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Auditor Report of HCL Infosystems Ltd.

Jun 30, 2015

1. We have audited the accompanying standalone financial statements of HCL Infosystems Limited ("the Company"), which comprise the Balance Sheet as at June 30, 2015, the Statement of Profit and Loss, the Cash Flow Statement for the year then ended, and a summary of the significant accounting policies and other explanatory information.

Management's Responsibility for the Standalone Financial Statements

2. The Company's Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 ("the Act") with respect to the preparation of these standalone financial statements to give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true 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 financial statements based on our audit.

4. We have taken into account the provisions of the Act and the Rules made thereunder including the accounting standards and matters which are required to be included in the audit report.

5. We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of the Act and other applicable authoritative pronouncements issued by the Institute of Chartered Accountants of India. Those Standards and pronouncements require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

6. An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the financial statements. The procedures selected depend on the auditors' judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company's preparation of the financial statements that give a true and fair view, in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on whether the Company has in place an adequate internal financial controls system over financial reporting and the operating effectiveness of such controls. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Company's Directors, as well as evaluating the overall presentation of the financial statements.

7. We believe that the audit evidence we have obtained is sufficient and appropriate to provide 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 explanations given to us, the aforesaid standalone financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at June 30, 2015, and its loss and its cash flows for the year ended on that date.

Report on Other Legal and Regulatory Requirements

9. As required by 'the Companies (Auditor's Report) Order, 2015', issued by the Central Government of India in terms of sub- section (11) of section 143 of the Act (hereinafter referred to as the "Order"), and on the basis of such checks of the books and records of the Company as we considered appropriate and according to the information and explanations given to us, we give in the Annexure a statement on the matters specified in paragraphs 3 and 4 of the Order.

10. 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 best of 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 the Company so far as it appears from our examination of those books.

(c) The Balance Sheet, the Statement of Profit and Loss, and the Cash Flow Statement dealt with by this Report are in agreement with the books of account.

(d) In our opinion, the aforesaid standalone financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014

(e) On the basis of the written representations received from the directors as on June 30, 2015 taken on record by the Board of Directors, none of the directors is disqualified as on June 30, 2015 from being appointed as a director in terms of Section 164 (2) of the Act.

(f) With respect to the other matters to be included in the Auditors' Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our knowledge and belief and according to the information and explanations given to us:

i. The Company has disclosed the impact, if any, of pending litigations as at June 30, 2015 on its financial position in its standalone financial statements - Refer Note 29.

ii. The Company has long-term contracts as at June 30, 2015 for which there were no material foreseeable losses. The Company did not have any long-term derivative contracts as at June 30, 2015.

iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company during the year ended June 30, 2015.

Referred to in paragraph 9 of the Independent Auditors' Report of even date to the members of HCL Infosystems Limited on the financial statements as of and for the year ended June 30, 2015

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

(b) The fixed assets are physically verified by the Management according to a phased programme designed to cover all the items over a period of three years which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. Pursuant to the programme, a portion of the fixed assets has been physically verified by the Management during the year and no material discrepancies have been noticed on such verification.

ii. (a) The inventory has been physically verified by the Management during the year. In our opinion, the frequency of verification is reasonable.

(b) In our opinion, the procedures of physical verification of inventory followed by the Management are reasonable and adequate in relation to the size of the Company and the nature of its business.

(c) On the basis of our examination of the inventory records, in our opinion, the Company is maintaining proper records of inventory. The discrepancies noticed on physical verification of inventory as compared to book records were not material.

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

iv. In our opinion, and according to the information and explanations given to us, there is an adequate internal control system commensurate with the size of the Company and the nature of its business for the purchase of inventory and fixed assets and for the sale of goods and services. Further, on the basis of our examination of the books and records of the Company, and according to the information and explanations given to us, we have neither come across, nor have been informed of, any continuing failure to correct major weaknesses in the aforesaid internal control system.

v. The Company has not accepted any deposits from the public within the meaning of Sections 73, 74, 75 and 76 of the Act and the rules framed there under to the extent notified.

vi. The Central Government of India has not specified the maintenance of cost records under 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 of the Company examined by us, in our opinion, the Company is generally regular in depositing undisputed statutory dues in respect of value added tax and is regular in depositing the undisputed statutory dues, including provident fund, employees' state insurance, income tax, sales tax, wealth tax, service tax, duty of customs, duty of excise, and other material statutory dues, as applicable, with the appropriate authorities.

(b) According to the information and explanations given to us and the records of the Company examined by us, there are no dues of wealth-tax, service-tax and duty of customs which have not been deposited on account of any dispute. The particulars of dues of income tax, sales tax, duty of excise, value added tax as at June 30, 2015 which have not been deposited on account of a dispute, are as follows

Name of the statute Nature of Amount Amount dues (Rs./Crores) deposited under protest (Rs./Crores)

Uttar Pradesh Trade Sales Tax 6.53 3.67 Tax Act, 1948

U.P.Value Added Tax Sales Tax 13.49 1.68 Act-2008

Delhi Sales Tax Act, Sales Tax 0.08 0.01 1975

Delhi Value Added Trade Tax 9.90 0.20 Tax Act, 2004

Tamil Nadu General Sales Tax 0.13 - Sales Tax Act, 1959

West Bengal Sales Tax Sales Tax 8.09 0.67 Act, 1994

Rajasthan Sales Tax Sales Tax 0.02 0.01 Act, 1994

Rajasthan Value Commercial 32.64 2.59 Added Tax Act, 2003 Tax

Kerala General Sales Sales Tax 0.75 0.20 Tax Act, 1963

Uttrakhand Value Sales Tax 26.03 - Added Tax Act, 2005

Jammu & Kashmir Value Sales Tax 2.71 0.04 Added Tax Act, 2005

Punjab General Sales Sales Tax 1.22 0.52 Tax Act, 1948

Andhra Pradesh Value Sales Tax 0.32 0.20 Added Tax Act, 2005

Karnataka Value Sales Tax 1.52 0.53 Added Tax, 2003

Bihar Value Added Tax Sales Tax 20.03 3.20 Act, 2005

Jharkhand Value Sales Tax 0.50 - Added Tax Act,2005

M.P. Value Added Tax Sales Tax 0.21 0.15 Act,2002

Maharashtra Value Sales Tax 22.91 0.19 Added Tax Act, 2002

Central Excise Act, Excise Duty 97.60 6.98 1944

Income Tax Act, 1961 Income Tax 5.39 0.01

Name of the statute Period to which Forum where the the amount dispute is pending relates

Uttar Pradesh Trade 2002-2007 Commercial Tax Tribunal, Tax Act, 1948 Noida/Additional Commissioner (Appeals) of Commercial Tax Noida/Hon'ble High court Allahabad

U.P.Value Added Tax 2007-2015 Commercial Tax Tribunal, Act-2008 Noida/Additional Commissioner (Appeals) of Commercial Tax Noida/Hon'ble High court Allahabad

Delhi Sales Tax Act, 2003-2005 Assessing Authority Sales 1975 Tax, Delhi/Joint Commissioner (Appeals) of Sales Tax, Delhi

Delhi Value Added 2005-2013 Tribunal of Sales Tax, Tax Act, 2004 Delhi/ Deputy Commissioner (Appeals) of Sales Tax, Delhi

Tamil Nadu General 2004-2009 Deputy Commissioner Sales Tax Act, 1959 (Appeals) of Sales Tax, Chennai/ Commercial Tax Officer, Chennai

West Bengal Sales Tax 2005-2012 Board of Sales Tax, Kolkata/ Act, 1994 Tribunals of Sales Tax, Kolkata/ Additional Commissioner (Appeals) of Sales Tax, Kolkata

Rajasthan Sales Tax 2003-2006 Deputy Commissioner Act, 1994 (Appeals) of Sales Tax, Jaipur

Rajasthan Value 2006-2012 Deputy Commissioner Added Tax Act, 2003 (Appeals) of Commercial Tax Jaipur/Tax board Commercial Tax, Jaipur

Kerala General Sales 2001-2015 Tribunals of Sales Tax, Tax Act, 1963 Kochi/ Deputy Commissioner (Appeals) of Sales Tax, Kochi/ Commercial Tax Officer

Uttrakhand Value 2011-2012 Deputy Commissioner Appeals, Added Tax Act, 2005 Dehradun

Jammu & Kashmir Value 2007-2014 Deputy Commissioner Appeals, Added Tax Act, 2005 Jammu

Punjab General Sales 2007-2013 Tribunal, Chandigarh/Deputy Tax Act, 1948 Commissioner Appeals, Punjab

Andhra Pradesh Value 2006-2014 Commissioner Appeals, Added Tax Act, 2005 Hyderabad

Karnataka Value 2006-2012 Deputy Commissioner Appeal, Added Tax, 2003 Bangalore/Joint Commissioner Appeal, Bangalore

Bihar Value Added Tax 2006-2015 Joint Commissioner Appeal Act, 2005 (Patna)/Commissioner Commercial Tax, Patna

Jharkhand Value 2012-2013 Assessing officer (Ranchi) Added Tax Act,2005

M.P. Value Added Tax 2011-2013 Joint Commissioner Appeal Act,2002

Maharashtra Value 2011-2013 Joint Commissioner Appeal Added Tax Act, 2002

Central Excise Act, 2002-2011 Commissioner (Appeals) 1944 Chennai/CESTAT, Chennai/ Allahabad High Court/CESTAT, Delhi/ Hon'ble Supreme Court/ Tribunal, Delhi/ Tribunal Chennai/ Hon'ble Cestat, Chennai / Additional Commissioner, Mumbai

Income Tax Act, 1961 2004-2012 Assessing Officer, Delhi/ ITAT, Delhi/CIT (A

c) There are no amounts required to be transferred by the Company to the Investor Education and Protection Fund in accordance with the provisions of the Companies Act, 1956 and the rules made thereunder.

viii. The Company has no accumulated losses as at the end of the financial year and it has not incurred any cash losses in the financial year ended on that date or in the immediately preceding financial year.

ix. According to the records of the Company examined by us and the information and explanation given to us, the Company has not defaulted in repayment of dues to any financial institution or bank or debenture holders as at the balance sheet date.

x. In our opinion, and according to the information and explanations given to us, the terms and conditions of the guarantees given by the Company for loans taken by others from banks or financial institutions during the year, are not prejudicial to the interest of the Company.

xi. In our opinion, and according to the information and explanations given to us, the term loans have been applied for the purposes for which they were obtained.

xii. During the course of our examination of the books and records of the Company, carried out in accordance with the generally accepted auditing practices in India, and according to the information and explanations given to us, we have neither come across any instance of material fraud on or by the Company, noticed or reported during the year, nor have we been informed of any such case by the Management.

For Price Waterhouse Firm Registration Number: 301112E Chartered Accountants

Avijit Mukerji Place : Gurgaon Partner Date : August 20, 2015 Membership Number: 056155


Jun 30, 2014

1. We have audited the accompanying financial statements of HCL Infosystems Limited (the "Company"), which comprise the Balance Sheet as at June 30, 2014, and the Statement of Profit and Loss and Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information, which we have signed under reference to this report.

Management''s Responsibility for the Financial Statements

2. The Company''s Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the Accounting Standards notified under the Companies Act, 1956 (the "Act") read with the General Circular 15/2013 dated September 13, 2013 of the Ministry of Corporate Affairs in respect of Section 133 of the Companies Act, 2013. This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the financial statements that give a true 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 financial statements based on our audit. We conducted our audit in accordance with the Standards on Auditing and other applicable authoritative pronouncements issued by the Institute of Chartered Accountants of India. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

4. An audit involves performing procedures to obtain audit evidence, about the amounts and disclosures in the financial statements. The procedures selected depend on the auditors'' judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditors consider internal control relevant to the Company''s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity''s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by Management, as well as evaluating the overall presentation of the financial statements.

5. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Opinion

6. In our opinion, and to the best of our information and according to the explanations given to us, the accompanying financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

(a) in the case of the Balance Sheet, of the state of affairs of the Company as at June 30, 2014;

(b) in the case of the Statement of Profit and Loss, of the loss for the year ended on that date; and

(c) in the case of the Cash Flow Statement, of the cash flows for the year ended on that date.

Emphasis of Matter

7. We draw attention to Note 57 to the accompanying financial statements regarding-

(a) Transfer of net assets amounting to Rs. 1,118.13 Crores of Hardware Solution Business to HCL Infotech Limited at Nil Consideration, net assets amounting to Rs. 79.31 Crores of Services business to HCL Services Ltd at a consideration of Rs. 61.00 crores and net assets amounting to Rs. 111.84 Crores of Learning business to HCL Learning Limited at a consideration of Rs. 113.00 Crores and Rs. 1,135.28 Crores, being the difference between the carrying value of net assets transferred and the consideration recoverable, debited to the Business Restructuring Reserve (BRR).

(b) Recording of assets and liabilities of HCL Infocom Limited, including its investments in the Transferee Companies, at their fair value and Rs. 959.48 crores, being the difference between the fair value of net assets and the book value of Company''s investment in HCL Infocom Limited, credited to the Capital Reserve.

(c) Utilisation of Capital Reserve, arising from merger of HCL Infocom Limited with the Company, to set-off against the BRR.

(d) Adjustment against the Securities Premium Account of the remaining balance in BRR amounting to Rs. 175.80 Crores.

The aforesaid accounting treatment is in accordance with the Scheme of Arrangement as sanctioned by the Hon''ble High Court of Delhi vide order dated September 18, 2013 received on October 30, 2013, effective from January 1, 2013, and filed with the Registrar of Companies, , NCT of Delhi & Haryana on November 1, 2013. Our conclusion is not qualified in respect of this matter.

Report on Other Legal and Regulatory Requirements

8. As required by ''the Companies (Auditor''s Report) Order, 2003’, as amended by ''the Companies (Auditor''s Report) (Amendment) Order, 2004’, issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Act (hereinafter referred to as the"Order"), and on the basis of such checks of the books and records of the Company as we considered appropriate and according to the information and explanations given to us, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the Order.

9. As required by section 227(3) of the Act, we report that:

(a) We have obtained all the information and explanations which, to the best of our knowledge and belief, were necessary for the purpose of our audit;

(b) In our opinion, proper books of account as required by law have been kept by the Company so far as appears from our examination of those books;

(c) The Balance Sheet, Statement of Profit and Loss, and Cash Flow Statement dealt with by this Report are in agreement with the books of account;

(d) In our opinion, the Balance Sheet, Statement of Profit and Loss, and Cash Flow Statement dealt with by this report comply with the Accounting Standards notified under the Companies Act, 1956;

(e) On the basis of written representations received from the directors as on June 30, 2014, and taken on record by the Board of Directors, none of the directors is disqualified as on June 30, 2014, from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Act.

Annexure To Auditors'' Report

Referred to in paragraph 8 of the Independent Auditors'' Report of even date to the members of HCL Infosystems Limited on the financial statements as of and for the year ended June 30, 2014

i. (a) The Company is maintaining proper records showing full particulars, including quantitative details and situation, of

fixed assets.

(b) The fixed assets are physically verified by the Management according to a phased programme designed to cover all the items over a period of 3 years which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. Pursuant to the programme, a portion of the fixed assets has been physically verified by the Management during the year and no material discrepancies have been noticed on such verification.

(c) In our opinion, and according to the information and explanations given to us, a substantial part of fixed assets has not been disposed off by the Company during the year. Also refer Note 57 to the accompanying financial statements regarding transfer of assets to wholly owned subsidiaries pursuant to a scheme of arrangement.

ii. (a) The inventory [excluding stocks with third parties] has been physically verified by the Management during the year.

In respect of inventory lying with third parties, these have substantially been confirmed by them. In our opinion, the frequency of verification is reasonable.

(b) In our opinion, the procedures of physical verification of inventory followed by the Management are reasonable and adequate in relation to the size of the Company and the nature of its business.

(c) On the basis of our examination of the inventory records, in our opinion, the Company is maintaining proper records of inventory. The discrepancies noticed on physical verification of inventory as compared to book records were not material.

iii. The Company has not granted/taken any loans, secured or unsecured, to companies, firms or other parties covered in the register maintained under Section 301 of the Act. Therefore, the provisions of Clause 4(iii)[(b),(c) and (d) /(f) and (g)] of the said Order are not applicable to the Company.

iv. In our opinion, and according to the information and explanations given to us, there is an adequate internal control system commensurate with the size of the Company and the nature of its business for the purchase of inventory and fixed assets and for the sale of goods and services. Further, on the basis of our examination of the books and records of the Company, and according to the information and explanations given to us, we have neither come across, nor have been informed of, any continuing failure to correct major weaknesses in the aforesaid internal control system.

v. (a) According to the information and explanations given to us, we are of the opinion that the particulars of all contracts or arrangements that need to be entered into the register maintained under section 301 of the Companies Act, 1956 have been so entered.

(b) In our opinion, and according to the information and explanations given to us, the transactions made in pursuance of such contracts or arrangements and exceeding the value of Rupees Five Lakhs in respect of any party during the year have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time.

vi. The Company has not accepted any deposits from the public within the meaning of Sections 58A and 58AA of the Act and the rules framed there under.

vii. In our opinion, the Company has an internal audit system commensurate with its size and the nature of its business.

viii. We have broadly reviewed the books of account maintained by the Company in respect of products where, pursuant to the rules made by the Central Government of India, the maintenance of cost records has been prescribed under clause (d) of sub-section (1) of Section 209 of the Act, and are of the opinion that, prima facie, the prescribed accounts and records have been made and maintained. We have not, however, made a detailed examination of the records with a view to determine whether they are accurate or complete.

ix. (a) According to the information and explanations given to us and the records of the Company examined by us, in of opinion, the Company is generally regular in depositing undisputed statutory dues in respect of sales tax and service tax, though there has been a slight delay in a few cases, and is regular in depositing undisputed statutory dues, including provident fund, investor education and protection fund, employees'' state insurance, income tax, wealth tax, customs duty, excise duty, professional tax, as applicable, with the appropriate authorities.

(b) According to the information and explanations given to us and the records of the Company examined by us, there are no dues of wealth-tax, service-tax and customs duty which have not been deposited on account of any dispute. The particulars of dues of income tax, sales tax and excise dutyas at June 30, 2014 which have not been deposited on account of a dispute are as follows:

Name of the Statute Nature of Amount Amount deposited the dues Rs./Crores under protest Rs./ Crores

Uttar Pradesh Trade Tax Sales Tax 15.04 4.56 Act, 1948

Delhi Sales Tax Act, 1975 Sales Tax 0.08 0.01

Delhi Value Added Tax Act, Trade Tax 6.49 - 2004

Tamil Nadu General Sales Sales Tax 2.02 0.87 Tax Act, 1959

West Bengal Sales Tax Act, Sales Tax 8.01 0.67 1994

Rajasthan Sales Tax Act, Sales Tax 0.03 0.01 1994

Rajasthan Value Added Tax Commercial Tax Act, 2003 (including 4.15 2.59 Penalty)

Kerala General Sales Tax Sales Tax 0.74 0.20 Act, 1963

Jammu & Kashmir Value Sales Tax Added Tax Act, 2005 (including 2.71 0.04 Penalty)

Punjab General Sales Tax Sales Tax Act, 1948 (including 1.22 0.52 Penalty)

Andhra Pradesh Value Sales Tax 0.28 0.21 Added Tax Act, 2005

Karnataka Value Added Sales Tax 0.92 0.28 Tax Act, 2003

Bihar Value Added Tax Act, Sales Tax 2005 (Including 0.48 0.30 Penalty)

Maharashtra Value Added Sales Tax Tax Act, 2002 (Including 4.12 - Penalty)

Central Excise Act, 1944 Excise Duty (Including 15.24 2.09 Penalty)/ Cenvat Short reversed /Interest onreversal of Cenvat Credit including Penalty/ Non submission of Proof of Export and Re Warehousing Certificates/ Denial of Cenvat Credit availed/ Demand of Service Tax

Income Tax Act, 1961 Income Tax (Representative 2.95 0.16 Assessee)/ Income Tax (Regular Assessment of erstwhile HCL Infinet Limited

Name of the Statute Period to which Forum where dispute the amount is pending relates

Uttar Pradesh Trade Tax 2002-2014 Commercial Tax Act, 1948 Tribunal, Noida/ Joint Commissioner (Appeals) of Commercial Tax, Noida/ Additional Commissioner (Appeals) of Commercial Tax, Noida

Delhi Sales Tax Act, 1975 2003-2004 Joint Commissioner (Appeals) of Sales Tax, Delhi

Delhi Value Added Tax Act, 2005-2010 Additional Commissioner 2004 of Sales Tax, Delhi/Deputy Commissioner (Appeals) of Sales Tax, Delhi

Tamil Nadu General Sales, 2003-2009 Commercial Tax Officer, Tax Act, 1959 Tax Act, 1959Tax Act, 1959Chennai

West Bengal Sales Tax Act, 2005-2010 Joint Commissioner 1994 (Appeals) of Sales Tax, Kolkata

Rajasthan Sales Tax Act, 2004-2010 Deputy Commissioner 1994 (Appeals) of Sales Tax, Jaipur

Rajasthan Value Added Tax 2006-2012 Deputy Commissioner Act, 2003 (Appeals) of Commercial Jaipur

Kerala General Sales Tax 2001-2012 Tribunals of Sales Act, 1963 Tax, Kochi/ Deputy Commissioner (Appeals) of Sales Tax, Kochi/ Check post authorities, Kerala

Jammu & Kashmir Value 2007-2009 Deputy Commissioner Added Tax Act, 2005 (Appeals), Jammu

Punjab General Sales Tax 2004-2013 High Court, Chandigarh Act, 1948 & Punjab/ Tribunal, Chandigarh/ By.Commissioner Appeals,Punjab

Andhra Pradesh Value 2005-2008 Commissioner (Appeals) Added Tax Act, 2005 of Commercial Tax, Hyderabad

Karnataka Value Added 2007-2008 Joint Commissioner Tax Act, 2003 Appeal, Bangalore

Bihar Value Added Tax Act, 2010-2013 Jt. Commissioner Appeal 2005 Patna

Maharashtra Value Added 2010-2011 Jt. Commissioner Appeal Tax Act, 2002

Central Excise Act, 1944 1980-2011 CESTAT Chennai/ Commissioner (Appeals) Chennai/ Commissioner (Appeals)/ CESTAT Delhi/ Tribunal Delhi/ Hon''ble Supreme Court/ Tribunal Chennai/ Hon''ble Cestat, Chennai/ Addl Commissioner Mumbai

Income Tax Act, 1961 1989-2007 High Court, Delhi/ Commissioner (Appeals), Delhi

x. The Company has no accumulated losses as at the end of the financial year and it has not incurred any cash losses in the financial year ended on that date. However it had incurred cash losses in the immediately preceding financial year.

xi. According to the records of the Company examined by us and the information and explanation given to us, the Company has not defaulted in repayment of dues to any financial institution or bank or debenture holders as at the balance sheet date.

xii. The Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities. Therefore, the provisions of Clause 4(xii) of the Order are not applicable to the Company.

xiii. As the provisions of any special statute applicable to chit fund/ nidhi/ mutual benefit fund/ societies are not applicable to the Company, the provisions of Clause 4(xiii) of the Order are not applicable to the Company.

xiv. In our opinion, the Company is not dealing in or tradingin shares, securities, debentures and other investments. Accordingly, the provisions of Clause 4(xiv) of the Order are not applicable to the Company.

xv. In our opinion, and according to the information and explanations given to us, the terms and conditions of the guarantees given by the Company for loans taken by others from banks or financial institutions during the year, are not prejudicial to the interest of the Company.

xvi. In our opinion, and according to the information and explanations given to us, the term loans have been applied for the purposes for which they were obtained.

xvii. According to the information and explanations given to us and on an overall examination of the balance sheet of the company, we report that the no funds raised on short-term basis have been used for long-term investment.

xviii. The Company has not made any preferential allotment of shares to parties and companies covered in the register maintained under Section 301 of the Act during the year. Accordingly, the provisions of Clause 4(xviii) of the Order are not applicable to the Company.

xix. The Company has not issued any debentures during the year and does not have any debentures outstanding as at the beginning of the year and at the year end. Accordingly, the provisions of Clause 4(xix) of the Order are not applicable to the Company.

xx. The Company has not raised any money by public issues during the year. Accordingly, the provisions of Clause 4(xx) of the Order are not applicable to the Company.

xxi. During the course of our examination of the books and records of the Company, carried out in accordance with the generally accepted auditing practices in India, and according to the information and explanations given to us, we have neither come across any instance of material fraud on or by the Company, noticed or reported during the year, nor have we been informed of any such case by the Management.

For Price Waterhouse Firm Registration Number: 301112E Chartered Accountants

Abhishek Rara Partner Place : Noida Membership Number: 077779 Date : August 28, 2014


Jun 30, 2012

1. We have audited the attached Balance Sheet of HCL Infosystems Limited (the "Company") as at June 30, 2012, and the related Statement of Profit and Loss and Cash Flow Statement for the year ended on that date annexed thereto, which we have signed under reference to this report. These financial statements are the responsibility of the Company's Management. Our responsibility is to express an opinion on these financial statements based on our audit.

2. We conducted our audit in accordance with the auditing standards generally accepted in India. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by Management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

3. As required by the Companies (Auditor's Report) Order, 2003, as amended by the Companies (Auditor's Report) (Amendment) Order, 2004 (together the "Order") issued by the Central Government of India in terms of sub-section (4A) of Section 227 of 'The Companies Act, 1956' of India (the 'Act') and on the basis of such checks of the books and records of the Company as we considered appropriate and according to the information and explanations given to us, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the Order.

4. Further to our comments in the Annexure referred to in paragraph 3 above, we report that:

(a) We have obtained all the information and explanations which, to the best of our knowledge and belief, were necessary for the purposes of our audit;

(b) In our opinion, proper books of account as required by law have been kept by the Company so far as appears from our examination of those books;

(c) The Balance Sheet, Statement of Profit and Loss and Cash Flow Statement dealt with by this report are in agreement with the books of account;

(d) In our opinion, the Balance Sheet, Statement of Profit and Loss and Cash Flow Statement dealt with by this report comply with the accounting standards referred to in sub-section (3C) of Section 211 of the Act;

(e) On the basis of written representations received from the directors, as on June 30, 2012 and taken on record by the Board of Directors, none of the directors is disqualified as on June 30, 2012 from being appointed as a director in terms of clause (g) of sub-section (1) of Section 274 of the Act;

(f) In our opinion and to the best of our information and according to the explanations given to us, the said financial statements together with the notes thereon and attached thereto give, in the prescribed manner, the information required by the Act, and give a true and fair view in conformity with the accounting principles generally accepted in India:

(i) in the case of the Balance Sheet, of the state of affairs of the Company as at June 30, 2012;

(ii) in the case of the Statement of Profit and Loss, of the profit for the year ended on that date; and

(iii) in the case of the Cash Flow Statement, of the cash flows for the year ended on that date.

[Referred to in paragraph 3 of the Auditors' Report of even date to the members of HCL Infosystems Limited on the financial statements for the year ended June 30, 2012]

1. (a) The Company is maintaining proper records showing full particulars, including quantitative details and situation, of fixed assets.

(b) The fixed assets are physically verified by the Management according to a phased programme designed to cover all the items over a period of three years which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. Pursuant to the programme, a portion of the fixed assets has been physically verified by the Management during the year and no material discrepancies have been noticed on such verification.

(c) In our opinion, and according to the information and explanations given to us, a substantial part of fixed assets has not been disposed of by the Company during the year.

2. (a) The inventory (excluding stocks with third parties) has been physically verified by the Management during the year. In respect of inventory lying with third parties, these have substantially been confirmed by them. In our opinion, the frequency of verification is reasonable.

(b) In our opinion, the procedures of physical verification of inventory followed by the Management are reasonable and adequate in relation to the size of the Company and the nature of its business.

(c) On the basis of our examination of the inventory records, in our opinion, the Company is maintaining proper records of inventory. The discrepancies noticed on physical verification of inventory as compared to book records were not material.

3. The Company has not granted/taken any loans, secured or unsecured, to companies, firms or other parties covered in the register maintained under Section 301 of the Act. Therefore, the provisions of Clause 4(iii)[(b),(c) and (d) /(f) and (g)] of the said Order are not applicable to the Company.

4. In our opinion, and according to the information and explanations given to us, there is an adequate internal control system commensurate with the size of the Company and the nature of its business for the purchase of inventory and fixed assets and for the sale of goods and services. Further, on the basis of our examination of the books and records of the Company, and according to the information and explanations given to us, we have neither come across nor have been informed of, any continuing failure to correct major weaknesses in the aforesaid internal control system.

5. (a) According to the information and explanations given to us, we are of the opinion that the particulars of all contracts or arrangements that need to be entered into the register maintained under Section 301 of the Companies Act, 1956 have been so entered.

(b) In our opinion, and according to the information and explanations given to us, the transactions made in pursuance of such contracts or arrangements and exceeding the value of Rupees Five Lakhs in respect of any party during the year have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time.

6. The Company has not accepted any deposits from the public within the meaning of Sections 58A and 58AA of the Act and the rules framed there under.

7. In our opinion, the Company has an internal audit system commensurate with its size and nature of its business.

8. We have broadly reviewed the books of account maintained by the Company in respect of products where, pursuant to the Rules made by the Central Government of India, the maintenance of cost records has been prescribed under clause (d) of sub-section (1) of Section 209 of the Act, and are of the opinion that prima facie, the prescribed accounts and records have been made and maintained. We have not, however, made a detailed examination of the records with a view to determine whether they are accurate or complete.

9. (a) According to the information and explanations given to us and the records of the Company examined by us, in our opinion, the Company is generally regular in depositing undisputed statutory dues in respect of works contract tax and employees' state insurance, though there has been a slight delay in a few cases, and is regular in depositing undisputed statutory dues, including provident fund, investor education and protection fund, income tax, wealth tax, service tax, sales tax, customs duty and excise duty, as applicable, with the appropriate authorities.

(b) According to the information and explanations given to us and the records of the Company examined by us, the particulars of dues of income tax, sales tax and excise duty as at June 30, 2012 which have not been deposited on account of a dispute, are as follows:

Name of the Statute Nature Amount Amount of the dues (Rs./Crores) deposited under protest (Rs./ Crores)

Uttar Pradesh Trade Sales Tax 14.31 5.13 Tax Act, 1948

Uttar Pradesh Value Commercial Tax 0.82 0.44 Added Tax Act, 2008 (Including Penalty)

Delhi Sales Tax Act, 1975 Sales Tax 0.08 0.03

Delhi Value Added Trade Tax 2.08 0.08 Tax Act, 2004

Tamil Nadu General Sales Tax 2.64 0.97 Sales Tax Act, 1959

West Bengal Sales Tax 1.83 - Sales Tax Act, 1994

Rajasthan Sales Sales Tax 0.04 0.01 Tax Act, 1994

Rajasthan Value Commercial tax 0.16 - Added Tax Act, 2003

Kerala General Sales Sales Tax 1.08 0.55 Tax Act, 1963

Karnataka Value Sales Tax 5.09 2.58 Added Tax Act, 2003

Andhra Pradesh Value Sales Tax 0.25 0.24 Added Tax Act, 2005

Punjab General Sales Tax (including 0.06 - Sales Tax Act, 1948 Penalty)

Punjab Value Added Sales Tax (including 0.72 0.50 Tax Act, 2005 Penalty)

Jammu & Kashmir Value Sales Tax (including 2.75 0.08 Added tax Act, 2005 Penalty)

Uttrakhand Value Sales Tax (including 12.98 1.48 Added Tax Act, 2005 Penalty)

Central Excise Act, 1944 Excise Duty 9.63 0.64 (Including Penalty)

Income Tax Act, 1961 Income Tax 3.95 0.89

Total 58.47 13.62

Name of the Statute Period to Forum where which the the dispute amount is pending relates

Uttar Pradesh Trade Tax Act,1948 2002-2008 Commercial Tax Tribunal, Noida / High Court, Allahabad / Joint Commissioner (Appeals) Commercial Tax, Noida / Additional Commissioner (Appeals) Commercial Tax, Noida

Uttar Pradesh Value Added Tax Act,2008 2008-2012 Joint Commissioner (Appeals) of Commercial Tax, Noida/ Additional Commissioner (Appeals) Commercial Tax, Noida

Delhi Sales Tax Act,1975 2003-2005 Joint Commissioner (Appeals) Sales Tax, Delhi

Delhi Value Added Tax Act,2004 2005-2009 Additional Commissioner of Sales Tax, Delhi / Deputy Commissioner (Appeals) sales Tax, Delhi

Tamil Nadu General Sales Tax Act,1959 2003-2009 Commercial Tax, Officer, Chennai / Deputy Commissioner (Appeals) of Chennai Sales Tax, Chennai

West Bengal Sales Tax Act,1994 2005-2009 Joint Commissioner (Appeals) of Sales Tax, Kolkata

Rajasthan Sales Tax Act,1994 1998-2006 Deputy Commissioner (Appeals) of Sales Tax, Jaipur

Rajasthan Value Added Tax Act,2003 2006-2008 Deputy Commissioner (Appeals) of Commercial Tax, Jaipur

Keralal General Sales Tax Act,1963 2001-2012 Tribunals of Sales Tax, Kochi / Deputy Commissioner (Appeals) Sales Tax, Kochi/ Check Post Authorities, Kerala

Karnataka Value Added Tax Act,2003 2005-2012 Assessing Officer, Bengaluru/ Deputy Commissioner Apeal Bengaluru/Joint Commissioner Appeals Sales Tax, Bengaluru

Andhra Pradesh Value Added Tax Act,2005 2005-2008 Commissioner (Appeals) of Commercial Tax, Hyderabad

Punjab General Sales Tax Act,1948 2004-2005 High Court, Chandigarh & Punjab

Punjab Value Added Tax Act,2005 2007-2009 Tribunal, Chandigarh

Jammu & Kashmir Value Added tax Act,2005 2007-2009 Deputy Commissioner Appeals, Jammu

Uttrakhand Value Added Tax Act,2005 2006-2009 Joint Commissioner Commercial Tax, Dehradun/ Deputy Commissioner Commercial Tax, Dehradun

Central Excise Act,1944 1980-2010 Central Excise & Service Tax Appellate Tribunal / Commissioner (Appeals)

Income Tax Act,1961 1989-2009 Commissioner (Appeals) / High Court

For detailed listing refer Note 53

10. The Company has no accumulated losses as at the end of the financial year and it has not incurred any cash losses in the financial year ended on that date or in the immediately preceding financial year.

11. According to the records of the Company examined by us and the information and explanation given to us, the Company has not defaulted in repayment of dues to any financial institution or bank or debenture holders as at the balance sheet date.

12. The Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities. Therefore, the provisions of Clause 4(xii) of the Order are not applicable to the Company.

13. As the provisions of any special statute applicable to chit fund/ nidhi/ mutual benefit fund/ societies are not applicable to the Company, the provisions of Clause 4(xiii) of the Order are not applicable to the Company.

14. In our opinion, the Company is not dealing in or trading in shares, securities, debentures and other investments. Accordingly, the provisions of Clause 4(xiv) of the Order are not applicable to the Company.

15. In our opinion and according to the information and explanations given to us, the terms and conditions of the guarantees given by the Company, for loans taken by others from banks or financial institutions during the year, are not prejudicial to the interest of the Company.

16. In our opinion, and according to the information and explanations given to us, the term loans have been applied, on an overall basis, for the purposes for which they were obtained.

17. According to the information and explanations given to us and on an overall examination of the balance sheet of the Company, we report that the no funds raised on short-term basis have been used for long-term investment.

18. The Company has not made any preferential allotment of shares to parties and companies covered in the register maintained under Section 301 of the Act during the year. Accordingly, the provisions of Clause 4(xviii) of the Order are not applicable to the Company.

19. The Company had created security or charge in respect of debentures issued in earlier years and redeemed during the year and which were not outstanding at the year-end.

20. The Company has not raised any money by public issues during the year. Accordingly, the provisions of Clause 4(xx) of the Order are not applicable to the Company.

21. During the course of our examination of the books and records of the Company, carried out in accordance with the generally accepted auditing practices in India, and according to the information and explanations given to us, except for processing of fraudulent expenses by certain employees, whose services have since been terminated, resulting in an aggregate loss of Rs. 0.52 Crores, by way of write off of fraudulent expenses, we have neither come across any instance of fraud on or by the Company, noticed or reported during the year, nor have we been informed of such case by the Management.

For Price Waterhouse

Firm Registration Number: 301112E

Chartered Accountants

Abhishek Rara

Place : Noida Partner

Date : August 24, 2012 Membership Number: 77779


Jun 30, 2011

1. We have audited the attached Balance Sheet of HCL Infosystems Limited (the "Company") as at June 30, 2011, and the related Profit and Loss Account and Cash Flow Statement for the year ended on that date annexed thereto, which we have signed under reference to this report. These financial statements are the responsibility of the Company's Management. Our responsibility is to express an opinion on these financial statements based on our audit.

2. We conducted our audit in accordance with the auditing standards generally accepted in India. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by Management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

3. As required by the Companies (Auditor's Report) Order, 2003, as amended by the Companies (Auditor's Report) (Amendment) Order, 2004 (together the "Order") issued by the Central Government of India in terms of sub-section (4A) of Section 227 of 'The Companies Act, 1956' of India (the 'Act') and on the basis of such checks of the books and records of the Company as we considered appropriate and according to the information and explanations given to us, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the Order.

4. Further to our comments in the Annexure referred to in paragraph 3 above, we report that:

(a) We have obtained all the information and explanations which, to the best of our knowledge and belief, were necessary for the purposes of our audit;

(b) In our opinion, proper books of account as required by law have been kept by the Company so far as appears from our examination of those books;

(c) The Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report are in agreement with the books of account;

(d) In our opinion, the Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report comply with the accounting standards referred to in sub-section (3C) of Section 211 of the Act;

(e) On the basis of written representations received from the directors, as on June 30, 2011 and taken on record by the Board of Directors, none of the directors is disqualified as on June 30, 2011 from being appointed as a director in terms of clause (g) of sub-section (1) of Section 274 of the Act;

(f) In our opinion and to the best of our information and according to the explanations given to us, the said financial statements together with the notes thereon and attached thereto give, in the prescribed manner, the information required by the Act, and give a true and fair view in conformity with the accounting principles generally accepted in India:

(i) in the case of the Balance Sheet, of the state of affairs of the Company as at June 30, 2011;

(ii) in the case of the Profit and Loss Account, of the profit for the year ended on that date; and

(iii) in the case of the Cash Flow Statement, of the cash flows for the year ended on that date.

[Referred to in paragraph 3 of the Auditors' Report of even date to the members of HCL Infosystems Limited on the financial statements for the year ended June 30, 2011]

1. (a) The Company is maintaining proper records showing full particulars, including quantitative details and situation, of fixed assets.

(b) The fixed assets are physically verified by the Management according to a phased programme designed to cover all the items over a period of three years which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. Pursuant to the programme, a portion of the fixed assets has been physically verified by the Management during the year and no material discrepancies between the book records and the physical inventory have been noticed.

(c) In our opinion and according to the information and explanations given to us, a substantial part of fixed assets has not been disposed of by the Company during the year.

2. (a) The inventory (excluding stocks with third parties) has been physically verified by the Management during the year. In respect of inventory lying with third parties, these have substantially been confirmed by them. In our opinion, the frequency of verification is reasonable.

(b) In our opinion, the procedures of physical verification of inventory followed by the Management are reasonable and adequate in relation to the size of the Company and the nature of its business.

(c) On the basis of our examination of the inventory records, in our opinion, the Company is maintaining proper records of inventory. The discrepancies noticed on physical verification of inventory as compared to book records were not material.

3. (a) The Company has not granted any loans, secured or unsecured, to companies, firms or other parties covered in the register maintained under Section 301 of the Act.

(b) The Company has not taken any loans, secured or unsecured, from companies, firms or other parties covered in the register maintained under Section 301 of the Act.

4. In our opinion and according to the information and explanations given to us, there is an adequate internal control system commensurate with the size of the Company and the nature of its business for the purchase of inventory, fixed assets and for the sale of goods and services. Further, on the basis of our examination of the books and records of the Company, and according to the information and explanations given to us, we have neither come across nor have been informed of any continuing failure to correct major weaknesses in the aforesaid internal control system.

5. (a) In our opinion and according to the information and explanations given to us, the particulars of contracts or arrangements referred to in Section 301 of the Act have been entered in the register required to be maintained under that section.

(b) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of such contracts or arrangements and exceeding the value of Rupees Five Lakhs in respect of any party during the year have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time.

6. The Company has not accepted any deposits from the public within the meaning of Sections 58A and 58AA of the Act and the rules framed there under.

7. In our opinion, the Company has an internal audit system commensurate with its size and nature of its business.

8. We have broadly reviewed the books of account maintained by the Company in respect of products where, pursuant to the Rules made by the Central Government of India, the maintenance of cost records has been prescribed under clause (d) of sub-section (1) of Section 209 of the Act, and are of the opinion that prima facie, the prescribed accounts and records have been made and maintained. We have not, however, made a detailed examination of the records with a view to determine whether they are accurate or complete.

9. (a) According to the information and explanations given to us and the records of the Company examined by us, in our opinion, except dues in respect of sales tax and employee state insurance contribution, where there have been some delays during the year, the Company is regular in depositing the undisputed statutory dues including provident fund, investor education and protection fund, employees' state insurance, sales-tax, wealth tax, service tax, customs duty, excise duty, cess and other material statutory dues as applicable with the appropriate authorities.

(b) According to the information and explanations given to us and the records of the Company examined by us, the particulars of dues of income-tax, sales-tax and excise duty as at June 30, 2011 which have not been deposited on account of a dispute, are as follows:

Name of the Statute Nature Amount Amount of the dues (?/Crores) deposited under protest (?/Crores)

Uttar Pradesh Trade Tax Act, 1948 Sales Tax (including 23.85 5.12 interest)

Uttar Pradesh Value Commercial tax 0.24 0.27 Added Tax Act, 2008 (including Penalty)

Delhi Sales Tax Act, 1975 Sales Tax 0.25 0.01

Delhi Value Added Trade Tax 5.61 - Tax Act, 2004

Tamil Nadu General Sales Tax 0.86 0.27 Sales Tax Act, 1959

West Bengal Sales Tax 3.00 - Sales Tax Act, 1994

Assam General Sales Tax 0.17 0.01 Sales Tax, 1993

Rajasthan Sales Sales Tax 0.04 0.01 Tax Act, 1994

Rajasthan Value Commercial tax 0.18 - Added Tax Act, 2003

Kerala General Sales Sales Tax 1.04 0.20 Tax Act, 1963

Maharashtra Sales Sales Tax 0.01 0.01 Tax Act, 1969

Himachal Pradesh Sales Tax (Including 0.08 0.08 Value Added Penalty) Tax Act, 2005.

Karnataka Value Sales Tax 1.63 0.58 Added Tax Act, 2003

Andhra Pradesh Value Sales Tax 0.25 0.12 Added Tax Act, 2005

Punjab General Sales Tax (including 0.06 - Sales Tax Act, 1948 Penalty)

Punjab Value Added Sales Tax (including 1.12 0.50 Tax Act, 2005 Penalty)

Jammu & Kashmir Value Sales Tax (including 2.75 0.08 Added tax Act, 2005 Penalty)

Uttrakhand Value Sales Tax (including 12.98 0.12 Added Tax Act, 2005 Penalty)

Central Excise Act, 1944 Excise Duty 9.32 0.85 (Including Penalty)

Income Tax Act, 1961 Income Tax 3.95 0.89

Total 67.39 9.12

Name of the Statue Period to Forum where which the the dispute amount is pending relates

Uttar Pradesh Trade Tax Act, 1948 2002-2008 Commercial Tax Tribunal, Noida / High Court, Allahabad / Joint Commissioner (Appeals) Commercial Tax, Noida/ Additional Commissioner (Appeals) Commercial Tax, Noida

Uttar Pradesh Value Added Tax Act, 2008 2008-2010 Joint Commissioner (Appeals) of Commercial Tax, Noida

Delhi Sales Tax Act, 1975 1999-2005 Assistant Commissioner Sales Tax, Delhi / Deputy Commissioner (Appeals), Sales Tax, Delhi / Joint Commissioner (Appeals) Sales Tax, Delhi

Delhi Value Added Tax Act, 2004 2005-2008 Additional Commissioner of Sales Tax, Delhi

Tamil Nadu General Sales Tax Act, 1959 1998-2009 Tribunal Commercial Tax, Chennai / Commercial Tax Officer,Chennai / Assistant Appellate Commissioner, Chennai

West Bengal Sales Tax Act, 1994 2001-2008 Joint Commissioner (Appeals) of Sales Tax, Kolkata

Assam General Sales Tax, 1993 2001-2007 Superintendent, Sales Tax, Guwahati/ Deputy Commissioner of Sales Tax, Guwahati

Rajasthan Sales Tax Act, 1994 1998-2006 Deputy Commissioner (Appeals) of Sales Tax, Jaipur

Rajasthan Value Added Tax Act, 2003 2006-2008 Deputy Commissioner (Appeals) of Commercial Tax, Jaipur

Kerala General Sales Tax Act, 1963 2001-2011 Tribunals of Sales Tax, Kochi / Deputy Commiss -ioner (Appeals) Sales Tax, Kochi /Check Post Authorities, Kerala

Maharashtra Sales Tax Act, 1969 2003-2004 Deputy Commissioner (Appeals) of Sales Tax, Mumbai

Himachal Pradesh Value Added Tax Act, 2005. 2006-2007 Assistant Commissioner of Sales Tax, Shimla

Karnataka Value Added Tax Act, 2003 2005-2008 Joint Commissioner Appeal Sales Tax, Bengaluru

Andhra Pradesh Value Added Tax Act, 2005 2005-2008 Commissioner (Appeals) of Commercial Tax, Hyderabad/ Assistant Commissioner, Hyderabad

Punjab General Sales Tax Act, 1948 2004-2005 Assistant Commissioner, Mohali

Punjab Value Added Tax Act, 2005 2007-2009 Assistant Commissioner, Mohali

Jammu & Kashmir Value Added tax Act, 2005 2007-2009 Deputy Commissioner Appeals, Jammu

Uttrakhand Value Added Tax Act, 2005 2007-2009 Joint Commissioner Commercial Tax, Dehradun

Central Excise Act, 1944 1980-2010 Central Excise & Service Tax Appellate Tribunal / Commissioner (Appeals)

Income Tax Act, 1961 1989-2009 Commissioner (Appeals) / High Court

Total

For detailed listing refer Note 26 on Schedule 21.

10. The Company has no accumulated losses as at June 30, 2011 and it has not incurred any cash losses in the financial year ended on that date or in the immediately preceding financial year.

11. According to the records of the Company examined by us and the information and explanation given to us, the Company has not defaulted in repayment of dues to any financial institution or bank or debenture holders as at the balance sheet date.

12. The Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

13. The provisions of any special statute applicable to chit fund / nidhi / mutual benefit fund/ societies are not applicable to the Company.

14. In our opinion, the Company is not a dealer or trader in shares, securities, debentures and other investments.

15. In our opinion and according to the information and explanations given to us, the terms and conditions of the guarantees given by the Company, for loans taken by others from banks or financial institutions during the year, are not prejudicial to the interest of the Company.

16. In our opinion, and according to the information and explanations given to us, on an overall basis, the term loans have been applied for the purposes for which they were obtained.

17. On the basis of an overall examination of the balance sheet of the Company, in our opinion and according to the information and explanations given to us, there are no funds raised on a short-term basis which have been used for long-term investment.

18. The Company has not made any preferential allotment of shares to parties and companies covered in the register maintained under Section 301 of the Act during the year.

19. The Company has created security or charge in respect of debentures issued and outstanding at the year-end.

20. The Company has not raised any money by public issues during the year.

21. During the course of our examination of the books and records of the Company, carried out in accordance with the generally accepted auditing practices in India, and according to the information and explanations given to us, except for the below mentioned instances of fraud on the Company during the year that resulted in aggregate loss of Rs. 0.87 Crores, as informed to us by the Management, we have neither come across any instance of fraud on or by the Company, noticed or reported during the year, nor have we been informed of any other such cases by the Management.

(i) Teeming and lading of receipts from customers by an employee, whose services have since been terminated, resulting in aggregate loss of Rs. 0.42 Crores to the Company by way of write-off of the amounts misappropriated by the said employee.

(ii) Processing of fraudulent expenses by certain employees, whose services have since been terminated, resulting in aggregate loss of Rs. 0.05 Crores, by way of write-off of the fraudulent expenses.

(iii) A bank guarantee relating to a customer contract, which upon presentation to the bank was determined to be forged, resulting in aggregate loss of Rs. 0.40 Crores by way of write-off of the dues from the customer.

For Price Waterhouse

Firm Registration Number: 301112E

Chartered Accountants

Abhishek Rara Place : Noida Partner

Date : August 17, 2011 Membership Number: F-77779


Jun 30, 2010

1. We have audited the attached Balance Sheet of HCL Infosystems Limited (the "Company") as at June 30, 2010, and the related Profit and Loss Account and Cash Flow Statement for the year ended on that date annexed thereto, which we have signed under reference to this report. These financial statements are the responsibility of the Companys Management. Our responsibility is to express an opinion on these financial statements based on our audit.

2. We conducted our audit in accordance with the auditing standards generally accepted in India. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by Management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

3. As required by the Companies (Auditors Report) Order, 2003, as amended by the Companies (Auditors Report) (Amendment) Order, 2004 (together the "Order") issued by the Central Government of India in terms of sub-section (4A) of Section 227 of The Companies Act, 1956 of India (the Act) and on the basis of such checks of the books and records of the Company as we considered appropriate and according to the information and explanations given to us, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the Order.

4. Further to our comments in the Annexure referred to in paragraph 3 above, we report that:

(a) We have obtained all the information and explanations which, to the best of our knowledge and belief, were necessary for the purposes of our audit;

(b) In our opinion, proper books of account as required by law have been kept by the Company so far as appears from our examination of those books;

(c) The Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report are in agreement with the books of account;

(d) In our opinion, the Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report comply with the accounting standards referred to in sub-section (3C) of Section 211 of the Act;

(e) On the basis of written representations received from the directors, as on June 30, 2010 and taken on record by the Board of Directors, none of the directors is disqualified as on June 30, 2010 from being appointed as a director in terms of clause (g) of sub-section (1) of Section 274 of the Act;

(f) In our opinion and to the best of our information and according to the explanations given to us, the said financial statements together with the notes thereon and attached thereto give, in the prescribed manner, the information required by the Act, and give a true and fair view in conformity with the accounting principles generally accepted in India:

(i) in the case of the Balance Sheet, of the state of affairs of the Company as at June 30, 2010;

(ii) in the case of the Profit and Loss Account, of the profit for the year ended on that date; and

(iii) in the case of the Cash Flow Statement, of the cash flows for the year ended on that date.

Annexure To Auditors Report [Ref in paragraph 3 of the Auditors Report,of evendate tothe members of HCL Infosystems Limited on the 1. (a) The Company is maintaining proper records showing full particulars, including quantitative details and situation, of fixed assets.

(b) The fixed assets are physically verified by the Management according to a phased programme designed to cover all the items over a period of three years which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. Pursuant to the programme, a portion of the fixed assets has been physically verified by the Management during the year and no material discrepancies between the book records and the physical inventory have been noticed.

(c) In our opinion and according to the information and explanations given to us, a substantial part of fixed assets has not been disposed of by the Company during the year.

2. (a) The inventory (excluding stocks with third parties) has been physically verified by the Management during the year. In respect of inventory lying with third parties, these have substantially been confirmed by them. In our opinion, the frequency of verification is reasonable.

(b) In our opinion, the procedures of physical verification of inventory followed by the Management are reasonable and adequate in relation to the size of the Company and the nature of its business.

(c) On the basis of our examination of the inventory records, in our opinion, the Company is maintaining proper records of inventory. The discrepancies noticed on physical verification of inventory as compared to book records were not material.

3. (a) The Company has not granted any loans, secured or unsecured, to companies, firms or other parties covered in the register maintained under Section 301 of the Act.

(b) The Company has not taken any loans, secured or unsecured, from companies, firms or other parties covered in the register maintained under Section 301 of the Act.

4. In our opinion and according to the information and explanations given to us, having regard to the explanation that certain items purchased are of special nature for which suitable alternative sources do not exist for obtaining comparative quotations, there is an adequate internal control system commensurate with the size of the Company and the nature of its business for the purchase of inventory, fixed assets and for the sale of goods and services. Further, on the basis of our examination of the books and records of the Company, and according to the information and explanations given to us, we have neither come across nor have been informed of any continuing failure to correct major weaknesses in the aforesaid internal control system.

5. (a) In our opinion and according to the information and explanations given to us, the particulars of contracts or arrangements referred to in Section 301 of the Act have been entered in the register required to be maintained under that section.

(b) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of such contracts or arrangements and exceeding the value of Rupees Five Lakhs in respect of any party during the year have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time.

6. The Company has not accepted any deposits from the public within the meaning of Sections 58A and 58AA of the Act and the rules framed there under.

7. In our opinion, the Company has an internal audit system commensurate with its size and nature of its business.

8. We have broadly reviewed the books of account maintained by the Company in respect of products where, pursuant to the Rules made by the Central Government of India, the maintenance of cost records has been prescribed under clause (d) of sub-section (1) of Section 209 of the Act, and are of the opinion that prima facie, the prescribed accounts and records have been made and maintained. We have not, however, made a detailed examination of the records with a view to determine whether they are accurate or complete.

9. (a) According to the information and explanations given to us and the records of the Company examined by us, in our opinion, except dues in respect of income-tax where there have been some delays during the year, the Company is regular in depositing the undisputed statutory dues including provident fund, investor education and protection fund, employees state insurance, sales-tax, wealth tax, service tax, customs duty, excise duty, cess and other material statutory dues as applicable with the appropriate authorities.

(b) According to the information and explanations given to us and the records of the Company examined by us, the particulars of dues of income-tax, sales-tax and excise duty as at June 30, 2010 which have not been deposited on account of a dispute, are as follows:

Name of the statute Amount (Rs./ Amount Period to (Nature of dues) Crores) deposited which the under protest amount relates (Rs./Crores)

UP. Trade Tax Act, 1948 21.86 3.96 2002 - 2008 (Sales Tax including Interest)

UP. Value Added Tax 0.28 0.27 2008 - 2010 Act, 2008 (Commercial Tax including Penalty)

Delhi Sales Tax Act, 1975 0.26 0.01 1999 - 2005 (Sales Tax)

Delhi Value Added Tax 1.72 - 2005 - 2007 Act, 2004 (Trade Tax)

Tamil Nadu General Sales 0.68 0.27 1998 - 2005 Tax Act, 1959 (Sales Tax)

West Bengal Sales Tax 0.08 - 2000 - 2007 Act, 1994 (Sales Tax)

Assam General Sales Tax 0.06 0.01 2001 - 2004 Act, 1993 (Sales Tax)

Rajasthan Sales Tax 0.04 0.01 1998 - 2006 Act, 1994 (Sales Tax)

Rajasthan Value Added Tax 0.18 - 2006 - 2008 Act, 2003 (Commercial Tax)

Kerala General Sales Tax 1.06 0.20 2001 - 2010 Act, 1963 (Sales Tax)

Maharashtra Sales Tax 0.01 0.01 2003 - 2004 Act, 1969 (Sales Tax)

Himachal Pradesh Value 0.08 0.08 2006 - 2007

Added Tax Act, 2005 (Sales Tax including Penalty)

Karnataka Value Added Tax 0.47 - 2006 - 2007 Act, 2003 (Sales Tax)

Andhra Pradesh Value Added 0.25 0.12 2005 - 2008 Tax Act, 2005 (Sales Tax)

Punjab General Sales Tax 0.06 - 2004 - 2005 Act, 1948 (Sales Tax including Penalty)

Punjab Value Added Tax 0.44 0.50 2007 - 2009 Act, 2005 (Sales Tax including Penalty)

Jammu & Kashmir Value 2.75 0.08 2007 - 2009 Added Tax Act, 2005 (Sales Tax Including Penalty)

Name of the Statue Forum where the dispute (Nature of dues> is pending

U.P. Trade Tax Act, 1948 (Sales Tax including Interest) Joint Commissioner (Appeals) of Commercial Tax / Commercial Tax Tribunal / High Court / Additional Commissioner (Appeals) of Commercial Tax

U.P. Value Added Tax Act, 2008 (Commercial Tax including Penalty) Joint Commissioner (Appeals) of Commercial Tax

Delhi Sales Tax Act, 1975 (Sales Tax) Assistant Commissioner of Sales Tax / Joint Commissioner (Appeals) of Sales Tax / Deputy Commissioner (Appeals) of Sales Tax

Delhi Value Added Tax Act, 2004 (Trade Tax) Additional Commissioner of Sales Tax / Deputy Commissioner (Appeals) of Sales Tax



Tamil Nadu General Sales Tax Act, 1959 (Sales Tax) Tribunal Commercial Tax/ Commercial Tax Officer/ Assistant Appellate Commissioner

West Bengal Sales Tax Act, 1994 (Sales Tax) Joint Commissioner (Appeals) of Sales Tax

Assam General Sales Tax Act, 1993 (Sales Tax) Superintendent, Sales Tax

Rajasthan Sales Tax Act, 1994 (Sales Tax) Deputy Commissioner (Appeals) of Sales Tax

Rajasthan Value Added Tax Act, 2003 (Commercial Tax) Deputy Commissioner (Appeals) of Commercial Tax

Kerala General Sales Tax Act, 1963 (Sales Tax) Check post authorities / Tribunals of Sales Tax / Deputy Commissioner (Appeals) of Sales Tax

Maharashtra Sales Tax Act, 1969 (Sales Tax) Deputy Commissioner (Appeals) of Sales Tax

Himachal Pradesh Value Added Tax Act, 2005 (Sales Tax including Penalty) Assistant Commissioner of Sales Tax

Karnataka Value Added Tax Act, 2003 (Sales Tax) Assessing Officer

Andhra Pradesh Value Added Tax Act, 2005 (Sales Tax) Commissioner Appeals

Punjab General Sales Tax Act, 1948 (Sales Tax including Penalty) High Court

Punjab Value Added Tax Act, 2005 (Sales Tax including Penalty) Assistant Commissioner

Jammu & Kashmir Value Added Tax Act, 2005 (Sales Tax Including Penalty) Deputy Commissioner Appeals



Name of the statute Amount (Rs./ Amount Period to (Nature of dues) Crores) deposited which the under protest amount relates (Rs./Crores)

Uttarakhand Value Added 0.70 1.12 2007 - 2009 Tax Act, 2005 (Sales Tax Including Penalty)

Central Excise Act, 1944 10.91 0.85 1980 - 2010 (Excise Duty Including Penalty)

Income Tax Act, 1961 2.94 0.16 1989 - 2007 (Income Tax)



Name of the Statue Forum where the dispute is pending

Uttarakhand Value Added Tax Act, 2005 (Sales Tax Including Penalty) Joint Commissioner Commercial Tax

Central Excise Act, 1944 (Excise Duty Including Penalty) CESTAT / Commissioner (Appeals)

Income Tax Act, 1961 (Income Tax) Commissioner (Appeals) / High Court

For detailed listing refer Note 26 on Schedule 21.

10. The Company has no accumulated losses as at June 30, 2010 and it has not incurred any cash losses in the financial year ended on that date or in the immediately preceding financial year.

11. According to the records of the Company examined by us and the information and explanation given to us, the Company has not defaulted in repayment of dues to any financial institution or bank or debenture holders as at the balance sheet date.

12. The Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

13. The provisions of any special statute applicable to chit fund / nidhi / mutual benefit fund/ societies are not applicable to the Company.

14. In our opinion, the Company is not a dealer or trader in shares, securities, debentures and other investments.

15. In our opinion and according to the information and explanations given to us, the terms and conditions of the guarantees given by the Company, for loans taken by others from banks or financial institutions during the year, are not prejudicial to the interest of the Company.

16. In our opinion, and according to the information and explanations given to us, on an overall basis, the term loans have been applied for the purposes for which they were obtained.

17. On the basis of an overall examination of the balance sheet of the Company, in our opinion and according to the information and explanations given to us, there are no funds raised on a short-term basis which have been used for long-term investment.

18. The Company has made preferential allotment of shares to parties and companies covered in the register maintained under Section 301 of the Act during the year. In our opinion and according to the information and explanations given to us, the price at which such shares have been issued is not prejudicial to the interest of the Company.

19. The Company has created security or charge in respect of debentures issued and outstanding at the year-end.

20. The Company has not raised any money by public issues during the year.

21. During the course of our examination of the books and records of the Company, carried out in accordance with the generally accepted auditing practices in India, and according to the information and explanations given to us, except for an instance of fraud on the Company reported to us during the year, that involved fraud by an employee (whose services have since been terminated) relating to sales, aggregating Rs 0.97 crores to unidentified parties, due to certain weaknesses in the internal control systems (which are since being strengthened), we have neither come across any instance of fraud on or by the Company, noticed or reported during the year, nor have we been informed of such case by the Management.

For Price Waterhouse Firm Registration Number: 301112E

Chartered Accountants

Abhishek Rara Place : Noida Partner

Date : August 27, 2010 Membership Number: F-77779

 
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