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HCL Infosystems Ltd.

BSE: 500179 Sector: Consumer
NSE: HCL-INSYS ISIN Code: INE236A01020
BSE LIVE 15:59 | 15 Dec 52.30 4.85
(10.22%)
OPEN

48.10

HIGH

53.20

LOW

47.75

NSE 15:59 | 15 Dec 52.35 4.85
(10.21%)
OPEN

48.05

HIGH

53.30

LOW

47.70

OPEN 48.10
PREVIOUS CLOSE 47.45
VOLUME 2455908
52-Week high 64.37
52-Week low 39.80
P/E
Mkt Cap.(Rs cr) 1,722
Buy Price 52.30
Buy Qty 1200.00
Sell Price 0.00
Sell Qty 0.00
OPEN 48.10
CLOSE 47.45
VOLUME 2455908
52-Week high 64.37
52-Week low 39.80
P/E
Mkt Cap.(Rs cr) 1,722
Buy Price 52.30
Buy Qty 1200.00
Sell Price 0.00
Sell Qty 0.00

HCL Infosystems Ltd. (HCL-INSYS) - Auditors Report

Company auditors report

TO

The Members of HCL Infosystems Limited

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

1. We have audited the accompanying standalone financial statements of HCL InfosystemsLimited ("the Company") which comprise the Balance Sheet as at March 31 2017the Statement of Profit and Loss (including Other Comprehensive Income) the Cash FlowStatement and the Statement of Changes in Equity for the year then ended and a summary ofthe 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 inSection 134(5) of the Companies Act 2013 ("the Act") with respect to thepreparation of these standalone Ind AS financial statements to give a true and fair viewof the financial position financial performance (including other comprehensive income)cash flows and changes in equity of the Company in accordance with the accountingprinciples generally accepted in India including the Indian Accounting Standardsspecified in the Companies (Indian Accounting Standards) Rules 2015 (as amended) underSection 133 of the Act. This responsibility also includes maintenance of adequateaccounting records in accordance with the provisions of the Act for safeguarding of theassets of the Company and for preventing and detecting frauds and other irregularities;selection and application of appropriate accounting policies; making judgments andestimates that are reasonable and prudent; and design implementation and maintenance ofadequate internal financial controls that were operating effectively for ensuring theaccuracy and completeness of the accounting records relevant to the preparation andpresentation of the standalone Ind AS financial statements that give a true and fair viewand 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 financialstatements based on our audit.

4. We have taken into account the provisions of the Act and the Rules made thereunderincluding the accounting and auditing standards and matters which are required to beincluded in the audit report under the provisions of the Act and the Rules madethereunder.

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

6. An audit involves performing procedures to obtain audit evidence about the amountsand the disclosures in the standalone Ind AS financial statements. The procedures selecteddepend on the auditors’ judgment including the assessment of the risks of materialmisstatement of the standalone Ind AS financial statements whether due to fraud or error.In making those risk assessments the auditor considers internal financial controlrelevant to the Company’s preparation of the standalone Ind AS financial statementsthat give a true and fair view in order to design audit procedures that are appropriatein the circumstances. An audit also includes evaluating the appropriateness of theaccounting policies used and the reasonableness of the accounting estimates made by theCompany’s Directors as well as evaluating the overall presentation of the standaloneInd AS financial statements.

7. We believe that the audit evidence we have obtained is su3cient and appropriate toprovide 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 explanationsgiven to us the aforesaid standalone Ind AS financial statements give the informationrequired by the Act in the manner so required and give a true and fair view in conformitywith the accounting principles generally accepted in India of the state of a3airs of theCompany as at March 31 2017 and its loss (including other comprehensive income) itscash 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 312016 and the transition date opening balance sheet as at July 1 2015 included in thesestandalone Ind AS financial statements are based on the previously issued statutoryfinancial statements for the nine months period ended March 31 2016 and for the yearended

June 30 2015 prepared in accordance with the Companies (Accounting Standards) Rules2006 (as amended) which were audited by us on which we expressed an unmodi3ed opiniondated May 25 2016 and August 20 2015 respectively. The adjustments to the financialstatements for the nine months ended March 31 2016 for the difierences in accountingprinciples adopted by the Company on transition to the Ind AS have been audited by us onwhich we have expressed an unmodi3ed opinion vide our report dated January 31 2017. Theadjustments to the financial statements for the year ended June 30 2015 for thedifierences in accounting principles adopted by the Company on transition to the Ind AShave been audited by us.

Our opinion is not quali3ed 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 theCentral 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 theCompany as we considered appropriate and according to the information and explanationsgiven to us we give in the Annexure B a statement on the matters specified in paragraphs3 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 bestof 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 theCompany so far as it appears from our examination of those books.

(c) The Balance Sheet the Statement of Profit and Loss (including other comprehensiveincome) the Cash Flow Statement and the Statement of Changes in Equity dealt with by thisReport are in agreement with the books of account. (d) In our opinion the aforesaidstandalone Ind AS financial statements comply with the Indian Accounting Standardsspecified under Section 133 of the Act.

(e) On the basis of the written representations received from the directors as on March31 2017 taken on record by the Board of Directors none of the directors is disquali3edas on March 31 2017 from being appointed as a director in terms of Section 164 (2) of theAct. (f) With respect to the adequacy of the internal financial controls over financialreporting of the Company and the operating effectiveness of such controls refer to ourseparate Report in Annexure A.

(g) With respect to the other matters to be included in the Auditors’ Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 in our opinionand to the best of our knowledge and belief and according to the information andexplanations given to us: i. The Company has disclosed the impact if any of pendinglitigations as at March 31 2017 on its financial position in its standalone Ind ASfinancial statements – Refer Note 29 and 42; ii. The Company has long-term contractsas at March 31 2017 for which there were no material foreseeable losses. The Company didnot have any long-term derivative contracts as at March 31 2017; iii. There has been nodelay in transferring amounts required to be transferred to the Investor Education andProtection Fund by the Company during the year ended March 31 2017. iv. The Company hasprovided requisite disclosures in the financial statements as to holdings as well asdealings in Specified Bank Notes during the period from November 8 2016 to December 302016. Based on audit procedures and relying on the management representation we reportthat the disclosures are in accordance with books of account maintained by the Company andas produced to us by the Management – Refer Note 54.

For Price Waterhouse
Firm Registration Number: 301112E
Chartered Accountants
Avijit Mukerji
Place of the Signature : Noida Partner
Date : May 30 2017 Membership Number: 056155

Annexure A to Independent Auditors’ Report

Referred to in paragraph 11(f) of the Independent Auditors’ Report of even date tothe members of HCL Infosystems Limited on the standalone Ind AS financial statements forthe 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 HCLInfosystems Limited ("the Company") as of March 31 2017 in conjunction with ouraudit of the standalone Ind AS financial statements of the Company for the year ended onthat date.

Management’s Responsibility for Internal Financial Controls

2. The Company’s management is responsible for establishing and maintaininginternal financial controls based on the internal control over financial reportingcriteria established by the Company considering the essential components of internalcontrol stated in the Guidance Note on Audit of Internal Financial Controls over FinancialReporting issued by the Institute of Chartered Accountants of India (ICAI).Theseresponsibilities include the design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the orderly and e3cientconduct of its business including adherence to company’s policies the safeguardingof its assets the prevention and detection of frauds and errors the accuracy andcompleteness of the accounting records and the timely preparation of reliable financialinformation as required under the Act.

Auditors’ Responsibility

3. Our responsibility is to express an opinion on the Company’s internal financialcontrols over financial reporting based on our audit. We conducted our audit in accordancewith the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting(the "Guidance Note") and the Standards on Auditing deemed to be prescribedunder section 143(10) of the Act to the extent applicable to an audit of internalfinancial controls both applicable to an audit of internal financial controls and bothissued by the ICAI. Those Standards and the Guidance Note require that we comply withethical requirements and plan and perform the audit to obtain reasonable assurance aboutwhether adequate internal financial controls over financial reporting was established andmaintained and if such controls operated effectively in all material respects.

4 Our audit involves performing procedures to obtain audit evidence about the adequacyof the internal financial controls system over financial reporting and their operatingeffectiveness. Our audit of internal financial controls over financial reporting includedobtaining an understanding of internal financial controls over financial reportingassessing the risk that a material weakness exists and testing and evaluating the designand operating effectiveness of internal control based on the assessed risk. The proceduresselected depend on the auditor’s judgement including the assessment of the risks ofmaterial misstatement of the financial statements whether due to fraud or error.

5. We believe that the audit evidence we have obtained is su3cient and appropriate toprovide a basis for our audit opinion on the Company’s internal financial controlssystem over financial reporting.

Meaning of Internal Financial Controls over Financial Reporting

6. A company’s internal financial control over financial reporting is a processdesigned to provide reasonable assurance regarding the reliability of financial reportingand the preparation of financial statements for external purposes in accordance withgenerally accepted accounting principles. A company’s internal financial control overfinancial reporting includes those policies and procedures that (1) pertain to themaintenance of records that in reasonable detail accurately and fairly reffect thetransactions and dispositions of the assets of the company; (2) provide reasonableassurance that transactions are recorded as necessary to permit preparation of financialstatements in accordance with generally accepted accounting principles and that receiptsand expenditures of the company are being made only in accordance with authorisations ofmanagement and directors of the company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorised acquisition use or disposition of thecompany’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 financialreporting including the possibility of collusion or improper management override ofcontrols material misstatements due to error or fraud may occur and not be detected.Also projections of any evaluation of the internal financial controls over financialreporting to future periods are subject to the risk that the internal financial controlover financial reporting may become inadequate because of changes in conditions or thatthe degree of compliance with the policies or procedures may deteriorate.

Opinion

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

For Price Waterhouse
Firm Registration Number: 301112E
Chartered Accountants
Avijit Mukerji
Place of the Signature: Noida Partner
Date : May 30 2017 Number : 056155

Annexure B to Independent Auditors’ Report

Referred to in paragraph 10 of the Independent Auditors’ Report of even date tothe members of HCLI Infosystems Limited on the standalone Ind AS financial statements asof and for the year ended March 31 2017 i. (a) The Company is maintaining properrecords showing full particulars including quantitative details and situation of 3xedassets.

(b) The 3xed assets are physically veri3ed by the Management according to a phasedprogramme designed to cover all the items over a period of three years which in ouropinion is reasonable having regard to the size of the Company and the nature of itsassets. Pursuant to the programme a portion of the 3xed assets has been physicallyveri3ed by the Management during the year and no material discrepancies have been noticedon such veri3cation.

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

Particulars Gross Block Net Block
Land and Building Ambattur Chennai 5.58 Crores 3.24 Crores

ii. The physical veri3cation of inventory have been conducted at reasonable intervalsby the Management during the year. The discrepancies noticed on physical veri3cation ofinventory as compared to book records were not material. iii. (a) The Company has grantedunsecured loans to one company covered in the register maintained under Section 189 ofthe Act.

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

(c) In respect of the aforesaid loans the schedule of repayment of principal andpayment of interest has been stipulated and the parties are repaying the principalamounts 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 morethan ninety days.

iv. The Company has not granted any loans or made any investments or provided anyguarantees or security to the parties covered under Section 185 and 186. Therefore theprovisions of Clause 3(iv) of the said Order are not applicable to the Company. v. TheCompany has not accepted any deposits from the public within the meaning of Sections 7374 75 and 76 of the Act and the Rules framed there under to the extent noti3ed. vi. TheCentral Government of India has not specified the maintenance of cost records undersub-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 Companyexamined by us in our opinion the Company is generally regular in depositing undisputedstatutory dues in respect of value added tax and employees’ state insurance and isregular in depositing undisputed statutory dues including sales tax service taxprovident fund income tax duty of customs duty of excise and other material statutorydues as applicable with the appropriate authorities.

(b) According to the information and explanations given to us and the records of theCompany examined by us there are no dues of service-tax duty of customs as at March 312017 which have not been deposited on account of a dispute. The particulars of dues ofincome tax sales tax value added tax and duty of excise as at March 31 2017 which havenot been deposited on account of a dispute are as follows:

Name of the statute Nature of dues Amount Amount deposited Period to which the amount relates Forum where the dispute is pending
(Rs. In crores) (Rs. In crores)
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 Assessing Officer/ Income Tax
2005-06 Appellate Tribunal
2006-07

 

Name of the statute Nature of dues Amount Amount deposited Period to which the amount relates Forum where the dispute is pending
(Rs. In crores) (Rs. In crores)
Central Excise Act Excise Duty 99.65 7.49 2002-2014 CESTAT /
1944 Commissioner (Appeals)
Haryana Sales Tax 1973 Sales Tax 0.20 - 2012-2013 Assessing Authority
Maharashtra Value Sales Tax 2.76 0.68 2005-2012 Joint Commissioner Appeal
Added Tax Act 2002
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 Joint Commissioner Appeal
2008-2015
Orissa Value Added Tax Sales Tax 0.17 0.01 2012-2014 Honorable High Court of
Act 2004 Orissa/ Deputy commissioner
Appeal (Bhubaneswar)
Karnataka Value Added Sales Tax 9.07 0.94 2006-2012 Deputy commissioner
Tax Act 2003 Appeal/ Honorable High
Court of Karnataka/Tribunal
Andhra Pradesh Value Sales Tax 0.27 0.20 2006-2007 Deputy commissioner Appeal
Added Tax Act 2005 2008-2009 (Hyderabad)
Punjab General Sales Sales Tax 0.12 0.03 2007-2008 Deputy commissioner
Tax Act 1948 Appeals Punjab
Jammu & Kashmir Sales Tax 2.71 0.04 2007-2008 Deputy Commissioner
Value Added Tax Act 2008-2009 Appeals Jammu
2005
The Uttarakhand Value Sales Tax - 0.37 2012-2013 Assessing Officer
Added Tax Act-2005
Kerala General Sales Tax Sales Tax 0.58 0.22 2007-2008 Commercial Tax Officer
Act 1963 2008-2009
2009-2010
2010-2011
2011-2012
2013-2014
2014-2015
2016-2017
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 Sales Tax 13.97 1.26 2005-2006 Board of Sales Tax Kolkata /
Act 1994 2007-2012 Sales Tax Tribunal Kolkata
2013-2014 / Additional Commissioner
(Appeals) of Sales Tax Kolkata
Tamil Nadu General Sales Tax 0.59 6.64 2004-2005 Commercial Tax Officer
Sales Tax Act 1959 2006-2008 Chennai / Deputy
2009-2016 Commissioner (Appeals) of
Sales Tax Chennai
Delhi Sales Tax Act 1975 Sales Tax 16.71 0.27 2003-2004 Tribunal of Sales Tax Delhi
2005-2006 / Deputy Commissioner
2007-2014 (Appeals) of Sales Tax Delhi/ Assistant Commissioner Sales Tax
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 andexplanation given to us the Company has not defaulted in repayment of loans or borrowingsto any financial institution or bank or Government or dues to debenture holders as at thebalance sheet date. ix. In our opinion and according to the information and explanationsgiven to us the moneys raised by way of term loans have been applied for the purposes forwhich they were obtained. The Company has not raised any moneys by way of initial publicoffer or further public offer (including debt instruments). x. During the course of ourexamination of the books and records of the Company carried out in accordance with thegenerally accepted auditing practices in India and according to the information andexplanations given to us we have neither come across any instance of material fraud bythe Company or on the Company by its Officers or employees noticed or reported during theyear nor have we been informed of any such case by the Management. xi. The Company hasnot 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 theCompany. xii. As the Company is not a Nidhi Company and the Nidhi Rules 2014 are notapplicable to it the provisions of Clause 3(xii) of the Order are not applicable to theCompany. xiii. The Company has entered into transactions with related parties incompliance with the provisions of Sections 177 and 188 of the Act. The details of suchrelated party transactions have been disclosed in the financial statements as requiredunder Indian Accounting Standard (Ind AS) 24 Related Party Disclosures specified in theCompanies (Indian Accounting Standards) Rules 2015 (as amended) under Section 133 of theAct.. xiv. The Company has not made any preferential allotment or private placement ofshares 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 theCompany. xv. The Company has not entered into any non-cash transactions with its directorsor persons connected with him. Accordingly the provisions of Clause 3(xv) of the Orderare not applicable to the Company. xvi. The Company is not required to be registered underSection 45-IA of the Reserve Bank of India Act 1934. Accordingly the provisions ofClause 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