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Hexaware Technologies Ltd.

BSE: 532129 Sector: IT
NSE: HEXAWARE ISIN Code: INE093A01033
BSE 00:00 | 19 Jun 434.45 -2.80
(-0.64%)
OPEN

436.80

HIGH

441.05

LOW

431.00

NSE 00:00 | 19 Jun 433.70 -2.30
(-0.53%)
OPEN

437.95

HIGH

441.55

LOW

430.30

OPEN 436.80
PREVIOUS CLOSE 437.25
VOLUME 20369
52-Week high 459.30
52-Week low 235.00
P/E 31.50
Mkt Cap.(Rs cr) 12,897
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 436.80
CLOSE 437.25
VOLUME 20369
52-Week high 459.30
52-Week low 235.00
P/E 31.50
Mkt Cap.(Rs cr) 12,897
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Hexaware Technologies Ltd. (HEXAWARE) - Auditors Report

Company auditors report

TO THE MEMBERS OF

HEXAWARE TECHNOLOGIES LIMITED

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

1. We have audited the accompanying standalone financial statements of HexawareTechnologies Limited ("the Company") which comprise the Balance Sheet as atDecember 31 2017 the Statement of Profit and Loss (including Other ComprehensiveIncome) the Cash Flow Statement and the Statement of Changes in Equity for the year thenended and a summary of the significant accounting policies and other explanatoryinformation.

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 Companies Act 2013. This responsibility also includes maintenance ofadequate accounting records in accordance with the provisions of the Act for safeguardingof the assets of the Company and for preventing and detecting frauds and otherirregularities; selection and application of appropriate accounting policies; makingjudgments and estimates that are reasonable and prudent; and design implementation andmaintenance of adequate internal financial controls that were operating effectively forensuring the accuracy and completeness of the accounting records relevant to thepreparation and presentation of the standalone Ind AS financial statements that give atrue and fair view and 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 inaccordance with the Standards on Auditing specified under Section 143(10) of the Act andother applicable authoritative pronouncements issued by the Institute of CharteredAccountants of India. Those Standards and pronouncements require that we comply withethical requirements and plan and perform the audit to obtain reasonable assurance aboutwhether the 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 sufficient 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 affairs of theCompany as at December 31 2017 and its total comprehensive income (comprising of profitand other comprehensive income) its cash flows and the changes in equity for the yearended on that date.

Other Matter

9. The standalone Ind AS financial statements of the Company as at and for the yearended December 31 2017 include the Ind AS financial statements of Risk TechnologyInternational Limited (the "Transferor Company") consequent to its merger intothe Company (refer Note 31 to the standalone Ind AS financial statements). We did notaudit the Ind AS financial statements of the Transferor Company as at and for the yearended December 31 2016 and the transition date opening balance sheet as at January 12016 included in the standalone Ind AS financial statements of the Company whose Ind ASfinancial statements reflect total assets of Rs. 1427.26 million as at December 31 2016and Rs. 483.35 million as at January 1 2016 net assets of Rs. 68.79 million as atDecember 31 2016 and Rs. 76.96 million as at January 1 2016 total comprehensive loss(comprising of loss) of Rs. (-) 8.17 million for the year ended December 31 2016 totalrevenue of Rs. amounting to Rs. 0.36 million for the year ended December 31 2016 asconsidered in the standalone Ind AS financial statements. The said Ind AS financialstatements of the Transferor Company have been audited by the predecessor auditor who hadaudited the statutory financial statements of the Transferor Company for the years endedDecember 31 2016 and December 31 2015. The predecessor auditor has expressed anunmodified opinion on the Ind AS financial statements of the Transferor Company as at andfor the year ended December 31 2016 and the transition date opening balance sheet as atJanuary 1 2016 vide report dated July 14 2017.

10. The comparative financial statements of the Company (other than of the TransferorCompany referred to in paragraph 9 above) as at and for the year ended December 31 2016and the transition date opening balance sheet as at January 1 2016 prepared in accordancewith Ind AS included in these standalone Ind AS financial statements have been audited bythe predecessor auditor who had audited the statutory financial statements for the yearsended December 31 2016 and December 31 2015. The predecessor auditor has expressed anunmodified opinion on the comparative financial statements and the opening balance sheetvide report dated July 17 2017.

Our opinion on the standalone Ind AS financial statements is not modified in respect ofthe matters noted in Paragraphs 9 and 10 above and with respect to our reliance on thework performed and the report of the other and the predecessor auditors.

Report on Other Legal and Regulatory Requirements

11. As required by the Companies (Auditor’s Report) Order 2016 issued by theCentral Government of India in terms of sub-section (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.

12. 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 aforesaid standalone Ind AS financial statements comply withthe Indian Accounting Standards specified under Section 133 of the Act.

(e) On the basis of the written representations received from the directors as onDecember 31 2017 taken on record by the Board of

Directors none of the directors is disqualified as on December 31 2017 from beingappointed as a director in terms of Section 164 (2) of the Act.

(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 pending litigations as at December31 2017 on its financial position in its standalone Ind AS financial statements ReferNote 30; ii. The Company has long-term contracts including derivative contracts as atDecember 31 2017 for which there were no material foreseeable losses. iii. There has beenno delay in transferring amounts required to be transferred to the Investor Educationand Protection Fund by the Company during the year ended December 31 2017.

For Price Waterhouse Chartered Accountants LLP
Firm Registration No. 012754N/N-500016
Chartered Accountants
Sumit Seth
Place: Mumbai Partner
Date: 7th February 2018 Membership No. 105869

Annexure A to Independent Auditor's Report

Referred to in paragraph 12(f) of the Independent Auditors’ Report of even date tothe members of Hexaware Technologies Limited on the standalone Ind AS financial statementsas of and for the year ended December 31 2017

Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section143 of the Act financial reporting of Hexaware Technologies Limited ("theCompany") as of December 1. Wehave over 31 2017 in conjunction with our audit of thestandalone Ind AS financial statements of the Company for the year ended on that 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. Ouraudit involves performing procedures to obtain audit evidence about the adequacy of theinternal financial controls system over Our audit of internal financial controls overfinancial reporting included obtaining an understanding of internal financial controlsover financial reporting assessing the risk that a material weakness exists and testingand evaluating the design and operating effectiveness of internal control based on theassessed risk. The procedures selected depend on the auditor’s judgement includingthe assessment of the risks of material misstatement of the financial statements whetherdue 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 themaintenance of records that in reasonable detail accurately and fairly reflect 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 December 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 Chartered Accountants LLP
Firm Registration No. 012754N/N-500016
Chartered Accountants
Sumit Seth
Place: Mumbai Partner
Date: 7th February 2018 Membership No. 105869

Annexure B to Independent Auditor's Report

Referred to in paragraph 11 of the Independent Auditors’ Report of even date tothe members of Hexaware Technologies Limited on the standalone Ind AS financial statementsas of and for the year ended December 31 2017 i. (a) The Company is maintaining properrecords showing full particulars including quantitative details and situation of fixedassets. (b) The fixed assets of the Company have been physically verified by theManagement during the year and no material discrepancies have been noticed on suchverification. In our opinion the frequency of verification is reasonable.

(c) The title deeds and lease agreements as applicable of immovable properties asdisclosed in Note 4 on Property Plant and Equipment and included in "Prepaidexpenses relating to leasehold land" in Note 9A to the financial statements are heldin the name of the Company except as disclosed in footnote to Note 9A to the financialstatements and except in case of properties acquired by entities that have since beenamalgamated with the Company. ii. The Company is in the business of rendering servicesand consequently does not hold any inventory. Therefore the provisions of Clause 3(ii)of the said Order are not applicable to the Company. iii. The Com pany has not granted anyloans secured or unsecured to companies firms limited liability partnerships or otherparties covered in the register maintained under Section 189 of the Act. Therefore theprovisions of Clause 3(iii) (iii)(a) (iii)(b) and (iii)(c) of the said Order are notapplicable to the Company. iv. In our opinion and according to the information andexplanations given to us the Company has complied with the provisions of Section 185 and186 of the Companies Act 2013 in respect of the loans and investments made andguarantees and security provided by it. v. The Company has not accepted any deposits fromthe public within the meaning of Sections 73 74 75 and 76 of the Act and the Rulesframed there under to the extent notified. vi. The Central Government of India has notspecified the maintenance of cost records under sub-section (1) of Section 148 of the Actfor any of the products of the Company. vii. (a) According to the information andexplanations given to us and the records of the Company examined by us in our opinionthe Company is regular in depositing undisputed statutory dues including provident fundemployees’ state insurance sales tax income tax service tax 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 December 31 2017 which have not been deposited onaccount of a dispute are as follows:

Name of the statute Nature of dues Amount ( Rs. in Million ) Period to which the amount relates Forum where the dispute is pending
Income Tax Act 1961 Income Tax 1.10 Assessment year 2009-10 Assessing officer
Income Tax Act 1961 Income Tax 2.76 Assessment year 2011-12 Commissioner of Income tax (Appeals)
Income Tax Act 1961 Income Tax 0.40 Assessment year 2012-13 Commissioner of Income tax (Appeals)

viii. As the Company does not have any loans or borrowings from any financialinstitution or bank or Government nor has it issued any debentures as at the balancesheet date the provisions of Clause 3(viii) of the Order are not applicable to theCompany. 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 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 haspaid/ provided for managerial remuneration in accordance with the requisite approvalsmandated by the provisions of Section 197 read with Schedule V to the Act. xii. As theCompany is not a Nidhi Company and the Nidhi Rules 2014 are not applicable to it theprovisions of Clause 3(xii) of the Order are not applicable to the Company. xiii. TheCompany has entered into transactions with related parties in compliance with theprovisions of Sections 177 and 188 of the Act. The details of such related partytransactions have been disclosed in the standalone Ind AS financial statements as requiredunder Indian Accounting Standard 24 Related Party Disclosures specified in the Companies(Indian Accounting Standards) Rules 2015 (as amended) under Section 133 of the Act. xiv.The Company has not made any preferential allotment or private placement of shares orfully 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. TheCompany has not entered into any non cash transactions with its directors or personsconnected with him to which Section 192 of the Act applies. Accordingly the provisions ofClause 3(xv) of the Order are not applicable to the Company. xvi. The Company is notrequired to be registered under Section 45-IA of the Reserve Bank of India Act 1934.Accordingly the provisions of Clause 3(xvi) of the Order are not applicable to theCompany.

For Price Waterhouse Chartered Accountants LLP
Firm Registration No. 012754N/N-500016
Chartered Accountants
Sumit Seth
Place: Mumbai Partner
Date: 7th February 2018 Membership No. 105869