Persistent Systems Ltd. - Quarterly/Annual Result Disclosures and Notes dated 31 Dec 2018
Auditor and Management Disclosures and Notes for the quarterly results dated 31 Dec 2018
1. The audited condensed financial statements for the quarter and nine months ended December 31, 2018, have been taken on record by the Board of Directors at its meeting concluded on January 28, 2019 as recommended by the Audit Committee at its meeting held on January 27, 2019. The statutory auditors have expressed an unqualified audit opinion.
2. Adoption of Ind AS 115 - Revenue from contracts with customers:
Effective April 1, 2018, the Company adopted Ind AS 115 “Revenue from Contracts with Customers” using the cumulative catch-up transition method which is applied to contracts that were not completed as of April 1, 2018. Accordingly, the comparatives have not been retrospectively adjusted. The effect on adoption of Ind AS 115 was insignificant on the financial statements.
3. As reported in the previous quarter, the Company has deposits of INR 430 million with the financial institutions viz. Infrastructure Leasing & Financial Services Ltd. (IL&FS) and IL&FS Financial Services Ltd. (referred to as “IL&FS Group”) as on the balance sheet date. These are due for maturity from January 2019 to June 2019, the first deposit being due on 28th January 2019. In August 2018, credit rating agency, has significantly downgraded the IL& FS Group’s rating. As of December 31, 2018, there have been no defaults in payment of interest on the aforesaid deposits. At this stage, it is difficult to estimate the ultimate probable loss if any. Accordingly, the management of the Company believes that there is no immediate need to recognize any impairment on the above deposits as of December 31, 2018. The Company will continue to monitor the developments in this matter for the purpose of determining the financial reporting impact, if any.
4. The Board of Directors considered and approved the Buyback of fully paid-up Equity Shares of face value of INR 10 each under "open market" route through the stock exchanges, for an aggregate amount not exceeding ` 2,250 million (Maximum Buyback Size) at a price not exceeding INR 750 per share (Maximum Buyback Price) at the Board Meeting.
5. The Board of Directors at its meeting held on January 27, 2019 and concluded on January 28, 2019 declared an interim dividend of INR 8 per share on the face value of INR 10 each for the Financial Year 2018-19.
Note on Debt service and interest service coverage ratios:
Debt service coverage ratio (DSCR) for QE Dec 18: 699.63
Debt service coverage ratio for YTD Dec 18: 868.90
Interest service coverage ratio (ISCR) for QE Dec 18: 22,920.33
Interest service coverage ratio for YTD Dec 18: 29,334.78
DSCR computed as = Annualised EBITDA / Debt Service of principal amount during a year
ISCR computed as = Annualised EBIT / Debt Service of interest amount during a year
Due to validation checks, these amounts have been provided in the notes.