HCL INFOSYSTEMS Auditors Report

TO


The Members of HCL Info systems Limited


Report on the Standalone Indian Accounting Standards (Ind AS) Financial Statements


1. We have audited the accompanying standalone financial statements of HCL Info systems Limited ("the Company"), which comprise the Balance Sheet as at March 31, 2017, the Statement of Profit and Loss (including Other Comprehensive Income), the Cash Flow Statement and the Statement of Changes in Equity for the year then ended, and a summary of the significant accounting policies and other explanatory information.


Management''''s Responsibility for the Standalone Ind AS Financial Statements


2. The Company''''s Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 ("the Act") with respect to the preparation of these standalone Ind AS financial statements to give a true and fair view of the financial position, financial performance (including other comprehensive income), cash flows and changes in equity of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards specified in the Companies (Indian Accounting Standards) Rules, 2015 (as amended) under Section 133 of the Act. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the standalone Ind AS financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.


Auditors'''' Responsibility


3. Our responsibility is to express an opinion on these standalone Ind AS financial statements based on our audit.


4. We have taken into account the provisions of the Act and the Rules made there under including the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made there under.


5. We conducted our audit of the standalone Ind AS financial statements in accordance with the Standards on Auditing specified under Section 143(10) of the Act and other applicable authoritative pronouncements issued by the Institute of Chartered Accountants of India. Those Standards and pronouncements require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the standalone Ind AS financial statements are free from material misstatement.


6. An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the standalone Ind AS financial statements. The procedures selected depend on the auditors'''' judgment, including the assessment of the risks of material misstatement of the standalone Ind AS financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company''''s preparation of the standalone Ind AS financial statements that give a true and fair view, in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Company''''s Directors, as well as evaluating the overall presentation of the standalone Ind AS financial statements.


7. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the standalone Ind AS financial statements.


Opinion


8. In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone Ind AS financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 2017, and its loss (including other comprehensive income), its cash flows and the changes in equity for the year ended on that date.


Other Matter


9. The financial information of the Company for the nine months period ended March 31, 2016 and the transition date opening balance sheet as at July 1, 2015 included in these standalone Ind AS financial statements, are based on the previously issued statutory financial statements for the nine months period ended March 31, 2016 and for the year ended


June 30, 2015 prepared in accordance with the Companies (Accounting Standards) Rules, 2006 (as amended) which were audited by us, on which we expressed an unmodified opinion dated May 25, 2016 and August 20, 2015 respectively. The adjustments to the financial statements for the nine months ended March 31, 2016 for the differences in accounting principles adopted by the Company on transition to the Ind AS have been audited by us, on which we have expressed an unmodified opinion vide our report dated, January 31, 2017. The adjustments to the financial statements for the year ended June 30, 2015 for the differences in accounting principles adopted by the Company on transition to the Ind AS have been audited by us.


Our opinion is not qualified in respect of this matter.


Report on Other Legal and Regulatory Requirements


10. As required by the Companies (Auditor''''s Report) Order, 2016, issued by the Central Government of India in terms of subsection (11) of section 143 of the Act ("the Order"), and on the basis of such checks of the books and records of the Company as we considered appropriate and according to the information and explanations given to us, we give in the Annexure B a statement on the matters specified in paragraphs 3 and 4 of the Order.


11. As required by Section 143 (3) of the Act, we report that:


(a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit.


(b) In our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books.


(c) The Balance Sheet, the Statement of Profit and Loss (including other comprehensive income), the Cash Flow Statement and the Statement of Changes in Equity dealt with by this Report are in agreement with the books of account.


(d) In our opinion, the aforesaid standalone Ind AS financial statements comply with the Indian Accounting Standards specified under Section 133 of the Act.


(e) On the basis of the written representations received from the directors as on March 31, 2017 taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2017 from being appointed as a director in terms of Section 164 (2) of the Act.


(f) With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate Report in Annexure A.


(g) With respect to the other matters to be included in the Auditors'''' Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our knowledge and belief and according to the information and explanations given to us:


i. The Company has disclosed the impact, if any, of pending litigations as at March 31, 2017 on its financial position in its standalone Ind AS financial statements - Refer Note 29 and 42;


ii. The Company has long-term contracts as at March 31, 2017 for which there were no material foreseeable losses. The Company did not have any long-term derivative contracts as at March 31, 2017;


iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company during the year ended March 31, 2017.


iv. The Company has provided requisite disclosures in the financial statements as to holdings as well as dealings in Specified Bank Notes during the period from November 8, 2016 to December 30, 2016. Based on audit procedures and relying on the management representation we report that the disclosures are in accordance with books of account maintained by the Company and as produced to us by the Management - Refer Note 54.


Referred to in paragraph 11(f) of the Independent Auditors'''' Report of even date to the members of HCL Info systems Limited


on the standalone Ind AS financial statements for the year ended March 31, 2017


Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Act


1. We have audited the internal financial controls over financial reporting of HCL Info systems Limited ("the Company") as of March 31, 2017 in conjunction with our audit of the standalone Ind AS financial statements of the Company for the year ended on that date.


Management''''s Responsibility for Internal Financial Controls


2. The Company''''s management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting issued by the Institute of Chartered Accountants of India (ICAI).These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to company''''s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Act.


Auditors'''' Responsibility


3. Our responsibility is to express an opinion on the Company''''s internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the "Guidance Note") and the Standards on Auditing deemed to be prescribed under section 143(10) of the Act to the extent applicable to an audit of internal financial controls, both applicable to an audit of internal financial controls and both issued by the ICAI. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.


4 Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditor''''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.


5. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Company''''s internal financial controls system over financial reporting.


Meaning of Internal Financial Controls over Financial Reporting


6. A company''''s internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company''''s internal financial control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company''''s assets that could have a material effect on the financial statements.


Inherent Limitations of Internal Financial Controls Over Financial Reporting


7. Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.


Opinion


8. In our opinion, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at March 31, 2017, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India.


Referred to in paragraph 10 of the Independent Auditors'''' Report of even date to the members of HCLI Info systems Limited on the standalone Ind AS financial statements as of and for the year ended March 31, 2017


i. (a) The Company is maintaining proper records showing full particulars, including quantitative details and situation, of fixed assets.


(b) The fixed assets are physically verified by the Management according to a phased programme designed to cover all the items over a period of three years which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. Pursuant to the programme, a portion of the fixed assets has been physically verified by the Management during the year and no material discrepancies have been noticed on such verification.


(c) The title deeds of immovable properties, as disclosed in Note 3 on fixed assets to the financial statements, are held in the name of the Company, except for the immovable property mentioned below.
















Particulars



Gross Block



Net Block



Land and Building, Ambattur, Chennai



5.58 Crores



3.24 Crores



ii. The physical verification of inventory have been conducted at reasonable intervals by the Management during the year. The discrepancies noticed on physical verification of inventory as compared to book records were not material.


iii. (a) The Company has granted unsecured loans, to one company covered in the register maintained under Section 189


of the Act.


(b) In respect of the aforesaid loans, the terms and conditions under which such loans were granted are not prejudicial to the Company''''s interest.


(c) In respect of the aforesaid loans, the schedule of repayment of principal and payment of interest has been stipulated, and the parties are repaying the principal amounts, as stipulated, and are also regular in payment of interest as applicable.


(d) In respect of the aforesaid loans, there is no amount which is overdue for more than ninety days.


iv. The Company has not granted any loans or made any investments, or provided any guarantees or security to the parties covered under Section 185 and 186. Therefore, the provisions of Clause 3(iv) of the said Order are not applicable to the Company.


v. The Company has not accepted any deposits from the public within the meaning of Sections 73, 74, 75 and 76 of the Act and the Rules framed there under to the extent notified.


vi. The Central Government of India has not specified the maintenance of cost records under sub-section (1) of Section 148 of the Act for any of the products of the Company.


vii. (a) According to the information and explanations given to us and the records of the Company examined by us, in our


opinion, the Company is generally regular in depositing undisputed statutory dues in respect of value added tax and employees'''' state insurance and is regular in depositing undisputed statutory dues, including sales tax, service tax, provident fund, income tax, duty of customs, duty of excise and other material statutory dues, as applicable, with the appropriate authorities.


(b) According to the information and explanations given to us and the records of the Company examined by us, there are no dues of service-tax, duty of customs as at March 31, 2017 which have not been deposited on account of a dispute. The particulars of dues of income tax, sales tax, value added tax and duty of excise as at March 31, 2017 which have not been deposited on account of a dispute, are as follows:






































Name of the statute



Nature of dues



Amount (Rs. In crores)



Amount deposited (Rs. In crores)



Period to which the amount relates



Forum where the dispute is pending



Income Tax Act, 1961



Income Tax



3.00



-



2011-12



CIT (Appeal)



Income Tax Act, 1961



Income Tax



0.77



-



2012-13



CIT (Appeal)



Income Tax Act, 1961



Income Tax



2.41



2004-05


2005-06


2006-07



Assessing Officer/ Income Tax Appellate Tribunal
























































































































































Name of the statute



Nature of dues



Amount (Rs. In crores)



Amount deposited (Rs. In crores)



Period to which the amount relates



Forum where the dispute is pending



Central Excise Act, 1944



Excise Duty



99.65



7.49



2002-2014



CESTAT/


Commissioner (Appeals)



Haryana Sales Tax, 1973



Sales Tax



0.20



-



2012-2013



Assessing Authority



Maharashtra Value Added Tax Act, 2002



Sales Tax



2.76



0.68



2005-2012



Joint Commissioner Appeal



M.P. Value Added Tax Act, 2002



Sales Tax



0.25



0.17



2011-2014



Joint Commissioner Appeal



Jharkhand Value Added Tax Act, 2005



Sales Tax



0.59



0.04



2011-2012



Joint Commissioner Appeal



Bihar Value Added Tax Act, 2005



Sales Tax



9.64



5.26



2006-2007


2008-2015



Joint Commissioner Appeal



Orissa Value Added Tax Act, 2004



Sales Tax



0.17



0.01



2012-2014



Honorable High Court of Orissa/ Deputy commissioner Appeal (Bhubaneswar)



Karnataka Value Added Tax Act, 2003



Sales Tax



9.07



0.94



2006-2012



Deputy commissioner Appeal/ Honorable High Court of Karnataka/Tribunal



Andhra Pradesh Value Added Tax Act, 2005



Sales Tax



0.27



0.20



2006-2007


2008-2009



Deputy commissioner Appeal (Hyderabad)



Punjab General Sales Tax Act, 1948



Sales Tax



0.12



0.03



2007-2008



Deputy commissioner Appeals Punjab



Jammu & Kashmir Value Added Tax Act, 2005



Sales Tax



2.71



0.04



2007-2008


2008-2009



Deputy Commissioner Appeals Jammu



The Uttarakhand Value Added Tax Act-2005



Sales Tax



-



0.37



2012-2013



Assessing Officer



Kerala General Sales Tax Act, 1963



Sales Tax



0.58



0.22



2007-2008


2008-2009


2009-2010


2010-2011 2011-2012


2013-2014


2014-2015 2016-2017



Commercial Tax Officer



Rajasthan Sales Tax Act, 1994



Sales Tax



178.17



71.67



2008-2015



Deputy Commissioner (Appeals) of Commercial Tax Jaipur / Tax board Commercial Tax Jaipur / Tax board / Commercial Tax Jaipur / Hon''''ble Rajasthan High Court



West Bengal Sales Tax Act, 1994



Sales Tax



13.97



1.26



2005-2006


2007-2012


2013-2014



Board of Sales Tax Kolkata / Sales Tax Tribunal, Kolkata / Additional Commissioner (Appeals) of Sales Tax Kolkata



Tamil Nadu General Sales Tax Act, 1959



Sales Tax



0.59



6.64



2004-2005


2006-2008


2009-2016



Commercial Tax Officer Chennai / Deputy Commissioner (Appeals) of Sales Tax Chennai



Delhi Sales Tax Act, 1975



Sales Tax



16.71



0.27



2003-2004


2005-2006


2007-2014



Tribunal of Sales Tax Delhi / Deputy Commissioner (Appeals) of Sales Tax Delhi/ Assistant Commissioner Sales Tax
































Name of the statute



Nature of dues



Amount (Rs. In crores)



Amount deposited (Rs. In crores)



Period to which the amount relates



Forum where the dispute is pending



U.P. Value Added Tax Act-2008



Sales Tax



20.35



6.32



2007-2016



Tribunal Commercial Tax, Noida/ Additional Commissioner (Appeals) of Commercial Tax/ Noida/ Hon''''ble High court Allahabad



Uttar Pradesh Trade Tax Act, 1948



Sales Tax



0.83



0.57



2003-2007



Tribunal Commercial Tax, Noida/ Additional Commissioner (Appeals) of Commercial Tax/ Noida/ Hon''''ble High court Allahabad



viii. According to the records of the Company examined by us and the information and explanation given to us, the Company has not defaulted in repayment of loans or borrowings to any financial institution or bank or Government or dues to debenture holders as at the balance sheet date.


ix. In our opinion, and according to the information and explanations given to us, the moneys raised by way of term loans have been applied for the purposes for which they were obtained. The Company has not raised any moneys by way of initial public offer or further public offer (including debt instruments).


x. During the course of our examination of the books and records of the Company, carried out in accordance with the generally accepted auditing practices in India, and according to the information and explanations given to us, we have neither come across any instance of material fraud by the Company or on the Company by its officers or employees, noticed or reported during the year, nor have we been informed of any such case by the Management.


xi. The Company has not paid/ provided for managerial remuneration- Refer Note-52 to the financial statements. Accordingly, the provisions of Clause 3(xi) of the Order are not applicable to the Company.


xii. As the Company is not a Nidhi Company and the Nidhi Rules, 2014 are not applicable to it, the provisions of Clause 3(xii) of the Order are not applicable to the Company.


xiii. The Company has entered into transactions with related parties in compliance with the provisions of Sections 177 and 188 of the Act. The details of such related party transactions have been disclosed in the financial statements as required under Indian Accounting Standard (Ind AS) 24, Related Party Disclosures specified in the Companies (Indian Accounting Standards) Rules, 2015 (as amended) under Section 133 of the Act..


xiv. The Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year under review. Accordingly, the provisions of Clause 3(xiv) of the Order are not applicable to the Company.


xv. The Company has not entered into any non-cash transactions with its directors or persons connected with him. Accordingly, the provisions of Clause 3(xv) of the Order are not applicable to the Company.


xvi. The Company is not required to be registered under Section 45-IA of the Reserve Bank of India Act, 1934. Accordingly, the provisions of Clause 3(xvi) of the Order are not applicable to the Company.


For Price Waterhouse


Firm Registration Number: 301112E


Chartered Accountants


Avijit Mukerji


Place of the Signature : Noida Partner


Date : May 30, 2017 Membership Number: 056155

CIN: U67190WB2003PTC096617. Trading in Commodities is done through our Group Company Dynamic Commodities Pvt. Ltd. The company is also engaged in Proprietory Trading apart from Client Business.
“2019 © COPYRIGHT DYNAMIC EQUITIES PVT. LTD.”

Disclaimer: There is no guarantee of profits or no exceptions from losses. The investment advice provided are solely the personal views of the research team. You are advised to rely on your own judgment while making investment / Trading decisions. Past performance is not an indicator of future returns. Investment is subject to market risks. You should read and understand the Risk Disclosure Documents before trading/Investing.

Disclosure: We, Dynamic Equities Private Limited are also engaged in Proprietory Trading apart from Client Business. In case of any complaints/grievances, clients may write to us at compliance@dynamiclevels.com

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