Annual Report 2016-17

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Annual Report 2016-17

Depreciation and Amortization

The depreciation and amortization for the year amounted to

1,490.17 Million as against

990.13 Million in the previous

year showing an increase of 50.50%. This increase is mainly attributable to increase in amortization of acquired

intangible rights which are recognized as intangible assets a part of business combinations.

Depreciation and amortization as a percentage of revenue was 5.18% in the year against 4.28% during the previous

year. Depreciation on Property, Plant and Equipment and intangible assets is provided using the Straight /ine Method

(‘S/M’) over the useful lives of the assets estimated by the management. Please refer Note 6.4 of the consolidated

onancials for details.

Exceptional items

The e[ceptional item in the statement of proot and loss represents the e[penses incurred in respect of settlement of

one of the litigation. A US based corporation had oled a suit against a step down subsidiary of the Company, claiming

damages for direct and contributory infringement of copyrights and breach of contract. The Court had directed the

parties to reach a settlement in this matter. Accordingly, an out of court settlement was reached with the claimant

without admission of any liability, during the year and an amount of

114.11 Million has been accounted as an e[pense,

net of insurance claim receivable which is based on the legal opinion obtained.

Provision for Taxation

Ta[ e[pense consists of current ta[ and deferred ta[.

The Group is e[posed to income ta[ in multiple geographies where it is doing business through its branches and

subsidiaries. Persistent Systems /td, the parent company is mainly liable to income ta[ in India.

The provision for ta[ for the year amounted to

1,128.20 Million (net of ta[ credit in respect of earlier years of

19.67 Million) against

890.89 Million (net of ta[ credit in respect of earlier years of

25.70 Million) in the previous

year. The deferred ta[ credit for the year was

136.12 Million against deferred ta[ e[penses of

33.03 Million in the

previous year.

The total ta[ e[pense for the year amounted to

992.08 Million against

923.92 Million for the previous year. The

Effective Ta[ Rate (ETR) for the year amounted to 24.8% as compared to 25.0% in the previous year. The decrease

in ETR is partly because of lower ta[ation in some of the overseas subsidiaries and partly due to increase in share of

revenues from SE=s.

Net Proot after Tax

The Net Proot for the year amounted to

3,014.65 Million against

2,772.99 Million for the previous year, recording an

increase of 8.7%. The Net Proot margin for the year was 10.5% as compared to 12.0% in the previous year.

Dividend

The total dividend per share for the year was

9 per share which includes an interim dividend of

6 paid during the

year and

3 per share proposed as onal dividend for the year. For the previous year, the total dividend was

8 per share

paid as interim dividend.

The total payout towards dividend for the year, was

720 Million (includes interim and proposed onal dividend) as

against

640 Million for the previous year. The total dividend distribution ta[ for the year on the above dividend was

146.58 Million against

130.30 Million for the previous year. The dividend payout ratio (including proposed onal