1. We have audited the attached balance sheet of HCL Technologies
Limited (the 'Company') as at June 30, 2011 and also the profit and
loss account and the cash flow statement for the year ended on that
date annexed thereto. These financial statements are the
responsibility of the Company's management. Our responsibility is to
express an opinion on these financial statements based on our audit.
2. We conducted our audit in accordance with auditing standards
generally accepted in India. Those Standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for
our opinion.
3. As required by the Companies (Auditors' Report) Order, 2003 (as
amended) (the 'Order') issued by the Central Government of India in
terms of sub-section (4A) of Section 227 of the Companies Act, 1956
(the 'Act'), we enclose in the Annexure a statement on the matters
specified in paragraphs 4 and 5 of the said Order.
4. Further to our comments in the Annexure referred to above, we
report that:
i. We have obtained all the information and explanations, which to the
best of our knowledge and belief were necessary for the purposes of our
audit;
ii. In our opinion, proper books of account as required by law have
been kept by the Company so far as appears from our examination of
those books;
iii. The balance sheet, profit and loss account and cash flow statement
dealt with by this report are in agreement with the books of account;
iv. In our opinion, the balance sheet, profit and loss account and cash
flow statement dealt with by this report comply with the accounting
standards referred to in sub-section (3C) of Section 211 of the Act;
v. On the basis of the written representations received from the
directors, as on June 30, 2011, and taken on record by the Board of
Directors, we report that none of the directors is disqualified as on
June 30, 2011 from being appointed as a director in terms of clause (g)
of sub-section (1) of Section 274 of the Act; and
vi. In our opinion and to the best of our information and according to
the explanations given to us, the said accounts 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:
(a) in the case of the balance sheet, of the state of affairs of the
Company as at June 30, 2011;
(b) in the case of the profit and loss account, of the profit for the
year ended on that date; and
(c) in the case of cash flow statement, of the cash flows for the year
ended on that date.
Annexure referred to in paragraph 3 of our report of even date
(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 the
previous year in accordance with a planned programme of verifying them
once in 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.
(c) There was no substantial disposal of fixed assets during the year.
(ii) (a) The management has conducted physical verification of
inventory at reasonable intervals during the year.
(b) The procedures of physical verification of inventory followed by
the management are reasonable and adequate in relation to the size of
the Company and the nature of its business.
(c) The Company is maintaining proper records of inventory and no
material discrepancies were noticed on physical verification.
(iii) (a) According to the information and explanations given to us,
the Company has not granted any loans, secured or unsecured to
companies, firms or other parties covered in the register maintained
under section 301 of the Act. Accordingly, the provisions of clause 4
(iii) (a) to (d) of the Order are not applicable to the Company and
hence not commented upon.
(b) According to information and explanations given to us, the Company
has not taken any loans, secured or unsecured from companies, firms or
other parties covered in the register maintained under section 301 of
the Act. Accordingly, the provisions of clause 4 (iii) (e) to (g) 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, there is an adequate internal control system commensurate
with the size of the Company and the nature of its business, for the
purchase of inventory and fixed assets and for the sale of goods and
services. During the course of our audit, we have not observed any
major weakness or continuing failure to correct major weakness in
internal control system of the Company in respect of these areas.
(v) In our opinion, there are no contracts or arrangements that need to
be entered in the register maintained under Section 301 of the Act.
(vi) The Company has not accepted any deposits from the public.
(vii) In our opinion, the Company has an internal audit system
commensurate with the size and nature of its business.
(viii) To the best of our knowledge and as explained, the Central
Government has not prescribed maintenance of cost records under clause
(d) of sub-section (1) of section 209 of the Act for the products of
the Company.
(ix) (a) Undisputed statutory dues including provident fund, investor
education and protection fund, employees' state insurance, income-tax,
sales-tax, wealth-tax, service tax, customs duty, excise duty, cess and
other material statutory dues have generally been regularly deposited
with the appropriate authorities though there has been a slight delay
in a few cases.
Further, since the Central Government has till date not prescribed the
amount of cess payable under section 441 A of the Act, we are not in a
position to comment upon the regularity or otherwise of the company in
depositing the same.
(b) According to the information and explanations given to us, no
undisputed amounts payable in respect of provident fund, investor
education and protection fund, employees' state insurance, income-tax,
wealth-tax, service tax, sales-tax, customs duty, excise duty, cess and
other material statutory dues were outstanding, at the year end, for a
period of more than six months from the date they became payable.
(c) According to the records of the Company, the dues outstanding of
income-tax, sales-tax, wealth-tax, service tax, customs duty, excise
duty and cess on account of any dispute, are as follows:
Name of Nature of Amount Period to Forum where
the Statute Dues (Rs.) which the dispute
amount is pending
relates
Income Tax Income Tax 1,105,830,990 2006-07 Income Tax
Act, 1961 Appellate
Tribunal
Income Tax Income Tax 10,729,493 2005-06 Commissioner of
Act, 1961 Income Tax
(Appeals)
Income Tax Income Tax 6,821,418 2005-06 Income Tax
Act, 1961 Appellate
Tribunal
Income Tax Income Tax 110,913,309 2005-06 Commissioner of
Act, 1961 Income Tax
(Appeals)
Income Tax Income Tax 413,109 2004-05 Commissioner of
Act, 1961 Income Tax
(Appeals)
Income Tax Income Tax 12,390,000 2004-05 Income Tax
Act, 1961 Appellate
Tribunal
Income Tax Income Tax 1,180,000 2003-04 Income Tax
Act, 1961 Appellate
Tribunal
Income Tax Income Tax 54,239,366 2003-04 Commissioner of
Act, 1961 Income Tax
(Appeals)
Income Tax Income Tax 35,792,992 2002-03 Commissioner of
Act, 1961 Income Tax
(Appeals)
Income Tax Income Tax 2,065,000 2001-02 Commissioner of
Act, 1961 Income Tax
(Appeals)
Central
Excise Custom Duty 2,018,406 2005-06 Customs, Excise,
and Customs Service Tax
Act, 1962 Appellant
Tribunal,
Bangalore
Indian
Stamp Stamp Duty 17,500,000 2005-06 Chief
Controlling
Act, 1889 Revenue
Authority,
Meerut
Sales Tax Sales Tax 2,712,000 2007-08 Sales Tax,
Joint
Commissioner
Appeal,
Bangalore.
(x) The Company has no accumulated losses at the end of the financial
year and it has not incurred cash losses in the current and immediately
preceding financial year.
(xi) Based on our audit procedures and as per the information and
explanations given by the management, we are of the opinion that the
Company has not defaulted in repayment of dues to a financial
institution, bank or debenture holders.
(xii) According to the information and explanations given to us and
based on the documents and records produced before us, the Company has
not granted loans and advances on the basis of security by way of
pledge of shares, debentures and other securities.
(xiii) In our opinion, the Company is not a chit fund or a nidhi /
mutual benefit fund / society. Therefore, the provisions of clause
4(xiii) of the Order are not applicable to the Company.
(xiv) In our opinion, the Company is not dealing in or trading in
shares, securities, debentures and other investments. Accordingly, the
provisions of clause 4(xiv) of the Order are not applicable to the
Company.
(xv) According to the information and explanations given to us, the
Company has given guarantees for loans taken by others from bank or
financial institutions, the terms and conditions whereof in our opinion
are not prima-facie prejudicial to the interest of the Company.
(xvi) Based on the information and explanations given to us by the
management, term loans were applied for the purpose for which the loans
were obtained.
(xvii) According to the information and explanations given to us and on
an overall examination of the balance sheet of the Company, we report
that no funds raised on short- term basis have been used for long-term
investment.
(xviii) The Company has not made any preferential allotment of shares
to parties or companies covered in the register maintained under
section 301 of the Act.
(xix) The Company has created security or charge in respect of
debentures outstanding at the year end.
(xx) The Company has not raised any money by public issue during the
year.
(xxi) To the best of our knowledge and according to the information and
explanations given to us, no fraud by the Company and no material fraud
on the Company has been noticed or reported during the year.
For S.R. Batliboi & Co.
Firm registration number: 301003E
Chartered Accountants
per Tridibes Basu
Partner
Membership No.: 17401
Gurgaon, India
July 27 , 2011