HCL Axon Solutions (Shanghai) Co., Ltd. Audited Financial Statements. 31 December PDF Free Download

Audited Financial Statements 31 December 2015 Important Notice The attached financial statements have been translated from the statutory financial statements prepared in accordance with the the Accounting System for Business Enterprises. In the event of any differences in interpreting the financial statements, the Chinese version shall prevail.

Index Pages AUDITOR S REPORT 1 2 AUDITED FINANCIAL STATEMENTS Balance Sheet 3 4 Income Statement 5 Statement of Cash Flows 6 7 Statement of Changes in Equity 8 Notes to Financial Statements 9 24

Auditor s report Ernst & Young Hua Ming (2016) Shen Zi No. 61112070_B01 To the board of directors of HCL Axon Solutions (Shanghai) Co., Ltd. We have audited the accompanying financial statements of HCL Axon Solutions (Shanghai) Co., Ltd. ( The company ), which comprise the balance sheet as at 31 December 2015, and the income statement, statement of cash flows and statement of changes in equity for the year then ended, and notes to the financial statements. Management s responsibility for the financial statements Management is responsible for the preparation and fair presentation of these financial statements. This responsibility includes: (1) preparing and fairly presenting the financial statements in accordance with the Accounting System for Business Enterprises; (2) designing, implementing and maintaining internal control as management determines is necessary to enable the preparation of the financial statements that are free from material misstatement, whether due to fraud or error. Auditors responsibility Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the Chinese Standards on Auditing. Those standards require that we comply with Code of Ethics for Chinese Certified Public Accountants and plan and perform the audit to obtain a reasonable assurance as to whether the financial statements are free from material misstatement. 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 the internal control relevant to the entity s preparation and fair presentation of 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 polices used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. 1 This branch has been authorized to practice by Ernst & Young Hua Ming LLP

Auditor s report (continued) Ernst & Young Hua Ming (2016) Shen Zi No. 61112070_B01 Opinion In our opinion, the financial statements present fairly, in all material aspects, the financial position of HCL Axon Solutions (Shanghai) Co., Ltd. as at 31 December 2015 and its financial performance and cash flows for the year then ended in accordance with the Accounting System for Business Enterprises. Zhang Fei Ernst & Young Hua Ming LLP, Shanghai Branch Chinese Certified Public Accountant Yuan Xiaohui Shanghai, the People s Republic of China Chinese Certified Public Accountant 19 August 2016 2 This branch has been authorized to practice by Ernst & Young Hua Ming LLP

BALANCE SHEET 31 December 2015 Notes 2015-12-31 2014-12-31 ASSETS Current assets: Cash 3 87,168,867.22 6,101,318.86 Accounts receivable 4 5 122,896,177.34 34,800,348.19 Other receivables 6 2,241,654.66 859,573.20 Advances to suppliers - 12,000.00 Inventories 7 335,769.00 111,528.59 Prepaid expenses 112,676.39 438,462.53 Total current assets 212,755,144.61 42,323,231.37 Non-current assets: Fixed assets cost 8 1,306,391.64 1,957,870.94 Less: Accumulated depreciation 8 1,060,066.60 1,124,802.87 Fixed assets, net 8 246,325.04 833,068.07 Long-term accounts receivable 4,484,141.50 5,707,600.42 Long-term prepayments 9 130,940.45 252,653.38 Total non-current assets 4,861,406.99 6,793,321.87 TOTAL ASSETS 217,616,551.60 49,116,553.24 The notes on pages 9 to 24 form an integral part of these financial statements. 3

INCOME STATEMENT Notes Revenue from principal operations 12 253,712,393.10 45,928,785.65 Less: Taxes and surcharges 178,220.51 274,585.05 Cost of sales 198,663,640.54 38,310,988.75 Operating expenses - 928.00 General and administrative expenses 5,276,570.89 2,835,117.46 Financial expenses 13 7,671,022.19 (228,159.34) Operating profit 41,922,938.97 4,735,325.73 Add: Non-operating income 785,386.19 758,171.73 Less: Non-operating expenses 274,230.08 91,123.97 Total profit 42,434,095.08 5,402,373.49 Less: Income tax 12,253,597.63 - Net profit 30,180,497.45 5,402,373.49 The notes on pages 9 to 24 form an integral part of these financial statements. 5

STATEMENT OF CASH FLOWS Supplementary Notes CASH FLOWS FROM OPERATING ACTIVITIES: Cash received from sale of goods or rendering of services 197,199,398.68 25,799,728.83 Cash received from tax return 771,897.23 - Cash received relating to other operating activities 2,398,509.56 758,171.73 Sub-total of cash inflows 200,369,805.47 26,557,900.56 Cash paid for goods and services 29,967,896.65 27,235,308.00 Cash paid to and on behalf of employees 108,868,112.01 2,500,404.54 Cash paid for all types of taxes 6,188,080.16 2,824,132.80 Cash paid relating to other operating activities 752,499.71 3,942,863.98 Sub-total of cash outflows 145,776,588.53 36,502,709.32 Net cash flows from/ (used in) operating activities (1) 54,593,216.94 (9,944,808.76) CASH FLOWS FROM INVESTING ACTIVITIES: Net cash received from disposal of fixed assets, intangible assets and other long-term assets 321,228.15 106,227.57 Sub-total of cash inflows 321,228.15 106,227.57 Cash paid for acquisition of fixed assets, intangible assets and other long-term assets 224,223.97 1,027,581.08 Sub-total of cash outflows 224,223.97 1,027,581.08 Net cash flows from / (used in) investing activities 97,004.18 (921,353.51) CASH FLOWS FROM FINANCING ACTIVITIES: Cash received from loans 27,000,000.00 - Sub-total of cash inflows 27,000,000.00 - The notes on pages 9 to 24 form an integral part of these financial statements. 6

STATEMENT OF CASH FLOWS CASH FLOWS FROM FINANCING ACTIVITIES (CONTINUED): Supplementary Notes Cash paid for dividends, profits or interests 683,637.62 - Sub-total of cash outflows 683,637.62 - Net cash flows from / (used in) financing activities 26,316,362.38 - EFFECT OF CHANGES IN EXCHANGE RATE ON CASH 60,964.86 9,414.72 NET INCREASE / (DECREASE) IN CASH AND CASH EQUIVALENTS (2) 81,067,548.36 (10,856,747.55) Supplementary Notes Supplementary Notes (1) Reconciliation of net profit to cash flows from operating activities Net profit 30,180,497.45 5,402,373.49 Add: Provision for impairment of assets (202,547.81) (288,273.10) Depreciation of fixed assets 216,940.43 121,380.13 Amortisation of long-term prepayments 121,712.93 165,366.93 Increase/ (decrease) in prepaid expenses 325,786.14 (205,289.23) Increase / (decrease) in accrued expenses 9,391,735.41 (1,502,596.62) Gains on disposal of fixed assets, Intangible assets and other Long-term assets 272,798.43 - Financial expenses 622,672.76 (9,414.72) (Increase) /decrease in inventories (224,240.41) 910,491.95 Increase in operating receivables (88,039,903.89) (25,107,873.27) Increase in operating payables 101,927,765.50 10,569,025.68 Net cash flows from operating Activities 54,593,216.94 (9,944,808.76) (2) Net increase / (decrease) in cash and cash equivalents Cash at end of year 87,168,867.22 6,101,318.86 Less: Cash at beginning of year 6,101,318.86 16,958,066.41 Net increase / (decrease) in cash and cash equivalents 81,067,548.36 (10,856,747.55) The notes on pages 9 to 24 form an integral part of these financial statements. 7

STATEMENT OF CHANGES IN EQUITY Paid-in capital: At beginning and end of year 2,069,250.00 2,069,250.00 Surplus reserves: At beginning of year 31,309.23 31,309.23 Surplus withdrawal 1,003,315.77 - At 31 December 2015 1,034,625.00 31,309.23 Retained earnings/ (accumulated losses): At beginning of year (6,503,314.36) (11,905,687.85) Surplus withdrawal (1,003,315.77) - Net profit for the year 30,180,497.45 5,402,373.49 At 31 December 2015 22,673,867.32 (6,503,314.36) The notes on pages 9 to 24 form an integral part of these financial statements. 8

NOTES TO FINANCIAL STATEMENTS 1. Corporate information HCL Axon Solutions (Shanghai) Co., Ltd. ( the Company ) is a limited company solely established by Malaysia JSPC I-SOLUTIONS BERHAD on 2 June 2004 upon approval by People s Government of Shanghai Pudong New District with document Pufuxiang Zi No.(2004) 256 ( 浦府项字 (2004) 第 256 号文 ). The registrated capital of the Company is USD 250,000. The aforesaid registrated capital has been verified by Shanghai Yuxin Accountants Limited with capital verification report Xinzi Yan No. (2004) 115 on 2 September 2004. In 2007, all the shares in the Company held by Malaysia JSPC I-SOLUTIONS BERHAD were sold to HCL AXON MALAYSIA SDN.BHD. On 5 January 2013, the name of the Company was changed to HCL Axon Solutions (Shanghai) Co., Ltd. and obtains its revised business license. It obtained business license numbered 310115400151585 (Pudong). Its legal representative is PUNEET MEHRA and the operation period is 20 years. Its legal registration address is 23508-23510, 14 Building, 498 Guoshoujing Road, SPSP, Pudong New Area, Shanghai. The Company is primarily engaged in the following businesses: Computer software development;design, production, sale of products, to provide after-sales services and related technical consulting; computer hardware and software wholesale, commission agency (excluding auction), import and export (not involving state trading involving quota and license management goods, in accordance with relevant state regulations apply), providing related services (Business which is involving administrative licensing, will operate with operating permits) 2. Significant accounting policies and estimates The financial statements have been prepared based on the following accounting policies and estimates, which are in accordance with the Accounting System for Business Enterprises and other related regulations issued by the Ministry of Finance of the People s Republic of China ( PRC ). Accounting system Accounting System for Business Enterprises Accounting year The accounting year of the Company is from 1 January to 31 December. Reporting currency The Company s reporting and presentation currency is the Renminbi ( Rmb ).Unless otherwise stated, the unit of the currency is Yuan. 9

NOTES TO FINANCIAL STATEMENTS (Continued) 2. Significant accounting policies and estimates (continued) Basis of accounting and measurement basis Unless otherwise stated, the Company s accounts have been prepared on an accrual basis using the historical cost as the basis of measurement. Assets are recorded at cost when they are acquired. Subsequently, if the assets are impaired, impairment provisions are made in accordance with the Accounting System for Business Enterprises. Foreign currency transactions Transactions in currencies other than the reporting currency are translated into the reporting currency at the exchange rates quoted by the People s Bank of China ( the reference rates ) and the cross rates quoted by the State Administration of Foreign Exchange Control (the cross rates ), prevailing on the transaction dates/first day of the month in which the transactions take place. Monetary assets and liabilities denominated in foreign currencies are restated into the reporting currency using the reference rates ruling at the balance sheet date. All the exchange differences from settlement and conversion of monetary foreign currency items, except for capitalisation of those relating to foreign currency borrowings in relation to construction and acquisition of fixed assets, are recognized in current period income statement. Non-monetary foreign currency items measured at historical cost should still be translated at the reference rates prevailing on the transaction date, and the amount denominated in the functional currency should not be changed. Cash equivalents Cash equivalents represent short-term, highly liquid investments which are readily convertible into known amounts of cash, and which are subject to an insignificant risk of changes in value. Bad debts Accounts receivable meeting the following criteria are recognised as bad debts: the debtor is deceased or has been declared bankrupt and the debts remain uncollectible after considering the assets of the bankrupt or the estate of the deceased debtor; debts that are long overdue where there is also evidence indicating that the debts are uncollectible or the possibility of collection is remote. 10

2. Significant accounting policies and estimates (continued) Bad debts (continued) Specific provisions are made to account for bad debt losses on accounts receivable and other receivables. A specific provision refers to an amount that is provided based on management s assessment of the recoverability of an individual receivable. Inventories Inventories are initially recorded at its cost. Inventory costs include purchase costs, processing costs and other costs. Inventories are valued at the lower of cost and net realizable value at the balance sheet date. Inventories are valued at the lower of cost and net realisable value at the balance sheet date. If the cost of inventories is higher than the net realisable value, a provision for decline in value of inventories is recognized in profit or loss for the current period. If factors that gave rise to the provision for the inventory previously made no longer exist, resulting in the net realizable value being higher than the book value, the previously provided inventory amount in the current period income statement should be reversed, to the extent of the amount previously provided for. Net realizable value is the estimated selling price in the ordinary course of business, less estimated costs to be incurred to completion and estimated expenses and related taxes necessary to make the sale.the provision for inventories is determined on an individual item basis. Fixed assets Fixed assets are tangible assets with high unit costs held by the Company for use in production of goods, supply of services, rental or for administrative purposes, and are expected to be used for more than one year. Fixed assets are recorded at cost when acquired. Fixed assets depreciation is calculated using the straight-line method. The respective estimated useful lives and estimated residual values of fixed assets are as follows: Estimated Estimated residual Annual Category useful life value [(%)] depreciation rate Office equipment 3-5years 5% 19.00%-31.67% At the end of the accounting period, fixed assets are carried at the lower of book value and recoverable amount. A provision for impairment of fixed assets is made for any difference between the book value and the lower recoverable amount. The recoverable amount of the fixed assets is the greater of the net selling price and the value in use. Value in use is the present value of estimated future cash flows expected to arise from the continuing use of an asset and from its disposal at the end of its useful life. 11

2. Significant accounting policies and estimates (continued) Fixed assets (continued) Gains or losses arising from the disposal, damage, obsolescence or physical counting of fixed assets are accounted for as non-operating expenses or income in the current year. Long-term prepayments Long-term prepayments are amortised over the periods from which the Company derives benefits, on a straight-line basis, as follows: Item Decorating expenses Beneficial period 3 years Revenue recognition Revenue from the sale of goods is recognised when: the significant risks and rewards in relation to ownership of the goods have been transferred to the buyer; the Company maintains neither continuing managerial involvement nor effective control over the goods sold; it is probable that the economic benefits associated with the transaction will flow to the Company; and the relevant amounts of revenue and costs can be measured reliably. Rendering of services are recognised when the results of service providing transactions can be estimated reliably and the transactions initiate and terminate within one fiscal year. For inter-temporal services, rendering of services are recognised by percentage of completion. Operating leases Leases where substantially all the rewards and risks of ownership of assets remain with the lessor are accounted for as operating leases. Rentals applicable to such operating leases are charged to the income statement on a straight-line basis over the lease terms. 12

2. Significant accounting policies and estimates (continued) Income tax Income tax is accounted for using the tax payable method, whereby the income tax provision is calculated based on the applicable income tax rate and the accounting results for the year after adjusting for items which are non-assessable or disallowed in accordance with the relevant tax laws. Related parties Parties are considered to be related if one party has the ability to control, or jointly control another party, or exercise significant influence over the other party in making financial and operating decisions. If two or more parties are subject to control from the same party, they are also regarded as related parties. 3. Cash Cash in bank 87,168,867.22 6,101,318.86 4. Accounts receivable Accounts receivable 122,995,934.79 35,102,653.45 Less: Bad debt provision 99,757.45 302,305.26 The ageing analysis is as below: 122,896,177.34 34,800,348.19 Ageing Balance % Bad debt Balance % Bad debt provision provision Within 1 year 122,288,855.43 99.43 99,757.45 34,155,028.90 97.30 202,305.26 1-2 years 707,079.36 0.57-847,624.55 2.42 - Over 2 years - - - 100,000.00 0.28 100,000.00 122,995,934.79 100.00 99,757.45 35,102,653.45 100.00 302,305.26 13

5. Bad debt provision Opening Closing balance Additions Reversals balance Accounts receivable 302,305.26 99,757.45 (302,305.26) 99,757.45 6. Other receivables Other receivables 2,241,654.66 859,573.20 7. Inventories Finished goods 335,769.00 111,528.59 8. Fixed assets Office equipment Cost: Opening balance 1,957,870.94 1,181,921.58 Additions 224,223.97 898,148.01 Disposals (875,703.27) (122,198.65) Closing balance 1,306,391.64 1,957,870.94 Accumulated depreciation: Opening balance 1,124,802.87 1,019,393.82 Charge for the year 216,940.43 121,380.13 Written back on disposal (281,676.70) (15,971.08) Closing balance 1,060,066.60 1,124,802.87 Net book value: Closing balance 246,325.04 833,068.07 14

8. Fixed assets (continued) As at 31 December, Management of the Company was in view of that no fixed assets impairment should be provided. There are no significant fixed assets that are temporary idle, retired or ready for disposal. 9. Long-term prepayments Decoration expenses Opening balance 252,653.38 123,220.31 Additions - 294,800.00 Amortisation (121,712.93) (165,366.93) Closing balance 130,940.45 252,653.38 10. Taxes payable Value added tax 3,283,252.01 1,551,464.74 Corporate income tax 12,253,597.63 - Withholding of corporate tax 26,284.44 26,284.44 Withholding of business tax 13,142.21 13,142.21 15,576,276.29 1,590,891.39 The major categories of taxes applicable to the Company and the respective tax rates are as follows: (1) Value added tax ( VAT ) - In accordance with the relevant tax laws in the PRC, the VAT rate for sales is 17%/6%. VAT is levied at 17%/6% on the invoiced value of sales and is payable by the purchaser. The Company is required to remit the VAT it collects to the tax authority, but may deduct the VAT it has paid on eligible purchases. (2) Withholding of individual - In accordance with the relevant tax laws in the income tax PRC, the Company is required to withhold individual income tax on salaries paid to its employees. 15

10. Taxes payable (continued) The major categories of taxes applicable to the Company and the respective tax rates are as follows: (3) Withholding of - In accordance with the relevant tax laws in the corporate taxes PRC, the Company is required to withhold and pay corporate income tax and business tax in respect of the interest and technology transfer fees payable to foreign investors and overseas related companies. 11. Paid-in capital Registered capital: RMB % RMB % HCL AXON MALAYSIA SDN.BHD 2,069,250.00 100.00 2,069,250.00 100.00 Paid-in capital: RMB % RMB % HCL AXON MALAYSIA SDN.BHD 2,069,250.00 100.00 2,069,250.00 100.00 Shanghai Xin Yu Accountant Firm issued [Xin Yu Yan (2004) No.115] capital verification report on 2 September 2004. 12. Revenue from principal operations Sale of goods 6,075,635.74 3,024,691.70 Rendering of services 247,636,757.36 42,904,093.95 253,712,393.10 45,928,785.65 16

13. Financial expenses Interest expense/ (income) 683,637.62 (59,476.42) Exchange loss /(gain) 6,970,265.73 (244,213.39) Others 17,118.84 75,530.47 14. Related party relationships and transactions 7,671,022.19 (228,159.34) Details of the Company s investor, which has a controlling interest in the Company, are as follows: Equity interest held and its Name of investor Place of registeration changes during the year HCL AXON MALAYSIA SDN.BHD Malaysia 100% Name HCL SWEDEN AB HCL POLAND SP.Z O.O. HCL Japan Limited HCL Technologies Ltd. HCL Technologies Limited Czech Repu HCL Hong Kong SAR Limited HCL GMBH HCL Technologies France HCL Australia Ser Pty Ltd HCL America Inc. Axon Solutions Australia Axon United Kingdom Axon Solutions Singapore Axon Solutions Sdn Bhd Axon America HCL AXON Inc. HCL Axon (Pty) Ltd HCL (Netherlands) B.V. HCL Tech. Ltd. Finland Br HCL Great Britain Limited. HCL Axon Tech.INC Canada HCL Tech Belgium HCL Tech Singapore HCL Tech Italy Relationship 17

14. Related party relationships and transactions (continued) Name HCL Tech. Ltd. Finland Br HCLT Ltd, Ireland Branch FILIAL ESPAÑOLA DE HCL SL HCL Technologies Ltd.Russia Branch HCL Austria HCL Technologies (Shanghai) Limited Axon Malaysia HCL Argentina HCL Czech HCL Hungary HCL Indonesia HCL Philippines HCL Portugal HCL Mexico HCL Frankfurter HCL Denmark HCL Tech Limited, Moscow HCL Utd.Arab Emir HCL Switzerland Relationship Significant transactions and balances between the Company and its related parties during the year are as follows: (1) Sales and purchases Sales of goods and services HCL Technologies France 69,196,211.00 318,923.41 HCL Axon Tech.INC - Canada 13,932,990.49 - HCL Tech Belgium 6,355,720.80 1,266,968.59 HCL Technologies (Shanghai) Limited 4,296,676.12 743,884.89 HCL America Inc. 4,678,839.76 - HCL POLAND SP.Z O.O. 3,125,300.00 - HCL Technologies Ltd. 2,230,978.62 168,651.22 HCL (Netherlands) B.V. 1,147,408.00 - HCL Argentina 109,476.00 - HCL Tech. Ltd. Finland Br 158,904.00 2,897,471.00 HCL Portugal 128,658.00 - HCL Czech 108,273.00 - HCL Mexico 79,995.00-18

14. Related party relationships and transactions (continued) Significant transactions and balances between the Company and its related parties during the year are as follows: (continued) (1) Sales and purchases (continued) Sales of goods and services(continued) HCL Tech Italy 75,483.00 - HCL Great Britain Limited 70,879.38 - FILIAL ESPAÑOLA DE HCL SL 62,317.00 - HCL Japan Limited 58,650.00 - HCL Hong Kong SAR Limited 57,730.00 - HCL Switzerland 56,674.00 - HCL Indonesia 46,029.00 - HCL Philippines 42,049.00 - HCL Australia Ser Pty Ltd 21,547.00 318,521.00 HCL Hungary 11,948.41 - Axon Malaysia 11,733.00 - HCLT Ltd, Ireland Branch 11,560.00 - Axon Solutions Sdn Bhd - 200,876.66 HCL GMBH - 59,380.00 HCL Tech Singapore - 15,408.00 Purchases of goods and services 106,076,030.58 5,990,084.77 HCL Technologies Ltd. 41,754,700.25 3,282,728.03 HCL America Inc. 6,514,737.75 1,797.32 HCL Portugal 4,115,224.52 - HCL Technologies (Shanghai) Limited 2,842,323.16 565,205.99 Axon Solutions SDN.BHD 2,777,037.74 - Axon United Kingdom 2,015,746.82 - HCL Tech Singapore 200,062.84 470,554.78 HCL Australia Ser Pty Ltd 154,915.12 110,501.99 HCL Axon (Pty) Ltd 99,280.88 77,629.21 HCL Frankfurter 96,436.70 - Axon Solutions Singapore 93,273.21 - HCL Demark 93,139.10 - HCL Hong Kong SAR Limited 51,564.90 37,700.01 HCL Austria 70,797.34 574,257.03 HCL SWEDEN AB 44,081.11 - HCLT Ltd, Ireland Branch 37,370.55 79,559.47 19

14. Related party relationships and transactions (continued) Significant transactions and balances between the Company and its related parties during the year are as follows: (continued) (1) Sales and purchases (continued) Purchases of goods and services (continued) HCL Japan Limited 37,875.00 - HCL AXON MALAYSIA SDN.BHD 36,618.85 - FILIAL ESPAÑOLA DE HCL SL 32,558.47 167,150.91 HCL GMBH 27,850.28 - HCL POLAND SP.Z O.O. 12,200.17 179,306.15 HCL Axon Tech.INC - Canada 15,415.99 - HCL Tech Limited, Moscow 3,389.97 - HCL Tech Belgium 1,854.87 13,191.04 HCL Tech. Ltd. Finland Br 1,819.08 - HCL (Netherlands) B.V. 688.34 - HCL Utd.Arab Emir 279.63 - HCL Technologies Ltd.Russia Branch - 20,244.05 HCL Tech Italy - 107.78 (2) Amounts due from/to related parties (continued) 61,131,242.64 5,579,933.76 Accounts receivable HCL Technologies France 52,679,673.04 1,488.95 HCL Tech Belgium 6,355,720.80 72,034.59 HCL Technologies (Shanghai) Limited 4,930,613.89 679,714.36 HCL Axon Tech.INC - Canada 4,674,101.74 - HCL POLAND SP.Z O.O. 3,125,300.00 - HCL Technologies Ltd. 1,334,038.27 - HCL (Netherlands) B.V. 1,146,328.35 - HCL Portugal 128,658.00 - HCL Argentina 109,476.00 - HCL Czech 108,273.00 - HCL Mexico 79,995.00 - HCL Tech Italy 75,483.00 - FILIAL ESPAÑOLA DE HCL SL 62,317.00-20

14. Related party relationships and transactions (continued) Significant transactions and balances between the Company and its related parties during the year are as follows: (continued) (2) Amounts due from/to related parties (continued) Accounts receivable (continued) HCL Japan Limited 58,650.00 - HCL Switzerland 56,674.00 - HCL Indonesia 46,029.00 - HCL Philippines 42,049.00 - HCL Australia Ser Pty Ltd 21,547.00 - HCL Hungary 11,948.41 - Axon Malaysia 11,733.00 - HCLT Ltd, Ireland Branch 11,560.00 - HCL Tech Singapore 150.06 16,325.76 HCL Hong Kong SAR Limited 99.84 155.54 Other receivables HCL Hong Kong SAR Limited 277,938.62 277,938.62 HCL Tech Singapore 146,215.40 146,215.40 HCL Technologies Ltd. 51,755.44 51,755.44 Axon Solution Ltd. 50,600.00 50,600.00 HCL AXON MALAYSIA SDN.BHD 32,333.93 32,333.93 HCL America Inc. 32,235.40 18,715.40 Accounts payable HCL Technologies Ltd. 45,857,111.94 4,829,993.67 Axon Solutions Sdn Bhd 28,306,444.58 25,529,406.84 HCL America Inc. 6,605,420.74 90,682.99 Axon Solution Ltd. 4,567,816.56 2,552,069.74 HCL Portugal 4,115,224.52 - HCL Great Britain Limited 2,282,499.54 2,400,349.38 HCL Tech Singapore 2,232,548.20 2,032,485.36 HCL Technologies (Shanghai) Limited 2,037,497.49 12,897.23 HCL Hong Kong SAR Limited 1,196,699.25 1,145,134.35 Axon Solutions Singapore 715,489.82 622,216.61 HCL Austria 645,054.37 574,257.03 Axon Solutions Australia 335,800.00 335,800.00 HCL Australia Ser Pty Ltd 265,417.11 110,501.99 HCL Japan Limited 247,012.21 209,137.21 21

14. Related party relationships and transactions (continued) Significant transactions and balances between the Company and its related parties during the year are as follows: (continued) (2) Amounts due from/to related parties (continued) Accounts payable (continued) FILIAL ESPAÑOLA DE HCL SL 199,709.38 167,150.91 HCL POLAND SP.Z O.O. 197,934.40 185,734.23 HCL Axon (Pty) Ltd 176,910.09 77,629.21 HCLT Ltd, Ireland Branch 116,930.02 79,559.47 HCL Frankfurte r 96,436.70 - HCL Denmark 93,139.10 - HCL Axon Tech.INC Canada 73,327.27 57,911.28 HCL Tech Belgium 60,504.26 58,649.39 HCL SWEDEN AB 44,081.11 - HCL AXON MALAYSIA SDN.BHD 36,618.85 - HCL GMBH 33,574.70 5,724.42 HCL Technologies Ltd. Russia Branch 20,244.05 20,244.05 HCL Tech. Ltd. Finland Br 14,605.58 12,786.50 HCL (Netherlands) B.V. 7,206.62 6,518.28 HCL Tech Limited, Moscow 3,389.97 - HCL Utd.Arab Emir 279.63 - Advances from customers HCL Technologies France 12,242,945.64 - HCL Canada 4,553,834.20 - Axon Solutions Sdn Bhd 3,996,486.75 32,631.34 HCL Tech Belgium 2,511,140.86 2,431,914.57 HCL Hong kong SAR Ltd 663,966.69 705,907.69 Axon Solution Ltd. 516,702.25 22,259.91 HCL Tech Singapore 358,570.70 358,570.70 HCL GMBH 229,235.00 229,235.00 Axon Solutions Singapore 124,558.91 40,954.37 HCL Tech Italy 9,161.27 9,988.93 HCL America Inc. 7,689.23 35.53 HCL POLAND SP.Z O.O. 5,749.56 5,831.67 HCL Australia Ser Pty Ltd 2,649.18 2,649.18 HCL Technologies Ltd. - 33,639.81 22

17. Events occurring after the balance sheet date The company has no events occurring after the balance sheet date need to disclosure. 18. Approval of the financial statements The financial statements have been authorised for issuance by the board of directors on 19 August 2016. 24

HCL Axon Solutions (Shanghai) Co., Ltd. Audited Financial Statements. 31 December 2015