FROM PUBLISHED ACCOUNTS

Segment Reporting as per IndAS 108

Compilers’ Note:

As compared to AS 17 ‘Segment Reporting’, Ind AS 108 ‘Operating Segments’ has changed the manner in which segment identification is done and has also mandated several additional disclosures. These disclosures are required in line to be what internally the company reports to its ‘Chief Operating Decision Maker (“CODM”). Given below is a compilation of the extracts of disclosures given in the financial statements for the year ended 31^st March 2018 from few companies in different industries.

1. REDDY’S LABORATORIES LTD

From Significant Accounting Policies:

Segment Reporting:

Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision maker. Refer 2.24 for segment information presented.

From Notes to Financial Statements

Segment Reporting:

The Chief Operating Decision Maker (“CODM”) evaluates the Company’s performance and allocates resources based on an analysis of various performance indicators by operating segments. The CODM reviews revenue and gross profit as the performance indicator for all of the operating segments, and does not review the total assets and liabilities of an operating segment. The Chief Executive Officer is the CODM of the Company.

The Company’s reportable operating segments are as follows:

• Global Generics;
• Pharmaceutical Services and Active Ingredients (“PSAI”); and
• Proprietary Products.

Global Generics: This segment consists of the Company’s business of manufacturing and marketing prescription and over-the-counter finished pharmaceutical products ready for consumption by the patient, marketed either under a brand name (branded formulations) or as generic finished dosages with therapeutic equivalence to branded formulations (generics). This segment includes the operations of the Company’s biologics business.

Pharmaceutical Services and Active Ingredients: This segment consists of the Company’s business of manufacturing and marketing active pharmaceutical ingredients and intermediates, also known as “API” or bulk drugs, which are the principal ingredients for finished pharmaceutical products. Active pharmaceutical ingredients and intermediates become finished pharmaceutical products when the dosages are fixed in a form ready for human consumption such as a tablet, capsule or liquid using additional inactive ingredients. This segment also includes the Company’s contract research services business and the manufacture and sale of active pharmaceutical ingredients and steroids in accordance with the specific customer requirements.

Proprietary Products: This segment consists of the Company’s business that focuses on the research, development, and manufacture of differentiated formulations and new chemical entities (“NCEs”). These novel products fall within the dermatology and neurology therapeutic areas and are marketed and sold through Promius ® Pharma, LLC.

Others: This includes the operations of the Company’s wholly-owned subsidiary, Aurigene Discovery Technologies Limited, a discovery stage biotechnology company developing novel and best-in-class therapies in the fields of oncology and inflammation and which works with established pharmaceutical and biotechnology companies in early-stage collaborations, bringing drug candidates from hit generation to pre-clinical development.

The measurement of each segment’s revenues, expenses and assets is consistent with the accounting policies that are used in preparation of the Company’s consolidated financial statements.

Segment Information:

(1) Revenue for the year ended 31^st March 2018 does not include inter-segment revenues from PSAI segment to Global Generics segment which amounts to Rs. 5,492 (as compared to Rs. 6,181 for the year ended 31^st March 2017).

(2) Post implementation of Goods and Services Tax (“GST”) with effect from 1^st July 2017, sales is disclosed net of GST. Sales for the year ended 31^st March 2017 included excise duty of Rs. 939 which is now subsumed in the GST. Sales for the year ended 31 March 2018 includes excise duty of Rs. 173 up to 30^th June 2017. Accordingly, sales for the year ended 31^st March 2018 are not comparable with those of the previous year presented.

Analysis of revenue by geography:

The following table shows the distribution of the Company’s revenues (excluding other operating income) based on the location of the customers:

Analysis of revenue within the Global Generics segment:

An analysis of revenue (excluding other operating income) by therapeutic areas in the Company’s Global Generics segment is given below:

Analysis of revenue within the PSAI segment:

An analysis of revenues (excluding other operating income) by therapeutic areas in the Company’s PSAI segment is given below:

Analysis of assets by geography:

The following table shows the distribution of the Company’s non-current assets (other than financial instruments and deferred tax assets) by country, based on the location of assets:

The following table shows the distribution of the Company’s property, plant and equipment including capital work in progress and intangible assets acquired during the year (other than goodwill arising on business combination) by country, based on the location of assets:

Analysis of depreciation and amortisation, for arriving gross profit by reportable segments:

Information about major customers

Revenues from two of the customers of the Company’s Global Generics segment were Rs.13,486 and Rs.10,755 representing approximately 9% and 8% of the Company’s total revenues, respectively for the year ended 3^rd March 2018.

Revenues from one of the customers of the Company’s Global Generics segment were Rs. 22,760 representing approximately 16% of the Company’s total revenues, for the year ended 31^st March 2017.

INFOSYS LTD

From Notes to Financial Statements

Segment Reporting:

Ind AS 108 establishes standards for the way that public business enterprises report information about operating segments and related disclosures about products and services, geographic areas, and major customers. The Group’s operations predominantly relate to providing end-to-end business solutions to enable clients to enhance business performance. Based on the ‘management approach’ as defined in Ind AS 108, the Chief Operating Decision Maker (CODM) evaluates the Group’s performance and allocates resources based on an analysis of various performance indicators by business segments and geographic segments. Accordingly, information has been presented both along business segments and geographic segments. The accounting principles used in the preparation of the financial statements are consistently applied to record revenue and expenditure in individual segments, and are as set out in the significant accounting policies.

Business segments of the Group are primarily enterprises in Financial Services (FS), enterprises in Manufacturing (MFG), enterprises in Retail, Consumer packaged goods and Logistics (RCL), enterprises in the Energy & utilities, Communication and Services (ECS), enterprises in Hi-tech (Hi-tech), enterprises in Life Sciences, Healthcare and Insurance (HILIFE) and all other segments. The FS reportable segments has been aggregated to include the Financial Services operating segment and the Finacle operating segment because of the similarity of the economic characteristics. All other segments represent the operating segments of businesses in India, Japan, China and IPS. Geographic segmentation is based on business sourced from that geographic region and delivered from both onsite and offshore locations. North America comprises the United States of America, Canada and Mexico, Europe includes continental Europe (both the east and the west), Ireland and the United Kingdom, and the Rest of the World comprises all other places except those mentioned above and India.

Revenue and identifiable operating expenses in relation to segments are categorized based on items that are individually identifiable to that segment. Revenue for ‘all other segments’ represents revenue generated by IPS and revenue generated from customers located in India, Japan and China. Allocated expenses of segments include expenses incurred for rendering services from the Company’s offshore software development centres and onsite expenses, which are categorised in relation to the associated turnover of the segment. Certain expenses such as depreciation, which form a significant component of total expenses, are not specifically allocable to specific segments as the underlying assets are used interchangeably. The Management believes that it is not practical to provide segment disclosures relating to those costs and expenses, and accordingly these expenses are separately disclosed as ‘unallocated’ and adjusted against the total income of the Group.

Assets and liabilities used in the Group’s business are not identified to any of the reportable segments, as these are used interchangeably between segments. The management believes that it is currently not practicable to provide segment disclosures relating to total assets and liabilities since a meaningful segregation of the available data is onerous.

Geographical information on revenue and business segment revenue information is collated based on individual customers invoiced or in relation to which the revenue is otherwise recognised.

Business Segment

For the years ended 31^st March 2018 and March 31^st 2017.

Geographic segments

For the years ended 31^st March 2018 and March 2017:

Significant clients

No client individually accounted for more than 10% of the revenues in the years ended 31^st March 2018 and 31^st March 2017.

RELIANCE INDUSTRIES LTD

From Notes to Financial Statements

Segment Information

The Group’s operating segments are established on the basis of those components of the Group that are evaluated regularly by the Executive Committee (the ‘Chief Operating Decision Maker’ as defined in Ind AS 108 – ‘Operating Segments’), in deciding how to allocate resources and in assessing performance. These have been identified taking into account nature of products and services, the different risks and returns and the internal business reporting systems.

The Group has five principal operating and reporting segments; viz; Refining, Petrochemicals, Oil and Gas, Organised Retail and Digital Services.

The accounting policies adopted for segment reporting are in line with the accounting policy of the Company with following additional policies for segment reporting.

1. Revenue and Expenses have been identified to a segment on the basis of relationship to operating activities of the segment. Revenue and Expenses which relate to enterprise as a whole and are not allocable to a segment on reasonable basis have been disclosed as “Unallocable”.
2. Segment Assets and Segment Liabilities represent Assets and Liabilities in respective segments. Investments, tax related assets and other assets and liabilities that cannot be allocated to a segment on a reasonable basis have been disclosed as “Unallocable”.

(i)  Primary Segment Information

Not reproduced…..

(ii)  Inter segment pricing are at Arm’s length basis.

(iii) As per Indian Accounting Standard 108 – Operating Segments, the Company has reported segment information on consolidated basis including business conducted through its subsidiaries.

(iv) The reportable segments are further described below:

–    The Refining segment includes production and marketing operations of the petroleum products.

–    The Petrochemicals segment includes production and marketing operations of petrochemicals products namely. High density Polythylene, Low density Polyethylene, Linear Low density Polyethylene, Polypropylene, Polyvinyl Chloride, Polyester Yarn, Polyester Fibres, Purified Terephthalic Acid, Paraxylene, Ethylene Glycol, Olefins, Aromatics, Linear Alkyl Benzene, Butadienc, Acrylonitrile, Poly Butadiene Rubber, Styrene Butadiene Rubber, Caustic Soda and Polyethylene Terephthalate.

–    The Oil and Gas segment includes exploration, development and production of crude oil and natural gas.

–    The organised Retail segment includes organise retail business in India.

–    The Digital Services segment includes range of digital services in India.

–    The business, which were not reportable segments during the year, have been grouped under the ‘Others’ segment.   This mainly comprises of:

• Media
• SEZ Development
• Textile

(v)   Secondary Segment Information:

ITC LTD

From Significant Accounting Policies

Operating Segments

Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision-maker (CODM). The CODM, who is responsible for allocating resources and assessing performance of the operating segments, has been identified as the Corporate Management Committee.

Segments are organised based on business which have similar economic characteristics as well as exhibit similarities in nature of products and services offered, the nature of production processes, the type and class of customer and distribution methods.

Segment revenue arising from third party customers is reported on the same basis as revenue in the financial statements. Inter-segment revenue is reported on the basis of transactions which are primarily market led. Segment results represent profits before finance charges, unallocated corporate expenses and taxes.

“Unallocated Corporate Expenses” include revenue and expenses that relate to initiatives / costs attributable to the enterprise as a whole and are not attributable to segments.

*Segment Liabilities of FMCG – cigarettes is before considering `233.02 Crore (2017 – Rs. 629.83 crore) in respect of disputed taxes, the recovery of which has been stayed or where States’ appeals are pending before Courts. These have been included under ‘Unallocated Corporate Liabilities’. Also Refer Note 28(i).

GEOGRAPHICAL INFORMATION

NOTES:

1)    The Group’s corporate strategy aims at creating multiple drivers of growth anchored on its core competencies. The Group is currently focused on four business groups: FMCG, Hotels, Paperboards, Paper and Packaging and Agri Business. The Group’s organisation structure and governance process are designed to support effective management of multiple businesses while retaining focus on each one of them.

The Operating Segments have been reported in a manner consistent with the internal reporting provided to the corporate Management Committee, which is the Chief Operating Decision Maker.

2)    The business groups comprise the following

FMCG :           Cigarettes         –     Cigarettes, Cigars etc.

Others   –     Branded  packaged  foods  business  (Staples, Snacks    and meals; Dairy and Beverages; Confections),   Apparels,     education     and stationery product, personal care product, safety matches and agarbattis.

Hotels                                              Hoteliering

Paperboards, Paper and Packaging       –         Paperboards, paper including speciality paper

and packaging including flexibles.

Agri Business       –      Agri commodities such as soya, spices, coffee and leaf tobacco.

Others                  –    Information Technology service etc.

3)    The Group companies have been included in segment classification as follows:

FMCG  :                 Cigarettes             –     Surya Nepal Private Limited

Others :                –     Surya Nepal Private Limited and North East Nutrients

Private Limited.

Hotels                    –     Srinivasa  Resorts  Limited,  Fortune  Park  Hotels Limited, Bay Island Hotels Limited and Welcome Hotels Lanka (Private) Limited.

Agri Business          –     Technico   Agri   Science   Limited,   Technico   Pty Limited and its subsidiaries Technico Technology Inc., alongwith its jointly controlled operations with Shamrock  Seed  Potato  Farm  Limited,  Technico Asia Holdings Pty Limited and Technico Hoticulture (Kunming) Co. Limited.

Others                   –      ITC  Infotech  India  Limited  and  its  subsidiaries ITC  Infotech  Limited,  ITC  Infotech  (USA).  Inc and Indivate Inc. Russell Credit Limited and its Subsidiaries Greenacre Holdings Limited, Wimco Limited, Pravan Poplar Limited, Prag Agro Farm Limited, ITC investments and Holding Limited and its Subsidiary MRR Trading and Investment Company Limited, Land Based India Limited and Gold Flake Corporation Limited.

4)    The geographical Information considered for disclosure are:

–     Sales within India

–     Sales outside India

5)    Segment result of “FMCG: Other” are after considering significant business development, brand Building and

Gestation cost of the Branded Package Foods business and Personal Care products and business

6)    As stocks options are granted under ITC ESOS to align the interest of employees with those shareholders and also to attract and retain talent for the group as a whole, the option value of ITC ESOS do not form part of segment performance reviewed by corporate management committee.

7)    The Group is not reliant on revenue from transactions from any single external customer and does not receive 10%

or more of its revenue from its transactions with any single external customer.