242 / 300
242
•
Annual Report 2016-17
1. Nature of operations
Persistent Systems /imited (the “Company”) is a public Company domiciled in India and incorporated under the
provisions of the Companies Act, 1956 (the “Act”). The shares of the Company are listed on Bombay Stock Exchange
and National Stock Exchange. The Company is a global company specializing in software products, services and
technology innovation. The Company offers complete product life cycle services.
2. Basis of preparation
The onancial statements of the Company have been prepared on an accrual basis and under the historical cost
convention except for certain onancial instruments and equity settled employee stock options which have been
measured at fair value. Historical cost is generally based on the fair value of consideration given in exchange of
goods and services. The accounting policies are consistently applied by the Company during the year and are
consistent with those used in previous year except for the changes in accounting policies required to be made on
adoption of Indian Accounting Standards notioed under the Companies Act, 2013.
Statement of compliance
In accordance with the notiocation issued by the Ministry of Corporate Affairs, the Company has adopted Indian
Accounting Standards (referred to as “Ind AS”) notioed under the Companies (Indian Accounting Standards) Rules,
2015. These are the Company’s orst Ind AS onancial statements. The date of transition is April 1, 2015. Previous
year’s numbers in the onancial statements have been restated to Ind AS. In accordance with Ind AS 101 First-time
Adoption of Indian Accounting Standards, the Company has presented a reconciliation from the presentation of
onancial statements under Accounting Standards notioed under the Companies (Accounting Standards) Rules,
2006 (“Previous GAAP”) to Ind AS of Shareholders’ equity as at March 31, 2016 and April 1, 2015 and of the
comprehensive net income for the year ended March 31, 2016.
3. Summary of signiocant accounting policies
(a) Use of estimates
The preparation of the onancial statements in conformity with Ind AS requires the management to make judgments,
estimates and assumptions that affect the reported amounts of revenue, expenses, assets and liabilities and
disclosure of contingent liabilities at the end of year. Although these estimates are based on the management’s
best knowledge of current events and actions, uncertainty about these assumptions and estimates could result in
the outcomes requiring a material adjustment to the carrying amounts of assets or liabilities in future periods.
Critical accounting estimates
i. Revenue recognition
The Company uses the percentage-of-completion method in accounting for its oxed-price contracts. Use of the
percentage-of-completion method requires the Company to estimate the efforts or costs expended to date as
a proportion of the total efforts or costs to be expended. Efforts or costs expended have been used to measure
progress towards completion. Provisions for estimated losses, if any, on uncompleted contracts are recorded in the
period in which such losses become probable based on the expected contract estimates at the reporting date.
ii. Income taxes
The Company’s major tax jurisdictions is India, though the Company also oles tax returns in other overseas
jurisdictions. Signiocant judgements are involved in determining the provision for income taxes.
iii. Property, plant and equipment
Property, plant and equipment represent a signiocant proportion of the asset base of the Company. The charge in
respect of depreciation is derived after determining an estimate of an asset’s expected useful life and the expected
residual value at the end of its life. The useful lives and residual values of Company’s assets are determined
by management at the time the asset is acquired and reviewed periodically. The lives are based on historical
experience with similar assets as well as anticipation of future events, which may impact their life, such as changes
in technology.
Notes forming part of onancial statements