1 Corporate information

IRIS Business Services Limited (“The Company”) is a public limited company domiciled and headquartered in India and is listed on the Bombay Stock Exchange (BSE) SME Platform. The registered office of the Company is located at T-231, Tower 2, 3rd Floor, International Infotech Park, Vashi, Navi Mumbai - 400 703. The company has subsidiaries in United States, Singapore and Italy. Incorporated in 2000, IRIS is a global provider of software products for compliance, data and analytics.

The Company cater to Regulators including Central Banks, Business Registries, Capital Market Regulators and Stock Exchanges. We also provide solutions to the regulated, including Corporates, Banks, Mutual Funds.

The financial statements of the Company for the year were approved and adopted by Board of Directors of the Company in its meeting held on May 30, 2018.

Rights, preferences and restrictions attached to equity shares

The company has a single class of equity shares. Accordingly, all equity shares rank equally with regard to dividends and share in the company’s residual assets. The equity shares are entitled to receive dividend as declared from time to time subject to payment of dividend to preference shareholders. The voting rights of an equity shareholder on a poll (not on show of hands) are in proportion to its share of the paid-up equity capital of the company. Voting rights cannot be exercised in respect of shares on which any call or other sums presently payable have not been paid.

Failure to pay any amount called up on shares may lead to forfeiture of the shares.

On winding up of the company, the holders of equity shares will be entitled to receive the residual assets of the company, remaining after distribution of all preferential amounts in proportion to the number of equity shares held.

Note 2 Taxes On Income

Current Tax is determined as the amount of tax payable in respect of the taxable income for the period. Deferred tax is computed in respect of timing differences in accordance with Accounting Standard 22. The components of deferred tax liabilities / assets are as under

Minimum Alternative Tax (MAT) Credit

In accordance with accounting policy of the company, MAT credit balance not recognised as an assets as at 31.03.2018 is RS. 3,75,54,770/-(As at 31.03.2017 is RS. 3,75,54,770/-).

Note 3 Operating Leases

The Company has entered into leave & license arrangement for its office premises for a period of 60 months.

The total future minimum lease payments under the leave & license arrangements classified as operating lease for each of the periods is given below:

Note 4.1 Employee benefits

The disclosures required as per the revised Accounting Standard (AS) 15 -Employee Benefits (revised 2005) are as under: Defined benefit plan (Gratuity) - As per the independent actuarial valuation carried out as at March 31, 2018

Note 5 Employee Stock Option Scheme

The Company provides share-based payment schemes to its employees. The relevant details of the scheme are as follows:

In September 11, 2017 the Board of Directors approved the “IRIS Business Services Limited - Employee Stock Option Scheme 2017” in order to reward the employees for their past association and performance as well as to motivate them to contribute to the growth and profitability of the Company (including subsidiary companies) with an intent to attract and retain talent in the organization. The aforesaid scheme was duly approved by shareholders in its EGM held on September 13, 2017. The Nomination and Remuneration committee of the Board has granted following options under the said Scheme to certain category of employees as per criteria laid down by Nomination and Remuneration committee of the Board. Key terms of the scheme:

Date of Shareholder’s Approval September 13, 2017

Total Number of Options approved 7,00,000

Vesting Schedule Option shall vest not earlier than 1 (One) year and not later than maximum Vesting Period of 4 (Four) years from the date of grant.

Maximum term of Options granted 9 Years

Method of Settlement Shares

Source of shares Primary-Fresh equity allotment by the Company

Stock price

The stock price of the Company is the listing market price of the Company’s equity share on Stock Exchanges on the date of grant.

Under the ESOP Schemes one option entitles one equity share of the Company.

Expected Volatility

Expected volatility is a measure of the amount by which share price is expected to fluctuate during a period. The measure of volatility used in option pricing models is the annualised standard deviation of the continuously compounded rates of return on the share over a period of time.

Since shares of the Company got listed only on the Grant Date and there is no history of share price trading, expected volatility had been derived from historic values NSE ViX index as on the Grant date.

Risk-free Rate of interest

The current yield rates of Central Government securities (with similar residual maturity as expected life of stock option) are being considered. This is based on the zero-coupon yield curve for Government Securities obtained from NSE.

Exercise Price

Exercise price is the price which the option holder has to pay at the time of exercising the option. Exercise prices are considered as per the information provided by the Company. As per the rules of ESOP plans, exercise price is the listing price of the shares of the Company on 11th October 2017 which is RS. 32.00.

Time to Maturity / Expected Life of options

The expected life of an option will be in-between the minimum period before which the options cannot be exercised and the period after which the options cannot be exercised.

The fair value of each award has been determined based on different expected lives of the options that vest each year, as if the award were several separate awards, each with a different vesting date. A weighted average of all the vests has been calculated to arrive at the value of the options granted.

The time to maturity has been estimated as illustrated by the following example. In case of the grant made on 11 October 2017, the earliest date of vesting is one year from the date of grant that is 11 October 2018. Hence, the minimum life of the option is 1 year. The exercise period is Five years from the date of vest as per the ESOP scheme; hence the maximum life of this vest is 6 years. The expected life is the average of minimum and maximum life, i.e. 3.5 years [(1 6)/2]. The time to maturity for the remaining vests has been calculated in a similar manner.

Dividend Yield

Expected dividend yield has been taken as “NIL” since the Company has not declared any dividend in the past.

Note 6 Segment reporting

The Company has identified business segments (Nature of revenue stream) as its primary segment and geographic segments as its secondary segment. Business segments comprise of Collect Segment (Regulatory platform), Create Segment (Enterprise Platform) and Consume Segment (Data Consumption Platform and Content Services).

Revenue and expenses directly attributable to segments are reported under each reportable segment. Expenses which are not directly identifiable to a specific segment have been allocated on the basis of associated manpower efforts. All other expenses which are not attributable or allocable to segments have been disclosed as un-allocable expenses. Assets and liabilities that are directly attributable or allocable to segments are disclosed under each reportable segment. All other assets and liabilities are disclosed as un-allocable. Fixed assets that are used interchangeably among segments are not allocated to primary and secondary segments.

Geographical revenue is allocated based on the location of the customer. Geographic segments of the company are Middle Eastern Countries, America (including Canada and South American countries), Europe, India and Others:

Note 7 Additional information to the financial statements Related Party Transactions

a. Subsidiary companies

1. IRIS Business Services, LLC

2. IRIS Business Services (Asia) Pte. Ltd.

3. Atanou Srl

b. Key managerial personnel (KMP), including KMP under Companies Act, 2013

1. S. Swaminathan, Whole Time Director and Chief Executive Officer

2. Deepta Rangarajan, Whole Time Director

3. K. Balachandran, Whole Time Director and Chief Financial Officer

4. Rajesh Singh, Company Secretary and Compliance Officer (was on employment till 28th February 2018)

5. Jay Mistry, Company Secretary and Compliance Officer

c. Relatives of Key managerial personnel (KMP)

1. Deepta Rangarajan, Spouse of Mr. S. Swaminathan

2. N Subramaniam, Father of Mr. S. Swaminathan

3. Sivakamu Subramaniam, Mother of Mr. S. Swaminathan

4. S. Chandrasekhar, Brother of Mr. S. Swaminathan

5. S. Swaminathan, Spouse of Ms. Deepta Rangarajan

6. Santhanakrishnan Rangarajan, Father of Ms. Deepta Rangarajan

7. Shanti Rangarajan, Mother of Ms. Deepta Rangarajan

8. Rajalakshmi Balachandran, Spouse of Mr. K. Balachandran

9. Sharanya Balachandran, Daughter of Mr. K. Balachandran

10. Shyama Balachandran, Daughter of Mr. K. Balachandran

11. Vijayalakshmi Nambiar, Mother of Mr. K. Balachandran

d. Independent Directors

1. Narayan Seshadri, Non-Executive Independent Director

2. Partho Datta, Non-Executive Independent Director (Resigned on 28th November 2017)

3. Sanjoy Bhattacharya, Non-Executive Independent Director (Resigned on 24th November 2017)

4. Rakesh Kathotia, Nominee Director (Resigned on 12th September 2017)

5. U R Bhat, Non-Executive Independent Director (Resigned on 3rd September 2017)

6. Bhaswar Mukherjee, Non-Executive Independent Director

7. Vinod Balmukand Agarwala, Non-Executive Independent Director

8. Ashok Venkatramani, Non-Executive Independent Director

e. Enterprises over which the above persons exercise significant influence/ control and with which the Company has transactions during the Year

1. FinX Solutions (UAE)

2. IRIS Knowledge Foundation

3. TVS Wealth Private Limited

4. TVS Electronics Limited

Note 8

Note on activities of Subsidiary “IRIS Business services (Asia) PTE Ltd.

As at 31st March 2018, the subsidiary’s total liabilities exceeded its total assets by SGD 64,022/- (RS. 31,80,722/-). Its financial statements have been prepared on a going concern basis. We are committed to provide necessary financial support as and when necessary and there will not by any financial crisis in the said subsidiary.

Note 9

In the opinion of the Board, all assets other than fixed assets and non-current investments have a realisable value in the ordinary course of business which is not different from the amount at which it is stated.

Note 10

Previous year’s figures have been regrouped wherever necessary.