. Non-monetary items denominated in foreign
currencies and measured at historical cost are translated into the functional currency at the
The entity has primarily leased rental offices premises , guest house, parking space, laptops etc exchange rate prevalent at the date of transaction.
across multiple locations.
1.12 Employee benefits
“The Ministry of Corporate Affiairs (MCA) notified IND AS 116 , the new lease accounting standard
on March 30, 2019 and came into force with effect from April 01, 2019. IND AS 116 has replaced Compensated absences
the guidance in IND AS 17 “”Leases””. The effect of initially applying this standard is recognised
at date of initial application (i.e. April 01, 2019). Ind AS 116 sets out the principles for the
The employees of certain locations can carry-forward a portion of the unutilized accrued
recognition, measurement, presentation and disclosure of leases for both lessees and lessors. It
compensated absences and utilize it in future service periods or receive cash compensation
introduces a single, on-balance sheet lease accounting model for lessees.The entity has applied
on termination of employment. Since the compensated absences do not fall due wholly within
IND AS 116 using the modified retrospective approach as per C5(b) of the standard. Accordingly
twelve months after the end of the period in which the employees render the related service and
the entity has not restated the comparative information, i.e. comparative information continues
are also not expected to be utilized wholly within twelve months after the end of such period,
to be reported under IND AS 17. Refer note 1.10 Significant accounting policy in the annual report
the benefit is classified as a long-term employee benefit. The Company records an obligation
of the company for the year ended March 31, 2019 for lease accounting policy as per IND AS 17.
for such compensated absences in the period in which the employee renders the services that
The impact of adoption of this accounting standard is significant.”
increase this entitlement. The obligation is measured on the basis of independent actuarial
valuation using the projected unit credit method.
The entity has applied IND AS 116 using the modified retrospective approach as per C5(b) of the
standard. Accordingly the entity has not restated the comparative information, i.e. comparative
1.13 Income taxes
information continues to be reported under IND AS 17. Refer note 1.10 Significant accounting
policy in the annual report of the company for the year ended March 31, 2019 for lease accounting
policy as per IND AS 17. Income tax expense comprises current and deferred income tax. Income tax expense is
recognized in the statement of profit and loss except to the extent that it relates to items
recognized directly in equity, in which case it is recognized in other comprehensive income.
The impact of adoption of this accounting standard is significant.
Current income tax for current and prior periods is recognized at the amount expected to be paid
to or recovered from the tax authorities, using the tax rates and tax laws that have been enacted
At the inception of contract the entity assesses wheather the contract is , or contains a lease. A or substantively enacted by the balance sheet date. Deferred income tax assets and liabilities are
contract is, or contains, a lease if the contract involves use of an identified asset and conveys the recognized for all temporary differences arising between the tax bases of assets and liabilities
right to control the use of asset for period of time in exchange for consideration i.e. customer and their carrying amounts in the financial statements.
has right to:

−− Obtains substantially all the economic benefits from using the asset and 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
−− Direct the use of asset 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
a. As a lessee recognized as income or expense in the period that includes the enactment or the substantive
enactment date. A deferred income 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
The entity recognises the right of use of asset and right of use of liability at the commencement
tax losses can be utilized. Deferred income taxes are not provided on the undistributed earnings
date of lease. The right of use of asset is initially measured at cost, which comprise of present
of subsidiaries and branches where it is expected that the earnings of the subsidiary or branch
value of future liabilty (lease rent payouts), any payment made at or before commencement
will not be distributed in the foreseeable future. The company offsets current tax assets and
date any inital direct cost incurred and an estimate of cost to dismantle or remove an underlying
current tax liabilities, where it has a legally enforceable right to set off the recognized amounts
asset or to restore an asset less any lease incentive received.
and where it intends either to settle on a net basis, or to realize the asset and settle the liability
simultaneously.
The lease liabilty is initially measured at present value of lease payments that is not paid at
commencement date discounted at implicit rate mentioned in lease or incremental borrowing
1.14 Provisions, Contingent Liabilities and Contingent Assets:
rate. The entity generally uses incremental borrowing rate as discount rate. The right-of-use
assets is depreciated using the straight-line method from the commencement date over the
useful life of right-of-use asset. The lease liability is subsequently measured at amortised The Company recognizes provisions only when it has a present legal or constructive obligation
cost using effective interest method. It is remeasured to reflect any lease modifications or as a result of a past event, it is probable that an outflow of resources embodying economic
reassessments. benefits will be required to settle the obligation and when a reliable estimate of the amount of
the obligation can be made.
The entity presents its right of use of assets in property plant and euipments and lease liabilties
in financial liabilities in the statement of financial position. No provision is recognized for –

b. Extension and termination of lease a. Any possible obligation that arises from past events and 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
The entity determines the lease term as the non-cancellable period of a lease, together with
both periods covered by an option to extend the lease if the entity is reasonably certain to
exercise that option; and periods covered by an option to terminate the lease if the entity is b. Present obligations that arise from past events but are not recognized because-
reasonably certain not to exercise that option. In assessing whether the entity is reasonably
certain to exercise an option to extend a lease, or not to exercise an option to terminate a lease, 1) It is not probable that an outflow of resources embodying economic benefits will be
it considers all relevant facts and circumstances that create an economic incentive for the entity required to settle the obligation; or
to exercise the option to extend the lease, or not to exercise the option to terminate the lease.
The entity revises the lease term if there is a change in the non-cancellable period of a lease. 2) A reliable estimate of the amount of obligation cannot be made.

c. Short term leases and low value assets Such obligations are disclosed as contingent liabilities. These are assessed continually and only
that part of the obligation for which an outflow of resources embodying economic benefits is
The entity has elected not to recognise right of use of assets and lease liabilities for short-term probable, is provided for, except in the extremely rare circumstances where no reliable estimate
leases that have lease term of 12 months or less and leases of low value assets. The entity can be made.

BIRLASOFT LIMITED (Subsidiaries Annual Report 2019-20) 58

 Birlasoft Computer Corporation

Contingent assets are not recognized in the financial statements since this may result in the
(Amount in USD)
recognition of income that may never be realized.

2B Other intangible assets

Provisions for onerous contracts are recognized when the expected benefits to be derived by the
Company from a contract are lower than the unavoidable costs of meeting the future obligations
under the contract. The provision is measured at the present value of the lower of the expected Changes in the carrying amount of other intangible assets
cost of terminating the contract and the expected net cost of continuing with the contract. Before

a provision is established the Company recognizes any impairment loss on the assets associated
Internally Total
with that contract.
Generated

1.15 Employee stock option Product

Development
In respect of stock options granted by the parent company, pursuant to the Group’s Employee Cost
Stock Option Scheme, the Company recognizes employee compensation expense, using the Gross carrying amount as at 1 April 2018 37,233 37,233
grant date fair value in accordance with Ind-AS 102 - Share Based Payment, on straight line
basis over the period over which the employees would become unconditionally entitled to apply Other additions 325,299 325,299
for the shares.
Disposal/retirements/derecognition - -
1.16 Financial Instrument Gross carrying amount as at 31 March 2019 362,532 362,532

Financial assets and liabilities are recognized when the Company becomes a party to the Accumulated depreciation as at 1 April 2018 12,429 12,429
contractual provisions of the instrument. Financial assets and liabilities are initially measured Depreciation 79,164 79,164
at fair value, except for trade receivables which are initially measured at transaction price.
Transaction costs that are directly attributable to the acquisition or issue of financial assets and Disposal/retirements/derecognition - -
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 Accumulated depreciation as at 31 March 2019 91,593 91,593
asset or financial liability. Carrying amount as at 1 April 2018 24,804 24,804

Carrying amount as at 31 March 2019 270,940 270,940

Gross carrying amount as at 1 April 2019 362,532 362,532

2A Property, plant and equipment (Amount in USD)
Other additions - -
Changes in the carrying amount of property, plant and equipment Disposal/retirements/derecognition 325,299 325,299
Plant & Furniture & Office Total Gross carrying amount as at 31 March 2020 37,233 37,233
Equipment Fixtures Equipments
Accumulated depreciation as at 1 April 2019 91,593 91,593
Gross carrying amountas at 1 April 2018 173,997 45,000 1,3825 232,822
Depreciation 45,028 45,028
Other additions - - - -
Disposal/retirements/derecognition 99,388 99,388
Disposal/retirements/derecognition 1,130 - - 1,130
Accumulated depreciation as at 31 March 2020 37,233 37,233
Gross carrying amount
as at 31 March 2019 172,867 45,000 13,825 231,692 Carrying amount as at 1 April 2019 270,940 270,940
Accumulated depreciation Carrying amount as at 31 March 2020 - -
as at 1 April 2018 165,052 45,000 13,136 223,188

Depreciation 8,865 - 162 9,027

31 March 2020 31 March 2019
Disposal/retirements/derecognition 1,130 - - 1,130
3 Investment in Subsidiaries
Accumulated depreciation 172,787 45,000 13,298 231,085
as at 31 March 2019 Trade Investments (Unquoted)

Carrying amount as at 1 April 2018 8,945 - 689 9,634 Investments in equity instruments
of subsidiaries (at cost)
Carrying amount as at 31 March 2019 80 - 527 607
MICROFUZZY KPIT TECNOLOGIA LTDA - -
Gross carrying amount as at 1 April 2019 172,867 45,000 13,825 231,692 (erstwhile SYSTIME Global Solutions LtdA,
Brazil) Nil (Previous year 1,000) shares of
Other additions - - - - BRL 1 each
Disposal/retirements/derecognition - - - - Birlasoft Technologies Canada Corporation 1 1
Gross carrying amount 172,867 45,000 13,825 231,692 (Formerly KPIT Technologies Corporation)
as at 31 December 2019 1 (Previous year 1) common share of
CAD 1 each
Accumulated depreciation
as at 1 April 2019 172,787 45,000 13,298 231,085 1 1

Depreciation 80 - 162 242

Disposal/retirements/derecognition - - - - 4 Deferred tax assets

Accumulated depreciation 172,867 45,000 13,460 231,327 Provision for doubtful debts and advances 271,451 -
as at 31 March 2020 Provision for leave encashment 257,674 255,357
Carrying amount as at 1 April 2019 80 - 527 607 Bad debts reserve 8,944 14,526
Carrying amount as at 31 March 2020 - - 365 365 Others 89,156 47,817

Commission and Bonus Payable 11,955 1,942

Loss - 25,175

639,180 344,817

Deferred tax liabilities

Provision for depreciation 93 55,718

Provision for doubtful debts 7,536 -

7,629 55,718

Net deferred tax asset 631,551 289,099

BIRLASOFT LIMITED (Subsidiaries Annual Report 2019-20) 59

 (Amount in USD) (Amount in USD)

31 March 2020 31 March 2019 31 March 2020 31 March 2019

5 Other non-current assets 13 Other current financial liabilities

(Unsecured, considered good unless Other than trade payables :

otherwise stated)
Accrued employee costs 1,216,752 1,273,709
Contract Fulfillment Cost 524 -
Payable to related parties (Refer Note 21) 481,756 247,535
524 -
1,698,508 1,521,244

6 Trade recievables
14 Other current liabilities
Trade Receivables considered
good - Unsecured 19,071,010 23,341,094 Unearned revenue 884,949 1,881,678

Trade Receivables -credit impaired 5,312 - Statutory remittances 131,502 153,012

19,076,322 23,341,094 1,016,451 2,034,690

Less: Allowances for bad and

doubtful trade receivables 5,312 77,535 15 Provisions
19,071,010 23,263,559 Provision for employee benefit

Compensated Absences 169,055 986,008

7 Cash and cash equivalents 169,055 986,008
Cheques in hand 118,206 -
Balances with banks 16 Revenue from operations
- In current accounts 1,949,385 1,704,808 Software services 37,840,589 38,284,199
2,067,591 1,704,808 37,840,589 38,284,199

8 Loans 17 Other income

Loans Receivable from related parties (Refer note 21) Interest income 1,115 3
Considered good - Unsecured
Provisions written back 32,583 19,471
Loan to Birlasoft Solutions Mexico. 750 -
Profit on sale of fixed assets (net) 71,762 200
750 -
Other non operating income 22,585 259,458

128,045 279,132
9 Other current assets

(Unsecured, considered good unless otherwise stated)

18 Employee benefits expense
Employee advances 33,030 50,007
Salaries, wages and incentives 18,408,968 19,720,409
Contract Fulfillment Cost 60 -
Staff welfare expenses 47,941 42,354
Advance to suppliers 19,685 2,662
18,456,909 19,762,763
52,775 52,669

19 Finance costs
10 Share capital
Interest expense 1 -
Authorised:
1 -
1,000,000 shares common stock

Issued subscribed and fully paid up:

204,082 (Previous year : 204,082) shares of 110,000 110,000

common stock fully paid up

110,000 110,000

11 Provisions

Provision for employee benefits

Compensated Absences 879,594 261,620

879,594 261,620

12 Trade payables

Total outstanding dues of creditors 5,793,945 8,119,763

5,793,945 8,119,763

BIRLASOFT LIMITED (Subsidiaries Annual Report 2019-20) 60

 Birlasoft Computer Corporation

(Amount in USD) (Amount in USD)

31 March 2020 31 March 2019 B. Transactions with related parties

20 Other expenses No. Name of the related party FY 2019-20 FY 2018-19

Travel and overseas expenses (net) 1,626,528 2,034,567 Amount of Balance Amount of Balance
transaction as at transaction as at
Transport and conveyance (net) 265,071 228,612 2019-20 31 Mar 20 2018-19 31 Mar 19
(USD) (USD) (USD) (USD)
Cost of service delivery (net) 15,665,235 12,558,043

Cost of professional sub-contracting (net) 1,919,318 2,978,267 1 Birlasoft Limited, India

(Formerly KPIT
Rent 8,982 11,657 Technologies Limited)
Rates & taxes 6,301 10,348 Advance given (net) (22,402) (20,258)
20,258 (24,538) (757)
Communication expenses (net) 128,093 142,403 Reimbursement of expenses (34,000) 6,568
Legal and professional fees 122,248 364,674 Software service charges 10,857,825 (1,541,483) 9,317,484 (6,375,725)
Marketing expenses 9,278 113,931 Sale of software services 9,475 3,139 7,799 2,877
Printing & stationery - 93 2 Birlasoft Technologies
Canada Corporation
Bad debts written off 21,983 - (Formerly KPIT
Foreign exchange loss (net) 1,996 (193) Technologies Corporation)

Miscellaneous expenses (net) 62,020 69,459 Software service charges 46,883 (45,054) 12,351 1,367

19,800,209 18,511,861 Sale of software services 420,587 16,657 1,898,030 255,636

Investments NIL 1 NIL 1

Note:
Reimbursement of expenses 5,518 NIL (310) NIL
(i) Certain expenses are net of recoveries/reimbursements from customers. NIL NIL
Advance given (net) 926 (1,915)

3 Birlasoft Solutions Inc.

21 Related party transactions: (Formerly KPIT
Infosystems Incorporated, USA)
A. Relationship with parent and other subsidiaries
Sale of software services 12,440,437 12,343,530 14,600,849 16,091,565
Relationship Name of related party
Software service charges 3,753,972 (3,728,738) 2,540,702 (1,513,600)
Holding Company Birlasoft Limited, India (Formerly KPIT Technologies Limited)
Advance given (net) (161,144) (595,665)
Subsidiary Companies Birlasoft Technologies Canada Corporation (445,978) 243,931
(Direct Holding) (Formerly KPIT Technologies Corporation) Reimbursement of expenses 2,726,632 (6,997)
Fellow Subsidiary Companies “Birlasoft Solutions Inc. 4 Birlasoft Solutions France
(Formerly KPIT Infosystems Incorporated, USA)” (Formerly KPIT
Technologies France)
Birlasoft Solutions France (Formerly KPIT Technologies France)
Birlasoft Solutions ME FZE (Formerly KPIT Infosystems ME FZE, Sale of software services 54 NIL 18 18
United Arab Emirates) (Australia Branch) Software service charges 46,489 (9,681) NIL NIL
Birlasoft Solutions ME FZE (Formerly KPIT Infosystems ME FZE,
5 Birlasoft Solutions ME FZE
United Arab Emirates) (Korea Branch)
(Formerly KPIT Infosystems
Birlasoft Solutions ME FZE (Formerly KPIT Infosystems ME FZE, ME FZE, United Arab Emirates)
United Arab Emirates) (Australia Branch)
Birlasoft Solutions Ltda (Formerly KPIT Technologies Software service charges NIL NIL NIL 20
Solucoes Em Informatica Ltda)
6 KPIT Technologies (UK) Ltd
Birlasoft Solutions Limited
(Formerly KPIT Infosystems Limited (UK)) Software service charges NIL NA 1,449 (1,449)
Birlasoft Solutions GmbH (Formerly KPIT Solutions GmbH) Sale of software services NIL NA 18,999 19,019
Birlasoft Consulting Inc. (Formerly Sparta Consulting Inc., USA) 7 KPIT Technologies GmbH,
Entities jointly controlled KPIT Technologies (UK) Ltd Germany
by a Group having joint
control over the reporting KPIT Infosystems Limited Filial UK, Sweden Sale of software services NIL NA 105,799 44,863

entity KPIT Technologies Netherlands B.V. 8 Birlasoft Consulting Inc.

(Formerly Sparta
KPIT Technologies GmbH, Germany Consulting Inc., USA)
KPIT (Shanghai) Software Technology Co. Limited, China
Sale of software services 16,741 17,866 301,665 282,618
KPIT Technologies Inc., USA
Software service charges 1,463,980 (203,655) 750,238 (414,685)
MicroFuzzy KPIT TECNOLOGIA LTDA, Brazil
Advance given (net) 200 NIL (2,847) (2,847)
KPIT Solutions GmbH, Germany NA
Reimbursement of expenses 107,414 1,738
KPIT Technologies GK, Japan
9 KPIT Technologies Inc., USA

Sale of software services NIL NA 22,870 58,169

Reimbursement of expenses 1,566 NA NIL NIL

Advance received (net) 297,674 NA 28,219 NIL

10 Birlasoft Solutions GmbH

(Formerly KPIT
Solutions GmbH)

Sale of software services 69,694 100,256 30,612 30,612

11 KPIT Technologies GK, Japan

Sale of software services NIL NA 1,698 1,698

BIRLASOFT LIMITED (Subsidiaries Annual Report 2019-20) 61

 (Amount in USD)

No. Name of the related party FY 2019-20 FY 2018-19

Amount of Balance Amount of Balance

transaction as at transaction as at
2019-20 31 Mar 20 2018-19 31 Mar 19
(USD) (USD) (USD) (USD)

12 KPIT (Shanghai) Software

Technology Co. Limited, China

Software service charges NIL NA 396 NIL

13 KPIT Infosystems Limited (UK)

Sale of software services NIL NA 1,190 NIL

Software service charges NIL NA 656 (656)

14 Birlasoft Solutions Limited

(Formerly KPIT Infosystems
Limited (UK))

Advance given (net) (15,520) (15,520) NIL NIL

Software service charges 146,098 4,923

Sale of software services NIL 1,190 NIL NIL

15 Birlasoft Inc

Reimbursement of expenses (36,990) (4,455) NIL NIL

16 Birlasoft Solutions Mexico

Loan given 746 750 NIL NIL

750 NIL NIL
Interest Income 4

22 Contingent liabilities:

The Company has no liabilities of contingent nature outstanding as at 31 March 2020.

For and on behalf of the Board of Directors of

Birlasoft Computer Corporation, USA
(Erstwhile Known as SYSTIME Computer Corporation, USA)

Dharmander Kapoor Roopinder Singh

Director Director

Place: Faridabad Place: New Jersey

Date: 20 May 2020 Date: 20 May 2020

BIRLASOFT LIMITED (Subsidiaries Annual Report 2019-20) 62

 Birlasoft Inc.

Birlasoft Inc.
Registered Office: 399, Thornall Street, 8th Floor, Edison, New Jersey 08837, USA.

Board’s Report Balance Sheet

As at 31 March 2020
Dear Shareholders,
(Amount in USD)
Your Board of Directors are pleased to present herewith the report of the Directors on the operations Note 31 March 2020 31 March 2019
of the Company together with the accounts for the financial year ended March 31, 2020.
ASSETS
Financial Results
Non-current assets
Particulars 2019-20 2018-19
Property, plant and equipment 2A 141,588 180,276
USD USD
(Million) (Million) Right-of-use assets 2A 366,302 -
Total Income 129.61 119.22 Financial assets

Net Profit / (Loss) for the year 8.15 0.23 (i) Investments 3 8,341,264 8,341,264

Deferred tax assets (net) 4 1,893,419 1,667,895

Operations
10,742,573 10,189,435
During the year under review, total income of the Company increased by 8.72% and the profit Current assets
increased by USD 7.92 Million.
Financial assets
Change in Management (i) Trade receivables 5 16,437,726 15,963,314

During the year under review, Mr. Anjan Lahiri resigned from his position of Director w.e.f. June 1, 2019; (ii) Cash and cash equivalents 6 12,629,231 3,460,761
and Mr. Prasad Thrikutam was appointed on the Board of Directors w.e.f. May 24, 2019.
(iii) Loans 7 7,576,234 7,614,018

Audit (iv) Other financial assets 8 2,993,756 2,207,474

Other current assets 9 3,408,034 3,088,604

The Company is not required by the local laws to have an independent audit firm to issue a report to
the shareholders on the financial statements. No audit opinion has been sought in respect of these 43,044,981 32,334,171
financial statements. The accounts are prepared from the internally prepared management accounts
of the Company. The same management accounts are audited in order for the Group Auditors to give TOTAL 53,787,554 42,523,607
an audit opinion in relation to the group accounts i.e. consolidated accounts of Birlasoft Limited, the
EQUITY AND LIABILITIES
parent Company. Hence, no separate audit report is given in respect of the Company.
Equity
For and on behalf of the Board of Directors
Birlasoft Inc. Equity share capital 10 3,379,393 3,379,393

Other equity 34,875,619 26,728,993

38,255,012 30,108,386
New Delhi Amita Birla
May 20, 2020 Director Non-current liabilities

Lease Liabilities 208,435 -

Other non current liabilities 11 - 39,287

208,435 39,287

Current liabilities

Financial liabilities

(i) Trade payables 12 306,789 2,213,635

(ii) Lease Liabilities 205,433 -

(iii) Other financial liabilities 13 9,061,401 7,360,764

Other current liabilities 14 3,140,100 2,253,789

Current tax liabilities ( net) 15 2,610,384 547,746

15,324,107 12,375,934

TOTAL 53,787,554 42,523,607

Significant accounting policies 1

Notes referred to above 2-23

form an integral part of the
financial statements

For and on behalf of the Board of Directors

Birlasoft Inc.

New Delhi Amita Birla

May 20, 2020 Director

BIRLASOFT LIMITED (Subsidiaries Annual Report 2019-20) 63

Statement of Profit and Loss Statement of Cash Flows
For the year ended on 31 March 2020 For the year ended on 31 March 2020
(Amount in USD)
(Amount in USD)
PARTICULARS 31 March 2020 31 March 2019

Note 31 March 2020 31 March 2019 A]CASH FLOW FROM OPERATING ACTIVITIES

Revenue from operations Profit for the period 8,146,624 229,379

Sale of services 16 129,586,605 1,19,174,479 Adjustments for

Other income 17 27,242 45,042 Income tax expense 2,615,689 (451,824)

Total income 1,29,613,847 1,19,219,522 Depreciation / Amortization 265,771 73,150

Expenses Interest expense 44,353 22,244

Employee benefits expense 18 41,965,245 43,117,764 Amortisation of ESOP compensation expense 118,056 -

Finance Cost 19 44,624 26,287 Operating Profit before working capital changes 11,190,493 (127,050)

Depreciation and amortization 2A 265,771 73,150 Adjustments for changes in working capital:

Other expenses 20 76,575,894 76,224,765 Trade receivables and unbilled revenue (12,70,703) (2,432,166)

Total expenses 1,18,851,534 119,441,966 Loans, other financials assets and other assets 2,044,365 538,110

Profit before tax 10,762,313 (222,445) Trade Payables (1,906,846) 2,773,412

Tax expenses Other financial liabilities, other liabilities 1,683,550 35,02,955

and provisions
Current tax 2,841,213 802,260
Cash generated from operations 11,740,859 4,255,260
Deferred tax (225,524) (1,254,084)
Taxes Paid (2,316,000) (802,260)
Total tax expense 2,615,689 (451,824)
Net cash from operating activities (A) 94,24,859 3,453,000
Profit for the year 8,146,624 229,379
B]CASH FLOW FROM INVESTING ACTIVITIES
Other comprehensive income - -
Purchase of Fixed Assets (27,580) (53,890)
Total comprehensive income 8,146,624 2,29,379
Net Cash from /(used in) investing activities(B) (27,580) (53,890)
Earnings per equity share for continuing
operations (face value per share $ 0.05 each) C]CASH FLOW FROM FINANCING ACTIVITIES

Basic 0.8 0.02 Repayment of lease liabilities (228,811) -

Diluted 0.8 0.02 Interest and finance charges - (22,244)

Significant accounting policies 1 Net cash from /(used in) financing activities(C) (2,28,811) (22,244)

Notes referred to above form an 2-23 D]Exchange differences on translation of - -

integral part of the financial statements foreign currency cash and cash equivalents

Net Increase / (decrease ) in cash 91,68,468 3,376,866

For and on behalf of the Board of Directors and cash equivalents (A + B + C + D)
Birlasoft Inc.
Cash & cash equivalents at close of the year 1,26,29,231 34,60,761
New Delhi Amita Birla (refer note 1 below)
May 20, 2020 Director
Cash & cash equivalents at beginning of the year 34,60,761 83,896
(refer note 1 below)

Cash surplus / (deficit) for the year 91,68,470 3,376,865

Note 1:

Cash and cash equivalents include:

Cheques in Hand - -

Balance with banks

In current accounts 1,26,29,231 3,460,761

Total Cash and cash equivalents 1,26,29,231 3,460,761

Cash and cash equivalents at the end of the year 1,26,29,231 3,460,761

Note 2:

Figures in brackets represent outflows of cash and cash equivalents.

Note 3:

The above Cash Flow Statement has been prepared under the indirect method as set out
in the Indian Accounting Standard (Ind-AS) 7 Statement of Cash Flows.

For and on behalf of the Board of Directors

Birlasoft Inc.

New Delhi Amita Birla

May 20, 2020 Director

BIRLASOFT LIMITED (Subsidiaries Annual Report 2019-20) 64

 Birlasoft Inc.

Statement of changes in equity Notes forming part of the Financial Statements for the
For the year ended on 31 March 2020
(Amount in USD) year ended on 31 March 2020
Company Overview:
A Equity share capital Number of Shares Amount

Balance as at 1 April 2018 10,000,000 3,379,393 Birlasoft Inc. (the “Company”) incorporated in the state of Delaware in March 1995. Birlasoft is
substantially owned by Birlasoft Limited (the “Parent”), an Indian corporation.
Changes in equity share capital during 2018-19 - -

Balance as at 31 March 2019 10,000,000 3,379,393 The Group provides specialized computer-related consulting and custom programming solutions to
customers located throughout the world.
Changes in equity share capital during 2019-20 - -
1. Significant Accounting Policies:
Balance as at 31 March 2020 10,000,000 3,379,393

BOther equity 1.1 Basis for preparation of financial statements:

Particulars Retained earnings Total
“The financial statements are prepared in accordance with the Indian Accounting Standards
Balance as on 01 April 2018 26,499,616 26,499,616 (“”Ind-AS””) as specified under Section 133 of the Companies Act, 2013 read with the Rule
3 of the Companies (Indian Accounting Standards) Rules, 2015 and Companies (Indian
Profit for the year 229,379 229,379 Accounting Standards) Amendment Rules, 2016 and the provisions of Companies Act, 2013.
The financial statements are presented in US Dollar (“”USD””),unless otherwise stated.”
Other comprehensive income - -

Total comprehensive income for the year 2,29,379 229,379 Accounting policies have been consistently applied except where a newly issued accounting
standard is initially adopted or a revision to an existing accounting standard requires a change in
Balance as on 31 March 2019 26,728,995 26,728,995 the accounting policy hitherto in use. 
Profit for the year 8,146,624 8,146,624
1.2 Current-non current classification
Other comprehensive income - -

Total comprehensive income for the year 81,46,624 8,146,624 All assets and liabilities are classified into current and non-current.

Balance as on 31 March 2020 34,875,619 34,875,619 Assets

Retained earnings represents the amount that can be distributed by the Company to its equity
shareholders considering the requirements of Companies Act, 2013. An asset is classified as current when it satisfies any of the following criteria:

For and on behalf of the Board of Directors a. It is expected to be realised in, or is intended for sale or consumption in, the Company’s
Birlasoft Inc. normal operating cycle;

b. It is held primarily for the purpose of being traded;

New Delhi Amita Birla

c. It is expected to be realised within 12 months after the reporting date; or
May 20, 2020 Director

d. It is cash or cash equivalent unless it is restricted from being exchanged or used to settle a
liability for atleast 12 months after the reporting date.

Current assets include the current portion of non-current financial assets. All other assets are
classified as non-current.

Liability

A liability is classified as current when it satisfies any of the following criteria:

a. It is expected to be settled in the Company’s normal operating cycle;

b. It is held primarily for the purpose of being traded;

c. It is due to be settled within 12 months after the reporting date; or

d. The Company does not have an unconditional right to defer settlement of the liability for
at least 12 months after the reporting date. Terms of a liability that could, at the option of
the counterparty, result in its settlement by the issue of equity instruments do not affect its
classification.

Current liabilities include current portion of non-current financial liabilities. All other liabilities
are classified as non-current.

Operating cycle

Operating cycle is the time between the acquisition of assets for processing and their realization
in cash or cash equivalents. The operating cycle of the Company is less than twelve months.

1.3 Revenue recognition:

The Company recognizes revenue when or as performance obligation i.e. delivery has occurred
or services are rendered in an amount that reflects the consideration expected to be received in
exchange for goods or service.

Effective April 1, 2018, the Company adopted Ind AS 115 “Revenue from Contracts with
Customers” using the cumulative catch-up transition method, applied to contracts that were not
completed as of April 1, 2018. In accordance with the cumulative catch-up transition method ,
the comparatives have not been retrospectively adjusted. The effect on adoption of Ind AS 115
was insignificant.

The Company recognizes revenue when or as performance obligation i.e. delivery has occurred
or services are rendered in an amount that reflects the consideration expected to be received in
exchange for goods or service. Cash payments received but unearned are recorded as deferred
revenue. The Company accounts for discounts as a reduction of revenue based on the ratable
allocation of the discounts to each of the underlying performance obligation that corresponds
to the progress by the customer towards earning the discount.

Revenues recognized in excess of amounts billed, if any, are classified as current assets under

BIRLASOFT LIMITED (Subsidiaries Annual Report 2019-20) 65

 Unbilled Accounts Receivable. The Earnings in excess of billings are classified as unbilled 1. As a lessee
revenue while billings in excess of earnings are classified as unearned revenue.
The Company recognises the right of use of asset and right of use of liability at the commencement
When there is uncertainty as to measurement or ultimate collectability, revenue recognition date of lease. The right of use of asset is initially measured at cost , which comprise of present
is postponed until such uncertainty is resolved. Provisions for estimated losses, if any, on value of future liabilty (lease rent payouts), any payment made at or before commencement date
uncompleted contracts are recorded in the period in which such losses become probable based any inital direct cost incurred and an estimate of cost to dismantle or remove an underlying asset
on the current contract estimates. or to restore an asset less any lease incentive received.The lease liabilty is initially measured
at present value of lease payments that is not paid at commencement date discounted at
1.4 Borrowing Costs: implicit rate mentioned in lease or incremental borrowing rate. The Company generally uses
incremental borrowing rate as discount rate.The right-of-use assets is depreciated using the
straight-line method from the commencement date over the useful life of right-of-use asset.
Borrowing costs that are directly attributable to the acquisition, construction or production of
The lease liability is subsequently measured at amortised cost using effective interest method.
a qualifying asset are capitalized as part of cost of that asset. All other borrowing costs are
It is remeasured to reflect any lease modifications or reassessments. The Company presents its
charged to the Statement of Profit and Loss.
right of use of assets in property plant and euipments and lease liabilties in financial liabilities
in the statement of financial position.
The exchange differences arising from foreign currency borrowings, to the extent that they are
regarded as an adjustment to interest costs, are regrouped from other exchange differences to
2. Extension and termination of lease
finance costs.

The Company determines the lease term as the non-cancellable period of a lease, together with
1.5 Property and equipment
both periods covered by an option to extend the lease if the Company is reasonably certain to
exercise that option; and periods covered by an option to terminate the lease if the Company is
Property, plant and equipment are carried at cost of acquisition or construction less accumulated reasonably certain not to exercise that option. In assessing whether the Company is reasonably
depreciation and/or accumulated impairment loss, if any. The cost of an item of property, plant certain to exercise an option to extend a lease, or not to exercise an option to terminate a lease,
and equipment comprises its purchase price, including import duties and other non-refundable it considers all relevant facts and circumstances that create an economic incentive for the
taxes or levies and any directly attributable cost of bringing the asset to its working condition for Company to exercise the option to extend the lease, or not to exercise the option to terminate
its intended use; any trade discounts and rebates are deducted in arriving at the purchase price. the lease. The Company revises the lease term if there is a change in the non-cancellable period
Assets under construction are disclosed as capital work-in-progress. of a lease.

1.6 Intangible assets 3. Short term leases and low value assets

In case of internally generated intangibles, costs incurred during the research phase of a project The Company has elected not to recognise right of use of assets and lease liabilities for short-
are expensed when incurred. Development activities involve a plan or design for the production term leases that have lease term of 12 months or less and leases of low value assets. The
of new or substantially improved products or processes. Development expenditure is capitalized Company recognises the lease payments associated with these leases as an expense on a
only if development costs can be measured reliably, the product or process is technically and straight- line basis over lease term.
commercially feasible, future economic benefits are probable, and the Company intends to
and has sufficient resources to complete development and to use the asset. The expenditure
4. Impairment testing for right of use of assets
capitalized includes the cost of materials, direct labour, overhead costs that are directly
attributable to preparing the asset for its intended use, and directly attributable borrowing costs
(in the same manner as in the case of property, plant and equipment). Other development Right of use of assets are tested for are tested for impairment whenever there is any indication
expenditure is recognized in the Statement of Profit and Loss as incurred. that their carrying amount is not recoverable. Impairment loss ,if any ,is recognised in statement
of profit and loss.
Intangible fixed assets are derecognized on disposal or when no future economic benefits
are expected from its use and subsequent disposal or when the economic benefits are not 1.10 Earnings per share
measurable.
Basic earnings per share are computed by dividing the profit for the year after tax by the weighted
1.7 Depreciation: average number of equity shares outstanding during the year. Diluted earnings per share is
computed by dividing the net profit after tax for the year by the weighted average number of
equity shares outstanding during the year as adjusted for the effects of all dilutive potential
Depreciation on property, plant and equipment is provided on the straight-line method over the
equity shares except where the results are anti-dilutive.
useful lives of the assets. The estimated useful lives are as follows:

Type of asset Useful life 1.11 Foreign currency transactions

Number of years

Computers 4 Transactions in foreign currencies are recorded at the exchange rates prevailing on the date
of the transaction. Monetary items are translated into the functional currency at the year-end
Office Equipment 10 rates. The exchange differences so determined and also the realized exchange differences are
recognized in the Statement of Profit and Loss.
Furniture and fixtures 8
1.12 Employee benefits
(1) For these class of assets, based on internal assessment, the useful lives as given above are
believed to best represent the period over which the assets are expected to be used. Hence the
Compensated absences
useful lives for these assets are different from the useful lives as prescribed under Part C of
Schedule II of the Companies Act 2013.
The employees of certain locations can carry-forward a portion of the unutilized accrued compensated
absences and utilize it in future service periods or receive cash compensation on termination of
Perpetual software licenses are amortized over 4 years. However, time-based software licenses
employment. Since the compensated absences do not fall due wholly within twelve months after
are amortized over the license period.
the end of the period in which the employees render the related service and are also not expected
to be utilized wholly within twelve months after the end of such period, the benefit is classified as a
Capitalized development costs are amortized over a period of 3 years. long-term employee benefit. The Company records an obligation for such compensated absences in
the period in which the employee renders the services that increase this entitlement. The obligation is
1.8 Leases measured on the basis of independent actuarial valuation using the projected unit credit method.

The Company has primarily leased rental offices premises , guest house, parking space, laptops 1.13 Income taxes
etc across multiple locations.
Income tax expense comprises current and deferred income tax. Income tax expense is
The Ministry of Corporate Affiairs (MCA) notified IND AS 116 , the new lease accounting standard recognized in the statement of profit and loss except to the extent that it relates to items
on March 30 2019 and came into force with effect from April 01 2019. IND AS 116 has replaced recognized directly in equity, in which case it is recognized in other comprehensive income.
the guidance in IND AS 17 “Leases”. The effect of initially applying this standard is recognised at Current income tax for current and prior periods is recognized at the amount expected to be paid
date of initial application (i.e. April 01 2019). Ind AS 116 sets out the principles for the recognition, to or recovered from the tax authorities, using the tax rates and tax laws that have been enacted
measurement, presentation and disclosure of leases for both lessees and lessors. It introduces a or substantively enacted by the balance sheet date. Deferred income tax assets and liabilities are
single, on-balance sheet lease accounting model for lessees. recognized for all temporary differences arising between the tax bases of assets and liabilities
and their carrying amounts in the financial statements.
The Company has applied IND AS 116 using the modified retrospective approach as per C5(b)
of the standard. Accordingly the company has not restated the comparative information, i.e. Deferred income tax assets and liabilities are measured using tax rates and tax laws that have
comparative information continues to be reported under IND AS 17. Refer note 1.9 Significant been enacted or substantively enacted by the balance sheet date and are expected to apply to
accounting policy in the annual report of the company for the year ended March 31 2019 for lease taxable income in the years in which those temporary differences are expected to be recovered
accounting policy as per IND AS 17. 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
The impact of adoption of this accounting standard is significant. enactment date. A deferred income 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 utilized. Deferred income taxes are not provided on the undistributed earnings
At the inception of contract the Company assesses wheather the contract is , or contains a lease.
of subsidiaries and branches where it is expected that the earnings of the subsidiary or branch
A contract is, or contains, a lease if the contract involves use of an identified asset and conveys
will not be distributed in the foreseeable future. The company offsets current tax assets and
the right to control the use of asset for period of time in exchange for consideration i.e. customer
current tax liabilities, where it has a legally enforceable right to set off the recognized amounts
has right to :
and where it intends either to settle on a net basis, or to realize the asset and settle the liability
- Obtains substantially all the economic benefits from using the asset and
simultaneously.
- direct the use of asset

BIRLASOFT LIMITED (Subsidiaries Annual Report 2019-20) 66

 Birlasoft Inc.

1.14 Investments: Provisions for onerous contracts are recognized when the expected benefits to be derived by the
Company from a contract are lower than the unavoidable costs of meeting the future obligations
Long Term investments are stated at cost less provision for diminution, other than temporary, in under the contract. The provision is measured at the present value of the lower of the expected
value of such investments. cost of terminating the contract and the expected net cost of continuing with the contract. Before
a provision is established the Company recognizes any impairment loss on the assets associated
with that contract.
1.15 Provisions, Contingent Liabilities and Contingent Assets:

1.16 Financial Instrument

The Company recognizes provisions only when it has a present legal or constructive obligation
as a result of a past event, it is probable that an outflow of resources embodying economic
benefits will be required to settle the obligation and when a reliable estimate of the amount of Financial assets and liabilities are recognized when the Company becomes a party to the
the obligation can be made. contractual provisions of the instrument. Financial assets and liabilities are initially measured
at fair value, except for trade receivables which are initially measured at transaction price.
Transaction costs that are directly attributable to the acquisition or issue of financial assets and
No provision is recognized for –
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
a. Any possible obligation that arises from past events and the existence of which will be asset or financial liability.
confirmed only by the occurrence or non-occurrence of one or more uncertain future events
not wholly within the control of the Company; or
1.17 Employee stock option

b. Present obligations that arise from past events but are not recognized because-
In respect of stock options granted by the parent company, pursuant to the Group’s Employee
Stock Option Scheme, the Company recognizes employee compensation expense, using the
1) It is not probable that an outflow of resources embodying economic benefits will be grant date fair value in accordance with Ind-AS 102 - Share Based Payment, on straight line
required to settle the obligation; or basis over the period over which the employees would become unconditionally entitled to apply
for the shares.
2) A reliable estimate of the amount of obligation cannot be made.
Use of Estimates:
Such obligations are disclosed as contingent liabilities. These are assessed continually and only
that part of the obligation for which an outflow of resources embodying economic benefits is The preparation of financial statements requires the management of the Company to make
probable, is provided for, except in the extremely rare circumstances where no reliable estimate judgments, estimates and assumptions that affect the reported balances of assets and liabilities
can be made. and disclosures relating to the contingent liabilities as at the date of the financial statements
and reported amounts of income and expenditure during the year. Actual results could differ
Contingent assets are not recognized in the financial statements since this may result in the from estimates. Differences between actual results and estimates are recognized in the year in
recognition of income that may never be realized. which the results are known / materialized.

(Amount in USD)

2A Property, plant and equipment

Changes in the carrying amount of property, plant and equipment

Computers Furniture Office Softwares ROU Lease Total

and Fixtures Equipments Assets

Gross carrying amount as at 1 April 2018 290,942 259,468 43,365 629,866 - 1,223,641

Other additions 53,890 - - - - 53,890

Disposal/retirements/derecognition - - - - - -

Gross carrying amount as at 31 March 2019 344,832 259,468 43,365 629,866 - 1,277,531

Accumulated depreciation as at 1 April 2018 187,439 187,532 19,268 629,866 - 1,024,105

Depreciation 51,761 14,244 7,145 - - 73,150

Disposal/retirements/derecognition - - - - -

Accumulated depreciation as at 31 March 2019 239,200 201,776 26,413 629,866 - 1,097,255

Carrying amount as at 1 April 2018 103,503 71,936 24,097 - - 199,536

Carrying amount as at 31 March 2019 105,632 57,692 16,952 - - 180,276

Gross carrying amount as at 1 April 2019 344,832 259,468 43,365 629,866 - 1,277,531

Other additions 27,580 - - - 565,805 593,385

Disposal/retirements/derecognition - - - - - -

Gross carrying amount as at 31 March 2020 372,412 259,468 43,365 629,866 565,805 1,870,916

Accumulated depreciation as at 1 April 2019 239,200 201,776 26,413 629,866 - 1,097,255

Depreciation 51,852 11,930 2,486 - 199,503 265,771

Disposal/retirements/derecognition - - - - - -

Accumulated depreciation as at 31 March 2020 2,91,052 213,706 28,899 629,866 199,503 1,363,026

Carrying amount as at 1 April 2019 105,632 57,692 16,952 - - 180,276

Carrying amount as at 31 March 2020 81,360 45,762 14,466 - 366,302 507,890

BIRLASOFT LIMITED (Subsidiaries Annual Report 2019-20) 67

3 Non current investments 8 Other fInancial Assets

(Amount in USD) (Amount in USD)

31 March 2020 31 March 2019 31 March 2020 31 March 2019

Trade Investments (Unquoted) Other receivables - 10,009

Investments in equity instruments Unbilled Revenue 2,993,756 2,197,465

of subsidiaries (at cost)
2,993,756 2,207,474
Birlasoft UK Ltd. 278,780 278,780

Enablepath LLC 8,062,484 8,062,484

9 Other current assets
8,341,264 8,341,264

(Amount in USD)

31 March 2020 31 March 2019

4 Deferred tax assets
(Unsecured, considered good
(Amount in USD) unless otherwise stated)

31 March 2020 31 March 2019 Contract Assets 637,600 542,408

- Provision for doubtful debts and advances 2,245 8,566 Employee advances 103,348 35,391

- Provision for leave encashment 412,376 367,480 Advance to suppliers 51,296 76,621

- Accrued Expenses 1,236,871 915,936 Prepaid expenses 477,572 1,436,040

- Lease liabilities 104,531 - Balances with statutory authorities 2,138,218 998,144

- Others 261,005 375,913 3,408,034 3,088,604

2,017,028 1,667,895

Deferred tax liabilities

10 Share capital
- Provision for depreciation 31,092 -
(Amount in USD)
- Right-of-use assets 92,517 -
31 March 2020 31 March 2019
123,609 -
Authorised:
Net deferred tax asset 1,893,419 1,667,895
20,000,000 shares common stock

Issued subscribed and fully paid up:

5 Trade receivables
10,000,000 (Previous year : 10,000,000)
shares of common stock fully
(Amount in USD) paid up; $ 0.05 Par Value 500,000 500,000
31 March 2020 31 March 2019 Additional Paid up Capital 2,879,393 2,879,393
(Unsecured) 3,379,393 3,379,393
Trade receivables

Considered good 16,398,169 15,963,314

11 Other non current liabilities
credit impaired 48,445 36,130

16,446,614 15,999,444 (Amount in USD)

Less: Allowances for bad and doubtful 8,888 36,130 31 March 2020 31 March 2019
trade receivables Lease equilisation Non Current - 39,287
16,437,726 15,963,314 - 39,287

6 Cash and bank balances 12 Trade payables

(Amount in USD) (Amount in USD)

31 March 2020 31 March 2019 31 March 2020 31 March 2019
Balances with banks Trade payables 306,789 2,213,635
In current accounts 12,629,231 3,460,761 306,789 2,213,635
12,629,231 3,460,761

13 Other current financial liabilities

7 Loans
(Amount in USD)
(Amount in USD) 31 March 2020 31 March 2019
31 March 2020 31 March 2019 Accrued Expenses 3,093,986 2,747,051
(Unsecured, considered good Payable to related parties 2,471,554 1,346,130
unless otherwise stated)
Security deposits 10,374 10,374
Loans and advances to
related parties Accrued employee costs 3,485,487 3,257,209
Dues from related parties 7,486,443 7,524,778 9,061,401 7,360,764
Loans and advances to other
than related parties

Security deposits 89,791 89,240

7,576,234 7,614,018

BIRLASOFT LIMITED (Subsidiaries Annual Report 2019-20) 68

 Birlasoft Inc.

14 Other current liabilities 20 Other expenses

(Amount in USD) (Amount in USD)

31 March 2020 31 March 2019 31 March 2020 31 March 2019

Advances from customers 472,712 445,488 Travel and overseas expenses (net) 2,812,326 2,680,048

Statutory remittances 1,373 2,419 Cost of service 475,816 488,044

Deferred income 2,627,162 1,728,728 Cost of Offshore Development 47,808,937 51,257,551

Lease equalisation 1,935 34,306 Cost of professional sub-contracting (net) 23,178,093 18,614,843

Others 36,918 42,848 Recruitment and training expenses 655,998 1,77,337

3,140,100 2,253,789 Rent 60,666 231,622

Repairs and maintenance - Office 78,637 72,346

Insurance 85,169 68,491

15 Current tax liabilities ( net)
Communication expenses (net) 278,845 273,077
(Amount in USD)
Legal and professional fees 737,638 1,468,687
31 March 2020 31 March 2019
Marketing expenses 240,352 417,306
Provision for taxes
Director Fee - 76,000
Income Tax Provision 2,610,384 547,746
Miscellaneous expenses (net) 163,417 399,413
2,610,384 547,746
76,575,894 76,224,765

16 Revenue from operations

21 Contingent liabilities:

(Amount in USD)
The Company has no liabilities of contingent nature outstanding as at 31 March 2020.
31 March 2020 31 March 2019

Revenue from services 129,586,605 119,174,479

129,586,605 119,174,479

17 Other income

(Amount in USD)

31 March 2020 31 March 2019

Other non operating income - 30,448

Provision for doubtful debts, 27,242 14,594

unbilled revenue and advances (net)

27,242 45,042

18 Employee benefits expense

(Amount in USD)

31 March 2020 31 March 2019

Salaries, wages and incentives 41,870,392 43,038,345

Staff welfare expenses 94,853 79,420

41,965,245 43,117,764

19 Finance costs

(Amount in USD)

31 March 2020 31 March 2019

Interest on lease liabilities 44,353 -

Interest expense - 22,244

Bank Charges 271 4,042

44,624 26,287

BIRLASOFT LIMITED (Subsidiaries Annual Report 2019-20) 69

22 Related party transactions:

A. Relationship with parent and other subsidiaries

Relationship Name of related party
Parent Birlasoft Limited
Subsidiary Companies Enablepath LLC
Birlasoft UK Limited
Birlasoft GMBH
Fellow Subsidiary Companies Birlasoft Solutions Inc. USA
(erstwhile KPIT Infosystems Incorporated, USA )
Birlasoft Solutions France
(erstwhile KPIT Technologies France SAS)
Birlasoft Computer Corporation, USA
(erstwhile SYSTIME Computer Corporation, USA)
Birlasoft Consulting Inc. (erstwhile Sparta Consulting Inc.)
(Subsidiary of Birlasoft Solutions Inc.)
Birlasoft Technologies Canada Corporation
(erstwhile KPIT Technologies Corporation)
(Subsidiary of Birlasoft Computer Corporation, USA)

B. Transactions with related parties

No. Name of the related party Amount of Balance Amount of Balance

transaction as at transaction as at
2019-20 31 March 2018-19 31 March
2020 2019
(USD) (USD) (USD) (USD)

1 Birlasoft Limited

Transfer pricing transactions 129,500 (1,000,865) (318,509) (1,130,365)

Salary Advance to US Transfers (142,259) (216,507) (74,248) (74,248)

2 Birlasoft UK Limited

Cost Transfers (535,821) NIL (31,673) (1,470)

3 Enablepath LLC

Cost Transfers (38,336) 7,486,443 327,714 7,524,778

4 Birlasoft Technologies
Canada Corporation

Software service charges 562,521 (41,585) (141,517) (141,517)

5 Birlasoft Solutions France

Software service charges 131,995 (131,995) NIL NIL

6 Birlasoft Solutions Inc. USA

Reimbursment of expenses 125,163 14,541 NIL NIL

Software service charges NIL (144,000) NIL NIL

7 Birlasoft Computer Corporation,USA

Reimbursment of expenses 4,679 4,455 NIL NIL

8 Birlasoft Consulting Inc. USA

Reimbursment of expenses 36,990 2,994 NIL NIL

23 Events after the reporting period

There are no events that have occurred after the reporting period which requires disclosure.

For and on behalf of the Board of Directors

Birlasoft Inc.

New Delhi Amita Birla

May 20, 2020 Director

BIRLASOFT LIMITED (Subsidiaries Annual Report 2019-20) 70

 Enablepath LLC

Enablepath LLC
Registered Office: 399, Thornall Street, 8th Floor, Edison, New Jersey 08837, USA.

Board’s Report Balance Sheet

As at 31 March 2020
Dear Shareholders,
(Amount in USD)
Your Company is pleased to present herewith the Report on the Operations together with the accounts Note 31 March 2020 31 March 2019
for the financial year ended March 31, 2020.
ASSETS
Financial Results
Non-current assets
Particulars 2019-20 2018-19
Property, plant and equipment 2A - 1,648
USD USD
(Million) (Million) Goodwill 2B 1,496,360 1,870,460
Total Income - 0.19 Deferred tax assets (Net) 3 773,524 773,524
Net Profit / (Loss) for the period (0.37) (0.85) 2,269,884 2,645,632

Operations Current assets

Financial assets
During the year, the Company did not generate any revenue.
(ii) Cash and cash equivalents 4 1,468 40,544
Audit 1,468 40,544

The Company is not required by the local laws to have an independent audit firm to issue a report to TOTAL 2,271,352 2,686,176
the shareholders on the financial statements. No audit opinion has been sought in respect of these EQUITY AND LIABILITIES
financial statements. The accounts are prepared from the internally prepared management accounts
of the Company. The same management accounts are audited in order for the Group Auditors to give Equity
an audit opinion in relation to the group accounts i.e. consolidated accounts of Birlasoft Limited, the
parent Company. Hence, no separate audit report is given in respect of the Company. Corpus 5 80,62,484 80,62,484

Other equity B (13,277,575) (12,901,086)

For and on behalf of the Board of Directors
Enablepath LLC (5,215,091) (4,838,602)

Current liabilities

Financial liabilities
New Delhi Amita Birla
May 20, 2020 Director (ii) Other financial liabilities 6 74,86,443 75,24,778

7,486,443 7,524,778

TOTAL 2,271,352 2,686,176

Significant accounting policies 1

Notes referred to above 2-12

form an integral part of the
financial statements

For and on behalf of the Board of Directors

Enablepath LLC

New Delhi Amita Birla

May 20, 2020 Director

BIRLASOFT LIMITED (Subsidiaries Annual Report 2019-20) 71

Statement of Profit and Loss Statement of cash flow
For the year ended on 31st March 2020 For the year ended on 31st March 2020

(Amount in USD) (Amount in USD)

Note 31 Mar 2020 31 Mar 2019 PARTICULARS 31 Mar 2020 31 Mar 2019

Revenue from operations A]CASH FLOW FROM OPERATING ACTIVITIES

Sale of services 7 - 187,148 Profit for the period (376,488) (854,353)

Total income - 187,148 Adjustments for

Expenses Income tax expense - 31,023

Employee benefits expense 8 - 232,823 Profit/Loss on sale of Property Plant and - -

Equipment (net)
Finance Cost 9 740 3,129
Depreciation / Amortization 375,748 511,759
Depreciation and amortization 2 375,748 511,759
Interest income - -
Other expenses 10 - 262,768
Dividend income - -
Total expenses 376,488 1,010,479
Operating Profit before working capital changes (740) (3,11,571)
Profit before tax (376,488) (823,331)
Adjustments for changes in working capital:
Tax expense
Trade receivables and unbilled revenue - 325,613
Deferred tax - 31,023
Loans, other financials assets and other assets - 124,638
Total tax expense - 31,023
Trade Payables - (310,894)
Profit for the year (376,488) (854,353)
Other financial liabilities, other liabilities (38,335) 194,911
Other comprehensive income - - and provisions
Total comprehensive income (376,488) (854,353) Cash generated from operations (39,075) 22,696
Significant accounting policies 1 Taxes Paid - -
Notes referred to above form 2-12 Net cash from operating activities (A) (39,075) 22,696
an form an integral part of the
financial statements C] Net Increase / (decrease ) in cash (39,075) 22,696
and cash equivalents (A + B)
For and on behalf of the Board of Directors
Cash & cash equivalents at close of the year 1,468 40,544
Enablepath LLC
(refer note 1 below)

Cash & cash equivalents at beginning of the year 40,544 17,849

(refer note 1 below)

New Delhi Amita Birla Cash surplus / (deficit) for the year (39,076) 22,694
May 20, 2020 Director
Note 1:

Cash and cash equivalents include:

Cheques in Hand - -

Balance with banks

In current accounts 1,468 40,544

Total Cash and cash equivalents 1,468 40,544

Cash and cash equivalents at the end of the year 1,468 40,544

Note 2:

Figures in brackets represent outflows of cash and cash equivalents.

Note 3:

The above Cash Flow Statement has been prepared under the indirect method as set out in the
Indian Accounting Standard (Ind-AS) 7 Statement of Cash Flows.

For and on behalf of the Board of Directors

Enablepath LLC

New Delhi Amita Birla

May 20, 2020 Director

BIRLASOFT LIMITED (Subsidiaries Annual Report 2019-20) 72

 Enablepath LLC

Statement of changes in equity Notes forming part of the Financial Statements

for the year ended on 31st March 2020
Company Overview:
(Amount in USD)
Enablepath LLC owned by Birlasoft Inc. (the “Company”) incorporated in the state of Delaware
Number of shares Amount
in March 1995. The Company is a wholly owned subsidiary of Birlasoft Limited (Erstwhile KPIT
A Corpus Technologies Limited).

Balance as at 1 April 2018 - 8,062,484

The Group provides specialized computer-related consulting and custom programming
Changes during 2016-17 - - solutions to customers located throughout the world.

Balance as at 31 March 2019 - 8,062,484 Audit

Changes during 2017-18 - -
The Company is not required by the local laws to have an independent audit firm to issue a
Balance as at 31 March 2020 - 8,062,484 report to the shareholders on the financials statements.No audit opinion has been sought
in respect of these financials statements.The accounts are prepared from the internally
* As this Limited liability corporation, there is no share capital. Birlasoft Inc is having 100%
prepared management accounts of the Company.The same management accounts are audited
ownership in Enablepath.
in order for the group Auditors to give an audit opinion in relation to the group accounts i.e.
B Other equity consolidated accounts of parent Company.Hence,no seperate audit report is given in respect
of the Company.
Particulars Retained earnings Total

Balance as on 01 April 2018 (12,046,728) (12,046,728) 1. Significant Accounting Policies:

Profit for the year (854,353) (854,353) 1.1 Basis for preparation of financial statements:
Other comprehensive income - -
“The financial statements are prepared in accordance with the Indian Accounting Standards
Total comprehensive income for the year (8,54,353) (854,353) (“Ind-AS”) as specified under Section 133 of the Companies Act, 2013 read with the Rule
3 of the Companies (Indian Accounting Standards) Rules, 2015 and Companies (Indian
Balance as on 31 March 2019 (12,901,086) (12,901,086) Accounting Standards) Amendment Rules, 2016 and the provisions of Companies Act, 2013.
Profit for the year (376,488) (376,488) The financial statements are presented in US Dollar (“USD”), unless otherwise stated.”

Other comprehensive income - - Accounting policies have been consistently applied except where a newly issued accounting
standard is initially adopted or a revision to an existing accounting standard requires a change in
Total comprehensive income for the year (3,76,488) (376,488)
the accounting policy hitherto in use. 
Balance as on 31 March 2020 (13,277,575) (13,277,575)
1.2 Current-non current classification
Retained earnings represents the amount that can be distributed by the Company to its equity
shareholders considering the requirements of Companies Act, 2013.
All assets and liabilities are classified into current and non-current.
For and on behalf of the Board of Directors
Enablepath LLC Assets

An asset is classified as current when it satisfies any of the following criteria:

New Delhi Amita Birla a. It is expected to be realised in, or is intended for sale or consumption in, the Company’s
May 20, 2020 Director normal operating cycle;

b. It is held primarily for the purpose of being traded;

c. It is expected to be realised within 12 months after the reporting date; or

d. It is cash or cash equivalent unless it is restricted from being exchanged or used to settle a
liability for atleast 12 months after the reporting date.

Current assets include the current portion of non-current financial assets. All other assets are
classified as non-current.

Liability

A liability is classified as current when it satisfies any of the following criteria:

a. It is expected to be settled in the Company’s normal operating cycle;

b. It is held primarily for the purpose of being traded;

c. It is due to be settled within 12 months after the reporting date; or

d. The Company does not have an unconditional right to defer settlement of the liability for
at least 12 months after the reporting date. Terms of a liability that could, at the option of
the counterparty, result in its settlement by the issue of equity instruments do not affect its
classification.

Current liabilities include current portion of non-current financial liabilities. All other liabilities
are classified as non-current.

Operating cycle

Operating cycle is the time between the acquisition of assets for processing and their realization
in cash or cash equivalents. The operating cycle of the Company is less than twelve months.

1.3 Revenue recognition:

The Entity earns revenue primarily from providing IT services, consulting and business solutions.
The Group offers a consulting-led, integrated portfolio of IT.

Revenue is recognised upon transfer of control of promised products or services to customers

in an amount that reflects the consideration which the entity expects to receive in exchange for
those products or services.

BIRLASOFT LIMITED (Subsidiaries Annual Report 2019-20) 73

 “Revenue from time and material and job contracts is recognised on output basis measured by 1.5 Property and equipment
units delivered, efforts expended, number of transactions processed, etc.
Property, plant and equipment are carried at cost of acquisition or construction less accumulated
−− Revenue related to fixed price maintenance and support services contracts where the Company depreciation and/or accumulated impairment loss, if any. The cost of an item of property, plant
is standing ready to provide services is recognised based on time elapsed mode and revenue is and equipment comprises its purchase price, including import duties and other non-refundable
straight lined over the period of performance. taxes or levies and any directly attributable cost of bringing the asset to its working condition for
its intended use; any trade discounts and rebates are deducted in arriving at the purchase price.
−− In respect of other fixed-price contracts, revenue is recognised using percentage-of- Assets under construction are disclosed as capital work-in-progress.
completion method (‘POC method’) of accounting with contract costs incurred/ efforts
expended determining the degree of completion of the performance obligation. 1.6 Intangible assets

−− Revenue from third party software is recognised upfront at the point in time when software is In case of internally generated intangibles, costs incurred during the research phase of a project
delivered to the customer, such revenue is recognised on net basis when the entity is acting are expensed when incurred. Development activities involve a plan or design for the production
as an agent.” of new or substantially improved products or processes. Development expenditure is capitalized
only if development costs can be measured reliably, the product or process is technically and
“Revenue is measured based on the transaction price, which is the consideration, adjusted for commercially feasible, future economic benefits are probable, and the Company intends to
volume discounts, service level credits, performance bonuses, price concessions and incentives, and has sufficient resources to complete development and to use the asset. The expenditure
if any, as specified in the contract with the customer. Expenses reimbursed by customers during capitalized includes the cost of materials, direct labour, overhead costs that are directly
the project execution are recorded as reduction to associated costs. Revenue also excludes attributable to preparing the asset for its intended use, and directly attributable borrowing costs
taxes collected from customers. “ (in the same manner as in the case of property, plant and equipment). Other development
expenditure is recognized in the Statement of Profit and Loss as incurred.
Contract assets are recognised when there is excess of revenue earned over billings on contracts.
Contract assets are classified as unbilled revenue (only act of invoicing is pending) when there Intangible fixed assets are derecognized on disposal or when no future economic benefits
is unconditional right to receive cash, and only passage of time is required, as per contractual are expected from its use and subsequent disposal or when the economic benefits are not
terms. measurable.

Unearned revenue (“contract liability”) is recognised when there is billings in excess of 1.7 Depreciation:
revenues.
Depreciation on property, plant and equipment is provided on the straight-line method over the
The billing schedules agreed with customers include periodic performance based payments useful lives of the assets. The estimated useful lives are as follows:
and / or milestone based progress payments. Invoices are payable within contractually agreed
Type of asset Useful life
credit period.
Number of years

In accordance with Ind AS 37, the entity recognises an onerous contract provision when the Computers 4
unavoidable costs of meeting the obligations under a contract exceed the economic benefits
to be received. Office Equipment 10

Furniture and fixtures 8

Contracts are subject to modification to account for changes in contract specification and
requirements. The entity reviews modification to contract in conjunction with the original For these class of assets, based on internal assessment, the useful lives as given above are
contract, basis which the transaction price could be allocated to a new performance obligation, believed to best represent the period over which the assets are expected to be used. Hence
or transaction price of an existing obligation could undergo a change. In the event transaction the useful lives for these assets are different from the useful lives as prescribed under Part C of
price is revised for existing obligation, a cumulative adjustment is accounted for. Schedule II of the Companies Act 2013.

The entity disaggregates revenue from contracts with customers by geography and business Perpetual software licenses are amortized over 4 years. However, time-based software licenses
verticals. are amortized over the license period.

Use of significant judgements in revenue recognition Capitalized development costs are amortized over a period of 3 years.

The entity’s contracts with customers could include promises to transfer multiple products and 1.8 Leases
services to a customer. The entity assesses the products / services promised in a contract and
identifies distinct performance obligations in the contract. Identification of distinct performance
obligation involves judgement to determine the deliverables and the ability of the customer to The entity has primarily leased rental offices premises , guest house, parking space, laptops etc
benefit independently from such deliverables. across multiple locations.

Judgement is also required to determine the transaction price for the contract. The transaction “The Ministry of Corporate Affiairs (MCA) notified IND AS 116 , the new lease accounting
price could be either a fixed amount of customer consideration or variable consideration standard on March 30, 2019 and came into force with effect from April 01, 2019. IND AS 116 has
with elements such as volume discounts, service level credits, performance bonuses, price replaced the guidance in IND AS 17 “”Leases””. The effect of initially applying this standard is
concessions and incentives. The transaction price is also adjusted for the effects of the time recognised at date of initial application (i.e. April 01, 2019). Ind AS 116 sets out the principles
value of money if the contract includes a significant financing component. Any consideration for the recognition, measurement, presentation and disclosure of leases for both lessees
payable to the customer is adjusted to the transaction price, unless it is a payment for a distinct and lessors. It introduces a single, on-balance sheet lease accounting model for lessees.
product or service from the customer. The estimated amount of variable consideration is The entity has applied IND AS 116 using the modified retrospective approach as
adjusted in the transaction price only to the extent that it is highly probable that a significant per C5(b) of the standard. Accordingly the entity has not restated the comparative
reversal in the amount of cumulative revenue recognised will not occur and is reassessed at information, i.e. comparative information continues to be reported under IND AS
the end of each reporting period. The entity allocates the elements of variable considerations 17. Refer note 1.10 Significant accounting policy in the annual report of the company
to all the performance obligations of the contract unless there is observable evidence that they for the year ended March 31, 2019 for lease accounting policy as per IND AS 17.
pertain to one or more distinct performance obligations. The impact of adoption of this accounting standard is significant.”

The entity uses judgement to determine an appropriate standalone selling price for a The entity has applied IND AS 116 using the modified retrospective approach as per C5(b) of the
performance obligation. The entity allocates the transaction price to each performance standard. Accordingly the entity has not restated the comparative information, i.e. comparative
obligation on the basis of the relative stand-alone selling price of each distinct product or information continues to be reported under IND AS 17. Refer note 1.10 Significant accounting
service promised in the contract. Where standalone selling price is not observable, the entity policy in the annual report of the company for the year ended March 31, 2019 for lease accounting
uses the expected cost plus margin approach to allocate the transaction price to each distinct policy as per IND AS 17.
performance obligation.
The impact of adoption of this accounting standard is significant.
The entity exercises judgment in determining whether the performance obligation is satisfied
at a point in time or over a period of time. The entity considers indicators such as how customer At the inception of contract the entity assesses wheather the contract is , or contains a lease. A
consumes benefits as services are rendered or who controls the asset as it is being created or contract is, or contains, a lease if the contract involves use of an identified asset and conveys the right
existence of enforceable right to payment for performance to date and alternate use of such to control the use of asset for period of time in exchange for consideration i.e. customer has right to:
product or service, transfer of significant risks and rewards to the customer, acceptance of
delivery by the customer, etc. −− Obtains substantially all the economic benefits from using the asset and

1.4 Borrowing Costs: −− Direct the use of asset

Borrowing costs that are directly attributable to the acquisition, construction or production of a. As a lessee
a qualifying asset are capitalized as part of cost of that asset. All other borrowing costs are
charged to the Statement of Profit and Loss. The entity recognises the right of use of asset and right of use of liability at the commencement
date of lease. The right of use of asset is initially measured at cost, which comprise of present
The exchange differences arising from foreign currency borrowings, to the extent that they are value of future liabilty (lease rent payouts), any payment made at or before commencement
regarded as an adjustment to interest costs, are regrouped from other exchange differences to date any inital direct cost incurred and an estimate of cost to dismantle or remove an underlying
finance costs. asset or to restore an asset less any lease incentive received.

BIRLASOFT LIMITED (Subsidiaries Annual Report 2019-20) 74

 Enablepath LLC

The lease liabilty is initially measured at present value of lease payments that is not paid at 1.14 Investments:
commencement date discounted at implicit rate mentioned in lease or incremental borrowing
rate. The entity generally uses incremental borrowing rate as discount rate. The right-of-use Long Term investments are stated at cost less provision for diminution, other than temporary, in
assets is depreciated using the straight-line method from the commencement date over the value of such investments.
useful life of right-of-use asset. The lease liability is subsequently measured at amortised
cost using effective interest method. It is remeasured to reflect any lease modifications or
1.15 Provisions, Contingent Liabilities and Contingent Assets:
reassessments.

The Company recognizes provisions only when it has a present legal or constructive obligation
The entity presents its right of use of assets in property plant and euipments and lease liabilties
as a result of a past event, it is probable that an outflow of resources embodying economic
in financial liabilities in the statement of financial position.
benefits will be required to settle the obligation and when a reliable estimate of the amount of
the obligation can be made.
b. Extension and termination of lease
No provision is recognized for –
The entity determines the lease term as the non-cancellable period of a lease, together with
both periods covered by an option to extend the lease if the entity is reasonably certain to
a. Any possible obligation that arises from past events and the existence of which will be
exercise that option; and periods covered by an option to terminate the lease if the entity is
confirmed only by the occurrence or non-occurrence of one or more uncertain future events
reasonably certain not to exercise that option. In assessing whether the entity is reasonably
not wholly within the control of the Company; or
certain to exercise an option to extend a lease, or not to exercise an option to terminate a lease,
it considers all relevant facts and circumstances that create an economic incentive for the entity
to exercise the option to extend the lease, or not to exercise the option to terminate the lease. b. Present obligations that arise from past events but are not recognized because-
The entity revises the lease term if there is a change in the non-cancellable period of a lease.
1) It is not probable that an outflow of resources embodying economic benefits will be
c. Short term leases and low value assets required to settle the obligation; or

The entity has elected not to recognise right of use of assets and lease liabilities for short-term 2) A reliable estimate of the amount of obligation cannot be made.
leases that have lease term of 12 months or less and leases of low value assets. The entity
recognises the lease payments associated with these leases as an expense on a straight- line Such obligations are disclosed as contingent liabilities. These are assessed continually and only
basis over lease term. that part of the obligation for which an outflow of resources embodying economic benefits is
probable, is provided for, except in the extremely rare circumstances where no reliable estimate
d. Impairment testing for right of use of assets can be made.

Right of use of assets are tested for are tested for impairment whenever there is any indication Contingent assets are not recognized in the financial statements since this may result in the
that their carrying amount is not recoverable. Impairment loss , if any ,is recognised in statement recognition of income that may never be realized.
of profit and loss.
Provisions for onerous contracts are recognized when the expected benefits to be derived by the
1.10 Earnings per share Company from a contract are lower than the unavoidable costs of meeting the future obligations
under the contract. The provision is measured at the present value of the lower of the expected
cost of terminating the contract and the expected net cost of continuing with the contract. Before
Basic earnings per share are computed by dividing the profit for the year after tax by the weighted
a provision is established the Company recognizes any impairment loss on the assets associated
average number of equity shares outstanding during the year. Diluted earnings per share is
with that contract.
computed by dividing the net profit after tax for the year by the weighted average number of
equity shares outstanding during the year as adjusted for the effects of all dilutive potential
equity shares except where the results are anti-dilutive. 1.16 Financial Instrument

1.11 Foreign currency transactions Financial assets and liabilities are recognized when the Company becomes a party to the
contractual provisions of the instrument. Financial assets and liabilities are initially measured
at fair value, except for trade receivables which are initially measured at transaction price.
Transactions in foreign currencies are recorded at the exchange rates prevailing on the date
Transaction costs that are directly attributable to the acquisition or issue of financial assets and
of the transaction. Monetary items are translated into the functional currency at the year-end
financial liabilities (other than financial assets and financial liabilities at fair value through profit
rates. The exchange differences so determined and also the realized exchange differences are
or loss) are added to or deducted from the fair value measured on initial recognition of financial
recognized in the Statement of Profit and Loss.
asset or financial liability.

1.12 Employee benefits

1.17 Employee stock option

Compensated absences
In respect of stock options granted by the parent company, pursuant to the Group’s Employee
Stock Option Scheme, the Company recognizes employee compensation expense, using the
The employees of certain locations can carry-forward a portion of the unutilized accrued grant date fair value in accordance with Ind-AS 102 - Share Based Payment, on straight line
compensated absences and utilize it in future service periods or receive cash compensation basis over the period over which the employees would become unconditionally entitled to apply
on termination of employment. Since the compensated absences do not fall due wholly within for the shares.
twelve months after the end of the period in which the employees render the related service and
are also not expected to be utilized wholly within twelve months after the end of such period,
the benefit is classified as a long-term employee benefit. The Company records an obligation Notes forming part of the Financial Statements
for such compensated absences in the period in which the employee renders the services that for the year ended on 31st March 2020
increase this entitlement. The obligation is measured on the basis of independent actuarial
valuation using the projected unit credit method.
(Amount in USD)

1.13 Income taxes 2A Property, plant and equipment

Changes in the carrying amount of property, plant and equipment

Income tax expense comprises current and deferred income tax. Income tax expense is
recognized in the statement of profit and loss except to the extent that it relates to items Computers Furniture Total
recognized directly in equity, in which case it is recognized in other comprehensive income. & Fixtures
Current income tax for current and prior periods is recognized at the amount expected to be paid
to or recovered from the tax authorities, using the tax rates and tax laws that have been enacted Gross carrying amount as at 1 April 2018 95,010 44,477 139,486
or substantively enacted by the balance sheet date. Deferred income tax assets and liabilities are
Other additions - - -
recognized for all temporary differences arising between the tax bases of assets and liabilities
and their carrying amounts in the financial statements. Disposal/retirements/derecognition - - -

Deferred income tax assets and liabilities are measured using tax rates and tax laws that have Gross carrying amount as at 31 March 2019 95,010 44,477 139,486
been enacted or substantively enacted by the balance sheet date and are expected to apply to Accumulated depreciation as at 1 April 2018 89,202 44,477 133,679
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 Depreciation 4,159 - 4,159
recognized as income or expense in the period that includes the enactment or the substantive
enactment date. A deferred income tax asset is recognized to the extent that it is probable that Disposal/retirements/derecognition - - -
future taxable profit will be available against which the deductible temporary differences and Accumulated depreciation as at 31 March 2019 93,362 44,477 137,838
tax losses can be utilized. Deferred income taxes are not provided on the undistributed earnings
of subsidiaries and branches where it is expected that the earnings of the subsidiary or branch Carrying amount as at 1 April 2018 5,807 - 5,807
will not be distributed in the foreseeable future. The company offsets current tax assets and
current tax liabilities, where it has a legally enforceable right to set off the recognized amounts Carrying amount as at 31 March 2019 1,648 - 1,648
and where it intends either to settle on a net basis, or to realize the asset and settle the liability
Gross carrying amount as at 1 April 2019 95,010 44,477 139,486
simultaneously.
Additions on account of merger - - -

Other additions - - -

BIRLASOFT LIMITED (Subsidiaries Annual Report 2019-20) 75

 (Amount in USD) (Amount in USD)

Computers Furniture Total 31 March 2020 31 March 2019

& Fixtures
5 Equity share capital (Corpus)

Issued subscribed and fully paid up: 8,062,484 8,062,484

Disposal/retirements/derecognition - - -
100% Ownership with Birlasoft Inc
Gross carrying amount as at 31 March 2020 95,010 44,477 139,486
8,062,484 8,062,484
Accumulated depreciation as at 1 April 2019 93,362 44,477 137,838

Additions on account of merger - - -

6 Other current financial liabilities
Depreciation 1,648 - 1,648
Payable to related parties 7,486,443 7,524,778
Disposal/retirements/derecognition - - -
7,486,443 7,524,778
Accumulated depreciation as at 31 March 2020 95,010 44,477 139,486

Carrying amount as at 1 April 2019 1,648 - 1,648

7 Revenue from operations
Carrying amount as at 31 March 2020 - - -
Revenue from Services - 187,148

- 187,148

2B Other intangible assets

Changes in the carrying amount of other intangible assets

8 Employee benefits expense
Intangible Goodwill Total
Assets Salaries, wages and incentives - 232,222

Gross carrying amount as at 1 April 2018 3,390,000 3,740,951 7,130,951 Staff welfare expenses - 601

Additions on account of merger - - - - 232,823

Other additions - - -

Disposal/retirements/derecognition - - - 9 Finance costs

Gross carrying amount as at 31 March 2019 3,390,000 3,740,951 7,130,951 Bank Charges 740 3,129

Accumulated depreciation as at 1 April 2018 3,256,500 1,496,391 4,752,891 740 3,129

Additions on account of merger - - -

Depreciation 133,500 374,100 507,600 10 Other expenses

Disposal/retirements/derecognition - - - Travel and overseas expenses (net) - 12,721

Accumulated depreciation as at 31 March 2019 3,390,000 1,870,491 5,260,491 Cost of professional sub-contracting (net) - 119,106

Carrying amount as at 1 April 2018 133,500 2,244,560 2,378,060 Recruitment and training expenses - 212

Carrying amount as at 31 March 2019 - 1,870,460 1,870,460 Rent - 5,849

Gross carrying amount as at 1 April 2019 3,390,000 3,740,951 7,130,951 Repairs and maintenance - Office - 105,917

Other additions - - - Insurance - 118

Disposal/retirements/derecognition - - - Communication expenses (net) - 4,146

Gross carrying amount as at 31 March 2020 3,390,000 3,740,951 7,130,951 Marketing expenses - 688

Accumulated depreciation as at 1 April 2019 3,390,000 1,870,491 5,260,491 Provision for doubtful debts, - 14,000
unbilled revenue and advances (net)
Depreciation - 374,100 374,100
Miscellaneous expenses (net) - 13
Disposal/retirements/derecognition - - -
- 262,768
Accumulated depreciation as at 31 March 2020 3,390,000 2,244,591 5,634,591

Carrying amount as at 1 April 2019 - 1,870,460 1,870,460

11 Contingent liabilities:
Carrying amount as at 31 March 2020 - 1,496,360 1,496,360
The Company has no liabilities of contingent nature outstanding as at 31 March 2020.

31 March 2020 31 March 2019

12 Related party transactions:
3 Deferred tax assets
A. Relationship with parent and other subsidiaries
Intangibles 727,086 727,086
Relationship Name of related party
Others 46,438 46,438
Ultimate Parent Birlasoft Inc
773,524 773,524

Deferred tax liabilities

B. Transactions with related parties
Accumulated depreciation - -
No. Name of the related party Amount of Balance Amount of Balance
- - transaction as at transaction as at
2019-20 31 March 2018-19 31 March
Net deferred tax asset 773,524 773,524 2020 2019
(USD) (USD) (USD) (USD)

1 Birlasoft Inc.
4 Cash and bank balances
Cost Transfers 38,336 (7,486,443) (327,714) (7,524,778)
Balances with banks

In current accounts 1,468 40,544 For and on behalf of the Board of Directors
Enablepath LLC
1,468 40,544

New Delhi Amita Birla

May 20, 2020 Director

BIRLASOFT LIMITED (Subsidiaries Annual Report 2019-20) 76

 Birlasoft Technologies Canada Corporation

Birlasoft Technologies Canada Corporation

(Formerly KPIT Technologies Corporation)
Registered Office: 8120-128 Street, Surrey BC V3W 1R1, Canada.

Board’s Report Balance Sheet

As at 31 March 2020
Dear Shareholders,
(Amount in CAD)
Your Board of Directors is pleased to present herewith the report of the Directors on the operations of Note 31 March 2020 31 March 2019
the Company together with the accounts for the financial year ended March 31, 2020.
ASSETS
Financial Results Non-current assets
Particulars 2019-20 2018-19 Income tax assets (net) 510,164 148,064
CAD CAD
(Million) (Million) Loans 6 2,109,722 5,351,227
Total Income 17.79 23.08 2,619,886 5,499,291
Net Profit / (Loss) for the period 1.89 3.24 Current assets

Financial assets
Operations
Trade receivables 2 6,242,937 6,187,881
During the year under review, total income of the Company has decreased by 22.90% which resulted
in net profit of CAD 1.89 million. Cash and cash equivalents 3 5,604,124 6,664,366

Loans 4 3,689,135 133,198

Change in Board of Directors
Unbilled Revenue 572,083 832,889
During the year, Mr. Anjan Lahiri and Mr. Pawan Sharma ceased to be the Directors. Further, Mr. Other current assets 5 350,064 254,387
Dharmander Kapoor, Mr. Baljeet S Chhazal and Ms. Indu Nangia were appointed as Directors.
16,458,343 14,072,720
Audit TOTAL ASSETS 19,078,229 19,572,011

The Company is required by the local laws to have an independent audit firm to audit the books EQUITY AND LIABILITIES
of accounts of the Company and to issue a report to the shareholders. However, such requirement
Equity
is waived by shareholders by passing a resolution. Therefore, no audit opinion has been sought in
respect of these financial statements. The accounts are prepared from the internally prepared Equity share capital 7 1 1
management accounts of the Company. The same management accounts are audited in order for the
Group Auditors to give an audit opinion in relation to the group accounts i.e. consolidated accounts Other equity 15,462,699 13,575,505
of Birlasoft Limited, the parent company. Hence, no separate audit report is given in respect of the
Company. 15,462,700 13,575,506

Liabilities
For and on behalf of the Board of Directors
Birlasoft Technologies Canada Corporation Non-Current liabilities

Provisions 8 147,271 161,458

147,271 161,458
New Jersey Indu Nangia
May 20, 2020 Director Current liabilities

Financial liabilities

Trade payables 9 1,770,366 5,007,892

Other financial liabilities 10 287,833 215,156

Other current liabilities 11 1,359,153 537,381

Provisions 12 36,267 74,618

Current income tax 14,639 -

liability (net)

3,468,258 5,835,047

TOTAL EQUITY AND LIABILITIES 19,078,229 19,572,011

Significant accounting
policies 1

Notes referred to above form an 2 - 19

integral part of the financial statements

For and on behalf of the Board of Directors

Birlasoft Technologies Canada Corporation
(Erstwhile KPIT Technologies Corporation)

Baljeet Chhazal Indu Nangia

Director Director
California New Jersey
May 20, 2020 May 20, 2020

BIRLASOFT LIMITED (Subsidiaries Annual Report 2019-20) 77

Statement of Profit and Loss Statement of Cash Flow
For the year ended on 31st March 2020 for the year ended on 31st March 2020

(Amount in CAD) (Amount in CAD)

Note 31 March 2020 31 March 2019 PARTICULARS 31 Mar 2020 31 Mar 2019

Revenue from operations 13 17,108,951 22,729,629 A] CASH FLOW FROM OPERATING ACTIVITIES

Other income 14 685,033 348,086 Profit for the period 1,887,194 3,240,293

Total income 17,793,984 23,077,715 Adjustments for

Expenses Income tax expense 716,039 1,211,693

Employee benefits expense 15 5,021,366 5,602,614 Interest income (174,966) (121,197)

Finance costs 16 - 48 Unrealised foreign exchange Loss - -

Other expenses 17 10,169,385 13,023,067 Operating Profit before working 2,428,267 4,330,789
capital changes
Total expenses 15,190,751 18,625,729
Adjustments for changes in working capital:
Profit before tax 2,603,233 4,451,986
Trade Payables (3,237,526) 1,298,514
Tax expense
Other financial liabilities, other liabilities 841,911 (842,623)
Current tax 716,039 1,211,693 and provisions
Total tax expense 716,039 1,211,693 Trade receivables and unbilled revenue 205,750 (225,682)
Profit for the year 1,887,194 3,240,293 Other current assets (95,677) (215,222)
Other comprehensive income - - Cash generated from operations 142,725 4,345,777
Total comprehensive income 1,887,194 3,240,293 Taxes Paid (1,063,500) (1,660,707)
for the year
Net cash from operating activities (A) (920,775) 2,685,070
Significant accounting policies 1
B] CASH FLOW FROM INVESTING ACTIVITIES
Notes referred to above 2 - 19
form an integral part of the Loan given to related parties (314,433) 3,034,128
financial statements
Loan given to related parties Non Current (5,351,227)
For and on behalf of the Board of Directors Interest received 174,966 121,197
Birlasoft Technologies Canada Corporation
(Erstwhile KPIT Technologies Corporation) Net Cash from /( used in ) investing (139,467) (2,195,902)
activities (B)

Net Increase / (decrease ) in cash and (1,060,242) 489,168

cash equivalents (A + B)
Baljeet Chhazal Indu Nangia Cash & cash equivalents at close of the year 5,604,124 6,664,366
Director Director (refer note 1 below)
California New Jersey
May 20, 2020 May 20, 2020 Cash & cash equivalents at beginning 6,664,366 6,175,198
of the year (refer note 1 below)

Cash surplus / (deficit) for the year (1,060,242) 489,168

Note 1:

Cash and cash equivalents include:

Balance with banks

Cheques in hand - 156,934

In current accounts 5,604,124 6,507,432

Total Cash and cash equivalents 5,604,124 6,664,366

Note 2:

Figures in brackets represent outflows of cash and cash equivalents.

Note 3:

The above Cash Flow Statement has been prepared under the indirect method as set out
in the Indian Accounting Standard (Ind-AS) 7 Satement of Cash Flows.

For and on behalf of the Board of Directors

Birlasoft Technologies Canada Corporation
(Erstwhile KPIT Technologies Corporation)

Baljeet Chhazal Indu Nangia

Director Director
California New Jersey
May 20, 2020 May 20, 2020

BIRLASOFT LIMITED (Subsidiaries Annual Report 2019-20) 78

 Birlasoft Technologies Canada Corporation

Statement of changes in equity Notes forming part of the Financial Statements

For the year ended on 31st March 2020 For the year ended on 31st March 2020

(Amount in CAD) Company Overview:

A Equity share capital Amount

Birlasoft Technologies Canada Corporation (Erstwhile KPIT Technologies Corporation) (“the
Balance as at 1 April 2018 1.00 Company”) is a Company incorporated in British Columbia, Canada on January 21, 1997. The
Company is a wholly owned subsidiary of Birlasoft Computer Corporation, USA (Erstwhile
Changes in equity share capital during 2017-18 - Known as SYSTIME Computer Corporation, USA) . The ultimate holding company is Birlasoft
Limited (Erstwhile KPIT Technologies Limited, India).
Balance as at 31 March 2019 1.00

Changes in equity share capital during 2018-19 - The Company is engaged in the business of providing software consultancy services in the
areas of Enterprise Resource Planning, Customer Relationship Management, Supply Chain
Balance as at 31 March 2020 1.00 Management, Business Intelligence, Business Integration, Human Resource Management,
Infrastructure Management Services and Strategic Sourcing.

B Other equity 1. Significant Accounting Policies:

Particulars Retained earnings Total
1.1 Basis for preparation of financial statements:
Balance as on 01 April 2018 10,335,212 10,335,212

Total comprehensive income for 3,240,293 3,240,293 “The financial statements have been prepared in accordance with the Indian Accounting
the year 2018-19 Standards (“”Ind-AS””) as specified under Section 133 of the Companies Act, 2013 read with
the Rule 3 of the Companies (Indian Accounting Standards) Rules, 2015 and Companies (Indian
Balance as on 31 March 2019 13,575,505 13,575,505 Accounting Standards) Amendment Rules, 2016 and the provisions of Companies Act, 2013.
The financial statements are presented in Canadian Dollars (“CAD”) and are rounded off to
Total comprehensive income for 1,887,194 1,887,194 nearest CAD.”
the year 2019-20

Balance as on 31 March 2020 15,462,699 15,462,699 Accounting policies have been consistently applied except where a newly issued accounting
standard is initially adopted or a revision to an existing accounting standard requires a change in
the accounting policy hitherto in use. 

For and on behalf of the Board of Directors 1.2 Current-non current classification
Birlasoft Technologies Canada Corporation
(Erstwhile KPIT Technologies Corporation) All assets and liabilities are classified into current and non-current.

Assets

Baljeet Chhazal Indu Nangia An asset is classified as current when it satisfies any of the following criteria:
Director Director
California New Jersey a. It is expected to be realised in, or is intended for sale or consumption in, the Company’s
May 20, 2020 May 20, 2020 normal operating cycle;

b. It is held primarily for the purpose of being traded;

c. It is expected to be realised within 12 months after the reporting date; or

d. It is cash or cash equivalent unless it is restricted from being exchanged or used to settle a
liability for atleast 12 months after the reporting date.

Current assets include the current portion of non-current financial assets. All other assets are
classified as non-current.

Liability

A liability is classified as current when it satisfies any of the following criteria:

a. It is expected to be settled in the Company’s normal operating cycle;

b. It is held primarily for the purpose of being traded;

c. It is due to be settled within 12 months after the reporting date; or

d. The Company does not have an unconditional right to defer settlement of the liability for
at least 12 months after the reporting date. Terms of a liability that could, at the option of
the counterparty, result in its settlement by the issue of equity instruments do not affect its
classification.

Current liabilities include current portion of non-current financial liabilities. All other liabilities
are classified as non-current.

Operating cycle

Operating cycle is the time between the acquisition of assets for processing and their realization
in cash or cash equivalents. The operating cycle of the Company is less than twelve months.

1.3 Revenue recognition:

The Entity earns revenue primarily from providing IT services, consulting and business solutions.
The Company offers a consulting-led, integrated portfolio of IT.

Revenue is recognised upon transfer of control of promised products or services to customers

in an amount that reflects the consideration which the entity expects to receive in exchange for
those products or services.

-- Revenue from time and material and job contracts is recognised on output basis measured by
units delivered, efforts expended, number of transactions processed, etc.

-- Revenue related to fixed price maintenance and support services contracts where the Company
is standing ready to provide services is recognised based on time elapsed mode and revenue is
straight lined over the period of performance.

BIRLASOFT LIMITED (Subsidiaries Annual Report 2019-20) 79

 -- In respect of other fixed-price contracts, revenue is recognised using percentage-of- significant increase in credit risk from initial recognition in which case those are measured at
completion method (‘POC method’) of accounting with contract costs incurred/ efforts lifetime ECL. Loss allowances for trade receivables are always measured at an amount equal
expended determining the degree of completion of the performance obligation. to lifetime expected credit losses. The amount of expected credit losses (or reversal) that is
required to adjust the loss allowance at the reporting date to the amount that is required to be
-- Revenue from third party software is recognised upfront at the point in time when software recognized is recorded as an impairment gain or loss in Statement of Profit or Loss.
is delivered to the customer, such revenue is recognised on net basis when the entity is acting
as an agent. b. Non- financial assets

Revenue is measured based on the transaction price, which is the consideration, adjusted for i. Property, plant and equipment and intangible assets
volume discounts, service level credits, performance bonuses, price concessions and incentives,
if any, as specified in the contract with the customer. Expenses reimbursed by customers during The management periodically assesses using, external and internal sources, whether there is an
the project execution are recorded as reduction to associated costs. Revenue also excludes indication that an asset may be impaired. Impairment loss is recognized when the carrying value
taxes collected from customers. of an asset exceeds its recoverable amount. The recoverable amount is higher of the asset’s fair
value less cost of disposal and value in use. For the purpose of impairment testing, assets are
Contract assets are recognised when there is excess of revenue earned over billings on contracts. grouped together into the smallest group of assets (cash generating unit or CGU) that generates
Contract assets are classified as unbilled revenue (only act of invoicing is pending) when there cash inflows from continuing use that are largely independent of the cash inflows of other assets
is unconditional right to receive cash, and only passage of time is required, as per contractual or CGUs.
terms.
Intangible assets which are not yet available for use are tested for impairment annually. Other
Unearned revenue (“contract liability”) is recognised when there is billings in excess of assets (tangible and intangible) are reviewed at each reporting date to determine if there is
revenues. any indication of impairment. For assets in respect of which any such indication exists and for
intangible assets mandatorily tested annually for impairment, the asset’s recoverable amount
The billing schedules agreed with customers include periodic performance based payments is estimated.
and / or milestone based progress payments. Invoices are payable within contractually agreed
credit period. If at the Balance Sheet date there is an indication that a previously assessed impairment loss
no longer exists or has decreased, the assets or CGU’s recoverable amount is estimated.
In accordance with Ind AS 37, the entity recognises an onerous contract provision when the For assets other than goodwill, the impairment loss is reversed to the extent that the asset’s
unavoidable costs of meeting the obligations under a contract exceed the economic benefits carrying amount does not exceed the carrying amount that would have been determined, net
to be received. of depreciation or amortization, if no impairment loss had been recognized. Such a reversal is
recognized in the Statement of Profit and Loss.
Contracts are subject to modification to account for changes in contract specification and
requirements. The entity reviews modification to contract in conjunction with the original ii. Goodwill
contract, basis which the transaction price could be allocated to a new performance obligation,
or transaction price of an existing obligation could undergo a change. In the event transaction CGUs to which goodwill has been allocated are tested for impairment annually, or more
price is revised for existing obligation, a cumulative adjustment is accounted for. frequently when there is indication for impairment. If the recoverable amount of a CGU is less
than its carrying amount, the impairment loss is allocated first to reduce the carrying amount of
The entity disaggregates revenue from contracts with customers by geography and business any goodwill allocated to the unit and then to the other assets of the unit pro-rata on the basis of
verticals. the carrying amount of each asset in the unit. 

Use of significant judgements in revenue recognition 1.6 Income taxes

The entity’s contracts with customers could include promises to transfer multiple products and Income tax expense comprises current and deferred income tax. Income tax expense is
services to a customer. The entity assesses the products / services promised in a contract and recognized in the statement of profit and loss except to the extent that it relates to items
identifies distinct performance obligations in the contract. Identification of distinct performance recognized directly in equity, in which case it is recognized in other comprehensive income.
obligation involves judgement to determine the deliverables and the ability of the customer to Current income tax for current and prior periods is recognized at the amount expected to be paid
benefit independently from such deliverables. to or recovered from the tax authorities, using the tax rates and tax laws that have been enacted
or substantively enacted by the balance sheet date. Deferred income tax assets and liabilities are
recognized for all temporary differences arising between the tax bases of assets and liabilities
Judgement is also required to determine the transaction price for the contract. The transaction
and their carrying amounts in the financial statements.
price could be either a fixed amount of customer consideration or variable consideration
with elements such as volume discounts, service level credits, performance bonuses, price
concessions and incentives. The transaction price is also adjusted for the effects of the time Deferred income tax assets and liabilities are measured using tax rates and tax laws that have
value of money if the contract includes a significant financing component. Any consideration been enacted or substantively enacted by the balance sheet date and are expected to apply to
payable to the customer is adjusted to the transaction price, unless it is a payment for a distinct taxable income in the years in which those temporary differences are expected to be recovered
product or service from the customer. The estimated amount of variable consideration is or settled. The effect of changes in tax rates on deferred income tax assets and liabilities is
adjusted in the transaction price only to the extent that it is highly probable that a significant recognized as income or expense in the period that includes the enactment or the substantive
reversal in the amount of cumulative revenue recognised will not occur and is reassessed at enactment date. A deferred income tax asset is recognized to the extent that it is probable that
the end of each reporting period. The entity allocates the elements of variable considerations future taxable profit will be available against which the deductible temporary differences and
to all the performance obligations of the contract unless there is observable evidence that they tax losses can be utilized. The company offsets current tax assets and current tax liabilities,
pertain to one or more distinct performance obligations. where it has a legally enforceable right to set off the recognized amounts and where it intends
either to settle on a net basis, or to realize the asset and settle the liability simultaneously.
The entity uses judgement to determine an appropriate standalone selling price for a
performance obligation. The entity allocates the transaction price to each performance 1.7 Leases
obligation on the basis of the relative stand-alone selling price of each distinct product or
service promised in the contract. Where standalone selling price is not observable, the entity The entity has primarily leased rental offices premises , guest house, parking space, laptops etc
uses the expected cost plus margin approach to allocate the transaction price to each distinct across multiple locations.
performance obligation.
“The Ministry of Corporate Affiairs (MCA) notified IND AS 116 , the new lease accounting
The entity exercises judgment in determining whether the performance obligation is satisfied standard on March 30, 2019 and came into force with effect from April 01, 2019. IND AS 116 has
at a point in time or over a period of time. The entity considers indicators such as how customer replaced the guidance in IND AS 17 “”Leases””. The effect of initially applying this standard is
consumes benefits as services are rendered or who controls the asset as it is being created or recognised at date of initial application (i.e. April 01, 2019). Ind AS 116 sets out the principles
existence of enforceable right to payment for performance to date and alternate use of such for the recognition, measurement, presentation and disclosure of leases for both lessees
product or service, transfer of significant risks and rewards to the customer, acceptance of and lessors. It introduces a single, on-balance sheet lease accounting model for lessees.
delivery by the customer, etc. The entity has applied IND AS 116 using the modified retrospective approach as
per C5(b) of the standard. Accordingly the entity has not restated the comparative
1.4 Borrowing Costs: information, i.e. comparative information continues to be reported under IND AS
17. Refer note 1.10 Significant accounting policy in the annual report of the company
for the year ended March 31, 2019 for lease accounting policy as per IND AS 17.
Borrowing costs that are directly attributable to the acquisition, construction or production of
The impact of adoption of this accounting standard is significant.”
a qualifying asset are capitalized as part of cost of that asset. All other borrowing costs are
charged to the Statement of Profit and Loss.
The entity has applied IND AS 116 using the modified retrospective approach as per C5(b) of the
standard. Accordingly the entity has not restated the comparative information, i.e. comparative
The exchange differences arising from foreign currency borrowings, to the extent that they are
information continues to be reported under IND AS 17. Refer note 1.10 Significant accounting
regarded as an adjustment to interest costs, are regrouped from other exchange differences to
policy in the annual report of the company for the year ended March 31, 2019 for lease accounting
finance costs.
policy as per IND AS 17.

1.5 Impairment
The impact of adoption of this accounting standard is significant.

a. Financial assets

The Company assesses at each Balance Sheet date whether a financial asset or a company of
financial assets is impaired. Ind AS 109 requires expected credit losses to be measured through
a loss allowance. The Company recognizes loss allowances using the expected credit loss
(ECL) model for the financial assets which are not fair valued through profit or loss. Expected
credit losses are measured at an amount equal to the 12-month ECL, unless there has been a

BIRLASOFT LIMITED (Subsidiaries Annual Report 2019-20) 80

 Birlasoft Technologies Canada Corporation

At the inception of contract the entity assesses wheather the contract is , or contains a lease. A No provision is recognized for –
contract is, or contains, a lease if the contract involves use of an identified asset and conveys the
right to control the use of asset for period of time in exchange for consideration i.e. customer a. Any possible obligation that arises from past events and the existence of which will be
has right to: confirmed only by the occurrence or non-occurrence of one or more uncertain future events
not wholly within the control of the Company; or
-- Obtains substantially all the economic benefits from using the asset and

-- Direct the use of asset b. Present obligations that arise from past events but are not recognized because-

a. As a lessee 1) It is not probable that an outflow of resources embodying economic benefits will be
required to settle the obligation; or
The entity recognises the right of use of asset and right of use of liability at the commencement
date of lease. The right of use of asset is initially measured at cost, which comprise of present 2) A reliable estimate of the amount of obligation cannot be made.
value of future liabilty (lease rent payouts), any payment made at or before commencement
date any inital direct cost incurred and an estimate of cost to dismantle or remove an underlying Such obligations are disclosed as contingent liabilities. These are assessed continually and only
asset or to restore an asset less any lease incentive received. that part of the obligation for which an outflow of resources embodying economic benefits is
probable, is provided for, except in the extremely rare circumstances where no reliable estimate
The lease liabilty is initially measured at present value of lease payments that is not paid at can be made.
commencement date discounted at implicit rate mentioned in lease or incremental borrowing
rate. The entity generally uses incremental borrowing rate as discount rate. The right-of-use Contingent assets are not recognized in the financial statements since this may result in the
assets is depreciated using the straight-line method from the commencement date over the recognition of income that may never be realized.
useful life of right-of-use asset. The lease liability is subsequently measured at amortised
cost using effective interest method. It is remeasured to reflect any lease modifications or
reassessments. Provisions for onerous contracts are recognized when the expected benefits to be derived by the
Company from a contract are lower than the unavoidable costs of meeting the future obligations
under the contract. The provision is measured at the present value of the lower of the expected
The entity presents its right of use of assets in property plant and euipments and lease liabilties cost of terminating the contract and the expected net cost of continuing with the contract. Before
in financial liabilities in the statement of financial position. a provision is established the Company recognizes any impairment loss on the assets associated
with that contract.
b. Extension and termination of lease
1.11 Financial Instrument
The entity determines the lease term as the non-cancellable period of a lease, together with
both periods covered by an option to extend the lease if the entity is reasonably certain to Financial assets and liabilities are recognized when the Company becomes a party to the
exercise that option; and periods covered by an option to terminate the lease if the entity is contractual provisions of the instrument. Financial assets and liabilities are initially measured
reasonably certain not to exercise that option. In assessing whether the entity is reasonably at fair value, except for trade receivables which are initially measured at transaction price.
certain to exercise an option to extend a lease, or not to exercise an option to terminate a lease, Transaction costs that are directly attributable to the acquisition or issue of financial assets and
it considers all relevant facts and circumstances that create an economic incentive for the entity financial liabilities (other than financial assets and financial liabilities at fair value through profit
to exercise the option to extend the lease, or not to exercise the option to terminate the lease. or loss) are added to or deducted from the fair value measured on initial recognition of financial
The entity revises the lease term if there is a change in the non-cancellable period of a lease. asset or financial liability.

c. Short term leases and low value assets

The entity has elected not to recognise right of use of assets and lease liabilities for short-term
leases that have lease term of 12 months or less and leases of low value assets. The entity
recognises the lease payments associated with these leases as an expense on a straight- line
basis over lease term.

d. Impairment testing for right of use of assets

Right of use of assets are tested for are tested for impairment whenever there is any indication
that their carrying amount is not recoverable. Impairment loss ,if any ,is recognised in statement
of profit and loss.

1.8 Earnings per share

Basic earnings per share are computed by dividing the profit for the year after tax by the weighted
average number of equity shares outstanding during the year. Diluted earnings per share is
computed by dividing the net profit after tax for the year by the weighted average number of
equity shares outstanding during the year as adjusted for the effects of all dilutive potential
equity shares except where the results are anti-dilutive.

1.9 Foreign currency transactions

Transactions in foreign currencies are recorded at the exchange rates prevailing on the date
of the transaction. Monetary items are translated into the functional currency at the year-end
rates. The exchange differences so determined and also the realized exchange differences are
recognized in the Statement of Profit and Loss.

2 Employee benefits

Compensated absences

The employees can carry-forward a portion of the unutilised accrued compensated absences and
utilise it in future service periods or receive cash compensation on termination of employment.
Since the compensated absences do not fall due wholly within twelve months after the end
of the period in which the employees render the related service and are also not expected to
be utilized wholly within twelve months after the end of such period, the benefit is classified
as a long-term employee benefit. The Company records an obligation for such compensated
absences in the period in which the employee renders the services that increase this entitlement.
The obligation is measured on the basis of independent actuarial valuation using the projected
unit credit method.

1.10 Provisions, Contingent Liabilities and Contingent Assets:

The Company recognizes provisions only when it has a present legal or constructive obligation
as a result of a past event, it is probable that an outflow of resources embodying economic
benefits will be required to settle the obligation and when a reliable estimate of the amount of
the obligation can be made.

BIRLASOFT LIMITED (Subsidiaries Annual Report 2019-20) 81

Notes forming part of the Financial Statements
For the year ended on 31st March 2020 (Amount in CAD)

31 Mar 2020 31 Mar 2019

(Amount in CAD)
9 Trade payables
31 Mar 2020 31 Mar 2019
Total outstanding dues of trade payables 1,770,366 5,007,892
2 Trade receivables
1,770,366 5,007,892
Trade Receivables considered good - Unsecured 6,242,937 6,260,648

Trade Receivables -credit impaired 9,016 -

10 Other current financial liabilities
6,251,953 6,260,648
Other than trade payables :
Less: Allowances for bad and 9,016 72,767
doubtful trade receivables Accrued employee costs 196,691 208,994

6,242,937 6,187,881 Payable to related parties (Refer note 18) 91,142 6,162

287,833 215,156

3 Cash and cash equivalents

Cheques in hand - 156,934 11 Other current liabilities

Balances with banks Unearned revenue 765,535 12,712

In current accounts 5,604,124 6,507,432 Statutory Liabilities 593,618 524,669

5,604,124 6,664,366 1,359,153 537,381

4 Loans 12 Provisions

Loans Receivable from related parties Provision for employee benefit

(Refer note 18) - Considered good - Unsecured
Compensated Absences 36,267 74,618
- Receivables from related parties - 133,198
36,267 74,618
-Loan to Birlasoft solutions Inc 3,689,135 -
(Erstwhile KPIT Infosystems Inc., USA)

3,689,135 133,198 13 Revenue from Operations

Software services 17,108,951 22,729,629

5 Other current assets 17,108,951 22,729,629

(Unsecured, considered good

unless otherwise stated) 14 Other income
Prepaid expenses 2,712 2,782 Interest income 174,966 121,197
Balances with Statutory authorities 303,163 215,176 Bad Debts w/back 2,777 -
Employee advances 24,670 20,777 Foreign exchange gain (net) 492,595 226,560
Advance to suppliers 18,431 14,563 Other non operating income (net of expenses 14,695 329
Security deposits 1,088 1,089 directly attributable to such income)
(including miscellaneous income)
350,064 254,387
685,033 348,086

6 Loans
15 Employee benefits expense
Loans Receivable from related parties -
(Refer note 18) Considered good - Unsecured Salaries, wages and incentives 5,016,429 5,591,559

-Loan to Birlasoft solutions Inc 2,109,586 5,351,227 Staff welfare expenses 4,937 11,055
(Erstwhile KPIT Infosystems Inc., USA) 5,021,366 5,602,614
2,109,722 5,351,227

16 Finance costs
7 Equity Share capital Interest expense - 48
Issued subscribed and fully paid up: - 48
100 (2018 :100) Class A voting 1 1
common shares with no par value fully paid up

1 1

8 Provisions

Provision for employee benefit

Compensated Absences 147,271 161,458

147,271 161,458

BIRLASOFT LIMITED (Subsidiaries Annual Report 2019-20) 82

 Birlasoft Technologies Canada Corporation

(Amount in CAD)
(Amount in CAD)
No. Name of the related party Amount of Balance Amount of Balance
31 Mar 2020 31 Mar 2019 transaction as at transaction as at
2019-20 31 Mar 20 2018-19 31 Mar 19
17 Other expenses (USD) (USD) (USD) (USD)
Travel and overseas expenses (net) 164,539 410,340 2 Birlasoft Computer Corporation,
USA (Erstwhile known as SYSTIME
Transport and conveyance (net) 28,943 66,540
Computer Corporation, USA)
Cost of service delivery (net) 8,229,390 10,021,118
Advance Received (Net) 437 2,555 26
Cost of professional sub-contracting (net) 1,586,809 2,329,736 NIL
Reimbursement of expenses (7,451) 406
Recruitment and training expenses 2,044 10,000
Sale of software services 62,361 63,363 16,202 1,848
Rent 15,458 16,363
Software service charges 560,948 (23,426) 2492,860 (351,602)
Insurance - 23,935
3 Birlasoft Solutions Inc.
Rates & taxes 94,723 77,443 (Erstwhile KPIT Infosystems
Incorporated, USA)
Communication expenses (net) 9 901
Advance Received (Net) 1,089 10,511 (5,819)
Legal and professional fees 33,059 32,489 (53,483)
Reimbursement of expenses (46,670) 16,140
Marketing expenses - 21,904
Loan given NIL 57,98,721 2,121,974 5,798,721
Printing & Stationery 346 209
Interest income 174,966 174,966
Provision for doubtful debts and advances (net) 10,420 - (1,30,669)
Software service charges 639,539 975,192 (239,861)
Miscellaneous expenses (net) 3,645 12,089
Sale of software services 1,313,804 471,130 558,015 339,143
10,169,385 13,023,067
4 Birlasoft Solutions ME FZE
Note (formerly KPIT Infosystems
ME FZE, United Arab Emirates)
Certain expenses are net of recoveries/reimbursements from customers.
Software service charges 28,668 (31,507) NIL NIL
18 Related party transactions: 5 KPIT Technologies (UK) Ltd

Sale of software services NIL NIL 11,904 NIL

A. Name of the related party and nature of relationship where control exists
Relationship Name of related party Software service charges NIL NIL 173,646 (55,926)

Ultimate holding company Birlasoft Limited (Erstwhile known as 6 KPIT Technologies GmbH, Germany
KPIT Technologies Limited), India
Software service charges NIL NIL 22,755 (142)
Holding Company Birlasoft Computer Corporation
(Erstwhile known SYSTIME Computer Corporation),USA 7 Birlasoft Consulting Inc. (formerly
Sparta Consulting Inc., USA)
Fellow Subsidiary Companies Birlasoft Solutions Inc.
(Erstwhile Known as KPIT Infosystems Incorporated) Sale of software services NIL NIL 1,48,424 10,567

Birlasoft Solutions ME FZE (formerly KPIT Infosystems ME FZE, Software service charges 71,271 (31,265) 202,817 (102,035)
United Arab Emirates) (Australia Branch)
8 Birlasoft Solutions Limited
Birlasoft Inc, USA
Software service charges 354,351 (228,028) 77,955 (77,955)
Birlasoft Solutions Limited
(Formerly KPIT Infosystems Limited (UK)) 9 KPIT Technologies
Netherlands BV
Birlasoft Consulting Inc. (formerly Sparta Consulting Inc., USA)
Software service charges NIL NIL 4,369 14,563
Birlasoft Solutions France (Formerly KPIT Technologies France)
Entities
jointly controlled KPIT Technologies (UK) Ltd 10 KPIT Technologies Inc.
by a Group having joint
KPIT Technologies GmbH, Germany Sale of software services NIL 137,444 (489,402) 70,359
control over the reporting
entity
KPIT Technologies Netherlands, BV Software service charges NIL NIL 25,096 (25,096)
KPIT Technologies Inc, USA Advance Received (Net) NIL NIL 132,069 (130,970)
KPIT Technologies GK, Japan Reimbursement of expenses 235,325 NIL NIL NIL
KPIT Infosystems Limited Filial UK, Sweden 11 Birlasoft Inc, US

Reimbursement of expenses 76,757 NIL NIL NIL

Sale of software services 750,601 59,218 189,048 189,048

B. Transactions with related parties

No. Name of the related party Amount of Balance Amount of Balance

transaction as at transaction as at 19 Contingent liabilities:
2019-20 31 Mar 20 2018-19 31 Mar 19
(USD) (USD) (USD) (USD) The Company has no liabilities of contingent nature outstanding as at 31 March 2020.
1 Birlasoft Limited (Erstwhile KPIT
Technologies Limited, India) For and on behalf of the Board of Directors
Birlasoft Technologies Canada Corporation
Advance Received (Net) (13,997) 23,241 1,856 (Erstwhile KPIT Technologies Corporation)
(37,658)
Reimbursement of expenses (26,974) 5,261

Sale of software services 1,438 NIL 532 532 Baljeet Chhazal Indu Nangia
Director Director
Software service charges 17,174,475 (19,87,766) 6,334,161 (4,286,523) California New Jersey
May 20, 2020 May 20, 2020

BIRLASOFT LIMITED (Subsidiaries Annual Report 2019-20) 83

Birlasoft Solutions Mexico S.A. DE C.V.
(Formerly KPIT Infosystems Mexico S.A. DE C.V.)
Registered Office: Rio Duero 31, Col. Cuauhtémoc Alcaldía Cuauhtémoc Ciudad de México,
CP 06500, México.

Board’s Report Balance Sheet

As at 31 March 2020
Dear Shareholders,
(Amount in MXN)
Your Board of Directors is pleased to present herewith the report of the Directors on the operations of
the Company together with the accounts for the financial year ended March 31, 2020. Note 31 Mar 2020

ASSETS
Financial Results
Current assets
Particulars 2019-20
MXN (Million) Financial assets

Total Income 0.11 Cash and cash equivalents 1 27,376

Net Profit / (Loss) for the year (0.69) Unbilled Revenue 108,677

TOTAL ASSETS 136,053

Operations
EQUITY AND LIABILITIES
The Company commenced its operations during the year. Equity

Name Change Equity share capital -

Other equity (689,013)

During the year, the name of Company changed from KPIT Infosystems Mexico S.A. DE C.V. to
Birlasoft Solutions Mexico S.A. DE C.V. (689,013)

Liabilities
Change in Management
Current liabilities
During the year under review, Mr. Anjan Lahiri, Mr. Pawan Sharma and Mr. Rajeev Gupta ceased to be
Financial liabilities
Directors of the Company, and Mr. Dharmander Kapoor and Mr. Roopinder Singh were appointed as
Directors. Trade payables 2 57,797

Audit Other financial liabilities 3 753,155

Other current liabilities 4 14,114

The Company is not required by the local laws to have an independent audit firm to issue a report to
the shareholders on the financial statements. No audit opinion has been sought in respect of these 825,066
financial statements. The accounts are prepared from the internally prepared management accounts
TOTAL EQUITY AND LIABILITIES 136,053
of the Company. The same management accounts are audited in order for the Group Auditors to give
an audit opinion in relation to the group accounts i.e. consolidated accounts of Birlasoft Limited, the Significant accounting policies 1
parent company. Hence, no separate audit report is given in respect of the Company.
Notes referred to above form an integral part 2-9 -
For and on behalf of the Board of Directors of the financial statements
Birlasoft Solutions Mexico S.A. DE C.V.
For and on behalf of the Board of Directors of
Birlasoft Solutions Mexico, S.A. DE C.V.
(Formerly KPIT Infosystems Mexico, S.A. DE C.V.)
New Jersey Roopinder Singh
May 20, 2020 Director

Dharmander Kapoor Roopinder Singh

Director Director
Faridabad New Jersey
May 20, 2020 May 20, 2020

BIRLASOFT LIMITED (Subsidiaries Annual Report 2019-20) 84

 Birlasoft Solutions Mexico S.A. DE C.V.

Statement of Profit and Loss Statement of Cash Flow

For the year ended on 31st March 2020 For the year ended on 31st March 2020

(Amount in MXN) (Amount in MXN)

Note 31 March 2020 PARTICULARS 31 March 2020

Revenue from operations 5 108,677 A] CASH FLOW FROM OPERATING ACTIVITIES

Total income 108,677 Profit for the period (689,013)

Expenses Operating Profit before working capital changes (689,013)

Employee benefits expense 5 176,017 Adjustments for changes in working capital:

Finance costs 6 663 Trade Payables 57,797

Other expenses 7 621,010 Other financial liabilities, other liabilities and provisions 767,269

Total expenses 797,690 Trade receivables and unbilled revenue (108,677)

Profit before tax (689,013) Cash generated from operations 27,376

Tax expense Net cash from operating activities (A) 27,376

Current tax -

Total tax expense - B] CASH FLOW FROM INVESTING ACTIVITIES -

Profit for the year (689,013) Net Increase / (decrease ) in cash and cash equivalents (A + B) 27,376

Other comprehensive income - Cash & cash equivalents at close of the year (refer note 1 below) 27,376

Total comprehensive income for the year (689,013) Cash & cash equivalents at beginning of the year (refer note 1 below) -

Significant accounting policies 1 Cash surplus / (deficit) for the year 27,376

Notes referred to above form an integral part 2-9 -

of the financial statements
Note 1:
For and on behalf of the Board of Directors of Cash and cash equivalents include:
Birlasoft Solutions Mexico, S.A. DE C.V.
(Formerly KPIT Infosystems Mexico, S.A. DE C.V.) Balance with banks

In current accounts 27,376

Total Cash and cash equivalents 27,376
Dharmander Kapoor Roopinder Singh
Director Director Note 2:
Faridabad New Jersey
20 May 2020 20 May 2020 Figures in brackets represent outflows of cash and cash equivalents.

Note 3:

The above Cash Flow Statement has been prepared under the indirect method as set out in the
Indian Accounting Standard (Ind-AS) 7 Satement of Cash Flows.

For and on behalf of the Board of Directors of

Birlasoft Solutions Mexico, S.A. DE C.V.
(Formerly KPIT Infosystems Mexico, S.A. DE C.V.)

Dharmander Kapoor Roopinder Singh

Director Director
Faridabad New Jersey
May 20, 2020 May 20, 2020

BIRLASOFT LIMITED (Subsidiaries Annual Report 2019-20) 85

Statement of Changes in Equity Notes forming part of the financial statements
For the year ended on 31st March 2020 for the year ended on 31st March 2020

(Amount in MXN) 1. Company Overview:

Birlasoft Solutions Mexico , S.A. DE C.V. (Erstwhile KPIT Infosystems Mexico, S.A. DE C.V)
A Other equity (“the Company”) is a Company incorporated in Mexico City on Ocober 25, 2018. The Company
is a wholly owned subsidiary of Birlasoft Solutions Inc. (Erstwhile Known as KPIT Infosystems
Particulars Retained earnings Total Incorporated) . The ultimate holding company is Birlasoft Limited (Erstwhile KPIT Technologies
Limited) India.
Balance as on 01 April 2019 - -

Total comprehensive income for the year 2019-20 (689,013) (689,013) The Company is engaged in the business of providing software consultancy services in the
areas of Enterprise Resource Planning, Customer Relationship Management, Supply Chain
Balance as on 31 March 2020 (689,013) (689,013) Management, Business Intelligence, Business Integration, Human Resource Management,
Infrastructure Management Services and Strategic Sourcing.

For and on behalf of the Board of Directors of 1. Significant Accounting Policies:

Birlasoft Solutions Mexico, S.A. DE C.V.
(Formerly KPIT Infosystems Mexico, S.A. DE C.V.) 1.1 Basis for preparation of financial statements:

“The financial statements have been prepared in accordance with the Indian Accounting
Standards (“”Ind-AS””) as specified under Section 133 of the Companies Act, 2013 read with
Dharmander Kapoor Roopinder Singh the Rule 3 of the Companies (Indian Accounting Standards) Rules, 2015 and Companies (Indian
Director Director Accounting Standards) Amendment Rules, 2016 and the provisions of Companies Act, 2013.
Faridabad New Jersey The financial statements are presented in Mexican peso (“MXN”) and are rounded off to nearest
May 20, 2020 May 20, 2020 MXN”

Accounting policies have been consistently applied except where a newly issued accounting
standard is initially adopted or a revision to an existing accounting standard requires a change in
the accounting policy hitherto in use. 

1.2 Current-non current classification

All assets and liabilities are classified into current and non-current.

Assets

An asset is classified as current when it satisfies any of the following criteria:

a. It is expected to be realised in, or is intended for sale or consumption in, the Company’s
normal operating cycle;

b. It is held primarily for the purpose of being traded;

c. It is expected to be realised within 12 months after the reporting date; or

d. It is cash or cash equivalent unless it is restricted from being exchanged or used to settle a
liability for atleast 12 months after the reporting date.

Current assets include the current portion of non-current financial assets. All other assets are
classified as non-current.

Liability

A liability is classified as current when it satisfies any of the following criteria:

a. It is expected to be settled in the Company’s normal operating cycle;

b. It is held primarily for the purpose of being traded;

c. It is due to be settled within 12 months after the reporting date; or

d. The Company does not have an unconditional right to defer settlement of the liability for
at least 12 months after the reporting date. Terms of a liability that could, at the option of
the counterparty, result in its settlement by the issue of equity instruments do not affect its
classification.

Current liabilities include current portion of non-current financial liabilities. All other liabilities
are classified as non-current.

Operating cycle

Operating cycle is the time between the acquisition of assets for processing and their realization
in cash or cash equivalents. The operating cycle of the Company is less than twelve months.

1.3 Revenue recognition:

The Entity earns revenue primarily from providing IT services, consulting and business solutions.
The Group offers a consulting-led, integrated portfolio of IT.

Revenue is recognised upon transfer of control of promised products or services to customers

in an amount that reflects the consideration which the entity expects to receive in exchange for
those products or services.

- Revenue from time and material and job contracts is recognised on output basis measured by
units delivered, efforts expended, number of transactions processed, etc.

- Revenue related to fixed price maintenance and support services contracts where the Company
is standing ready to provide services is recognised based on time elapsed mode and revenue is
straight lined over the period of performance.

BIRLASOFT LIMITED (Subsidiaries Annual Report 2019-20) 86

 Birlasoft Solutions Mexico S.A. DE C.V.

- In respect of other fixed-price contracts, revenue is recognised using percentage-of-completion or substantively enacted by the balance sheet date. Deferred income tax assets and liabilities are
method (‘POC method’) of accounting with contract costs incurred/ efforts expended recognized for all temporary differences arising between the tax bases of assets and liabilities
determining the degree of completion of the performance obligation. and their carrying amounts in the financial statements.

- Revenue from third party software is recognised upfront at the point in time when software is Deferred income tax assets and liabilities are measured using tax rates and tax laws that have
delivered to the customer, such revenue is recognised on net basis when the entity is acting as been enacted or substantively enacted by the balance sheet date and are expected to apply to
an agent. 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
Revenue is measured based on the transaction price, which is the consideration, adjusted for recognized as income or expense in the period that includes the enactment or the substantive
volume discounts, service level credits, performance bonuses, price concessions and incentives, enactment date. A deferred income tax asset is recognized to the extent that it is probable that
if any, as specified in the contract with the customer. Expenses reimbursed by customers during future taxable profit will be available against which the deductible temporary differences and
the project execution are recorded as reduction to associated costs. Revenue also excludes tax losses can be utilized. The company offsets current tax assets and current tax liabilities,
taxes collected from customers. where it has a legally enforceable right to set off the recognized amounts and where it intends
either to settle on a net basis, or to realize the asset and settle the liability simultaneously.
Contract assets are recognised when there is excess of revenue earned over billings on contracts.
Contract assets are classified as unbilled revenue (only act of invoicing is pending) when there 1.6 Earnings per share
is unconditional right to receive cash, and only passage of time is required, as per contractual
terms. Basic earnings per share are computed by dividing the profit for the year after tax by the weighted
average number of equity shares outstanding during the year. Diluted earnings per share is
Unearned revenue (“contract liability”) is recognised when there is billings in excess of computed by dividing the net profit after tax for the year by the weighted average number of
revenues. equity shares outstanding during the year as adjusted for the effects of all dilutive potential
equity shares except where the results are anti-dilutive.
The billing schedules agreed with customers include periodic performance based payments
and / or milestone based progress payments. Invoices are payable within contractually agreed 1.7 Foreign currency transactions
credit period.
Transactions in foreign currencies are recorded at the exchange rates prevailing on the date
In accordance with Ind AS 37, the entity recognises an onerous contract provision when the of the transaction. Monetary items are translated into the functional currency at the year-end
unavoidable costs of meeting the obligations under a contract exceed the economic benefits rates. The exchange differences so determined and also the realized exchange differences are
to be received. recognized in the Statement of Profit and Loss.

Contracts are subject to modification to account for changes in contract specification and 1.8 Employee benefits
requirements. The entity reviews modification to contract in conjunction with the original
contract, basis which the transaction price could be allocated to a new performance obligation, Compensated absences
or transaction price of an existing obligation could undergo a change. In the event transaction
price is revised for existing obligation, a cumulative adjustment is accounted for. The employees can carry-forward a portion of the unutilised accrued compensated absences and
utilise it in future service periods or receive cash compensation on termination of employment.
The entity disaggregates revenue from contracts with customers by geography and business Since the compensated absences do not fall due wholly within twelve months after the end
verticals. of the period in which the employees render the related service and are also not expected to
be utilized wholly within twelve months after the end of such period, the benefit is classified
Use of significant judgements in revenue recognition as a long-term employee benefit. The Company records an obligation for such compensated
absences in the period in which the employee renders the services that increase this entitlement.
The obligation is measured on the basis of independent actuarial valuation using the projected
The entity’s contracts with customers could include promises to transfer multiple products and
unit credit method.
services to a customer. The entity assesses the products / services promised in a contract and
identifies distinct performance obligations in the contract. Identification of distinct performance
obligation involves judgement to determine the deliverables and the ability of the customer to 1.10 Provisions, Contingent Liabilities and Contingent Assets:
benefit independently from such deliverables.
The Company recognizes provisions only when it has a present legal or constructive obligation
Judgement is also required to determine the transaction price for the contract. The transaction as a result of a past event, it is probable that an outflow of resources embodying economic
price could be either a fixed amount of customer consideration or variable consideration benefits will be required to settle the obligation and when a reliable estimate of the amount of
with elements such as volume discounts, service level credits, performance bonuses, price the obligation can be made.
concessions and incentives. The transaction price is also adjusted for the effects of the time
value of money if the contract includes a significant financing component. Any consideration No provision is recognized for –
payable to the customer is adjusted to the transaction price, unless it is a payment for a distinct
product or service from the customer. The estimated amount of variable consideration is a. Any possible obligation that arises from past events and the existence of which will be
adjusted in the transaction price only to the extent that it is highly probable that a significant confirmed only by the occurrence or non-occurrence of one or more uncertain future events
reversal in the amount of cumulative revenue recognised will not occur and is reassessed at not wholly within the control of the Company; or
the end of each reporting period. The entity allocates the elements of variable considerations
to all the performance obligations of the contract unless there is observable evidence that they
b. Present obligations that arise from past events but are not recognized because-
pertain to one or more distinct performance obligations.

1) It is not probable that an outflow of resources embodying economic benefits will be

The entity uses judgement to determine an appropriate standalone selling price for a
required to settle the obligation; or
performance obligation. The entity allocates the transaction price to each performance
obligation on the basis of the relative stand-alone selling price of each distinct product or
service promised in the contract. Where standalone selling price is not observable, the entity 2) A reliable estimate of the amount of obligation cannot be made.
uses the expected cost plus margin approach to allocate the transaction price to each distinct
performance obligation. Such obligations are disclosed as contingent liabilities. These are assessed continually and only
that part of the obligation for which an outflow of resources embodying economic benefits is
The entity exercises judgment in determining whether the performance obligation is satisfied probable, is provided for, except in the extremely rare circumstances where no reliable estimate
at a point in time or over a period of time. The entity considers indicators such as how customer can be made.
consumes benefits as services are rendered or who controls the asset as it is being created or
existence of enforceable right to payment for performance to date and alternate use of such Contingent assets are not recognized in the financial statements since this may result in the
product or service, transfer of significant risks and rewards to the customer, acceptance of recognition of income that may never be realized.
delivery by the customer, etc.
Provisions for onerous contracts are recognized when the expected benefits to be derived by the
1.4 Borrowing Costs: Company from a contract are lower than the unavoidable costs of meeting the future obligations
under the contract. The provision is measured at the present value of the lower of the expected
Borrowing costs that are directly attributable to the acquisition, construction or production of cost of terminating the contract and the expected net cost of continuing with the contract. Before
a qualifying asset are capitalized as part of cost of that asset. All other borrowing costs are a provision is established the Company recognizes any impairment loss on the assets associated
charged to the Statement of Profit and Loss. with that contract.

The exchange differences arising from foreign currency borrowings, to the extent that they are 1.11 Financial Instrument
regarded as an adjustment to interest costs, are regrouped from other exchange differences to
finance costs. Financial assets and liabilities are recognized when the Company becomes a party to the
contractual provisions of the instrument. Financial assets and liabilities are initially measured
1.5 Income taxes at fair value, except for trade receivables which are initially measured at transaction price.
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
Income tax expense comprises current and deferred income tax. Income tax expense is
or loss) are added to or deducted from the fair value measured on initial recognition of financial
recognized in the statement of profit and loss except to the extent that it relates to items
asset or financial liability.
recognized directly in equity, in which case it is recognized in other comprehensive income.
Current income tax for current and prior periods is recognized at the amount expected to be paid
to or recovered from the tax authorities, using the tax rates and tax laws that have been enacted

BIRLASOFT LIMITED (Subsidiaries Annual Report 2019-20) 87

Notes forming part of the Financial Statements Notes forming part of the Financial Statements
For the year ended on 31st March 2020 For the year ended on 31st March 2020

(Amount in MXN) (Amount in MXN)

31 March 2020
8 Related party transactions:
1 Cash and cash equivalents

Balances with banks A. Name of the related party and nature of relationship where control exists
In current accounts 27,376 Relationship Name of related party
27,376 Ultimate holding company Birlasoft Limited (Erstwhile known as
KPIT Technologies Limited), India
Holding Company Birlasoft Solutions Inc.
31 March 2020 (Erstwhile Known as KPIT Infosystems Incorporated)
2 Trade payables Fellow Subsidiary Companies Birlasoft Solutions Ltda
(Formerly KPIT Technologies Solucoes Em Informatica Ltda)
Total outstanding dues of trade payables 57,797
Birlasoft Consulting Inc. (formerly Sparta Consulting Inc., USA
57,797
Entities jointly controlled by KPIT (Shanghai) Software Technology Co. Limited, China
a Group having joint control (w.e.f. 01 January 2019 upto 31 January 2020)
31 March 2020
over the reporting entity KPIT Technologies (UK) Ltd
3 Other current financial liabilities (w.e.f. 01 January 2019 upto 31 January 2020)

Other than trade payables : KPIT Technologies GmbH, Germany

(w.e.f. 01 January 2019 upto 31 January 2020)
Accrued employee costs 30,252
KPIT Infosystems Limited Filial UK, Sweden
Payable to related parties (Refer note 10) 722,903 (w.e.f. 01 January 2019 upto 31 January 2020)

753,155 KPIT Technologies Limited, India

(Erstwhile KPIT Engineering Limited)
(w.e.f. 01 January 2019 upto 31 January 2020)

31 March 2020 MicroFuzzy Industrie-Elektronic GmbH

(w.e.f. 01 January 2019 upto 31 January 2020)
4 Other current liabilities
KPIT Technologies Inc,USA
Statutory Liabilities 14,114 (w.e.f. 01 January 2019 upto 31 January 2020)

14,114 KPIT Technologies GK,Japan

(w.e.f. 01 January 2019 upto 31 January 2020)
B. Transactions with related parties
31 March 2020

5 Revenue from Operations

Sr. no. Name of the related party Amount of Balance
Software services 108,677 transaction as at
2019-20 31 Mar 20
108,677 (MXN) (MXN)

1 Birlasoft Computer Corporation, USA

31 March 2020 (Erstwhile known as SYSTIME Computer
Corporation, USA)
5 Employee benefits expense
Loan taken (17,766) (17,766)
Salaries, wages and incentives 176,017
Interest payable (99) (99)
176,017
2 Birlasoft Solutions Inc. (Erstwhile KPIT
Infosystems Incorporated, USA)

31 March 2020 Loan taken (703,655) (703,655)

6 Finance costs Interest payable (1,382) (1,382)

Interest expense 663

663
9 Contingent liabilities:

The Company has no liabilities of contingent nature outstanding as at 31 March 2020.

31 March 2020

7 Other expenses For and on behalf of the Board of Directors of

Birlasoft Solutions Mexico, S.A. DE C.V.
Legal and professional fees 271,082 (Formerly KPIT Infosystems Mexico, S.A. DE C.V.)
Foreign exchange loss (net) 346,402

Miscellaneous expenses (net) 3,526

Dharmander Kapoor Roopinder Singh
621,010 Director Director
Faridabad New Jersey
Note
May 20, 2020 May 20, 2020
Certain expenses are net of recoveries/reimbursements from customers.

BIRLASOFT LIMITED (Subsidiaries Annual Report 2019-20) 88

 Birlasoft Solutions Ltda.

Birlasoft Solutions Ltda.

(Formerly KPIT Technologies Soluções em Informática Ltda.)
Registered Office: Alameda Santos, 1165 – 10ª andar – Cerqueira Cesar 01419-002 – São Paulo/SP,
Brasil.

Board’s Report Review report of financial statements

As of March 31, 2020 and 2019
Dear Shareholders,
Qualified opinion
Your Directors are pleased to present herewith the Eighth report on the operations of the Company
together with the audited accounts for the financial year ended March 31, 2020. To The Management of Birlasoft Solutions Ltda. (KPIT Technologies Soluções em Informática Ltda.)
São Paulo - SP
Financial Results
We reviewed the financial statements of Birlasoft Solutions Ltda. (KPIT Technologies Soluções em
Particulars 2019-20 2018-19 Informática Ltda.) (“Company”) comprising the balance sheet on March 31st, 2020 and respective
R$ R$ income statements, changes in shareholders’ equity, and cash flow for the year ended on such date,
Net Revenue 25,847,090 21,507,987 as well as the summary of the main accounting policies and explanatory notes, comprising the
significant accounting practices and other clarifying information.
Net Profit / (Loss) for the year 1,727,084 (543,001)
Based on our review, except for the matter described in the “Base for conclusion for qualified
Operations opinion”, we are not aware of any fact that let us to believe that the financial statements do not
present accordingly, in all material matters, the financial position of Birlasoft Solutions Ltda. (KPIT
During the year under review, total revenues of the Company increased by 20.17% resulting in increase Technologies Soluções em Informática Ltda.), on March 31, 2020, the results of its operations and its
in profit of R$ 1,727,084. cash flows for the year ended in such date in accordance with accounting practices adopted in Brazil
and international financial report standards (IFRS) issued by International Accounting Standards
Board (IASB).
Name Change

Base for conclusion for qualified opinion

During the year, the name of the Company changed from KPIT Technologies Soluções em Informática
Ltda. to Birlasoft Solutions Ltda.
The Company has continued to adopt, under human resources policy, hiring legal entities as services
providers to develop technical activities without any formal employment under Brazilian labor laws.
Change in Management
The performance of occasional initiatives by people linked to these service providers, possibly with
such characteristics, can result in potential labor contingency.
During the year under review, Mr. Anjan Lahiri and Mr. Rajeev Gupta ceased to be Directors and Mr.
Roopinder Singh was appointed as a Director.
Our review was carried out according to Brazilian and International audit standards. Our
responsibilities, in accordance with such standards, are described in the following section titled
Audit “Auditor’s responsibility for the audit of the financial statements”. We are independent in relation
to the Company in accordance with the relevant ethical principles set out in the Code of Ethics of
The Company appointed Actual Contabilidade S/S. as auditors to conduct the audit and the audit Professional Accountants and professional standards issued by the Federal Accounting Council and
report issued by the auditors is attached with the accounts of the Company. have complied with other ethical responsibilities according to these standards.

For and on behalf of the Board of Directors We believe the evidence obtained by audit is enough and proper to establish the grounds for our
Birlasoft Solutions Ltda. qualified opinion.

Management’s liability on the financial statements

New Jersey Roopinder Singh
April 15, 2020 Director
Company’s management is liable for preparing and submitting the financial statements according
to the accounting practices adopted in Brazil according to the international standards for financial
report (IRFS) issued by International Accounting Standards Board – (IASB) and the internal control
determined as necessary to allow preparing such financial statements free from relevant misstatement
irrespective if caused by fraud or error. In preparing the financial statements, management is
responsible for assessing the Company’s ability to continue operational, disclosing, as applicable,
issues related to its operational continuity and using the this accounting basis in the preparation of
the financial statements unless management either intends to liquidate the Company or to cease
operations, or has no realistic alternative to avoid closing the operations.

Auditor’s responsibility for the audit of the financial statements

Our goals are to obtain reasonable assurance that the financial statements, as a whole, are free from
material misstatement, whether due to fraud or error, and to issue an auditors’ report that includes
our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit
carried out in accordance with Brazilian and international standards will always detect a material
misstatement when it exists. Misstatements should 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 financial statements. As part of an audit
carried out in accordance with Brazilian and International Auditing Standards, we exercise professional
judgment and maintain professional skepticism throughout the audit. We also:

¯¯ Identify and assess the relevant risks of material misstatement in the financialstatements,
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.

¯¯ Understand internal control relevant to the audit in order to design audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the Company’s internal control.

¯¯ Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by Management.

¯¯ Conclude on the appropriateness of management’s use of the going operational accounting

basis 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 for operational
continuity of Company. If we conclude that a material uncertainty exists, we are required to
draw attention in our auditors’ report to the related disclosures in the financial statements or,
if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the
audit evidence obtained up to the date of our auditors’ report, however, adverse events or future
conditions may eventually cause the Company to no longer remain in operational continuity.

BIRLASOFT LIMITED (Subsidiaries Annual Report 2019-20) 89

 ¯¯ Evaluate the overall presentation, structure and content of the financial statements, including
the disclosures, and whether the financial statements represent the correspondent transactions
Notes to the Financial Statements
As of March 31, 2020 and 2019
and events in a manner compatible with proper presentation.
(In Brazilian reais without cents)
¯¯ Audit evidence was obtained, suitable and sufficient, regarding financial information to express
an opinion on the financial statements. We are responsible for the guidance, supervision and
performance of the audit and, consequently, for the audit opinion. 1 - Operational context

We communicate with the responsible for governance regarding, among other issues, the planned The Company’s activities include basically the consulting and advisory services in types and
scope and timing of the audit and significant audit findings, including any significant deficiencies in configurations, as well as installation project developments related to the products sold, the
internal control that we identified during our audit. sale of computer programs, software and applications, as well the consulting services in the
information technology area and participation in other companies.
São Paulo, 16 de abril de 2020
2 - Presentation of the Financial Statements
Actual Contabilidade S/S
a. Statement of compliance with IFRS and BRGAAP standards
CRC-SP - 2SP024780/O-6
Financial Statements have been prepared according to the accounting practices adopted in
Brazil which encompasses the Business Corporations Laws, and Pronouncing, Guidance And
Rodrigo Aparecido Leme de Oliveira Interpretation issued by Accounting Pronouncing Committee -CPC.

Contador CRC - 1SP309141/O-1 The showed amounts take into account the adoption of the Tax Transitional System - RTT as
provided for in law nº 11.941 /09, which purpose is to maintain the tax neutrality of changes in
Brazilian corporate law, introduced by laws 11.638 /07 and 11.941 /09 and by other changes in
accounting standards arising from the IFRS.

On November 12th, 2013 the Provisional Measure – MP nº 627 was published and converted
in Law nº 12.973 in May 13, 2014 which among other provisions, revokes the Tax Transitional
Regime - RTT. The provisions of such Provisional Measure shall apply as from the year 2015 or as
from the year 2014 for the taxpayers who perform the anticipated adoption. The Administration
of Company is evaluating the impacts thereon and which is the period more convenient for the
adoption. On March 31st, 2020, the company considers there will be no effects to be taken into
account in the Financial Statements.

On April 15th, 2020, The Administration of Company authorized the conclusion of such financial
statements.

b. Measurement base

The financial statements have been prepared based on the historic cost except the following
material items recognized in the balance sheet:

Non-derivative financial Instruments designated at fair value by means of the results are
measured at fair value.

The financial assets available for sale are measured by the fair value.

c. Functional Currency and presentation currency

The items included in the financial statements have been measured by adopting the currency of
the economic environment in which the Company operates (functional currency). The financial
statements are showed in Brazilian Reais, which is the Company’s functional currency.

d. Estimates use and judgment

The preparation of the financial statements according to the accounting practices adopted in
Brazil requires the use of the judgments, estimates, and suppositions by The Administration
of Company affecting the accounting policies use and reported values of the assets, liabilities,
incomes and expenses. The actual results might differ from the estimates.

The estimates and assumptions are reviewed annually by The Administration of Company. The
changes are recognized in the financial year in which such estimates are reviewed and in future
years affected.

3 - Main Accounting Practices

a. Financial instruments

The Company’s non-derivative financial assets and liability are classified under the following
categories:

i. Non-Derivative financial assets

Company recognizes the loans and receivables and deposits firstly on the origin date. All other
financial assets (including assets designated by fair value through the results) are recognized
firstly on the negotiation date when the Company becomes a party in the contractual provisions
of the instrument. The Company classifies the non-derivative financial assets in the following
categories: financial assets measured at fair value through the income and receivables.

ii. Receivables

Receivables are financial assets with fixed or determined payments, which are not offered in the
active market. Such assets are recognized firstly at the fair value added from any attributed cost
of the transactions. After the initial recognition, the loans and receivables are measured by the
amortized cost using the actual interest method, reduced from the loss due to the reduction on
the recoverable amount.

Receivables encompass the cash and cash equivalent, accounts receivables from customers and
other receivables.

BIRLASOFT LIMITED (Subsidiaries Annual Report 2019-20) 90

 Birlasoft Solutions Ltda.

iii. Cash and cash equivalents The financial expenses comprise interest expense on contractual expenses, bank charges,
losses in fair value of financial assets measured at fair value by means of results and contingent
Include cash, bank sight deposits and temporary short term investments up to 90 days from consideration, etc.
the date of investment or deemed of immediate liquidity or convertible into known amount of
cash, which are subject to an insignificant risk of change in value and are recorded by the cost h. Income Tax and Social Contribution
values added by the income earned up to the balance sheets dates and do not exceed its market
or performance value. The income tax and social contribution of the current year are calculated based on 15% rate
added from 10% additional on taxable profit exceeding R$ 240,000 for income tax and 9% on
iv. Non-derivative financial liabilities the taxable profit for social contribution on net profit, which take into account the tax loss offset
and the loss of Social Contribution limited to 30% the taxable profit.
Firstly, Company recognizes the debt instruments issued on the date they are originated. All
other financial liabilities are recognized firstly on the negotiation date when Company becomes The income tax and social contributions expenses comprise the current taxes.
a party in the contractual provisions of the instrument. Company writes off the financial liability
when the contractual obligations are withdrew, canceled or overdue. The tax charges and contributions calculated and collected by the Company, as well as their
income statements and fiscal and accounting records are subject to review by the tax authorities
Such financial liabilities are recognized first by fair value deducted by any cost of the related in variable prescription deadlines.
transactions. After the initial recognition, such financial liabilities are measured by the amortized
cost using the actual interest method, as applicable, in order to reflect the costs incurred up to Current tax
the balance sheet date.
Current tax is the tax payable and receivable estimated on taxable profit or losses of the year,
The Non-derivative financial liabilities of the Company refer basically to imports payable to based on the tax rates published or materially published on the date the financial statements
holding added by exchange rate variation incurred up to the balance sheet date, suppliers and are prepared and any adjustments on taxes payable in respect to the previous years.
other accounts payable showed by known values or to be determined, updated by monetary
adjustment index and interest, as applicable, to reflect the costs incurred up to the balance
i. Intangible
sheet date.

As established by CPC 06 Leases (IFRS 16), in 2020, the right to use the property and building
b. Fixed Assets
infrastructure where the Company is installed was recognized, with the corresponding liability
being the total of the installments falling due, according to the agreement lease whose term
Acknowledgement and measurement: Fixed assets are measured by acquisition historic cost, will end in July 2021.
deducting the accrued depreciation and losses from the reduction to recoverable amount
(impairment) as required. The fixed assets costs include the expenses directly attributable to
the assets acquisition. Other expenses are capitalized only when there is an increase in the
economic benefits of the fixed assets item. Any other expense, when incurred, is recognized
in results as expense. Gains and losses in the fixed assets disposal determined by comparing 4 Cash and Cash Equivalents
the resources from disposal and fixed assets accounting value are recognized as net in other 2020 2019
incomes in the results.
Cash and Cash Equivalents 664 512
Depreciation: The depreciation is computed by the straight-line method, at rates deemed
Investments 2,356,332 612,979
compatible with the useful life.
2,356,996 613,491
c. Reduction on the assets recoverable amount

Non-derivative Financial Assets (including receivables) 5 Accounts Receivable

2020 2019
The financial assets are evaluated at each submission date if it is not measured by fair value in
order to determine any objective evidence of loss in the recoverable value. The assets has the Domestic sales 4,404,371 2,542,408
loss in recoverable value if there is objective evidence of loss resulting from one or more events
taking place after the assets initial recognition, and such loss event had a negative effect on the Foreign Sales – related parties 495,507 446,142
future cash flows forecast which should be estimated reliably.
Reimbursable expenses 97,964 391,048
The objective evidence of the financial assets lost value should include the debtor default or Allowance for doubtful accounts (175,969) (175,969)
delay in payment, the renegotiation of the amount payable to the Company under conditions
that The Company should not accept on other transactions, indications the debtor or issuer 4.821.873 3.203.629
should be bankrupted or the end of the active market for the securities.

d. Provisions 6 Transactions with Related Parties

A provision is recognized in respect to the past event, if the Company legal or constructive The transactions with related parties consist basically of information technologies services to
obligation could be estimated reliably and is likely to be an economic resource required to settle enterprises abroad as showed below:
the obligation. The provisions are determined by means of deduction to cash flow expected at
a rate before taxes reflecting the evaluations by current market regarding the value of money in 2020 2019
time and the specific risks to the liability. Current Assets – Accounts receivable:

Company supported by legal opinion by its legal advisors and Management represents to have Birlasoft Limited (KPIT US) (Cummins) 248,286 190,459
no knowledge of tax, civil and labor proceedings affecting materially its business, in addition to
Birlasoft Limited (KPIT US) (WTF) 55,822 20,830
those already reflected in the financial statements on March 31st, 2020.
Birlasoft Limited (KPIT US) (NOV) 49,949 86,020
e. Operating Income
Birlasoft Solutions Limited UK (KPIT UK)
(Unilever) 141,450 148,833
The operating income from sale in the regular course of the activities is measured by the fair
value of the consideration received or to be received, net of returns, commercial discounts and 495,507 446,142
bonuses. The operating income is recognized according to the service invoice is issuance, based
on the technical working hours approved by customers. Certain service provision contracts The transactions performed during the year were the following:
provide for the delivery of services and / or contractual rights that are provided at different times
during the term of the contracts, which require, under the terms established in CPC 47 (IFRS 15), 2020 2019
that Management make an analysis with relation to the portion of revenue related to each stage
of the contract for its proper recognition. Services Revenue:

Foreing market:
f. Operational costs
Birlasoft Limited (KPIT US) (Cummins) 2,394,832 2,317,313
The cost of services in the markets in which the Company operates is mainly represented by the KPIT Technologies Oshkosh - 40,731
cost of productive hours worked at the rate paid to the technicians, billable and nonbillable to
customers, the cost of hours spent in any rework (guarantees). Birlasot Limited (KPIT US) (WTF) 404,911 201,312

Birlasoft Limited (KPIT US) (NOV) 429,690 457,369

g. Financial income and financial expenses
Birlasoft Limited (KPIT UK) (Unilever) 1,104,665 751,269
The financial income comprises interest income on investments, discounts obtained and yields
SPARTA Consulting INC DBA KPIT - 293,873
from instruments classified as cash equivalents. The interest income is recognized in the results,
by means of the effective interest method. KPIT US (Cummins –Red Praire) - 214,104

4,334,098 4,275,971

BIRLASOFT LIMITED (Subsidiaries Annual Report 2019-20) 91

7 - Intercompany loan agreement 8 - Capital Stock

Birlasoft Solutions Inc (KPIT Infosystems Incorporated - KPIT US) is a wholly owned subsidiary The capital, totally paid up, is of R$ 4,022,378 (R$ 4,022,378 at 2019), divided in 4,022,378
of Birlasoft Limited (KPIT Technologies Limited, India - KPIT India) and Birlasoft Solutions Ltda. (4,022,378 at 2019) quotas at the nominal amount of R$ 1.00 each, distributed to quota holders
(KPIT Technologies Soluções em Informática Ltda. - KPIT Brazil) is a wholly owned subsidiary of in the following proportion:
Birlasoft Solutions Inc (KPIT US).
Number of
Shareholder Sharequotas
A Birlasoft Solutions Inc (KPIT Infosystems Incorporated - KPIT US), a company incorporated
under the laws of State of New Jersey shall advance a loan of US$ 800,000 to Birlasoft Solutions Birlasoft Limited (KPIT Technologie Limited) 1,000
Ltda. (KPIT Brazil) to fund its working capital requirements.
Birlasoft Solutions Inc (KPIT Infosystems Incorporated) 4,021,378
Birlasoft Solutions Ltda. shall be liable to pay interest at the rate of 3.5% per annum on the 4,022,378
principal amount outstanding. The interest shall be paid on half yearly basis.

Birlasoft Solutions Ltda. shall repay the entire loan within a period not exceeding thirtysix
months on rolling basis form the date of disbursal of the loan.

Balance Sheets
As of March 31, 2020 and 2019

(In Brazilian reais without cents) (In Brazilian reais without cents)

Assets 2020 2019 Liabilities 2020 2019

Current assets: Current liabilities:

Cash and cash equivalents 2,356,996 613,491 Suppliers 162,732 53,181

Accounts receivable 4,821,873 3,203,629 Intercompany loan Agreement 68,039 16,621

Advances to suppliers - 11,105 Taxes and contributions payable 136,171 208,640

Advances to employees 3,199 22,732 Payroll and related charges 165,290 154,619

Recoverable taxes 1,119,434 1,433,673 Accrued vacations and related charges 800,506 881,972

Other accounts receivable 542,086 71,904 Accrued consulting fees 944,584 958,417

Accrued bonus 101,169 422,464

8,843,588 5,356,534 Lease agreement obligations 467,198 -

Other accruals 587,957 121,980

3,433,646 2,817,894

Non-Current assets: Non-Current liabilities:

Judicial deposits 22,981 - Intercompany loan agreement 4,158,960 2,547,930

Property, plant and equipment 86,986 110,353 4,314,692 2,547,930

Intangible 622,930 - Shareholders’ equity:

Lease agreement obligations 155,732 - Capital stock 4,022,378 4,022,378

732,897 110,353 Accumulated losses (2,194,231) (3,921,315)

1,828,147 101,063

9,576,485 5,466,887 9,576,485 5,466,887

The accompanying notes are an integral part of these financial statements.

BIRLASOFT LIMITED (Subsidiaries Annual Report 2019-20) 92

 Birlasoft Solutions Ltda.

Income Statements Cash Flow Statements

For the Years Ended March 31, 2020 and 2019 For the Years Ended March 31 2020, and 2019

(In Brazilian reais without cents, except profit (loss) per sharequota) (In Brazilian reais without cents)

2020 2019 2020 2019

Gross revenue: CASH FLOW OF OPERATIONAL ACTIVITIES

Services revenue - domestic market 23,170,417 18,555,546 Profit (loss) for the year 1,727,084 (543,001)

Services revenue - foreign market 4,334,098 4,275,971 Adjustments to reconcile the fiscal
year net profit with Cash generated
27,504,515 22,831,517 by operational activities:
Deductions: Depreciation and amortization 32,561 45,198
Sales Taxes (1,657,425) (1,323,530) Interest and exchange variation on 1,073,198 50,051
Operational net revenue 25,847,090 21,507,987 intercompany loans

Cost of services rendered (17,275,949) (9,646,146) Decrease (Increase) in the operational assets:

Gross profit 8,571,141 11,861,841 Accounts receivable from clients (1,618,244) (1,602,957)

Operational expenses Advances to suppliers 11,105 (10,466)

Selling expenses (773,143) (518,869) Advances to employees 19,533 10,041

Administrative and general expenses (4,501,495) (11,677,622) Recoverable taxes 314,239 224,911

Tax expenses (6,293) (190,222) Other accounts receivable (470,182) 10,686

Finance (expenses) revenues, net (1,018,548) (139,307) Judicial deposits (22,981) -

(6,299,479) (12,526,020) Increase (decrease) in the operational liabilities:

Profit (loss) before financial result 2,271,662 (664,179) Suppliers 109,551 (11,992)

Income and Social contributions tax (544,578) 121,178 Taxes and contributions payable (72,469) 84,001

Profit (loss) for the year 1,727,084 (543,001) Salaries and Labor Taxes payable 10,671 (112,256)

Profit (loss) per sharequota 0.43 (0.13) Accrued vacations and related charges (81,466) (6,993)

Accrued consulting fees (13,833) 474,593

The accompanying notes are an integral part of these financial statements. Accrued bonus (321,295) (182,201)

Other accruals 465,977 79,369

Cash generated from (invested in) 1,163,449 (1,491,016)

operational activities
Statements of Changes in Shareholders’ Equity CASH FLOW OF INVESTMENTS ACTIVITIES
For the Years Ended March 31, 2020 and 2019
Fixed assets acquisition (9,194) (29,312)
(In Brazilian reais without cents)
Cash invested on activities of investments (9,194) (29,312)
Capital Accumulated Total
CASH FLOW OF FINANCIAL ACTIVITIES
Stock Losses
Intercompany loan agreement 589,250 1,877,030
Balances at April 1, 2018 4,022,378 (3,378,314) 644,064
INCREASE OF AVAILABLE FUNDS BALANCE 1,743,505 356,702
Loss for the year - (543,001) (543,001)
CASH AND CASH EQUIVALENTS
Balances at March 31, 2019 4,022,378 (3,921,315) 101,063
Opening Balance 613,491 256,789
Profit for the year - 1,727,084 1,727,084
Ending Balance 2,356,996 613,491
Balances at March 31, 2020 4,022,378 (2,194,231) 1,828,147
INCREASE OF AVAILABLE FUNDS BALANCE 1,743,505 356,702

The accompanying notes are an integral part of these financial statements.

The accompanying notes are an integral part of these financial statements.

BIRLASOFT LIMITED (Subsidiaries Annual Report 2019-20) 93

Birlasoft Sdn. Bhd.
Registered Office: Unit 30-01, Level 30, Tower A, Vertical Business Suite, Avenue 3, Bangsar South
No.8, Jalan Kerinchi 59200 Kuala Lumpur, Malaysia.

DIRECTORS’ REPORT (b) to ensure that any current assets which were unlikely to be realised in the ordinary course
of business including the value of current assets as shown in the accounting records of the
The directors hereby submit their report together with the audited financial statements of the company have been written down to an amount which the current assets might be expected
company for the financial year ended 31 March 2020. so to realise.

PRINCIPAL ACTIVITIES At the date of this report, the directors are not aware of any circumstances:

The principal activities of the company are engaged in software development and information (a) which would require the writing off of bad debts or to make any allowance for doubtful
technology consultancy services. There were no significant changes in the nature of these activities debts in the financial statements of the company; or
during the financial year.
(b) which would render the values attributed to current assets in the financial statements of the
FINANCIAL RESULTS company misleading; or

RM (c) not otherwise dealt with in this report or financial statements of the company which would
render any amount stated in the financial statements misleading; or
Loss for the financial year (4283)

(d) which have arisen which would render adherence to the existing method of valuation of
In the opinion of the directors, the results of the operations of the company during the financial year
assets or liabilities of the company misleading or inappropriate.
were not substantially affected by any item, transaction or event of a material and unusual nature.

At the date of this report, there does not exist:

DIVIDEND

(a) any charge on the assets of the company which has arisen since the end of the financial year
No dividend has been paid or declared since the end of the previous financial year. The directors do
which secures the liabilities of any other person; or
not recommend the payment of any dividend in respect of the current financial year.

(b) any contingent liability of the company which has arisen since the end of the financial year.
MOVEMENTS ON RESERVES AND PROVISIONS

No contingent or other liability has become enforceable, or is likely to become enforceable, within the
There were no material transfers to or from reserves or provisions during the financial year.
period of twelve months after the end of the financial year which, in the opinion of the directors, will or
may affect the ability of the company to meet its obligations when they fall due.
ISSUE OF SHARES AND DEBENTURES
In the opinion of the directors, no item, transaction or event of a material and unusual nature has
There was no issuance of shares or debentures by the company during the financial year. arisen in the interval between the end of the financial year and the date of this report which is likely
to affect substantially the results of operations of the company for the financial year in which this
OPTIONS report is made.

No option has been granted during the financial year to take up unissued shares of the company. HOLDING COMPANY

DIRECTORS The directors regard Birlasoft Limited, a company incorporated and domiciled in India, as the
company’s holding company.
The directors in office since the date of the last report are:
Deepathayyil Vachali (f) AUDITORS
Sayersilan A/L Periannan
The details of the auditors’ remuneration for the financial year are disclosed in Note 10 to the financial
Rajan Mittal statements.
Raghvendra Mittal
The auditors, Messrs Siew Boon Yeong & Associates, Chartered Accountants, have expressed their
DIRECTORS’ INTERESTS willingness to continue in office.

As the company is a wholly-owned subsidiary of Birlasoft Limited, under Section 59(3) of the Signed on behalf of the Board of Directors in accordance with a resolution of the Directors
Companies Act 2016 in Malaysia, the interests in the shares of the company of all the directors,
who are also directors of the holding company, are disclosed in the Directors’ Report of the holding
company.

DIRECTORS’ BENEFITS
SAYERSILAN A/L PERIANNAN DEEPATHAYYIL VACHALI
Since the end of the previous financial year, no director has received or become entitled to receive a Director Director
benefit by reason of a contract made by the company or a related corporation with the director or with
a firm of which the director is a member, or with a company in which the director has a substantial Kuala Lumpur,
financial interest, except as disclosed in Note 12 to the financial statements. Date: 5 May 2020

Neither during nor at the end of the financial year was the company a party to any arrangement
whose object was to enable the directors to acquire benefits through the acquisition of shares in, or STATEMENT BY DIRECTORS
debentures of, the company or any other body corporate. Pursuant to Section 251(2) of the Companies Act 2016

DIRECTORS’ REMUNERATION In the opinion of the directors, the financial statements set out on pages 10 to 26 are drawn up in
accordance with Malaysian Private Entities Reporting Standard and the requirements of Companies
None of the directors of the company have received any remunerations from the company during the Act 2016 in Malaysia so as to give a true and fair view of the financial position of the company as at
financial year. 31 March 2020 and of the financial performance and cash flows of the company for the financial year
ended on that date.
INDEMNIFYING DIRECTORS, OFFICERS OR AUDITORS
Signed in Kuala Lumpur on 5 May 2020
No indemnities have been given or insurance premiums paid, during or since the end of the financial
year, for any person who is or has been the director, officer or auditor of the company. Signed on behalf of the Board of Directors in accordance with a resolution of the Directors

OTHER STATUTORY INFORMATION

Before the financial statements of the company were made out, the directors took reasonable steps:

(a) to ascertain that proper action had been taken in relation to the writing off of bad debts and SAYERSILAN A/L PERIANNAN DEEPATHAYYIL VACHALI
the making of allowance for doubtful debts and satisfied themselves that there were no Director Director
known bad debts to be written off and that no allowance for doubtful debts was necessary;
and Kuala Lumpur,

Date: 5 May 2020

BIRLASOFT LIMITED (Subsidiaries Annual Report 2019-20) 94

 Birlasoft Sdn. Bhd.

STATUTORY DECLARATION
Pursuant to Section 251(1)(b) of the Companies Act 2016

I, Sayersilan A/L Periannan, being the director primarily responsible for the financial management of it exists. Misstatements can arise from fraud or error and are considered material if, individually or in
Birlasoft Sdn. Bhd., do solemnly and sincerely declare that to the best of my knowledge and belief the aggregate, they could reasonably be expected to influence the economic decisions of users taken
the financial statements set out on pages 10 to 26 are correct, and I make this solemn declaration on the basis of these financial statements.
conscientiously believing the same to be true and by virtue of the provisions of the Statutory
Declarations Act, 1960.

Subscribed and solemnly declared in Kuala Lumpur on 5 May 2020 As part of an audit in accordance with approved standards on auditing in Malaysia and International
Standards on Auditing, we exercise professional judgement and maintain professional scepticism
SAYERSILAN A/L PERIANNAN throughout the audit. We also:

Before me: −− Identify and assess the risks of material misstatement of the financial statements of the
company, whether due to fraud or error, design and perform audit procedures responsive to
Commissioner for Oaths 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,
INDEPENDENT AUDITORS’ REPORT TO THE MEMBER misrepresentations, or the override of internal control.

OF BIRLASOFT SDN. BHD. −− Obtain an understanding of internal control relevant to the audit in order to design audit
(Incorporated in Malaysia)
procedures that are appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the company’s internal control.
Report on the Audit of the Financial Statements
−− Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by the directors.
Opinion

−− Conclude on the appropriateness of the directors’ use of the going concern basis of accounting
We have audited the financial statements of Birlasoft Sdn. Bhd., which comprise the statement of
and, based on the audit evidence obtained, whether a material uncertainty exists related to
financial position as at 31 March 2020, and the statement of profit or loss and other comprehensive
events or conditions that may cast significant doubt on the company’s ability to continue as a
income, statement of changes in equity and statement of cash flows for the financial year then ended,
going concern. If we conclude that a material uncertainty exists, we are required to draw attention
and notes to the financial statements, including a summary of significant accounting policies, as set
in our auditors’ report to the related disclosures in the financial statements of the company or, if
out on pages 10 to 26.
such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit
evidence obtained up to the date of our auditors’ report. However, future events or conditions
In our opinion, the accompanying financial statements give a true and fair view of financial position may cause the company to cease to continue as a going concern.
of the company as at 31 March 2020, and of its financial performance and its cash flows for the
financial year then ended in accordance with Malaysian Private Entities Reporting Standard and the
−− Evaluate the overall presentation, structure and content of the financial statements of the
requirements of Companies Act 2016 in Malaysia.
company, including the disclosures, and whether the financial statements represent the
underlying transactions and events in a manner that achieves fair presentation.
Basis for Opinion
We communicate with the directors regarding, among other matters, the planned scope and timing of
We conducted our audit in accordance with approved standards on auditing in Malaysia and the audit and significant audit findings, including any significant deficiencies in internal control that
International Standards on Auditing. Our responsibilities under those standards are further described we identify during our audit.
in the Auditors’ Responsibilities for the Audit of the Financial Statements section of our report. We
believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for
Other Matters
our opinion.

This report is made solely to the member of the company, as a body, in accordance with Section 266
Independence and Other Ethical Responsibilities
of the Companies Act 2016 in Malaysia and for no other purpose. We do not assume responsibility to
any other person for the content of this report.
We are independent of the company in accordance with the By-Laws (on Professional Ethics, Conduct
and Practice) of the Malaysian Institute of Accountants (“By-Laws”) and the International Ethics
Standards Board for Accountants’ Code of Ethics for Professional Accountants (“IESBA Code”), and
SIEW BOON YEONG & ASSOCIATES DATO’ SIEW BOON YEONG
we have fulfilled our other ethical responsibilities in accordance with the By-Laws and the IESBA
AF: 0660 01321/07/2020 J
Code.
Chartered Accountants Chartered Accountant

Information Other than the Financial Statements and Auditors’ Report Thereon Kuala Lumpur,
Date: 5 May 2020
The directors of the company are responsible for the other information. The other information
comprises the Directors’ Report but does not include the financial statements of the company and
our auditors’ report thereon.

Our opinion on the financial statements of the company does not cover the Directors’ Report and we
do not express any form of assurance conclusion thereon.

In connection with our audit of the financial statements of the company, our responsibility is to
read the Directors’ Report and, in doing so, consider whether the Directors’ Report is materially
inconsistent with the financial statements of the company or our knowledge obtained in the 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 the
Directors’ Report, we are required to report that fact. We have nothing to report in this regard.

Responsibilities of the Directors for the Financial Statements

The directors of the company are responsible for the preparation of financial statements of the
company that give a true and fair view in accordance with Malaysian Private Entities Reporting Standard
and the requirements of the Companies Act 2016 in Malaysia. The directors are also responsible for
such internal control as the directors determine are necessary to enable the preparation of financial
statements of the company that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements of the company, the directors are 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 the directors either intend to
liquidate the company or to cease operations, or have no realistic alternative but to do so.

Auditors’ Responsibilities for the Audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whether the financial statements of the
company as a whole are free from material misstatement, whether due to fraud or error, and to issue
an auditors’ 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 approved standards on auditing in
Malaysia and International Standards on Auditing will always detect a material misstatement when

BIRLASOFT LIMITED (Subsidiaries Annual Report 2019-20) 95

Statement of Financial Position Statement of Cash Flows
As at 31 March 2020 For the financial year ended 31 March 2020

2020 2019 2020 2019

Note RM RM RM RM

ASSETS CASH FLOWS FROM OPERATING ACTIVITIES

Non-Current Assets (Loss)/profit before taxation (17,609) 2,06,673

Property, plant and equipment 4 - 1,782 Adjustment for:

Current Assets Depreciation of property, plant and equipment 1,782 2,900

Trade and other receivables 5 119,216 83,320 Operating (loss)/profit before working capital changes (15,827) 209,573

Current tax assets 82,997 27,284 (Increase)/decrease in receivables (35,896) 234,458

Bank balances 1,850,273 2,433,382 (Decrease)/increase in payables (488,999) 938,814

2,052,486 2,543,986 Cash (used in)/generated from operating activities (540,722) 1,382,845

Total Assets 2,052,486 2,545,768 Tax refunded - 78,552

EQUITY AND LIABILITIES Tax paid (42,387) (128,630)

Equity Net cash (used i)/generated from operating activities (583,109) 1,332,767

Share capital 6 5,000 5,000 CASH FLOWS FROM FINANCING ACTIVITIES - -

Retained profits 1,264,091 1,268,374 Net (decrease)/increase in cash and cash equivalents (583,109) 1,332,767

Total Equity 1,269,091 1,273,374 Cash and cash equivalents at the beginning 2,433,382 1,100,615
of the financial year
Liabilities
Cash and cash equivalents at the end 1,850,273 2,433,382
Current Liabilities of the financial year
Trade and other payables 7 760,003 1,245,939 Cash and cash equivalents comprise:
Other liabilities 8 23,392 26,455 Bank balances 1,850,273 2,433,38
Total Liabilities 783,395 1,272,394

Total Equity and Liabilities 2,052,486 2,545,768

Statement of Profit or Loss and other comprehensive

income
For the financial year ended 31 March 2020

2020 2019
Note RM RM

REVENUE 9 603,842 1,332,396

COST OF SALES (533,142) (1,038,613)

GROSS PROFIT 70,700 293,783

OTHER OPERATING INCOME 225 -

DEPRECIATION OF PROPERTY, PLANT (1,782) (2,900)

AND EQUIPMENT

OTHER OPERATING EXPENSES (86,752) (84,210)

(LOSS)/PROFIT BEFORE TAXATION 10 (17,609) 2,06,673

INCOME TAX EXPENSE 11 13,326 (76,982)

NET (LOSS)/PROFIT,
REPRESENTING TOTAL
COMPREHENSIVE (LOSS)/
INCOME FOR THE (4,283) 129,691
FINANCIAL YEAR

Statement of changes in equity

For the financial year ended 31 March 2020

Non - Distributable Total

distributable Retained
Share capital profits
RM RM RM

At 1 April 2018 5,000 1,138,683 1,143,683

Total comprehensive - 129,691 129,691

income for the financial year

At 31 March 2019/1 April 2019 5,000 1,268,374 1,273,374

Total comprehensive - (4,283) (4,283)

loss for the financial year

At 31 March 2020 5,000 1,264,091 1,269,091

BIRLASOFT LIMITED (Subsidiaries Annual Report 2019-20) 96

 Birlasoft Sdn. Bhd.

Notes to the financial statements At the end of each reporting period, foreign currency monetary items are translated using the
closing rate. Non-monetary items that are measured at historical cost in a foreign currency are
31 March 2020
translated using the exchange rates at the date of the transactions. Non-monetary items that are
measured at fair value in a foreign currency are translated using the exchange rates at the date
1. GENERAL INFORMATION when the fair value was determined.

The company is a private limited company, incorporated and domiciled in Malaysia. Exchange differences are recognised in profit or loss in the period in which they arise.

The address of the registered office and principal place of business of the company is Unit 30- (e) Financial Assets
01, Level 30, Tower A, Vertical Business Suite, Avenue 3, Bangsar South, No. 8, Jalan Kerinchi,
59200 Kuala Lumpur.
Financial assets are recognised in the statement of financial position when the company
becomes a party to the contractual provisions of the instrument.
The principal activities of the company are engaged in software development and information
technology consultancy services.
On initial recognition, financial assets are measured at transaction price, include transaction costs
for financial assets not measured at fair value through profit or loss, unless the arrangement
The holding company is Birlasoft Limited, a company incorporated and domiciled in India. constitutes, in effect, a financing transaction for the counterparty to the arrangement.

2. SIGNIFICANT ACCOUNTING POLICIES After initial recognition, financial assets are classified into one of three categories: financial
assets measured at fair value through profit or loss, financial assets that are debt instruments
All significant accounting policies set out below are consistent with those applied in the previous measured at amortised cost, and financial assets that are equity instruments measured at cost
financial year unless otherwise stated. less impairment.

(a) Basis Of Preparation (i) Financial Assets At Fair Value Through Profit Or Loss

The financial statements have been prepared in accordance with the Malaysian Private Entities Financial assets are classified as at fair value through profit or loss when the financial assets are
Reporting Standard (“MPERS”) and the requirements of the Companies Act 2016 in Malaysia. within the scope of Section 12 of the MPERS or if the financial assets are publicly traded or their
fair value can otherwise be measured reliably without undue cost or effort.
The financial statements, which are presented in Ringgit Malaysia (“RM”) have been prepared
on the historical cost basis, except as disclosed in the accounting policies as set out below. Changes in fair value are recognised in profit or loss.

(b) Property, Plant And Equipment If a reliable measure of fair value is no longer available for an equity instrument that is not
publicly traded but is measured at fair value through profit or loss, its fair value at the last
The cost of an item of property, plant and equipment is recognised as an asset when it is probable date that instrument was reliably measurable is treated as the cost of the instrument, and it is
that future economic benefits associated with the item will flow to the company and the cost measured at this cost amount less impairment until a reliable measure of fair value becomes
of the item can be measured reliably. After recognition as an asset, an item of property, plant available.
and equipment are measured at cost less any accumulated depreciation and any accumulated
impairment losses. (ii) Financial Assets That Are Debt Instruments Measured At Amortised Cost

Depreciation is provided on a straight-line method so as to write off the depreciable amount of After initial recognition, debt instruments are measured at amortised cost using the effective
the following assets over their estimated useful lives, as follows: interest method. Debt instruments that are classified as current assets are measured at the
undiscounted amount of the cash or other consideration expected to be received.
%

Computers 33 Effective interest method is a method of calculating the amortised cost of financial assets and of
allocating the interest income over the relevant period. The effective interest rate is the rate that
Depreciation of an asset begins when it is ready for its intended use. exactly discounts estimate future cash receipts through the expected life of the financial assets
or, when appropriate, a shorter period, to the carrying amount of the financial assets.
If there is an indication of a significant change in factors affecting the residual value, useful life or
asset consumption pattern since the last annual reporting date, the residual values, depreciation (iii) Financial Assets That Are Equity Instruments Measured At Cost Less Impairment
method and useful lives of depreciable assets are reviewed, and adjusted prospectively.
Equity instruments that are not publicly traded and whose fair value cannot otherwise be
The carrying amounts of items of property, plant and equipment are derecognised on disposal measured reliably without undue cost or effort, and contracts linked to such instruments that, if
or when no future economic benefits are expected from their use or disposal. Any gain or loss exercised, will result in delivery of such instruments, are measured at cost less impairment.
arising from the derecognition of items of property, plant and equipment, determined as the
difference between the net disposal proceeds, if any, and the carrying amounts of the item, is Impairment Of Financial Assets
recognised in profit or loss.
At the end of each reporting period, the company assesses whether there is any objective
(c) Impairment Of Non-Financial Assets evidence that financial assets that are measured at cost or amortised cost, are impaired.

At each reporting date, the company assesses whether there is any indication that an asset may Objective evidences could include:
be impaired. If any such indication exists, the recoverable amount of the asset is estimated.
−− significant financial difficulty of the issuer; or
When there is an indication that an asset may be impaired but it is not possible to estimate the
recoverable amount of the individual asset, the company estimates the recoverable amount of −− a breach of contract; or
the cash-generating unit to which the asset belongs.
−− the lender granting to the borrower a concession that the lender would not otherwise
The recoverable amount of an asset and a cash-generating unit is the higher of the fair value consider; or
less costs to sell and value-in-use. In assessing value-in-use, the estimated future cash flows
are discounted to their present value using a pre-tax discount rate that reflects current market −− it becoming probable that the borrower will enter bankruptcy or other financial
assessments of the time value of money and the risks specific to the asset. reorganisation; or

If the recoverable amount of an asset or a cash-generating unit is less than the carrying amount, −− observable data indicating that there is a measurable decrease in the estimated future cash
an impairment loss is recognised to reduce the carrying amount to its recoverable amount. An flows from the financial assets since the initial recognition of those assets.
impairment loss for a cash-generating unit is firstly allocated to reduce the carrying amount of
any goodwill allocated to the cash-generating unit, and then, to the other non-current assets
of the unit pro rata on the basis of the carrying amount of each appropriate asset in the cash- For certain category of financial assets, such as trade receivables, if it is determined that no
generating unit. Impairment loss is recognised immediately in profit or loss. objective evidence of impairment exists for an individually assessed financial asset, whether
significant or not, the assets are included in a group with similar credit risk characteristics and
collectively assessed for impairment.
An impairment loss recognised in prior periods for an asset or the appropriate assets of a cash-
generating unit is reversed when there has been a change in the estimates used to determine
the asset’s recoverable amount. An impairment loss is reversed to the extent that the asset’s Impairment losses, in respect of financial assets measured at amortised cost, are measured as
carrying amount does not exceed the carrying amount that would have been determined, net of the differences between the assets’ carrying amounts and the present values of their estimated
depreciation, if no impairment loss had been recognised in prior periods. cash flows discounted at the assets’ original effective interest rate.

A reversal of an impairment loss is recognised immediately in profit or loss. If there is objective evidence that impairment losses have been incurred on financial assets
measured at cost less impairment, the amount of impairment losses are measured as the
difference between the asset’s carrying amount and the best estimate of the amount that the
(d) Foreign Currency Transaction company would receive for the asset if it were to be sold at the reporting date.

Transactions in foreign currencies are initially recognised in the functional currency by applying The carrying amounts of the financial assets are reduced directly, except for the carrying
to the foreign currency amount the spot exchange rates between the functional currency and the amounts of trade receivables which are reduced through the use of an allowance account. Any
foreign currency at the date of the transactions. impairment loss is recognised in profit or loss immediately. If, in subsequent period, the amount
of an impairment loss decreases, the previously recognised impairment losses are reversed

BIRLASOFT LIMITED (Subsidiaries Annual Report 2019-20) 97

 directly, except for the amounts related to trade receivables which are reversed to write back obligation.
the amount previously provided in the allowance account. The reversal is recognised in profit
or loss immediately. (i) Revenue Recognition

Derecognition Of Financial Assets Revenue from services rendered is recognized in the profit or loss based on the value of services
performed and invoiced to customers during the reporting period.
Financial assets are derecognised when the contractual rights to the cash flows from the
financial assets expire, or are settled, or the company transfers to another party substantially all (j) Interest income
of the risks and rewards of ownership of the financial assets.
Interest income is recognised on accrual basis using the effective interest method.
On derecognition of financial assets in their entirety, the differences between the carrying
amounts and the sum of the consideration received and any cumulative gains or losses are
(k) Income Tax Expense
recognised in profit or loss in the period of the transfer.

Income taxes for the financial year comprise current and deferred tax.
(f) Equity Instruments

Current tax is the expected amount of income taxes payable in respect of the taxable profit for
Ordinary shares are classified as equity.
the financial year and is measured using the tax rates that have been enacted or substantively
enacted at the end of the reporting period.
Equity instruments are any contracts that evidence a residual interest in the assets of the
company after deducting all of its liabilities. Equity instruments issued by the company, other
Deferred tax is provided in full, using the liability method, on temporary differences arising
than those issued as part of a business combination or those accounted for in paragraph 22.15A
between the tax bases of assets and liabilities and their carrying amounts in the financial
to 22.15B of Section 22 of the MPERS, are measured at the fair value of the cash or other
statements.
resources received or receivable, net of transaction costs. If payment is deferred and the time
value of money is material, the initial measurement shall be on a present value basis.
Deferred tax liabilities are recognised for all taxable temporary differences other than those
that arise from goodwill or excess of the acquirer’s interest in the net fair value of the acquiree’s
The company accounts for the transaction costs of an equity as a deduction from equity. Income
identifiable assets, liabilities and contingent liabilities over the business combination costs
tax relating to the transaction costs is accounted for in accordance with Section 29 of the
or from the initial recognition of an asset or liability in a transaction which is not a business
MPERS.
combination and at the time of the transaction, affects neither accounting profit nor taxable
profit.
Distributions to owners are deducted from the equity. Related income tax is accounted for in
accordance with Section 29 of the MPERS.
Deferred tax assets are recognised for all deductible temporary differences, unused tax losses
and unused tax credits to the extent that it is probable that taxable profit will be available against
(g) Financial Liabilities which the deductible temporary differences, unused tax losses and unused tax credits can be
utilised.
Financial liabilities are recognised in the statement of financial position when the company
becomes a party to the contractual provisions of the instrument. Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the
period when the asset is realised or the liability is settled, based on the tax rates that have been
On initial recognition, financial liabilities are measured at transaction price, include transaction enacted or substantively enacted at the end of the reporting period.
costs for financial liabilities not measured at fair value through profit or loss, unless the
arrangement constitutes, in effect, a financing transaction for the company to the arrangement. Deferred tax is recognised in profit or loss, except when it arises from a transaction which is
recognised directly in equity, in which case the deferred tax is also charged or credited directly
After initial recognition, financial liabilities are classified into one of three categories: financial in equity, or when it arises from a business combination that is an acquisition, in which case
liabilities measured at fair value through profit or loss, financial liabilities measured at amortised the deferred tax is included in the resulting goodwill or excess of the acquirer’s interest in the
cost, or loan commitments measured at cost less impairment. net fair value of the acquiree’s identifiable assets, liabilities and contingent liabilities over the
business combination costs. The carrying amounts of deferred tax assets are reviewed at each
(i) Financial Liabilities Measured At Fair Value Through Profit Or Loss end of the reporting date and reduced to the extent that it is no longer probable that sufficient
taxable profits will be available to allow all or part of the deferred tax assets to be utilised.
Financial liabilities are classified as at fair value through profit or loss when the financial liabilities
are within the scope of Section 12 of the MPERS or if the financial liabilities are publicly traded (l) Cash And Cash Equivalents
or their fair value can otherwise be measured reliably without undue cost or effort.
Cash comprises cash and bank balances including bank overdrafts. Cash equivalents are short-
If a reliable measure of fair value is no longer available for an equity instrument that is not term, highly liquid investments that are readily convertible to known amounts of cash which are
publicly traded but is measured at fair value through profit or loss, its fair value at the last subject to an insignificant risk of changes in value.
date that instrument was reliably measurable is treated as the cost of the instrument, and it is
measured at this cost amount less impairment until a reliable measure of fair value becomes (m) Related Parties
available.
A related party is a person or entity that is related to the entity that is preparing its financial
(ii) Financial Liabilities Measured At Amortised Cost statements (the reporting entity):

After initial recognition, financial liabilities other than financial liabilities at fair value through (i) a person or a close member of that person’s family is related to a reporting entity if that
profit or loss are measured at amortised cost using the effective interest method. Gains or losses person:
are recognised in profit or loss when the financial liabilities are derecognised or impaired.
a. is a member of the key management personnel of the reporting entity or of a holding
Effective interest method is a method of calculating the amortised cost of financial liabilities company of the reporting entity;
and of allocating the interest expense over the relevant period. The effective interest rate is
the rate that exactly discounts estimate future cash payments through the expected life of the b. has control or joint control over the reporting entity; or
financial liabilities or, when appropriate, a shorter period, to the carrying amount of the financial
liabilities.
c. has significant influence over the reporting entity.

(iii) Loan Commitments Measured At Cost Less Impairment

(ii) an entity is related to a reporting entity if any of the following conditions applies:

Commitments to receive loan that meet the conditions of Section 11 of the MPERS are measured a. the entity and the reporting entity are members of the same group (which means that each
at cost less impairment. holding company, subsidiary company and fellow subsidiary company is related to the
others).
Derecognition Of Financial Liabilities
b. one entity is an associate or joint venture of the other entity (or an associate or joint venture
Financial liabilities are derecognised when the obligation specified in the contract is discharged, of a member of a group of which the other entity is a member).
cancelled or expires.
c. both entities are joint ventures of the same third entity.
Any difference between the carrying amounts of the financial liabilities derecognised and the
consideration paid is recognised in profit or loss. d. one entity is a joint venture of a third entity and the other entity is an associate of the third
entity.
(h) Provisions
e. the entity is a post-employment benefit plan for the benefit of employees of either the
reporting entity or an entity related to the reporting entity. If the reporting entity is itself
A provision is recognised when the company has an obligation at the reporting date as a result
such a plan, the sponsoring employers are also related to the reporting entity.
of a past event, it is probable that a transfer of economic benefits will be required to settle the
obligation and a reliable estimate can be made of the amount of the obligation.
f. the entity is controlled or jointly controlled by a person identified in (a).
The risks and uncertainties are taken into account in reaching the best estimate of a provision.
g. the entity, or any member of a group of which it is a part, provides key management
When the effect of the time value of money is material, the amount recognised in respect of
personnel services to the reporting entity or to the parent of the reporting entity.
the provision is the present value of the expenditure expected to be required to settle the

BIRLASOFT LIMITED (Subsidiaries Annual Report 2019-20) 98

 Birlasoft Sdn. Bhd.

h. a person identified in (i)(b) has significant influence over the entity or is a member of the 7. TRADE AND OTHER PAYABLES
key management personnel of the entity (or of a parent of the entity).
2020 2019
RM RM
Close members of the family of an individual are those family members who may be expected to
influence, or be influenced by, that individual in their dealings with the entity. Trade payables

Key management personnel are those persons having authority and responsibility for planning, Holding company 16,731 2,86,942
directing and controlling the activities of the entity, directly or indirectly, including any director Other payables
(whether executive or otherwise) of that entity.
Related party 636 27,221
3. CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS
Third parties 21,217 18,969
Estimates and judgements are continually evaluated and are based on historical experience and Amount owing to holding company 721,419 19,286
other factors, including expectations of future events that are believed to be reasonable under
the circumstances. The estimates and judgements that affect the application of the company’s Amount owing to related companies - 893,521
accounting policies and disclosures, and have a significant risk of causing a material adjustment
to the carrying amounts of assets, liabilities, income and expenses are discussed below. 760,003 1,245,939

(a) Depreciation Of Property, Plant And Equipment The credit term of trade payables granted to the company is 180 days (2019: 180 days).

The estimates for residual values, useful lives and related depreciation charges for the property, The amount owing to related company in other payables is unsecured, interest free and
plant and equipment are based on commercial and production factors which could change repayable on demand.
significantly as a result of technical innovations and competitors’ action in response to the
market conditions. The amounts owing to holding company and related companies are non-trade in nature,
unsecured, interest free and repayable on demand.
The company anticipates that the residual values of these property, plant and equipment will
be insignificant. As a result, residual values are not being taken into consideration for the
8. OTHER LIABILITIES
computation of the depreciable amount.
2020 2019
Changes in the expected level of usage and technological development could impact the RM RM
economic useful lives and the residual values of these assets, therefore future depreciation
charges could be revised. Accruals 23,392 26,455

(b) Income Taxes

9. REVENUE
There are certain transactions and computations for which the ultimate tax determination
may be different from the initial estimate. The company recognises tax liabilities based on its Revenue represents the invoiced value of services rendered, net of discounts.
understanding of the prevailing tax laws and estimates of whether such taxes will be due in the
ordinary course of business. Where the final tax outcome of these matters is different from the
amounts that were initially recognised, such difference will impact the income tax and deferred 10. (LOSS)/PROFIT BEFORE TAXATION
tax provisions in the period in which such determination is made.
2020 2019
RM RM
4. PROPERTY, PLANT AND EQUIPMENT
(Loss)/profit before taxation is
stated after charging:
The details of property, plant and equipment are as follows:
Auditors’ remuneration

Computers - current year’s provision 5,300 5,500
RM
- over provision in respect of prior year - (200)
Cost
Depreciation of property, plant and
At 1 April 2019/31 March 2020 8,699 equipment 1,782 2,900

Accumulated depreciation Loss on foreign exchange - realised 3,234 -

At 1 April 2019 6,917 Rental of premises 3,824 2,732

Charge for the financial year 1,782 After crediting:

At 31 March 2020 8,699 Interest income 225 -

Net carrying amount

11. INCOME TAX EXPENSE
At 31 March 2020 -
2020 2019
At 31 March 2019 1,782
RM RM
Depreciation - 2019 2,900
Malaysian income tax:

- current year’s provision 5,485 66,668

5. TRADE AND OTHER RECEIVABLES
- (over)/under provision in respect (18,811) 10,314
of prior year
2020 2019
RM RM (13,326) 76,982

Trade receivables 116,582 80,686

A reconciliation of income tax expense applicable to (loss)/profit before taxation at the statutory
Other receivables 2,634 2,634 income tax rate to income tax expense at the effective income tax rate is as follows:

119,216 83,320 2020 2019

RM RM
The company’s normal trade credit terms granted to the trade receivables is 60 days (2019: 60 (Loss)/profit before taxation (17,609) 2,06,673
days). Other credit terms are assessed and approved on a case-by-case basis.
Income tax expense at Malaysian (4,226) 49,602
statutory tax rate of 24% (2019: 24%)
6. SHARE CAPITAL
• Adjustments for the following tax effects:
2020 2019 2020 2019
Number of ordinary shares RM RM - expenses not deductible for tax purposes 9,492 16,579

Issued share capital 5,000 5,000 5,000 5,000 - deferred tax assets not recognised during 219 487
the financial year
The holders of the ordinary shares are entitled to receive dividends as and when declared by the 9,711 17,066
company. All ordinary shares carry one vote per share without restrictions and rank equally with
regards to the company’s residual assets. • (Over)/under provision of current income (18,811) 10,314
tax in respect of prior year
The ordinary shares have no par value. (13,326) 76,982

BIRLASOFT LIMITED (Subsidiaries Annual Report 2019-20) 99

 The amounts of temporary differences for which no deferred tax assets have been recognised in
the financial statements are as follows:
Statement of Profit or Loss
As at 31 March 2020
2020 2019
2020 2019
RM RM
RM RM
Excess of accumulated depreciation over
REVENUE 603,842 1,332,396
corresponding capital allowances claimed 3,479 2,567
Less: COST OF SALES

12. RELATED PARTY TRANSACTIONS Cost of offshore projects 303,359 182,677

Cost of outsource consultants 229,477 828,726

(a) Identify of related parties
Insurance - 5,088
For the purposes of these financial statements, parties are considered to be related to the Medical expenses 306 21,062
company if the company has the ability, directly or indirectly, to control or joint control the party
or exercise significant influence over the party in making financial and operating decisions, or Visa expenses - 1,060
vice versa, or where the company and the party are subject to common control. Related parties
may be individuals or other entities. 533,142 1,038,613

GROSS PROFIT 70,700 293,783

Related parties also include key management personnel defined as those persons having
authority and responsibility for planning, directing and controlling the activities of the Add: OTHER OPERATING INCOME
company either directly or indirectly. The key management personnel comprise the directors
Interest income 225 -
and management personnel of the company, having authority and responsibility for planning,
directing and controlling the activities of the company directly or indirectly. 70,925 293,783

Less: OPERATING EXPENSES

(b) Related company/party transactions
Auditors’ remuneration
The related company/party transactions of the company are shown below. The balances related
to these transactions are shown in Note 7. - current year’s provision 5,300 5,500

2020 2019 - over provision in respect of prior year - (200)

RM RM Bank charges 2 1,167
i. Transactions with holding company Depreciation 1,782 2,900
- Services received 303,359 182,677 Loss on foreign exchange - realised 3,234 -
ii. Transactions with company in which the Goods and services tax - 2,060
directors of the company have substantial
financial interest Penalty - 9,288
- Services received 229,477 828,726 Professional fees 61,929 55,676
- Rental of premises 3,824 2,732 Rental of premises 3,824 2,732

Secretarial and filing fees 4,812 3,779

The directors are of the opinion that all the transactions above have been entered into in the
normal course of business and have been established on terms and conditions that are not Service tax 406 90
materially different from that obtainable in transactions with unrelated parties.
Tax compliance fees 7,245 4,118
(c) Compensation of key management personnel 88,534 87,110

The company does not has any key management compensation during the financial year. (LOSS)/PROFIT BEFORE TAXATION (17,609) 206,673

13. CATEGORIES OF FINANCIAL INSTRUMENTS

2020 2019
RM RM

Financial assets:

Measured at amortised cost

Trade and other receivables 119,216 83,320

Bank balances 1,850,273 2,433,382

1,969,489 2,516,702

Financial liabilities:

Measured at amortised cost

Trade and other payables 7,60,003 1,245,939

14. AUTHORISATION FOR ISSUE OF FINANCIAL STATEMENTS

These financial statements were authorised for issue on 5 May 2020 by the Board of Directors.

BIRLASOFT LIMITED (Subsidiaries Annual Report 2019-20) 100

 Birlasoft Solutions ME FZE

Birlasoft Solutions ME FZE

(Formerly KPIT Infosystems ME FZE)
Registrered Office: Dubai Airport Free Zone Area, West Wing 2, Office 2W113, P.O. Box: 54931,
Dubai, UAE.

Manager’s report Independent auditor’s report to the shareholder of M/s Birlasoft Solutions ME FZE (Formerly
KPIT Infosystems ME FZE), Dubai Airport Free Zone, Dubai - U.A.E
The manager has pleasure in presenting this report and the audited financial statements for the year
ended 31 March 2020. Opinion

Principal activities We have audited the accompanying financial statements of M/s Birlasoft Solutions ME FZE (Formerly
KPIT Infosystems ME FZE), Dubai Airport Free Zone, Dubai, U.A.E (“the Establishment”) which
comprise the statement of financial position as at 31 March 2020, the statement of comprehensive
The activity of the establishment as per service license is providing software and IT infrastructure
income, changes in equity and cash flows for the year then ended, and notes to the financial
services. During the year also, the establishment was engaged in providing software and IT
statements, including a summary of significant accounting policies.
infrastructure services.

In our opinion, the financial statements present fairly, in all material respects, the financial position of
Financial results
the establishment as at 31 March 2020, its financial performance and its cash flows for the year then
ended in accordance with International Financial Reporting Standards (IFRSs).
The establishment has achieved revenue of AED 961,728 for the year ended 31 March 2020 (31 March
2019 revenue is AED 5,486,074). The net loss for the year is AED 2,501,611 (31 March 2019: net loss is
Basis for Opinion
AED 2,337,912). Restructuring of the operations within the group entities under the parent company
of the establishment have led to reduction in revenue in the current financial year. The establishment
is in process of realigning the operations and working positively to revamp the performance in next We conducted our audit in accordance with International Standards on Auditing (ISAs) and
financial year. The management is optimistic about the prospects for the next year and expects to implementing regulation No.1/2000 issued by Dubai Airport Free Zone Authority pursuant to Law
improve the performance of the establishment. The management has assessed the impact of COVID- no. (2) of 1996 and its amendment No. (2) of 2000. Our responsibilities under those standards are
19 on the presented financial statements and it is considered not substantial and not requiring any further described in the Auditor’s Responsibilities for the Audit of the financial statements section of
adjustments in the financial statements for the year ended 31 March 2020. our report. We are independent of the establishment in accordance with the ethical requirements that
are relevant to our audit of the financial statements and we have fulfilled our other responsibilities
in accordance with, these requirements. We believe that the audit evidence we have obtained is
Management Responsibilities
sufficient and appropriate to provide a basis for our audit opinion.

The company law requires the management to prepare the financial statements for each financial
Responsibilities of Management and Those Charged with Governance for the Financial
year, which provide a true and fair view of the state of the affairs of the establishment and the net
statements
profit or loss for the year. The management is responsible for keeping proper accounting records
which disclose with reasonable accuracy at any time, the financial position of the establishment
and to enable them to ensure that the financial statements comply with the International Financial Management is responsible for the preparation and fair presentation of the financial statements in
Reporting Standards and implementing regulation No.1/2000 issued by Dubai Airport Free Zone accordance with IFRSs and applicable law of United Arab Emirates, and for such internal control as
Authority pursuant to Law no. (2) of 1996 and its amendment No. (2) of 2000. management determines is necessary to enable the preparation of financial statements that are free
from material misstatement, whether due to fraud or error. In preparing the financial statements,
management is responsible for assessing the establishment’s ability to continue as a going concern,
Events after the reporting period
disclosing as applicable, matters related to going concern and using the going concern basis of
accounting unless management either intends to liquidate the establishment or to cease operations
There are no significant events after the reporting period affecting the financial statements or or has no realistic alternative but to do so. Those charged with governance are responsible for
disclosures. The management is in the process of assessment of the impact of COVID-19 on the overseeing the establishment’s financial reporting process.
financial performance of the establishment in the coming year.
Auditors’ responsibilities for the Audit of the Financial statements
Shareholder and its interests
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole
The shareholder and its interests in the establishment were disclosed in the note 1 of the financial are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report
statements. There were no changes to the shareholding structure during the year. that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee
that an audit conducted in accordance with ISAs will always detect a material misstatement when it
Management 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
As per the renewed service license of the establishment, Mr. Sangram Tukaram Kadam and Mr. Elson the basis of these financial statements.
Varghese Mattappadom are appointed as the managers of the establishment. Mr. Sangram Tukaram
Kadam and Mr. Dharmander Kapoor are appointed as the directors of the establishment. As part of an audit in accordance with ISAs, we exercise professional judgment and maintain
professional skepticism throughout the audit. We also:
Auditors
−− Identify and assess the risks of material misstatement of the financial statements, whether due
Koya Chartered Accountants were the auditors of the establishment for the year ended 31 March to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit
2020 and they express their willingness to continue as auditors for the year ending 31 March 2021. 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
Acknowledgements
override of internal control.

The manager wishes to place on record his sincere gratitude for the continuous support extended by
−− Obtain an understanding of internal control relevant to the audit in order to design audit
various governments, banks, customers, suppliers, employees and all well-wishers.
procedures that are appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the establishment’s internal control.
Manager
−− Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by management.

Birlasoft Solutions ME FZE −− Conclude on the appropriateness of management’s use of the going concern basis of accounting
(Formerly KPIT Infosystems ME FZE) and, based on the audit evidence obtained, whether a material uncertainty exists related to
events or conditions that may cast significant doubt on the establishment’s ability to continue
18 May 2020 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 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 establishment to cease to continue as a
going concern.

−− Evaluate the overall presentation, structure and content of the financial statements, including
the disclosures, and whether the financial statements represent the underlying transactions and
events in a manner that achieves fair presentation.

−− Obtain sufficient appropriate audit evidence regarding the financial information of the entities or
business activities within the establishment to express an opinion on the financial statements.
We are responsible for the direction, supervision and performance of the audit. We remain solely
responsible for our audit opinion.

BIRLASOFT LIMITED (Subsidiaries Annual Report 2019-20) 101

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
Statement of Financial Position
As at 31 March 2020
internal control that we identify during our audit.
(Amount in AED)
Other matters
31 March 2020 31 March 2019
Notes AED AED
As per the information provided by the management, the establishment has assessed and concluded
the impact of COVID-19 on the presented financial statements and it is considered not substantial Assets
and not requiring any adjustments in the financial statements for the year ended 31 March 2020.
Accordingly, the financial position and results of operations as of and for the year ended 31 March Non-current assets
2020 have not been adjusted to reflect the COVID-19 impact. The duration and impact of the COVID-
Property, plant and equipment 5 83,809 125,353
19 pandemic, as well as the effectiveness of government and central bank responses, remains unclear
at this time. It is not possible to reliably estimate the duration and severity of these consequences, as Total non-current assets 83,809 125,353
well as their impact on the financial position and results of the establishment for future periods. It is
anticipated to negatively impact revenue and related profit, possibly causing losses to be incurred for Current assets
the coming year, as markets globally continue to contract significantly.
Due from related parties 6 160,038 227,417

Report on other legal and regulatory requirements Accounts and other receivables 7 1,875,729 1,642,513

Cash and bank balances 8 11,656,224 14,122,744

We further confirm that proper financial records have been kept by the establishment and the
contents of the managers’ report relating to these financial statements are in agreement with the Total current assets 13,691,991 15,992,674
establishment’s financial records. We have obtained all the information and explanations, which
we considered necessary for our audit. According to the information available to us, there were no Total assets 13,775,800 16,118,027
contraventions, during the year of the implementing regulation No.1/2000 issued by the Dubai
Equity and liabilities
Airport Free Zone Authority pursuant to Law No. (2) of 1996 and its amendment No. (2) of 2000 and
Federal Law No. 2 of 2015 (amended) or of the establishment’s articles of association which might Equity
have materially affected the financial position of the establishment or the results of its operations
for the year. Share capital 1 1,000,000 1,000,000

Retained earnings 7,863,064 10,364,675

Koya Chartered Accountants
P. P. Kunhamad Koya Shareholders’ current account 9 185,661 185,661
Reg. No. 623
Total equity 9,048,725 11,550,336
19 May 2020 Non-current liabilities

Provision for employees’ 10 254,046 274,336

end of service benefits

Total non-current liabilities 254,046 274,336

Current liabilities

Accounts and other payables 11 10,61,046 8 29,183

Due to related parties 6 34,11,983 34,64,172

Total current liabilities 4,473,029 4,293,355

Total liabilities 4,727,075 4,567,691

Total equity and liabilities 13,775,800 16,118,027

For Birlasoft Solutions ME FZE (Formerly KPIT Infosystems ME FZE)

Manager

The notes on pages 12 to 24 form an integral part of these financial statements.

Statement of Comprehensive Income

For the year ended 31 March 2020

31 March 2020 31 March 2019

Notes AED AED

Revenue 12 961,728 5,486,074

Cost of consultancy services 13 (776,695) (818,368)

Staff cost (1,655,748) (5,145,987)

General & administration expenses 14 (1,135,220) (1,964,650)

Other income 104,324 105,019

Loss for the year (2,501,611) (2,337,912)

Other comprehensive income - -

Total comprehensive loss for the year (2,501,611) (2,337,912)

BIRLASOFT LIMITED (Subsidiaries Annual Report 2019-20) 102

 Birlasoft Solutions ME FZE

Statement of changes in equity Notes to the Financial Statements

For the year ended 31 March 2020 For the year ended 31 March 2020

(Amount in AED)
1. Legal status and business activities
Shareholder’s Retained Current Total
Share earnings account The financial statements combine the following:
capital
AED AED AED AED i. M/s.Birlasoft Solutions ME FZE, Dubai, U.A.E (“parent company”), registered with Dubai
Balance as at 1 April 2018 1,000,000 12,702,587 185,661 13,888,248 Airport Free Zone Authority as a Free Zone Establishment under the service license no: 756
issued on 17 July 2005. The establishment was formerly registered with the name “KPIT
Total comprehensive loss for the year - (2,337,912) - (2,337,912) Infosystems ME FZE” and the name was changed to “Birlasoft Solutions ME FZE” as per
the amended memorandum and certificate of name change dated 05 November 2019.
Balance as at 31 March 2019 1,000,000 10,364,675 185,661 11,550,336

Total comprehensive loss for the year - (25,01,611) - (2,501,611) The shareholder and its shareholding pattern as on the date of statement of financial position is
as follows:
Balance as at 31 March 2020 1,000,000 7
,863,064 185,661 9,048,725
Name of the shareholder Nationality No. of AED %
Shares

M/s. Birlasoft Limited Indian 1 1,000,000 100

1 1,000,000 100

Statement of Cash Flows ii. M/s. Birlasoft Solutions ME FZE, branch (formerly, KPIT infosystems ME FZE, branch)
For the year ended 31 March 2020 registered with Australian Securities and Investments Commission, Australia, under the
Australian Registered Body Number – 164 424 364 issued on 12th July 2013.
(Amount in AED)

31 March 2020 31 March 2019 iii. M/s. Birlasoft Solutions ME FZE, branch (formerly, KPIT infosystems ME FZE, branch)
AED AED registered is South Korea, as per registration No: 131181-0057655 issued on 13th June
2014. The establishment opened the branch to expand its operations in Korea and Asia
Cash flows from operating activities Pacific region.
Net loss for the year (2,501,611) (2,337,912)
Activity
Adjustments for:

Depreciation 41,544 62,125 The activity of the establishment as per service license is providing software and IT infrastructure
services. During the year also, the establishment was engaged in providing software and IT
Allowance for doubtful debts - 56,784 infrastructure services.

Provision for employees’ end of service benefits (20,290) (194,166)

Management
Cash flows before working capital changes (2,480,357) (2,413,169)
As per the renewed service license of the establishment, Mr. Sangram Tukaram Kadam and
Changes in: Mr. Elson Varghese Mattappadom are appointed as the managers of the establishment. Mr.
Due from related parties 67,379 (51,055) Sangram Tukaram Kadam and Mr. Dharmander Kapoor are appointed as the directors of the
establishment.
Accounts and other receivables (233,216) 5,148,166
Accounting period
Accounts and other payables 231,863 (666,908)

Due to related parties (52,189) (947,161) These financial statements relate to the accounts for the period from 01 April 2019 to 31 March
2020.
Margin money deposits 456,750 -

Net cash (used in)/from operating activities (2,009,770) 1,069,873 2 Application of new and revised International Financial Reporting Standards (IFRS)

Cash flows from investing activities

2.1 New standards, interpretations and amendments effective from January 1, 2019
Additions to property, plant & equipment - (1,876)
The following new and revised IFRSs are mandatory to be applied by entities and have been
Net cash used in investing activities - (1,876) adopted in these financial statements to the extent they are applicable.
Net (decrease)/increase in cash and (2,009,770) 1,067,997
cash equivalents −− IFRS 16 - ‘Leases’

Cash and cash equivalents at the 13,528,361 12,460,364

−− Amendments to IAS 19 – ‘Employee Benefits’ - Plan Amendment, Curtailment or Settlement
beginning of the year

Cash and cash equivalents at the 11,518,591 13,528,361 −− Amendments to IAS 28 – ‘Investments in Associates and Joint Ventures’ - Long-term Interests in
end of the year Associates and Joint Ventures

Cash and cash equivalents comprise of:

−− Amendments to IFRS 9 – ‘Financial Instruments’ - Prepayment Features with Negative
Cash at bank 11,518,591 13,528,361 Compensation

−− Annual improvements 2015 - 2017 cycle as below:

−− Amendments to IAS 23 – ‘Borrowing Costs’ - Borrowing Costs Eligible for Capitalization

−− Amendments to IFRS 3 – ‘Business Combinations’ -Previously Held Interest in a Joint

Operation

−− Amendments to IFRS 11 – ‘Joint Arrangements ‘-Previously Held Interest in a Joint Operation

2.2 New standards, interpretations and amendments not yet effective

The establishment has not applied the following new and revised IFRSs that have been issued
but are not yet effective for annual periods beginning on or after January 1, 2019. The adoption
in the relevant accounting period is purely optional and will have required relevant disclosures
with in the financial statements.

−− IFRS 17- ‘Insurance Contracts’ (effective for annual periods beginning on or after 1 January
2021)

−− Amendments to IFRS 3- ‘Business Combinations ‘-Definition of a Business (effective for annual

periods beginning on or after 1 January 2020)

BIRLASOFT LIMITED (Subsidiaries Annual Report 2019-20) 103

 −− Amendments to IAS 1- ‘Presentation of Financial Statements’- Definition of Material (effective 3.6 Revenue recognition
for annual periods beginning on or after 1 January 2020)
Revenue is recognized in the statement of comprehensive income at the fair value of the
−− Amendments to IAS 8– ‘Accounting Policies, Changes in Accounting Estimates and Errors’- consideration received and receivable, provided it is probable that the economic benefits will
Definition of Material (effective for annual periods beginning on or after 1 January 2020) flow to the establishment and the revenue and costs, if applicable, can be measured reliably.

−− Amendments to the Conceptual Framework for Financial Reporting, including amendments 3.6.1 Rendering of services
to references to the Conceptual Framework in IFRS Standards (effective for annual periods
beginning on or after 1 January 2020) Revenue represents the net invoiced value of services rendered during the year.

−− Amendments to IAS 28 Investments in Associates and Joint Ventures (effective date has been 3.7 Employees’ terminal benefits
deferred indefinitely)
Provision is made for employees’ terminal benefits on the basis prescribed under the U.A.E
−− Amendments to IFRS 10 Financial statements (effective date has been deferred indefinitely) Labour Law based on employees’ salaries and number of years of service. The terminal benefits
are paid to employees on termination or completion of their term of employment. Accordingly,
3 Basis of preparation and significant accounting policies the establishment has no expectation of settling its employees’ terminal benefits obligation in
the near future.
3.1 Basis of combination
3.8 Accounts and other receivables
These financial statements combine the assets, liabilities and operations of Birlasoft Solutions
ME FZE (Formerly KPIT Infosystems ME FZE) in U.A.E, Australia and South Korea. The Accounts and other receivables originated by the establishment are measured at cost. An
significant accounting policies adopted in the preparation of these financial statements are set allowance for credit losses of accounts receivable is established when there is objective
out below. evidence that the establishment will not be able to collect the amounts due. Indicators that the
accounts receivable are impaired include consistent default in the payments when due, financial
3.2 Statement of compliance difficulties of the customer and other indicators. When accounts receivable is considered
uncollectible, it is written off against the allowance account for credit losses. Subsequent
recoveries of amounts previously written off are credited in the statement of comprehensive
These financial statements have been prepared in accordance with the International Financial
income. The carrying value of accounts receivable approximates to their fair value due to the
Reporting Standards and Interpretations issued by the International Accounting Standards
short-term nature of those receivables.
Board (IASB) and the International Financial Reporting Interpretations Committee (IFRIC) of
the IASB that are relevant to the operations of the establishment. All significant intercompany
balances, transactions, income and expenses have been eliminated on consolidation. The 3.9 Accounts and other payables
accounting policies adopted have been consistently applied in dealing with items considered
material to the establishment’s financial statements. Liabilities are recognized for amounts to be paid in the future for goods or services received,
whether or not billed to the establishment.
3.3 Basis of preparation
3.10 Impairment
The financial statements are prepared under the historical cost convention, modified to
incorporate changes to the carrying values of assets and liabilities as necessary. Financial assets

3.4 Foreign currencies At each reporting date, the establishment assesses if there is any objective evidence indicating
impairment of financial assets or non-collectability of receivables.
3.4.1 Functional and presentation currency
An impairment loss, if any, arrived at as difference between the carrying amount and the
The financial statements are presented in Arab Emirates Dirham (AED), which is the recoverable amount, is recognized in the statement of comprehensive income. The recoverable
establishment’s functional and presentation currency. amount represents the present value of expected future cash flows discounted at original
effective interest rate. Cash flows relating to short term receivables are not discounted.
3.4.2 Transactions and balances
Non -financial assets
Foreign currency transactions are translated into the functional currency using exchange
rates prevailing at the transaction dates. Monetary assets and liabilities expressed in foreign At each reporting date, the establishment assesses if there is any indication of impairment of
currencies at the reporting date are translated at rates of exchange ruling at that date. Exchange non-financial assets. If an indication exists, the establishment estimates the recoverable amount
differences arising in these cases are dealt with in the statement of comprehensive income. of the asset and recognizes an impairment loss in the statement of comprehensive income. The
establishment also assesses if there is any indication that an impairment loss recognized in prior
years no longer exists or has reduced.
3.5 Property, plant and equipment

The resultant impairment loss or reversals are recognized immediately in the statement of
Property, plant and equipment are stated at cost less accumulated depreciation and identified
comprehensive income.
impairment loss, if any. The cost comprises of purchase price, together with any incidental
expense of acquisition.
3.11 Cash and cash equivalents
Subsequent costs are included in the asset’s carrying amount or recognized as a separate asset,
as appropriate, only when it is probable that future economic benefits associated with the item Cash and cash equivalents comprise bank balance and demand deposit and other short term
will flow to the establishment and the cost of the item can be measured reliably. All other repairs highly liquid investments that are readily convertible to a known amount of cash and are subject
and maintenance expenses are charged to the statement of comprehensive income during the to an insignificant risk of changes in value.
financial period in which they are incurred.
3.12 Finance leases
Depreciation is spread over its useful lives so as to write off the cost of property, plant and
equipment using the straight – line method over its useful lives as follows: Leases are classified as finance leases whenever the terms of the lease transfer substantially
all the risks and rewards of ownership to lessee. Assets held under finance lease or hire
Years purchase contracts are included in the statement of financial position at cost less depreciation
Air conditioning machine 10 in accordance with the establishment’s normal accounting policies. The future installments
are shown as liability. Interest is charged to the statement of comprehensive income over the
Furniture, fixtures & fittings 8 period of the lease so as to produce a constant periodic rate of interest on the remaining balance
outstanding.
Motor vehicle 5

Computer systems & peripherals 4 3.13 Operating leases

Leasehold Improvements 2 Leases under which the substantial risk and rewards of ownership are retained by the lessor are
classified as operating leases. Operating lease payments are recognized as an expense in the
The estimated useful lives, residual values and depreciation method are reviewed at the end of statement of comprehensive income on a straight-line basis over the lease term.
each reporting period, with the effect of any changes in estimate accounted for on a prospective
basis. 4 Significant accounting estimates

The gain or loss arising on the disposal or retirement of an item property, plant and equipment is The preparation of financial statements requires management to make judgments, estimates
determined as the difference between the sales proceeds and the carrying amount of the asset and assumptions that affect the application of policies and reported amounts of assets and
and is recognized in the statement of comprehensive income. liabilities, income and expenses. Actual results may differ from these estimates.

BIRLASOFT LIMITED (Subsidiaries Annual Report 2019-20) 104

 Birlasoft Solutions ME FZE

Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to

accounting estimates are recognized in the period in which the estimates are revised if the
revision affects only that period or in the period of revision and future periods if the revision
affects both current and future periods.

The key assumptions concerning the future and other sources of estimation uncertainty at
the reporting date, that have a significant risk of causing material adjustment to the carrying
amounts of assets and liabilities within the next financial year are:

4.1 Allowance for doubtful debts

Management has estimated the recoverability of accounts receivable balances and has
considered the allowance required for doubtful debts on the current economic environment and
past default history.

4.2 Property, plant and equipment

Property, plant and equipment are depreciated over its estimated useful life, which is based on
expected usage of the asset and expected physical wear and tear which depends on operational
factors. The management has not considered any residual value as it is deemed immaterial.

5 Property, plant and equipment (Amount in AED)

Air conditioning Furniture, Motor Computer Leasehold Total

machine fixtures & Vehicle Systems & Improvements
fittings peripherals
AED AED AED AED AED AED

Cost

Balance at 01 April 2018 232,409 37,000 295,020 17,961 582,852

Additions - 1,876 - 1,876

Balance at 31 March 2019 462 232,409 37,000 296,896 17,961 584,728

Additions/disposals - - - - - -

Balance at 31 March 2020 462 232,409 37,000 296,896 17,961 584,728

Accumulated depreciation

Balance at 01 April 2018 69 102,005 37,000 252,197 5,979 397,250

Depreciation 46 28,910 - 24,477 8,692 62,125

Balance at 31 March 2019 115 130,915 37,000 276,674 14,671 459,375

Depreciation 46 28,764 - 9,928 2,806 41,544

Balance at 31 March 2020 161 159,679 37,000 286,602 17,477 500,919

Carrying amounts

As at 31 March 2020 301 72,730 - 10,294 484 83,809

As at 31 March 2019 347 101,494 - 20,222 3,290 125,353

BIRLASOFT LIMITED (Subsidiaries Annual Report 2019-20) 105

Notes to the Financial Statements (Amount in AED)
For the year ended 31 March 2020
31 March 2020 31 March 2019
(Amount in AED) AED AED

31 March 2020 31 March 2019 8 Cash and bank balances

AED AED
Cash at bank 11,518,591 13,528,361
6 Related party transactions
Margin money deposits 137,633 594,383
Due from related parties
11,656,224 14,122,744
Birlasoft Technologies, Canada 82,004 -

Birlasoft Ltd Japan Branch 78,034 82,845

9 Shareholder’s current account
Birlasoft solutions Inc, USA - 144,572
There are no defined repayment arrangements for the shareholder’s current accounts and
160,038 227,417 these amounts are interest free and unsecured.
Due to related parties
Birlasoft Limited, Pune 3,201,603 2,989,631 31 March 2020 31 March 2019
AED AED
Birlasoft Limited, Singapore 154,568 179,703
10 Provision for employees’ end
Birlasoft solutions Inc, USA 35,332 - of service benefits
Birlasoft Solutions Limited, UK 17,681 Opening balance 274,336 468,502
Birlasoft Limited, Bahrain 2,799 - Charges for the year 21,630 68,651
KPIT(Shanghai) Software Technology Co Ltd - 293,063 Reversals during the year - (211,083)
Birlasoft solutions, France - 837 Less: payments during the year (41,920) (51,734)
KPIT Technologies(UK) Limited - 938 254,046 274,336
3,411,983 3,464,172

Parties are considered to be related if one party has the ability to control the other party or exercise 31 March 2020 31 March 2019
significant influence over the other party in making financial and operating decisions. Related AED AED
party transactions represent transactions with shareholder, director and senior management of
11 Accounts and other payables
the establishment and entities in which they have significant influence or control or are similarly
influenced or controlled. The establishment enters into transactions with related parties in the Accounts payable 130,985 183,876
normal course of business at prices determined by the management.
Deferred revenue 178,557 2,181
During the year, there were cost recharges between the related parties as business executions Provisions and accrued expenses 626,952 586,173
happened from various entities within the group.
Other payable 124,552 56,953

1,061,046 829,183
31 March 2020 31 March 2019
AED AED

7 Accounts and other receivables 12 Revenue

Accounts receivables 1,659,119 2,213,647

Revenue represents income generated from providing software and IT infrastructure services.
Less: allowance for doubtful debts (122,125) (812,749)

1,536,994 1,400,898
13 Cost of consultancy services
Staff advances 6,391 6,391
Cost of consultancy services include consultancy fee paid to consultants and subcontractors.
Deposits 42,923 44,479

Prepayments 117,245 114,547

31 March 2020 31 March 2019
Other receivables 172,176 76,198
AED AED
1,875,729 1,642,513
14 General & administration expenses
Age wise analysis of accounts receivables
Legal, visa, professional and other charges 267,234 267,005
Less than 3 months 1,500,165 972,458
Rent 149,176 300,554
3 - 6 months 35,038 134,316
Travelling and conveyance 153,468 517,631
More than 6 months 123,916 1,106,873
Insurance 104,414 115,384
1,659,119 2,213,647
Communication 49,362 85,088

a) The fair value of accounts receivables is not materially different from their net balances Maintenance 35,390 33,579
shown in the statement of financial position.
Bank charges 31,978 63,507

b) The credit risk on accounts receivable is limited as the establishment evaluates its Business promotion 4,113 110,379
customers and limits the credit risks by ensuring that collections are in line with the agreed
terms and conditions. Printing and stationery 1,552 5,079

Miscellaneous expenses 15,524 59,058

c) Provision is made against accounts receivables as soon as they are estimated as doubtful.
Bad debts 281,465 288,477
Movement in the allowance for doubtful debts
Allowance for doubtful debts - 56,784
Balance at the beginning of the year 812,749 793,247
Depreciation 41,544 62,125
Additional allowance during the year - 56,784
1,135,220 1,964,650
Adjustments/transfers (6,90,624) (37,282)

122,125 812,749

BIRLASOFT LIMITED (Subsidiaries Annual Report 2019-20) 106

 Birlasoft Solutions ME FZE

15 Financial instruments

Financial assets and liabilities

Financial assets of the establishment include cash and bank balances, due from related parties
and accounts and other receivables and financial liabilities include accounts and other payables,
due to related parties and other long term liabilities.

Credit risk

Financial assets, which potentially expose the establishment to concentration of credit risk,
comprise principally of bank accounts and accounts receivables. The establishment’s bank
accounts are placed with banks with good credit ratings. The credit risk on accounts receivables
is limited as the establishment evaluates its customers and limits the credit risk by ensuring
that collections are in line with agreed terms and conditions. A review of the recoverability of
accounts receivables has been carried out as at the statement of financial position date and
adequate provisions have been raised.

Exchange risk

Currency risk related to change in exchange rate which affect payment flows in foreign currencies
and valuation of liabilities in foreign currencies. The establishment regularly monitors exchange
fluctuations and take such steps as may be required to cover itself.

Liquidity risk

The establishment manages its liquidity risk by ensuring it has sufficient liquid cash balances
to meet its payment obligations as they fall due. The establishment maintains good working
relations with its banks and ensures compliance with the covenants as stipulated in facility
agreements.

Interest rate risk

The establishment is not exposed to any interest rate risk as they do not have any variable
interest rate financial assets/liabilities at the reporting date.

Fair value

The management believes that the fair values of the financial assets and liabilities are not
materially different from their carrying amounts at the statement of financial position date.

16 Contingent liabilities and capital commitments

31 March 2020 31 March 2019

AED AED

Letters of guarantee 137,633 594,383

There are no known contingent liabilities except the above and ongoing business obligations in
the normal course of business against which no loss is expected, with the exception of the issues
surrounding the COVID-19 outbreak, which is anticipated to negatively impact the revenue and
related profit, possibly causing losses to be incurred for the coming fiscal year, as markets
globally continue to contract significantly.

17 Comparative amounts

Previous year amounts have been regrouped and reclassified wherever necessary to make them
comparable to those of the current year.

BIRLASOFT LIMITED (Subsidiaries Annual Report 2019-20) 107

NOTES
NOTES