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Hinduja Global Solutions Ltd.

BSE: 532859 Sector: IT
NSE: HGS ISIN Code: INE170I01016
BSE LIVE 15:42 | 17 Aug 505.55 -2.20
(-0.43%)
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548.95

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548.95

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505.00

NSE 15:50 | 17 Aug 506.70 0.60
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OPEN

507.90

HIGH

513.95

LOW

500.10

OPEN 548.95
PREVIOUS CLOSE 507.75
VOLUME 1749
52-Week high 637.90
52-Week low 461.00
P/E 12.04
Mkt Cap.(Rs cr) 1,050
Buy Price 505.55
Buy Qty 174.00
Sell Price 0.00
Sell Qty 0.00
OPEN 548.95
CLOSE 507.75
VOLUME 1749
52-Week high 637.90
52-Week low 461.00
P/E 12.04
Mkt Cap.(Rs cr) 1,050
Buy Price 505.55
Buy Qty 174.00
Sell Price 0.00
Sell Qty 0.00

Hinduja Global Solutions Ltd. (HGS) - Auditors Report

Company auditors report

INDEPENDENT AUDITORS’ REPORT

TO THE MEMBERS OF HINDUJA GLOBAL SOLUTIONS LIMITED

Report on the Standalone Financial Statements

1. We have audited the accompanying standalone financial statements of Hinduja GlobalSolutions Limited ("the Company") which comprise the Balance Sheet as at March31 2016 the Statement of Profit and Loss the Cash Flow Statement for the year thenended and a summary of the significant accounting policies and other explanatoryinformation in which are incorporated the Returns for the year ended on that date auditedby the branch auditors of the Company’s branches at Philippines and Mauritius.

Management’s Responsibility for the Standalone 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 financial statements to give a true and fair view of thefinancial position financial performance and cash flows of the Company in accordance withthe accounting principles generally accepted in India including the Accounting Standardsspecified under Section 133 of the Act read with Rule 7 of the Companies (Accounts)Rules 2014 and Accounting Standard 30 Financial Instruments:

Recognition and Measurement issued by the Institute of Chartered Accountants of Indiato the extent it does not contradict any other accounting standard referred to in Section133 of the Act read with Rule 7 of Companies (Accounts) Rules 2014. This responsibilityalso includes maintenance of adequate accounting records in accordance with the provisionsof the Act for safeguarding of the assets of the Company and for preventing and detectingfrauds and other irregularities; selection and application of appropriate accountingpolicies; making judgments and estimates that are reasonable and prudent; and designimplementation and maintenance of adequate internal financial controls that wereoperating effectively for ensuring the accuracy and completeness of the accountingrecords relevant to the preparation and presentation of the financial statements thatgive a true and fair view and are free from material misstatement whether due to fraud orerror.

Auditors’ Responsibility

3. Our responsibility is to express an opinion on these standalone financial statementsbased on our audit. 4. We have taken into account the provisions of the Act and the Rulesmade thereunder including the accounting standards and matters which are required to beincluded in the audit report.

5. We conducted our audit in accordance with the Standards on Auditing specified underSection 143(10) of the Act and other applicable authoritative pronouncements issued by theInstitute of Chartered Accountants of India. Those Standards and pronouncements requirethat we comply with ethical requirements and plan and perform the audit to obtainreasonable assurance about whether the financial statements are free from materialmisstatement. 6. An audit involves performing procedures to obtain audit evidence aboutthe amounts and the disclosures in the financial statements. The procedures selecteddepend on the auditors’ judgment including the assessment of the risks of materialmisstatement of the financial statements whether due to fraud or error. In making thoserisk assessments the auditor considers internal financial control relevant to theCompany’s preparation of the financial statements that give a true and fair view inorder to design audit procedures that are appropriate in the circumstances. An audit alsoincludes evaluating the appropriateness of the accounting policies used and thereasonableness of the accounting estimates made by the Company’s Directors as wellas evaluating the overall presentation of the financial statements.

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

Opinion

8. In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid standalone financial statements give the information requiredby the Act in the manner so required and give a true and fair view in conformity with theaccounting principles generally accepted in India of the state of affairs of the Companyas at March 31 2016 and its profit and its cash flows for the year ended on that date.

Other Matter

9. We did not audit the standalone financial statements of two Branches included in thefinancial statements of the Company which constitute total assets of Rs 36259.95 lacsand net assets of Rs 14355.10 lacs as at March 31 2016 total revenue of Rs 62926.81lacs net profit of Rs 1868.89 lacs and net cash flows amounting to Rs 999.53 lacs forthe year then ended. These financial statements and other financial information have beenaudited by other auditors whose report has been furnished to us and our opinion on thefinancial statements to the extent they have been derived from such standalone financialstatements is based solely on the report of such other auditors.

Our opinion is not qualified in respect of these matters.

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 sub-section (11) of section 143 ofthe Act (hereinafter referred to as the "Order") and on the basis of suchchecks of the books and records of the Company as we considered appropriate and accordingto the information and explanations given to us we give in the Annexure B a statement onthe 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 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 and proper returnsadequate for the purposes of our audit have been received from the branches not visited byus.

(c) The reports on the accounts of the branch offices of the Company audited underSection 143 (8) of the Act by branch auditors have been sent to us and have been properlydealt with by us in preparing this report.

(d) The Balance Sheet the Statement of Profit and Loss and the Cash Flow Statementdealt with by this Report are in agreement with the books of account and with the returnsreceived from the branches not visited by us.

(e) In our opinion the aforesaid standalone financial statements comply with theAccounting Standards specified under Section 133 of the Act read with Rule 7 of theCompanies (Accounts) Rules 2014 and Accounting Standard 30 Financial Instruments:Recognition and Measurement issued by the Institute of Chartered Accountants of India tothe extent it does not contradict any other accounting standard referred to in section 133of the Act read with Rule 7 of the Companies (Accounts) Rules 2014.

(f) On the basis of the written representations received from the directors as on March31 2016 taken on record by the Board of Directors none of the directors disqualified ason March 31 2016 from being appointed as a director in terms of Section 164 (2) of theAct.

(g) 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.

(h) 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 pending litigations as at March31 2016 on its financial position in its standalone financial statements;

ii. The Company has long-term contracts as at March 31 2016 for which there were nomaterial foreseeable losses. The Company did not have any long-term derivative contractsas at March 31 2016.

iii. There has been no delay in transferring amounts required to be transferred tothe Investor Education and Protection Fund by the Company during the year ended March 312016.

FOR PRICE WATERHOUSE
Firm Registration Number: 301112E
Chartered Accountants
JEETENDRA MIRCHANDANI
Place: Mumbai Partner
Date: May 25 2016 Membership Number: 048125

ANNEXURE A TO INDEPENDENT AUDITORS’ REPORT

Referred to in paragraph 11 of the Independent Auditors’ Report of even date tothe members of Hinduja Global Solutions Limited on the standalone financial statements forthe year ended March 31 2016

Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section143 of the Act

1. We have audited the internal financial controls over financial reporting of HindujaGlobal Solutions Limited ("the Company") as of March 31 2016 in conjunctionwith our audit of the standalone 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 efficientconduct 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 sufficient 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 the maintenance of records that in reasonable detail accurately andfairly reflect the transactions and dispositions of the assets of the company;

(2) provide reasonable assurance that transactions are recorded as necessary to permitpreparation of financial statements in accordance with generally accepted accountingprinciples and that receipts and expenditures of the company are being made only inaccordance with authorisations of management and directors of the company; and (3) providereasonable assurance regarding prevention or timely detection of unauthorised acquisitionuse or disposition of the company’s assets that could have a material effect on thefinancial 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 2016 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.

Other Matter

9. Our aforesaid report under Section 143(3)(i) of the Act on the adequacy andoperating effectiveness of the internal financial controls over financial reportinginsofar as it relates to one Branch is based on the corresponding report of the auditorof such Branch of the Company. Our opinion is not qualified in respect of this matter.

FOR PRICE WATERHOUSE
Firm Registration Number: 301112E
Chartered Accountants
JEETENDRA MIRCHANDANI
Place: Mumbai Partner
Date: May 25 2016 Membership Number: 048125

ANNEXURE B TO INDEPENDENT AUDITORS’ REPORT

Referred to in paragraph 10 of the Independent Auditors’ Report of even date tothe members of Hinduja Global Solutions Limited on the standalone financial statements as2016 of andforthe year ended March 31

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

(b) The fixed assets are physically verified 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 fixed assets has been physicallyverified by the Management during the year and no material discrepancies have been noticedon such verification.

(c) The title deeds of immovable properties as disclosed in Note 11 on fixed assets tothe financial statements are held in the name of the Company.

ii. The Company is in the business of rendering services and consequently does nothold any inventory. Therefore the provisions of Clause 3(ii) of the said Order are notapplicable to the Company.

iii. The Company has not granted any loans secured or unsecured to companies firmsLimited Liability Partnerships or other parties covered in the register maintained underSection 189 of the Act. Therefore the provisions of Clause 3(iii) (iii)(a) (iii)(b) and(iii)(c) of the said Order are not applicable to the Company.

iv. In our opinion and according to the information and explanations given to us theCompany has complied with the provisions of Section 186 of the Companies Act 2013 (the‘Act’) in respect of the loans and investments made and guarantees and securityprovided by it. The Company has not granted any loans or provided any guarantees orsecurity to the parties covered under Section 185. Therefore the provisions of clause3(IV) of the said order to the extent of Section 185 of the Act are not applicable to theCompany.

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

vi. The Central Government of India has not specified the maintenance of cost recordsunder 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 ofthe Company examined by us in our opinion the Company is regular in depositing theundisputed statutory dues including provident fund employees’ state insuranceincome tax sales tax service tax duty of customs duty of excise value added tax cessand other material statutory dues 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 sales-tax service-tax duty of customs dutyof excise value added tax which have not been deposited on account of any dispute. Theparticulars of dues of income tax as at March 31 2016 which have not been deposited onaccount of a dispute are as follows:

Name of the statute Nature of dues Amount ( R in lacs) Period to which the amount relates Forum where the dispute is pending
The Income Tax Act 1961 Income Tax liability including interest and penalty where applicable 429.57 Assessment Year 2008-2009 Commissioner of Income Tax Appeal
161.00 Assessment Year 2011-2012 The Income Tax Appellate Tribunal
1954.29 Assessment Year 2012-2013 Commissioner of Income Tax Appeal

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. The Company has not raised any moneys by way of initial public offer furtherpublic offer (including debt instruments) and term loans. Accordingly the provisions ofClause 3(ix) of the Order are not applicable to the Company.

x. During the course of our examination of the books and records of the Companycarried out in accordance with the generally accepted auditing practices in India andaccording to the information and explanations given to us we have neither come across anyinstance of material fraud by the Company or on the Company by its officers or employeesnoticed or reported during the year nor have we been informed of any such case by theManagement.

xi. The Company has paid/provided for managerial remuneration in accordance with therequisite approvals mandated by the provisions of Section 197 read with Schedule V to theAct.

xii. As the Company is not a Nidhi Company and the Nidhi Rules 2014 are not applicableto 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 withthe provisions of Sections 177 and 188 of the Act. The details of such related partytransactions have been disclosed in the financial statements as required under AccountingStandard (AS) 18 Related Party Disclosures specified under Section 133 of the Act readwith Rule 7 of the Companies (Accounts) Rules 2014.

xiv. The Company has not made any preferential allotment or private placement of sharesor fully or partly convertible debentures during the year under review. Accordingly theprovisions 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 orpersons connected with him.

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

FOR PRICE WATERHOUSE
Firm Registration Number: 301112E
Chartered Accountants
JEETENDRA MIRCHANDANI
Place: Mumbai Partner
Date: May 25 2016 Membership Number: 048125