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Notes forming part of consolidated onancial statements (Contd.)
Annual Report 2016-17
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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 proot/ loss at the time of transaction. Deferred
tax assets are recognized only to the extent that sufocient 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 sufocient taxable proot 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 proot 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 proot 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 proot 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 specioed period.
(o) Segment reporting
(i) Identiocation 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 identioed as
operating segments.
(ii) Allocation of income and direct expenses
Income and direct expenses allocable to segments are classioed based on items that are individually identioable
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.