Datamatics Global Services Ltd. - Quarterly/Annual Result Disclosures and Notes dated 31 Dec 2020

1. The unaudited consolidated financial results and the unaudited standalone financial results of the Company for the quarter and nine months ended December 31, 2020 have been reviewed by the Audit Committee of the Board and approved by the Board of Directors at its meeting held on January 28, 2021. The statutory auditors have reviewed unaudited consolidated and unaudited standalone financial results.

2. The unaudited standalone / consolidated financial results have been prepared in accordance with Indian Accounting Standards (Ind AS), the provisions of the Companies Act, 2013 (the Act), as applicable and guidelines issued by the Securities and Exchange Board of India (SEBI).

3. The Company has an investment in the unaudited standalone financial results of Rs. 646.30 million in two of its wholly owned subsidiaries and has also extended advances of Rs. 0.05 million to these subsidiaries as on December 31, 2020. The net worth of these subsidiaries as on December 31, 2020 is Rs. 426.08 million which is lower than the amount of investment. The investment is for long term and of strategic nature. As the management is confident of turning around these subsidiaries in the near future and hence, no provision for diminution in the value of investment and advances has been considered necessary by the management.

4. Operations during the quarter continued to be impacted by measures to contain covid-19 pandemic. The business gathered momentum, though recovery has been gradual and partial. Accordingly, the results for the quarter are not comparable with those for for the previous quarter and corresponding quarter of previous year. Based on the information available up to date, the Group expects to recover the carrying value of its assets.

5. The Company, vide Board Meeting dated November 13, 2019, had approved the amalgamation of Datamatics Digital Limited (formerly known as Techjini Solutions Private Limited) ("DDL"), a wholly owned subsidiary of the Company, with Datamatics Global Services Limited (DGSL) through a Scheme of Arrangement u/s 230232 of the Companies Act, 2013 ("Scheme") with an Appointed Date of June 01, 2019. Since DDL is a wholly owned subsidiary of the Company, no further shares would be required to be issued by the Company since the entire share capital of DDL is held by the Company.

The Company and DDL have complied with all the requisite filings are per directions of the National Company Law Tribunal, Mumbai Bench ("NCLT"). The NCLT has passed the order of DGSL-DDL merger vide order no. CP (CAA) 970/30-232/MB/2020 dated November 06, 2020. Hence owing to the fact that DDL has been merged with DGSL w.e.f. June 01, 2019, the accounting effect of the merger has been given in the standalone books of accounts of DGSL in the current quarter. Consequently all relevant previous year / quarter figures pertaining to standalone financial statements have also been restated.

6. The date of implementation of the Code on Wages, 2019 and the Code on Social Security 2020 is yet to be notified by the Government. The Ministry of Labour and Employment has released draft rules for the Code on Social Security 2020 on November 13, 2020, and has invited suggestions from stakeholders which are under active consideration by the Ministry. The Group will assess the impact of these Codes and give effect in the financial results when the Rules / Schemes thereunder are notified.

7. The Group has entered into a stock redemption agreement to dispose off the entire stake in one of the subsidiaries "Cignex Datamatics Inc" (Cignex). As a result, w.e.f. January 01, 2021, Group's control over Cignex and its subsidiaries shall be shifted and they will cease to be a subsidiary and step down subsidiaries.

8. On April 20, 2020, Duo Consulting Inc. ("Duo"), a subsidiary of Cignex Datamatics Inc. (Cignex USA), entered into a sale and assignment agreement ("Asset Purchase Agreement") with a third party. Under the terms of the agreement, Duo has agreed to sell contracts and computer system, assign its employees along with customer contracts, and business IT systems. Consequently, the Management of the Holding Company, in its annual assessment for goodwill impairment, has impaired the goodwill associated with Duo amounting to Rs. 157.72 million in the consolidated financial results for the year ended March 31, 2020.

9. Previous quarter / year figures have been appropriately regrouped, recasted and reclassified wherever necessary to conform to the current year presentations.