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Company Information

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HCL Technologies Ltd.

Sep 27, 04:00
1295.50 -62.15 ( -4.58 %)
 
VOLUME : 229491
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1374.45
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1377.00
Sep 27, 03:59
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VOLUME : 7653504
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Market Cap. ( ₹ ) 351473.90 Cr. P/BV 5.87 Book Value ( ₹ ) 220.78
52 Week High/Low ( ₹ ) 1378/800 FV/ML 2/1 P/E(X) 31.54
Bookclosure 23/10/2021 TTM EPS ( ₹ ) 42.08 Div Yield (%) 0.77
AUDITOR'S REPORT
You can view full text of the latest Director's Report for the company.
Year End :2021-03 

INDEPENDENT AUDITORS’ REPORT


To the Members of HCL Technologies Limited

Report on the Audit of the Standalone Financial Statements

Opinion

We have audited the standalone financial statements of HCL Technologies Limited (“the Company”), which comprise the Standalone Balance Sheet as at 31 March 2021, and the Standalone Statement of Profit and Loss (including other comprehensive income), Standalone Statement of Changes in Equity and Standalone Statement of Cash Flows for the year then ended, and notes to the standalone financial statements, including a summary of the significant accounting policies and other explanatory information (hereinafter referred to as ‘the standalone financial statements').

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone financial statements give the information required by the Companies Act, 2013 (“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 31 March 2021, and profit and other comprehensive income, changes in equity and its cash flows for the year ended on that date.

Basis for Opinion

We conducted our audit in accordance with the Standards on Auditing (SAs) specified under section 143(10) of the Act. Our responsibilities under those SAs are further described in the Auditor’s Responsibilities for the Audit of the Standalone Financial Statements section of our report. We are independent of the Company in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India together with the ethical requirements that are relevant to our audit of the standalone financial statements under the provisions of the Act and the Rules thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion on the standalone financial statements.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the standalone financial statements of the current period. These matters were addressed in the context of our audit of the standalone financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

Description of Key Audit Matters

The key audit matter

How the matter was addressed in our audit

Revenue Recognition on fixed price contracts (See note 1(f) and 3.19 to the standalone financial statements)

Revenue and onerous obligation in respect of open fixed price contracts involves critical estimates as there is an inherent and presumed fraud risk involved around the recognition of revenue, given the customized and complex nature of these contracts.

Estimation of efforts is a critical estimate to determine revenue and liability for onerous obligations for open fixed price contracts. The estimate has a high inherent uncertainty as it requires consideration of progress of contracts, efforts incurred till date and efforts required to complete the remaining contract performance obligations.

In view of the significance of the matter we applied the following audit procedures in this area, among others to obtain sufficient appropriate audit evidence:

• evaluating the design, implementation and operating effectiveness of internal controls relating to estimation of efforts required and recording of efforts incurred to complete the remaining contract performance obligations.

• obtaining an understanding of the systems, processes and controls implemented by management for recording and computing revenue and associated contract assets, and unearned and deferred revenue balances.

• involving our Information Technology (‘IT') specialists to assess the design, implementation and operating effectiveness of key IT controls over the IT environment in which business systems operate, including IT general controls and application controls pertaining to allocation of resources and budgeting systems which prevents unauthorized changes to recording of costs incurred and controls relating to the estimation of contract costs required to complete the project.

• selecting specific/statistical samples of contracts and testing revenue recognition and estimation of onerous obligation, if any, by performing the following procedures.

- evaluating identification of performance obligation and allocation of transaction price to each performance obligation;

- performing retrospective review of the costs incurred with estimated costs to identify significant variations and verifying that variations have been considered in estimating the remaining costs to complete the contract; and

- assessing the appropriateness of work in progress (contract assets) on balance sheet date by verifying the underlying information and identify possible changes in estimated costs to complete the remaining performance obligations.

The key audit matter

How the matter was addressed in our audit

Evaluation of tax positions and litigations (See note 1(g) and 3.25 to the standalone financial statements)

The Company is required to estimate its income tax liabilities in accordance with the tax laws applicable in India. Further, there are matters of interpretation in terms of application of tax laws and related rules to determine current tax provision and deferred taxes.

The Company has material tax positions and litigations on a range of tax matters. This requires management to make significant judgments to determine the possible outcome of uncertain tax positions and litigations and their consequent impact on related accounting and disclosures in the standalone financial statements.

In view of the significance of the matter we applied the following audit

procedures in this area, among others to obtain sufficient appropriate

audit evidence:

• testing the design, implementation and operating effectiveness of the Company’s key controls over identifying uncertain tax positions and matters involving litigations/disputes.

• obtaining details of tax positions and tax litigations for the year and as at 31 March 2021 and holding discussions with designated management personnel.

• assessing and analysing select key correspondences with tax authorities and inspecting external legal opinions obtained by management for key uncertain tax positions and tax litigations.

• evaluating underlying evidence and documentation to determine whether the information provides a basis for amounts reserved / not reserved in the books of account.

• involving our internal tax specialists and evaluating management’s underlying key assumptions in estimating the tax provisions and estimate of the possible outcome of significant tax litigations; and

• in respect of tax positions and litigations, assessing the computation of provisions and consequent impact on related accounting and disclosures in the standalone financial statements.

Other Information

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

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

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

Management’s and Board of Directors’ Responsibility for the Standalone Financial Statements

The Company's Management and Board of Directors are responsible for the matters stated in section 134(5) of the Act with respect to the preparation of these standalone financial statements that give a true and fair view of the state of affairs, profit/loss and other comprehensive income, changes in equity and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) specified under section 133 of the Act. 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 accuracy and completeness of the accounting records, relevant to the preparation and presentation of the standalone financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

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

The Board of Directors is also responsible for overseeing the Company’s financial reporting process.

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

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

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

• Identify and assess the risks of material misstatement of the standalone financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under section 143(3)(i) of the Act, we are also responsible for expressing our opinion on whether

Standalone Financial Statements 209

the company has adequate internal financial controls with reference to standalone financial statements in place and the operating effectiveness of such controls.

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

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

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

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

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

Report on Other Legal and Regulatory Requirements

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

2. (A) As required by Section 143(3) of the Act, we report that:

(a) We have sought and obtained all the information and explanations which to the 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 Standalone Balance Sheet, the Standalone Statement of Profit and Loss (including other

210 HCL Annual Report 2021

comprehensive income), the Standalone Statement of Changes in Equity and the Standalone Statement of Cash Flows 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 Ind AS specified under section 133 of the Act.

(e) On the basis of the written representations received from the directors as on 31 March 2021 taken on record by the Board of Directors, none of the directors is disqualified as on 31 March 2021 from being appointed as a director in terms of Section 164(2) of the Act.

(f) With respect to the adequacy of the internal financial controls with reference to standalone financial statements of the Company and the operating effectiveness of such controls, refer to our separate Report in “Annexure B”.

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

(i) The Company has disclosed the impact of pending litigations as at 31 March 2021 on its financial position in its standalone financial statements - Refer Note 3.33 to the standalone financial statements;

(ii) The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses;

(iii) There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company; and

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

(C) With respect to the matter to be included in the Auditors’ Report under section 197(16):

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

For B S R & Co. LLP

Chartered Accountants

Firm’s Registration No.101248W/W-100022

Rakesh Dewan

Partner

Membership No.: 092212

ICAI UDIN.: 21092212AAAAAQ1046

Place: Gurugram, India

Date: 23 April 2021

Annexure A referred to in our Independent Auditors’ Report

With reference to the Annexure A referred to in the Independent

Auditors' Report to the members of HCL Technologies Limited on

the standalone financial statements for the year ended 31 March

2021, we report the following:

(i) (a) The Company has maintained proper records showing

full particulars, including quantitative details and situation of its fixed assets.

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

(c) According to the information and explanations given to us, the title deeds of immovable properties included in property, plant and equipment are held in the name of Company. In respect of immovable properties taken on lease and disclosed as right-of-use-assets in the standalone financial statements, the lease agreements are in the name of the Company.

(ii) Inventories lying with Company have been physically verified by the management during the year. In our opinion, the frequency of such verification is reasonable. As informed to us, no material discrepancies were noticed on such verification. Inventories lying with third parties have been confirmed by them as at year end and no material discrepancies were noticed in respect of such confirmation.

(iii) According to the information and explanations given to us, the Company has not granted any loans, secured or unsecured to companies, firms, limited liability partnerships or other parties covered in the register maintained under section 189 of the Act. Accordingly, the provisions of paragraph 3 (iii) (a), (b) and (c) of the Order are not applicable to the Company.

(iv) According to the information and explanations given to us, the Company has not entered into any transactions related to loans, investments, guarantees and securities to which the provisions of Section 185 of the Act is applicable. Further, according to the information and explanations given to us and based on our audit procedures performed, we are of the opinion that provisions of section 186 of the Act have been complied in respect of loan, guarantees and investments given by the Company. There are no securities provided by the Company as specified under the section 186 of the Act.

(v) According to the information and explanations given to us, the Company has not accepted any deposits as mentioned in the directives issued by the Reserve Bank of India, the provisions of section 73 to 76 or any other relevant provisions of the Act and the rules framed thereunder. Accordingly, the provisions of paragraph 3(v) of the Order is not applicable to the Company.

(vi) According to the information and explanations given to us, the Central Government has not prescribed the maintenance of cost records under sub-section (1) of section 148 of the Act for any of the services rendered by the Company. Accordingly, the provisions of paragraph 3(vi) of the Order is not applicable to the Company.

(vii) (a) According to the information and explanations given to

us and based on our examination of the records of the Company, amounts deducted/ accrued in the books of account in respect of undisputed statutory dues including Provident fund, Employees’ State Insurance, Income Tax, Goods and Service tax, duty of Customs, cess and other material statutory dues have generally been

regularly deposited during the year by the Company with the appropriate authorities though there have been slight delays in case of payment of duty of customs. As explained to us, the Company did not have any dues on account of duty of excise.

(b) According to the information and explanation given to us, no undisputed amounts payable in respect of Provident Fund, Employee’s State Insurance, Income-Tax, Goods and Service tax, duty of Customs, Cess and other statutory dues were outstanding, at the year end, for a period of more than six months from the date they became payable.

(c) According to the records of the Company, the dues of Income-tax, Service tax, Sales tax, Goods and Service Tax, Duty of Customs, and Provident Fund which have not been deposited by the Company with the appropriate authorities on account of any disputes as at 31 March 2021, are as follows:

Name of the Statue

Nature of the dues

INR*

(in crores)

Period to which amount relates

Forum where dispute is pending

Income Tax Act, 1961

Income Tax

70.6

Financial year 2016-17

Deputy

Commissioner of Income Tax-Delhi

Income Tax Act, 1961

Income Tax

171.6

Financial Year 2003-04, 200405, 2011-12 to Financial year 2015-16 and Financial year 2017-18

Commissioner of Income Tax (Appeals)

Income Tax Act, 19611

Income Tax

10

Financial Year 2012-13 and Financial Year 2016-17

Commissioner of Income Tax (Appeals)

Income Tax Act, 19612

Income Tax

372.6

Financial Year 2003-04 to Financial Year 2006-07 and Financial year 2008-09 to Financial year 2010-11

Income Tax Appellate Tribunal-Delhi

Income Tax Act, 19613

Income Tax

34.9

Financial Year 2012-13 to Financial Year 2014-15

Income Tax Appellate Tribunal-Delhi

Income Tax Act, 19613

Income Tax

69.3

Financial Year 2006-07 to Financial Year 2011-12

Income Tax Appellate Tribunal-Mumbai

Income Tax Act, 1961

Income Tax

1.2

Financial year 2002-03 and Financial year 2003-04

High Court of Delhi

Income Tax Act, 19611

Income Tax

1.6

Financial Year 2006-07

High Court of Karnataka

Income Tax Act, 1961

Income Tax

0.6

Financial Year 2008-09

High Court of Allahabad

Income Tax Act, 1961

Income Tax

11.3

Financial Year 2002-03 to Financial Year 2004-05

Hon’ble Supreme Court of India

Bombay Sales Tax Act, 1959

Value

Added Tax

0.62

Financial Year 2004-05

Joint

Commissioner (Appeals), Mumbai

Maharashtra VAT Act, 2002

Value

Added Tax

0.48

Financial Year 2009-10 and 2011-12

Joint

Commissioner (Appeals), Mumbai

Central Sales Tax,1956

Sales Tax

0.05

Financial Year 2012-13

Joint Commissioner (Appeals)

Central Sales Tax,1956

Sales Tax

0.31

Financial Year 2014-15

Joint Commissioner (Appeals), Maharashtra

UP VAT Act 2008

Value Added Tax

0.11

Financial Year 2010-11

Joint Commissioner (Appeals), Noida

Maharashtra VAT Act, 2002

Value Added Tax

7.94

Financial Year 2012-13

Joint Commissioner (Appeals), Large Tax Payer Unit, Mumbai

Name of the Statue

Nature of the dues

INR*

(in crores)

Period to which amount relates

Forum where dispute is pending

Maharashtra VAT Act, 2002

Value Added Tax

1.24

Financial Year 2014-15

Joint Commissioner (Appeals), Large Tax Payer Unit, Mumbai

Goods and Service Tax Act, 2017

Goods and

Service

Tax

4.35

October 2017 to September 2018

Additional Commissioner (appeals) of Goods and Sernce Tax

Goods and Service Tax Act, 2017

Goods and

Service

Tax

5.35

October 2018 to December 2019

Additional Commissioner (appeals) of Goods and Service Tax

Customs Act, 1962

Duty to Customs

0.27

Financial Year 2006-07

Common Adjudicating Authority (Directorate of Revenue Intelligence)

Customs Act, 1962

Duty to Customs

2.21

Financial Year 1997-98 to Financial Year 1999-00

Office of Assistant Commissioner of Customs

Customs Act, 1962

Duty to Customs

0.59

Financial Year 2007-08 and Financial Year 2009-10 to Financial Year 2013-14

Customs, Excise, Service Tax Appellant Tribunal, Maharashtra

Finance Act 1994, read with Service Tax Rules,1994

Service Tax

0.79

Financial Year 2006-07

High Court of Allahabad

Finance Act 1994, read with Service Tax Rules, 1994

Service Tax

0.63

Financial Year 2006-07

Commissioner of Service Tax (Appeals)

Finance Act 1994, read with Service Tax Rules, 1994

Service Tax

0.07

Financial Year 2006-07 to Financial Year 2011-12 and Financial Year 2009-10

Customs, Excise, Service Tax Appellant Tribunal, Allahabad

Finance Act 1994, read with Service Tax Rules, 1994

Service Tax

0.63

Financial Year 2011-12

Customs, Excise, Service Tax Appellant Tribunal, Chennai

Finance Act 1994, read with Service Tax Rules, 1994

Service Tax

0.37

Financial Year 2013-14

Customs, Excise, Service Tax Appellant Tribunal

Finance Act 1994, read with Service tax rules,1994

Service Tax

1.36

Financial Year 2013-14

Commissioner of Service Tax (Appeals)

Finance Act 1994, read with Service tax rules,1994

Service Tax

1.18

Financial Year 2007-10

High Court

Finance Act 1994, read with Service tax rules,1994

Service Tax

15.56

April 2012 to September 2012

Customs, Excise, Service Tax Appellant Tribunal, Allahabad

Finance Act 1994, read with Service tax rules,1994

Service Tax

2.06

June 2011 to August 2014

Customs, Excise, Service Tax Appellant Tribunal, Allahabad

Central Board Trustees

Provident

Fund

4.30

Financial Year 2007-08

to Financial Year 2013-14

Bombay High court

1 Pursuant to the scheme of amalgamation of HCL Eagle Limited, HCL Technologies Solutions Limited and HCL Comnet Limited.

2 The Company has made payment of tax liability for financial year 2004-05 amounting to ' 0.6 crores under Vivad Se Vishwas Scheme in the current year and is awaiting final acceptance from the Income tax Department.

3 The Company has made payment of tax liability for financial year 2007-08 to financial year 2014-15 amounting to ' 54.84 crores

212 HCL Annual Report 2021

under Vivad Se Vishwas Scheme in the current year and is awaiting final acceptance from the Income tax Department.

* Amount represents amount demanded in demand orders and excludes interest and penalty as may be applicable thereon.

Total amount deposited under protest / adjusted against refunds in respect of Income tax is ' 139.61 Crores (except amount considered in Vivad se Vishwas Scheme disclosed above), Custom Duty ' 0.69 Crores, Service tax is ' 1.31 Crores, Goods and Service tax is ' 0.97 Crores, Value added tax is ' 0.71 Crores and Provident Fund is ' 0.89 Crores.

(viii) In our opinion and according to the information and explanations given to us and based on our examination of the records of the Company, the Company has not defaulted in repayment of loans or borrowings to banks. The Company did not have any outstanding loans or borrowings from financial institutions or government or dues to debenture holders during the year.

(ix) According to the information and explanations given to us, the Company has not raised any money by way of initial public offer / further pubic offer / debt instruments. In our opinion and according to the information and explanations given to us, the term loans taken by the Company have been applied for the purposes for which they were raised.

(x) To the best of our knowledge and according to the information and explanations given to us, no material fraud by the Company or on the Company by its officers or employees has been noticed or reported during the course of our audit.

(xi) In our opinion and according to information and explanations given to us and based on our examination of the records of the Company, the managerial remuneration has been provided/ paid by the Company in accordance with the provisions of Section 197 read with Schedule V to the Act.

(xii) According to the information and explanations given to us, in our opinion, the Company is not a Nidhi Company as prescribed under Section 406 of the Act. Accordingly, paragraph 3(xii) of the Order is not applicable to the Company.

(xiii) According to the information and explanations given to us and based on of our examination of the records of the Company, all the transactions with the related parties are in compliance with the provisions of Sections 177 and 188 of the Act where applicable and the details have been disclosed in the notes to the standalone financial statements as required by the applicable accounting standards.

(xiv) According to the information and explanation given to us and based on of our examination of the records of the Company, the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year. Accordingly, paragraph 3(xiv) of the Order is not applicable to the Company.

(xv) According to information and explanations given to us and based on our examination of the records of the Company, the Company has not entered into any non-cash transactions with directors or persons connected with them. Accordingly, paragraph 3(xv) of the Order is not applicable to the Company.

(xvi) According to the information and explanations given to us, the Company is not required to be registered under section 45-IA of the Reserve Bank of India Act, 1934.

For B S R & Co. LLP

Chartered Accountants

Firm's Registration No.101248W/W-100022

Rakesh Dewan

Partner

Membership No.: 092212

ICAI UDIN.: 21092212AAAAAQ1046

Place: Gurugram, India Date: 23 April 2021

Annexure B to the Independent Auditors’ report on the standalone financial statements of HCL Technologies Limited for the year ended 31 March 2021

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

(Referred to in paragraph 2(A)(f) under ‘Report on Other Legal and Regulatory Requirements’ section of our report of even date)

Opinion

We have audited the internal financial controls with reference to standalone financial statements of HCL Technologies Limited (“the Company”) as of 31 March 2021 in conjunction with our audit of the standalone financial statements of the Company for the year ended on that date.

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

Management’s Responsibility for Internal Financial Controls

The Company's management and the Board of Directors are responsible for establishing and maintaining internal financial controls based on the internal financial controls with reference to standalone financial statements criteria established by the Company considering the essential components of internal control stated in the Guidance Note. These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to company's policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013 (hereinafter referred to as “the Act”).

Auditors’ Responsibility

Our responsibility is to express an opinion on the Company's internal financial controls with reference to standalone financial statements based on our audit. We conducted our audit in accordance with the Guidance Note and the Standards on Auditing, prescribed under section 143(10) of the Act, to the extent applicable to an audit of internal financial controls with reference to standalone financial statements. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls with reference to standalone financial statements were established and maintained and whether such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls with

reference to standalone financial statements and their operating effectiveness. Our audit of internal financial controls with reference to standalone financial statements included obtaining an understanding of such internal financial controls, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditor's judgement, including the assessment of the risks of material misstatement of the standalone financial statements, whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Company's internal financial controls with reference to standalone financial statements.

Meaning of Internal Financial controls with Reference to Standalone Financial Statements

A company's internal financial controls with reference to standalone financial statements is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of standalone financial statements for external purposes in accordance with generally accepted accounting principles. A company's internal financial controls with reference to standalone financial statements include those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of standalone financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorisations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorised acquisition, use, or disposition of the company's assets that could have a material effect on the standalone financial statements.

Inherent Limitations of Internal Financial controls with Reference to Standalone Financial Statements

Because of the inherent limitations of internal financial controls with reference to standalone financial statements, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls with reference to standalone financial statements to future periods are subject to the risk that the internal financial controls with reference to standalone financial statements may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

For B S R & Co. LLP

Chartered Accountants

Firm's Registration No.101248W/W-100022

Rakesh Dewan

Partner

Membership No.: 092212

ICAI UDIN.: 21092212AAAAAQ1046

Place: Gurugram, India Date: 23 April 2021