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Shaping the future of software driven business
Consolidated Financials •
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determination of taxable profit (or loss), tax bases, unused tax losses, unused tax credits and tax rates, when there is
uncertainty over income tax treatments under Ind AS 12. According to the appendix, companies need to determine the
probability of the relevant tax authority accepting each tax treatment, or group of tax treatments, that the companies
have used or plan to use in their income tax filing which has to be considered to compute the most likely amount or the
expected value of the tax treatment when determining taxable profit (tax loss), tax bases, unused tax losses, unused tax
credits and tax rates.
The standard permits two possible methods of transition - i) Full retrospective approach – Under this approach, Appendix C
will be applied retrospectively to each prior reporting period presented in accordance with Ind AS 8 – Accounting Policies,
Changes in Accounting Estimates and Errors, without using hindsight and
ii) Retrospectively with cumulative effect of initially applying Appendix C recognized by adjusting equity on initial
application, without adjusting comparatives.
The effective date for adoption of Ind AS 12 Appendix C is annual periods beginning on or after April 1, 2019.
The Group will adopt the standard on April 1, 2019 and has decided to adjust the cumulative effect in equity on the date of
initial application i.e. April 1, 2019 without adjusting comparatives.
The effect on adoption of Ind AS 12 Appendix C would be insignificant in the consolidated financial statements.
Amendment to Ind AS 12 – Income taxes:
On March 30, 2019, Ministry of Corporate Affairs issued amendments to the
guidance in Ind AS 12, ‘Income Taxes’, in connection with accounting for dividend distribution taxes.
The amendment clarifies that an entity shall recognise the income tax consequences of dividends in profit or loss, other
comprehensive income or equity according to where the entity originally recognised those past transactions or events.
Effective date for application of this amendment is annual period beginning on or after April 1, 2019. The Group is currently
evaluating the effect of this amendment on the standalone financial statements.
(p) Segment reporting
(i) Identification of segment
The Group’s operations predominantly relate to providing software products, services and technology innovation
covering full life cycle of product to its customers.
The components of the Group that engage in business activities from which they earn revenue and incur expenses,
whose operating results are regularly reviewed by the Group’s Chief Operating Decision Maker are identified as
operating segments.
(ii) Allocation of income and direct expenses
Income and direct expenses allocable to segments are classified based on items that are individually identifiable
to that segment such as salaries, project related travel expenses etc. The remainder is considered as un-allocable
expense and is charged against the total income.
(iii) Unallocated items
Unallocated items include general corporate income and expense items which are not allocated to any business
segment.
Segregation of assets, liabilities, depreciation and amortization and other non-cash expenses into various reportable
segments have not been presented except for trade receivables as these items are used interchangeably between
segments and the Group is of the view that it is not practical to reasonably allocate these items to individual segments
and an ad-hoc allocation will not be meaningful.
(iv) Inter-segment transfers
There are no inter-segments transactions.
(v) Segment accounting policies
The Group prepares its segment information in conformity with accounting policies adopted for preparing and
presenting the financial statements of the Group as a whole.
Notes forming part of consolidated financial statements (Contd.)