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HCL Infosystems Ltd.

BSE: 500179 Sector: Consumer
NSE: HCL-INSYS ISIN Code: INE236A01020
BSE 12:22 | 19 Jan 27.90 -1.45
(-4.94%)
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29.40

HIGH

29.90

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27.90

NSE 12:14 | 19 Jan 27.85 -1.45
(-4.95%)
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29.85

HIGH

29.85

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27.85

OPEN 29.40
PREVIOUS CLOSE 29.35
VOLUME 573350
52-Week high 31.35
52-Week low 7.95
P/E
Mkt Cap.(Rs cr) 918
Buy Price 0.00
Buy Qty 0.00
Sell Price 27.90
Sell Qty 82194.00
OPEN 29.40
CLOSE 29.35
VOLUME 573350
52-Week high 31.35
52-Week low 7.95
P/E
Mkt Cap.(Rs cr) 918
Buy Price 0.00
Buy Qty 0.00
Sell Price 27.90
Sell Qty 82194.00

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

Company auditors report

To

the Members of

HCL Infosystems Limited

Report on the Audit of the Standalone Financial Statements

Opinion

We have audited the standalone financial statements of HCL Infosystems Limited("the Company") which comprise the standalone balance sheet as at 31 March2021 and the standalone statement of profit and loss (including other comprehensiveincome) standalone statement of changes in equity and standalone statement of cash flowsfor the year then ended and notes to the standalone financial statements including asummary of the significant accounting policies and other explanatory information(hereinafter referred to as "the standalone financial statements").

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 Companies Act 2013 ("Act") in the manner so required and give a true andfair view in conformity with the accounting principles generally accepted in India of thestate of affairs of the Company as at 31 March 2021 and loss and other comprehensiveloss changes in equity and its cash flows for the year ended on that date.

Basis for Opinion

We conducted our audit in accordance with the Standards on Auditing (SAs) specifiedunder section 143(10) of the Act. Our responsibilities under those SAs are furtherdescribed in the Auditor's Responsibilities for the Audit of the Standalone FinancialStatements section of our report. We are independent of the Company in accordance with theCode of Ethics issued by the Institute of Chartered Accountants of India together with theethical requirements that are relevant to our audit of the standalone financial statementsunder the provisions of the Act and the Rules thereunder and we have fulfilled our otherethical responsibilities in accordance with these requirements and the Code of Ethics. Webelieve that the audit evidence we have obtained is sufficient and appropriate to providea basis for our opinion on the Standalone financial statements.

Material Uncertainty on Going Concern

We draw attention to note 57 of the standalone financial statements which states thatthe Company has accumulated losses and has incurred a net loss of Rs. 204.76 crore duringthe current year. Further its net worth is fully eroded and that the Company's currentliabilities exceed its current assets as at 31 March 2021. These conditions along withother matters set forth in note 58 indicate that a material uncertainty exists that maycast significant doubt on the Company's ability to continue as a going concern i.e.whether the Company will be able to realise its assets and discharge all its contractualobligations and liabilities as they fall due in near future in the normal course of thebusiness. However based upon the measures as set forth in the note 57 includingnecessary financial support from a significant promoter shareholder the management andthe Board of Directors of the Company have a reasonable expectation that the Company willbe able to operate as a going concern in the near future. Accordingly management hasprepared the standalone financial statements on a going concern basis.

Our opinion is not modified in respect of this matter.

Key Audit Matters

Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the standalone financial statements of the current period.These matters were addressed in the context of our audit of the standalone financialstatements as a whole and in forming our opinion thereon and we do not provide aseparate opinion on these matters. In addition to the matter described in the MaterialUncertainty Related to Going Concern section we have determined the matter describedbelow to be key audit matter to be communicated in our report.

Description of Key Audit Matter

Recoverability of loans given to certain subsidiaries See note 2.14 (a) and 14 to the standalone financial statements
The key audit matter How the matter was addressed in our audit
The Company has given loans to its subsidiaries amounting to Rs. 2.81 crores (net of impairment losses Rs. 81.78 crores). In view of the significance of the matter we applied the following audit procedures in this area amongst others to obtain sufficient appropriate audit evidence:
Assessment of the recoverable amount of loans including interest thereon given to these subsidiaries has been identified as a key audit matter due to: • Evaluating design implementation and operating effectiveness of controls over process followed for recoverability of principal and interest.
• Significance of the carrying amount of these balances and these subsidiaries have been incurring losses. • Assessing the projections prepared by the Company and the assumptions used with particular attention to the following:
• This assessment requires the Company to make significant estimates and judgements of the future cash flows qualitative assessments of the projects in those subsidiaries and timelines of expected project approvals. - assessing the reasonableness of the cash flow forecasts through analysis of past performance vis- a-vis previous forecasts and our knowledge of the business of the Company;
• Changes to any of these estimates and judgements may lead to material changes in the estimated recoverable amount impacting both the potential impairment charge and the recognition of interest income. - performing sensitivity analyses of the key assumptions used in the forecasts to determine the appropriate level of impairment and interest income to be recognised;
- understanding the nature and duration of the ongoing projects in the respective subsidiaries to determine the likely timing of recovery of the loans;
• Assessing whether disclosures made in the standalone Ind AS financial statements are in compliance with the applicable accounting standards.

Other Information

The Company's management and Board of Directors are responsible for the otherinformation. The other information comprises the information included in the Company'sannual report but does not include the financial statements and our auditors' reportthereon.

Our opinion on the standalone financial statements does not cover the other informationand we do not express any form of assurance conclusion thereon.

In connection with our audit of the standalone financial statements our responsibilityis to read the other information and in doing so consider whether the other informationis materially inconsistent with the standalone financial statements or our knowledgeobtained in the audit or otherwise appears to be materially misstated. If based on thework we have performed we conclude that there is a material misstatement of this otherinformation we are required to report that fact. We have nothing to report in thisregard.

Management's and Board of Directors' Responsibility for the Standalone FinancialStatements

The Company's Management and Board of Directors are responsible for the matters statedin section 134(5) of the Act with respect to the preparation of these standalone financialstatements that give a true and fair view of the state of affairs profit/ loss and othercomprehensive income changes in equity and cash flows of the Company in accordance withthe accounting principles generally accepted in India including the Indian AccountingStandards (Ind AS) specified under section 133 of the Act. This responsibility alsoincludes maintenance of adequate accounting records in accordance with the provisions ofthe 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 were operatingeffectively for ensuring accuracy and completeness of the accounting records relevant tothe preparation and presentation of the standalone financial statements that give a trueand fair view and are free from material misstatement whether due to fraud or error.

In preparing the standalone financial statements the Management and Board of Directorsare responsible for assessing the Company's ability to continue as a going concerndisclosing as applicable matters related to going concern and using the going concernbasis of accounting unless the Board of Directors either intends to liquidate the Companyor to cease operations or has no realistic alternative but to do so.

The Board of Directors is also responsible for overseeing the Company's financialreporting process.

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

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

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

• Identify and assess the risks of material misstatement of the standalonefinancial statements whether due to fraud or error design and perform audit proceduresresponsive to those risks and obtain audit evidence that is sufficient and appropriate toprovide a basis for our opinion. The risk of not detecting a material misstatementresulting from fraud is higher than for one resulting from error as fraud may involvecollusion forgery intentional omissions misrepresentations or the override of internalcontrol.

• Obtain an understanding of internal control relevant to the audit in order todesign 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 hasadequate internal financial controls with reference to financial statements in place andthe operating effectiveness of such controls.

• Evaluate the appropriateness of accounting policies used and the reasonablenessof accounting estimates and related disclosures in the standalone financial statementsmade by the Management and Board of Directors.

• Conclude on the appropriateness of the Management and Board of Directors use ofthe going concern basis of accounting and based on the audit evidence obtained whether amaterial uncertainty exists related to events or conditions that may cast significantdoubt on the Company's ability to continue as a going concern. If we conclude that amaterial uncertainty exists we are required to draw attention in our auditor's report tothe related disclosures in the standalone financial statements or if such disclosures areinadequate to modify our opinion. Our conclusions are based on the audit evidenceobtained up to the date of our auditor's report. However future events or conditions maycause the Company to cease to continue as a going concern.

• Evaluate the overall presentation structure and content of the standalonefinancial statements including the disclosures and whether the standalone financialstatements represent the underlying transactions and events in a manner that achieves fairpresentation.

We communicate with those charged with governance regarding among other matters theplanned scope and timing of the audit and significant audit findings including anysignificant deficiencies in internal control that we identify during our audit. We alsoprovide those charged with governance with a statement that we have complied with relevantethical requirements regarding independence and to communicate with them allrelationships and other matters that may reasonably be thought to bear on ourindependence and where applicable related safeguards.

From the matters communicated with those charged with governance we determine thosematters that were of most significance in the audit of the standalone financial statementsof the current period and are therefore the key audit matters. We describe these mattersin our auditors' report unless law or regulation precludes public disclosure about thematter or when in extremely rare circumstances we determine that a matter should not becommunicated in our report because the adverse consequences of doing so would reasonablybe expected to outweigh the public interest benefits of such communication.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditors' Report) Order 2016 ("the Order")issued by the Central Government in terms of section 143 (11) of the Act we give in the"Annexure A" a statement on the matters specified in paragraphs 3 and 4 of theOrder to the extent applicable.

2. (A) 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 standalone balance sheet the standalone statement of profit and loss (includingother comprehensive income) the standalone statement of changes in equity and thestandalone statement of cash flows dealt with by this Report are in agreement with thebooks of account.

d) In our opinion the aforesaid standalone financial statements comply with the Ind ASspecified under section 133 of the Act.

e) On the basis of the written representations received from the directors as on 31March 2021 taken on record by the Board of Directors none of the directors isdisqualified as on 31 March 2021 from being appointed as a director in terms of Section164(2) of the Act.

f) The going concern matter described under the Material Uncertainty Related to GoingConcern paragraph above in our opinion may have an adverse effect on the functioning ofthe Company; and

g) With respect to the adequacy of the internal financial controls with reference tofinancial statements of the Company and the operating effectiveness of such controlsrefer to our separate Report in "Annexure B".

(B) 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 information and according to the explanations given to us:

i. The Company has disclosed the impact of pending litigations as at 31 March 2021 onits financial position in its standalone financial statements - Refer Note 37 to thestandalone financial statements.

ii. The Company has long-term contract for which there were no material foreseeablelosses. The company did not have any long term derivative contracts as on 31 March 2021.

iii. There were no amounts which were required to be transferred to the InvestorEducation and Protection Fund by the Company.

iv. The disclosures in the standalone financial statements regarding holdings as wellas dealings in specified bank notes during the period from 8 November 2016 to 30 December2016 have not been made in these financial statements since they do not pertain to thefinancial year ended 31 March 2021.

(C) With respect to the matter to be included in the Auditors' Report under section197(16):

In our opinion and according to the information and explanations given to us theremuneration paid by the company to its directors during the current year is in accordancewith the provisions of Section 197 of the Act. The remuneration paid to any director isnot in excess of the limit laid down under Section 197 of the Act. The Ministry ofCorporate Affairs has not prescribed other details under Section 197(16) which arerequired to be commented upon by us.

Annexure A To Independent Auditors' Report

Annexure A referred to in our Independent Auditor's Report to the Members of HCLInfosystems Limited on the standalone financial statement for the year ended 31 March2021 we report the following:

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

(b) The Company has a regular programme of physical verification of its fixed assetsby which all fixed assets are verified by the management in a phased manner over a periodof three years. In our opinion this periodicity of physical verification is reasonablehaving regard to the size of the Company and the nature of its assets. Pursuant to theprogramme certain fixed assets were physically verified during the year and no materialdiscrepancies were noticed on such verification.

(c) According to the information and explanations given to us and on the basis of ourexamination of the records of the Company the title deed of immovable properties includedin fixed assets are held in the name of the Company except for the immovable propertymention below:

(Rs in crores)

Particulars Gross Block Net Block
Land and Buildings at Ambattur Chennai 5.58 3.08

(ii) The physical verification of inventory has been conducted at reasonable intervalsby the management during the year. The discrepancies noticed on physical verification ofinventory as compared to books records were not material.

(iii) According to the information and explanations given to us the Company has notgranted any loans secured or unsecured to Companies firms limited liabilitypartnerships or other parties covered in the register maintained under Section 189 of theAct. Accordingly the provisions of clause 3 (iii) of the order not applicable to theCompany.

(iv) According to the information and explanations given to us there are no loansguarantee and security given by the Company in respect which provisions of Section 185 ofthe Companies Act 2013 are applicable. Further provisions of Section 186 of theCompanies Act 2013 have been complied with respect to loans given investments madeguarantees and security given by the Company. Also refer note 52 to the standalonefinancial statements.

(v) As per the information and explanations given to us the Company has not acceptedany deposits as mentioned in the directives issued by the Reserve Bank of India and theprovisions of Section 73 to 76 or any other relevant provisions of the Companies Act 2013and the rules framed there under. Accordingly paragraph 3(v) of the Order is notapplicable to the Company.

(vi) According to the information and explanations given to us the Central Governmenthas not prescribed the maintenance of cost records under sub-section (1) of section 148 ofthe Companies Act 2013 for any of the products of the Company. Accordingly paragraph3(vi) of the Order is not applicable to the Company.

(vii) (a) According to the information and explanations given to us and on the basis ofour examination of the records of the Company amounts deducted/ accrued in the books ofaccount in respect of undisputed statutory dues including Provident fund Employees' stateinsurance Income tax Sales tax Service tax Goods and Services tax Duty of customsDuty of excise Value added tax Cess and other material statutory dues have generallybeen regularly deposited with the appropriate Authorities.

According to information and explanations given to us no undisputed amounts payable inrespect of Provident fund Employees' state insurance Income-tax Sales tax Service taxGoods and service tax Duty of customs Duty of excise Value added tax Cess and anyother material statutory dues were in arrears as at 31 March 2021 for a period of morethan six months from the date they became payable.

(b) According to the information and explanations given to us there are no dues ofIncome-tax Sales tax Service tax Duty of customs Duty of excise Value added tax andGoods and service tax which have not been deposited by the Company on account of disputesexcept for the following:

Name of Act Nature of dues Demand (in crores) Amount Deposit (in crores) Period to which the amount relates Forum where the dispute is pending
Central Excise Act 1944 Excise 0.49 0.02 2006-07 to 2008-09 2010-11 Commissioner Appeals
Central Excise Act 1944 Excise 0.21 0.02 2002-03 2012-13 High Court
Customs Act 1962 Customs 0.02 2008-09 Commissioner (Appeals)
Customs Tariff Act 1975 Customs 40.49 5.00 2005-2009 CESTAT
Finance Act 1994 Service Tax 70.94 5.00 2003-06 2010-11 to 2013-14 High Court
Finance Act 1994 Service Tax 351.86 13.25 2006-2009 2010-2015 CESTAT
Goods and Services Tax 2017 SGST 0.02 2018-19 Deputy Commissioner
Sales Tax/ Value added Act under various states Sales Tax 8.05 2.26 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 Additional Commissioner (Appeals)
Sales Tax/ Value added Act under various states Sales Tax 0.93 0.17 2014-15 Additional Commissioner
Sales Tax/ Value added Act under various states* Sales Tax 6.31 0.00 2007-08 2010-11 2011-12 2016-17 2017-18 Assessing Officer
Sales Tax/ Value added Act under various states Sales Tax 0.36 0.06 2003-04 2005-06 2006-07 2010-11 2012-13 2013-14 2014-15 2016-17 Assistant Commissioner
Sales Tax/ Value added Act under various states Sales Tax 19.06 1.54 2003-04 2004-05 2005-06 2007-08 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 Deputy Commissioner
Sales Tax/ Value added Act under various states Sales Tax 10.13 1.79 2006-07 2007-08 2008-09 2009-10 2010-112011-12 2012-13 2013-14 2014-15 2015-16 Deputy Commissioner (Appeals)
Sales Tax/ Value added Act under various states Sales Tax 0.12 0.08 2005-06 2006-07 2007-08 2008-09 High Court
Sales Tax/ Value added Act under various states Sales Tax 11.74 1.34 2007-08 2009-10 2014-15 2015-16 2016-17 Joint Commissioner
Sales Tax/ Value added Act under various states Sales Tax 8.02 2.09 2004-05 2008-09 2011-12 2012-13 2013-14 2014-15 2016-17 Joint Commissioner (Appeals)
Sales Tax/ Value added Act under various states Sales Tax 1.37 0.45 2001-02 2003-04 2005-06 2006-07 2007-08 2009-10 2010-112012-13 2013-14 2014-15 Sales Tax Tribunal
Sales Tax/ Value added Act under various states Sales Tax 0.01 0.01 2013-14 Special Commissioner (Appeals)
Sales Tax/ Value added Act under various states Sales Tax 24.30 53.56 2005-06 2008-09 2009-10 2010-11 2011-12 2012-13 Tax Board
Sales Tax/ Value added Act under various states Sales Tax 0.01 2009-10 and 2014-15 Intelligence Officer
Entry Tax Act Entry Tax 0.09 2008-09 2009-10 Additional Commissioner (Appeals)
Entry Tax Act Entry Tax 0.34 0.05 2008-11 Assessing Officer
Entry Tax Act Entry Tax 0.25 0.02 2008-09 2009-10 2010-112014-15 2016-17 Deputy Commissioner (Appeals)
Entry Tax Act Entry Tax 0.58 0.09 2012-13 2012-14 High Court
Entry Tax Act Entry Tax 0.09 0.11 2010-112011-12 2014-15 Tax Board
Central Sales tax Act 1956 CST 1.44 0.45 2007-08 2008-09 2010-112011-12 2012-13 2013-14 2014-15 2016-17 Additional Commissioner (Appeals)
Central Sales tax Act 1956 CST 0.07 0.03 2004-05 200506 2008-09 2009-102010-11 2011-12 2012-13 2013-14 2014-15 Assessing Officer
Central Sales tax Act 1956 CST 0.11 0.03 2003-04 2013-14 2014-15 2015-16 Assistant Commissioner
Central Sales tax Act 1956 CST 3.16 1.00 2003-04 2004-05 2006-07 2007-08 2010-112012-13 2013-14 2014-15 2015-16 2016-17 2011-12 Deputy Commissioner
Central Sales tax Act 1956 CST 7.15 0.70 2006-07 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2015-16 2017-18 Deputy Commissioner (Appeals)
Central Sales tax Act 1956 CST 0.28 0.30 2004-05 2005-06 2006-07 2007-08 2009-10 2016-17 Joint Commissioner
Central Sales tax Act 1956 CST 0.75 0.47 2005-06 2011-12 2013-14 2014-15 Joint Commissioner (Appeals)
Central Sales tax Act 1956 CST 2.68 1.43 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2010-11 2011-12 2014-15 2015-16 Sales Tax Tribunal
Central Sales tax Act 1956 CST 0.10 2013-14 Special Commissioner (Appeals)
Central Sales tax Act 1956 CST 0.66 2006-07 2008-09 Tax Board
Central Sales tax Act 1956 CST 0.37 0.11 2004-05 2013-14 2014-15 2015-16 Commercial Tax Officer
Central Sales tax Act 1956 CST 1.55 0.46 2012-13 2013-14 Department of Trade and Taxes
Central Sales tax Act 1956 CST 1.48 0.01 2010-112011-12 2014-15 2015-16 ETO - Haryana
Central Sales tax Act 1956 CST 0.04 2015-16 AVTO- DELHI
Central Sales tax Act 1956 CST 0.02 2015-16 2016-17 Sales Tax Officer
Central Sales tax Act 1956 CST 0.01 2015-16 Commissioner
Sales Tax/ Value added Act under various states Sales Tax 2.60 2.79 2004-05 2007-08 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 Commercial Tax Officer
Sales Tax/ Value added Act under various states Sales Tax 4.08 2015-16 Commissioner
Sales Tax/ Value added Act under various states Sales Tax 2.85 0.13 2010-112011-12 Uppar Auykat Appeals
Sales Tax/ Value added Act under various states Sales Tax 2.25 0.31 2012-13 2013-14 2014-15 ETO
Sales Tax/ Value added Act under various states* Sales Tax 0.00 0.01 2015-16 Senior Joint Commissioner
Sales Tax/ Value added Act under various states Sales Tax 0.12 0.04 2013-14 Assistant Commissioner (Appeals)
Sales Tax/ Value added Act under various states Sales Tax 0.21 0.14 2009-10 Tax Officer
Entry Tax Act Entry Tax 0.09 0.04 2008-09 2009-10 2010-112011-12 2013-14 2014-15 Commercial Tax Officer
Entry Tax Act Entry Tax 0.01 0.01 2009-10 2016-17 Joint Commissioner
Entry Tax Act Entry Tax 0.27 0.19 2011-12 2012-13 2013-14 Joint Commissioner (Appeals)
Entry Tax Act Entry Tax 0.02 0.02 2012-13 2016-17 Assistant Commissioner
Income tax Act 1961 Income tax 19.95 2006-07 and 2013-14 Income tax Appellate tribunal
Income tax Act 1961 Income tax 10.75 2005-2006 2006-07 2011-12 and 2017-18 Commissioner of Income Tax (Appeals)

* Represents demand below Rs one lac.

(viii) According the information and explanations given to us the Company has notdefaulted in repayment of loans or borrowings to any banks or financial institution. TheCompany did not have any outstanding loans or borrowings from Government and there were nodebentures issued during the year or outstanding as at 31 March 2021.

(ix) According to the information and explanations given to us the moneys raised byway of term loans have been applied for the purpose for which they were obtained. TheCompany has not raised any moneys by way of initial public offer or further public offer(including debt instruments).

(x) According to the information and explanations given to us no material fraud by theCompany or on the Company by its officers or employees has been noticed or reported duringthe year.

(xi) According to the information and explanations given to us and based on ourexamination of records of the Company the managerial remuneration has paid / provided bythe Company in accordance with the requisite approvals mandated by the provisions ofsection 197 read with Schedule V to the Act.

(xii) According to the information and explanations given to us the Company is not aNidhi Company. Accordingly paragraph 3(xii) of the Order is not applicable to theCompany.

(xiii) According to the information and explanations given to us and on the basis ofour examination of the records of the Company all transactions with the related partiesare in compliance with the Section 177 and Section 188 of the Act where applicable anddetails of such transactions have been disclosed in the standalone financial statements asrequired by the applicable accounting standards.

(xiv) According to the information and explanations given to us and on the basis of ourexamination of records of the Company the Company has not made any preferential allotmentor private placement of shares or fully or partly convertible debentures during the year.Accordingly paragraph 3(xiv) of the Order is not applicable to the Company.

(xv) According to the information and explanations given to us the Company has notentered into any non-cash transactions with directors or persons connected with him.Accordingly paragraph 3(xv) of the Order is not applicable to the Company.

(xvi) According to the information and explanations given to us the Company is notrequired to be registered under section 45-IA of the Reserve Bank of India Act 1934.

Annexure B To Independent Auditors' Report

Annexure B to the Independent Auditors' report on the standalone financial statementsof HCL Infosystems Limited for the year ended 31 March 2021.

Report on the internal financial controls with reference to the aforesaid standalonefinancial statements under Clause (i) of Sub-section 3 of Section 143 of the CompaniesAct 2013

(Referred to in paragraph 2(A)(g) under 'Report on Other Legal and RegulatoryRequirements' section of our report of even date)

Opinion

We have audited the internal financial controls with reference to standalone financialstatements of HCL Infosystems Limited ("the Company") as of 31 March 2021 inconjunction with our audit of the standalone financial statements of the Company for theyear ended on that date.

In our opinion the Company has in all material respects adequate internal financialcontrols with reference to standalone financial statements and such internal financialcontrols were operating effectively as at 31 March 2021 based on the internal financialcontrols with reference to standalone financial statements criteria established by theCompany considering the essential components of internal control stated in the GuidanceNote on Audit of Internal Financial Controls Over Financial Reporting issued by theInstitute of Chartered Accountants of India (the "Guidance Note").

Management's Responsibility for Internal Financial Controls

The Company's management and the Board of Directors are responsible for establishingand maintaining internal financial controls based on the internal financial controls withreference to standalone financial statements criteria established by the Companyconsidering the essential components of internal control stated in the Guidance Note.These responsibilities include the design implementation and maintenance of adequateinternal financial controls that were operating effectively for ensuring the orderly andefficient conduct of its business including adherence to company's policies thesafeguarding of its assets the prevention and detection of frauds and errors theaccuracy and completeness of the accounting records and the timely preparation ofreliable financial information as required under the Companies Act 2013 (hereinafterreferred to as "the Act").

Auditors' Responsibility

Our responsibility is to express an opinion on the Company's internal financialcontrols with reference to standalone financial statements based on our audit. Weconducted our audit in accordance with the Guidance Note and the Standards on Auditingprescribed under section 143(10) of the Act to the extent applicable to an audit ofinternal financial controls with reference to standalone financial statements. ThoseStandards and the Guidance Note require that we comply with ethical requirements and planand perform the audit to obtain reasonable assurance about whether adequate internalfinancial controls with reference to standalone financial statements were established andmaintained and whether such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls with reference to standalone financial statements andtheir operating effectiveness. Our audit of internal financial controls with reference tostandalone financial statements included obtaining an understanding of such internalfinancial controls assessing the risk that a material weakness exists and testing andevaluating the design and operating effectiveness of internal control based on theassessed risk. The procedures selected depend on the auditor's judgement including theassessment of the risks of material misstatement of the standalone financial statementswhether due to fraud or error.

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 controls withreference to standalone financial statements.

Meaning of Internal Financial controls with Reference to Standalone FinancialStatements

A company's internal financial controls with reference to standalone financialstatements is a process designed to provide reasonable assurance regarding the reliabilityof financial reporting and the preparation of financial statements for external purposesin accordance with generally accepted accounting principles. A company's internalfinancial controls with reference to financial statements include those policies andprocedures 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 authorizations of management and directors of the company; and

(3) provide reasonable assurance regarding prevention or timely detection ofunauthorized acquisition use or disposition of the company's assets that could have amaterial effect on the standalone financial statements.

Inherent Limitations of Internal Financial controls with Reference to StandaloneFinancial Statements

Because of the inherent limitations of internal financial controls with reference tostandalone financial statements including the possibility of collusion or impropermanagement override of controls material misstatements due to error or fraud may occurand not be detected. Also projections of any evaluation of the internal financialcontrols with reference to standalone financial statements to future periods are subjectto the risk that the internal financial controls with reference to standalone financialstatements may become inadequate because of changes in conditions or that the degree ofcompliance with the policies or procedures may deteriorate.

For B S R & Associates LLP Chartered Accountants
Firm Registration No.:116231W/W-100024
Sandeep Batra
Place: New Delhi Partner
Date: 25-June-2021 Membership No.: 099320
UDIN:21093320AAAABG9347

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