Section B:
• Reporting in case of previous years’ financial statements audited by another firm
SKF India Ltd. (year ended 31st December, 2013)
From Auditor’s Report
Other Matter
The financial statements of the Company as at 31st December, 2012 and for the year then ended were audited by another firm of chartered accountants who, vide their report dated 21 February, 2013, expressed an unmodified opinion on those financial statements.
• Basis of preparation of financial statements (in view of section 133 of the Companies Act, 2013)
Infosys Ltd (year ended 31st March, 2014)
From Significant Accounting Policies
The financial statements are prepared in accordance with Indian Generally Accepted Accounting Principal (GAAP) under the historical cost convention on the accrual basis except for certain financial instruments which are measured at fair values. GAAP comprises mandatory accounting standards as prescribed by the Companies (Accounting Standards) Rules, 2006, the provisions of the Companies Act, 2013 (to the extent notified) and the Companies Act, 1956 (to the extent applicable) and guidelines issued by the Securities and Exchange Board of India (SEBI). Accounting policies have been consistently applied except where a newly issued accounting standard is initially adopted or a revision to an existing accounting standard requires a change in the accounting policy hitherto in use.
• Disclosure for Contingent Liabilities and Commitments
Infosys Ltd (year ended 31st March 2014)
From Notes to Accounts
Claims against the company not acknowledged as debts include demands from the Indian Income tax authorities for payment of additional tax of Rs. 1,548 crore (Rs. 1,088 crore) including interest of Rs. 430 crore (Rs. 313 crore) upon completion of their tax review for fiscal 2006, fiscal 2007, fiscal 2008 and fiscal 2009. These income tax demands are mainly on account of disallowance of a portion of the deduction claimed by the company u/s. 10A of the Income-tax Act. The deductible amount is determined by the ratio of export turnover to total turnover. The disallowance arose from certain expenses incurred in foreign currency being reduced from export turnover but not reduced from total turnover. The tax demand for fiscal 2007, fiscal 2008 and fiscal 2009 also includes disallowance of portion of profit earned outside India from the STP units and disallowance of profits earned from SEZ units. The matter for fiscal 2006, fiscal 2007, fiscal 2008 and fiscal 2009 are pending before the Commissioner of Income-tax (Appeals), Bangalore. The company is contesting the demand and the management including its tax advisors believes that its position will likely be upheld in the appellate process. The management believes that the ultimate outcome of these proceedings will not have a material adverse effect on the Company’s financial position and result of operations.
As of the Balance Sheet date, the Company’s net foreign currency exposures that are not hedged by a derivative instrument or otherwise are nil (Rs. 1,189 crore as at 31st March, 2013).
The foreign exchange forward and options contracts mature between 1 to 12 months. The table below analyses the derivative financial instrument into relevant maturity groupings based on the remaining period as of the balance sheet date:
The Company recognised a gain on derivative financial instruments of Rs. 217 crore and Rs. 68 crore during the year ended 31st March, 2014 and 31st March, 2013, respectively, which is included in other income.
