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• Annual Report 2018-19
Shaping the future of software driven business
Amendment to Ind AS 19:
plan amendment, curtailment or settlement- On March 30, 2019, Ministry of Corporate
Affairs issued amendments to Ind AS 19, ‘Employee Benefits’, in connection with accounting for plan amendments,
curtailments and settlements.
The amendments require an entity:
• to use updated assumptions to determine current service cost and net interest for the remainder of the period after
a plan amendment, curtailment or settlement; and
• to recognise in profit or loss as part of past service cost, or a gain or loss on settlement, any reduction in a surplus,
even if that surplus was not previously recognised because of the impact of the asset ceiling.
Effective date for application of this amendment is annual period beginning on or after April 1, 2019. The Group does
not expect any impact on account of this amendment.
(o) Income taxes
Tax expense comprises of current and deferred tax. Current income tax is measured at the amount expected to be paid to
the tax authorities in accordance with the Income Tax Act, 1961 enacted in India and tax laws prevailing in the respective
tax jurisdictions where the Group operates. The tax rates and tax laws used to compute the amount are those that are
enacted or substantively enacted, at the reporting date. Current income tax relating to items recognized directly in equity
is recognized in equity and not in statement of profit and loss.
Deferred income taxes reflect the impact of temporary differences between tax base of assets and liabilities and their
carrying amounts. Deferred tax is measured based on the tax rates and the tax laws enacted or substantively enacted at
the reporting date.
Deferred tax liabilities are recognized for all taxable temporary differences, except deferred tax liability arising from
initial recognition of goodwill or an asset or liability in a transaction that is not a business combination and, affects
neither accounting nor taxable profit/ loss at the time of transaction. Deferred tax assets are recognized for all deductible
temporary differences, the carry forward of unused tax credits and any unused tax losses, except deferred tax assets
arising from initial recognition of goodwill or an asset or liability in a transaction that is not a business combination and,
affects neither accounting nor taxable profit/ loss at the time of transaction. Deferred tax assets are recognized only to
the extent that sufficient future taxable income will be available against which such deferred tax assets can be realized.
In the situations where the Group is entitled to a tax holiday under the Income-tax Act, 1961 enacted in India or tax laws
prevailing in the respective tax jurisdictions where it operates, no deferred tax (asset or liability) is recognized in respect of
temporary differences which reverse during the tax holiday period, to the extent the Group’s gross total income is subject
to the deduction during the tax holiday period. Deferred tax in respect of temporary differences which reverse after the
tax holiday period is recognized in the year in which the temporary differences originate.
The carrying amount of deferred tax asset is reviewed at each reporting date and reduced to the extent that it is no longer
probable that sufficient taxable profit will be available against which such deferred tax assets can be realized.
Deferred tax assets and deferred tax liabilities are offset, if a legally enforceable right exists to set off current tax assets
against current tax liabilities and the deferred tax assets and deferred tax liabilities relate to the same taxable entity and
the same taxation authority.
Deferred tax relating to items recognized outside the statement of profit and loss is recognized in co-relation to the
underlying transaction either in other comprehensive income or directly in equity.
Minimum alternate tax (MAT) paid in a year is charged to the statement of profit and loss as current tax. MAT credit
available is recognized as an asset only to the extent that there is convincing evidence that the Group will pay normal
income tax during the period, i.e., the period for which MAT credit is allowed to be carried forward. In the year in which
the Group recognizes MAT credit as an asset in accordance with the Guidance Note on Accounting for Credit Available
in respect of Minimum Alternative Tax under the Income-tax Act, 1961, the said asset is created by way of credit to the
statement of profit and loss and shown as “MAT Credit Entitlement.” The Group reviews the “MAT credit entitlement”
asset at each reporting date and writes down the asset to the extent the Group does not have convincing evidence that it
will pay normal tax during the specified period.
Ind AS 12 Appendix C, Uncertainty over Income Tax Treatments:
On March 30, 2019, Ministry of Corporate Affairs
has notified Ind AS 12 Appendix C, Uncertainty over Income Tax Treatments which is to be applied while performing the
Notes forming part of consolidated financial statements (Contd.)