Hexaware Technologies

1.  We have audited the attached consolidated balance sheet of Hexaware
 Technologies Limited (the Company) and its subsidiaries (the
 Group), as at December 31, 2008 and the consolidated profit and loss
 account and the consolidated cash flow statement of the Group for the
 year ended on that date annexed thereto. These consolidated financial
 statements are the responsibility of the Company’s management. They
 have been prepared on the basis of separate financial statements and
 other financial information regarding components. Our responsibility is
 to express an opinion on these consolidated financial statements based
 on our audit.
 
 2.  We conducted our audit in accordance with the auditing standard
 generally accepted in India. This standard requires that we plan and
 perform the audit to obtain reasonable assurance as to 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.  a) We did not audit the financial statements of certain
 subsidiaries, whose financial statements reflect the total assets of
 Rs. 1,206.17 million as at December 31, 2008, total revenues of Rs.
 3,407.82 million and net cash inflows amounting to Rs. 77.51 million
 for the year then ended. These financial statements and other financial
 information, other than to the extent stated in paragraph 3(b) below,
 have been audited by other auditors whose reports have been furnished
 to us, and our opinion, in so far as it relates to the amounts included
 in respect of these subsidiaries is based solely on the report of other
 auditors.
 
 b) As the audited financial statements as at and for the year ended
 December 31, 2008 of a subsidiary company were not available in respect
 which, the total assets as at December 31, 2008 of Rs. 98.14 million,
 total revenues for the year then ended of Rs. 197.51 million and net
 cash inflows for the year then ended of Rs. 20.04 million and the notes
 to financial statements, have been recognized/disclosed in the
 financial statements on the basis of unaudited financial statements as
 at and for the year ended December 31, 2008 as provided by the
 management of that subsidiary company.
 
 4.  Without qualifying our report, we invite attention to Note 13 of
 Schedule 13 B regarding remuneration of Rs. 2.11 million (Previous Year
 Rs. 2.11 million) paid to a director during the previous year, in
 respect of which the Central Government approval is awaited
 
 5.  We report that the consolidated financial statements have been
 prepared by the Company’s management in accordance with the
 requirements of Accounting Standard (AS) 21,’Consolidated Financial
 Statements’,.
 
 6.  Based on our audit and on consideration of reports of other
 auditors on separate financial statements and on the other financial
 information of the components, and to the best of our information and
 according to the explanations given to us, we are of the opinion that
 the attached consolidated financial statements give a true and fair
 view in conformity with the accounting principles generally accepted in
 India:
 
 a) in the case of the consolidated balance sheet, of the consolidated
 state of affairs of the Group as at December 31, 2008;
 
 b) in the case of the consolidated profit and loss account, of the
 consolidated profit of the Group for the year ended on that date; and
 
 c) in the case of the consolidated cash flow statement, of the
 consolidated cash flows of the Group for the year ended on that date.
 
 ANNEXURE TO THE AUDITOR’S REPORT
 
 Re: Hexaware Technologies Limited
 
 Referred to in Paragraph 3 of our report of even date
 
 i) In respect of its fixed assets:
 
 a) The Company has maintained proper records showing full particulars
 including quantitative details and situation of fixed assets.
 
 b) As per information and explanation given to us, physical
 verification of fixed assets was carried out by the management during
 the year and no material discrepancies were noticed by the management
 on such verification. In our opinion, the frequency of verification is
 reasonable.
 
 c) The fixed assets disposed off during the year, in our opinion, do
 not constitute a substantial part of the fixed assets of the Company
 and such disposal has, in our opinion, not affected the going concern
 status of the Company.
 
 ii) The activities of the Company and the nature of its business do not
 involve the use of inventory. Accordingly, clause 4(ii) of the
 Companies (Auditor’s Report) Order is not applicable.
 
 iii) The Company has not granted or taken any loan secured/unsecured,
 to/from companies, firms or parties covered in the register maintained
 under section 301 of the Companies Act, 1956. Accordingly, clause 4
 (iii) of the Companies (Auditor’s Report) Order is not applicable to
 the Company.
 
 iv) In our opinion, and according to the information and explanations
 given to us, there is an internal control system commensurate with the
 size of the Company and nature of its business for purchase of fixed
 assets and sale of services. The activities of the Company do not
 involve purchase of inventory and sale of goods. During the course of
 our audit we have not observed any continuing failure to correct major
 weaknesses in internal control system.
 
 v) In respect of contracts and arrangements entered in the register
 maintained in pursuance of Section 301 of the Companies Act 1956:
 
 a) To the best of our knowledge and belief and according to the
 information and explanations given to us, particulars of contracts or
 arrangements that needed to be entered into the register maintained
 under the said section have been so entered.
 
 b) According to information and explanations given to us, where the
 transactions made in pursuance of such contracts or arrangements during
 the year are in excess of Rs. 500,000, they have been made at prices,
 which are, prima facie, reasonable having regard to the prevailing
 market prices at the relevant time.
 
 vi) The Company has not accepted any deposits from the public and hence
 the directives issued by the Reserve bank of India and the provisions
 of Sec 58A, 58AA or any other relevant provisions of the Act and the
 Companies (Acceptance of Deposit) Rules, 1975 with regard to the
 deposits accepted from the public are not applicable to the Company.
 
 vii) A firm of Chartered Accountants appointed by the Management as
 well as the internal audit department of Company carried out internal
 audit during the year. The firm of chartered accountants have submitted
 their draft report for the last quarter which is under discussion. In
 our opinion, the internal audit system of the Company is commensurate
 with its size and nature of business.
 
 viii) According to the information and explanations given to us, the
 Central Government has not prescribed maintenance of cost records under
 clause (d) of sub-section (1) of Section 209 of the Act. Therefore the
 provisions of clause 4 (viii) of the Companies (Auditor’s Report) Order
 are not applicable to the Company.
 
 ix) a) The Company has generally been regular in depositing with the
 appropriate authorities, undisputed statutory dues including provident
 fund, employees’ state insurance, income tax, sales tax, wealth tax,
 service tax, custom duty, excise duty, cess, investor education and
 protection fund and any other material statutory dues applicable to it.
 According to the information and explanation given to us, no undisputed
 amounts payable in respect of statutory dues were in arrears as at 31st
 December, 2008 for a period of more than six months from the date they
 became payable.
 
 b) According to information and explanations given to us there are no
 dues of sales tax, income tax, customs duty, wealth tax, service tax,
 excise duty and cess, which have not been deposited with the
 appropriate authorities on account of any dispute except as follows:
 
 Name of statute     Nature of
                     the dues
 
 Income Tax          Income tax
 Act, 1961           demands
 
 Amount         Period to       Forum where
 Rupees         which the       dispute is
 in Millions    amount relates  pending
 
 0.57           Assessment      Income Tax
                Year 2001-02    Appellate Tribunal
 
 x) The Company has no accumulated losses at the end of the financial
 year and it has not incurred any cash losses in such financial year and
 in the immediately preceding financial year.
 
 xi) In our opinion and according to the information and explanations
 given to us, the Company has not borrowed any amounts from banks and
 financial institutions or by issue of debentures and hence the question
 of default in repayment of dues does not arise.
 
 xii) According to the information and explanations given to us, the
 Company has not given any loans and advances on the basis of security
 by way of pledge of shares, debentures and other securities and hence
 the question of maintenance of adequate records for this purpose does
 not arise.
 
 xiii) In our opinion and according to the information and explanations
 given to us, the Company is not a chit fund or a nidhi/ mutual benefit
 fund / society. Therefore, the provisions of clause 4 (xiii) of the
 Companies (Auditor’s Report) Order, 2003 are not applicable to the
 Company.
 
 xiv) In our opinion and according to the information and explanations
 given to us, the Company is not dealing or trading in shares,
 securities, debentures and other investments. Therefore, the provisions
 of clause 4 (xiv) of the Companies (Auditor’s Report) Order, 2003 are
 not applicable to the Company.
 
 xv) In our opinion, the terms and conditions on which the Company has
 given guarantees for loans taken by a subsidiary company from a bank
 are not prejudicial to the interest of the Company.
 
 xvi) The Company has not taken any term loan during the year and hence
 the question of applying term loans for the purpose for which they were
 obtained does not arise.
 
 xvii) According to information and explanations given to us, and on an
 overall examination of the balance sheet of the Company, funds raised
 on short term basis have, prima-facie, not 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 Companies Act, 1956.
 
 xix) The Company has not issued any debentures during the year, hence
 the question of creation of security or charge in respect of debentures
 issued does not arise.
 
 xx) The Company has not raised any money by way of public issues during
 the year.
 
 xxi) To the best of our knowledge and belief and according to the
 information and explanation given to us, no fraud on or by the company
 was noticed or reported during the year.
 
                                       For Deloitte Haskins & Sells
                                              Chartered Accountants
 
                                                     P. R. Barpande
 
 Place : Mumbai                                           Partner
 Dated : 16th February, 2009                   Membership No. 15291