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HCL Technologies Ltd.

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Market Cap. (₹) 148613.71 Cr. P/BV 3.59 Book Value (₹) 304.93
52 Week High/Low (₹) 1188/920 FV/ML 2/1 P/E(X) 14.69
Bookclosure 01/11/2019 EPS (₹) 74.60 Div Yield (%) 0.73
Year End :2019-03 

Report on the Audit of the Standalone Financial Statements

Opinion

We have audited the accompanying standalone financial statements (Ind AS financial statement) of HCL Technologies Limited (“the Company”), which comprise the Balance sheet as at March 31,2019, the Statement of Profit and Loss, including the statement of Other Comprehensive Income, the Cash Flow Statement and the Statement of Changes in Equity for the year then ended, and notes to the financial statements, including a summary of significant accounting policies and other explanatory information.

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone financial statements give the information required by the Companies Act, 2013, as amended (“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, 2019, its profit including other comprehensive income its cash flows and the changes in equity for the year ended on that date.

Basis for Opinion

We conducted our audit of the standalone financial statements in accordance with the Standards on Auditing (SAs),as specified under section 143(10) of the Act. Our responsibilities under those Standards are further described in the ‘Auditor’s Responsibilities for the Audit of the Standalone Financial Statements’ section of our report. We are independent of the Company in accordance with the ‘Code of Ethics’ issued by the Institute of Chartered Accountants of India together with the ethical requirements that are relevant to our audit of the financial statements under the provisions of the Act and the Rules thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the standalone financial statements.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the standalone financial statements for the financial year ended March 31, 2019. These matters were addressed in the context of our audit of the standalone financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. For each matter below, our description of how our audit addressed the matter is provided in that context.

We have determined the matters described below to be the key audit matters to be communicated in our report. We have fulfilled the responsibilities described in the Auditor’s responsibilities for the audit of the standalone financial statements section of our report, including in relation to these matters. Accordingly, our audit included the performance of procedures designed to respond to our assessment of the risks of material misstatement of the standalone financial statements. The results of our audit procedures, including the procedures performed to address the matters below, provide the basis for our audit opinion on the accompanying standalone financial statements.

Key audit matters

How our audit addressed the key audit matter

Accuracy of recognition, measurement, presentation and disclosures of revenues and impact of adoption of Ind AS 115 “Revenue from Contracts with Customers” (new revenue accounting standard)(as described in note 1(f) and 2.19 of the standalone financial statements)

The Company has adopted Ind AS 115 “Revenue from Contracts with Customers” starting 1 April 2018. The application of the new revenue accounting standard involves certain key judgements and principles for evaluating various distinctive terms/matters.

The Company also derives portion of its revenue from long-term and fixed price projects. Estimated effort is a critical estimate to determine revenues for fixed price contract. This estimate has a high inherent uncertainty as it requires consideration of progress of the contract, efforts incurred till date, efforts required to complete the remaining contract performance obligations.

We assessed the company’s process to identify the recognition of revenue for fixed price contract, accounting for distinctive terms in arrangements and impact of adoption of the new revenue accounting standard. Our audit approach consisted testing of the design and operating effectiveness of the internal controls and substantive testing on sample as follows:

- Evaluated the design of internal controls.

- Selected samples and tested the operating effectiveness of the internal control.

- Tested relevant information technology systems’ controls relating to contracts and related information used in recording and disclosing revenue.

- Tested continuing and new contracts and performed the following procedures to assess management analysis and impact of Ind AS 115 adoption:

o Read, analyzed and identified the distinct performance obligations in these contracts.

o Compared these performance obligations with that identified and recorded by the Company.

o Considered the terms of the contracts and assessed the transaction price including any variable consideration to test revenue.

- Further, In respect of fixed price contracts, progress towards completion of performance obligation used to compute revenue was verified based on actual cost relative to estimated cost from the information technology systems. Also reviewed cost incurred with estimated cost to identify significant variations and reasons and to verify whether those variations have been considered in estimating the remaining cost to complete the contract.

- Assessed management analysis of various distinctive terms in order to test appropriateness of revenue recognition.

- Assessed the appropriateness of the disclosure made pursuant to new revenue accounting standard.

Evaluation of tax positions (as described in note 2.33 of the standalone financial statements)

The Company has material tax positions and matters under dispute which involves significant judgment to determine the possible outcomes and are complex in nature. Accordingly, these positions and disputed matters are determined to be a key audit matter in our audit.

We performed the following procedures:

- Assessed the company’s process for identifying tax positions and disputed matters the related accounting policy of provisioning for these exposures.

- Obtained details of tax positions and disputed matters for the year and as at March 31, 2019 from management.

- Involved our internal specialist to test the management’s underlying assumptions in estimating the tax provision/ benefits and the possible outcome of the tax positions and matters.

- Our internal specialist also considered legal precedence and other rulings and legal opinions obtained by the management in evaluating position on these tax positions.

- Discussed disputed matters with management and obtained management specialist opinion for significant matters.

- We have also assessed the impact of any change in existing positions as of April 1, 2018 to evaluate whether any change was required to management’s position.

Impairment assessment of intangible (as described in note 1(i), 1(n) and 2.3 of the Standalone financial statements)

As required by Ind AS 38 Intangible Assets, the Company tests Licensed IPR’s and customer relationships for impairment annually in accordance with Ind AS 36 Impairment of Assets.

The risk for the standalone financial statements relates to the appropriateness of the determination and recognition of impairments.

For impairment of intangibles we reviewed impairment analysis performed by the management. In addition, we considered whether any indicators of impairment were present by understanding the business rationale for intangibles.

Other Information

The Company’s Board of Directors is responsible for the other information. The other information comprises the information included in the Management Discussion and Analysis, Director’s Report including annexures, Corporate Governance Report and Business Responsibility Report, but does not include the standalone financial statements and our auditor’s report thereon. Our opinion on the standalone financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.

In connection with our audit of the standalone financial statements, our responsibility is to read the other information and, in doing so, consider whether such other information is materially inconsistent with the standalone financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

Responsibilities of Management for the Standalone Financial Statements

The Company’s Board of Directors is responsible for the matters stated in section 134(5) of the Act with respect to the preparation of these standalone financial statements that 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 (Ind AS) specified under section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015, as amended. 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 the 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 financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

In preparing the standalone financial statements, management is responsible for assessing the Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

Those Board of Directors are also responsible for overseeing the Company’s financial reporting process.

Auditor’s Responsibilities for the Audit of the Standalone Financial Statements

Our objectives are to obtain reasonable assurance about whether the standalone financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these standalone financial statements.

As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

- Identify and assess the risks of material misstatement of the standalone financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

- Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under section 143(3)(i) of the Act, we are also responsible for expressing our opinion on whether the Company has adequate internal financial controls system in place and the operating effectiveness of such controls.

- Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.

- Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Company to cease to continue as a going concern.

- Evaluate the overall presentation, structure and content of the standalone financial statements, including the disclosures, and whether the standalone financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the standalone financial statements for the financial year ended March 31, 2019 and are therefore the key audit matters. We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor’s Report) Order, 2016 (“the Order”), issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act, we give in the “Annexure 1”a statement on the matters specified in paragraphs 3 and 4 of the Order.

2. 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 the Statement of Other Comprehensive Income, the Cash Flow Statement and 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 financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Companies (Indian Accounting Standards) Rules, 2015, as amended;

(e) On the basis of the written representations received from the directors as on March 31, 2019 taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2019 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 with reference to these standalone financial statements and the operating effectiveness of such controls, refer to our separate Report in “Annexure 2” to this report;

(g) In our opinion, the managerial remuneration for the year ended March 31, 2019 has been paid / provided by the Company to its directors in accordance with the provisions of section 197 read with Schedule V to the Act;

(h) With respect to the other matters to be included in the Auditor’s Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, as amended in our opinion and to the best of our information and according to the explanations given to us:

i. The Company has disclosed the impact of pending litigations on its financial position in its standalone financial statements;

ii. The Company has made provision, as required under the applicable law or accounting standards, for material foreseeable losses, if any, on longterm contracts including derivative contracts;

iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company;

Annexure 1 referred to in paragraph 1 of the section on “Report on Other Legal and Regulatory Requirements” of our report of even date

Re: HCL Technologies Limited (the Company)

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

(b) All fixed assets were physically verified by the management in accordance with a planned programme of verifying them in phased manner 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. No material discrepancies were noticed on such verification conducted during the financial year.

(c) According to the information and explanations given by the management, the title deeds of immovable properties included in property, plant and equipment are held in the name of the Company.

(ii) The inventory has been physically verified by the management during the year. In our opinion, the frequency of verification is reasonable. No material discrepancies were noticed on such physical verification. Inventories lying with third parties have been confirmed by them as at year end and no material discrepancies were noticed in respect of such confirmations.

(iii) According to the information and explanations given to us, the Company has not granted any loans, secured or unsecured to companies, firms, Limited Liability Partnerships or other parties covered in the register maintained under section 189 of the Companies Act, 2013. Accordingly, the provisions of clause 3(iii)(a), (b) and (c) of the Order are not applicable to the Company and hence not commented upon.

(iv) In our opinion and according to the information and explanations given to us, provisions of section 186 of the Companies Act 2013 in respect of loans given have been complied with by the Company. In our opinion and according to the information and explanations given to us, there are no loans, investments, guarantees, and securities given in respect of which provisions of section 185 of the Companies Act 2013 are applicable and hence not commented upon.

(v) The Company has not accepted any deposits within the meaning of Sections 73 to 76 of the Act and the Companies (Acceptance of Deposits) Rules, 2014 (as amended). Accordingly, the provisions of clause 3(v) of the Order are not applicable.

(vi) To the best of our knowledge and as explained, the Central Government has not specified the maintenance of cost records under clause 148(1) of the Companies Act, 2013, for the products/services of the Company.

(vii) (a) The Company is regular in depositing with appropriate authorities undisputed statutory dues including provident fund, employees’ state insurance, income-tax, goods and service tax, duty of custom, cess and other statutory dues applicable to it.

(b) According to the information and explanations given to us, no undisputed amounts payable in respect of provident fund, employees’ state insurance, income-tax, goods and service tax,duty of custom, cess and other statutory dues were outstanding, at the year end, for a period of more than six months from the date they became payable except for service tax as below:

Name of the Statute

Nature of Dues

Amount (in Crores of Rs.s.)

Period to which the amount relates

Due Date

Date of Payment

Finance Act 1994, read with Service Tax Rules, 1994*

Service tax

6.00

2010-11 to 2014-15

06-Feb-17

Not Paid

* As informed by Management, the Company has filed a writ petition before the Bombay High Court on 19 March 2018 which is not yet accepted by the High Court yet. The writ petition has been filed because time limit to file appeal with the Commissioner, Appeals was lapsed.

(c) According to the records of the Company, the dues of income-tax, service tax, duty of custom, duty of excise and provident fund on account of any dispute, are as follows:

Name of the Statute

Nature of Dues

Amount (in Crores of Rs.)

Period to which the amount relates

Forum where dispute is pending

Income Tax Act, 1961

Income Tax

3.71

2014-15

Commissioner of Income Tax (Appeals)

Income Tax Act, 1961

Income Tax

4.06

2013-14

CIT(A), New Delhi

Income Tax Act, 1961

Income Tax

2.10

2012-13

Commissioner of Income Tax (Appeals)

Income Tax Act, 1961

Income Tax

21.58

2011-12

Commissioner of Income Tax (Appeals)

Income Tax Act, 1961

Income Tax

2.46

2010-11

Income Tax Appellate Tribunal

Income Tax Act, 1961

Income Tax

72.41

2009-10

Income Tax Appellate Tribunal

Income Tax Act, 1961

Income Tax

67.28

2008-09

Income Tax Appellate Tribunal

Income Tax Act, 1961

Income Tax

0.69

2008-09

Income Tax Appellate Tribunal

Income Tax Act, 1961

Income Tax

245.77

2006-07

Income Tax Appellate Tribunal

Income Tax Act, 1961

Income Tax

217.10

2005-06

Income Tax Appellate Tribunal

Income Tax Act, 1961

Income Tax

18.74

2004-05

Income Tax Appellate Tribunal

Income Tax Act, 1961

Income Tax

1.83

2004-05

Income Tax Appellate Tribunal

Income Tax Act, 1961

Income Tax

15.95

2004-05

Income Tax Appellate Tribunal

Income Tax Act, 1961

Income Tax

6.97

2004-05

Supreme Court

Income Tax Act, 1961

Income Tax

0.55

2004-05

Commissioner of Income Tax (Appeals)

Income Tax Act, 1961

Income Tax

2.24

2003-04

Delhi High Court

Income Tax Act, 1961

Income Tax

4.22

2003-04

Income Tax Appellate Tribunal

Income Tax Act, 1961

Income Tax

2.34

2003-04

Supreme Court

Income Tax Act, 1961

Income Tax

7.28

2003-04

Commissioner of Income Tax (Appeals)

Income Tax Act, 1961

Income Tax

3.09

2002-03

Supreme Court

Income Tax Act, 1961

Income Tax

13.75

2002-03

Income Tax Appellate Tribunal

Income Tax Act, 1961

Income Tax

0.21

2002-03

Delhi High Court

Income Tax Act, 1961

Income Tax

9.14

2001-02

Income Tax Appellate Tribunal

Income Tax Act, 1961

Income Tax

0.36

2000-01

Delhi High Court

Income Tax Act, 1961 #

Income Tax

0.01

2011-12

Income Tax Appellate Tribunal

Income Tax Act, 1961 #

Income Tax

1.40

2010-11

Income Tax Appellate Tribunal

Income Tax Act, 1961 #

Income Tax

20.72

2009-10

Income Tax Appellate Tribunal

Income Tax Act, 1961 #

Income Tax

0.32

2008-09

Income Tax Appellate Tribunal

Income Tax Act, 1961 #

Income Tax

0.46

2007-08

Income Tax Appellate Tribunal

Income Tax Act, 1961 #

Income Tax

13.66

2005-06

Income Tax Appellate Tribunal

Income Tax Act, 1961 #

Income Tax

0.08

2004-05

Income Tax Appellate Tribunal

Income Tax Act, 1961 *

Income Tax

15.66

2013-14

Income Tax Appellate Tribunal

Income Tax Act, 1961 *

Income Tax

6.39

2012-13

Income Tax Appellate Tribunal

Income Tax Act, 1961 *

Income Tax

13.13

2011-12

Income Tax Appellate Tribunal

Income Tax Act, 1961 *

Income Tax

5.01

2010-11

Income Tax Appellate Tribunal

Income Tax Act, 1961 *

Income Tax

20.84

2009-10

Income Tax Appellate Tribunal

Income Tax Act, 1961 *

Income Tax

32.15

2008-09

Income Tax Appellate Tribunal

Income Tax Act, 1961 *

Income Tax

6.99

2007-08

Income Tax Appellate Tribunal

Income Tax Act, 1961 *

Income Tax

20.28

2006-07

Income Tax Appellate Tribunal

Customs Act, 1962

Custom Duty

0.27

2006-07

Common Adjudicating Authority (Directorate of Revenue Intelligence)

Customs Act, 1962 *

Custom Duty

0.12

2009-14

Office of Assistant Commissioner of Customs

Customs Act, 1962 *

Custom Duty

0.26

2009-14

Office of Assistant Commissioner of Customs

Customs Act, 1962 *

Custom Duty

6.87

2007-08

Office of Assistant Commissioner of Customs

Customs Act, 1962 *

Custom Duty

0.01

1999-00

Office of Assistant Commissioner of Customs

Customs Act, 1962 *

Custom Duty

1.12

1998-99

Office of Assistant Commissioner of Customs

Customs Act, 1962 *

Custom Duty

2.41

1997-99

Office of Assistant Commissioner of Customs

Customs Act, 1962 *

Custom Duty

6.88

1997-98

Office of Assistant Commissioner of Customs

Customs Act, 1962 *

Custom Duty

0.08

1997-98

Office of Assistant Commissioner of Customs

Finance Act 1994, read with Service Tax Rules, 1994

Service Tax

4.04

2013-15

High Court

Finance Act 1994, read with Service Tax Rules, 1994

Service Tax

0.13

2012-15

Commissioner, Appeals

Finance Act 1994, read with Service Tax Rules, 1994

Service Tax

14.52

2010-13

High Court

Finance Act 1994, read with Service Tax Rules, 1994

Service Tax

0.10

2009-10

Customs, Excise, Service Tax Appellant Tribunal, Allahabad

Finance Act 1994, read with Service Tax Rules, 1994

Service Tax

0.30

2006-11

Customs, Excise, Service Tax Appellant Tribunal, Allahabad

Finance Act 1994, read with Service Tax Rules, 1994

Service Tax

7.21

2006-07

Commissioner (Appeals)

Finance Act 1994, read with Service Tax Rules, 1994

Service Tax

0.94

2006-07

High Court

Finance Act 1994, read with Service Tax Rules, 1994*

Service Tax

0.48

2007-08 to 2011-12

Commissioner (Appeals)

Central Excise Act 1944

Excise Duty

3.22

2011-12

Commissioner Appeals, Central Excise, Chennai

Central Board Trustees *

Provident fund

4.30

1996-14

Bombay High Court

Above amount represents total demand inclusive of interest. Total amount deposited / adjusted in respect of Income tax is Rs. 139.48 Crores, Custom Duty Rs. 7.13 Crores, Service tax is Rs. 4.44 Crores and Provident Fund is Rs. 0.89 Crores.

# Pursuant to scheme for demerger of IT enabled business of HCL Comnet Systems & Services Limited in FY 2012 - 13.

* Pursuant to acquisition of demerged business of Geometric Limited in FY 2016-17.

(viii) In our opinion and according to the information and explanations given by the management, the Company has not defaulted in repayment of loans or borrowing to a bank. The Company did not have any outstanding loans or borrowing dues in respect of financial institution or government or dues to debenture holders during the year.

(ix) According to the information and explanations given by the management, the Company has not raised any money way of initial public offer / further public offer / debt instruments hence, reporting under clause (ix)is not applicable to the Company and hence not commented upon. In our opinion and according to information and explanations given by the management, term loans were applied for the purpose for which they were raised.

(x) Based upon the audit procedures performed for the purpose of reporting the true and fair view of the financial statements and according to the information and explanations given by the management, we report that no fraud by the Company or no fraud / material fraud on the Company by the officers and employees of the Company has been noticed or reported during the year.

(xi) According to the information and explanations given by the management, the managerial remuneration has been paid / provided in accordance with the requisite approvals mandated by the provisions of section 197 read with Schedule V to the Companies Act, 2013.

(xii) In our opinion, the Company is not a nidhi Company. Therefore, the provisions of clause 3(xii) of the order are not applicable to the Company and hence not commented upon.

(xiii) According to the information and explanations given by the management, transactions with the related parties are in compliance with section 177 and 188 of Companies Act, 2013 where applicable and the details have been disclosed in the notes to the financial statements, as required by the applicable accounting standards.

(xiv) According to the information and explanations given to us and on an overall examination of the balance sheet, the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year under review and hence, reporting requirements under clause 3(xiv) are not applicable to the Company and, not commented upon.

(xv) According to the information and explanations given by the management, the Company has not entered into any noncash transactions with directors or persons connected with him as referred to in section 192 of Companies Act, 2013.

(xvi) According to the information and explanations given to us, the provisions of section 45-IA of the Reserve Bank of India Act, 1934 are not applicable to the Company.

ANNEXURE 2 TO THE INDEPENDENT AUDITOR’S REPORT OF EVEN DATE ON THE STANDALONE FINANCIAL STATEMENTS OF HCL TECHNOLOGIES LIMITED Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013, as amended (“the Act”)

We have audited the internal financial controls over financial reporting of HCL Technologies Limited (“the Company”) as of March 31, 2019 in conjunction with our audit of the standalone financial statements of the Company for the year ended on that date.

Management’s Responsibility for Internal Financial Controls

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. 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 the 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 Companies Act, 2013, as amended.

Auditor’s Responsibility

Our responsibility is to express an opinion on the Company’s internal financial controls over financial reporting with reference to these standalone financial statements 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 as specified under section 143(10) of the Companies Act, 2013, as amended, to the extent applicable to an audit of internal financial controls and, both issued by the Institute of Chartered Accountants of India. 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 with reference to these standalone financial statements was established and maintained and if such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls over financial reporting with reference to these standalone financial statements and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting with reference to these standalone financial statements, 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 judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the internal financial controls over financial reporting with reference to these standalone financial statements.

Meaning of Internal Financial Controls Over Financial Reporting With Reference to these Financial Statements

A company’s internal financial control over financial reporting with reference to these standalone financial statements 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 with reference to these standalone financial statements 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 authorisations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorised 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 with Reference to these Standalone Financial Statements

Because of the inherent limitations of internal financial controls over financial reporting with reference to these standalone financial statements, 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 with reference to these standalone financial statements to future periods are subject to the risk that the internal financial control over financial reporting with reference to these standalone financial statements may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Opinion

In our opinion, the Company has, in all material respects, adequate internal financial controls over financial reporting with reference to these standalone financial statements and such internal financial controls over financial reporting with reference to these standalone financial statements were operating effectively as at March 31, 2019, 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.

For S.R. Batliboi & CO. LLP

Chartered Accountants

ICAI Firm Registration Number: 301003E/E300005

per Nilangshu Katriar

Partner

Membership Number: 58814

Place of Signature: Gurugram

Date: May 9, 2019

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KYC is one time exercise while dealing in securities markets - once KYC is done through a SEBI registered intermediary (broker, DP, Mutual Fund etc.), you need not undergo the same process again when you approach another intermediary.
Attention Investors :
No need to issue cheques by investors while subscribing to IPO. Just write the bank account number and sign in the application form to authorise your bank to make payment in case of allotment. No worries for refund as the money remains in investor's account.
“Investment in securities market are subject to market risks, read all the related documents carefully before investing”.