Notes to Accounts of MPS Ltd.

Mar 31, 2025

2.8 Provisions and Contingent Liabilities
Provision

A provision is recognized if, as a result of
a past event, the Company has a present
legal or constructive obligation that can
be estimated reliably, and it is probable
that an outflow of economic benefits
will be required to settle the obligation.
If the effect of the time value of money
is material, 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 liability.

Where discounting is used, the increase in
the provision due to the passage of time is
recognized as a finance cost.

The amount recognized as a provision is the
best estimate of the consideration required
to settle the present obligation at reporting
date, taking into account the risks and
uncertainties surrounding the obligation.
When some or all of the economic benefits
required to settle a provision are expected
to be recovered from a third party, the
receivable is recognized as an asset if it is
virtually certain that reimbursement will be
received and the amount of the receivable
can be measured reliably.

Contingent Liabilities

A contingent liability is a possible
obligation that arises from past events
whose existence will be confirmed by
the occurrence or non-occurrence of one
or more uncertain future events beyond
the control of the Company or a present
obligation that is not recognised because it
is not probable that an outflow of resources
will be required to settle the obligation. A
contingent liability also arises in extremely
rare cases, where there is a liability that
cannot be recognised because it cannot
be measured reliably. The Company
does not recognize a contingent liability
but discloses its existence in the financial
statements unless the probability of outflow
of resources is remote.

Provisions, contingent liabilities and
commitments are reviewed at each balance
sheet date.

2.9 Revenue recognition

The Company derives revenue primarily
from content solutions, platform solutions
and related services.

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

• Revenue related to fixed-price contracts
is recognised using percentage-of-
completion method (''POC method'')
of accounting with efforts incurred in
determining the degree of completion of
the performance obligation.

• 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
is recognized based on time elapsed mode
and revenue is straight lined over the period
of performance.

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.
Revenue also excludes taxes collected from
customers.

Revenue from subsidiaries is recognised
based on transaction price which is at
arm''s length.

Contract assets are recognised when there
is excess of revenue earned over billings on
contracts. Contract assets are classified as
unbilled receivables (only act of invoicing is
pending) when there is unconditional right
to receive cash, and only passage of time is
required, as per contractual terms.

Income received in advance comprising of
Unearned and deferred revenue ("contract

liability") is recognised when there is a
billing in excess of revenues.

The billing schedules agreed with customers
include periodic performance based
payments and/or milestone based progress
payments. Invoices are payable within
contractually agreed credit period.

In accordance with Ind AS 37, the Company
recognises an onerous contract provision
when the unavoidable costs of meeting the
obligations under a contract exceed the
economic benefits to be received.

Contracts are subject to modification to
account for changes in contract specification
and requirements. The Company reviews
modification to contract in conjunction
with the original 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
price is revised for existing obligation, a
cumulative adjustment is accounted for.

The Company disaggregates revenue from
contracts with customers geography and
nature of services.

Use of significant judgements in revenue
recognition

• The Company''s contracts with customers
could include promises to transfer multiple
products and services to a customer.
The Company 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 benefit
independently from such deliverables.

• Judgement is also required to determine
the transaction price for the contract. The

transaction 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
value of money if the contract includes
a significant financing component. Any
consideration 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
adjusted in the transaction price only to
the extent that it is highly probable that
a significant reversal in the amount of
cumulative revenue recognised will not
occur and is reassessed at the end of each
reporting period. The Company 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.

• The Company uses judgement to
determine an appropriate standalone
selling price for a performance
obligation. The Company allocates the
transaction price to each performance
obligation on the basis of the relative
standalone selling price of each distinct
product or service promised in the
contract. Where standalone selling price
is not observable, the Company uses the
expected cost plus margin approach to
allocate the transaction price to each
distinct performance obligation.

• The Company exercises judgement in
determining whether the performance
obligation is satisfied at a point in time
or over a period of time. The Company
considers indicators such as how

customer 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 product or service, transfer
of significant risks and rewards to the
customer, acceptance of delivery by the
customer, etc.

• Revenue for fixed-price contract is
recognised using percentage-of-
completion method. The Company
uses judgement to estimate the efforts
incurred which is used to determine the
degree of completion of the performance
obligation.

2.10 Recognition of dividend income,
rental income and interest income

Dividend income is accounted for when the
right to receive it is established.

Interest income is recognised on a time
proportion basis taking into account the
amount outstanding and the interest rate
applicable.

Rental income from operating leases is
recognised on time proportionate basis over
the period of rent.

2.11 Government Grants

Government grants that are awarded as
incentives with no ongoing performance
obligations are recognised when there is
reasonable assurance that:

a) the Company will comply with the
conditions attached to them; and

b) the grant will be received.

These are recorded at fair value where
applicable. Government grants are recognised

in the statement of profit and loss, either
on a systematic basis when the Company
recognises, as expenses, the related costs that
the grants are intended to compensate or,
immediately if the costs have already been
incurred.

Government grants related to income are
presented as an offset against the related
expenditure.

2.12 Employee benefits

a) Short-term employee benefits:

All employee benefits falling due within
twelve months of the end of the period
in which the employees render the
related services are classified as short
term employee benefits, which include
benefits like salaries, wages, short term
compensated absences, performance
incentives, etc measured on an
undiscounted basis and are recognised
as expenses in the period in which the
employee renders the related service
and measured accordingly.

b) Post-employment benefits:

Post employment benefit plans are
classified into defined benefits plans
and defined contribution plans as under:

• Gratuity: The Company has an
obligation towards gratuity, a defined
benefit retirement plan covering
eligible employees. The plan provides
for a lump sum payment to vested
employees at retirement, death while
in employment or on termination of
employment of an amount based on
the respective employee''s salary and
the tenure of employment, which is
payable upon completion of period as
per Gratuity Act 1972.The liability in

respect of Gratuity is recognised in the
books of accounts based on actuarial
valuation by an independent actuary.
The estimates of future salary increases
take into account the inflation, seniority,
promotion and other relevant factors.
The gratuity liability for the employees
of the Company is funded with an
insurance company in the form of a
qualifying insurance policy. The gratuity
benefit obligation recognised in the
balance sheet represents the present
value of the obligations as reduced by
fair value of assets held by the Insurance
Company. Actuarial gain/losses are
recognised immediately in the other
comprehensive income. Further details
about gratuity obligations are given in
Note 30.

• Superannuation: Certain

employees of the Company are also
participants in the superannuation
plan (''the Plan''), a defined
contribution plan. Contribution made
by the Company to the plan is charged
to Statement of Profit and Loss.

• Provident fund: For employees in
India, provident fund is deposited with
Regional Provident Fund Commissioner.
This is treated as defined contribution
plan. Company''s contribution to the
provident fund is charged to Statement
of Profit and Loss.

• Employee State Insurance: For

employees in India, Employee State
Insurance (ESI) is deposited with
Employee State Insurance Corporation.
This is treated as defined contribution
plan. Company''s contribution to the
ESI is charged to Statement of Profit
and Loss.

• Social security plans: For

employees outside India, Employees
contributions payable to the social
security plan, which is a defined
contribution scheme, is charged to
the statement of profit and loss in the
period in which the employee renders
services.

c) Other long-term employee
benefits: Compensated absences:

As per the Company''s policy, eligible
leaves can be accumulated by the
employees and carried forward to future
periods to either be utilized during the
service, or encashed. Encashment can be
made on early retirement, on separation,
at resignation and upon death of the
employee. Accumulated compensated
absences are treated as other long¬
term employee benefits. The Company''s
liability in respect of compensated
absences is recognised in the books of
account based on actuarial valuation
using projected unit credit method as at
Balance Sheet date by an independent
actuary. Actuarial losses/gains are
recognised in the Statement of Profit and
Loss in the year in which they arise.

d) Termination benefits:

Termination benefits are recognised
as an expense when, as a result of a
past event, the Company has a present
obligation that can be estimated reliably,
and it is probable that an outflow of
economic benefits will be required to
settle the obligation.

Actuarial valuation

The liability in respect of all defined
benefit plans is accrued in the books
of account on the basis of actuarial
valuation carried out by an independent

actuary using the Projected Unit Credit
Method, which recognizes each year
of service as giving rise to additional
unit of employee benefit entitlement
and measure each unit separately
to build up the final obligation. The
obligation is measured at the present
value of estimated future cash flows.
The discount rates used for determining
the present value of obligation under
defined benefit plans, is based on
the market yields on Government
securities as at the Balance Sheet date,
having maturity periods approximating
to the terms of related obligations.
Remeasurement gains and losses in
respect of all defined benefit plans
arising from experience adjustments and
changes in actuarial assumptions are
recognised in the period in which they
occur, directly in other comprehensive
income. They are included in retained
earnings in the Statement of Changes
in Equity and in the Balance Sheet.
Changes in the present value of the
defined benefit obligation resulting from
plan amendments or curtailments are
recognised immediately in profit or loss
as past service cost.

Gains or losses on the curtailment or
settlement of any defined benefit plan
are recognised when the curtailment
or settlement occurs. Any differential
between the plan assets (for a funded
defined benefit plan) and the defined
benefit obligation as per actuarial
valuation is recognised as a liability if it is
a deficit or as an asset if it is a surplus (to
the extent of the lower of present value
of any economic benefits available in the
form of refunds from the plan or reduction
in future contribution to the plan).

2.13 Share based payments

Employee stock option plan (ESOP): The fair
value of options granted under the ''MPS
Limited- Employee Stock Options Scheme
2023'' (“ESOS 2023“ or “Scheme")
is recognised as an employee benefits
expense with a corresponding increase in
equity. The total amount to be expensed is
determined by reference to the fair value
of the options granted:—including any
market performance conditions (e.g., the
entity''s share price)—excluding the impact
of any service and non-market performance
vesting conditions (e.g. profitability, sales
growth targets and remaining an employee
of the entity over a specified time period),
and—including the impact of any non¬
vesting conditions (e.g. the requirement for
employees to save or holdings shares for a
specific period of time). The total expense
is recognised over the vesting period, which
is the period over which all of the specified
vesting conditions are to be satisfied. At
the end of each period, the entity revises
its estimates of the number of options that
are expected to vest based on the non¬
market vesting and service conditions. It
recognises the impact of the revision to
original estimates, if any, in profit or loss,
with a corresponding adjustment to equity.

2.14 Treasury Shares

The Company has created an ESOP Trust
(MPS Employee Welfare Trust “ESOP Trust")
which acts as a vehicle to execute its ESOP
Scheme. The ESOP trust is considered as an
extension of the Company and the shares
held by the ESOP trust are treated as
Treasury shares. The ESOP Trust purchases
Company''s share from secondary market
for issuance to the employees on exercise
of the granted stock options. These shares

are recognized at cost and is disclosed
separately as reduction from Other Equity
as treasury shares. No gain or loss is
recognized the Statement of Profit and Loss
on purchase, sale, issuance, or cancellation
of treasury shares.

2.15 Tax Expense

Income tax expense comprises current and
deferred tax. It is recognised in Statement
of Profit and Loss except to the extent that it
relates to a business combination, or items
recognised directly in equity or in OCI.

a) Current tax:

Current tax comprises the expected tax
payable or receivable on the taxable
income or loss for the year. The amount
of current tax payable or receivable
is the best estimate of the tax amount
expected to be paid or received after
considering uncertainty related to
income taxes, if any. It is measured
using tax rates enacted or substantively
enacted at the reporting date.

Current tax assets and liabilities
are offset only if there is a legally
enforceable right to set off the
recognised amounts, and it is intended
to realize the asset and settle the
liability on a net basis or simultaneously.
Any adjustment to the tax payable or
receivable in respect of previous year
is shown separately. While determining
the tax provisions, the Company
assesses whether each uncertain tax
position is to be considered separately
or together with one or more uncertain
tax positions depending upon the
nature and circumstances of each
uncertain tax position.

b) Deferred tax:

Deferred tax is recognised in respect
of temporary differences between
the carrying amounts of assets and
liabilities for financial reporting
purposes and the amounts used for
taxation purposes. Deferred tax is not
recognised for:

• temporary differences arising on the
initial recognition of assets or liabilities
in a transaction that is not a business
combination and that affects neither
accounting nor taxable profit or loss
at the time of the transaction;

• temporary differences related to
freehold land and investments in
subsidiaries, to the extent that the
Company is able to control the timing
of the reversal of the temporary
differences and it is probable that
they will not reverse in the foreseeable
future; and

• taxable temporary differences arising
on the initial recognition of goodwill.

Deferred tax assets are recognised for
unused tax losses, unused tax credits
and deductible temporary differences to
the extent that it is probable that future
taxable profits will be available against
which they can be used. Unrecognised
deferred tax assets are reassessed at
each reporting date and recognised to
the extent that it has become probable
that future taxable profits will be
available against which they can be
used. Deferred tax is measured at the
tax rates that are expected to apply to
the period when the asset is realised or
the liability is settled, based on the laws
that have been enacted or substantively
enacted by the reporting date. The
measurement of deferred tax reflects
the tax consequences that would follow
from the manner in which the Company

expects, at the reporting date, to recover
or settle the carrying amount of its assets
and liabilities.

Deferred tax assets and liabilities are
offset only if there is a legally enforceable
right to set off the recognised amounts,
and it is intended to realize the asset
and settle the liability on a net basis or
simultaneously.

2.16 Dividend Distributions

The Company recognizes a liability to make
payment of dividend to owners of equity
when the distribution is authorized and is no
longer at the discretion of the Company. A
corresponding amount is recognised directly
in equity.

2.17 Foreign currency transactions and
translations

a) Functional and presentation
currency

The financial statements are presented
in Indian Rupees (INR), the functional
currency of the Company. Items
included in the financial statements
of the Company are recorded using
the currency of the primary economic
environment in which the Company
operates (the ''functional currency''). All
the amount have been rounded-off to
the nearest lacs, unless otherwise stated.

b) Transactions and balances

Foreign currency transactions are
translated into the functional currency
using exchange rates at the date of
the transaction or at rates that closely
approximate the rate at the date of the
transaction. At the end of each reporting
period, monetary items denominated in
foreign currencies are retranslated at the
rates prevailing at that date.

Non-monetary items that are measured in
terms of historical cost in a foreign currency
are translated using the exchange rates at
the dates of the initial transactions. Non¬
monetary items measured at fair value in
a foreign currency are translated using the
exchange rates at the date when the fair
value is determined.

Foreign exchange gains and losses from
settlement of these transactions and from
translation of monetary assets and liabilities
at the reporting date exchange rates
are recognised in the Statement of Profit
and Loss.

Foreign currency translation reserve

The exchange differences arising from the
translation of financial statements of foreign
branches with functional currency other
than the Indian Rupee is recognized in other
comprehensive income and is presented
within equity.

2.18 Leases

The Company''s lease asset classes primarily
consist of leases for offices, lease lines,
office equipments. The Company, at the
inception of a contract, assesses whether the
contract is a lease or not lease. A contract
is, or contains, a lease if the contract
conveys the right to control the use of an
identified asset for a time in exchange for a
consideration. This policy has been applied
to contracts existing and entered into on or
after 1 April 2019.

The Company recognises a right-of-use
asset and a lease liability at the lease
commencement date. The right-of-use
asset is initially measured at cost, which
comprises the initial amount of the lease
liability adjusted for any lease payments
made at or before the commencement

date, plus any initial direct costs incurred
and an estimate of costs to dismantle and
remove the underlying asset or to restore
the underlying asset or the site on which
it is located, less any lease incentives
received.

The right-of-use asset is subsequently
depreciated using the straight-line method
from the commencement date to the end of
the lease term.

The lease liability is initially measured at the
present value of the lease payments that
are not paid at the commencement date,
discounted using the Company''s incremental
borrowing rate. It is remeasured when
there is a change in future lease payments
arising from a change in an index or rate,
if there is a change in the Company''s
estimate of the amount expected to be
payable under a residual value guarantee,
or if the Company changes its assessment
of whether it will exercise a purchase,
extension or termination option. When the
lease liability is remeasured in this way, a
corresponding adjustment is made to the
carrying amount of the right-of-use asset,
or is recorded in profit or loss if the carrying
amount of the right-of-use asset has been
reduced to zero.

The Company has elected not to recognise
right-of-use assets and lease liabilities for
short-term leases that have a 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 over the lease term.

2.19 Earnings per share

Basic earnings/ (loss) per share is calculated
by dividing the net profit or loss for the
year attributable to equity shareholders by
the weighted average number of equity

shares outstanding during the year. The
weighted average number of equity shares
outstanding during the period is adjusted
for events such as bonus issue, bonus
element in a rights issue, share split, and
reverse share split (consolidation of shares)
that have changed the number of equity
shares outstanding, without a corresponding
change in resources.

For the purpose of calculating diluted
earnings/(loss) per share, the net profit
or loss for the year attributable to equity
shareholders and the weighted average
number of shares outstanding during the
year are adjusted for the effects of all
dilutive potential equity shares, except
where the result would be anti-dilutive.

2.20 Cash Flow Statement

Cash flows are reported using the indirect
method, whereby profit for the period is
adjusted for the effects of transactions of a
non-cash nature, any deferrals or accruals
of past or future operating cash receipts or
payments and item of income or expenses
associated with investing or financing
cash flows. The cash flows from operating,
investing and financing activities of the
Company are segregated.

2.21 Measurement of fair values

A number of the accounting policies and
disclosures require measurement of fair
values, for both financial and non-financial
assets and liabilities.

Fair values are categorised into different
levels in a fair value hierarchy based on
the inputs used in the valuation techniques
as follows:

Level 1: quoted prices (unadjusted) in active
markets for identical assets or liabilities.

Level 2: inputs other than quoted prices
included in Level 1 that are observable
for the asset or liability, either directly
(i.e. as prices) or indirectly (i.e. derived
from prices).

Level 3: inputs for the asset or liability that
are not based on observable market data
(unobservable inputs).

The Company has an established control
framework with respect to the measurement
of fair values. This includes a finance team
that has overall responsibility for overseeing
all significant fair value measurements,
including Level 3 fair values. The finance team
regularly reviews significant unobservable
inputs and valuation adjustments. If third
party information is used to measure fair
values, then the finance team assesses the
evidence obtained from the third parties to
support the conclusion that these valuations
meet the requirements of Ind AS, including
the level in the fair value hierarchy in which
the valuations should be classified.

When measuring the fair value of an asset
or a liability, the Company uses observable
market data as far as possible. If the inputs
used to measure the fair value of an asset
or a liability fall into different levels of the
fair value hierarchy, then the fair value
measurement is categorised in its entirety in
the same level of the fair value hierarchy as
the lowest level input that is significant to the
entire measurement.

The Company recognises transfers
between levels of the fair value hierarchy
at the end of the reporting period during
which the change has occurred. Further
information about the assumptions made
in measuring fair values used in preparing
these financial statements is included in the
respective notes.

2.22 Recent Pronouncement

Ministry of Corporate Affairs ("MCA")
notifies new standards or amendments to the
existing standards under Companies (Indian
Accounting Standards) Rules as issued from
time to time. During the year ended March
31, 2025, MCA has notified Ind AS 117—
Insurance Contracts and amendments to
Ind As 116—Leases , relating to sale and
lease back transactions, applicable from
April 1, 2024. The Company has assessed
that there is no significant impact on its
financial statements.

On May 9, 2025, MCA notifies the
amendments to Ind AS 21—Effects of
Changes in Foreign Exchange Rates. These
amendments aim to provide clearer guidance
on assessing currency exchangeability
and estimating exchange rates when
currencies are not readily exchangeable.
The amendments are effective for annual
periods beginning on or after April 1, 2025.
The Company has assessed that there is no
significant impact on its financial statements.

---

Mar 31, 2024

2.8 Provisions and Contingent Liabilities Provision

A provision is recognized if, as a result of a past event, the Company has a present legal or constructive obligation that can be estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation. If the effect of the time value of money is material, 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 liability. Where discounting

is used, the increase in the provision due to the passage of time is recognized as a finance cost.

The amount recognized as a provision is the best estimate of the consideration required to settle the present obligation at reporting date, taking into account the risks and uncertainties surrounding the obligation. When some or all of the economic benefits required to settle a provision are expected to be recovered from a third party, the receivable is recognized as an asset if it is virtually certain that reimbursement will be received and the amount of the receivable can be measured reliably.

Contingent Liabilities

A contingent liability is a possible obligation that arises from past events whose existence will be confirmed by the occurrence or non-occurrence of one or more uncertain future events beyond the control of the Company or a present obligation that is not recognised because it is not probable that an outflow of resources will be required to settle the obligation. A contingent liability also arises in extremely rare cases, where there is a liability that cannot be recognised because it cannot be measured reliably. The Company does not recognize a contingent liability but discloses its existence in the financial statements unless the probability of outflow of resources is remote.

Provisions, contingent liabilities and commitments are reviewed at each balance sheet date.

2.9 Revenue recognition

The Company derives revenue primarily from content solutions, platform solutions and related services.

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

• Revenue related to fixed-price contracts is recognised using percentage-of-completion method (''POC method'') of accounting with efforts incurred in determining the degree of completion of the performance obligation.

• 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 is recognized based on time elapsed mode and revenue is straight lined over the period of performance.

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. Revenue also excludes taxes collected from customers.

Revenue from subsidiaries is recognised based on transaction price which is at arm''s length.

Contract assets are recognised when there is excess of revenue earned over billings on contracts. Contract assets are classified as unbilled receivables (only act of invoicing is pending) when there is unconditional right to receive cash, and only passage of time is required, as per contractual terms.

Income received in advance comprising of Unearned and deferred revenue ("contract

liability") is recognised when there is a billing in excess of revenues.

The billing schedules agreed with customers include periodic performance based payments and/or milestone based progress payments. Invoices are payable within contractually agreed credit period.

In accordance with Ind AS 37, the Company recognises an onerous contract provision when the unavoidable costs of meeting the obligations under a contract exceed the economic benefits to be received.

Contracts are subject to modification to account for changes in contract specification and requirements. The Company reviews modification to contract in conjunction with the original 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 price is revised for existing obligation, a cumulative adjustment is accounted for.

The Company disaggregates revenue from contracts with customers geography and nature of services.

Use of significant judgements in revenue recognition

• The Company''s contracts with customers could include promises to transfer multiple products and services to a customer. The Company 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 benefit independently from such deliverables.

• Judgement is also required to determine the transaction price for the contract. The transaction 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 value of money if the contract includes a significant financing component. Any consideration 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 adjusted in the transaction price only to the extent that it is highly probable that a significant reversal in the amount of cumulative revenue recognised will not occur and is reassessed at the end of each reporting period. The Company 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.

• The Company uses judgement to determine an appropriate standalone selling price for a performance obligation. The Company allocates the transaction price to each performance obligation on the basis of the relative standalone selling price of each distinct product or service promised in the contract. Where standalone selling price is not observable, the Company uses the expected cost plus margin approach to allocate the transaction price to each distinct performance obligation.

• The Company exercises judgement in determining whether the performance obligation is satisfied at a point in time

or over a period of time. The Company considers indicators such as how customer 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 product or service, transfer of significant risks and rewards to the customer, acceptance of delivery by the customer, etc.

• Revenue for fixed-price contract is recognised using percentage-of-completion method. The Company uses judgement to estimate the efforts incurred which is used to determine the degree of completion of the performance obligation.

2.10 Recognition of dividend income and interest income

Dividend income is accounted for when the right to receive it is established.

Interest income is recognised on a time proportion basis taking into account the amount outstanding and the interest rate applicable.

Rental income from operating leases is recognised on time proportionate basis over the period of rent.

2.11 Government Grants

Government grants that are awarded as incentives with no ongoing performance obligations are recognised when there is reasonable assurance that:

a) the Company will comply with the conditions attached to them; and

b) the grant will be received.

These are recorded at fair value where applicable. Government grants are

recognised in the statement of profit and loss, either on a systematic basis when the Company recognises, as expenses, the related costs that the grants are intended to compensate or, immediately if the costs have already been incurred.

Government grants related to income are presented as an offset against the related expenditure.

2.12 Employee benefits

a) Short-term employee benefits:

All employee benefits falling due within twelve months of the end of the period in which the employees render the related services are classified as short term employee benefits, which include benefits like salaries, wages, short term compensated absences, performance incentives, etc measured on an undiscounted basis and are recognised as expenses in the period in which the employee renders the related service and measured accordingly.

b) Post-employment benefits: Post

employment benefit plans are classified into defined benefits plans and defined contribution plans as under:

• Gratuity: The Company has an obligation towards gratuity, a defined benefit retirement plan covering eligible employees. The plan provides for a lump sum payment to vested employees at retirement, death while in employment or on termination of employment of an amount based on the respective employee''s salary and the tenure of employment, which is payable upon completion of period as per Gratuity Act 1972. The liability in respect of Gratuity is

recognised in the books of accounts based on actuarial valuation by an independent actuary. The gratuity liability for the employees of the Company is funded with an insurance company in the form of a qualifying insurance policy. The gratuity benefit obligation recognised in the balance sheet represents the present value of the obligations as reduced by fair value of assets held by the Insurance Company. Actuarial gain/losses are recognised immediately in the other comprehensive income.

• Superannuation: Certain employees of the Company are also participants in the superannuation plan (''the Plan''), a defined contribution plan. Contribution made by the Company to the plan is charged to Statement of Profit and Loss.

• Provident fund: For employees in India, provident fund is deposited with Regional Provident Fund Commissioner. This is treated as defined contribution plan. Company''s contribution to the provident fund is charged to Statement of Profit and Loss.

• Employee State Insurance:

For employees in India, Employee State Insurance (ESI) is deposited with Employee State Insurance Corporation. This is treated as defined contribution plan. Company''s contribution to the ESI is charged to Statement of Profit and Loss.

• Social security plans: For

employees outside India, Employees contributions payable to the social security plan, which is a defined contribution scheme, is charged to the statement of profit and loss in

the period in which the employee renders services.

c) Other long-term employee benefits: Compensated absences:

As per the Company''s policy, eligible leaves can be accumulated by the employees and carried forward to future periods to either be utilized during the service, or encashed. Encashment can be made on early retirement, on separation, at resignation and upon death of the employee. Accumulated compensated absences are treated as other long-term employee benefits. The Company''s liability in respect of compensated absences is recognised in the books of account based on actuarial valuation using projected unit credit method as at Balance Sheet date by an independent actuary. Actuarial losses/gains are recognised in the Statement of Profit and Loss in the year in which they arise.

d) Termination benefits:

Termination benefits are recognised as an expense when, as a result of a past event, the Company has a present obligation that can be estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation.

Actuarial valuation

The liability in respect of all defined benefit plans is accrued in the books of account on the basis of actuarial valuation carried out by an independent actuary using the Projected Unit Credit Method, which recognizes each year

of service as giving rise to additional unit of employee benefit entitlement and measure each unit separately to build up the final obligation. The obligation is measured at the present value of estimated future cash flows. The discount rates used for determining the present value of obligation under defined benefit plans, is based on the market yields on Government securities as at the Balance Sheet date, having maturity periods approximating to the terms of related obligations. Remeasurement gains and losses in respect of all defined benefit plans arising from experience adjustments and changes in actuarial assumptions are recognised in the period in which they occur, directly in other comprehensive income. They are included in retained earnings in the Statement of Changes in Equity and in the Balance Sheet. Changes in the present value of the defined benefit obligation resulting from plan amendments or curtailments are recognised immediately in profit or loss as past service cost.

Gains or losses on the curtailment or settlement of any defined benefit plan are recognised when the curtailment or settlement occurs. Any differential between the plan assets (for a funded defined benefit plan) and the defined benefit obligation as per actuarial valuation is recognised as a liability if it is a deficit or as an asset if it is a surplus (to the extent of the lower of present value of any economic benefits available in the form of refunds from the plan or reduction in future contribution to the plan).

2.13 Share based payments

Employee stock option plan (ESOP): The fair value of options granted under the ''MPS Limited- Employee Stock Options Scheme 2023'' (“ESOS 2023“ or “Scheme") is recognised as an employee benefits expense with a corresponding increase in equity. The total amount to be expensed is determined by reference to the fair value of the options granted:

- including any market performance conditions (e.g., the entity''s share price)

- excluding the impact of any service and non-market performance vesting conditions (e.g. profitability, sales growth targets and remaining an employee of the entity over a specified time period), and - including the impact of any nonvesting conditions (e.g. the requirement for employees to save or holdings shares for a specific period of time). The total expense is recognised over the vesting period, which is the period over which all of the specified vesting conditions are to be satisfied. At the end of each period, the entity revises its estimates of the number of options that are expected to vest based on the non-market vesting and service conditions. It recognises the impact of the revision to original estimates, if any, in profit or loss, with a corresponding adjustment to equity.

2.14 Treasury Shares

The Company has created an ESOP Trust (MPS Employee Welfare Trust “ESOP Trust") which acts as a vehicle to execute its ESOP Scheme. The ESOP trust is considered as an extension of the Company and the shares held by the ESOP trust are treated as Treasury shares. The ESOP Trust purchases Company''s share from secondary market

for issuance to the employees on exercise of the granted stock options. These shares are recognized at cost and is disclosed separately as reduction from Other Equity as treasury shares. No gain or loss is recognized the Statement of Profit and Loss on purchase, sale, issuance, or cancellation of treasury shares.

2.15 Tax Expense

Income tax expense comprises current and deferred tax. It is recognised in Statement of Profit and Loss except to the extent that it relates to a business combination, or items recognised directly in equity or in OCI.

a) Current tax:

Current tax comprises the expected tax payable or receivable on the taxable income or loss for the year. The amount of current tax payable or receivable is the best estimate of the tax amount expected to be paid or received after considering uncertainty related to income taxes, if any. It is measured using tax rates enacted or substantively enacted at the reporting date.

Current tax assets and liabilities are offset only if there is a legally enforceable right to set off the recognised amounts, and it is intended to realize the asset and settle the liability on a net basis or simultaneously. Any adjustment to the tax payable or receivable in respect of previous year is shown separately. While determining the tax provisions, the Company assesses whether each uncertain tax position is to be considered separately or together with one or more uncertain tax positions depending upon the nature and circumstances of each uncertain tax position.

b) Deferred tax:

Deferred tax is recognised in respect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. Deferred tax is not recognised for:

• temporary differences arising on the initial recognition of assets or liabilities in a transaction that is not a business combination and that affects neither accounting nor taxable profit or loss at the time of the transaction;

• temporary differences related to freehold land and investments in subsidiaries, to the extent that the Company is able to control the timing of the reversal of the temporary differences and it is probable that they will not reverse in the foreseeable future; and

• taxable temporary differences arising on the initial recognition of goodwill.

Deferred tax assets are recognised for unused tax losses, unused tax credits and deductible temporary differences to the extent that it is probable that future taxable profits will be available against which they can be used. Unrecognised deferred tax assets are reassessed at each reporting date and recognised to the extent that it has become probable that future taxable profits will be available against which they can be used. Deferred tax is measured at the tax rates that are expected to apply to the period when the asset is realised or the liability is settled, based on the laws that have been enacted or substantively enacted by the reporting date. The measurement of deferred tax reflects the tax consequences that would follow from the manner in which the Company expects,

at the reporting date, to recover or settle the carrying amount of its assets and liabilities.

Deferred tax assets and liabilities are offset only if there is a legally enforceable right to set off the recognised amounts, and it is intended to realize the asset and settle the liability on a net basis or simultaneously.

2.16 Dividend Distributions

The Company recognizes a liability to make payment of dividend to owners of equity when the distribution is authorized and is no longer at the discretion of the Company. A corresponding amount is recognised directly in equity.

2.17 Foreign currency transactions and translations

a) Functional and presentation currency

The financial statements are presented in Indian Rupees (INR), the functional currency of the Company. Items included in the financial statements of the Company are recorded using the currency of the primary economic environment in which the Company operates (the ''functional currency''). All the amount have been rounded-off to the nearest lacs, unless otherwise stated.

b) Transactions and balances

Foreign currency transactions are translated into the functional currency using exchange rates at the date of the transaction or at rates that closely approximate the rate at the date of the transaction. At the end of each reporting period, monetary items denominated in foreign currencies are retranslated at the rates prevailing at that date.

Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rates at the dates of the initial transactions. Nonmonetary items measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value is determined.

Foreign exchange gains and losses from settlement of these transactions and from translation of monetary assets and liabilities at the reporting date exchange rates are recognised in the Statement of Profit and Loss.

Foreign currency translation reserve

The exchange differences arising from the translation of financial statements of foreign branches with functional currency other than the Indian Rupee is recognized in other comprehensive income and is presented within equity.

2.18 Leases

The Company''s lease asset classes primarily consist of leases for offices, lease lines, office equipments. The Company, at the inception of a contract, assesses whether the contract is a lease or not lease. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a time in exchange for a consideration. This policy has been applied to contracts existing and entered into on or after 1 April 2019.

The Company recognises a right-of-use asset and a lease liability at the lease commencement date. The right-of-use asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for any lease payments

made at or before the commencement date, plus any initial direct costs incurred and an estimate of costs to dismantle and remove the underlying asset or to restore the underlying asset or the site on which it is located, less any lease incentives received.

The right-of-use asset is subsequently depreciated using the straight-line method from the commencement date to the end of the lease term.

The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted using the Company''s incremental borrowing rate. It is remeasured when there is a change in future lease payments arising from a change in an index or rate, if there is a change in the Company''s estimate of the amount expected to be payable under a residual value guarantee, or if the Company changes its assessment of whether it will exercise a purchase, extension or termination option. When the lease liability is remeasured in this way, a corresponding adjustment is made to the carrying amount of the right-of-use asset, or is recorded in profit or loss if the carrying amount of the right-of-use asset has been reduced to zero.

The Company has elected not to recognise right-of-use assets and lease liabilities for short-term leases that have a 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 over the lease term.

2.19 Earnings per share

Basic earnings/(loss) per share is calculated by dividing the net profit or loss for the year attributable to equity

shareholders by the weighted average number of equity shares outstanding during the year. The weighted average number of equity shares outstanding during the period is adjusted for events such as bonus issue, bonus element in a rights issue, share split, and reverse share split (consolidation of shares) that have changed the number of equity shares outstanding, without a corresponding change in resources.

For the purpose of calculating diluted earnings/(loss) per share, the net profit or loss for the year attributable to equity shareholders and the weighted average number of shares outstanding during the year are adjusted for the effects of all dilutive potential equity shares, except where the result would be anti-dilutive.

2.20 Cash Flow Statement

Cash flows are reported using the indirect method, whereby profit for the period is adjusted for the effects of transactions of a non-cash nature, any deferrals or accruals of past or future operating cash receipts or payments and item of income or expenses associated with investing or financing cash flows. The cash flows from operating, investing and financing activities of the Company are segregated.

2.21 Measurement of fair values

A number of the accounting policies and disclosures require measurement of fair values, for both financial and non-financial assets and liabilities.

Fair values are categorised into different levels in a fair value hierarchy based on the inputs used in the valuation techniques as follows:

Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities.

Level 2: inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).

Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs).

The Company has an established control framework with respect to the measurement of fair values. This includes a finance team that has overall responsibility for overseeing all significant fair value measurements, including Level 3 fair values. The finance team regularly reviews significant unobservable inputs and valuation adjustments. If third party information is used to measure fair values, then the finance team assesses the evidence obtained from the third parties to support the conclusion that these valuations meet the requirements of Ind AS, including the level in the fair value hierarchy in which the valuations should be classified.

When measuring the fair value of an asset or a liability, the Company uses observable market data as far as possible. If the inputs used to measure the fair value of an asset or a liability fall into different levels of the fair value hierarchy, then the fair value measurement is categorised in its entirety in the same level of the fair value hierarchy as the lowest level input that is significant to the entire measurement.

The Company recognises transfers between levels of the fair value hierarchy at the end of the reporting period during which the

change has occurred. Further information about the assumptions made in measuring fair values used in preparing these financial statements is included in the respective notes.

2.22 Recent Pronouncement

Ministry of Corporate Affairs ("MCA") notifies new standards or amendments to the existing standards under Companies

(Indian Accounting Standards) Rules as issued from time to time. For the year ended 31 March 2024, MCA has not notified any new standards or amendments to the existing standards applicable to the Company.

For the purpose of the impairment testing, goodwill is allocated to the Cash Generating Units (CGU) which represents the recoverable amount of the above CGU based on its value in use. The value in use of CGU is determined to be higher than the carrying amount post the sensitivity analysis towards change in the key assumptions including the cash flow projections consequent to the change in the estimated future economic conditions. No probable scenario was identified where the CGU recoverable amount would fall below their carrying amount.

Value in use was determined by discounting the future cash flows generated from the continuing use of the CGU. The calculation was based on the following key assumptions:

i. The anticipated annual revenue growth and margin included in the cash flow projections are based on past experience, actual operating results and the 5 year business plan in all periods presented.

ii. The terminal growth rate 2% to 3% for the year ended 31 March 2024 (31 March 2023: 2% to 3%) representing management view on the future long-term growth rate.

iii. Discount rate of 19% to 20% for the year ended 31 March 2024 (31 March 2023: 17% to 19%) was applied in determining the recoverable amount of the CGUs. The discount rate was estimated based on past experience and historical industry average weighted-average cost of capital.

iv. The estimate of recoverable amount is particularly sensitive towards pretax discount rate and terminal growth rate, There will be no impairment even if the weighted average cost of capital is increased by 1% and the terminal growth rate is decreased by 1%. Management is not currently aware of any other reasonably possible changes to key assumptions that would cause a unit''s carrying amount to exceed its recoverable amount.

The values assigned to the key assumptions represent the management''s assessment of future trends in the industry and based on both internal and external sources.

(b) Defined benefit plans Gratuity

As per the “Gratuity Act,1972", the Company operates a scheme of gratuity which is a defined benefit plan and in accordance with Ind AS 19 “Employee Benefits", an actuarial valuation has been carried out in respect of gratuity. The discount rate assumed is 7.17% p.a. (31 March 2023: 7.30% p.a.) which is determined by reference to market yield at the Balance Sheet date on Government bonds.

The retirement age has been considered at 58 to 60 years (31 March 2023: 58 to 60 years) and mortality table is as per IALM (2012-14) (31 March 2022: IALM (2012-14)).

The estimates of future salary increases, considered in actuarial valuation is 6% p.a. (31 March 2023: 6% p.a.), taking into account of inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market.

The plans assets are maintained with Life Insurance Corporation of India in respect of gratuity scheme for employees of the Company. The expected rate of return on plan assets is 7.17% p.a. (31 March 2023: 7.30% p.a.).

(e) Share based payments

During the year ended 31 March, 2023, the shareholders of the Company vide Postal Ballot Resolution dated 21 January 2023, had approved ''MPS Limited- Employee Stock Options Scheme 2023'' (“ESOS 2023" or “Scheme") authorizing the Nomination and Remuneration Committee to grant to the eligible employees of the Company and its subsidiary not exceeding 4,00,000/- (Four Lacs) employee stock options, convertible into not more than equal number of equity shares of face value of Rs. 10/- (INR Ten) each fully paid up upon exercise, out of which not more than 2,00,000 (Two Lacs) equity shares to be sourced from Secondary Acquisition, from time to time through an employee welfare trust namely ''MPS Employee Welfare Trust'' (“Trust").

The Nomination and Remuneration Committee of the Board of Directors of the Company at its meeting held on 11 April 2023, had considered and approved the grant of 74,030 (Seventy Four Thousand and Thirty) options exercisable into not more than 74,030 (Seventy Four Thousand and Thirty) of equity shares of the Company of the face value of INR 10/- (INR Ten Only) each fully paid-up, to eligible employees of the Company and its subsidiary under the Scheme.

During the year, the Company had announced an ''MPS Limited - Phantom Stock Option Scheme 2023'' ("PSOS 2023") for eligible employees in foreign subsidiaries. As per this scheme, the employees would be entitled to receive the difference between the fair value of the share at the date of vesting of PSOS 2023 and the exercise price.

Note:

(a) Fair valuation of financial assets and liabilities with short term maturities is considered as approximate to respective carrying amount due to the short term maturity of these instruments.

(b) Fair value of non-current financial assets has not been disclosed as there is no significant differences between carrying value and fair value.

(c) Derivatives are carried at fair value at each reporting date. The fair values of the derivative financial instruments has been determined using valuation techniques with market observable inputs. The models incorporate various inputs including the credit quality of counter-parties and foreign exchange forward rates.

(d) The fair value of the mutual funds are based on net assets value of the funds as at reporting date.

(e) The fair value of the financial assets and liabilities is included at the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale.

(f) The fair value of lease liabilities need not be disclosed as it is specific expemption as per Ind AS 107 * Refer note 2.21 for Level of hierarchy

34 Financial risk management

Risk management framework

The Company''s activities expose it to a variety of financial risks: market risk, credit risk and liquidity risk. i Market risk

Market risk includes foreign exchange risk, pricing risk and interest risk that may affect the Company''s income or the value of its holdings of financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimising the returns.

34 Financial risk management (Contd..)

Currency risk

The Company is exposed to currency risk to the extent that there is a mismatch between the currencies in which revenue and expense are denominated and the functional currency of the Company. The currencies in which the Company is exposed to risk are USD, EUR, GBP and Others. The Company takes adequate foreign exchange forward covers as per the guidelines approved by the Board to mitigate currency risk.

Customer balances forms a significant part of the financial assets carried at amortised cost and contract assets, which is valued considering provision for allowance using expected credit loss method. This assessment is not based on any mathematical model but an assessment considering the nature of segment, impact immediately seen in the demand outlook of these segments and the financial strength of the customers in respect of whom amounts are receivable.

The Company based on internal assessment which is driven by the historical experience/ current facts available in relation to default and delays in collection thereof, the credit risk for trade receivables is considered low. The Company estimates its allowance for trade receivable using lifetime expected credit loss.

With regard to other financial assets with contractual cash flows other than trade receivables, management believes these to be high quality assets with negligible credit risk. The management believes that the parties from which these financial assets are recoverable, have strong capacity to meet the obligations and where the risk of default is negligible and accordingly no material provision for excepted credit loss has been provided on these financial assets. Break up of financial assets other than trade receivables have been disclosed on balance sheet.

Investments and balances with banks

The Company limits its exposure to credit risk by investing in liquid securities, short term bonds and maintaining bank balances only with counterparties that have a good credit rating. The Company invests as per the guidelines approved by the Board to mitigate this risk.

iii Liquidity risk

Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The Company''s approach to managing liquidity is to ensure, as far as possible, that it will have sufficient liquidity to meet its liabilities when they are due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Company''s reputation.

The Company''s treasury department is responsible for managing the short term and long term liquidity requirements. Liquidity situation is reviewed regularly by the management.

36 Segment information Operating Segments

The Chairman and CEO of the Company has been identified as the Chief Operating Decision Maker (CODM) as defined by Ind AS 108, Operating Segments. Operating Segments have been defined and presented based on the regular review by the CODM to assess the performance of each segment and to make decision about allocation of resources. Accordingly, the Company has determined reportable segment by nature of its product and service, accordingly following are the reportable segments:

(a) Content Solutions: Content solutions mean creating and developing content for print and digital delivery. It includes content authoring/development, content production, content transformation, fulfillment and customer support services.

(b) Platform Solutions: Platform solutions means developing and implanting various software and technology services programs.

No operating segments have been aggregated to form the above reportable operating segments.

The Company prepares its segment information in conformity with the accounting policies adopted for preparing and presenting the financial statements of the Company as a whole.

Common allocable costs are allocated to each segment according to the relative contribution of each segment to the total common costs.

(ii) The Supreme Court on 28 February 2019 had provided its judgment regarding inclusion of other allowances such as travel allowances, special allowances, etc., within the expression ''basic wages'' for the purpose of computation of contribution of provident fund under the Employees'' Provident Fund and Miscellaneous Provisions Act, 1952 (''EPF Act''). There are interpretive challenges on the application of the Supreme Court Judgment including the period from which judgment would apply, consequential implications on resigned employees, etc. Further, various stakeholders had also filed representations with PF authorities in this respect. All these factors raises significant uncertainty regarding the implementation of the Supreme Court Judgment. Owing to the aforesaid uncertainty and pending clarification from regulatory authorities in this regard, the Company had recognized provision for the PF contribution on the basis of above mentioned order with effect from the order date. Further, the management believes that impact of aforementioned uncertainties on the financial statements of the Company should not be material.

39 Commitments as at year end

Estimated amount of contracts remaining to be executed on capital account (net of advances) INR Nil (31 March 2023: INR 77.21 lacs).

40 Corporate Social Responsibility (CSR) Expense

Pursuant to Section 135 of the Companies Act 2013, a Corporate Social Responsibility (CSR) committee has been formed by the Company. The areas for CSR activities includes imparting education to underprivileged children and girls, building intellect and instill higher values of life through education, promoting healthcare and any other areas the Board may find appropriate. Gross amount required to be spent by the Company during the year was INR 192.26 Lacs (for the year ended 31 March 2023; INR 158 Lacs).

41(a) During the year, the Company paid final dividend of INR 3,421.16 Lacs for the financial year 2022-23 (31 March 2023: INR 5,131.74 Lacs for the financial year 2021-22) to its equity share holders. This represents a payment of INR 20 per equity share (31 March 2023: INR 30 per equity share).

41(b) During the year, the Company paid an interim dividend of INR 5,131.74 Lacs respectively (31 March 2023: Nil) to its equity share holders. This represents a payment of INR 30 per equity share (31 March 2023: Nil).

The Board of Directors recommended a final dividend of INR 45 per equity share (face value of INR 10 per share) for the financial year 2023-24, which shall be paid subject to the approval of shareholders in the Annual General Meeting.

42 The Company publishes this financial statement along with the consolidated financial statements. In accordance with Ind AS 108, Operating segments, the Company has disclosed the segment information in the consolidated financial statements.

43(a) The Company has granted a loan of INR 2,988.72 Lacs (USD 3.60 Million) to MPS North America LLC, USA, its wholly owned subsidiary for the acquisition of Research Square AJE LLC, North Carolina, USA along with its subsidiary American Journal Online (Beijing) Information Consulting Company Limited, Beijing, China, AI-Tool (“Curie") and Research Quality Evaluation (“RQE") through a newly formed Special Purpose Vehicle (“SPV") American Journal Experts LLC.

47 Company is compliant with number of layers prescribed under Clause 87 of Section 2 of Companies Act, 2013.

48 The Ministry of Corporate Affairs (MCA) has prescribed a new requirement for companies under the proviso to Rule 3(1) of the Companies (Accounts) Rules, 2014, inserted by the Companies (Accounts) Amendment Rules 2021 requiring companies, which uses accounting software for maintaining its books of accounts, shall only use such accounting software which has a feature of recording audit trail of each and every transaction, creating an edit log of each change made in the books of account along with the date when such changes were made and ensuring that the audit trail cannot be disabled. The new requirement is applicable with effect from the financial year beginning on 1 April 2023.

The Company uses an accounting software as the primary accounting software for maintaining its books of accounts. During the current financial year, the audit trail (edit log) features for any direct changes made at the database level were not enabled for the accounting software used for maintenance of all the accounting records by the Company. However, the audit trails (edit log) at the applications level (entered from the frontend by users) for the accounting software were operating for all relevant transactions recorded in the software.

The Company also uses one third party application for processing its payroll. The ''Independent Service Auditor''s Assurance Report on the Description of Controls, their Design and Operating Effectiveness'' (''Type 2 report'' issued in accordance with SSAE 21, Statement on Standards for Attestation Engagements does not comment on existence of audit trail (edit logs) for any maintenance of logs of direct changes made at the database level. Further audit trail feature for the changes made through application level are retained only for 365 days as the same results into slowing down of system due to huge volume of data.

50 Other statutory information

(i) The Company does not have any Benami property, where any proceeding has been initiated or pending against the Company for holding any Benami property.

(ii) The Company has not granted any loans and advances in nature of loan, either repayable on demand or without specifying any terms or period of repayments to promoters, directors, KMP and related parties during the year.

(iii) The Company does not have any charges or satisfaction which is yet to be registered with ROC beyond the statutory period

(iv) The Company has not traded or invested in Crypto currency or Virtual Currency during the period/year.

(v) The Company has not advanced or loaned or invested funds, other than those disclosed in Note No. 43, to any other person(s) or entity(ies), including foreign entities (Intermediaries) with the understanding that the Intermediary shall:

(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the company (Ultimate Beneficiaries) or

(b) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries

(vi) The Company has not received any fund from any person(s) or entity(ies), including foreign entities (Funding Party) with the understanding (whether recorded in writing or otherwise) that the Company shall:

(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (Ultimate Beneficiaries) or

(b) provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries,

(vii) The Company has not any such transaction which is not recorded in the books of accounts that has been surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961 (such as, search or survey or any other relevant provisions of the Income Tax Act, 1961).

For Walker Chandiok & Co. LLP For and on behalf of the Board of Directors of MPS Limited

Chartered Accountants

ICAI Firm Registration Number: 001076N/N500013

Rohit Arora Rahul Arora Ajay Mankotia

Partner Chairman and CEO Director

Membership Number: 504774 DIN: 05353333 DIN: 03123827

Place: New Delhi Place: Florida, USA Place: New Delhi

Date: 21 May 2024 Date: 21 May 2024 Date: 21 May 2024

Sunit Malhotra Raman Sapra

Chief Financial Officer Company Secretary

Membership No.: 084004 Membership No.: F9233 Place: Noida, Uttar Pradesh Place: Noida, Uttar Pradesh

Date: 21 May 2024 Date: 21 May 2024

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Mar 31, 2023

1. I nvestment property comprises land and building for basement, ground floor, first floor, eighth floor and parking areas situated in Bengaluru. The title deeds for land and building for basement, ground floor and first floor are in the name of Brigade Marketing Company Private Limited, erstwhile Company that was merged with Macmillan India Limited (now MPS Limited) in 2001 under section 391 to 394 of the Companies Act, 1956 in terms of the approval of the Honorable High Court at Karnataka. The title deeds for land and building for remaining areas are in the name of the Company.

2. The Company has obtained an independent valuation for the fair value of its investment property by a registered valuer as per rule 2 of Companies (Registered Valuers and Valuation) Rules, 2017 based on the market value approach. The valuer has relied on the prevalent real estate rates and realisable price of similar property in the same vicinity.

For the purpose of the impairment testing, goodwill is allocated to the Cash Generating Units (CGU) which represents the recoverable amount of the above CGU based on its value in use. The value in use of CGU is determined to be higher than the carrying amount post the sensitivity analysis towards change in the key assumptions including the cash flow projections consequent to the change in the estimated future economic conditions. No probable scenario was identified where the CGU recoverable amount would fall below their carrying amount.

Value in use was determined by discounting the future cash flows generated from the continuing use of the CGU. The calculation was based on the following key assumptions:

i. The anticipated annual revenue growth and margin included in the cash flow projections are based on past experience, actual operating results and the 5 year business plan in all periods presented.

ii. The terminal growth rate 2% to 3% for the year ended 31 March 2023 (31 March 2022: 1% to 2%) representing management view on the future long-term growth rate.

iii. Discount rate of 17% to 19% for the year ended 31 March 2023 (31 March 2022: 14.5% to 19%) was applied in determining the recoverable amount of the CGUs. The discount rate was estimated based on past experience and historical industry average weighted-average cost of capital.

iv. The estimate of recoverable amount is particularly sensitive towards pretax discount rate and terminal growth rate, There will be no impairment even if the weighted average cost of capital is increased by 1% and the terminal growth rate is decreased by 1%. Management is not currently aware of any other reasonably possible changes to key assumptions that would cause a unit''s carrying amount to exceed its recoverable amount.

The values assigned to the key assumptions represent the management''s assessment of future trends in the industry and based on both internal and external sources.

(iii) Rights, preferences and restrictions attached to equity shares

The Company has only one class of equity shares having a par value of INR 10 per share. Each holder of equity shares is entitled to one vote per share. The equity share holders are entitled to receive dividend as declared from time to time. In the event of liquidation of the Company, the holders of equity shares will be entitled to receive the remaining assets of the Company, after distribution of all preferential amount, if any. The distribution will be in proportion to number of equity shares held by the shareholders.

In accordance with “Employee Stock Option Scheme of MPS Limited", the ESOP Trust (MPS Employee Welfare Trust) purchased equity shares of the Company from secondary market. The shares purchased by the ESOP Trust are disclosed as Treasury Shares (Refer note 2.13).

(viii) Aggregate number of bonus shares issued, shares issued for consideration other than cash during the period of five years immediately preceding the reporting date:

There are no bonus shares, shares issued for consideration other than cash issued during the period of five years immediately preceding the reporting date.

(ix) The Board of Directors, at its meeting held on 27 October 2021, approved Buyback of fully paid-up equity shares of face value of INR 10 each from the eligible equity shareholders through the tender offer process, at a price not exceeding INR 900 per equity share, for an aggregate amount not exceeding INR 8,500 Lacs, payable in cash. The Company has bought back 9,44,444 fully paid up equity shares and extinguished the equity shares bought back on 11 February 2022. The Company has utilised its Securities Premium of INR 10,442.74 Lacs and General Reserve of INR 21.28 lacs for the buyback of its equity shares. Total transaction cost including tax of INR 2,058.47 Lacs incurred towards buyback was offset from Securities Premium and General Reserve. In accordance with Section 69 of the Companies Act 2013, the Company has created Capital Redemption Reserve of INR 94.44 Lacs equal to the nominal value of the shares bought back as an appropriation from the General Reserve.

30 Micro, Small and Medium enterprises

There are no Micro, Small and Medium enterprises, to whom the company owes dues, which are outstanding for more than 45 days as at the end of year except for the amount of INR Nil (31 March 2022: INR Nil) against which interest has been accrued (refer below(ii)). The information as required to be disclosed in relation to Micro and Small enterprises has been determined to the extent such parties have been identified on the basis of information available with the Company.

(A) Defined contribution plans

The Company has certain defined contribution plan such as provident fund, 401(k) plan, employee state insurance (ESI) and social security fund and pension scheme for qualifying employees. Under the schemes, the company is required specified percentage of payroll costs to fund the benefits. During the year, the Company has contributed following amounts to:

(B) Defined benefit plans Gratuity

As per the “Gratuity Act,1972", the Company operates a scheme of gratuity which is a defined benefit plan and in accordance with Ind AS 19 “Employee Benefits", an actuarial valuation has been carried out in respect of gratuity. The discount rate assumed is 7.30% p.a. (31 March 2022: 6.41% p.a.) which is determined by reference to market yield at the Balance Sheet date on Government bonds.

The retirement age has been considered at 58 to 65 years (31 March 2022: 58 to 65 years) and mortality table is as per IALM (2012-14) (31 March 2022: IALM (2006-08)).

The estimates of future salary increases, considered in actuarial valuation is 6% p.a. (31 March 2022: 6% p.a.), taking into account of inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market.

The plans assets are maintained with Life Insurance Corporation of India in respect of gratuity scheme for employees of the Company. The expected rate of return on plan assets is 7.30% p.a. (31 March 2022: 6.41% p.a.).

32 Leases

(i) In adopting Ind AS 116, the Company has applied the below practical expedients:

The Company has applied a single discount rate to a portfolio of leases with reasonably similar characteristics

The Company has treated the leases with remaining lease term of less than 12 months as if they were “short term leases"

The Company has not applied the requirements of Ind AS 116 for leases of low value assets

(ii) The Company has discounted lease payments using the applicable incremental borrowing rate which ranges between 4.5% p.a. to 10.0% p.a. for measuring the lease liability.

Note:

(a) Fair valuation of financial assets and liabilities with short term maturities is considered as approximate to respective carrying amount due to the short term maturity of these instruments.

(b) Fair value of non-current financial assets has not been disclosed as there is no significant differences between carrying value and fair value.

(c) Derivatives are carried at fair value at each reporting date. The fair values of the derivative financial instruments has been determined using valuation techniques with market observable inputs. The models incorporate various inputs including the credit quality of counter-parties and foreign exchange forward rates.

(d) The fair value of the mutual funds are based on net assets value of the funds as at reporting date.

(e) The fair value of the financial assets and liabilities is included at the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale.

(f) The fair value of lease liabilities need not be disclosed as it is specific expemption as per Ind AS 107

* Refer note 2.20 for Level of hierarchy

34 Financial risk management Risk management framework

The Company''s activities expose it to a variety of financial risks: market risk, credit risk and liquidity risk. i Market risk

Market risk includes foreign exchange risk, pricing risk and interest risk that may affect the Company''s income or the value of its holdings of financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimising the returns.

The Company is exposed to currency risk to the extent that there is a mismatch between the currencies in which revenue and expense are denominated and the functional currency of the Company. The currencies in which the Company is exposed to risk are USD, EUR, GBP and Others. The Company takes adequate foreign exchange forward covers as per the guidelines approved by the Board to mitigate currency risk.

Sensitivity analysis

A reasonably possible strengthening (weakening) of the USD, EUR and GBP against INR at 31 March would have affected the measurement of financial exposure denominated in a foreign currency and affected equity and profit or loss by the amounts shown below. This analysis assumes that all other variables, in particular interest rates, remain constant and ignores any impact on forecast revenue and expenses.

Forward covers

The Company takes adequate foreign exchange forward covers to mitigate the risk of changes in exchange rates on foreign currency exposures. The counterparty for these contracts is bank. These forward covers are value based on quoted prices for similar assets and liabilities in active markets or input that are directly or indirectly observable in the marketplace.

Pricing pressure is a constant risk due to increased competition. The Company strives to mitigate this risk with existing customers by a trade-off for volumes. Thereon, it is the Company''s endeavour to reduce the impact by taking advantage of economies of scale and increasing productivity, as well increasing automation within these processes.

Interest rate risk

The Company is not exposed to interest rate risk. ii Credit risk

Trade receivables and other financial assets

The Company''s exposure to credit risk is influenced mainly by the individual characteristics of each customer and if a customer fails to meet its contractual obligations. The demographics of the customer, including the default risk of the industry and country in which the customer operates, also has an influence on credit risk assessment. Details of concentration of revenue are as follows:

Expected credit loss for trade receivables, unbilled revenues and contract assets (customer balances):

Customer balances forms a significant part of the financial assets carried at amortised cost and contract assets, which is valued considering provision for allowance using expected credit loss method. This assessment is not based on any mathematical model but an assessment considering the nature of segment, impact immediately seen in the demand outlook of these segments and the financial strength of the customers in respect of whom amounts are receivable.

The Company based on internal assessment which is driven by the historical experience/ current facts available in relation to default and delays in collection thereof, the credit risk for trade receivables is considered low. The Company estimates its allowance for trade receivable using lifetime expected credit loss.

Expected credit loss on financial assets and contract assets other than trade receivables:

With regard to other financial assets with contractual cash flows other than trade receivables, management believes these to be high quality assets with negligible credit risk. The management believes that the parties from which these financial assets are recoverable, have strong capacity to meet the obligations and where the risk of default is negligible and accordingly no material provision for excepted credit loss has been provided on these financial assets. Break up of financial assets other than trade receivables have been disclosed on balance sheet.

Investments and balances with banks

The Company limits its exposure to credit risk by investing in liquid securities, short term bonds and maintaining bank balances only with counterparties that have a good credit rating. The Company invests as per the guidelines approved by the Board to mitigate this risk.

iii Liquidity risk

Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The Company''s approach to managing liquidity is to ensure, as far as possible, that it will have sufficient liquidity to meet its liabilities when they are due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Company''s reputation.

The Company''s treasury department is responsible for managing the short term and long term liquidity requirements. Liquidity situation is reviewed regularly by the management.

The Company is equity financed which is evident from the capital structure. Further, the Company has always been a net cash company with cash and bank balances along with investment which is predominantly investment in fixed deposits with bank, liquid and short term mutual funds.

36 Segment information Operating Segments

The Chairman and CEO of the Company has been identified as the Chief Operating Decision Maker (CODM) as defined by Ind AS 108, Operating Segments. Operating Segments have been defined and presented based on the regular review by the CODM to assess the performance of each segment and to make decision about allocation of resources. Accordingly, the Company has determined reportable segment by nature of its product and service, accordingly following are the reportable segments:

(a) Content Solutions: Content solutions mean creating and developing content for print and digital delivery. It includes content authoring/development, content production, content transformation, fulfillment and customer support services.

(b) Platform Solutions: Platform solutions means developing and implanting various software and technology services programs.

No operating segments have been aggregated to form the above reportable operating segments. The Company prepares its segment information in conformity with the accounting policies adopted for preparing and presenting the financial statements of the Company as a whole.

Common allocable costs are allocated to each segment according to the relative contribution of each segment to the total common costs.

(i) Revenue and expenses which relate to the Company as a whole and not allocable to segments on reasonable basis have been included under ''unallocated revenue / expenses''. Details are as follows:

(ii) Assets and liabilities used in the Company''s business are not identified to any of the reportable segments, as these are used interchangeably between segments and the management believes that it is not practicable to provide segment disclosures relating to total assets and liabilities.

(c) Geographical segments:

The geographical information analysis of the Company''s revenue and non-current assets by the Company''s country of domicile (i.e. India) and other countries. In presenting the geographical information segment revenue has been based on the geographical location of customers and segment assets which have been based on the geographical location of the assets.

(ii) The Supreme Court on 28 February 2019 had provided its judgment regarding inclusion of other allowances such as travel allowances, special allowances, etc., within the expression ''basic wages'' for the purpose of computation of contribution of provident fund under the Employees'' Provident Fund and Miscellaneous Provisions Act, 1952 (''EPF Act''). There are interpretive challenges on the application of the Supreme Court Judgment including the period from which judgment would apply, consequential implications on resigned employees, etc. Further, various stakeholders had also filed representations with PF authorities in this respect. All these factors raises significant uncertainty regarding the implementation of the Supreme Court Judgment. Owing to the aforesaid uncertainty and pending clarification from regulatory authorities in this regard, the Company had recognized provision for the PF contribution on the basis of above mentioned order with effect from the order date. Further, the management believes that impact of aforementioned uncertainties on the financial statements of the Company should not be material.

39 Commitments as at year end

Estimated amount of contracts remaining to be executed on capital account (net of advances) INR 77.21 lacs (31 March 2022: Nil).

40 Corporate Social Responsibility (CSR) Expense

Pursuant to Section 135 of the Companies Act 2013, a Corporate Social Responsibility (CSR) committee has been formed by the Company. The areas for CSR activities includes imparting education to underprivileged children and girls, building intellect and instill higher values of life through education, promoting healthcare and any other areas the Board may find appropriate. Gross amount required to be spent by the Company during the year was INR 158 Lacs (for the year ended 31 March 2022; INR 157 Lacs).

41 During the year, the company paid final dividend of INR 5,131.74 Lacs (31 March 2022 Nil) to its equity share holders. This represents a payment of INR 30 per equity share (31 March 2022 Nil).

The Board recommended a final dividend of INR 20 (face value of INR 10 per share ) per equity share. This payment is subject to the approval of shareholders in the Annual General Meeting (AGM) of the Company to be held on 31 July 2023.

42 The Company publishes this financial statement along with the consolidated financial statements. In accordance with Ind AS 108, Operating Segments, the Company has disclosed the segment information in the consolidated financial statements.

49 Employee Stock Option Scheme

The shareholders of the Company vide Postal Ballot Resolution dated 21 January 2023, had approved ''MPS Limited-Employee Stock Options Scheme 2023'' (“ESOS 2023" or “Scheme") authorizing the Nomination and Remuneration Committee to grant to the eligible employees of the Company and its subsidiary(ies) not exceeding 4,00,000/- (Four Lacs) employee stock options, convertible into not more than equal number of equity shares of face value of Rs. 10/- (INR Ten) each fully paid up upon exercise, out of which not more than 2,00,000 (Two Lacs) equity shares to be sourced from Secondary Acquisition, from time to time through an employee welfare trust namely ''MPS Employee Welfare Trust'' (“Trust").

50 Subsequent Events after Balance Sheet date

Subsequent to the quarter ended 31 March 2023, the Nomination and Remuneration Committee of the Board of Directors of the Company at its meeting held on 11 April 2023, had considered and approved the grant of 74,030 (Seventy Four Thousand and Thirty) options exercisable into not more than 74,030 (Seventy Four Thousand and Thirty) of equity shares of the Company of the face value of Rs. 10/- (INR Ten Only) each fully paid-up, to eligible employees under the Scheme.

Subsequent to the quarter ended 31 March 2023, the Board of Directors of the Company, in its meetings on 11 April 2023, has considered and approved the Raising of funds through the issuance of equity shares of the Company (“Equity Shares") or any other Equity-linked Securities of the Company or other securities convertible into or exchangeable for Equity Shares by way of Qualified Institutions Placement (“QIP") in accordance with the provisions of Chapter VI of SEBI (lssue of Capital and Disclosure Requirements) Regulations, 2018, as amended from time to time and other applicable laws, and/or any other permissible mode(s), in one or more of the tranches for an aggregate amount up to INR 250 crores (INR Two hundred fifty crores Only), subject to necessary approval and such other permissions, sanctions and statutory approvals, as may be required. The same was approved by the Shareholders vide Postal Ballot Resolution dated 14 May 2023.

52 Other statutory information

(i) The Company does not have any Benami property, where any proceeding has been initiated or pending against the Company for holding any Benami property.

(ii) The Company has not granted any loans and advances in nature of loan, either repayable on demand or without specifying any terms or period of repayments to promoters, directors, KMP and related parties during the year.

(iii) The Company does not have any charges or satisfaction which is yet to be registered with ROC beyond the statutory period

(iv) The Company has not traded or invested in Crypto currency or Virtual Currency during the period/year.

(v) The Company has not advanced or loaned or invested funds, other than those disclosed in Note No. 43, to any other person(s) or entity(ies), including foreign entities (Intermediaries) with the understanding that the Intermediary shall:

(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the company (Ultimate Beneficiaries) or

(b) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries

(vi) The Company has not received any fund from any person(s) or entity(ies), including foreign entities (Funding Party) with the understanding (whether recorded in writing or otherwise) that the Company shall:

(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (Ultimate Beneficiaries) or

(b) provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries,

(vii) The Company has not any such transaction which is not recorded in the books of accounts that has been surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961 (such as, search or survey or any other relevant provisions of the Income Tax Act, 1961.

---

Mar 31, 2022

1. Investment property comprises land and building for basement, ground floor, first floor, eighth floor and parking areas situated in Bengaluru. The title deeds for land and building for basement, ground floor and first floor are in the name of Brigade Marketing Company Private Limited, erstwhile Company that was merged with Macmillan India Limited (now MPS Limited) in 2001 under section 391 to 394 of the Companies Act, 1956 in terms of the approval of the Honorable High Court at Karnataka. The title deeds for land and building for remaining areas are in the name of the Company.

2. The Company has obtained an independent valuation for the fair value of its investment property based on the market value approach. The valuer has relied on the prevalent real estate rates and realisable price of similar property in the same vicinity.

5(a) Impairment testing of goodwill

For the purposes of impairment testing, goodwill is allocated to the Cash Generating Units (CGU) which represents the lowest level at which the goodwill is monitored for internal management purposes, which is not higher than the Company''s operating reportable segments.

For the purpose of the impairment testing, goodwill is allocated to the Cash Generating Units (CGU) which represents the recoverable amount of the above CGU based on its value in use. The value in use of CGU is determined to be higher than the carrying amount post the sensitivity analysis towards change in the key assumptions including the cash flow projections consequent to the change in the estimated future economic conditions arising from the possible effects due to COVID-19. No probable scenario was identified where the CGU recoverable amount would fall below their carrying amount.

Value in use was determined by discounting the future cash flows generated from the continuing use of the CGU. The calculation was based on the following key assumptions:

i. The anticipated annual revenue growth and margin included in the cash flow projections are based on past experience, actual operating results and the 5 year business plan in all periods presented.

ii. The terminal growth rate 1% to 2% for the year ended 31 March 2022 (31 March 2021: 1% to 2%) representing management view on the future long-term growth rate.

iii. Discount rate of 14.5% to 19% for the year ended 31 March 2022 (31 March 2021: 15.5% to 19%) was applied in determining the recoverable amount of the CGUs. The discount rate was estimated based on past experience and historical industry average weighted-average cost of capital.

iv. The estimate of recoverable amount is particularly sensitive towards pretax discount rate and terminal growth rate, There will be no impairment even if the weighted average cost of capital is increased by 1% and the terminal growth rate is decreased by 1%. Management is not currently aware of any other reasonably possible changes to key assumptions that would cause a unit''s carrying amount to exceed its recoverable amount.

The values assigned to the key assumptions represent the management''s assessment of future trends in the industry and based on both internal and external sources.

(iii) Rights, preferences and restrictions attached to equity shares

The Company has only one class of equity shares having a par value of INR 10 per share. Each holder of equity shares is entitled to one vote per share. The equity share holders are entitled to receive dividend as declared from time to time. In the event of liquidation of the Company, the holders of equity shares will be entitled to receive the remaining assets of the Company, after distribution of all preferential amount, if any. The distribution will be in proportion to number of equity shares held by the shareholders.

(vii) Aggregate number of bonus shares issued, shares issued for consideration other than cash during the period of five years immediately preceding the reporting date:

There are no bonus shares issued during the period of five years immediately preceding the reporting date.

(viii) The Board of Directors, at its meeting held on 27 Octobar 2021, approved Buyback of fully paid-up equity shares of face value of INR 10 each from the eligible equity shareholders through the tender offer process, at a price not exceeding INR 900 per equity share, for an aggregate amount not exceeding INR 8500 Lacs, payable in cash. The Company has bought back 9,44,444 fully paid up equity shares on 07 February 2022 and extinguished the equity shares bought back on 11 February 2022. The Company has utilised its Securities Premium of INR 10,442.74 Lacs and General Reserve of INR 21.28 lacs for the buyback of its equity shares. Total transaction cost including tax of INR 2,058.47 Lacs incurred towards buyback was offset from Securities Premium and General Reserve. In accordance with Section 69 of the Companies Act 2013, the Company has created Capital Redemption Reserve of INR 94.44 Lacs equal to the nominal value of the shares bought back as an appropriation from the General Reserve.

The Board of Directors, at its meeting held on 11 August 2020, approved Buyback of fully paid-up equity shares of face value of INR 10 each from the eligible equity shareholders through the tender offer process, at a price not exceeding INR 600 per equity share, for an aggregate amount not exceeding INR 3,400 Lacs, payable in cash. The Company has bought back 5,66,666 fully paid up equity shares on 7 October 2020 and extinguished the equity shares bought back on 12 October 2020. The Company has utilised its Securities Premium of INR 4,157.57 Lacs for the buyback of its equity shares. Total transaction cost including tax of INR 814.24 Lacs incurred towards buyback was offset from Securities Premium. In accordance with Section 69 of the Companies Act 2013, the Company has created Capital Redemption Reserve of INR 56.67 Lacs equal to the nominal value of the shares bought back as an appropriation from the General Reserve.

(B) Defined benefit plans

Gratuity

In accordance with Ind AS 19 "Employee Benefits”, an actuarial valuation has been carried out in respect of gratuity. The discount rate assumed is 6.41% p.a. (31 March 2021: 6.26% p.a.) which is determined by reference to market yield at the Balance Sheet date on Government bonds.

The retirement age has been considered at 58 to 65 years (31 March 2021: 58 to 65 years) and mortality table is as per IALM (2006-08) (31 March 2021: IALM (2006-08)).

The estimates of future salary increases, considered in actuarial valuation is 6% p.a. (31 March 2021: 6% p.a.), taking into account of inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market.

The plans assets are maintained with Life Insurance Corporation of India in respect of gratuity scheme for employees of the Company. The expected rate of return on plan assets is 6.41% p.a. (31 March 2021: 6.26% p.a.).

32 Leases

(i) In adopting Ind AS 116, the Company has applied the below practical expedients:

The Company has applied a single discount rate to a portfolio of leases with reasonably similar characteristics The Company has treated the leases with remaining lease term of less than 12 months as if they were "short term leases" The Company has not applied the requirements of Ind AS 116 for leases of low value assets

(ii) The Company has discounted lease payments using the applicable incremental borrowing rate which is 4.5% to 9.5% for measuring the lease liability.

(a) Fair valuation of financial assets and liabilities with short term maturities is considered as approximate to respective carrying amount due to the short term maturity of these instruments.

(b) Fair value of non-current financial assets has not been disclosed as there is no significant differences between carrying value and fair value.

(c) Derivatives are carried at fair value at each reporting date. The fair values of the derivative financial instruments has been determined using valuation techniques with market observable inputs. The models incorporate various inputs including the credit quality of counter-parties and foreign exchange forward rates.

(d) The fair value of the mutual funds are based on net assets value of the funds as at reporting date.

(e) The fair value of the financial assets and liabilities is included at the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale. The fair-value of the financial-instruments factor the uncertainties arising out of COVID-19, where applicable.

* Refer note 2.19 for Level of hierarchy

34 Financial risk management

Risk management framework

The Company''s activities expose it to a variety of financial risks: market risk, credit risk and liquidity risk. i Market risk

Market risk includes foreign exchange risk, pricing risk and interest risk that may affect the Company''s income or the value of its holdings of financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimising the returns.

Currency risk

The Company is exposed to currency risk to the extent that there is a mismatch between the currencies in which revenue and expense are denominated and the functional currency of the Company. The currencies in which the Company is exposed to risk are USD, EUR, GBP and Others. The Company takes adequate foreign exchange forward covers as per the guidelines approved by the Board to mitigate currency risk.

Forward covers

The Company takes adequate foreign exchange forward covers to mitigate the risk of changes in exchange rates on foreign currency exposures. The counterparty for these contracts is bank. These forward covers are value based on quoted prices for similar assets and liabilities in active markets or input that are directly or indirectly observable in the marketplace.

Pricing risk:

Pricing pressure is a constant risk due to increased competition. The Company strives to mitigate this risk with existing customers by a trade-off for volumes. Thereon, it is the Company''s endeavour to reduce the impact by taking advantage of economies of scale and increasing productivity, as well increasing automation within these processes.

Interest rate risk

The Company is not exposed to interest rate risk.

Expanding the customer base is mitigating this risk. Within the current customers, the Company is looking to deepen the partnership by supporting publishers in new areas of outsourcing.

Expected credit loss for trade receivables:

Trade receivables of INR 4,871.29 Lacs as at 31 March 2022 (31 March 2021 : INR 5,729.92 Lacs) forms a significant part of the financial assets carried at amortised cost, which is valued considering provision for allowance using expected credit loss method. In addition to the historical pattern of credit loss, we have considered the likelihood of increased credit risk and consequential default considering emerging situations due to COVID-19. This assessment is not based on any mathematical model but an assessment considering the nature of segment, impact immediately seen in the demand outlook of these segments and the financial strength of the customers in respect of whom amounts are receivable.

The Company based on internal assessment which is driven by the historical experience/ current facts available in relation to default and delays in collection thereof, the credit risk for trade receivables is considered low. The Company estimates its allowance for trade receivable using lifetime expected credit loss.

Expected credit loss on financial assets other than trade receivables:

With regard to other financial assets with contractual cash flows other than trade receivables, management believes these to be high quality assets with negligible credit risk. The management believes that the parties from which these financial assets are recoverable, have strong capacity to meet the obligations and where the risk of default is negligible and accordingly no material provision for excepted credit loss has been provided on these financial assets. Break up of financial assets other than trade receivables have been disclosed on balance sheet.

Investments

The Company limits its exposure to credit risk by investing in liquid securities and short term bonds and only with counterparties that have a good credit rating. The Company invests as per the guidelines approved by the Board to mitigate this risk.

iii Liquidity risk

Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The Company''s approach to managing liquidity is to ensure, as far as possible, that it will have sufficient liquidity to meet its liabilities when they are due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Company''s reputation.

The Company''s treasury department is responsible for managing the short term and long term liquidity requirements. Liquidity situation is reviewed regularly by the management.

The Company is equity financed which is evident from the capital structure. Further, the Company has always been a net cash company with cash and bank balances along with investment which is predominantly investment in fixed deposits with bank, liquid and short term mutual funds.

36 Segment information

Operating Segments

The CEO and Whole Time Director of the Company has been identified as the Chief Operating Decision Maker (CODM) as defined by Ind AS 108, Operating Segments. Operating Segments have been defined and presented based on the regular review by the CODM to assess the performance of each segment and to make decision about allocation of resources. Accordingly, the Company has determined reportable segment by nature of its product and service, accordingly following are the reportable segments:

(a) Content solutions: Content solutions mean creating and developing content for print and digital delivery. It includes content authoring/development, content production, content transformation, fulfillment and customer support services.

(b) eLearning solutions: offering custom technology-enabled learning services which included Web-based tutorials, Simulation- and Game-based learning, Augmented and Virtual Reality, Learning Nuggets and Motion Graphics, Learning Consulting to corporates, government agencies, universities etc.

(c) Platform solutions: Platform solutions means developing and implanting various software and technology services programs.

36 Segment information

The Company has aggregated its operating segment into Content, eLearning and Platform operating reportable segment, which is consistent with aggregation criteria defined under Ind AS 108 i.e. similar economic characteristics, similar nature of the production process, similar type or class of customer for their products and services and similar method used to distribute their product or provide their services.

Accordingly, operating segment i.e. books, journals, customer fulfillment and others are aggregated into content operating segment and technology and software related services aggregated into platform operating segment. The CODM has evaluated the segment wise allocation for the business of the new acquisition of HighWire Company into existing segment of Platform Solutions.

The Company prepares its segment information in conformity with the accounting policies adopted for preparing and presenting the financial statements of the Company as a whole.

Common allocable costs are allocated to each segment according to the relative contribution of each segment to the

total common costs

(ii) Assets and liabilities used in the Company''s business are not identified to any of the reportable segments, as these are used interchangeably between segments and the management believes that it is not practicable to provide segment disclosures relating to total assets and liabilities.

(d) Geographical informations:

The geographical information analysis the Company''s revenue and non-current assets by the holding Company''s country of domicile (i.e. India) and other countries. In presenting the geographical information segment revenue has been based on the geographical location of customers and segment assets which have been based on the geographical location of the assets.

38	Contingent liabilities to the extent not provided for:
(i)	Claims against Company, disputed by the Company, not acknowledged as debt:	INR in Lacs
	As at	As at
	31 March 2022	31 March 2021
	(a) Income tax 318.29	651.67
	(b) Service tax 43.14	43.14

The above amounts are based on the notice of demand / Assessment Orders / claims by the relevant authorities / parties and the Company is contesting these claims. Outflows, if any, arising out of these claims would depend on the outcome of the decisions of the appellate authorities and the Company''s rights for future appeals before the judiciary. The management believes that the ultimate outcome of these proceedings will not have a material adverse effect on the Company''s financial position and results of operations.

(ii) The Supreme Court on 28 February 2019 had provided its judgment regarding inclusion of other allowances such as travel allowances, special allowances, etc., within the expression ''basic wages'' for the purpose of computation of contribution of provident fund under the Employees'' Provident Fund and Miscellaneous Provisions Act, 1952 (''EPF Act''). There are interpretive challenges on the application of the Supreme Court Judgment including the period from which judgment would apply, consequential implications on resigned employees, etc. Further, various stakeholders had also filed representations with PF authorities in this respect. All these factors raises significant uncertainty regarding the implementation of the Supreme Court Judgment. Owing to the aforesaid uncertainty and pending clarification from regulatory authorities in this regard, the Company had recognized provision for the PF contribution on the basis of above mentioned order with effect from the order date. Further, the management believes that impact of aforementioned uncertainties on the financial statements of the Company should not be material.

39 Commitments as at year end

Estimated amount of contracts remaining to be executed on capital account (net of advances) INR NIL Lacs (31 March 2021: INR 62.21 Lacs).

40 Corporate Social Responsibility (CSR) Expense

As required by Section 135 of the Companies Act 2013, a Corporate Social Responsibility (CSR) committee has been formed by the Company. The areas for CSR activities include imparting primary education to under privileged girls, computer education to underprivileged children and building intellect and instill higher values of life through education and any other area the Board may find appropriate. Gross amount required to be spent by the Company during the year was INR 157 Lacs (for the year ended 31 March 2021; INR 163 Lacs).

The goodwill of INR 3,423.26 Lacs comprises value of acquired workforce and expected synergies arising from the acquisition. Goodwill is deductible for income tax purposes at USA.

The company incurred acquisition related cost of INR 64.61 Lacs on legal fees and due diligence costs in previous financial year. These cost have been included in legal and professional fees under the head "other expenses”. The measurment period of goodwill had been closed on 30 June 2021.

If the acquisition had occurred on 1 April 2020, management estimates that total revenue for the Company would have been higher by INR 2,393.88 Lacs and the profit after taxes would have been higher by INR 159.66 Lacs. The pro-forma amounts are not necessarily indicative of the results that would have occurred if the acquisition had occurred on date indicated or that may result in the future.

42 The Board recommended a final dividend of INR 30 (face value of INR 10 per share ) per equity share. This payment is subject to the approval of shareholders in the Annual General Meeting (AGM) of the Company to be held on June 27, 2022.

Further, there has been no delay in transferring amounts and shares, required to be transferred, to the Investor Education and Protection Fund by the Group.

44 The Company publishes this financial statement along with the consolidated financial statements. In accordance with Ind AS 108, Operating Segments, the Company has disclosed the segment information in the consolidated financial statements.

(vi) Transaction price allocated to the remaining performance obligations

The Company applies the practical expedient in paragraph 121 of Ind AS 115 and does not disclose information about remaining performance obligations that have original expected durations of one year or less.

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

51 Other statutory information

(i) The Company do not have any Benami property, where any proceeding has been initiated or pending against the Company for holding any Benami property.

(ii) The Company do not have any charges or satisfaction which is yet to be registered with ROC beyond the statutory period

(iii) The Company have not traded or invested in Crypto currency or Virtual Currency during the period/year.

(iv) The Company have not advanced or loaned or invested funds to any other person(s) or entity(ies), including foreign entities (Intermediaries) with the understanding that the Intermediary shall:

(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the company (Ultimate Beneficiaries) or

(b) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries

(v) The Company have not received any fund from any person(s) or entity(ies), including foreign entities (Funding Party) with the understanding (whether recorded in writing or otherwise) that the Company shall:

(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (Ultimate Beneficiaries) or

(b) provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries,

(vi) The Company have not any such transaction which is not recorded in the books of accounts that has been surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961 (such as, search or survey or any other relevant provisions of the Income Tax Act, 1961.

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Mar 31, 2019

Notes forming part of Financial Statements

Rs in Lacs, except share and per share data, unless otherwise stated

35 Corporate Social Responsibility (CSR) Expense

As required by Section 135 of the Companies Act 2013, a Corporate Social Responsibility (CSR) committee has been formed by the Company. The areas for CSR activities include imparting primary education to under privileged girls, computer education to underprivileged children and building intellect and instill higher values of life through education and any other area the Board may find appropriate. Gross amount required to be spent by the Company during the year was Rs 196.94 Lacs (for the year ended 31 March 2018; Rs 191.79 Lacs).

Amount spent by the company on its CSR activities are as follows:

Purpose	31 March 2019	Year ended 31 March 2018
Promotion of education and skills	152.68	140.46
Health care	43.68	51.33
Total	196.36	191.79

36 Business Combination:

The Company during the year ended 31 March 2017, had given purchase consideration of Rs 428.16 Lacs in cash to acquire certain assets including application platform business from Digital River, Inc. a company based in USA vide asset purchase agreement dated 3 February 2017 which qualifies for business combination accounting. The customary condition for consummation of the said acquisition has been completed subsequent to year ended 31 March 2017, i.e. with effect from 1 April 2017. The acquisition of THINK Subscription strengthens the Company''s platform capabilities to include subscription management and fulfillment solutions.

Following assets and liabilities have been recorded on fair value through business combination accounting by the Company : Rs in lacs

Particulars	Note	As at 1 April 2017
Property, plant and equipment	3.1	62.69
Other intangible assets	4	453.01
Trade receivables		168.91
Advance from customers		(306.72)
Net assets		377.89
Purchase consideration		428.16
Goodwill on acquisition	4	50.27

The goodwill of Rs 50.27 Lacs comprises value of acquired workforce and expected synergies arising from the acquisition. Goodwill is deductible for income tax purposes.

The company incurred acquisition related cost of Rs 5.37 Lacs on legal fees and due diligence costs. These cost have been included in legal and professional fees under the head "other expenses".

37 There has been no delay in transferring amounts and shares, required to be transferred, to the Investor Education and Protection Fund by the Company. a, unless otherwise stated

38 Details of provisions

The Company has made provision for pending litigation matter based on its assessment of the amount it estimates to incur to meet such obligation, details of which are given below: .

Provision for service tax matter	As at 31 March 2019	As at 31 March 2018
As at commencement of the year	154.28	149.46
Additions	4.82	4.82
Utilisation	-	-
As at end of the year	159.10	154.28
Out of the above following amount are expected to be incurred within year	159.10	154.28

39 During the Financial Year 2017-18 the Board of Directors of the Company had approved the Scheme of Amalgamation involving Amalgamation of ADI BPO Services Limited (post demerger of its ''Infrastructure Management Business Undertaking'' into ADI Media Private Limited) into the Company.

During the Financial Year 2018-19, the Board of Directors of the Company, based on a communication from ADI BPO Services Limited that the Board of ADI BPO Services Limited had decided to withdraw the proposed Scheme of demerger of "Infrastructure Management Business Undertaking" of ADI BPO Services Limited into ADI Media Private Limited and pursuant to Clause 38 (c) and proviso 39.2 of Clause 39 of the Scheme of Amalgamation declared the said Scheme to be null and void. Pursuant to Clause 40, the Company has taken steps for withdrawal of the Scheme with National Company Law Tribunal (NCLT), Chennai and withdrawal of such Scheme has been approved by NCLT, Chennai on 01 February 2019.

40 The Company publishes this financial statement along with the consolidated financial statements. In accordance with Ind AS 108, Operating Segments, the Company has disclosed the segment information in the consolidated financial statements.

41 Disclosure pursuant to section 186(4) of the Companies Act, 2013 in respect of unsecured loans to subsidiary companies (refer note 32): Rs in lacs

MPS Interactive Systems Limited	Purpose/Term of loan	Year ended 31 March 2019
Outstanding as at the beginning of year	General business
Given during the year	purpose for a tenure of 5 years	2,300.00
Repaid during the year		-
Maximum balance outstanding		2,300.00
Outstanding as at the end of year		2,300.00

42 Revenue from contracts with customers (i) Revenue from contracts with customers

Revenues for the year ended 31 March 2019 and 31 March 2018 are as follows:

Particulars	As at 31 March 2019	As at 31 March 2018
Content solutions	18,439.18	17,751.76
Platform solutions	3,957.07	4,08244
	22,396.25	21,834.20

(ii) Disaggregation of revenue from contracts with customers

In the following table, revenue is disaggregated by primary geographical market and major products/service lines.

	Year ended 31 March 2019			Year ended 31 March 2018
Revenue by geographical markets	Content Solutions	Platform Solutions	Total	Content solutions	Platform solutions	Total
India (country of domicile)	21.71	58.02	79.73	10.82	5.63	16.45
Europe	9,786.58	1,889.61	11,676.19	8,732.14	1,671.71	10,403.85
USA	8,320.07	1,845.31	10,165.38	8,703.48	2,20791	10,911.39
Rest of the World	310.82	164.13	474.95	305.32	197.19	502.51
Total	18,439.18	3,957.07	22,396.25	17,751.76	4,082.44	21,834.20

Refer note 30 (ii) on Financial risk management for information on revenue from top customers.

(iii) Contract balances

The following table provides information about receivables, contract assets and contract liabilities from contracts with customers Rs in lacs

	As at 31 March 2019
Receivables, which are included in Trade and other receivables'' (refer note 10)	3,782.30
Unbilled revenue (refer note 7(ii) )	85.63
Contract assets (refer note 9(ii) )	2,140.68
Contract liabilities (refer note 16)	475.52

Trade receivables are non-interest bearing and are generally on terms of 0 to 60 days.

Changes in Contract assets and Contract Liabilities are as follows: Rs in lacs

	Year ended 31 March 2019	Year ended 31 March 2019
	Contract Assets	Contract Liabilities
Balance as on the date of transition (1 April 2018)	1,527.12	392.97
Revenue recognised that was included in the unearned balance at	-	(372.58)
the beginning of the year
Increases due to cash received, excluding amounts recognised as revenue during the year	~	455.13
Transfers from contract assets recognised at the beginning of the period to receivables	(1,430.69)	-
Increases as a result of changes in the measure of progress	2,044.25	-
Balance at the end of the year	2,140.68	475.52

(iv) The amount of revenue recognised in 31 March 2019 from performance obligations satisfied (or partially satisfied) in previous periods, mainly due to the changes in the transaction price is Rs 46.45 Lacs.

(v) Reconciliation of revenue recognized with the contracted price is as follows:

Year ended 31 March 2018 Contracted price 22,443.50 21,905.30

Reductions towards variable consideration components (47.25) (71.10)

Revenue recognised 22,396.25 21,834.20

The reduction towards variable consideration comprises of volume discounts, bulk discount and price discount, etc.

(vi) Transaction price allocated to the remaining performance obligations

The Company applies the practical expedient in paragraph 121 of Ind AS 115 and does not disclose information about remaining performance obligations that have original expected durations of one year or less.

As per our report of even date attached
For B S R & Co. LLP	For and on behalf of the Board of Directors of MPS Limited
Chartered Accountants
ICAI Firm Registration Number:	101248W/W-100022
Shashank Agarwal	Rahul Arora	Vijay Sood
Partner	Managing Director	Director
Membership Number: 095109	DIN: 05353333	DIN: 01473455
	Sunit Malhotra
	Chief Financial Officer & Company Secretary
Place: Gurugram	Place: Gurugram
Date : 17 May 2019	Date : 17 May 2019

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Mar 31, 2018

30 FINANCIAL RISK MANAGEMENT (contd...) iii Liquidity risk

Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The Company''s approach to managing liquidity is to ensure, as far as possible, that it will have sufficient liquidity to meet its liabilities when they are due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Company''s reputation.

The Company''s treasury department is responsible for managing the short term and long term liquidity requirements. Liquidity situation is reviewed regularly by the management.

The Company is equity financed which is evident from the capital structure. Further, the Company has always been a net cash company with cash and bank balances along with investment which is predominantly investment in liquid and short term mutual funds.

32 RELATED PARTY TRANSACTIONS

The related parties as per the terms of Ind AS-24,"Related Party Disclosures", (specified under section 133 of the Companies Act, 2013, read with Rule 7 of Companies (Accounts) Rules, 2015) are disclosed below:-

A Names of related parties and description of relationship:

1 Holding Company ADI BPO Services Limited

2 Subsidiary Company MPS North America LLC

MAG AB, Sweden (refer note 3 below)

3 Downstream Subsidiary Company Magplus Inc,USA (merged with its holding company w.e.f 10 August 2017)

4 Company Under Common ControlADI Media Private Limited

5 Key management personnel (KMP) Mr. Nishith Arora, Non-Executive Chairman w.e.f 15 May 2017

(Executive Chairman and Whole time Director till 14 May 2017)

Mr. Rahul Arora, Chief Executive Officer and Whole Time Director

Ms. Yamini Tandon, Non- Executive Director

Mr. D E Udwadia, Non-Executive Director

Mr. Ashish Dalal, Non-Executive Director (till 9 March 2018)

Mr. Vijay Sood, Non-Executive Director

Mr. Sunit Malhotra, CFO & Company Secretary (Company Secretary w.e.f 23 October 2017) and Director of holding company till 15 January 2018

Mr. Hitesh Jain, Company Secretary till 12 September 2017

Ms. Gagan Sahni Tyagi, Director of holding company

Ms. Pooja Singh (appointed as Director of holding company w.e.f 15

January 2018)

6 Firm in which KMP is a partner M/s Udwadia & Co.

Notes:

1 No amount has been written off/written back during the year in respect of dues from/to related parties.

2 Company has taken one rent free premises at Noida location w.e.f. 1 June 2014 and one rented premises at Gurugram location w.e.f 1 September 2017.

3 The Board of Directors of the Company at their meeting held on 25 January 2017 approved for liquidation of MAG AB, Sweden, a subsidiary company. MAG AB, vide approval of its shareholders at their meeting held on 16 February 2017, has filed for voluntary liquidation procedure in February 2017. MAG AB, was liquidated in December 2017 and ceased to be a subsidiary of the Company. Residual fund of MAG AB has been disbursed to the Company in extinguishment of 100 percent shareholding of the Company in MAG AB. The difference between the net assets and investment value amounting to INR 220.55 lacs has been considered as gain on disposal of investment and presented under the head "other income".

The above amounts are based on the notice of demand/Assessment Orders/claims by the relevant authorities /parties and the Company is contesting these claims. Outflows, if any, arising out of these claims would depend on the outcome of the decisions of the appellate authorities and the Company''s rights for future appeals before the judiciary. The management believes that the ultimate outcome of these proceedings will not have a material adverse effect on the Company''s financial position and results of operations.

34 COMMITMENTS AS AT YEAR END

a) Estimated amount of contracts remaining to be executed on capital account (net of advances) INR 38.72 Lacs

(31 March 2017: INR 68.42 Lacs; 1 April 2016: INR 25.73 Lacs).

b) Leases:

(i) The Company has entered into cancellable and non-cancellable operating leases for office premises. The aggregate lease rentals payable are charged as expenses. Rental payments under such leases are INR 410.09 Lacs (31 March 2017: INR 413.19 Lacs) has been included under rent expense in note 24.

(ii) The Company has operating lease arrangements in respect of vehicles which are cancellable, range between

1 years to 5 years. The aggregate lease rentals payable are charged as expenses. Rental payments under such leases are INR 21.59 Lacs (31 March 2017: INR 23.31 Lacs) has been included under rent expense in note 24.

(iii) The Company has significant operating lease arrangements which are non-cancellable for a period up to

3 years. The leases have varying terms, escalation clauses and renewal rights. On renewal, the terms of the leases are renegotiated.

35 CORPORATE SOCIAL RESPONSIBILITY (CSR) EXPENSE

As required by Section 135 of the Companies Act 2013, a Corporate Social Responsibility (CSR) committee has been formed by the Company. The areas for CSR activities include imparting primary education to under privileged girls, computer education to underprivileged children and building intellect and instill higher values of life through education and any other area the Board may find appropriate. Gross amount required to be spent by the Company during the year was INR 191.79 Lacs (for the year ended 31 March 2017; INR 170.53 Lacs).

36 BUSINESS COMBINATION:

The Company during the year ended 31 March 2017, had given an purchase consideration of INR 428.16 Lacs in cash to acquire certain assets including application platform business from Digital River, Inc. a company based in USA vide asset purchase agreement dated 3 February 2017 which qualifies for business combination accounting. The customary condition for consummation of the said acquisition has been completed subsequent to year ended 31 March 2017, i.e. with effect from 1 April 2017. The acquisition of THINK Subscription strengthens the Company''s platform capabilities to include subscription management and fulfillment solutions.

Following assets and liabilities have been recorded on fair value through business combination accounting by the Company :

The goodwill of INR 50.27 Lacs comprises value of acquired workforce and expected synergies arising from the acquisition. Goodwill is deductible for income tax purposes.

The company incurred acquisition related cost of INR 5.37 Lacs on legal fees and due diligence costs. These cost have been included in legal and professional fees under the head ""other expenses"".

38 There has been no delay in transferring amounts and shares, required to be transferred, to the Investor Education and Protection Fund by the Company.

40 The Board of Directors of the Company have approved the scheme of amalgamation involving amalgamation of ADI BPO Services Limited (post demerger of its ''Infrastructure Management Business Undertaking'' into ADI Media Private Limited) into the Company. The scheme has been filed with the stock exchanges for their approval. The Company will file the scheme with NCLT for further process once approved.

41 Subsequent to year end, the Company has entered into definitive agreements on 24 April 2018 for the acquisition of the enterprise e-Learning business of Tata Interactive Systems in India (a division of Tata Industries Limited, a company incorporated in India having its registered office in Mumbai) and its branches in USA, UK, Canada and UAE and for the entire paid up equity share capital held by Tata Industries Limited in its wholly owned subsidiaries, Tata Interactive Systems AG, Switzerland and Tata Interactive Systems GmbH, Germany. The Company is confident that the transactions will close in the near future on fulfillment of mutually agreed closing conditions.

42 The Company publishes this financial statement along with the consolidated financial statements. In accordance with Ind AS 108, Operating Segments, the Company has disclosed the segment information in the consolidated financial statements.

43 DISCLOSURE AS PER PARA A OF SCHEDULE V OF THE LISTING REGULATIONS

There are no loans and advances in the nature of loans given to subsidiaries, associates, firms/companies in which directors are interested.

44 FIRST-TIME ADOPTION OF IND AS Transition to Ind AS

These are the Company''s first financial statements prepared in accordance with Ind AS.

The significant accounting policies set out in note 2 have been applied in preparing the financial statements for the year ended 31 March 2018, the comparative information presented in these financial statements for the year ended 31 March 2017 and in the preparation of an opening Ind AS balance sheet at 1 April 2016 (the Company''s date of transition). In preparing its opening Ind AS balance sheet, the Company has adjusted the amounts reported previously in financial statements prepared in accordance with the accounting standards notified under Companies (Accounting Standards) Rules, 2006 (as amended) and other relevant provisions of the Act (previous GAAP or Indian GAAP). An explanation of how the transition from previous GAAP to Ind AS has affected the Company''s financial position, financial performance and cash flows is set out in the following tables and notes.

(A) Exemptions and exceptions availed

Set out below are the applicable Ind AS 101 optional exemptions and mandatory exceptions applied in the transition from previous GAAP to Ind AS.

Ind AS optional exemptions

1 Business combinations

Ind AS 101 provides the option to apply Ind AS 103 "Business Combinations" prospectively from the

44 FIRST-TIME ADOPTION OF IND AS (contd...)

transition date or from a specific date prior to the transition date. This provides relief from full retrospective application that would require restatement of all business combinations prior to the transition date. The Company elected to apply Ind AS 103 prospectively to business combinations occurring after its transition date.

2 Deemed cost

Ind AS 101 permits a first-time adopter to elect to continue with the carrying value for all of its property, plant and equipment as recognized in the financial statements as at the date of transition to Ind AS, measured as per the previous GAAP and use that as its deemed cost as at the date of transition. This exemption can also be used for intangible assets and investment property covered by Ind AS 38 Intangible Assets and Ind AS 40 Investment Property respectively . Accordingly, the Company has elected to measure all of its property, plant and equipment, investment property and intangible assets at their previous GAAP carrying value.

3 Investments in subsidiaries

Ind AS 101 permits the first time adopter to measure investment in subsidiaries in accordance with Ind AS 27 at one of the following:

a) cost determined in accordance with Ind AS 27 or

b) Deemed cost:

(i) fair value at date of transition

(ii) previous GAAP carrying amount at that date.

The Company has elected to consider previous GAAP carrying amount of its investments in subsidiaries on the date of transition to Ind AS as its deemed cost for the purpose of determining cost in accordance with principles of Ind AS 27-"Separate financial statements"

Ind AS mandatory exceptions

1 Estimates

An entity''s estimates in accordance with Ind AS at the date of transition to Ind AS shall be consistent with estimates made for the same date in accordance with previous GAAP (after adjustments to reflect any difference in accounting policies), unless there is objective evidence that those estimates were in error.

Ind AS estimates as at 1 April 2016 are consistent with the estimates as at the same date made in conformity with previous GAAP. The Company made estimates for following items in accordance with Ind AS at the date of transition as these were not required under previous GAAP:

- Impairment of financial assets based on expected credit Loss model.

- Determination of the discounted value for financial instruments carried at amortized cost.

- Fair valuation of financial instruments carried at fair value through profit and loss.

2 Classification and measurement of financial assets

Ind AS 101 requires an entity to assess classification of financial assets on the basis of the facts and circumstances existing as on the date of transition. Further, the standard permits measurement of financial assets accounted at amortized cost based on facts and circumstances existing at the date of transition if retrospective application is impracticable.

Accordingly, the Company has determined the classification of financial assets based on facts and circumstances that exist on the date of transition. Measurement of the financial assets accounted at amortized cost has been done retrospectively except where the same is impracticable.

i) Others include adjustments resulting from classification of actuarial gain/(loss) to OCI, etc.

44 (E) Other than effect of certain reclassifications due to difference in presentation, there was no other material effect of cash flow from operating, financing, investing activities for all periods presented.

44 (F) Notes to the Reconciliations

1 Security deposits

Under the previous GAAP, interest free lease security deposits (that are refundable in cash on completion of the lease term) are recorded at their transaction value. Under Ind AS, all financial assets are required to be recognized at fair value. Accordingly, the company has fair valued these security deposits under Ind AS. Difference between the fair value and transaction value of the security deposit has been recognized as prepaid rent. Consequent to this change, the amount of security deposits decreased by INR 62.40 Lacs as at 31 March 2017 (1 April 2016 INR 29.29 Lacs). The prepaid rent increased by INR 58.61 Lacs as at 31 March 2017 (1 April2016 INR 26.41 Lacs). Total equity decreased by INR 3.79 Lacs as on 31 March 2017 (1 April 2016 INR 2.88 Lacs). The profit for the year and total equity as at 31 March 2017 decreased by INR 0.91 Lacs due to amortisation of the prepaid rent of INR 10.18 Lacs which is partially off-set by the notional interest income of INR 9.27 Lacs recognized on security deposits.

2 Current Investments

Under the previous GAAP, Current investments were carried at lower of cost and fair value. Under Ind AS, these investments are required to be measured at fair value. The resulting fair value changes of these investments have been recognized in retained earnings as at the date of transition and subsequently in the profit or loss for the year ended 31 March 2017. Accordingly, total equity has been increased by INR 5.39 Lacs as at 31 March 2017 (1 April 2016 INR 12.21 Lacs) and profit for the year ended

31 March 2017 decreased by INR 6.82 Lacs.

3 Trade Receivables

As per Ind AS 109, the company is required to apply expected credit loss model for recognising the allowance for doubtful debts. As a result, the allowance for doubtful debts increased/(decreased) by INR 5.67 Lacs as at 31 March 2017 (1 April 2016 (INR 13.43 Lacs)). Consequently, the total equity as at

31 March 2017 increased/(decreased) by (INR 5.67 Lacs) (1 April 2016 INR 13.43) and profit for the year ended 31 March 2017 decreased by INR 19.10 Lacs.

4 Derivative Instruments - Foreign Exchange Forward Contracts

Under Previous GAAP, unrealized net loss on foreign exchange forward contracts, if any, as at each

44 FIRST-TIME ADOPTION OF IND AS (contd...)

Balance Sheet date was provided for. Under Ind AS, foreign exchange forward contracts are mark-to-market as at Balance Sheet date and unrealised net gain or loss is recognized in profit and loss statement.

Unrealized mark-to-market gain of INR 87.07 Lacs on forward contracts are recognized as at 1 April 2016. This amount was realised during the year ended 31 March 2017.

5 Deferred Tax

Under previous GAAP requires deferred tax accounting using the income statement approach, which focuses on differences between taxable profits and accounting profits for the period. Ind AS 12 requires entities to account for deferred taxes using the balance sheet approach, which focuses on temporary differences between the carrying amount of an asset or liability in the balance sheet and its tax base. The application of Ind AS 12 approach has resulted in recognition of deferred tax on new temporary differences which was not required under Indian GAAP. Also deferred tax have been recognized on the adjustment made on transition to Ind AS.

Consequent to the above, the total equity is increased/(decreased) by INR 1.40 Lacs as at 31 March 2017 (1 April 2016: (INR 38.02 Lacs)) and profit for the year ended 31 March 2017 increased by INR 39.42 Lacs.

6 Re-measurements of post-employment benefit obligations

Under Ind AS, re-measurements i.e. actuarial gains and losses and the return on plan assets on the net defined benefit obligation are recognized in other comprehensive income instead of profit or loss. Under the previous GAAP, these re-measurements were forming part of the profit or loss for the year. As a result of this change, the profit before tax for the year ended 31 March 2017 increased by INR 58.76 Lacs. There is no impact on the total equity as at 1 April 2016 and 31 March 2017.

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Mar 31, 2017

1: COMPANY OVERVIEW

MPS Limited (“the Company”) is engaged in the business of providing publishing solutions viz., type setting and data digitization services for overseas publishers and supports international publishers through every stage of the author-to-reader publishing process and provides a digital - first strategy for publishers across content production, enhancement and transformation, delivery and customer support. This digital focus spans across STM / academic, higher education, trade and directory markets.

The Company offers a diverse geographic spread with production facilities registered under the Software Technology Park of India (STPI) scheme in Chennai, Noida, Gurgaon and Bengaluru. The Company also operates with other production facilities in Dehradun and editorial and marketing offices in United States. The Company’s multi location presence helps it in executing various customer requirements efficiently.

Note 2.1 The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses.

Note 2.2 There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company.

Note 3 EMPLOYEE BENEFIT PLANS

1.a. Defined contribution plans

The Company makes contributions to Provident Fund, 401 (k) plan, Superannuation Fund and Employee State Insurance (ESI) Scheme for qualifying employees. Under the Schemes, the Company is required to contribute a specified percentage of the payroll costs to fund the benefits. The Company recognised Rs.450.80 Lacs (Previous year Rs.427.12 Lacs) for Provident Fund contributions, Rs.8.20 Lacs (Previous year Rs.3.30 Lacs) for 401 (k) plan, Rs.6.30 Lacs (Previous year Rs.6.30 Lacs.) for Superannuation Fund contributions and Rs.92.92 Lacs (Previous year Rs.82.62 Lacs) for ESI in the Statement of Profit and Loss. The contributions payable to these plans by the Company are at rates specified in the rules of the Schemes.

1.b. Defined benefit plans

The Company offers the following employee benefit scheme to its employees:

i. Gratuity

The following table sets out the funded status of the defined benefit schemes and the amount recognised in the financial statements:

Note 4 SEGMENT INFORMATION

The Company operates in one business segment of providing publishing solutions viz., typesetting and data digitization services and is considered to constitute a single segment in the context of primary segment reporting as prescribed by Accounting Standard 17 - “Segment Reporting” specified in Rule 7 of Companies (Accounts) Rules, 2014 and Companies (Accounting Standards) Amendment Rules, 2016.

Note 5 RELATED PARTY TRANSACTIONS

In the normal course of business, the Company enters into transactions at arm’s length with affiliated companies, its ultimate holding company and key management personnel. The names of related parties of the Company, as required to be disclosed under Accounting Standard 18 “Related Party Disclosures” is as follows:

Note 6 As required by Section 135 of the Companies Act 2013, a Corporate Social Responsibility (CSR) committee has been formed by the Company. The areas for CSR activities include imparting primary education to under privileged girls, computer education to underprivileged children and building intellect and instill higher values of life through education and any other area the Board may find appropriate. Gross amount required to be spent by the Company during the year was Rs.70.53 Lacs.

Note 7 The Company during the year ended 31 March 2017, has given an advance of Rs.428 Lacs to acquire group of assets including application platform business from Digital River, Inc. a company based in USA vide asset purchase agreement dated 3 February 2017. The customary condition for consummation of the said acquisition has been completed subsequent to year ended 31 March 2017, i.e. with effect from 1 April 2017.

Note 8 DISCLOSURE AS PER PARA A OF SCHEDULE V OF THE Listing Regulations

There are no loans and advances in the nature of loans given to subsidiaries, associates, firms / companies in which directors are interested.

Note 9 PREVIOUS YEAR’S FIGURES

Previous year’s figures have been regrouped / reclassified wherever necessary to correspond with the current year’s classification / disclosure.

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Mar 31, 2016

1. Disclosure required under section 22 of the Micro, Small & Medium Enterprises Development Act, 2006:

The information required to be disclosed under the Micro, Small and Medium enterprises Development Act, 2006 has been determined to the extent such parties have been identified on the basis of information available with the Company. There are no over dues to parties on account of principal amount and / or interest and accordingly, no additional disclosures are required.

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

3. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company.

4. During the previous year 2014-15, pursuant to the transition provisions prescribed in Schedule II to the Companies Act, 2013, the Company had fully depreciated the carrying value of assets (determined after considering the change in the method of depreciation from WDV to SLM), net of residual value, where the remaining useful life of the asset was determined to be nil as on 01 April 2014, and had adjusted an amount of '' 168.91 lacs (net of deferred tax of '' 85.83 lacs) against the opening Surplus balance in the Statement of Profit and Loss under Reserves and Surplus.

Note 5. EMPLOYEE BENEFIT PLANS

1.a. Defined contribution plans

The Company makes contributions to Provident Fund , Superannuation Fund and Employee State Insurance (ESI) Scheme for qualifying employees. Under the Schemes, the Company is required to contribute a specified percentage of the payroll costs to fund the benefits. The Company recognised '' 399.52 Lacs (Previous year '' 367.44 Lacs.) for Provident Fund contributions, '' 6.30 Lacs (Previous year '' 6.30 Lacs.) for Superannuation Fund contributions and '' 82.62 Lacs (Previous year '' 70.40 Lacs) for ESI in the Statement of Profit and Loss. The contributions payable to these plans by the Company are at rates specified in the rules of the Schemes.

Note 6. SEGMENT INFORMATION

The Company operates in one business segment of providing publishing solutions viz., typesetting and data digitization services and is considered to constitute a single segment in the context of primary segment reporting as prescribed by Accounting Standard 17 - "Segment Reporting".

Note 7. DISCLOSURE AS PER CLAUSE 32 OF THE LISTING AGREEMENTS WITH THE STOCK EXCHANGES

There are no Loans and advances in the nature of loans given to subsidiaries / companies in which directors are interested.

Note 8. PREVIOUS YEAR''S FIGURES

Previous year''s figures have been regrouped / reclassified wherever necessary to correspond with the current year''s classification / disclosure.

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Mar 31, 2015

1.CORPORATE INFORMATION

Background

MPS Limited ("the Company") is engaged in the business of providing publishing solutions viz., type setting and data digitization services for overseas publishers and supports international publishers through every stage of the author -to- reader publishing process and provides a digital-first strategy for publishers across content production, enhancement and transformation, delivery and customer support. This digital focus spans across STM/academic, higher education, trade and directory markets.

The Company offers a diverse geographic spread with production facilities registered under the Software Technology Park of India (STPI) scheme in Chennai, New Delhi, Gurgaon and Bengaluru. The Company also operates with other production facilities in Dehradun, Noida and editorial and marketing offices in United States and United Kingdom.

The Company has a wholly owned subsidiary namely MPS North America LLC (MPS NA LLC) as a Limited Liability Company under the laws of the State of Florida in the United States of America.

2. SHARE CAPITAL

(ii) Terms/rights attached to equity shares

The Company has only one class of equity shares having a par value of Rs.10 / per share. Each holder of equity shares is entitled to one vote per share. In the event of liquidation of the Company, the holders of equity shares will be entitled to receive any of the remaining assets of the Company, after distribution of all preferential amount. The distribution will be in proportion to number of equity shares held by the shareholders.

3. ADDITIONAL INFORMATION TO THE FINANCIAL STATEMENTS INRinLacs

Note Particulars As at 31- As at 31 mar-2015 -Mar -2014

25.1 Contingent liabilities and commitments (to the extent not provided for)

(i) Contingent liabilities

Claims against the Company not acknowledged as debts

(a) Income tax 599.55 853.58

(b) Service tax 564.98 675.56

(c) Employee state insurance(ESI) and Provident fund (PF) vendor payments) 6.59 6.56

(d) Other claims 196.40 256.00

The above amounts are based on the notice of demand / Assessment Orders / claims by the relevant authorities / parties and the Company is contesting these claims. Outflows, if any, arising out of these claims would depend on the outcome of the decisions of the appellate authorities and the Company's rights for future appeals before the judiciary.

INRinLacs

Commitments As at 31- As at 31 mar-2015 -Mar -2014

(ii) Estimated amount of contracts remaining to be executed on capital account and not provided for Tangible assets 22.34 57.52

22.34 57.52

4. Disclosure required under section 22 of the Micro, Small & Medium Enterprises Development Act, 2006:

The information required to be disclosed under the Micro, Small and Medium enterprises Development Act, 2006 has been determined to the extent such parties have been identified on the basis of information available with the Company. There are no over dues to parties on account of principal amount and / or interest and accordingly, no additional disclosures are required. No reimbursements are expected.

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

6. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company.

7.Change in Accounting Policy

a. During the year, the Company changed its accounting policy of providing depreciation on fixed assets effective April 01,2014. Depreciation is now provided on Straight Line basis for all assets which was hitherto providing on Written Down Value basis for some assets and Straight Line basis for others.

The depreciation expense in the Statement of Profit and Loss for the year is higher by '93.65 lacs consequent to the above change in the method of depreciation.

b. Pursuant to the transition provisions prescribed in Schedule II to the Companies Act, 2013, the Company has fully depreciated the carrying value of assets (determined after considering the change in the method of depreciation from WDV to SLM), net of residual value, where the remaining useful life of the asset was determined to be nil as on April 1, 2014, and has adjusted an amount of Rs.168.91 lacs (net of deferred tax of Rs.85.83 lacs) against the opening Surplus balance in the Statement of Profit and Loss under Reserves and Surplus.

8. EMPLOYEE BENEFIT PLANS

a. Defined contribution plans

The Company makes contributions to Provident Fund , Superannuation Fund and Employee State Insurance (ESI) Scheme for qualifying employees. Under the Schemes, the Company is required to contribute a specified percentage of the payroll costs to fund the benefits. The Company recognised INR 367.44 Lacs (Previous year INR 329.19 Lacs.) for Provident Fund contributions , INR 6.30 Lacs (Previous year INR 6.30 Lacs.) for Superannuation Fund Contributions and INR 70.40 Lacs (Previous year INR 61.94 Lacs) for ESI in the Statement of Profit and Loss. The contributions payable to these plans by the Company are at rates specified in the rules of the schemes.

9. SEGMENT INFORMATION

The Company operates in one business segment of providing publishing solutions viz., typesetting and data digitization services and is considered to constitute a single segment in the context of primary segment reporting as prescribed by Accounting Standard 17 - "Segment Reporting".

10. RELATED PARTY TRANSACTIONS

In the normal course of business, the Company enters into transactions at arm's length with affiliated companies, its ultimate holding company and key management personnel. The names of related parties of the Company, as required to be disclosed under Accounting Standard 18 "Related Party Disclosures" is as follows:

a. Details of related parties:

Description of relationship Names of related Parties

(i) Holding Company ADI BPO Services Limited

(ii) Subsidiary Company MPS North America LLC

M. Nishith Arora, Chief Executive Officer

(iii) Key Management Mr. Rahul Arora, Director Personnel (KMP) Ms. Yamini Tandon, Director (w.e.f 11-Aug-2014)

Ms. Yamini Tandon, Vice President-Service Delivery ( w.e.f 17-Feb- (IV) Relatives of KMP 2014 till 10-Aug-2014)

(i) Rs. 48.56 Lacs paid as remuneration during the financial year 2014-15 to Mr. Rahul Arora, Whole Time Director. The Company had earlier filed an application on November 8, 2013 before the Central Government (Ministry of Corporate Affairs) , since Mr. Rahul Arora was not a resident in India for a continuous period of 12 months immediately preceding the date of his appointment as a Whole Time Director of the Company. Pursuant to the provisions of Section 196 and 197 read with Clause (e), Part I, Schedule V of the Companies Act 2013, the Company, in continuation, has applied afresh vide its application in Form MR 2 filed on March 11,2015, and the application is currently pending.

(ii) Rs.18.49 Lacs paid to Ms. Yamini Tandon, appointed as Whole Time Director of the Company for a period of 5 years with effect from August 11,2014. The Company, pursuant to the provisions of Section 196 and 197 read with Clause (e), Part I, Schedule V of the Companies Act 2013, has applied to Central Government (Ministry of Corporate Affairs) vide its application in Form MR 2 filed on November 6, 2014 since Ms. Yamini Tandon was not a resident in India for a continuous period of 12 months immediately preceding the date of her appointment as a Whole Time Director and the application is currently pending.

11. DISCLOSURE AS PER CLAUSE 32 OF THE LISTING AGREEMENTS WITH THE STOCK EXCHANGES

There are no Loans and advances in the nature of loans given to subsidiaries / companies in which directors are interested.

12. PREVIOUS YEAR'S FIGURES

Previous year's figures have been regrouped / reclassified wherever necessary to correspond with the current year's classification / disclosure.

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Mar 31, 2014

1. CORPORATE INFORMATION

1.1 Background

MPS Limited ("the Company") is engaged in the business of providing publishing solutions viz., type setting and data digitization services for overseas publishers and supports international publishers through every stage of the author-to-reader publishing process and provides a digital-first strategy for publishers across content production, enhancement and transformation, delivery and customer support. This digital focus spans across STM/academic, higher education, trade and directory markets.

The Company ofers a diverse geographic spread with production facilities registered under the Software Technology Park of India (STPI) scheme in Chennai, New Delhi, Gurgaon and Bengaluru. The Company also operates with other production facilities in Dehradun, Noida and editorial and marketing ofces in United States and United Kingdom.

During the year, the Company has incorporated a wholly owned subsidiary namely MPS North America LLC (MPS NA LLC) on 29 May 2013, as a Limited Liability Company under the laws of the State of Florida in the United States of America.

1. CORPORATE INFORMATION

1.1 Background

MPS Limited ("the Company") is engaged in the business of providing publishing solutions viz., type setting and data digitization services for overseas publishers and supports international publishers through every stage of the author-to-reader publishing process and provides a digital-first strategy for publishers across content production, enhancement and transformation, delivery and customer support. This digital focus spans across STM/academic, higher education, trade and directory markets.

The Company ofers a diverse geographic spread with production facilities registered under the Software Technology Park of India (STPI) scheme in Chennai, New Delhi, Gurgaon and Bengaluru. The Company also operates with other production facilities in Dehradun, Noida and editorial and marketing ofces in United States and United Kingdom.

During the year, the Company has incorporated a wholly owned subsidiary namely MPS North America LLC (MPS NA LLC) on 29 May 2013, as a Limited Liability Company under the laws of the State of Florida in the United States of America.

Note 2 Additional information to the financial statements

As at As at 31-Mar-2014 31-Mar-2013 Note Particulars INR in Lacs INR in Lacs

2.1 Contingent liabilities and commitments (to the extent not provided for)

(i) Contingent liabilities

Claims against the Company not acknowledged as debts

(a) Income Tax

Relating to transfer pricing adjustments and disallowance of export 853.58 766.27 commission and other deductions

(b) Service Tax

Penalty and interest for delayed payments, disallowance of input credit 675.56 520.29 and demand on overseas commission

(c) Employee State Insurance (ESI) and Provident Fund (PF) vendor payments 6.56 6.56

(d) VAT - 6.52

(e) Other Claims 256.00 -

The above amounts are based on the notice of demand/Assessment Orders/claims by the relevant authorities/parties and the Company is contesting these claims. Outflows, if any, arising out of these claims would depend on the outcome of the decisions of the appellate authorities and the Company''s rights for future appeals before the judiciary No reimbursements are expected.

2.3 There are no micro and small enterprises, to whom the Company owes dues, which are outstanding for more than 45 days during the year and also as at 31-Mar-2014 (PY - INR Nil). This information has been identified on the basis of information available with the Company. This has been relied upon by the auditors

2.4 Employee benefit plans

2.4.1.a Defined contribution plans

The Company makes contributions to Provident Fund, Superannuation Fund and Employee State Insurance (ESI) Scheme for qualifying employees. Under the Schemes, the Company is required to contribute a specified percentage of the payroll costs to fund the benefits. The Company recognised INR 329.19 Lacs (Previous year INR 276.62 Lacs.) for Provident Fund contributions, INR 6.30 Lacs (Previous year INR 6.00 Lacs.) for Superannuation Fund Contributions and INR 61.94 Lacs (Previous year INR 66.81 Lacs) for ESI in the Statement of Profit and Loss. The contributions payable to these plans by the Company are at rates specified in the rules of the schemes.

2.4.2.b Defined benefit plans

The Company offers the following employee benefit schemes to its employees: i. Gratuity (included as part of contribution to provident and other funds in note 24, employees benefit expenses)

The following table sets out the funded status of the defined benefit schemes and the amount recognised in the financial statements:

2.5 Segment information

The Company operates in one business segment of providing publishing solutions viz., typesetting and data digitization services and is considered to constitute a single segment in the context of primary segment reporting as prescribed by Accounting Standard 17 - "Segment Reporting".

3.c The remuneration to Key Management Personnel includes Rs. 48.98 Lacs paid as remuneration to Mr Rahul Arora, Whole Time Director effective from August 12, 2013. An application was made to the Central Government pursuant to Section 269, 310 read with Part A of Schedule XIII since Mr. Rahul Arora was not a resident in India for a continuous period of 12 months immediately preceding the date of his appointment as a Whole Time Director. The Central Government has taken on record the aforesaid application and has informed vide their letter dated January 9, 2014 that the matter will be further examined on receipt of the shareholders'' approval. Accordingly, the above is subject to approval of the shareholders and the Central Government

4 Disclosure as per Clause 32 of the Listing Agreements with the Stock Exchanges

There are no Loans and advances in the nature of loans given to subsidiaries/companies in which directors are interested.

5 Previous Year''s figures

Previous year''s figures have been regrouped/reclassified wherever necessary to correspond with the current year''s classification/ disclosure.

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Mar 31, 2013

1. CORPORATE INFORMATION

1.1 Background

MPS Limited, (the Company) is engaged in the business of providing publishing solutions viz., typesetting and data digitization services for overseas publishers. The Company has a 100% Export Oriented Unit in Bengaluru, and units registered under the Software Technology Park of India (STPI) scheme that are located in Chennai, Delhi, Gurgaon and Dehradun. The Company also operates through its branch in United States of America. The Company provides Publishing services relating to typesetting of books and journals, composing of Yellow Page Advertisements and catalogues, data coding, conversion, indexing, editing, copy editing, editorial services, software development, maintenance and support to global publishers.

On 11-October-2011, ADI BPO Services Limited entered into a Share Purchase Agreement with HM Publishers Holdings Limited, the erstwhile Holding Company and purchased its entire shareholding in the Company, comprising 10,339,980 equity shares representing 61.46% of the issued, subscribed and paid up equity capital of the Company. As at 31-March-2013, ADI BPO Services Limited, the holding company held 12,616,996 equity shares representing 75% of the issued, subscribed and paid up equity capital of the Company.

2.1 Employee benefit plans

2.1.a Defined contribution plans

The Company makes contributions to Provident Fund, Superannuation Fund and Employee State Insurance (ESI) Scheme for qualifying employees. Under the Schemes, the Company is required to contribute a specified percentage of the payroll costs to fund the benefits. The Company recognised INR 276.62 Lacs (15 months period ended 31 March, 2012 INR 379.44 Lacs.) for Provident Fund contributions, INR 6.00 Lacs (15 months period ended 31 March, 2012 INR 7.76 Lacs.) for Superannuation Fund Contributions and INR 66.81 Lacs (15 months period ended 31 March, 2012 INR 102.46 Lacs) for ESI in the Statement of Profit and Loss. The contributions payable to these plans by the Company are at rates specified in the rules of the schemes.

2.1.b Defined benefit plans

The Company offers the following employee benefit schemes to its employees:

i. Gratuity

The following table sets out the funded status of the defined benefit schemes and the amount recognised in the financial statements:

3.1 Segment information

The Company operates in one business segment of providing publishing solutions viz., typesetting and data digitization services and is considered to constitute a single segment in the context of primary segment reporting as prescribed by Accounting Standard 17 -''''Segment Reporting".

The Company''s operations are managed on a worldwide basis from India and they operate in four principal geographical areas viz., India, Europe, United States of America and Rest of the World. The secondary segment is identified to these geographical locations. Details of secondary segment by geographical locations are given below:

4 Subsequent to the year end, the Company has entered into a Membership Interest Purchase Agreement on May 10, 2013 with M/s Element LLC ("Element") and its members, for acquiring 100% ownership of Element , a Limited Liability Company located in Florida, USA for an aggregate consideration of approximately INR 1000 lacs. The proposed transaction is subject to fulfillment of certain terms and conditions as per the said Agreement.

5 Previous Year''s figures

The Board of Directors of the Company, at their meeting held on 15-November-2011, approved the change in the Company''s financial year from December to March. Accordingly, the financial statements for the previous period of 15 months are from 1-January-2011 to 31-March-2012. Hence, the figures for the current financial year of 12 months are not comparable with those of previous period.

As stated above since the Company''s financial statements for the previous period were prepared for the 15 month period from 1-January-2011 to 31-March-2012 and the Revised Schedule VI became effective from 1 April, 2011, the financial statements for the current year have been prepared under Revised Schedule VI for the first time. This has significantly impacted the disclosure and presentation made in the financial statements. Previous period''s figures have been regrouped / reclassified wherever necessary to correspond with the current year''s classification / disclosure.

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Mar 31, 2012

I. BACKGROUND

i. MPS Limited, (the Company) is engaged in the business of providing publishing solutions viz., typesetting and data digitization services for overseas publishers. The Company has a 100% Export Oriented Unit in Bengaluru, and units registered under the Software Technology Park of India (STPI) scheme that are located in Chennai, Delhi and Gurgaon. The Company also operates through its branches in United States of America and United Kingdom. The Company provides Publishing services relating to typesetting of books and journals, composing of Yellow Page Advertisements and catalogues, data coding, conversion, indexing, editing, copy editing, editorial services, software development, maintenance and support to global publishers.

ii. On 11-October-2011, HM Publishers Holdings Limited, the erstwhile holding Company, entered into a Share Purchase Agreement (SPA) with ADI BPO Services Limited (known as ADI BPO Services Private Limited upto 8-May-2012), a domestic Company, to sell its entire shareholding in the Company, comprising 10,339,980 equity shares representing 61.46% of the issued, subscribed and paid up equity capital of the Company. Following this agreement, the execution of the stake sale was concluded as an open-market block deal transaction on the National Stock Exchange and in terms of the Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 1997 and subsequent amendments thereto, open offer proceedings were initiated by ADI BPO Services Limited with a Public Announcement on 14-October- 2011 which were completed on 6-January-2012. Subsequent to the closure of the open offer proceedings, ADI BPO Services Limited has become the Holding Company with 76.27% shareholding.

iii. Consequent to the Scheme of amalgamation of the wholly owned subsidiaries of the Company, MPS Technologies Limited and MPS Content Services Inc., USA and its wholly owned subsidiary MPS Content Services India Private Limited, with the Company, with an appointed date of 31-December-2010, sanctioned by the Honourable High Court of Madras vide its order dated 29- June-2011, all the assets, liabilities and reserves as on 31-December-2010 of the said erstwhile subsidiaries (Transferor Companies) were recorded in the books of the Company at the respective values appearing in the books of the Transferor Companies without revaluation. The excess of the value of Investment in the books of the Company over the value of share capital and reserves of the Transferor Companies of Rs1,326.58 Lacs was adjusted against the reserves of the Company in accordance with the Scheme of Amalgamation. Accordingly an amount of Rs500 Lacs was adjusted against the General Reserves and the balance of Rs826.58 lacs against the surplus in Profit and Loss Account as on 31-December-2010.

The Profit and Loss Account for the 15 months ended 31-March-2012 accordingly includes the operations of the erstwhile subsidiaries while the same are not included in the Previous Year and hence are not comparable.

The Board of Directors of the Company, at their meeting held on 15-November-2011, approved the change in the Company's financial year from December to March. Accordingly, the financial statements are presented for the period from 1-January- 2011 to 31-March-2012. Hence, the figures for the current financial period are not comparable with those of the previous year. Previous year figures have been regrouped/reclassified wherever necessary to conform to current period's classification.

1. Issued, Subscribed and Paid-up Share Capital

Of the 1,68,22,668, equity shares (PY - 1,68,22,668 shares), 1,68,19,852 shares (PY - 1,68,19,852 shares) were allotted as fully paid up pursuant to contracts without payments being received in cash which includes 1,63,52,636 shares (PY - 1,63,52,636 shares) issued as Bonus Shares.

Of the above, 1,28,31,496 shares (PY - 1,03,39,980 shares) are held by ADI BPO Services Limited (PY - H M Publishers Holdings Ltd, United Kingdom), the Holding Company.

2. Secured Loan

(a) Working Capital Demand Loan / Cash credits availed by erstwhile subsidiary amounting to RsNil (PY - Rs371.66 Lacs) are secured by a guarantee given by HM Publishers Holdings Limited.

(b) Working Capital Demand Loan / Cash credits availed amounting to RsNil (PY - Rs600 lacs) are secured by inventories and book debts of the Company.

3. There are no micro and small enterprises, to whom the Company owes dues , which are outstanding for more than 45 days during the year and also as at 31-March-2012 (PY - RsNil). This information and that given in "Current Liabilities" in Schedule 10 has been identified on the basis of information available with the Company. This has been relied upon by the auditors.

The above amounts are based on the notice of demand / Assessment Orders by the relevant authorities and the Company is contesting these claims with the respective authorities. Outflows, if any, arising out of these claims would depend on the outcome of the decisions of the appellate authorities and the Company's rights for future appeals before the judiciary. No reimbursements are expected.

(b) The Company has received orders from service tax authorities disallowing input credit of service tax aggregating to Rs687.59 Lacs for the period June 2006 to December 2010. The Company has filed/is in the process of filing appeals against such orders. Based on legal opinion, the Company is of the view that the disallowance is not sustainable.

The Company has filed appeals against the service tax demand of Rs72 Lacs on overseas commission for the period from 18-April-2006 to 31-December-2006. The Company has been advised that in the event of the demand being upheld by the Appellate Authority, the Company being an exporter of services, is eligible to avail the tax as input credit.

Notes :

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

(ii) The estimate of future salary increases considered, takes into account the inflation , seniority, promotion, increments and other relevant factors.

(iii) The entire Plan Assets are managed by the Life Insurance Corporation of India (LIC). The details with respect to the composition of investments in the fair value of Plan Assets have not been disclosed in the absence of the necessary information.

(iv) The details of experience adjustments arising on account of plan assets and liabilities for the years 2007 to 2010 as required by Accounting Standard (AS) - 15 (Revised) "Employee Benefits" are not available in valuation report.

(v) The Company's best estimate, as soon as it can reasonably be determined of contributions expected to be paid to the plan during the annual period beginning after the balance sheet date RsNil.(PY - Rs89 Lacs)

The above disclosure excludes the figures of the overseas branch, as it is governed by the laws prevailing in the United States of America.

4. Segment Reporting:

The company operates in one business segment of providing publishing solutions viz., typesetting and data digitization services and is considered to constitute a single segment in the context of primary segment reporting as prescribed by Accounting Standard 17 - "Segment Reporting.

Notes

1. Related party relationships are as identified by the Company on the basis of information available and relied upon by the auditors.

2. No amount has been written back during the year in respect of dues to related parties.

5. Leases

The company has entered into cancellable and non-cancellable operating leases for office premises. Lease rentals recognized in respect of such operating leases in the statement of Profit and Loss Account is Rs1,044.55 Lacs ( PY - Rs780.17 Lacs)

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Dec 31, 2010

A. Background

MPS Limited, (the Company) is engaged in the business of providing typesetting and data digitization services for overseas publishers. The Company has a 100% Export Oriented Unit in Bengaluru, and units registered under the Software Technology Park of India (STPI) scheme that are located in Chennai, Delhi and Gurgaon. In March, 2009, the Company had set up a Unit at Noida which is located in a Special Economic Zone notified area. The Company also operates through its branches in United States of America and United Kingdom. The Company provides Publishing Services relating to typesetting of books and journals, composing of Yellow Page Advertisements and catalogues, data coding, conversion, indexing, editing, copy editing and editorial services to global publishers.

MPS Limited had two direct subsidiaries MPS Technologies Limited and MPS Content Services Inc. USA (formerly ICC Macmillan Inc. USA) MPS Content Services India Private Limited (formerly ICC India Private Limited) was a subsidiary of MPS Content Services Inc. USA.

The Board of Directors of the Company, at its meeting held on 10th January 2011, approved a Scheme of Amalgamation pursuant to Sections 391 to 394 of the Companies Act, 1956 and Oregon Business Corporation Act, USA involving the Amalgamation of the wholly owned subsidiaries of the Company, MPS Technologies Ltd. and MPS Content Services Inc. USA and its wholly owned subsidiary MPS Content Services India Private Limited with the parent company, MPS Limited (the Company), with effect from 31 December 2010, (Appointed Date'). This Scheme has been sanctioned by the Honourable High Court of Madras vide its order dated 15th June 2011.

On an application made by the Company, the Registrar of Companies (ROC) vide its letter dated 6th June 2011 has granted extension of time for holding the Annual General Meeting for a period of three months upto 30th September, 2011.

Consequent to the sanction of the above scheme:

1. All the assets, liabilities and reserves of MPS Technologies Limited, MPS Content Services Inc. USA and its subsidiary MPS Content Services India Private Limited (Transferor Companies) have been recorded in the books of the Company at the respective values appearing in the books of the Transferor Companies without revaluation.

2. The excess of the value of Investment in the books of the parent company over the value of share capital and reserves of the erstwhile subsidiaries of Rs. 1326.58 Lacs has to be adjusted against the reserves of the Transferee Company in accordance with the Scheme of Amalgamation. Accordingly an amount of Rs. 500 Lacs has been adjusted against the General Reserves and the balance has been adjusted against the surplus in Profit and Loss Account.

3. Contingent Liability: (a) Disputed Demands

Name of the Statute Nature of Dues Rs. In Lacs

Income Tax Act, 1961 Income Tax 5.21 (PY - 5.21) demands of erstwhile subsidiaries

Income Tax Act, 1961 IncomeTax 529.81 (PY - Nil) demands

Income Tax Act, 1961 IncomeTax 73.70 (PY - Nil) demands

Income Tax Act, 1961 IncomeTax 1.56 (PY -1.56) demands of erstwhile subsidiaries

Section 66A of Finance Act Service Tax 227.77 (PY - 227.77) demands

Section 66A of Finance Act Service Tax 99.99 (PY - Nil) demands

Section 66A of Finance Act Service Tax 39.54 (PY - Nil) demands

Section 66A of Finance Act Service Tax 5.29 (PY - Nil) demands

Section 66A of Finance Act Service Tax 9.66 (PY-Nil) demands

Name of the Period Forum where dispute is pending Statute

Income Tax Act, Asst Year 2005-06 Income Tax Appellate Tribunal, 1961 Chennai

Income Tax Act, Asst Year 2007-08 Deputy Commissioner of Income 1961 Tax, Chennai

Income Tax Act, Asst Year 2007-08 Deputy Commissioner of Income 1961 Tax, Chennai Income Tax Act, Asst Year 2007-08 Commissioner of Income Tax 1961 (Appeals), Chennai

Section 66A of July 2003 to Customs and Excise Service Finance Act Dec 2006 Tax Appellate Tribunal, Bengaluru

Section 66A of Oct 2007 to Customs and Excise Service Finance Act Sept 2008 Tax Appellate Tribunal, Bengaluru

Section 66A of Jan 2007 to Commissioner of Service Tax, Finance Act Sep 2007 Bengaluru

Section 66A of Aug 2007 to Commissioner of Service Tax, Finance Act Sept 2007 Bengaluru

Section 66A of Oct 2007 to Commissioner of Service Tax, Finance Act Dec 2007 Bengaluru

(b) No provision has been considered for Service Tax amounting to Rs.227.77 Lacs on overseas commission paid for the period from 1 July, 2003 to 31 December, 2006, as the demands raised by the Authorities for this period is being contested by the Company. The Service Tax for the period from January, 2007 to December, 2010 together with interest amounting to Rs.291.85 Lacs and has been fully remitted. Interest on delayed remittance of Service Tax Rs.52.36 Lacs has been provided for.

(c) As on 31 December, 2010, the Company has appealed against the disallowance of Service Tax claim of Rs.190.54 Lacs. Subsequent to the year end, the company has appealed against disallowance of Rs. 7.99 Lacs. In the opinion of the management, the disallowance is not sustainable.

4. Subsequent to the year end, the Beverly facility of MPS Content Services Inc., erstwhile subsidiary of the Company, has been closed down and the company has incurred an amount of Rs. 48.76 Lacs (equivalent of USD 107,294) towards severance pay to employees and termination costs for early vacation of the premises.

5. Employee Benefits:

The entire Plan Assets are managed by the Life Insurance Corporation of India (LIC). The details with respect to the composition of investments in the fair value of Plan Assets have not been disclosed in the absence of the necessary information.

The above disclosure excludes the figures of the overseas branch, as it is governed by the laws prevailing in the United States of America.

6. Segment Reporting:

Business Segment

The Company operates in one business segment, the business of typesetting and data digitization services for overseas publishers. All assets, liabilities, revenue and expenses are related to this segment.

Notes:

1. Geographical Segments

The Company's operations are managed on a worldwide basis from India, although, they operate in four principal geographical areas of the world, namely India, Europe, United States of America and Rest of the world and the revenues are segregated based on the geographical location of the customer.

2. Segmental Assets includes all operating assets used by respective segment and consists principally of operating cash, debtors, inventories and fixed assets net of allowances and provisions. Segmental Liabilities include all operating liabilities and consist primarily of creditors and accrued liabilities. Segment assets and liabilities do not include income tax assets and liabilities.

7. Related Party Disclosure

Information relating to related party transactions (As identified by the management and relied upon by the Auditors)

1. Parties where control exists;

1.1. Ultimate Holding Company : Georg Von Holtzbrinck GmbH & Co K.G.

1.2. Holding Company : H M Publishers Holdings Ltd.

1.3. Subsidiary Companies* : MPS Technologies Ltd. MPS Content Services Inc. USA MPS Content Service India Pvt. Ltd.

"Until 31st December 2010 (Refer Note I of Schedule 19)

2. Group Companies / Entities with whom the Company had transactions during the year:

Macmillan Publishers Limited, UK Macmillan Iberia SAU

Macmillan Academic Publishing Inc. Macmillan Education, SA

Macmillan Publishers China Limited Ediciones Castillo Group Macmillan, Mexico

Macmillan Publishers Australia Proprietary Limited Gill & Macmillan Publishers (Ireland)

Macmillan Hellas (Greece) Macmillan Publishers Holdings LLC

Holtzbrinck Publishers Holdings Limited Macmillan Education Limited

Nature America Inc. Macmillan Publishers India Limited

Kingfisher Publications Limited Bookworxs GmbH

HGV Hanseatische Gasellschaft Euroscript GmbH

Macmillan Poland

8. No provision has been made for Minimum Alternate Tax (MAT), as the Company has obtained legal opinion to the effect that the income accrued or arising at a unit in the SEZ, does not fall within the ambit of Section 115JB of the Income Tax Act, 1961.

Current tax is determined in respect of taxable income for the Calendar year ended 31st December, 2010. The ultimate current Tax liability will be determined on the basis of taxable income for the Financial year 1st April, 2010 to 31st March, 2011.

9. Pursuant to the announcement by the Institute of Chartered Accountants of India (ICAI) in respect of 'Accounting for Derivatives' though the Company has opted not to follow the recognition and measurement principles relating to derivatives as specified in Accounting Standard - 30, 'Financial Instruments, Recognition and Measurement', keeping in view the principle of prudence as enunciated in AS 1. Disclosure of Accounting Policies, the entity has not considered, by way of prudence, the net gains in respect of all outstanding derivative contracts at the balance sheet date.

The value of forward contracts entered into hedge the foreign currency risk of firm commitments/highly probable transactions as at 31st December, 2010 is USD 10,100,000, Euro 450,000 and GBP 2,000,000 (Previous year - USD 11,500,000 & Euro 2,575,000).

The remeasurement of the fair value as at the balance sheet date has resulted in mark to market net gains of Rs.174.99 Lacs (Previous year - net gain of Rs. 217.07 Lacs) relating to undesignated forward contracts. The gains have not been recognised in the Profit and Loss account as a matter of prudence.

10. The financial statements of 2010 includes the operating results of the erstwhile subsidiaries consequent to Amalgamation, which do not form part of the operating results of previous year. Hence the figures for the current year are not comparable with those of the previous year. Previous year figures have been regrouped / reclassified wherever necessary to conform to current year's presentation.

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Dec 31, 2009

Background

MPS Limited, formerly known as Macmillan India Limited (the Company) is engaged in the business of providing typesetting and data digitization services for overseas publishers. The Company has a 100% Export Oriented Unit in Bengaluru, and units registered under the Software Technology Park of India (STPI) scheme that are located in Chennai, Delhi and Gurgaon. In March, 2009, the Company has set up an Unit at Noida which is located in a Special Economic Zone notified area. The Company also operates through its branches in United States of America and United Kingdom. The Company provides Publishing services relating to typesetting of books and journals, composing of Yellow Page Ads and catalogues, data coding, conversion, indexing, editing, copy editing and editorial services to global publishers.

MPS Limited has two direct subsidiaries MPS Technologies Limited and MPS Content Services Inc, USA (formerly ICC Macmillan Inc, USA). MPS Content Services India Private Limited (formerly ICC India Private Limited) is a subsidiary of MPS Content Services Inc, USA.

With effect from 25th June 2009, the Company has changed its name to "MPS Limited" and the necessary statutory approvals have been obtained for change of name.

The Indian Subsidiary ICC India Private Ltd has changed its name to MPS Content Services India Pvt. Ltd. and Foreign Subsidiary in USA had changed its name from ICC Macmillan Inc to MPS Content Services Inc.

MPS Mobile Inc, a subsidiary of MPS Content Service Inc (formerly ICC Macmillan Inc, USA) which was formed during the year was dissolved on 28th December 2009 since the company did not commence business.

2. In the year 2006 MPS Limited acquired MPS Content Services Inc, USA and its subsidiary MPS Content Services India Private Limited for a consideration of Rs. 1,562.74 lacs. In accordance with the terms of the Share Purchase agreement an amount of Rs. 24.22 lacs (equivalent USD 50,000) was retained in the books of MPS Content Services Inc from the consideration payable to the individual promoters as security for any breach of warranties or for any claim against MPS Limited (the purchaser) relating to the labour dispute and the transfer pricing assessments. During the year the final settlement was made to the promoters after reducing an amount of Rs. 9.79 lacs (equivalent of USD 21,002) towards claims relating to the labour dispute of MPS Content Services India Private Limited and an amount of Rs. 0.88 lacs (equivalent of USD 1 887) towards advances taken by one of the promoters. Accordingly, this amount of Rs. 9.79 lacs is reduced from the carrying value of investments.

3. Contingent Liability

a. Disputed Demands:

Name of Nature of Rupees Period Forum where dispute the Statute Dues (in lacs) is pending

Income Tax Act, Income Tax 5.21 Asst Year 2003-04 Income Tax Appellate 1961 Demands (PY - Nil) of Subsi- diary Tribunal Chennai

Income Tax Act, Income Tax 24.36 Asst Year 2005-06 Commissioner of Income Tax 1961 Demands (PY - 24.36) (Appeals), Chennai

Income Tax Act, Income Tax 147.28 Asst Year 2006-07 Commissioner of Income Tax 1961 Demands (PY - Nil) (Appeals), Chennai

Section 66A of Service Tax demands 227.77 July, 2003 to Customs and Excise Service Tax Finance Act (Refer note b) (PY - 227.77) Dec,2006 Appellate Tribunal, Bengaluru

b. No provision has been considered for service tax amounting to Rs. 227.77 lacs on overseas commission paid for the period from 1st July, 2003 to 31st December, 2006, as the demands raised by the Authorities for this period is being contested by the company. The service tax for the period from January 2007 to December 2008 together with interest amounts to Rs. 281.15 lacs out of which Rs. 154.46 lacs has been remitted. However, interest on delayed remittance of service tax Rs. 62.70 lacs has been provided for.

4. There are no amounts due to Micro, Small and Medium Enterprises as identified by the management and relied upon by the auditors.

5. The net worth of MPS Content Services Inc., USA, a subsidiary, has been eroded and its subsidiary MPS Content Services India Private Limited has not carried on operations during 2009 since its principal infrastructure (namely production activities, fixed assets, employees etc) has been transferred to the Company. However, the Company (MPS) has committed to extend continued financial and operational support to MPS Content Services Inc, USA and to MPS Content Services India Private Limited for the foreseeable future. Accordingly both the subsidiaries are considered as going concerns and the investments Rs. 3,320.47 lacs, receivables Rs. 257.28 lacs and advances Rs. 649.14 lacs relating to MPS Content Services Inc, USA are considered good and recoverable.

6. The Board of Directors of the Company at their meeting held on December 21, 2009 have approved the proposal for the Company to acquire the shares of MPS Content Services India Private Limited from MPS Content Services Inc, USA, whereby MPS Content Services India Private Limited will become a subsidiary of MPS Limited and cease to be a subsidiary of MPS Content Services Inc, USA.

7. In the meeting held on 25th February 2009, the remuneration of the Managing Director has been revised effective from 1st February, 2009. The revision has been approved by shareholders at the Annual General Meeting held on 23rd June 2009. An application seeking Central Governments approval has been filed to comply with provisions of Section 309 read with Schedule XIII of the Companies Act, 1956. The approval of the Central Government is awaited.

8. Segment Reporting

Based on a reconsideration of nature of risks, rewards and other relevant factors, the Exports of Information Processing and E-Business which were hitherto considered as individual reportable segments have been combined in to a single reportable segment namely Publishing Services. Consequently, the figures for the previous year has been recasted to make it comparable with the current year.

9. Related Party Disclosure

Information relating to related party transactions (As identified by the management and relied upon by auditors)

1. Parties where control exists

1.1 Ultimate Holding Company Georg Von Holtzbrinck Gmbh & Co K.G.

1.2 Holding Company H M Publishers Holdings Ltd

2. Subsidiary Companies: MPS Technologies Ltd

MPS Content Services Inc., USA

MPS Content Services India Private Limited

MPS Mobile Inc., (dissolved w.e.f. 28.12.2009)

3. Fellow Subsidiaries with whom the company had transactions during the year

Macmillan Publishers Holdings LLC Ediciones Castillo Grupo Macmillan, HGV Hanseatische Gasellschaft Mexico

Macmillan Academic Inc Gill & Macmillan Publishers Bookworxs Gmbh

Macmillan Publishers Australia Macmillan Publishers China Ltd Holtzbrinck-USA Proprietary Limited

Macmillan Greece Macmillan Publishers Limited Macmillan Publish- ers India Limited

Macmillan Iberia SAU Macmillan Education Limited Frank Brothers & Co (Publishers) Limited

Macmillan SA Kingfisher Publica- tions Limited

4. Key Management personnel Mr. Rajiv K Seth, Managing Director

10. Pursuant to the announcement by the Institute of Chartered Accountants of India (ICAI) in respect of Accounting for Derivatives though the Company has opted not to follow the recognition and measurement principles relating to derivatives as specified in Accounting Standard-30, Financial Instruments, Recognition and Measurement, issued by the ICAI for the year ended 31s t December 2009, keeping in view the principle of prudence as enunciated in AS 1, Disclosure of Accounting Policies, the entity has not considered by way of prudence, the net gains in respect of all outstanding derivative contracts at the balance sheet date.

The value of forward contracts entered into to hedge the foreign currency risk of firm commitments/highly probable transactions as at 31st December 2009 is USD 11,500,000 and Euro 2,575,000 (Previous year USD 1,200,000, Euro 1,500,000 and GBP 600,000).

The remeasurement of the fair value as at the balance sheet date has resulted in mark to market net gains of Rs. 217.07 lacs (Previous year mark to market losses of Rs. 262.10 lacs) relating to undesignated forward contracts. The gains have not been recognised in the profit and loss account as a matter of prudence.

11. Current tax is determined in respect of taxable income for the calendar year ended December 31, 2009. The ultimate current tax liability will be determined on the basis of taxable income for the year April 01, 2009 to March 31, 2010.

Pursuant to amendment in Finance Act, 2009, Fringe Benefit Tax has been abolished with effect from April 1, 2009 and hence no provision is considered for the period April 1, 2009 to December 31, 2009.

12. The Company will initiate a review of the transactions with overseas associates to ascertain compliance with transfer pricing requirements under the Income Tax Act, 1961 during the year ending March 31, 2010. Therefore, adjustments, if any, arising out of such study, have not been made in the attached financial statements.

13. The financial statements of 2008 included the operating results of the Publishing Business upto 12th May 2008 which do not form part of the operating results for the current year consequent to the demerger. Hence the figures for the current year are not comparable with those of the previous year. Previous year figures have been regrouped/ reclassified wherever necessary to conform to the current year classification.