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HCL TECHNOLOGIES LIMITED Corporate Identity Number-L74140DL1991PLC046369 Registered Office: 806, Siddharth, 96, Nehru Place, New Delhi 110 019 Corporate Office: Plot No.: 3A, Sector 126, Noida-201 304, UP, India Website: www.hcltech.com ; E-mail ID: investors@hcl.com
Tele-Fax: + 91 11 26436336
NOTICE
NOTICE is hereby given that the Twenty Seventh Annual General Meeting (`AGM') of the members of HCL Technologies Limited ("Company") will be held on Tuesday, 6th day of August, 2019 at 11:00 A.M. at The Stein Auditorium, Habitat World, at the India Habitat Centre, Lodhi Road, New Delhi-110 003, (Entry from gate number 3 on Vardhman Marg) to transact the following business:
ORDINARY BUSINESS:
Item No. 1 - Adoption of Financial Statements along with the Reports of the Board of Directors and of the Auditors thereon
To receive, consider and adopt the Audited Financial Statements (including Audited Consolidated Financial Statements) of the Company for the financial year ended March 31, 2019 together with the Reports of the Board of Directors and of the Auditors thereon.
Item No. 2 - Re-appointment of Mr. Shiv Nadar as Director liable to retire by rotation
To appoint a Director in place of Mr. Shiv Nadar (DIN - 00015850), who retires by rotation and being eligible, offers himself for re-appointment.
Item No. 3 - Appointment of Statutory Auditors
To appoint Statutory Auditors of the Company to hold office from the conclusion of this Annual General Meeting until the conclusion of the Thirty Second Annual General Meeting of the Company and to fix their remuneration.
To consider and, if thought fit, to pass the following resolution as an Ordinary Resolution:
"RESOLVED THAT pursuant to the provisions of Section 139,142 and all other applicable provisions, if any, of the Companies Act, 2013 and the rules made thereunder (including any statutory modification(s) or re-enactment thereof for the time being in force), and pursuant to the recommendations of the Board of Directors, approval of the members of the Company be and is hereby accorded to appoint B S R & Co. LLP, Chartered Accountants (ICAI Firm Registration No. 101248W/W-100022) as Statutory Auditors of the Company, in place of retiring auditors S. R. Batliboi & Co. LLP (Registration No. 301003E /E00005), to hold office for a period of five years from the conclusion of this Annual General Meeting (`AGM') till
the conclusion of the Thirty Second AGM of the Company to be held in the year 2024."
"RESOLVED FURTHER THAT the Board of Directors of the Company (including any Committee(s) of the Board) be and is hereby authorized to fix remuneration of the Statutory Auditors during their tenure and reimburse their travelling and out of pocket expenses."
SPECIAL BUSINESS:
Item No. 4 - Re-appointment of Mr. R. Srinivasan as an Independent Director of the Company
To consider and, if thought fit, to pass the following resolution as Special Resolution:
"RESOLVED THAT pursuant to the provisions of Sections 149, 150, 152 read with Schedule IV and any other applicable provisions of the Companies Act, 2013 ("Act") and the Companies (Appointment and Qualification of Directors), Rules, 2014 and applicable provisions of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("SEBI LODR Regulations") (including any statutory modification(s) or re-enactment thereof for the time being in force), Mr. R. Srinivasan (DIN - 00575854), Independent Director of the Company, who has submitted a declaration that he meets the criteria of independence under Section 149(6) of the Act and is not debarred from holding the office of director by virtue of any SEBI order or any other such authority, who is eligible for re-appointment for a second term under the provisions of the Act and the rules made thereunder and SEBI LODR Regulations and in respect of whom the Company has received a notice in writing from a member signifying his candidature for the office of Director pursuant to Section 160 of the Act, be and is hereby re-appointed as an Independent Director of the Company not liable to retire by rotation for another term effective from August 6, 2019 till the conclusion of AGM to be held in the year ending March 31, 2024."
"RESOLVED FURTHER THAT Mr. R. Srinivasan shall continue to be an Independent Director even after attaining the age of 75 years during his tenure of directorship."
"RESOLVED FURTHER THAT in the event the AGM of the Company for the year ended March 31, 2024 is not held on or before August 5, 2024, the tenure of Mr. R. Srinivasan (DIN - 00575854) as an Independent Director shall end on August 5, 2024."
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Item No. 5 - Re-appointment of Mr. S. Madhavan as an Independent Director of the Company
To consider and, if thought fit, to pass the following resolution as Special Resolution:
"RESOLVED THAT pursuant to the provisions of Sections 149, 150, 152 read with Schedule IV and any other applicable provisions of the Companies Act, 2013 ("Act") and the Companies (Appointment and Qualification of Directors), Rules, 2014 and applicable provisions of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("SEBI LODR Regulations") (including any statutory modification(s) or re-enactment thereof for the time being in force), Mr. S. Madhavan (DIN - 06451889), Independent Director of the Company, who has submitted a declaration that he meets the criteria of independence under Section 149(6) of the Act and is not debarred from holding the office of director by virtue of any SEBI order or any other such authority, who is eligible for re-appointment for a second term under the provisions of the Act and the rules made thereunder and SEBI LODR Regulations and in respect of whom the Company has received a notice in writing from a member signifying his candidature for the office of Director pursuant to Section 160 of the Act, be and is hereby re-appointed as an Independent Director of the Company not liable to retire by rotation for another term effective from August 6, 2019 till the conclusion of AGM to be held in the year ending March 31, 2024."
"RESOLVED FURTHER THAT in the event the AGM of the Company for the year ended March 31, 2024 is not held on or before August 5, 2024, the tenure of Mr. S. Madhavan (DIN - 06451889) as an Independent Director shall end on August 5, 2024."
Item No. 6 - Re-appointment of Ms. Robin Ann Abrams as an Independent Director of the Company
To consider and, if thought fit, to pass the following resolution as Special Resolution:
"RESOLVED THAT pursuant to the provisions of Sections 149, 150, 152 read with Schedule IV and any other applicable provisions of the Companies Act, 2013 ("Act") and the Companies (Appointment and Qualification of Directors), Rules, 2014 and applicable provisions of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("SEBI LODR Regulations") (including any statutory modification(s) or re-enactment thereof for the time being in force), Ms. Robin Abrams (DIN - 00030840), Independent Director of the Company, who has submitted a declaration that she meets the criteria of independence under Section 149(6) of the Act and is not debarred from holding the office of director by virtue of any SEBI order or any other such authority, who is eligible for re-appointment for a second term
under the provisions of the Act and the rules made thereunder and SEBI LODR Regulations and in respect of whom the Company has received a notice in writing from a member signifying her candidature for the office of Director pursuant to Section 160 of the Act, be and is hereby re-appointed as an Independent Director of the Company not liable to retire by rotation for another term effective from August 6, 2019 till the conclusion of AGM to be held in the year ending March 31, 2024."
"RESOLVED FURTHER THAT in the event the AGM of the Company for the year ended March 31, 2024 is not held on or before August 5, 2024, the tenure of Ms. Robin Abrams (DIN - 00030840) as an Independent Director shall end on August 5, 2024."
Item No. 7 - Re-appointment of Dr. Sosale Shankara Sastry as an Independent Director of the Company
To consider and, if thought fit, to pass the following resolution as Special Resolution:
"RESOLVED THAT pursuant to the provisions of Sections 149, 150, 152 read with Schedule IV and any other applicable provisions of the Companies Act, 2013 ("Act") and the Companies (Appointment and Qualification of Directors), Rules, 2014 and applicable provisions of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("SEBI LODR Regulations") (including any statutory modification(s) or re-enactment thereof for the time being in force), Dr. Sosale Shankara Sastry (DIN - 05331243), Independent Director of the Company, who has submitted a declaration that he meets the criteria of independence under Section 149(6) of the Act and is not debarred from holding the office of director by virtue of any SEBI order or any other such authority, who is eligible for reappointment for a second term under the provisions of the Act and the rules made thereunder and SEBI LODR Regulations and in respect of whom the Company has received a notice in writing from a member signifying his candidature for the office of Director pursuant to Section 160 of the Act, be and is hereby re-appointed as an Independent Director of the Company not liable to retire by rotation for another term effective from August 6, 2019 till the conclusion of AGM to be held in the year ending March 31, 2024."
"RESOLVED FURTHER THAT in the event the AGM of the Company for the year ended March 31, 2024 is not held on or before August 5, 2024, the tenure of Dr. Sosale Shankara Sastry (DIN - 05331243) as an Independent Director shall end on August 5, 2024."
Item No. 8 - Payment of commission to Non-Executive Directors
To consider and, if thought fit, to pass the following resolution as Special Resolution:
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"RESOLVED THAT pursuant to the provisions of Section 197 and any other applicable provisions of the Companies Act, 2013 (`Act')(including any statutory modification(s) or re-enactment thereof for the time being in force) and in accordance with the Articles of Association of the Company, authority be and is hereby accorded to the Board of Directors for the payment of commission not exceeding one percent per annum of the net profits of the Company calculated in accordance with the provisions of Section 198 of the Act, to all the non-executive directors of the Company collectively in each financial year over a period of five years beginning from April 1, 2019 and extending upto and including the financial year of the Company ending on March 31, 2024.
"RESOLVED FURTHER THAT the aforesaid amount to be paid to the above directors at the end of each of the financial years shall be decided by the Board of Directors."
A MEMBER HOLDING MORE THAN TEN PERCENT OF THE TOTAL SHARE CAPITAL OF THE COMPANY MAY APPOINT A SINGLE PERSON AS A PROXY, WHO SHALL NOT ACT AS A PROXY FOR ANY OTHER MEMBER.
PROXIES SUBMITTED ON BEHALF OF COMPANIES AND OTHER BODIES CORPORATE, SOCIETIES, TRUST, ETC., MUST BE SUPPORTED BY AN APPROPRIATE RESOLUTION, AS APPLICABLE.
3. The Register of Members of the Company will remain closed from July 31, 2019 to August 2, 2019 (both days inclusive) in terms of the provisions of Section 91 of the Act and Regulation 42 of SEBI (Listing Obligations and Disclosure Requirement) Regulations, 2015 (`SEBI LODR Regulations').
"RESOLVED FURTHER THAT for the purpose of giving effect to this resolution, the Board of Directors (including the Nomination and Remuneration Committee) be and is hereby authorized to do all such acts, deeds, matters and things as it may in its sole and absolute discretion deem necessary or expedient in this regard."
By order of the Board of Directors For HCL Technologies Limited
Manish Anand Company Secretary Membership No.: FCS-5022
Date: July 8, 2019 Place: New Delhi
NOTES
1. A MEMBER ENTITLED TO ATTEND AND VOTE AT THE ANNUAL GENERAL MEETING ("AGM") IS ENTITLED TO APPOINT A PROXY TO ATTEND AND VOTE ON A POLL INSTEAD OF HIMSELF/HERSELF AND THE PROXY NEED NOT BE A MEMBER OF THE COMPANY. THE PROXY FORM, DULY COMPLETED AND SIGNED, MUST BE RECEIVED AT THE REGISTERED OFFICE OF THE COMPANY, NOT LESS THAN FORTY-EIGHT HOURS BEFORE THE SCHEDULED TIME OF THE AGM. A BLANK PROXY FORM IS ENCLOSED WITH THIS NOTICE.
2. PURSUANT TO THE PROVISIONS OF SECTION 105 OF THE COMPANIES ACT, 2013 ("ACT") AND THE RULES FRAMED THERE UNDER, A PERSON CAN ACT AS A PROXY ON BEHALF OF NOT MORE THAN FIFTY MEMBERS AND MEMBERS HOLDING IN AGGREGATE NOT MORE THAN TEN PERCENT OF THE TOTAL SHARE CAPITAL OF THE COMPANY CARRYING VOTING RIGHTS.
4. The Board of Directors has not recommended final dividend on equity shares for the year ended March 31, 2019.
5. Route Map of the venue of the AGM is given at the end of the Notice.
6. Brief profile of Directors to be appointed/re-appointed including nature of their expertise, names of Companies in which they hold directorships and committee memberships, shareholding in the Company and relationships with other directors, is provided under Additional Information Section of this Notice.
7. A Statement pursuant to Section 102(1) of the Act, setting out the material facts relating to the Special Business to be transacted at the AGM forms part of this Notice.
8. Members are advised to update their address and NEFT / NACH details, in respect of shares held in physical form, with the Company's Registrar and Share Transfer Agent, M/s. Alankit Assignments Limited (Unit: HCL Technologies Limited), 205-208, Anarkali Complex, Jhandewalan Extension, New Delhi-110055 and in respect of shares held in electronic form, with the respective Depository Participant with whom the demat account is maintained, to get the dividends and other correspondence in the right bank account or at the registered address.
9. Pursuant to Sections 20, 101 and 136 of the Act read with the relevant Rules made thereunder, Companies can serve the Notice of AGM, Annual Reports, Proxy Form, Attendance Slip and other notices and communications through electronic mode to those members who have registered their e-mail IDs either with the Company or with the Depository Participant(s). Physical copies of the Notice of the AGM, Annual Report, Proxy Form and Attendance Slip are being sent to those members who have not registered their e-mail IDs with the Company or the Depository Participant(s).
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Members who have not registered their e-mail IDs with the Company can now register the same by submitting a duly filled letter/communication to M/s. Alankit Assignments Limited or to the Secretarial Department of the Company. Members holding shares in demat form are requested to register their e-mail IDs with their Depository Participant(s) only. Members of the Company, who have registered their e-mail IDs, are entitled to receive such communication in physical form upon request made to the Company.
Members receiving above documents electronically are requested to print the Attendance Slip and submit it duly filled at the registration counter to attend the AGM.
Members may note that the copies of the Notice of the AGM, Annual Report, Proxy Form and Attendance Slip are also available on the website of the Company www.hcltech.com.
10. The Register of Directors and Key Managerial Personnel and their shareholding maintained under Section 170 of the Act, and the Register of contracts or arrangements in which the Directors are interested maintained under Section 189 of the Act and all other documents referred in this notice and explanatory statement including certificate from the Statutory Auditors of the Company certifying that the `2004 Stock Option Plan' of the Company is being implemented in accordance with the Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014 are open for inspection at the Registered Office and Corporate Office of the Company during 11.00 a.m. IST to 1.00 p.m. IST on all working days upto the date of the AGM and shall also remain open for inspection during the AGM.
11. Members are requested to note that as per Section 124 of the Act, the dividend remaining unclaimed for a period of seven years from the date of transfer to the Company's Unpaid Dividend Account shall be transferred to the Investor Education and Protection Fund (`IEPF'). In addition, as per Section 124(6) of the Act read with Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 ("IEPF Rules") as amended from time to time, all shares in respect of which dividend has not been paid or claimed for seven consecutive years or more shall be transferred by the Company to the IEPF Authority within such period as may be prescribed by the Ministry of Corporate Affairs.
In the event of transfer of shares and the unclaimed dividend to IEPF, Members are entitled to claim the same from IEPF Authority by submitting an online application in the prescribed Form IEPF-5 available on the website www.iepf.gov.in and sending a physical copy of the same duly signed to the Company along with the requisite documents enumerated in Form IEPF-5. Members can file only one consolidated claim in a financial year as per the IEPF Rules.
12. The status of dividends remaining unpaid/unclaimed with the respective due dates of transfer to IEPF is provided in the Annual Report. Members are requested to contact M/s. Alankit Assignments Limited or the Secretarial Department of the Company for claiming the unclaimed dividend standing to the credit of their account.
13. The Securities and Exchange Board of India has mandated submission of Permanent Account Number (PAN) by every participant in the securities market. Members holding shares in demat form are, therefore, requested to submit PAN details to the Depository Participant(s) with whom they have their demat accounts. Members holding shares in physical form can submit their PAN details to M/s. Alankit Assignments Limited or the Secretarial Department of the Company.
14. With an aim of curbing fraud and manipulation risk in physical transfer of securities, SEBI via its press release no. 51/2018 dated December 2, 2018 circular extended the date of physical transfer of securities by March 31, 2019. Accordingly, with effect from April 1, 2019, except transmission or transposition of securities, requests for effecting transfer of securities in physical mode shall not be processed unless the securities are held in the dematerialized form with a Depository. In view of the above and the inherent benefits of holding shares in electronic form, we urge the members holding shares in physical form to opt for dematerialization.
15. For convenience of the members and proper conduct of the AGM, entry to the AGM venue will be regulated by the Attendance Slip. Members are, therefore, requested to sign at the place provided on the Attendance Slip and hand it over at the registration counter at the venue of the AGM.
16. Member(s) / Proxies / Authorized Representatives are requested to bring the enclosed attendance slip duly filled in and signed for attending the meeting. Member(s) who hold equity shares in electronic mode are requested to write the DP ID and Client ID number and those who hold equity shares in physical mode are requested to write their folio number in the attendance slip.
17. In compliance with the provisions of Section 108 of the Act and Rule 20 of the Companies (Management and Administration) Rules, 2014 and Regulation 44 of SEBI LODR Regulations, the Company is pleased to provide its members, a facility to exercise their right to vote on resolutions proposed to be considered at the AGM by electronic means. The Company has entered into an arrangement with National Securities Depository Limited (`NSDL') for facilitating remote e-voting for the AGM.
18. The facility of voting through ballot paper shall be made available at the AGM venue to those members, who have
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not cast their vote by remote e-voting. The members who have already cast their vote by remote e-voting prior to the AGM may also attend the AGM but shall not be entitled to cast their vote again at the AGM. In case members cast their votes through remote e-voting and ballot, voting done by remote e-voting shall prevail and votes cast through ballot shall be treated as invalid.
19. The members of the Company, whose names appear in the Register of Members/list of Beneficial Owners as on the cut-off date i.e. July 30, 2019 may cast their vote electronically on the Resolutions set for thin this Notice as per the instructions for remote e-voting given hereunder:
The remote e-voting commences on August 2, 2019 (9:00 a.m. IST) and ends on August 5, 2019 (5:00 p.m. IST).The remote e-voting module shall be disabled by NSDL for voting there after. Once the vote on are solution is casted by the member, the member shall not be allowed to change it subsequently.
20. Any person, who acquires shares of the Company and becomes a member of the Company after dispatch of the Notice of AGM but holds shares as on the cut-off date i.e. July 30, 2019, may obtain a login ID and password by sending a request at evoting@nsdl.co.in.
21. In case of joint holders attending the AGM, only such joint holder who is higher in the order of names will be entitled to vote.
22. Members holding shares in single name are advised to make nomination in respect of their shareholding in the Company. The Nomination Form SH-13 prescribed by the Government can be obtained, in case of shares held in physical form, from the Registrar and Share Transfer Agent or the Secretarial Department of the Company, and in case of shares held in demat form, from their respective Depository Participant(s).
23. Voting through electronic means
Step 1: Log-in to NSDL e-voting system at https://www. evoting.nsdl.com/
Step 2: Cast your vote electronically on NSDL e-voting system.
Details on Step 1 are mentioned below:
How to Log-in to NSDL e-voting website?
1. Visit the e-voting website of NSDL. Open web browser by typing the following URL: https://www.evoting.nsdl. com/ either on a Personal Computer or on a mobile phone.
2. Once the home page of e-voting system is launched, click on the icon "Login" which is available under `Shareholders' section.
3. A new screen will open. You will have to enter your User ID, your Password and a Verification Code as shown on the screen.
Alternatively, if you are registered for NSDL eservices i.e. IDEAS, you can log-in at https://eservices.nsdl. com/ with your existing IDEAS login. Once you log-in to NSDL e-services after using your log-in credentials, click on e-voting and you can proceed to Step 2 i.e. Cast your vote electronically.
4. Your User ID details are given below:
Manner of holding shares i.e. Demat
Your User ID is:
(NSDL or CDSL) or Physical
For Members who 8 Character DP ID followed by 8 Digit
hold shares in demat account with NSDL
Client ID
For example, if your DP ID is IN300*** and Client ID is 12****** then your user ID is IN300***12******
For Members who hold shares in demat account with CDSL
16 Digit Beneficiary ID
For example, if your Beneficiary ID is 12************** then your user ID is 12**************
For Members
EVEN Number followed by Folio
holding shares in Physical Form
Number registered with the Company
For example, if EVEN is 101456 and folio number is 001*** then user ID is 101456001***
5. Your password details are given below:
a) If you are already registered for e-voting, then you can use your existing password to login and cast your vote.
b) If you are using NSDL e-voting system for the first time, you will need to retrieve the `initial password' which was communicated to you. Once you retrieve your `initial password', you need to enter the `initial password' and the system will force you to change your password.
c) How to retrieve your `initial password'?
(i) If your email ID is registered in your demat account or with the Company, your `initial password' is communicated to you on your email ID. Trace the email sent to you from NSDL from your mailbox. Open the email and open the attachment i.e. a .pdf file. Open the .pdf file. The password to open the .pdf file is your 8-digit client ID for NSDL account, last 8 digits of client ID for CDSL account or folio number for shares held in physical form.
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The .pdf file contains your `User ID' and your `initial password'.
6. Upon confirmation, the message "Vote cast successfully" will be displayed.
(ii) If your email ID is not registered, your `initial password' is communicated to you on your postal address.
6. If you are unable to retrieve or have not received the "Initial password" or have forgotten your password:
a) Click on "Forgot User Details/Password?" (If you are holding shares in your demat account with NSDL or CDSL) option available on www.evoting. nsdl.com
b) "Physical User Reset Password?" (If you are holding shares in physical mode) option available on www.evoting.nsdl.com
c) If you are still unable to get the password by aforesaid two options, you can send a request at evoting@nsdl.co.in mentioning your demat account number/folio number, your PAN, your name and your registered address.
d) Members can also use OTP (One Time Password) based login for casting the votes on the e-voting systems by NSDL.
7. After entering your password, tick on Agree to "Terms and Conditions" by selecting on the check box.
8. Now, you will have to click on "Login" button.
9. After you click on the "Login" button, Home page of e-voting will open.
Details on Step 2 are given below:
How to cast your vote electronically on NSDL e-voting system?
1. After successful login at Step 1, you will be able to see the Home page of e-voting. Click on e-voting. Then, click on Active Voting Cycles.
2. After click on Active Voting Cycles, you will be able to see all the companies "EVEN" in which you are holding shares and whose voting cycle is in active status.
3. Select "E-voting event number" (`EVEN') of "HCL Technologies Limited" for casting your vote.
4. Now you are ready for e-voting as the Voting page opens.
5. Cast your vote by selecting appropriate options i.e. assent or dissent, verify/modify the number of shares for which you wish to cast your vote and click on "Submit" and also "Confirm" when prompted.
7. You can also take the printout of the votes cast by you by clicking on the print option on the confirmation page.
8. Once you confirm your vote on the resolution, you will not be allowed to modify your vote.
General Guidelines for Members
1. Institutional shareholders (i.e. other than individuals, HUF, NRI etc.) are required to send scanned copy (PDF/JPG format) of the relevant Board Resolution Authority letter etc. with the attested specimen signature of the duly authorized signatory(ies) who are authorized to vote, to the Scrutinizer by e-mail to officenns@gmail.com with a copy marked to evoting@nsdl.co.in
2. It is strongly recommended not to share your password with any other person and take utmost care to keep your password confidential. Login to the e-voting website will be disabled upon five unsuccessful attempts to key in the correct password. In such an event, you will need to go through the "Forgot User Details/Password?" or "Physical User Reset Password?" option available on www.evoting.nsdl.com to reset the password.
3. In case of any queries, you may refer the Frequently Asked Questions (FAQs) for Shareholders and e-voting user manual for Shareholders available at the download section of www.evoting.nsdl.com or call on toll free no.: 1800-222-990 or send a request at evoting@nsdl.co.in
24. Mobile number and e-mail ID can also be updated in the user profile details of the folio which may be used for sending future communications.
25. The voting rights of members shall be in proportion to their shares of the paid-up equity share capital of the Company as on the cut-off date i.e. July 30, 2019.
26. The poll process shall be conducted and scrutinized and report thereon will be prepared in accordance with Section 109 of the Act read with the Companies (Management and Administration) Rules, 2014.
27. The Company has appointed Mr. Nityanand Singh, Practicing Company Secretary, (Membership no. FCS:2668) as the Scrutinizer to scrutinize the remote e-voting process and the ballot to be cast by the members at the AGM in a fair and transparent manner.
28. The Scrutinizer shall after the conclusion of voting at the AGM, first count the votes cast at the AGM and there after unblock the votes cast through remote e-voting in the
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presence of at least two witnesses not in the employment of the Company. The Scrutinizer shall not later than 48 hours of conclusion of the AGM submit a consolidated Scrutinizer's Report of the total votes cast in favor of or against, if any, to the Chairman of the Company or any other Director of the Company authorized by him in writing, who shall countersign the same. The Chairman, or any other person authorized by the him, shall declare the result of the voting forthwith.
29. The results of remote e-voting and poll on resolutions shall be aggregated and declared on or after the AGM of the Company and the resolutions will be deemed to be passed on the date of the AGM, subject to receipt of the requisite numbers of votes in favour of the resolutions.
The results of the voting along with the Scrutinizer's report shall be placed on the Company's website, www.hcltech.com and on the website of NSDL www.evoting.nsdl.com immediately after their declaration. The results shall also be immediately communicated to BSE Limited and National Stock Exchange of India Limited and be displayed at the Registered Office of the Company.
30. Your Company is pleased to provide the facility of live webcast of the proceedings of the AGM. Members who are entitled to participate in the AGM can view the proceeding of AGM by logging on the e-voting website of NSDL using their secure login credentials. Members who are not able to attend the AGM physically are encouraged to use this facility of webcast.
EXPLANATORY STATEMENT PURSUANT TO SECTION 102(1) OF THE COMPANIES ACT, 2013 ("Act")
Item No. 2
This explanatory statement for Item No. 2 is provided though strictly not required as per section 102 of the Act.
Mr. Shiv Nadar was appointed as a non-retiring Director. However, due to the resignation of Mr. Sudhindar Krishan Khanna (DIN - 01529178), currently the number of NonIndependent Directors are two viz. Mr. Shiv Nadar and Ms. Roshni Nadar Malhotra.
In accordance with the provisions of the Act, not less than twothird of the Non-Independent Directors (which is 1.34 rounded off to 2 directors) should be liable to retire by rotation. In view of these provisions, both the Non-Independent directors shall be required to retire by rotation.
Mr. Shiv Nadar, being longest in office shall retire at the forthcoming AGM and being eligible, has offered himself for re-appointment as Director of the Company.
Based on the recommendations of Nomination and Remuneration Committee, the Board of Directors considered and recommended the re-appointment of Mr. Shiv Nadar to the members of the Company.
None of the Directors or Key Managerial Personnel of the Company and their relatives are in any way concerned or interested, financially or otherwise, in this resolution except Mr. Shiv Nadar and Ms. Roshni Nadar Malhotra being related to Mr. Shiv Nadar.
The Board of Directors recommends the resolution as set out at Item no. 2 for approval of the Members to be passed as an Ordinary Resolution.
Item No. 3
This explanatory statement for Item No. 3 is provided though strictly not required as per section 102 of the Act.
S. R. Batliboi & Co. LLP, Chartered Accountants (ICAI Firm Registration No. 301003E / E00005), have been the Statutory Auditors of the Company since the financial year 2009-10. They were re-appointed as the Statutory Auditors of the Company at the AGM held in the year 2014 for a period of five years to hold office up to the conclusion of the AGM to be held in the year 2019. In terms of Section 139(2) of the Act and Rule 6 of the Companies (Audit & Auditors) Rules, 2014, their term will expire in the ensuing AGM.
Pursuant to the provisions of Section 139, 142 and all other applicable provisions, if any, of the Act and the rules made thereunder, approval of the members of the Company be and is hereby sought to appoint B S R & Co. LLP, Chartered Accountants (ICAI Firm Registration No. 101248W/W-100022) as the Statutory Auditors of the Company, in place of the retiring auditors, to hold office for a period of five years from the conclusion of this AGM till the conclusion of the Thirty Second AGM of the Company to be held in the year 2024.
The Audit Committee proposed the appointment of B S R & Co. LLP as the Statutory Auditors after assessing B S R & Co. LLP and another audit firm based on certain parameters which included past audit experience of the audit firm particularly in auditing large IT companies having overseas subsidiaries, strength & experience of key members proposed in the audit team, independence of the audit firm, etc. The Board of Directors after considering the recommendations of the Audit Committee has recommended the said appointment for approval by the members of the Company.
B S R & Co. LLP would audit the financial statements of the Company on a standalone and consolidated basis under Ind AS and would also audit the financial statements of certain subsidiaries. The global network firms of B S R & Co. LLP would audit the consolidated financial statements as per US GAAP and the financial statements of certain overseas
7
subsidiaries. The aggregate fee proposed to be paid would be around Rs. 22 crores plus expenses and taxes, as applicable for the financial year 2019-20. There is an increase in the fee that is proposed to be paid to the new auditors from the fee that was paid to existing auditors due to increase in the quantum of work including new acquisitions. It is proposed to authorise the Board of Directors, including relevant Committee(s) thereof, to finalise the fee / expenses and to approve incremental fee, from time to time, based on the increase in the quantum of work and vary such other terms in consultation with the Statutory Auditors.
None of the Directors or Key Managerial Personnel of the Company and their relatives are in any way concerned or interested, financially or otherwise, in this resolution.
The Board of Directors recommends the resolution as set out at Item no. 3 for approval of the members to be passed as an Ordinary Resolution.
Item No. 4
In accordance with the provisions of the Act and SEBI LODR Regulations, an Independent Director can be appointed for a maximum of two terms of five years each. The first term is to be counted w.e.f. the AGM falling after April 1, 2014. Mr. R. Srinivasan was appointed as an Independent Director of the Company for a term of five years up to the date of AGM scheduled in the year 2019.
Based on the recommendation of the Nomination and Remuneration Committee, the Board of Directors of the Company at their meeting held on May 9, 2019, have recommended the re-appointment of Mr. R. Srinivasan for the second term as provided in the resolution.
Further, the Securities and Exchange Board of India, vide its Notification dated May 9, 2018 notified that a listed entity shall not appoint a person or continue the directorship of any person as Non-Executive Director who has attained the age of 75 years or more unless a special resolution is passed to that effect.
Members are requested to note that Mr. R. Srinivasan will attain the age of seventy-five years in the year 2021 during his tenure of directorship in the Company. Accordingly, in terms of the new provisions of SEBI LODR Regulations, the approval of the members would also be required for continuation of the directorship after attaining the age of 75 years.
The Company has received a declaration from Mr. R. Srinivasan confirming that he meets the criteria of Independence as prescribed under Section 149(6) of the Act and as per SEBI LODR Regulations. A copy of the draft letter for re-appointment of Mr. R. Srinivasan setting out the terms and conditions is available for inspection at the Registered Office of the Company on any working day between 11.00 a.m. IST to 1.00 p.m. IST upto the date of AGM and will also be available for inspection
at the venue of the AGM and available on the website of the Company.
The Company has received consent in writing and other relevant disclosures from Mr. R. Srinivasan.
In terms of Section 160 of the Act, the Company has received a notice in writing from a member of the Company proposing the candidature of Mr. R. Srinivasan to be re-appointed as an Independent Director.
Brief profile of Mr. R. Srinivasan is enclosed, and detailed profile is available on www.hcltech.com.
In the opinion of the Board of Directors, he fulfils the condition specified in the Act for such re-appointment and such appointment is independent of the management. Accordingly, the Board of Directors recommends the passing of resolution set out in Item No. 4 as a Special Resolution.
Except, Mr. R. Srinivasan and his relatives, none of the Directors or Key Managerial Personnel of the Company and their relatives, are in any way concerned or interested, financially or otherwise, in the resolution as set out in item no. 4 of the Notice.
The Board of Directors recommends the resolution as set out at Item no. 4 for approval of the members to be passed as a Special Resolution.
Item No. 5
In accordance with the provisions of the Act and SEBI LODR Regulations, an Independent Director can be appointed for a maximum of two terms of five years each. The first term is to be counted w.e.f. the Annual General Meeting falling after April 1, 2014. Mr. S. Madhavan was appointed as an Independent Director of the Company for a term of five years up to the date of AGM scheduled in the year 2019.
Based on the recommendation of the Nomination and Remuneration Committee, the Board of Directors of the Company at their meeting held on May 9, 2019, have recommended the re-appointment of Mr. S. Madhavan for the second term as provided in the resolution.
The Company has received a declaration from Mr. S. Madhavan confirming that he meets the criteria of Independence as prescribed under Section 149(6) of the Act and as per SEBI LODR Regulations. In the opinion of the Board of Directors, he fulfils the conditions specified in the said Act and is independent of the management. A copy of the draft letter for re-appointment of Mr. S. Madhavan setting out the terms and conditions is available for inspection at the Registered Office of the Company on any working day between 11.00 a.m. IST to 1.00 p.m. IST upto the date of AGM and will also be available for inspection at the venue of the AGM and available on the website of the Company.
8
The Company has received consent in writing and other relevant disclosures from Mr. S. Madhavan.
In terms of Section 160 of the Act, the Company has received a notice in writing from a member of the Company proposing the candidature of Mr. S. Madhavan to be re-appointed as an Independent Director.
In terms of Section 160 of the Act, the Company has received a notice in writing from a member of the Company proposing the candidature of Ms. Robin Ann Abrams to be re-appointed as an Independent Director.
Brief profile of Ms. Robin Ann Abrams is enclosed, and detailed profile is available on www.hcltech.com.
Brief profile of Mr. S. Madhavan is enclosed and detailed profile is available on www.hcltech.com.
In the opinion of the Board of Directors he fulfils the condition specified in the Act for such re-appointment and such appointment is independent of the management. Accordingly, the Board of Directors recommends the passing of resolution set out in Item No. 5 as a Special Resolution.
Except, Mr. S. Madhavan and his relatives, none of the Directors or Key Managerial Personnel of the Company and their relatives, are in any way concerned or interested, financially or otherwise, in the resolution as set out in item no. 5 of the Notice.
The Board of Directors recommends the resolution as set out at Item no. 5 for approval of the members to be passed as a Special Resolution.
Item No. 6
In accordance with the provisions of the Act and SEBI LODR Regulations, an Independent Director can be appointed for a maximum of two terms of five years each. The first term is to be counted w.e.f. the Annual General Meeting falling after April 1, 2014. Ms. Robin Ann Abrams was appointed as an Independent Director of the Company for a term of five years up to the date of AGM scheduled in the year 2019.
Based on the recommendation of the Nomination and Remuneration Committee, the Board of Directors of the Company at their meeting held on May 9, 2019, have recommended the re-appointment of Ms. Robin Ann Abrams for the second term as provided in the resolution.
The Company has received a declaration from Ms. Robin Ann Abrams confirming that she meets the criteria of Independence as prescribed under Section 149(6) of the Act and as per SEBI LODR Regulations. In the opinion of the Board of Directors, she fulfils the conditions specified in the saidAct and is independent of the management. A copy of the draft letter for re-appointment of Ms. Robin Ann Abrams setting out the terms and conditions is available for inspection at the Registered Office of the Company on any working day between 11.00 a.m. IST to 1.00 p.m. IST upto the date of AGM and will also be available for inspection at the venue of the AGM and available on the website of the Company.
The Company has received consent in writing and other relevant disclosures from Ms. Robin Ann Abrams.
In the opinion of the Board of Directors she fulfils the condition specified in the Act for such re-appointment and such appointment is independent of the management. Accordingly, the Board of Directors recommends the passing of resolution set out in Item No. 6 as a Special Resolution.
Except, Ms. Robin Ann Abrams and her relatives, none of the Directors or Key Managerial Personnel of the Company and their relatives, are in any way concerned or interested, financially or otherwise, in the resolution as set out in item no. 6 of the Notice.
The Board of Directors recommends the resolution as set out at Item no. 6 for approval of the members to be passed as a Special Resolution.
Item No. 7
In accordance with the provisions of the Act and SEBI LODR Regulations, an Independent Director can be appointed for a maximum of two terms of five years each. The first term is to be counted w.e.f. the Annual General Meeting falling after April 1, 2014. Dr. Sosale Shankara Sastry was appointed as an Independent Director of the Company for a term of five years up to the date of AGM scheduled in the year 2019.
Based on the recommendation of the Nomination and Remuneration Committee, the Board of Directors of the Company at their meeting held on May 9, 2019, have recommended the re-appointment of Dr. Sosale Shankara Sastry for the second term as provided in the resolution.
The Company has received a declaration from Dr. Sosale Shankara Sastry confirming that he meets the criteria of Independence as prescribed under Section 149(6) of the Act and as per SEBI LODR Regulations. In the opinion of the Board of Directors, he fulfils the conditions specified in the said Act and is independent of the management. A copy of the draft letter for re-appointment of Dr. Sosale Shankara Sastry setting out the terms and conditions is available for inspection at the Registered Office of the Company on any working day between 11.00 a.m. IST to 1.00 p.m. IST upto the date of AGM and will also be available for inspection at the venue of the AGM and available on the website of the Company.
The Company has received consent in writing and other relevant disclosures from Dr. Sosale Shankara Sastry.
In terms of Section 160 of the Act, the Company has received a notice in writing from a member of the Company proposing the
9
candidature of Dr. Sosale Shankara Sastry to be re-appointed period for which members can authorise the Board of Directors
as an Independent Director.
at a time is five years.
Brief profile of Dr. Sosale Shankara Sastry is enclosed and detailed profile is available on www.hcltech.com.
In the opinion of the Board of Directors he fulfils the condition specified in the Act for such re-appointment and such appointment is independent of the management. Accordingly, the Board of Directors recommends the passing of resolution set out in Item No. 7 as a Special Resolution.
Except, Dr. Sosale Shankara Sastry and his relatives, none of the Directors or Key Managerial Personnel of the Company and their relatives, are in any way concerned or interested, financially or otherwise, in the resolution as set out in item no. 7 of the Notice.
The Board of Directors recommends the resolution as set out at Item no. 7 for approval of the members to be passed as a Special Resolution.
Item No. 8
The Non-Executive Directors can be paid remuneration only by way of commission. The aggregate commission to all the Non-Executive Directors cannot exceed one percent per annum of the net profits of the Company.
The approval to pay commission to the Non-Executive Directors is granted by the members of the Company and the maximum
Accordingly, the members of the Company in the Annual General Meeting held in the year 2014 had granted authority to the Board of Directors to pay the aforesaid commission to the Non-Executive Directors upto the financial year 2019.
It is now proposed to seek fresh approval of the members to authorise the Board of Directors for a period of five financial years commencing from April 1, 2019 and extending upto and including the financial year of the Company ending on March 31, 2024.
All Non-executive directors may be deemed to be concerned or interested in the resolution set out at Item No. 8 of the Notice to the extent of the remuneration by way of commission that may be received by them.
Mr. Shiv Nadar, Chairman and Chief Strategy Officer being related to Ms. Roshni Nadar Malhotra, is also interested in this resolution to the extent of commission, if any, paid to Ms. Roshni Nadar Malhotra.
None of the Key Managerial personnel of the Company or their relatives are in any way concerned or interested, financially or otherwise in this resolution.
The Board of Directors recommends the resolution as set out at Item no. 8 for approval of the members to be passed as a Special Resolution.
10
DETAILS OF DIRECTORS SEEKING APPOINTMENT/RE-APPOINTMENT AS REQUIRED UNDER SEBI (LISTING OBLIGATIONS AND DISCLOSURE REQUIREMENTS) REGULATIONS, 2015
Name of the Directors
Shiv Nadar
Mr. R. Srinivasan
Date of Birth (Age in years) 18-Jul-1945 (74)
28-Jun-1946 (73)
Date of Appointment
01-Feb-2017
04-Dec-2014
Qualifications
Electrical Engineer from Electrical Engineering
Coimbatore in South India Degreefrom Madras
University, MBA Degree
from the Indian Institute of
Management, Ahmedabad
Experience and expertise Information Technology
in specific functional area Sector, Strategic Planning
and Management
Shareholding in HCL
184 equity shares
Technologies Limited
Relationship with other
Relative (Father) of Ms.
Directors / KMPs
Roshni Nadar Malhotra,
Director of the Company.
Directorships / Committee
-
Membership and
Chairmanship held in other
Listed Companies
Strategic and Business Management
None
-
Mr. S. Madhavan 27-Oct-1956 (62) 04-Dec-2014 Fellow member of the Institute of Chartered Accountants of India, Post Graduate Diploma in Business Management from the Indian Institute of Management, Ahmedabad Advisory and Tax Matters and Leadership Development
2,500 equity shares
None
1. UFO Moviez India Limited: Member - Audit Committee Chairman - Nomination & Remuneration Committee
2. Glaxo SmithKline Consumer Healthcare Ltd.
3. Transport Corporation of India
Name of the Directors Date of Birth (Age in years) Date of Appointment Qualifications
Experience and expertise in specific functional area Shareholding in HCL Technologies Limited Relationship with other Directors / KMPs Directorships / Committee Membership and Chairmanship held in other listed companies
Ms. Robin Abrams
Dr. Sosale Shankara Sastry
12-May-1951 (68)
15-May-1956 (63)
04-Dec-2014
04-Dec-2014
Bachelor of Arts and a Juris Doctor B.Tech from Indian Institute of Technology, Bombay; M.S.
Degree from the University of EECS (1979),University of California, Berkeley; M.A.
Nebraska
Mathematics (1980), University of California, Berkeley
and Ph.D. EECS, University of California, Berkeley
Strategic Planning and Management. Electronic Research, InformationTechnology Sector,
Cybersecurity and Critical Infrastructure Protection.
-
-
None
None
-
-
Notes: 1. The Directorship, Committee Membership and Chairmanships do not include positions in Foreign companies, unlisted
companies, private companies and Section 8 companies. 2. The proposal for re-appointment of Directors has been approved by the Board of Directors pursuant to the recommendation
of Nomination and Remuneration Committee considering their skills, experience and positive outcome of performance evaluation. 3. Terms and conditions of re-appointment and remuneration are as per the Nomination and Remuneration Policy of the Company. 4. Detailed profile of Directors, number of meetings of the Board of Directors attended by them during the financial year and remuneration drawn are provided in the Corporate Governance Report which forms part of the Annual Report.
11
ROUTE MAP TO THE AGM VENUE
12
CORPORATE INFORMATION
Board of Directors
Mr. Shiv Nadar Ms. Roshni Nadar Malhotra Mr. Deepak Kapoor Mr. James Philip Adamczyk Mr. S. Madhavan Ms. Nishi Vasudeva Ms. Robin Abrams Dr. Sosale Shankara Sastry Mr. R. Srinivasan Mr. Thomas Sieber
Chairman & Chief Strategy Officer Non-Executive Non-Independent Director Non-Executive & Independent Director Non-Executive & Independent Director Non-Executive & Independent Director Non-Executive & Independent Director Non-Executive & Independent Director Non-Executive & Independent Director Non-Executive & Independent Director Non-Executive & Independent Director
Key Managerial Personnel
Mr. C. Vijayakumar Mr. Prateek Aggarwal Mr. Manish Anand
President & Chief Executive Officer Chief Financial Officer Company Secretary
Registered Office
806, Siddharth 96, Nehru Place New Delhi - 110019 Telefax: +91-11-26436336
Bankers
Canara Bank Deutsche Bank AG State Bank of India The Hongkong and Shanghai Banking
Corporation Limited
Corporate Office
Plot No.: 3A, Sector 126, Noida - 201 304 Telephone: +91 120 6125000
Citibank N.A. Standard Chartered Bank BNP Paribas Bank of America N.A.
Annual Report 2018-19 1
Contents
Management Discussion and Analysis
03
Directors' Report
36
Corporate Governance Report
101
CEO & CFO Certificates
138
Business Responsibility Report
139
Standalone Financial Statements
160
Consolidated Financial Statements
221
Statement under Section 129
293
2 Contents
MANAGEMENT DISCUSSION AND ANALYSIS
Investors are cautioned that this discussion contains forward-looking statements that involve risks and uncertainties. When words like `anticipate,' `believe,' `estimate,' `intend,' `will,' `expect' and other similar expressions are used in this discussion, they relate to the Company or its business and are intended to identify such forward-looking statements. The Company undertakes no obligations to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or other factors. Actual results, performances or achievements could differ materially from those expressed or implied in such statements. Factors that could cause or contribute to such differences include those described under the heading `Risk' as well as factors discussed elsewhere in this report. Readers are cautioned not to place undue reliance on the forward-looking statements as they speak only as of their dates. The following discussion and analysis should be read in conjunction with the Company's financial statements included herein, and the notes thereto.
Annual Report 2018-19 3
4 Management Discussion and Analysis
INDEX
· The Changing Landscape o Industry Overview o HCL Strategy
· Mode 1: Core Services o Applications Services o Infrastructure Management Services o Engineering and R&D Services o Digital Process Operations (Business Services)
· Mode 2: NextGeneration Services o Digital and Analytics Services o Cloud Native Services o IoTWoRKSTM o Cyber Security & GRC
· Mode 3: Products & Platforms o HCL Software o DRYiCE o Industry Platforms
· Talent Update o Talent Composition o Talent Acquisition & Development o Diversity & Inclusion o Recognition of HCL Culture & Engagement Practices o Compliance at HCL
· Corporate Social Responsibility
· Risk Management o Technology Adoption and Consumption Risk o Political and Economic Risk o Regulatory Compliance Risk o Business Continuity Risk o Information and Cyber Security Risk o Privacy Risk o Foreign Exchange Risk o Acquisitions and Strategic Partnerships Risk o HR Related Risk o Tax Related Risk
· Performance trend o Value Addition
· Financial Performance
· Consolidated Results o Results of Operations o Taxation o Financial Position o Cash Flows o Key Financial Ratios
· Standalone Results o Results of Operations o Financial position o Cash flows o Key Financial Ratios
Fast Track to the Future, Now
Industry Overview
Technological innovations are reshaping the world we live in. Exponential advances across technologies like cloud computing, artificial intelligence (AI), machine learning, robotics, IoT, augmented and virtual reality would continue to transform every aspect of human life. We strongly believe enterprises will continue to invest in these technologies to transform every aspect of their businesses. Some of the key trends on the technology spending by enterprises include
· While new technologies and digital transformation spends are growing at a healthy mid-teens CAGR, traditional products & services will grow at low single digits and is still four fifths of the enterprise IT spend. As a result of this, we continue to see opportunities in both spend patterns for service providers who possess a comprehensive suite of offerings. Many transformational opportunities have the potential to convert large traditional spend into new age technology spend over the next few years.
to people's lives, focusing on a human-centered, end-toend digital transformation. In doing so, these enterprises are achieving new levels of growth, and in the process, redefining the very role of the enterprise in our societies.
HCL Strategy
While the demand for technologies continue to rise and organizations grapple with the disruption, HCL is accelerating its evolution with the adoption of a unique road map for growth the Mode 1-2-3 strategy.
Our primary focus is to provide a comprehensive portfolio of services and products, as part of our Mode 1-2-3 strategy to help customers maximize innovation, drive business efficiency and performance, and achieve success in the digital world. Clients are looking beyond custom services designed as a reactive strategy to business problems, but for proactive solutions that can build on readily available platforms with best practices and custom expertise on tap. In this context, HCL is executing a strategy that leverages its core strength in product engineering services and IT services to build the next generation products & services.
· There is a continuing shift in market buying patterns with "As a Service" Outsourcing growing thrice compared to traditional sourcing growing in high single digits.
· Since every business is becoming software defined and technology led business models are emerging in every vertical, the technology investment is more than ever business outcome aligned and would be sustained through economic cycles.
· Technology Infrastructure is becoming core to Digital Transformation as Digital Foundation. Some of the key components of this include Hybrid cloud, Platform centric approach and Digital Workplace shift from device to users to experience.
We have started to see AI becoming core to business transformation in 2019, especially smart machine learning algorithms and advanced robotics. AI adoption will strengthen further, with smart, autonomous machines leveraging the new technology to perform tasks traditionally accomplished by humans. Drones and autonomous cars will continue transforming supply chains and logistics. Enterprises that can optimally leverage the power of such disruptive technologies will gain a competitive advantage across business functions. The growth of augmented analytics, expected to represent the third major wave for data and analytics, will be a crucial determinant in this direction, with over 40% of data science tasks projected to be automated by 2020.
Tomorrow's organizations have already started moving beyond simply offering products and services. They are moving closer
Our Mode 1 encompasses core services in the areas of Applications, Infrastructure, Engineering and Research & Development Services (ERS) and Digital Process Operations (DPO) to transform clients' businesses and Information Technology (IT) landscape, making them `lean' and `agile'. The primary goal in this mode is to augment clients' business competencies through extreme automation and operational agility. We continue to see healthy demand for these services as mentioned earlier about the large market opportunities for traditional services.
We also see the strong emerging trend of integrated market opportunities by combining various traditional services and even new technologies into single client engagement. This demand allows for end to end ownership, agile service execution and business outcome led service delivery. Some of the strategic deals we won this year had our various services offerings including Application Services, Infrastructure services and Digital Process Operations.
We also had other deal wins we had this year included our product engineering led business operations, Infrastructure, Applications combined with our Mode 2 Services coming together as a digital transformation proposition etc. As we look into the future, HCL is well positioned to win more integrated deals and execute them to the utmost satisfaction of our clients.
Under Mode 2, we offer experience-centric and outcomebased integrated offerings including Digital and Analytics, IOTWoRKSTM (Internet of Things), Cloud Native, and CyberSecurity. We have also built several innovation laboratories all over the world for Digital, Analytics, IoT Works, and Cloud Native Services. Our scale digital programs that empower
Annual Report 2018-19 5
clients to take their digital projects to large scale roll outs continues to see tremendous traction in the market.
Mode 3 is an ecosystem led strategy focused to design and develop products and platforms for the "As a Service" economy through organic and inorganic routes. This will help us strengthen our position in the software products segment, enhance customer engagement and stay ahead of competition, with risk mitigation through this flexible approach. Our Mode 3 strategy consists of three growth vectors
· HCL Software A combination of organic IP, acquisitions and IP partnerships across segments like Data, DevOps, Automation, Mainframe, Collaboration and Marketing & Commerce.
· DRYiCE AI powered foundation for digital enterprise to transform & simplify IT, Business and Digital Operations.
· Industry focused IP Platforms Outcome aligned platforms that aligns client interest with HCL's business goals in high growth verticals like Telecom, Financial Services, Healthcare, Manufacturing and Aerospace.
In each of these categories, we continue to invest in new propositions that have been well received by clients during the year. Additional information can be found in the detailed section on Mode 3.
We leverage the power of employees' ideas exemplified by the concept of IdeapreneurshipTM. It is a culture that fosters grassroots innovation based on the belief of inverting the organizational pyramid to engage, enable, and empower frontline employees who are best placed to cater to customers' businesses. Thus, our `Relationships Beyond the Contract' (RBtC), powered by IdeapreneurshipTM, provides the opportunity to ideate, collaborate, and create unique ideas to solve customers' business problems. By taking relationships beyond the contract, HCL focuses on building long-term, mutually beneficial associations with customers.
At HCL, we are interested in how humanity's relationship with technology will evolve through the next decade of rapid innovation. HCL has launched HCL 2030 Platform in World Economic Forum this year as a part of the theme of human-machine harmony with its ecosystem of partners and stakeholders. This will serve as a platform for in-depth discussions with future leaders and innovators to drive transformation across digital technologies.
Our `Global to Local Campaign', which was recently launched with the US 30 and followed with the Nordics 10 campaigns, is aligned with our 2030 Vision. Over the next year, HCL will continue these campaigns across all major geos, each with its own distinct local flavor, yet tied to our global vision and fabric.
Mode 1: Core Services
Applications Services
The applications services market today is undergoing a massive transformation. There is a continual shift from systems of record to systems of innovation. While the overall spend on traditional services has moderated, growth is being driven by new technologies like the cloud, application modernization, analytics, IoT, and digitalization.
HCL offers a full life cycle of consulting services and proven delivery capabilities aligned with the needs of specific industries and sectors and tailored for each client need. HCL's applications business is structured around various integrated horizontal capabilities, allowing us to offer a unified approach in developing the right solutions for client business needs. During the year, we have also successfully implemented our DRYiCE AI led automation platform in various customer engagements. DRYiCE for Application Services help the organizations to enhance their user experience, improve productivity, faster GTM and cost reduction. Through this unique combination of AI led automation, extensive experience in industry verticals and people expertise, we provide powerful solutions to address our client needs.
While traditional systems integration services remain critical with the shifting applications landscape, clients are now seeking partners that can also help them take advantage of emerging technologies and simplify their IT operations, while simultaneously reducing costs and investing in business growth. Using end-to-end IT capabilities from systems integration to application maintenance and support we deliver value-driven solutions designed to help organizations maximize their return on investment, enhance business productivity, and reduce the total cost of technology ownership.
Building Partnerships
HCL identified client and technology partnerships at the core of its growth strategy almost at inception. There is a plethora of partnership led business opportunities available to the most innovative and flexible service provider. We recognize the importance of investing in and developing strong intellectual property and offerings in new and emerging technology areas. We continue to work with clients to drive business outcomes through large IT program delivery, with leading enterprise application providers SAP, Oracle, and Microsoft.
In the SAP space, HCL is transforming our customers' traditional SAP application landscape to post-modern ERP SAP business platform landscape with a focus on S/4HANA®, C/4HANA, ARIBA and SAP Cloud Platform (SCP) as the core building blocks. An MOU was signed between HCL and SAP in 2018 for the program DIGITALignitionTM, which focuses the two companies on delivering an Experience-centric Intelligent
6 Management Discussion and Analysis
Enterprise using SAP digital platforms and services for our customers.
HCL has made both horizontal and industry IP investments in the SAP eco-system, including delivering DRYiCETM LUCY and the COPA (Cognitive Orchestrated Process Automation) framework on SAP_Cloud Platform (SCP). And in January 2018 HCL's continued investment in industry solutions resulted in HCL signing a global reseller agreement with SAP SE where SAP will resell the HCL's iMRO® S/4HANA product. iMRO® is a next-generation maintenance, repair, and overhaul solution which will be sold under the brand name SAP® Enterprise Asset Management (SAP EAM), an add-on for Maintenance, Repair & Overhaul (MRO) by HCL for SAP S/4HANA®.
With Microsoft, HCL has developed four strategic areas of collaboration designed to enable our mutual customers' digital transformation. These include:
· Azure/Azure stack and cloud-based computing.
· Business applications utilizing Microsoft Dynamics/ Dynamics 365.
· The data platform focused on Internet of Things, Artificial Intelligence and Machine Learning.
· The Modern Workplace using the broad suite of collaboration and productivity solutions from Microsoft.
We also announced a new partnership with Microsoft whereby HCL will optimize and migrate third party Independent Software Vendor (ISV) applications to the Azure public cloud.In the Oracle space, HCL has reworked its proposition to help in reinventing the core for Oracle applications on premise customers and reframing the future with Oracle SaaS (Software as a service) cloud apps. The service offerings are designed to take the customers through the journey of building a digital enterprise with Oracle cloud, and the necessary investments being made in this direction. The go-to-market strategy for Oracle practice is aligned with Oracle's impetus on migrating customers to SaaS and IaaS.
As digital transformation and Agile DevOps initiatives gain focus, there is a blurring of boundaries in the Application testing space across teams, which has led to an increase in demand for integrated testing. To meet these objectives, HCL has been helping customers transform their legacy organizations to more agile collaborative Integrated Quality Engineering function that is supported by an Automation First approach.
HCL continues to invest in building digital assurance capabilities and offerings, strengthening its homegrown IPs by including Artificial Intelligence and Machine Learning components and delivering as-a-service models through HCL OneTest. Our delivery model integrates on-site business transformation consulting services with near and offshore
technical development and support to make sure our clients receive the ideal systems integration solutions at the right price. With our offshore centers of excellence, we are able to accelerate implementation, while reducing the risks and costs associated with global deployment. Effective business and IT transformation are a result of our unique capabilities in being able to merge our onsite and offshore capabilities seamlessly.
Infrastructure Management Services (IMS)
Enterprises are looking at their Infrastructure Management Service (IMS) providers to create their digital foundation that would accelerate digital transformation and be the core of digital operations for years. This demands a flexible architecture of hybrid cloud led deployments, microservices led application design, AI / ML for IT Operations. Clients are looking at this digital foundation to manage the petabytes of machine led data generated by large IOT deployments. On the end user computing side, IMS providers need to be creative and adaptive to support digital workplace that goes beyond managing devices to users to experience.
HCL's IMS practice caters to Global 2000 enterprises spread across a broad spectrum of industries ranging from manufacturing to financial services, automotive, telecom, hitech, consumer goods, retail, banking, financial services and insurance, energy and utility, logistics, travel and tourism, media and entertainment, life sciences and independent software vendors (ISVs). Our IMS practice currently manages over 6 million globally distributed customer assets and devices in addition to over 20 million helpdesk contacts for ~2 million business users in 30+ languages. We do this using a network of service delivery centers spread across the globe.
HCL's Key IT Infrastructure Services that enable Next Generation ITO
Next Generation Data Center and Cloud Services: While organizations are fast adopting DevOps and Automation to realize their digital vision, complexity, resource intensiveness, costs and silos of legacy infrastructure are becoming major hindrances in achieving that vision. Enterprises must make their Data Centers digital ready with software-defined infrastructure and hybrid cloud powered by intelligent automation & catalogbased consumption model with the ability to scale up and down. HCL believes in making the Data centers (DC) ready for Digital Transformation and supports the entire lifecycle from DC transformation to modern data centers by enabling latest technology & solutions like Software Defined Infrastructure, Hybrid Cloud architecture and Hyper Converged Infrastructure. HCL is also capable of running agile and lean DC operations through application of advanced autonomics and service orchestration leveraging Machine Learning, Artificial Intelligence & Cognitive solutions. HCL continues to invest in building industry-leading, differentiated tools for optimized
Annual Report 2018-19 7
cloud enablement, such as ElasticOps for Automated Hybrid Cloud Operations, HCL CART (Cloud Assessment Tool), HCL DPrizm (Digital Prizm), and HCL MyCloud Portal for multi Cloud Orchestration, self-service and dynamic provisioning solutions, and OpsML and iAutomate.
Digital Workplace Services: Our digital workplace services are designed to create a modern digital user experience and enhance productivity on the go. The service leverages our SMART Workplace Model with its four pillars as shown in the picture below.
Smart IT
focused on assessing and transforming the user
experience at every touch point and interaction.
Smart Users
to leverage cognitive bots for contextual and omni-channel
access and self-service.
Smart Machine
that infuse self-diagnostic and self-healing capacities in workplace assets.
Smart Spaces
meant to expand traditional workplace boundaries by leaving the power of wearable and IoT.
We have gone a step further by shaping the Digital Workplace Service for Gen-Y. For this, we use our automation platform DRYiCETM that creates self-help and self-healing capabilities to empower users with reliable, secure, personalized and anyplace-any-time-any-device access to the workplace. The key goals are to maintain a data-driven, collaborative and engaging environment.
Next Generation Network Services: These services enable a secure, agile, automated, efficient, and optimized network for organizations. Next Generation Network offerings are differentiated by an IP and AI driven orchestration layer across network portfolio and services- Automating NetOps 2.0 through `NetBot', Cognitive network assessment through `NetAssess' and redefining collaboration user experience using Bots as Co-Worker through `Rendezvous'. Innovation is and will continue to be central to network strategy. We continue to drive technology disruptions in areas such as SDN (Sensus) and Multi-Cloud network transformation, integrating programmability to the fabric of network infrastructure, making it virtualized, automated and readily adaptable to changing workload needs and hybrid cloud ecosystem. Our positioning of `Network Service Integrator' framework is a key driver for growth, catalyzing new market penetration and global reach, adding value through partnerships, ensuring quality, faster
time to market and certified integration, ensuring an agnostic ecosystem, end-to-end.
DRYiCETM Autonomics and Orchestration: HCL DRYiCETM forms the Automation and Orchestration backbone of most of our services. With more than 40 integrated modules featuring latest autonomics technologies such as Machine Learning, Deep learning, Cognitive and Natural Language Processing, Robotic Process Automation, Predictive Analytics and Artificial Intelligence DRYiCETM enables the Enterprise IT to be agile and efficient. It brings self-service, dynamic provisioning and proactive monitoring and management at the core of data centers, enables employees and service desk agents to be more productive and tackle higher order tasks, and networks to be self-healing and optimized. With built-in service orchestration, actions can be triggered across complex processes and ecosystems to ensure that business reacts fast to changing conditions.
Enterprise Platform Services: HCL's Enterprise Platform Services (EPS) are designed to deliver comprehensive, full stack, pre-validated solutions to support adoption of digital and cloud platforms including private and public PaaS & containers, Middleware, Database, SAP. Customers use our integrated end-to-end EPS solutions to build future-ready infrastructure,
8 Management Discussion and Analysis
modernize applications and streamline operations that, in turn fuel agile, DevOps and microservices.
Business Services Management: This service is aimed at modernizing the management fabric for next-gen hybrid enterprises. It covers unified monitoring, IT automation, IT operations analytics and unified reporting. Customers use our proven frameworks such as MTaaSTM(Management Tools as a Service), MyCloud, AUTOPS (Automated Operations), and ITOPS (Analytics-based IT Operations) delivered as a hybrid SaaS (Software as a Service)-based platform for rapid value optimization.
Service Integration and Management (SIAM): HCL's framework and solution accelerators help customers target, design and build the right Service Integration and Management (SIAM) model. The framework unlocks greater supplier management synergy for applications, infrastructure and the cloud. At the core of this outcome is a process-driven service integration platform powered by HCL's Gold Blue Print (GBP) solution that modernizes the integration and orchestration of multiple service providers and outsourcing services.
Integrated Operations Services across Enterprise: HCL's Integrated Operations Services are designed for the digital end to end IT operations of Global 2000 enterprises. The service combines an agile development operations-oriented support framework, a highly elastic and self-healing infrastructure, high levels of automation, cyber security practices and a comprehensive performance management solution.
Engineering and R&D Services
HCL's Engineering and R&D Services (ERS) is the largest Indian heritage Engineering Service Provider (ESP) and collaborates with some of the most innovative and successful organizations in the world. With over four decades of experience of operating under complex multi-vendor environments and customer value chains, HCL seamlessly integrates with, and complements customers' Research and Development (R&D) activities.
We offer comprehensive engineering services and solutions in all aspects of product development and platform engineering, spanning hardware, embedded software, mechanical, Very Large Scale Integration (VLSI) design, Product Lifecycle Management (PLM), and software engineering. Our clientele are leaders across several engineering industry segments such as telecommunications, aerospace and defense, automotive, consumer electronics, industrial manufacturing, medical devices, office automation, semiconductor and Independent Software Vendors (ISVs). We successfully collaborate with innovation partners, universities, industry bodies, and manufacturing partners.
Over the past decade, HCL's engineering services have helped more than 300 organizations develop and launch marketleading products across various market segments. Today,
HCL works with 65 of the top 100 R&D spenders in the world. Empowered by a deep engineering heritage, out-of-the-box thinking, and a solid foundation of talent, processes, systems, frameworks, and tools, HCL is a preferred engineering partner for global companies with its ability to drive significant business impact and value through accelerated product launches, improved engineering efficiencies, and adoption of new and disruptive technologies.
Today, HCL is a thought leader in emerging technologies covering Internet of Things (IoT), digital platforms, product intelligence, big data analytics, accessibility, social media platforms, Artificial Reality/Virtual Reality (AR / VR), agile product development, and more. HCL encourages bold thinking and disruptive approaches needed to help customers outperform in a rapidly changing digital economy. HCL ERS engages technology enthusiasts through the CTO Straight Talk platform, a one-of-its-kind publication that features peerto-peer knowledge and thought leadership, while providing a stage for industry leaders to connect.
HCL is constantly pushing the boundaries of technology in defining new and differentiated ways of offering industrialized delivery of engineering services. One such area is the suite of solutions which packages HCL's best practices, intellectual property, and accelerated frameworks into service offerings such as HCL's Platform for acceleration of NexGen Engineering Analytics, PANGEA (Platform for acceleration of NexGen Engineering Analytics), and HCL's analytics-driven Autonomous Product Lifecycle service to name a few. These solutions speed up product development and reduce life cycle maintenance costs for customers. ERS has a strong innovation culture, resulting in IP and strategic innovations, while leveraging alliances, start-ups, and key academic research for co-creation with customers.
HCL's solutions cater to engineering needs across the product development life cycle and helps customers address the challenges of accelerated product development, improved price-to-benefit ratio, and adoption of new technologies. HCL is heavily investing in developing solutions that can help clients quickly influence the overall product ecosystem.
HCL has continued to display its leadership in terms of service capabilities and scale of operations over a wide spectrum of industries. We are recognized as a leader by analyst firms in diverse domains, including software product engineering, automotive engineering services, embedded and semiconductor engineering services, aerospace engineering, Industry 4.0 services, Product Lifecycle Management (PLM) services, mobile application & testing services and product engineering services. HCL's investments in 80+ engineering labs (environmental compliance, certification, and benchmarking), 100+ client development centers and Centers of Excellence (in niche areas such as industrial design, high-performance computing, automation, imaging, big data and analytics, etc.)
Annual Report 2018-19 9
have resulted in a complete ecosystem of comprehensive engineering services from concept to market for customer products and platforms across domains. Digital platforms need engineering rigor for development and HCL ERS has created a robust digital platform engineering business.
Digital Process Operations (Business Services)
HCL Digital Process Operations (DPO) has shifted the very grounds of operations outsourcing from cost optimization to Process-First, Technology-led Digital Operations, by adapting to the new paradigm led by digital forces. Our strategy around digital operations helps organizations redefine their traditional inverted operations pyramid to an upright threestacked digital operations pyramid focusing on three broad stacks Process Architecture, Technology Architecture and Experience Architecture. Process architecture sits in the middle stack enabling process transformation using our proprietary Three Lever BPM (Business Process Management) process consulting and orchestration platforms for digital workflows and multichannel integration. Bottom stack comprises of the technology architecture, better leveraging the underlying technology landscape enabled by autonomics. Top of the stack is the experience architecture, where domain-led knowledge workers are enabled by technology to create a digital workforce which amplifies customer experience. By leveraging these tenets, combined with our extensive domain expertise, we successfully address the challenges of the enterprises in the digital age.
HCL DPO provides technology-led digital business services to more than 100 F500/ G2000 clients across industries. These services enable clients to improve organizational processes, reduce costs, manage risk, compliance and control, provide sustained profitable growth and superior customer experience. With the state-of-the-art delivery centers across India, the US, Europe, Ireland, the UK, Latin America, and the Philippines, HCL DPO leverages its IGDM (Integrated Global Delivery Model) to provide customers with best-in-class services. The HCL DPO edge is a result of the following differentiating factors.
· Process-First, Technology-led Digital Operations framework This is a combination of the three factors listed below
o Process Architecture - Transforming Business Processes
Our proprietary 3-Lever Business Process Management (BPM) approach helps organizations reduce waste through lean implementation, define risk and controls, and identify areas requiring intelligent process automation. This is augmented by our domain-intensive repository of industry blueprints, Gold Standard Process Discovery Toolkit & proprietary
10 Management Discussion and Analysis
orchestration platforms likeToscana©, Datawave, SCORP, Impress, Alps etc. for digital workflows & multichannel integration.
o Technology Architecture - Leveraging Technology Landscape
By harnessing the power of autonomics, HCL DPO helps organizations deploy bolt-on technology point solutions like RPA, Artificial Intelligence (AI), Machine Learning (ML), Analytics, and Blockchain to drive business process digitalization. This will not only help them efficiently utilize the enterprise platform and underlying data but also maximize ROI.
Robotic process automation Our RPA solution creates an ecosystem for rapid and scalable enterprise-wide RPA implementations with low capex requirements. Our Robotic Process Automation (RPA) Centre of Excellence (CoE) powered by rich industry process blueprints coupled with RPA use case library, provides scalable plug and play toolkit for accelerated RPA journey.
Cognitive automation In continuation with our digital journey, our patented cognitive AI-led knowledge extraction solution, EXACTO has provided us an edge by creating more efficient processes across our customer's enterprise value chains. In the past few months, we have successfully demonstrated this capability by executing multiple implementations with our key customers across various industries.
Analytics HCL DPO provides expert services that address the entire data life cycle from ingestion to insight. We have executed multiple projects in this area with our key customers covering voice analytics, data analytics, text analytics and predictive analytics delivering transformational gains.
Blockchain HCL DPO provides Blockchain enabled digital processes across industries. In the past few months, we have worked on multiple Proof of Concept (PoCs) / implementations key ones being SCM (Supply Chain Management) SAP Cloud Platform & Mortgage with others in progress.
o Experience Architecture - Amplifying Customer Experience
We focus on creating the digital workforce by enabling the domain-led knowledge workers with the right technology and process architecture, which
creates a value zone to amplify customer experience. Most of our customers have taken the next step this year
Technology and process intervention streamlines towards implementing complete operating model change in
existing processes through automation and de- their organizations, with HCL D&A being called upon to guide
skilling, venturing a niche top of the pyramid stack and be the digital partner of choice to drive this change. We
to be performed by digital workforce across our have introduced and enhanced several industry/domain
various vertical and horizontal service offerings to specific capabilities this year, including
create a more predictable and sustainable next-gen enterprise.
· Innovative engagement constructs HCL DPO has demonstrated the ability to create and execute highly customized constructs - ranging from joint venture, carveout, build-operate-transfer, assisted captive, hybrid and co-sourcing models. Our collaborative and consultative engagement approach provides flexibility and helps to
· Cognitive procurement solutions for the retail industry.
· Data science model manager platform to ease and accelerate the adoption of data solutions.
· New competencies in Agile and Organization Change Management.
· Machine Learning-driven Fraud Detection solutions for the Insurance Industry.
create a win-win scenario for our clients by putting skin in
· Zero Touch KYC solutions for the Financial Services
the game and sharing in their risks.
industry.
· Industry-specific offerings - Combining our extensive domain expertise across multiple industry verticals & horizontals, and the ability to bring in the right technologies and partners, HCL DPO has constructed various service propositions that are targeted at specific business challenges faced by enterprises in the digital age.
· Collaborative models to co-create / co-innovate with clients HCL DPO is increasingly becoming strategic to its customers by co-creating through a global network of HCL co-innovation labs. We have recently set up a joint robotics development centre with one of our leading banking clients in India. The center will enable bank's digital operations by leveraging cutting-edge automation solutions leveraging AI / ML technologies.
· Integrated Model - HCL's proprietary EFaaS (Enterprise Function as a Service) model offers an on-cloud solution to reduce the cost of enterprise functions. By re-engineering business processes, standardization of application platforms & creation of shared service centres, EFaaS transforms clients' enterprise functions and reduces high onetime setup cost by leveraging per-use, per-transaction & per-subscriber payment model.
Mode 2: Next Generation Services
Digital and Analytics Services
HCL's Digital & Analytics (D&A) services continues to build on its leadership position in driving digital transformation through scale execution for our enterprise customers. This year, D&A continued its growth across all industry verticals and geographies. The growth is driven by the robust trend of enterprises across industries moving beyond digital transformation proof of concepts (POCs), and by adopting scale digital for wider impact on their customer engagement and operational efficiencies.
Scale Digital Centers
We launched the Scale Digital Center in India followed by the development of similar centers in Frisco, Texas and Redmond (USA), London and Amsterdam (Europe), and Melbourne (Australia). These centers are cross-disciplinary hubs for our teams of digital practitioners to work upon innovative solutions for our strategic customers.
Our Scale Digital Service Offering has been a true differentiator in driving digital transformation for some of our large customers. Some key client engagements are mentioned below to indicate the breadth and depth of our scale digital programs.
· We are driving large scale digital operating model change for a large, global European bank across their global locations in the Mediterranean and in Australia.
· Our Scale Digital Service Proposition continues to drive business growth at a large Telecom company in the U.S. where we are now driving Customer Experience transformation by re-designing and modernizing their Digital Payments platform.
· We are designing a composable, digital platform for a large Oil and Gas company to solve one of the more complex problems around acquisition and analysis of geological & geophysical data.
· A large restaurant chain is benefitting by re-imagining their Customer Experience value chain and are driving innovation across the spectrum to create great Customer Experiences across physical and digital channels. This required revamping the company's backbone and creating flexible and scalable digital platforms that personalize the customer experience, create new business models like curbside delivery, and create a unified experience across all channels.
Annual Report 2018-19 11
We continue to look at acquisitions to build and expand capabilities in strategic growth areas. This year, we announced the acquisition of Strong-Bridge Envision in the United States. This enhances our digital transformation consulting capabilities in digital strategy development, agile program management, business transformation and organizational change management.
Digital Partner eco-system
Our strategic partner eco-system continued to evolve and expand this year with fantastic traction and recognition from longstanding partners including Amazon Web Services (AWS), Microsoft, Salesforce (including Mulesoft), Adobe, Pega, Appian, Denodo, Tableau and others. We also deepened our relationship with the Silicon Valley ecosystem through our investment in Morado Ventures, an early stage venture fund focused on Artificial Intelligence, Machine Learning, and data technology start-ups.
2018 was also a banner year for D&A within HCL as we successfully geared up the internal organization through a focused reskilling and up skilling program to equip our practitioners with the skills necessary to participate in and drive next-gen digital transformation programs.
IoTWoRKSTM
IoTWoRKSTM, the dedicated Internet of Things (IoT) business unit of HCL Technologies, enables organizations to maximize effectiveness, and returns on their asset investments by cocreating best-in-class IoT driven solutions. These solutions
help our customers drive business transformation by creating efficient processes, new revenue streams and effective models that deliver measurable outcomes.
At HCL we believe that the transformative impact of IoT is realized by IoT-izing the dark `things', connecting the assets to a `data' platform, and then using the data to derive actionable business `insights'. This is followed by business decisions that ultimately lead to a change in enterprise's `processes and people practices'.
IoTWoRKSTM provides end-to-end IoT services for organizations across three phases, Define-Build-Run by helping organizations design enterprise IoT strategy, develop and run the IoT systems for realizing real business value.
IoT COLLABTM and Solutions Portfolio:
IoT COLLABTM is HCL's next-gen innovation space to co-create an IoT-led transformation roadmap with our customers. The dual location IoT innovation centres, located in Seattle, USA, and Noida, India are the preferred destination for businesses to arrive with a unique set of challenges and leave with a customised IoT roadmap. This co-creation happens because of the presence of a complete stakeholder ecosystem comprising of partners, hardware and software specialists, Subject Matter Experts and finance specialists.
Each roadmap is custom-created to solve a business challenge, and results in key business outcomes like increased productivity, minimized inefficiencies, creation of new revenue streams and innovative business models.
New solution launches:
HCL globally launched its Smart Clinical Trial solution which helps accelerate the discovery-to-market journey for a drug. This loT-led
solution aims to save time, effort, and capital for pharmaceutical companies by leveraging our futuristic patient engagement platform and framework.
Overall Equipment Effectiveness (OEE) Analytics
Smart Clinical Trial Solution
HCL launched OEE analytics solution in Oct `18 which gives manufacturing plants an insight into a key metric-- OEE. This solution gives the visibility of downtime analysis & enables the plant to quickly analyze the causes for variation in availability, performance, and quality. It also offers the ability to suggest corrective measures in case of a deviation from the set target using various predictive and prescriptive methods of action-driven analytics. The solution replaces the manual effort spent by our customers to track OEE using spreadsheets, relying instead on tribal knowledge.
Active Grid Management
Solution
HCL, in partnership with Indra, launched its Active Grid Management solution for the North American market, aiming to help create the next generation of distribution grids. This solution leverages loT to create situational awareness for electric distribution grids, hence helping to improve efficiency, drive revenue, and transform the way grids operate.
HCL has launched a Radio Frequency Identification (RFID)-led IT Asset Tracking and Management solution with the aim to enhance asset onboarding, transform inventory
auditing processes, and improve asset visibility through location monitoring of IT assets.
The plug and play solution harnesses the power of loT and enables enterprises to locate critical Information Technology assets in real time along with curbing potential
losses incurred due to asset theft and misplacement. By leveraging systems integration along with asset tracking technology, the solution helps enhance automate asset
security and manage workflows/processes, resulting in improved operational efficiency and productivity.
IT Asset Tracking and Management
Solution
12 Management Discussion and Analysis
HCL IoTWoRKSTM has been selected by Microsoft as an Azure IoT Elite Partner for FY'19. We are one of the 3 GSI's (Global Service Integrators) selected for this partnership category. Our sizable number of Azure IoT-based customer engagements was a testimony to our current engagement and relationship with Microsoft. The selection as an Elite partner allows us to leverage the industry-leading technologies of Azure IoT, Cloud and Security.
Cloud Native Services
As businesses realize the potential of cloud, acquiring a `Cloud State of Mind' is the top item on the agenda of every ambitious enterprise. It starts with an open mind to identify the ideal workloads for the cloud public or private while retaining the right workloads on premises or in traditional data centers.
The Cloud State of Mind
The cloud state of mind enables enterprises to view every initiative they take, every business plan they implement, every product and service they launch, and every technology investment made through the lens of cloud. This means they can go digital on a strong foundation of cloud, scale effortlessly, introduce innovation into development, be well prepared for a world of serverless computing, stay agile and adopt new business models and change the way they compete. For organizations adopting a cloud state of mind, cloud is not the end but a start of a new way of executing business objectives.
Service Capabilities
HCL Cloud Services is a part of our strategically important Mode 2 initiative, the Cloud Service works in collaboration with all HCL service lines and verticals. At this intersection of HCL capabilities, customers can accelerate innovation and create a more responsive IT organization.
Key Cloud Partnership Highlights
Microsoft Azure: HCL is an Expert Managed Services Partner (MSP) and Gold Certified Partner for Azure and amongst the fastest revenue growth partners of Microsoft Azure. The focus on this successful partnership ensures we can deliver highly complex cloud implementations without compromising the strategic vision of our customer's cloud pursuits.
HCL has been amongst the early ones to be recognized and elevated as an Azure Expert MSP. Through this distinction Microsoft recognizes the ability of HCL to manage the large and complex cloud transformation journeys for Microsoft customers.
HCL and Microsoft jointly launched Independent Software Vendor (ISV) Migration Factory at the recent Microsoft Global partner event Microsoft Inspire. This joint initiative aims at accelerating the Software as a Service (SaaS) journey for ISVs while adopting Azure as the cloud platform. Multiple
HCL Intellectual Properties and solutions from the existing portfolio of HCL were made co-sell ready on the Microsoft One Commercial Partner portal.
Amazon Web Services (AWS): HCL is a premier AWS consulting partner, which makes us one of the top APN (AWS Partner Network) consulting partners providing technical solutions spanning design, architect, build, migrate and manage workloads and applications on AWS. HCL was recertified by AWS as a Managed Services Partner. This stellar achievement validates our capabilities in the AWS cloud infrastructure and application migration space. HCL was among the early partners to enroll in the AWS Solution Provider Program and is among the early adopters of Enterprise Contract for AWS Marketplace.
Pivotal: HCL is a Strategic Global System Integrator (GSI) partner of Pivotal offering a full spectrum of Pivotal services. Enterprises use these services to drive their innovation programs and accelerate their digital transformation journey. The partnership aims to help enterprises create a new generation of cloud-native applications for Pivotal Cloud Foundry® (PCF), the cloud-native application platform, running on advanced digital infrastructure helping enterprises to accelerate business transformation. Along with Pivotal offerings HCL aimed at enabling the workforce with immersive training experience to learn PCF, micro services architectures, and continuous integration and delivery practices.
Google Cloud Platform (GCP): HCL is a recognized as a Google Premier Partner across various product lines. HCL enrolled into the Google Account Acceleration Program to accelerate account interlock for target accounts and drive joint Google and HCL initiatives.
IBM: The HCL partnership with IBM is designed to help advance hybrid journeys of organizations worldwide. HCL will offer replatforming and refactoring services that enable enterprises to build and migrate applications to IBM Cloud Private from within the company's HCL Cloud Native Labs. The services are available now in HCL's Cloud Native Labs in London and will be subsequently rolled out in New York and Noida later this year. HCL and IBM will also assist clients in building joint solutions that include IBM AI capabilities.
SaaS Partnerships
Enterprise clients are looking to leveraging out of the box SaaS offerings in areas like HRM, CRM and Service management that can provide agility with stability and move the spend from capex to opex. In this context, our strategy is to partner with select service providers whose offerings can co-exist and be integrated to the rest of the enterprise platforms through microservices / API driven architecture. Our growth strategy lies in our continued investments on SaaS partnerships in areas such as HRM, CRM, service management, subscription management, product configuration management etc. Each of
Annual Report 2018-19 13
these areas favors good growth in the foreseeable future for We also help our customers develop an evolving posture
HCL.
across all domains of security including
HCL Cloud Native Labs: The HCL Cloud Native Labs enable Cloud Native transformation by accelerating adoption. The HCL Cloud Native Labs are the only set of facilities in the world that can demonstrate a global hybrid, multi-region, production environment based on VMware, DELL and Pivotal. The labs will also provide immersive training to help large enterprises undertake the cultural transformation necessary to successfully adopt modern cloud-native approaches to software development.
Cybersecurity & GRC
In today's dynamic business landscape, it is important for organizations to focus on protecting their vital Information Technology (IT) resources, whilst strengthening internal control and corporate governance. To do this, companies require an effective mechanism that will help them achieve security and trust in their business transactions driven by IT systems, while meeting regulatory compliance and managing stakeholder demand. With our dynamic cybersecurity framework, firms can integrate and orchestrate key processes, increase reliability and reputation, and capture opportunities while mitigating uncertainty.
Cybersecurity & Governance, Risk and Compliance (GRC), which is an integral part of HCL's Mode 2 strategy helps organizations embrace a dynamic cybersecurity posture and mitigate uncertainty by neutralizing threats. The rapid changes in technology have exposed organizations to an increased threat of security breaches. An enterprise's need for Cybersecurity & GRC, and an effective business continuity capability have become even more critical with the advent of new age technologies such as cloud, digital and analytics, Internet of Things (IoT) etc. Organizations need an experienced and mature cybersecurity partner who drives business growth while helping ensure compliance with business and regulatory requirements.
The HCL Cybersecurity & GRC business helps organizations manage the industry shifts that are changing the way businesses operate. We provide the full spectrum of services required to meet the threats and vulnerabilities across all verticals and protect the 360-degree landscape of a customer across IT and cyber-connected systems. Our Dynamic Cybersecurity framework helps our customers move from a `static' to a `dynamic' posture to deal with an ever-escalating threat landscape, offering a full spectrum of services covering:
Strategy and architecture Transformation and integration Managed services
Infrastructure and cloud security Application security Identity and access management Governance, risk, and compliance Data security Disaster recovery and business continuity planning
With over 3,500 dedicated security professionals, 6 Cybersecurity Fusion Centers (CSFC) spread across the globe which have cognitive and global threat intelligence built into them, and 40+ global delivery locations, HCL's Cybersecurity and GRC Services protect some of the world's largest companies across industry verticals and geographies. From strategy, architecture, and consulting services to system integration and managed security services, HCL as a partner can help clients build a future-ready and secure enterprise.
Mode 3: Products and Platforms
Our products and platforms strategy involve a combination of organic and inorganic IPs, along with partnership led innovations. We continue to see client needs for product and platforms that automate operations & drive agility, solve business challenges end to end through flexible investment models, create value out of data and protect technology investments. HCL continues to look out for opportunities to grow this portfolio to create a complete suite of offerings in the chosen areas.
The large-scale deployments of these products provide us with a great opportunity to reach and serve thousands of global enterprises across a wide range of industries and markets. Products and Platforms continues connecting the dots between the existing strengths while looking beyond tomorrow and aligning with the trends shaping the future. We are building a world-class software products business, committed to bringing speed, insights, and innovations to create enduring value for our customers. As mentioned earlier, we have three broad segments in Mode 3 HCL Software, DRYiCE and Industry Platforms. The details are mentioned below.
HCL Software
This critical part of our Mode 3 offerings has evolved through our IP Partnerships, acquisitions and subsequent organic investments. Our software offerings are organized in the following structure
Data Data platforms, data integration and data analytics.
Mainframes Application modernization and mainframe tools.
14 Management Discussion and Analysis
DevOps Development operations and security tools. Actian Hybrid Data Platform
Automation Workload automation and edge management.
Marketing & Commerce Platforms that support marketing campaigns and eCommerce activities
Collaboration Collaboration workflow and productivity applications.
The software products in scope represent a total addressable market of more than $50 billion and include:
Appscan for secure application development, BigFix for secure device management, Unica (on premise) for marketing automation, Commerce (on premise) for omnichannel e-commerce, Portal (on premise) for digital experience, Notes and Domino for e-mail and low-code rapid
application development, Connections for workstream collaboration, and Actian for Hybrid data management
These platforms embrace the real-world complexity of multimode IT that ranges from mainframe to the cloud and everything in between. We believe in working with partners, creating highvalue business models that integrate software and services, and finding new ways to innovate (big and small) to delight our customers.
We are intensely customer-focused in our product roadmaps, lab advocacy, transparent development processes, highvelocity releases, and consultative field operations teams. Since September 2016, we have produced more than 340 partner releases and over 90 HCL releases. Each of these releases is essentially a response to the strong demand we have been seeing from our clients who are active users of these platforms. Here are some of the major releases:
UrbanCode Deploy v7.0 (major release after five years)
Unica v11.0 (major release after two years) Collaboration Suite v10 (major release after five years) Test Suite v9.x (Eight major releases since September
2016) Mainframe: PCOMM v13, HOD v13, HATS v9.6, HACP
EE v1.0, FA v14.1, FM v14.1, CICS IA v5.5, CICS DA v5.3 LEAP v9.0 in (major release after four years)
New (v1.0) Releases
Design Room Live! UrbanCode Velocity
During the financial year, HCL acquired Palo Alto based Actian, a leading vendor of hybrid data management and analytics products. Actian will play a critical role in enhancing HCL's Mode 3 offerings in data management products and platforms. Actian's products when combined with HCL's Mode 2 solution offerings like Cloud Native, Digital and Analytics, and DRYiCETM, will be a powerful proposition to harness the power of hybrid data.
DRYiCE
DRYiCE is the organic IP software unit of HCL Technologies, which focuses on building industry-leading software products to simplify and transform IT and business operations leveraging AI and cloud. DRYiCE's mission is to become the Enterprise AI Foundation. DRYiCE software products act as a key differentiator by bringing in automation for Mode 1 and 2 services. The DRYiCE portfolio focuses on three core areas AIOPS, XaaS Service Orchestration, and Business Flow Intelligence. DRYiCE is quickly becoming recognized as the AI foundation of our clients' enterprise solutions and offers end-toend automation across IT services and business operations. A brief description of the DRYiCE products and platforms follows:
AIOPS Portfolio:
1. DRYiCE iAutomate is an automated remediation engine that brings in the power of AI for smart runbook automation in tandem with orchestration engines.
2. DRYiCE LUCY is an AI-powered cognitive assistant that automates industry-wide use cases through smart conversations.
3. DRYiCE MyCloud is a proactive multi-cloud lifecycle management product that combines data exploration and data visualization to enable effective analysis and actionable insights for IaaS/PaaS/SaaS.
4. DRYiCE MyXalytics is an intelligent reporting and AI-based predictive analytics solution that provides a custom-tailored view of operations.
5. DRYiCE MTaaS is a private cloud-based enterprise management platform for delivery of IT management tools.
6. DRYiCE iAssure is an integrated AI-led service assurance platform, with the vision of simplifying and transforming enterprise IT operations.
XaaS Service Orchestration Portfolio:
1. DRYiCE SX is a cloud-native catalog aggregation and fulfillment orchestration platform for various services from multiple suppliers in an e-commerce style service marketplace.
Annual Report 2018-19 15
2. DRYiCE XSM is a solution designed to manage the lifecycle of XaaS ("Anything" as a Service) delivery models.
3. DRYiCE GBP (Gold Blueprint) is the process ecosystem of HCL best practice processes; designed, used, and maintained for SIAM and ITSM with preconfigured best practices.
4. DRYiCE ROAR is a resource unit billing and reconciliation engine, which allows enterprises and service providers to reconcile across different billing and charging units in a multi-provider ecosystem.
Business Flow Monitoring Product
1. DRYiCE iControl is an end-to-end intelligent and predictive Business Process Flow monitoring solution, giving real-time performance and impact.
Industry Platforms
Over the last few years, HCL has leveraged its core strength in product engineering services to acquire or build Intellectual properties in various segments like Aerospace, Finance, Healthcare and Telecom. We continue to see tremendous opportunities to invest and partner with the clients in this arena as we see rapid growth in technologies like 5G, IOT and AR/ VR. We are pursuing innovative business models that create variable pricing models that are well aligned with our client interests. This should help us to address our client business problems without the need to risk significant costs upfront.
In summary, we continue to execute our Mode 1-2-3 strategy very well during this financial year as it is visible both in the business growth and the positive response from our clients and industry analysts.
List of abbreviations
AI Artificial Intelligence AI Ops Artificial Intelligence Driven Technology
Operations APN AWS Partner Network AR Augmented Reality AWS Amazon Web Service BPM Business Process Management COPA Cognitive Orchestrated Process Automation CPG Consumer Packaged Goods CTO Chief Technology Officer DC Data Center D&A Digital and Analytics DPO Digital Business Operations DPrizm Digital Prizm
EAM Enterprise Asset Management EFaaS Enterprise Function as a Service EPS Enterprise Platform Services ERP Enterprise Resource Planning ERS Engineering and R&D Services ESP Engineering Service Provider GBP Gold Blue Print GCP Google Cloud Platform GRC Governance Risk and Compliance GSI Global Service Integrator HCLF HCL Foundation IaaS - Infrastructure as a Service ICDA Integrated Community Development Approach IMS Infrastructure Management Service IoT Internet of Things IP Intellectual Property ISV Independent Software Vendor IT Information Technology ITSM Information Technology Services Management ML Machine Learning M&A Mergers and Acquisitions MSP Managed Services Partner NGO Non Governmental Organizations PaaS - Platform as a Service PANGEA Platform for Acceleration of NexGen
Engineering Analytics PLM Product Lifecycle Management PoC Proof of Concept R&D Research and Development R&R Rewards and Recognition RBtC Relationships Beyond the Contract RFP Request for Proposal RPA Robotic Process Automation SaaS - Software as a Service SCP SAP Cloud Platform SCM Supply Chain Management SDN Software Defined Networks SIAM Service Integration and Management TTT Train The Teacher UPSRLM - Uttar Pradesh State Rural Livelihood Mission VLSI Very Large-Scale Integration VMs Virtual Machines VR Virtual Reality XaaS Anything as a Service
16 Management Discussion and Analysis
Talent Update
1. Talent composition
As we close out another successful year, HCL Technologies continues to grow globally reflected in our increased employee strength of 1,37,965 to support the business strategy of Mode 1-2-3.
Our strategy and strong commitment to talent localization for more than a decade confers us a competitive advantage in a tightening regulatory environment with respect to workforce mobility. Some of the key milestones achieved during the financial year include
We celebrated 30 years of our presence in the United States of America.
We celebrated 10 years of presence in the NORDICS during the financial year.
In the United States alone, we now have approximately 17,000 employees with 67% localization.
We established a new delivery center in Adelaide, Australia.
Our focus on tapping the unique advantages of smaller cities in India continues. These cities enable higher operational resilience, stability and scalability. The employee strength in our new vista locations of Madurai, Lucknow, Nagpur, Vijayawada and Coimbatore is up nearly 60% from last year. Our employee strength crossed into 5 digits and is currently at 10,500+ employees.
We strive to enhance the employee experience and equip our workforce with tools and platforms to help accelerate their professional growth in the organization. Over the past year, there has been organizational wide increase of focus towards these common goals.
In line with HCL's core belief of employee centricity, we place significant emphasis on the respect and dignity of every employee. HCL is committed to providing its employees a conducive work environment that is free from any kind of discrimination or harassment. All our policies, programs, processes and practices aim at providing an equitable, safe and inclusive work environment, and to ensure the same, we have a multi-layered grievance redressal framework to enable prompt and fair redressal in accordance to the policies of the organization.
2. Talent Acquisition & Development
Through "Simplify HR", a suite of tools has been revamped with simplified functionality to provide an improved user experience. These tools have taken automation to the next level, by leveraging the digital technologies across the entire employee life cycle including talent acquisition, talent integration, talent assessment and employee travel processes. Virtual assistance
and "botification" have been enabled across multiple tools to enhance the quality and experience of work place interactions.
Talent Acquisition
Given our hiring in tens of thousands across the globe, we leveraged artificial intelligence & data science to hire the right talent at the right time. We deployed "Intelligent Neural Network" engine that searches through the database of a million+ candidate records to power our talent acquisition with prescriptive insights.
With this level of automation, reliance on digital platforms and sourcing intelligence, our dependence on partners to find talent for us in the Indian market is possibly the lowest among the top players in the industry. This strategy of achieving sourcing independence for regular and full-time employees makes us more resilient and self-sufficient while at the same time allowing us to open these channels when required.
Talent Development & Career Progression
Talent Development offers integrated and comprehensive learning ecosystem focusing on development of HCL ideapreneurs in alignment to HCL's Mode 1-2-3 strategy. It offers a robust and nurturing learning framework to empower HCLites with the relevant skills in the digital economy.
In the last financial year, we used demand, fulfilment and learning analytics to create a governance framework that constantly align the demand and learning systems to identify focused skills for the next 2 years and build them at scale. Structured Learning journeys have been curated and learning solutions have been designed in partnership with globally benchmarked learning partners offering world class content. An entire gamut of Leadership and Behavioral learning journeys have also been customized, covering all aspects of defined competencies.
These learning programs act as touch-points during employee life-cycle, which positively impacts current performance and productivity in their respective roles and prepares them to be future ready.
Our training approach at client and business line level has helped our employees to proactively identify training needs and deepen their skills in new technologies.
Last year our employees invested more than three million hours in training to enhance and learn new skills resulting in training of a significant part of our employee base
More than 30,000+ unique employees were trained on digital skills
Our prescriptive career recommendation platform, leveraging Artificial Intelligence and Big Data achieved further traction in this financial year. 9,000 HCLites progressed in their career
Annual Report 2018-19 17
journeys during the financial year and thereby taking the launch to date count to 17,000.
3. Diversity & Inclusion
As an organization, we believe diversity inspires creative thinking and leads to sustained innovation within the workplace. HCL prides itself on being an organization with an open, transparent, and inclusive culture. Our focus on creating an inclusive environment for employees with diverse backgrounds combined with concerted efforts from our leadership and employees has enabled the diversity ratio to improve at all levels. Our various programs on networking, advocacy, and professional development are helping to build an inclusive workforce which goes beyond demographic differences to include gender, nationality, culture, ethnicity, age, and the differing abilities of individuals.
HCL's Diversity and Inclusion strategy focuses on Talent Attraction, Talent Growth and Talent Retention. These 3 strategies work in tandem to ensure a unified experience in promoting gender diversity, cultural diversity and inclusivity across the enterprise
Our leadership commitment ensures that senior leaders has certain number of women direct reports. The focused efforts by leaders have enabled to achieve this goal to a large extent. We now have ~40% more women in senior leadership roles directly reporting to our corporate leaders.
We ensure fair representation of diverse candidates in the hiring process to attract top talent and consider the cognitive diversity while hiring a candidate for the position.
To position HCL as Employer of Choice, we leverage internal and external social media channels for maximum impact. Our employee friendly policies, processes and enabling environment attracts top & diverse pool of talent across the globe and industry. With representation of 140 nationalities and operation in 44 countries, we are truly a global company.
We have recently set up a Women's Leadership Centre in North Carolina, US, that would offer STEM training, leadership development, and mentorship opportunities to women. With the aim of enabling strong career development for women, HCL has launched focused programs for women employees at all levels with a special focus on increasing the representation of women leaders in the leadership.
Stepping Stones is the program for mid-level women managers to pace up their growth to leadership positions. The women have opportunity to connect with leadership and experience learning from globally acclaimed vendors.
ASCEND Program is for women in functional roles and focusses on career progression towards their aspired role. This program has blended learning approach
where key learning element include mentoring by senior leaders, SME guided peer coaching, Leadership connect session, Virtual learning enabled by LinkedIn and Harvard. This program has created very evident impact in terms of retention and role change for women leaders who completed the program.
PRELUDE is relatively a new program launched with an objective to tap in to existing open positions and mapping with next level role of women leaders, specifically in technical domains. This program has a blended learning approach which focusses on equipping women leaders with tools and skills to perform their next level role effectively.
Senior Hire Integration is another feather in women leadership development bouquet. This program helps integration & assimilation of senior women hires into HCL Ecosystem through upward and lateral coaching by senior leaders, Peer Buddies and Direct Reports.
Networking & Advocacy: iMotivate, Feminspiration, Women Connect, BlogHer are the platform wherein successful women leaders address the aspiring young leaders, help HCLites gain insight into successful leadership as well as understand perspectives on gender matters. We have enabled more than 150 such platforms
iBelieve is a program for women who wish to RESTART careers in IT. Eligible candidates enrolling into this program gets skilled for job opportunities in HCL and post the successful completion of the training, they are employed with HCL. Through iBelieve we offer customized skilling pathways as per the candidate's previous experience and education qualification. The program has received overwhelming response and has helped us to hire talented and motivated women employees, while demonstrating corporate social responsibility.
Talent Retention
We are making conscious efforts to create an environment which is more amenable and friendly to our employees. We are committed to create a culture that considers their special needs, and an environment that allows them to grow and thrive as professionals and while not hampering their work life balance. Some of our key initiatives include:
Facilitating work life balance and flexible work arrangement policies like Telecommute and Day Care.
Quarterly lunch meet of Senior Women leaders with Board Members.
Pre & Post maternity counselling for managers and new mothers.
18 Management Discussion and Analysis
Workshop focusing on Inclusion & Unconscious Biases, Inclusion Assessments & Labs.
Women connect group in each geo to promote gender diversity.
4. Recognition of HCL Culture & Engagement Practices
To reinforce alignment of core beliefs, and actions, HCL Technologies continues to transform its policies, processes and practices. This has further enabled and empowered the employees, a fact that has been well recognized by various industry forums and leading associations.
HCL was recognized as the Top Employer in the United Kingdom for the thirteenth consecutive year in recognition of its best-in-class employee engagement and people practices
o Since 2007, HCL has been consistently recognized among UK's best employers. HCL's unique IdeapreneurshipTM culture fosters grass-root innovation, providing an opportunity to 135,000+ ideapreneurs to ideate, collaborate and create everyday innovative ideas to solve customer's business problems. It is based on the fundamental belief of inverting the organizational pyramid and engaging, enabling & empowering the front-line employees who are best placed to appreciate & understand the customers' business and shape the roadmap to enhance the `value zone' created in every interaction they have
The people capital index (PCI) study 2019 announced HCL in the top 50 companies for developing their people capital organized by Jombay. The PCI is inspired by the World Economic Forum's Human Capital Index. PCI is an indicator of employee and market perception on how well the organization is developing their people capital.
At the Brandon Hall group in the USA, HCL was recognized for its practice that sets new benchmarks across industry segment. The details of the recognition are captured below:
o Silver award for the Best advance in leadership development for our flagship leadership development program Top Gun. Top Gun program helps to build talent pipeline for Leadership roles & critical positions by identifying talent gaps proactively including future business investments.
o Silver award for the Best advance in leadership development strategy for our leadership and professional development strategy which helps to bridge the gap between business strategy and business performance.
o Silver award for the Best inclusion & Diversity strategy where we showcased our workplace strategy for inclusion and diversity which supports HCL vision and create positive organizational outcomes.
o Gold award for the coaching & mentoring program. HCL has outstanding mentoring & knowledge sharing programs at an enterprise level.
o Silver award for Best Advance in Employee Engagement programmes showcasing our engagement practices globally to measure, manage, and improve employee engagement.
o Silver award for Best Advance in Career management & succession planning at workplace.
o Bronze award in best in wellness & benefits program where we showcased our wellness & well being initiatives.
5. Compliance at HCL
At HCL, compliance is core to its activities and the company employs multiple mechanisms including periodic internal/ external audits and a constant review of its policies in response to changing political/legal climate in the countries that it operates in. A strong governance framework driven by a centralised compliance team ensures that the risk of noncompliance is minimized.
Corporate Social Responsibility - HCL Foundation
HCL Foundation (HCLF), the CSR arm of HCL Technologies, continues to contribute towards national and international development goals through long term sustainable programs. The foundation aims to alleviate poverty and achieve inclusive growth and development in active engagement with the communities. Its vision of "creating a source code for socioeconomic development," is materialized through its flagship programs - HCL Samuday, HCL Grant, HCL Uday and Power of 1. Through concentrated efforts under its key flagship programs, HCL Foundation has been able to reach out to people who were living in extreme poverty ridden conditions, in rural and urban areas.
KEY HIGHLIGHTS 2018-19
HCL Samuday: HCL Samuday has been working towards upliftment of rural community with a reach of 6 lakhs people residing across 765 villages of Uttar Pradesh. The program is bringing about all-round development in agriculture, education, infrastructure, health, livelihood, and WASH, in the target villages. Over 20,000 farmers have profited from various interventions under agriculture; Nutritional food security attained by 2,500+ households; around 13,000 children in Class 1 & 2 are receiving ICT-based
Annual Report 2018-19 19
education in 300 govt. primary schools; 18,500+ neoliterates and 2,000+ women are learning to become literate; 40,480+ patients have been treated through Mobile Health Clinics, 950 children with severe acute malnutrition treated and over 4,700 deliveries facilitated through Institutional Delivery points; around 424 kWp of solar energy infrastructure installed, and 125 Govt. Schools supported through rooftop solar installation; over more than 9,500 women facilitated for financial linkages and economically empowered and 18,000+ households have improved sources of income through various agri-allied and entrepreneurial activities; 142 villages made Open Defecation Free. 32,000+ households practicing safe sanitation with 41,000+ individuals impacted by behavior change activities related to practice safe sanitation.
HCL Grant: The HCL Grant aims to achieve sustainable rural development by supporting NGOs doing path-breaking work in India in thematic categories of Environment, Education and Health. Wildlife Trust of India (Environment), She Hope Society for Women Entrepreneurs (Health) and Srijan Foundation (Education) are the three NGOs that received ` 5 crore (US$0.71 Million each) in the 4th edition of HCL Grant. The other finalists received ` 25 Lakhs (US$0.04 Million) each. So far, the HCL Grant has already committed ` 51.5 crore (~US$7.36 Million) towards high impact projects. Through this commitment, the HCL Grant supported projects aim to cover 10,17,033 people in 7,577 villages in 43 districts across 15 states of India, through 16 HCL Grant NGO Partners. 4,64,088 lives in most remote rural areas have already been impacted and 12,000 hectares of common land & forest land brought under community governance, through these projects, operational in the states of Andhra Pradesh, Bihar, Gujarat, Jammu & Kashmir, Jharkhand, Karnataka, Madhya Pradesh, Maharashtra, Meghalaya, Nagaland, Odisha, Rajasthan, Tamil Nadu, Uttar Pradesh & West Bengal.
Power of One: Under the `Power of One' program, 36,517 employees, on an average, continued to donate INR 1/2/5 per day towards the social and economic upliftment of vulnerable communities. In 2018, HCL Foundation supported over 172 academically bright students from low income families across India with education scholarships, and 30 students received sports scholarships (in addition to the existing 21 sports scholars). This initiative is exclusively funded by `Power of One' donations by HCLites. In FY 2018-19, 14,610 volunteers engaged in Po1 community service activities, clocking 1,08,093 hours.
20 Management Discussion and Analysis
Power of One Volunteer Rewards and Recognition (R&R) Program Over 13, 000 HCLites across 8 locations have been recognized and felicitated through a unique R&R program across HCL Foundation locations in Noida, Bangalore, Chennai, Madurai and Hyderabad in December-January.
HCL Uday: With a vision of clean, green healthy communities, the HCL Foundation is working to break the cycle of urban poverty through its integrated urban development program Uday. The program reached out to 3,48,929 people across 11 cities of India where HCL has a presence through interventions across thematic areas of Education, Health, Livelihood and Environment using an Integrated Community Development Approach (ICDA). In FY 2018-19, 1,16,011 people have benefited through the education initiatives of HCL Foundation that focus on early childhood care and development of children below 6 years, bridge and remediation support to out of school children, comprehensive technology-based quality enhancement of government schools, adult literacy and life skill based gender transformative programs for youth and adolescents. Through skilling initiatives, 19,195 youth were trained in various trades like mechanical, ITES/CRM, Fashion designing and nursing. 1,55,442 people benefited through the health, nutrition and WASH interventions that include monthly health camps, weekly checkups, community healthcare programs, mass sanitation and cleanliness drives. Additionally, 46,520 trees were planted in schools, residential spaces, public spaces and at the Sorkha Uday Upvan. 73,445 people were supported in the areas affected by floods in Assam, Kerala and Gaja cyclone in TN.
Community Initiatives beyond India: We also reached out to our local communities in different geographies:
o The United States: HCLA is supporting SOS Children's Villages which is reaching out to 290,000 vulnerable children and families by providing medical and nutrition services, educational programs (STEM programming) and emergency relief efforts. HCLA's sponsorship of Code the Dream, an initiative by Uniting NC, is supporting free coding education classes for 40 youth from socially and economically compromised backgrounds. NPower Technologies (NGO) promotion of employability by developing the skills of youth and war veterans via trainings, internships and job placements. In addition, HCLites also contributed to the local community by taking part in Autism & Breast Cancer Awareness Walks,
Food Packaging events, building houses through Habitat for Humanity, blood donation drives as well as food and toy drives.
o The United Kingdom: HCL UK has been working with The Prince's Trust for the past 5 years by helping disadvantaged young people to get trained in technology, life skills and career skills. In 2018, 54 young people were trained and 12 customer organizations engaged through Get Started with Technology series. World of Work Day event helped 20 young people get exposure into the world of technology, thus helping them secure jobs. HCLites raised over GBP 2,000 through Palace to Palace and GBP 4,060 through Future Steps both in support of disadvantaged youth.
o South Africa: HCL has invested over R 1.3M to promote a high quality technology-enabled environment for students at the University of Johannesburg (UJ), and inaugurated an Electrical Engineering Computer Lab, to which it has donated 64 computers. HCL is also supporting bursaries to the tune of R 780000 to 15 students studying Computer Science. HCL is supporting Nelson Mandela Foundation by sponsoring the Mandela Day Library Project as part of Literacy program in local schools.
HCL Foundation Academy - As part of its outreach, HCLFA and IIM Bangalore-CCGC are hosting a series of CSR and SDG Roundtables, Dialogues and Conversations, with relevant stakeholders. The Roundtable Series 1: Role of Responsible Business for achieving SDGs with focus on "Livelihood Enhancement" was held at the Management Development Centre at IIM Bangalore in March in the presence of NGOs & various stakeholders working in the development sector. The first such initiative explores how corporates can align their CSR initiatives with SDGs in the area of livelihood and entrepreneurship.
Award - HCLF recognised as Top 10 Responsible Businesses in India at Social and Business Enterprise Responsible Awards 2018 (SABERA). Ms. Nidhi Pundhir, Director HCL Foundation, was felicitated under the `101 Most Impactful CSR Leaders' Talent Listing by World CSR Day in February 2019.
Risk Management
With the vision to integrate risk management with the overall strategic and operational practices, HCL has established an Enterprise Risk Management Policy and Framework, as a comprehensive set of components that provide the foundations and organizational arrangements for designing,
implementing, monitoring, reviewing and continually improving risk management throughout the organization. The design of the HCL's ERM framework is based on the internationally recognized standard "Enterprise Risk Management Integrating with Strategy and Performance" (COSO ERM Framework 2017), developed by the Treadway Commission. This framework follows a "top-down" system, where objectives are to distill insights and provide clarity on the KEY RISKS shaping company performance, support risk-informed decisions at the Board of Directors, Functional Directors and Executive Director levels, ensure a risk dialogue among the management team, and enable proper risk oversight by the Board.
1. Technology Adoption and Consumption Risk
Risk
IT services are getting aligned more towards business outcomes and digital business-enablement, as enterprises are changing through digital business transformation, which includes connected platforms and new industry revenue streams.
Increased adoption of cloud/SaaS products through widespread adoption of hardware virtualization, Service oriented architecture, and autonomic and utility computing has led to growth in cloud computing. The increased adoption of cloud allows to have technology solutions up and running faster, with improved manageability and less maintenance. SaaS (Software as a Service), in which the application serves multiple businesses and users, has resulted in changes in the way software is licensed and services are delivered.
Additionally, risk management has become central to technology planning and implementation as stakeholders have become much more concerned about risk. Technology product and service providers will have to demonstrate to their clients about a holistic, coordinated, and integrated process to address these concerns and manage risk throughout the organization.
HCL Strategy
Among the top IT service providers, HCL has a unique proposition that encompasses a combination of Intellectual Properties and comprehensive integrated services portfolio as part of its Mode 1-2-3 strategy. This strategy has been proven successful in this financial year through strategic large wins and record bookings through the year more than once.
HCL helps global enterprises re-imagine and transform their businesses through digital technology transformation. Through Mode 1, HCL delivers core services in the areas of applications, infrastructure, BPO, and Engineering & R&D, leveraging DRYiCE autonomics and orchestration to transform clients' business and IT landscapes, making them "lean" and "agile". Mode 2 focuses on the experience-centric and outcome-oriented integrated offerings of Digital & Analytics,
Annual Report 2018-19 21
IoTWoRKSTM, Cloud Native Services and Cyber-security & GRC services. Finally, through Mode 3, HCL continues to explore and enter into innovative IP-based partnerships, targeting specific next-generation opportunities.
In case of cloud computing, HCL has picked out the trend of hybrid cloud earlier than most in the industry. During the year, we saw market validation of our early call with enterprises moving towards a flexible model where the workload will remain well distributed between on premises, private cloud and public cloud. Clients will take advantage of this deployment model depending on the business requirements of each application. This trend augurs well for our businesses as we have clear offerings across our Mode 1-2-3 including Infrastructure Services, Cloud Native and Data management platforms to address client requirements in every scenario.
Going forward, HCL will focus on increasing our digital innovation pace and scale through a variety of initiatives that support client digital transformation. We continue to believe there is a tremendous opportunity to create new propositions with the emergence of XaaS, Blockchain, AR, AI, human digital interfaces etc. If we look beyond 2030 through our HCL 2030 platform, the technology spend of Global 2000 enterprises as a percentage of revenue would increase significantly from the low single digits today to mid to high single digits. Service providers with the most comprehensive and rapidly evolving IP led offerings who can solve client's business problems would gain the most as this transformation continues through the entire `20s.
In addition to HCL's comprehensive service offerings, the company is committed to ensuring that the risks associated with expansion and digital transformation are addressed and treated through an enterprise-wide approach to risk management, enabling the organisation to consider the potential impact of all types of risks on all processes, activities, stakeholders, products and services.
2. Political and Economic Risk
Risk
The company derives ~60% of its revenues from America and ~25% from Europe. If the economy in Americas or Europe continues to be volatile or deteriorate, this can have adverse impact on the discretionary spend by our customers in these countries.
In last few years, several countries, particularly United States of America have been discouraging outsourcing of services through various protectionary measures like restricting free mobility of technical work staff etc. Such practices may cause adverse impact on the revenues of the Company or may result in higher costs.
22 Management Discussion and Analysis
HCL Strategy
HCL has been expanding its business across various countries to minimize dependence on a particular country for service delivery. HCL has also implemented strategy of hiring local talent to avoid adverse impact on business due to various restrictions on free mobility of technical staff. Over the last decade or two, HCL has been leading localization of work force through a variety of measures including diversity programs and fresher hiring. The 30-year celebrations in US is a visible demonstration of this in this financial year. We continue to believe in the most flexible work force model of onsite, onshore, near shore and offshore not only to address these concerns but more importantly to get the best people to solve client business challenges.
3. Regulatory Compliance Risk
Risk
As HCL is operating in several countries and is continuously adding new geographies, there is an increased risk of noncompliance with regulatory requirements that are relevant to its business.
HCL Strategy
HCL has put in place a comprehensive global regulatory compliance framework with defined process owners for various compliance related activities relevant to each function within HCL. To strengthen this further, quarterly compliance certificate are presented to the Board of Directors by the respective functions with responsibility for such compliances. These certifications are audited periodically by HCL's internal audit team and by external law firms, before reviewed with the Board. The global regulatory compliance function helps in creating awareness around the regulatory framework, and helps each team focus on various local compliance - related aspects being faced by business entities in respective countries.
In addition, HCL has established a comprehensive Risk & Compliance organization that provides global analysis, assessment, policy, and governance for risks related to information security, privacy, business continuity, third party engagements and operational activities. HCL's compliance program is not only designed to avoid violation of laws and regulations, but also to protect the Company's reputation, employees, and customers. Program effectiveness is periodically reviewed and audited by HCL's internal audit team and reported to the audit committee.
4. Business Continuity Risk
Risk
With the technological, geopolitical, societal, economic, and environmental risks all coming together to create an intrinsically complex and fast-changing global risk landscape, our reputation
as a 21st Century Enterprise is often measured by our resilience to threats, and how efficiently we respond to disruptive events. HCL needs to adapt and ensure the sustainability of its continuity planning by linking it to operational resiliency across key clients, delivery locations, and core enabling functions.
HCL Strategy
An effective Business Continuity and Resilience program is a key risk management strategy for HCL. The firm has revamped its Business Continuity Management (BCM) framework to ensure that it meets safety, continuity, and recovery best practices for employees, assets, and business services in the event of a disruption. In the last fiscal year, HCL has been certified for ISO 22301:2012, which demonstrates our alignment to global standards in our path to improve the resiliency posture of the organization. The HCL BCM framework incorporates emergency response, crisis management, disaster recovery, and business continuity, and is designed to adapt and respond to the rapidly changing global environment.
5. Information and Cyber Security Risk
Risk
As cyber security threats continue to increase, becoming more severe and widespread, globalized risk of compromise to confidentiality, integrity, and availability of HCL corporate and client data has the potential to significantly impact HCL's success, sustainability, and reputation in the industry.
HCL Strategy
HCL continues to improve and evolve its Cyber and Information security posture with respect to protecting our own and our clients' technology and data. HCL has rolled out a comprehensive Information Security and Cyber Security program across the global enterprise, which helps reduce cyber threat exposure by proactively detecting threats, preventing attacks, and identifying, responding, and recovering critical information infrastructure. Cybersecurity incidents are appropriately investigated with time bound resolution and being tracked and reviewed by senior management at regular intervals. The program also ensures that HCL employees are provided with continuous training to increase awareness regarding cybersecurity threats and mitigation. Additionally, the Information Security and Cyber Security teams work continuously with other Risk & Compliance domains and corporate functions, to ensure there are strong synergies between groups in the event of an incident that impacts multiple functions.
coupled with the dynamic and stringent regulatory landscape, presents an increased risk of non-compliance with privacy and data protection laws and regulations. This further creates a risk of damage to brand reputation and relationships between HCL and its customers. The European General Data Protection Regulation (GDPR) along with a multitude of new regulations in the Americas and APAC regions, require a robust privacy and data protection program to enable HCL to demonstrate compliance to both clients and regulators. Several countries have begun imposing stringent regulatory requirements that affect the way in which HCL handles personal data across those jurisdictions notably, China, the Philippines, Singapore, Argentina and Brazil, among others. The landscape continues to evolve, and many more regulatory developments are expected in the coming year.
HCL Strategy
HCL has created an enterprise wide Privacy & Data Protection Framework which includes governance, policies and procedures, training and awareness programs, privacy impact assessments, privacy by design, data mapping, third party contractual oversight, incident management, and a mechanism for monitoring regulatory compliance for every geography. The implementation of this framework is enabled through a phased strategy: Assess, Design, Implement and Monitor. This approach ensures the continued development of the Framework to meet new international regulatory challenges and developments proactively and efficiently, in addition to addressing evolving customer expectations. This dynamic, modular, risk-based privacy framework, bolstered further by industry-recognized certifications and accreditations, enables HCL to ensure compliance with applicable regulations and established privacy standards and best practices. It allows the company to have a competitive advantage in the market, with privacy as a business enabler.
7. Forex Exchange Risk
Risk
HCL derives majority of its revenues from clients based outside India and accordingly over 97%of its revenues are realized in foreign currencies. Its delivery teams are also based across various countries and accordingly, over 75%of its costs are denominated in foreign currencies. This exposes the Company to any adverse movement in exchange rates of foreign currencies.
HCL Strategy
6. Privacy Risk
Risk The access to internal/employee data and to customer-owned data which occurs because of certain outsourced relationships,
The Company uses foreign exchange forward contracts and options to mitigate the risk of movements in foreign exchange rates associated with receivables and forecast transactions in certain foreign currencies. This is governed by policy and processes determine by the Board which defines the period of hedges and % of risk to be covered.
Annual Report 2018-19 23
8. Acquisitions and Strategic Partnership Risk
HCL Strategy
Risk
From time to time HCL has acquired certain businesses and have entered into strategic partnership with other companies. Success of these acquisition/partnership depends upon several factors including proper integration of acquired employees with the rest of the Company, optimum usage of synergies between acquired business and the Company. This exposes the Company to risk of impairment of goodwill and other intangibles.
HCL Strategy
HCL has pioneered a unique inorganic growth model that identifies value assets that can be enhanced through creative synergies. Since inception, HCL has executed several industry first models that have become industry standard subsequently. We are confident that some of the recent pursuits in this arena will bear fruits in the next few years. To ensure this, we have established an ongoing Integration and Performance Management program to enable acquired businesses and HCL get the maximum returns on these investments. To complete this program, performance of such acquired business is periodically reviewed by Board committees and corrective action taken from time to time. Impairment of goodwill and other intangibles are evaluated at least once at the end of the year.
9. HR Related Risk
Risk:
As HCL continues its growth journey, one of the key areas of focus is talent availability and readiness of our leadership to lead and execute the organizational strategy. The presence and demonstration of required competencies and skills across levels continues to play a key role in defining the success trajectory of the organization. It's the right and able people who bring the business strategy to life, a reality that HCL is deeply cognizant of.
HCL is focused on deploying a robust training strategy to cater to the development needs of employees across leadership levels. This includes professional, functional, technical and leadership development learning solutions. To ensure business continuity and focus on driving the organization strategy, the leadership planning include succession planning and shortterm backups at all times. Talent Management in partnership with Business and HR leaders carry out a half yearly activity to assess the current Criticality, Capability and Risk index of the senior leaders. This acts as the cornerstone for determining and implementing the succession planning approach for maintaining a healthy leadership pipeline.
HCL has defined a five step process which articulates the succession planning approach i.e. assessment of the key positions basis the organization's operational activities and strategic imperatives, identification of Critical to Success capabilities for each key position, objective assessment to identify current capability metrics for the potential successors, a structured development journey of identified successors, positioning for growth based on their demonstrated ability to take on senior/enlarged roles.
10. Tax Related Risk
Risk
HCL is subject to taxes in numerous jurisdictions worldwide and enjoys tax benefits in India on its Software exports under Special Economic Zone scheme of Govt. of India. Any changes in tax laws in India and other countries where HCL has significant presence can have adverse impact on effective tax rate of the Company. As HCL operates in several jurisdictions, transfer pricing arrangements among legal entities in these jurisdictions are always subject of review by various tax authorities.
HCL Strategy
HCL specialized tax teams keep themselves abreast of latest tax developments in various jurisdictions and implements appropriate tax planning strategies based on changes in tax laws in various countries. HCL also gets into advance transfer pricing arrangement in several countries and get the transfer pricing arrangements reviewed by external consultants periodically.
24 Management Discussion and Analysis
PERFORMANCE TREND
Value Addition
Revenue has increased from ` 36,701 crores in fiscal 2015 to ` 60,427 crores in fiscal 2019, with a compounded annual growth rate (CAGR) of 12.7% over the last two years.
Market capitalization has increased from ` 129,315 crores in fiscal 2015 to ` 147,489 crores in fiscal 2019.
*FY 15-16 numbers are for nine months period as the Company has changed the financial year to align with the Companies Act requirement
Profit for the year has increased from ` 7,317 crores in fiscal 2015 to ` 10,120 crores in fiscal 2019.
*Market Capitalization based on market rate as on last date of the respective financial year.
The net worth of the Company has increased from ` 24,367 crores to ` 41,366 crores in fiscal 2019.
*FY 15-16 numbers are for nine months period as the Company has changed the financial year to align with the Companies Act requirement
Annual Report 2018-19 25
FINANCIAL PERFORMANCE
Consolidated results
This part of the Management Discussion and Analysis refers to the consolidated financial statements of HCL ("the Company" or "the Parent Company") and its subsidiaries referred to as "the Group". The discussion should be read in conjunction with the financial statements and related notes to the consolidated accounts of HCL for the year ended 31 March 2019 prepared in accordance with the Indian Accounting Standard (referred to as "Ind AS"), prescribed under Section 133 of the Companies Act, 2013, read with the Companies (Indian Accounting Standard) rules as amended from time to time.
Results of Operations (Consolidated):
Particulars
Revenues from operations Purchase of stock-in-trade Changes in inventories of stock-in-trade Employee benefit expense Outsourcing costs Other expenses Depreciation and amortisation expense Total Expenditure Profit before finance cost, other income & tax Finance costs Other income Profit before tax Provision for tax Share of profit of associates Non-controlling interest Profit for the year
31 March 2019
Amount % Revenue
60,427
100.0%
1,615
2.7%
81
0.1%
29,283
48.5%
9,761
16.2%
5,761
9.5%
2,073
3.4%
48,574
80.4%
11,853
19.6%
174
0.3%
943
1.6%
12,622
20.9%
2,502
4.1%
-
-
-
-
10,120
16.8%
Year Ended
31 March 2018
Amount % Revenue
50,569
100.0%
1,251
2.5%
104
0.2%
24,729
49.0%
8,620
17.0%
4,619
9.1%
1,383
2.7%
40,706
80.5%
9,863
19.5%
69
0.1%
1,217
2.4%
11,011
21.8%
2,302
4.6%
13
0.0%
(1)
0.0%
8,721
17.2%
(` in Crores)
Growth % Increase
19.5% 29.1% -22.1% 18.4% 13.2% 24.7% 49.9% 19.3% 20.2% 154.0% -22.5% 14.6%
8.7% -
16.0%
Comments: Revenue from operations increased to ` 60,427 crores in FY 2019 as compared to ` 50,569 crores in FY 2018 resulting in
a growth of 19.5%. Profit before tax (PBT) increased to ` 12,622 crores in FY 2019 as compared to ` 11,011 crores in FY 2018 resulting in a
growth of 14.6%. Profit for the year (PAT) increased to ` 10,120 crores in FY 2019 as compared to ` 8,721 crores in FY 2018 resulting a
growth of 16.0%.
Revenues
The Group derives its revenue from three segments viz Software services, IT Infrastructure services and Business Process Outsourcing services.
Segment wise details are given below:
Particulars
Software Services Infrastructure Services Business Process Outsourcing Services Total Revenue
31 March 2019
Amount % of total
34,911
57.8%
22,476
37.2%
3,040
5.0%
60,427
100.0%
Year Ended
31 March 2018
Amount % of total
29,611
58.5%
19,095
37.8%
1,863
3.7%
50,569
100.0%
(` in Crores)
% Increase 17.9% 17.7% 63.2% 19.5%
26 Management Discussion and Analysis
Geography wise breakup of revenues
The Group also reviews its business on a geographic basis. The following table classifies total revenue by geographic areas:
Particulars
America Europe India * Rest of the world Total Service Revenue
31 March 2019
Amount % of total
35,972
59.6%
16,136
26.7%
2,118
3.5%
6,201
10.2%
60,427
100.0%
Year Ended
31 March 2018
Amount % of total
29,463
58.4%
13,843
27.4%
1,995
3.9%
5,268
10.3%
50,569
100.0%
(` in Crores)
% Increase 22.1% 16.6% 6.1% 17.7% 19.5%
* includes revenue billed to India based captive of global customers.
US geography has grown by 22.1%, Europe by 16.6% and Rest of the world by 17.7% in Fiscal 2019.
Employee benefits expense and outsourcing costs
Particulars
Salaries, wages and bonus Contribution to provident fund and other employee benefits Staff welfare expenses Subtotal (A) Outsourcing costs (B) Total (A+B)
31 March 2019
Amount % Revenue
25,649
42.5%
3,511
5.8%
123 29,283
9,761 39,044
0.2% 48.5% 16.2% 64.7%
Year Ended
31 March 2018
Amount % Revenue
21,506
42.6%
3,115
6.2%
108 24,729
8,620 33,349
0.2% 49.0% 17.0% 66.0%
(` in Crores)
% Increase 19.3% 12.7% 13.9% 18.4% 13.2% 17.1%
Employee benefit expense includes salaries which have fixed and variable component, contributions to retirement and pension schemes. It also includes expenses incurred on staff welfare.
Outsourcing costs include a) outsourcing of several customers related activities e.g. hosting services, facilities management, disaster recovery, maintenance, break fix services etc. and b) hiring of third party consultants from time to time to supplement the in house teams.
Employee benefits expense has increased by ` 4,554 crores compared to previous year. The increase in employee cost is primarily on account of increase in number of employees (137,965 in fiscal 2019 as compared to 120,081 in fiscal 2018) and an increase in the average cost per employee due to normal salary revisions.
The employee benefits expense and outsourcing costs as a % of revenue has reduced from 66.0% to 64.7% in current year.
Other expenses
Particulars
Rent Power & Fuel Travel and conveyance Communication costs Repairs and maintenance Software license fee Others Total
31 March 2019
Amount % Revenue
761
1.3%
336
0.6%
1,815
3.0%
306
0.5%
592
1.0%
509
0.8%
1,442
2.4%
5,761
9.5%
Year Ended
31 March 2018
Amount % Revenue
566
1.1%
313
0.6%
1,461
2.9%
285
0.6%
445
0.9%
323
0.6%
1,226
2.4%
4,619
9.1%
(` in Crores)
% Increase 34.5% 7.3% 24.2% 7.4% 33.0% 57.6% 17.6% 24.7%
Other expenses as a % of revenue has increased from 9.1% in previous year to 9.5% in current year.
Annual Report 2018-19 27
Depreciation and amortisation expense
Depreciation and amortization expense as % of revenue has increased from 2.7% in the previous year to 3.4 % in current year mainly on account of increase in depreciation of computers by ` 194 crores, amortisation of licensed IPRs by ` 348 crores and other intangibles by ` 113 crores.
Other Income The details of Other Income are as follows:
Particulars
Interest Income on deposits Income on investments in mutual funds and bonds Exchange Differences Others Total
31 March 2019 447 249 182 65 943
Year Ended 31 March 2018
457 163 581
16 1,217
(` in Crores)
Growth -2.3% 53.2%
-68.7% 317.0% -22.5%
Exchange differences
The Group derives over 97% of its revenues in foreign currencies and over 75% of its costs are incurred in foreign currencies. This exposes the Group to risks of adverse variations in foreign currency exchange rates.
Exchange rates for major currencies with respect to INR are given below:-
Average Rate
USD
For the Year Ended March 31,2019
69.75
For the Year Ended March 31,2018
64.52
Depreciation/(appreciation) (%)
8.1%
GBP 91.67 85.32 7.4%
EURO 80.58 74.94 7.5%
AUD 50.87 49.96 1.8%
Period Ended As at March 31,2019 As at March 31,2018 Depreciation/(appreciation) (%)
USD 69.11 65.18 6.0%
GBP 90.62 91.60 -1.1%
EURO 77.68 80.81 -3.9%
AUD 49.01 50.16 -2.3%
The Group uses foreign exchange forward contracts and options to mitigate the risk of movements in foreign exchange rates associated with receivables and forecast transactions in certain foreign currencies. During the current fiscal year, the Group had an exchange gain of ` 182 crores (previous year ` 581 crores). These exchange differences are a) on account of restatement of foreign currency assets and liabilities, b) exchange gain (loss) incurred on forward covers/ options on occurrence of hedge transactions for which cash flow hedge accounting is being followed, and c) mark to market impact of other hedges.
The Group follows cash flow hedge accounting in respect of forward covers and options to hedge the foreign exchange risks related to the forecast revenues. Exchange gain (loss) arising on such forward covers, where a hedged transaction has occurred during the year, has been included under `exchange difference' and changes in the fair value of derivatives (net of tax), that are designated and effective as hedges of future cash flows as on the balance sheet date, are recognized directly in the hedging reserve account under `Shareholders Funds'. The total unrealized exchange (loss) gain (net of tax) recognized in the hedging reserve account as at 31 March, 2019 is ` 171 crores (previous year ` 137 crores).
Taxation
Tax expense as a percentage of profit before tax has decreased from 20.9% in the previous year to 19.8% in fiscal 2019. Tax expenses percentage in current year is lower on account of reversal of tax provision carried in certain jurisdiction.
28 Management Discussion and Analysis
FINANCIAL POSITION
ASSETS (a) Property, plant and equipment (b) Capital work in progress (c) Goodwill (d) Other intangible assets (e) Other non-current assets (f) Current assets
Investments Trade receivables Cash and bank balances Loans Other current assets TOTAL ASSETS
(` in Crores) 31 March 2019 31 March 2018
5,293 235
9,061 8,534 5,730
4,560 320
6,799 7,394 4,392
2,220 11,706 7,872 1,312 6,612 58,575
2,357 9,639 4,018 3,410 5,134 48,023
EQUITY (a) Equity share capital (b) Other equity TOTAL EQUITY
271 41,198 41,469
278 36,108 36,386
LIABILITIES (a) Non - current liabilities (b) Current liabilities TOTAL EQUITY AND LIABILITIES
4,807 12,299 58,575
1,530 10,107 48,023
Property, plant and equipment and capital work in progress
The Group has made addition to gross block by ` 1,898 crores (previous year ` 1,298 crores) in property, plant & equipment during fiscal 2019, which mainly comprises computers and networking equipment, plant and equipment's and investment in facilities.
Capital work - in- progress stood at ` 235 crores (previous year ` 320 crores).
Goodwill and intangibles
The Group has made addition to goodwill by ` 2,095 crores (previous year ` 45 crores) for acquisitions consummated during the year [ for details refer note no 2 to consolidated financial statement].
The Group has also made addition to intangibles by ` 2,357 crores (previous year ` 3,477 crores) mainly for purchase of licensed IPRs.
Treasury Investments
The guiding principles of the Group's treasury investments are safety, liquidity and return. The Group has efficiently managed its surplus funds through careful treasury operations.
The Group deploys its surplus funds in fixed deposits with banks, inter-corporate deposits and investments in debt mutual funds and bonds, with a limit on investments with any individual bank/fund.
Annual Report 2018-19 29
Breakup of treasury investments is given below
Debt Mutual Funds Bonds Fixed Deposits with Banks Inter-corporate deposits Total
Particulars
31 March 2019 994
1,226 3,885 1,664 7,769
(` in Crores)
31 March 2018 2,357 260 2,522 3,643 8,782
Current and non-current Assets
Current and non-current assets, excluding treasury assets increased by ` 7,515 crores (` 20,168 crores in fiscal 2018 to ` 27,683 crores in fiscal 2019); the increase is mainly on account of increase in balance with banks in current accounts by ` 2,576 crores (mainly due to increase in balance with EEFC account by ` 2,610 crores in fiscal 2019), trade receivables by ` 2,067 crores, deferred tax assets (net) by ` 618 crores, deferred contract cost (previously classified as deferred cost ) by ` 529 crores, finance lease receivables by ` 548 crores, prepaid expenses by ` 434 crores, unrealized gain on derivatives financials instruments by ` 114 crores and contract assets (previously classified as unbilled revenue) by ` 436 crores , classification of unbilled revenue has been changed to contract assets on account of adoption of Ind AS 115 w.e.f 1 April 2018.
Shareholder's Fund
(a) The Company has an authorized share capital of ` 300 crores, divided into 1,500,000,000 equity shares of ` 2 each. During the year, employees exercised their options for 396,120 equity shares under the employee's stock option plans 2004.
(b) During the year, the Company has carried out the share buyback of 36,363,636 fully paid-up equity shares of face value of ` 2/- each at a price of ` 1,100/- per share paid in cash for an aggregate consideration of ` 4,000 crores. The same has been recorded as reduction of Equity Share Capital by ` 7 crores and Other Equity by ` 3,993 crores.
(c) The Consolidated Shareholder's Fund of the Group stood at ` 41,469 crores as at 31 March 2019 (previous year ` 36,386 crores).
Borrowings
The Group had outstanding non-current borrowings of ` 2,977 crores and current borrowings of ` 1,218 crores as at 31 March 2019 (previous year non-current borrowings of ` 338 crores and current borrowings of ` 219 crores). The Group had taken borrowings to fund the acquisitions consummated during the year and to meet the working capital requirements.
Current and non-current Liabilities
Current and non-current liabilities, excluding borrowings, increased by ` 1,831 crores (` 11,080 crores in fiscal 2018 to ` 12,911 crores in fiscal 2019); the increase is mainly on account of increase in accrued salaries and benefits by ` 490 crores, contract liabilities (previously classified as revenue received in advance) by ` 416 crores, trade payables by ` 387 crores and liabilities towards non- controlling interest by ` 378 crores in the form of compound financial instrument (financial liability) recorded as part of joint venture agreement in case of acquisition consummated during the year.
CASH FLOWS
A summary of the cash flow statement is given below:
Cash and cash equivalents at the beginning of the year Net cash generated from operating activities Net cash used in investing activities Cash flows used in financing activities Effect of exchange differences on cash and cash equivalents held in foreign currency Cash and cash equivalents at the end of the year
(` in Crores)
Year Ended
31 March 2019 31 March 2018
1,699
1,321
8,971
8,328
(3,073)
(2,283)
(1,462)
(5,714)
(201)
47
5,934
1,699
30 Management Discussion and Analysis
Cash flow from operations
The Group generated net cash from operating activities of ` 8,971 crores in FY 2019 (` 8,328 crores in FY 2018) (` in crores)
Year Ended
31 March 2019 31 March 2018
Operating profit before working capital changes
14,058
11,918
Effect of working capital changes
(2,466)
(1,234)
Cash generated from operations
11,592
10,684
Tax payments made
(2,621)
(2,356)
Net cash generated from operating activities
8,971
8,328
Cash flow from investing activities
Purchase of property, plant and equipment and intangibles, including capital work in progress and capital advances, net (Purchase)/ sale of investments Payments for business acquisitions, net of cash acquired Redemption / maturity of bank deposits (net) having maturity over three months Net cash in subsidiaries being disposed of Interest income Taxes paid Others Net cash used in investing activities
(` in crores) Year Ended 31 March 2019 31 March 2018
(3,434)
(5,321)
2,502 (2,828)
380 -
511 (200)
(4) (3,073)
(2,459) (107) 5,403 (144) 500 (153) (2)
(2,283)
In fiscal 2019 the Group used ` 3,073 crores for investing activities (` 2,283 crores in fiscal 2018). The significant items of investing activities were:-
The Group used ` 3,434 crores for purchase of property, plant and equipment and intangible assets in fiscal 2019 (` 5,321 crores in fiscal 2018).
During the current fiscal, the Group has made payment of ` 2,828 crores (net of cash acquired) as purchase consideration (Previous year ` 107 crores), for acquisitions consummated during the year [for details refer note no 2 to consolidated financial statements].
Fixed deposits with banks (net) of ` 380 crores have been matured in fiscal 2019 (matured ` 5,403 crores in fiscal 2018). Interest on deposits received in fiscal 2019 of ` 511 crores (` 500 crores in fiscal 2018.)
Cash flow from financing activities
Buyback of equity shares Expenses on buyback of equity shares Dividend paid (including taxes) Proceeds/Repayment of borrowings (net) Interest paid Capital contribution from non-controlling interests Payments for deferred consideration on business acquisitions Principal payment for finance lease obligations Net cash used in financing activities
(` in crores)
Year Ended
31 March 2019 31 March 2018
(4,000)
(3,500)
(12)
(14)
(1,321)
(2,031)
3,623
(148)
(71)
(14)
292
-
(26)
(16)
53
9
(1,462)
(5,714)
Annual Report 2018-19 31
In fiscal 2019 the Group used ` 1,462 crores in financing activities (` 5,714 crores in fiscal 2018). The significant items of financing activities are:-
Payment of dividends including taxes of ` 1,321 crores (` 2,031 crores in fiscal 2018). During the year, the Company has carried share buyback of 36,363,636 fully paid-up equity shares of face value of ` 2/- each
at a price of ` 1,100/- per share paid in cash for an aggregate consideration of ` 4000 crores. The company had net borrowing of ` 3,623 crores during the fiscal 2019.
Key financial ratio
Profitability Ratios Operating Profit Margin Net Profit Margin Return on Net Worth
Liquidity Ratio Current Ratio
Management Efficiency Ratio Debtors Turnover Ratio Inventory Turnover Ratio
Leverage Ratio Interest Coverage Ratio - Borrowings Debt Equity Ratio
Units
% % %
Times
Times Times
Times Times
(` in crores) Year Ended 31 March 2019 31 March 2018
19.6
19.5
16.8
17.2
24.5
24.0
2.4
2.4
5.7
5.5
12.9
6.0
141.2 0.1
787.6 0.0
Inventory Turnover Ratio Inventory turnover ratio has changed by 112.9% as compared to previous year mainly on account of decrease in average inventory.
Interest coverage & debt equity ratio
Interest coverage ratio and debt equity ratio have changed by 82.1% and 562.9% respectively as compared to previous year mainly on account of increase in borrowing to ` 4,195 crores from ` 557 crores as compared to previous year alongwith related interest cost on borrowing.
Return on net worth
The Group return on net worth has increased to 24.5% from 24.0% during the year mainly on account of profit earned by the Group ` 10,120 crores during the year.
Standalone results
Standalone results of HCL excludes the performance of its subsidiaries.
The discussion in the paragraphs which follow should be read in conjunction with the financial statements and related notes relevant to the standalone results of HCL Technologies Limited (herein referred to as "HCL" or "the Company") for the year ended 31 March 2019 prepared in accordance with the Indian Accounting Standard (referred to as "Ind AS"), prescribed under Section 133 of the Companies Act, 2013, read with the Companies (Indian Accounting Standard) rules as amended from time to time.
32 Management Discussion and Analysis
Results of Operations (Standalone)
Particulars
Revenue from operations Purchase of stock-in-trade Change in inventories of stock-in-trade Employee benefit expense Outsourcing costs Other expenses Depreciation and amortisation expense Total Expenditure Profit before finance cost ,other income & tax Finance cost Other income Profit before tax Provision for tax Profit for the year
31 March 2019
Amount % Revenue
26,012
100.0%
142
0.5%
22
0.1%
8,079
31.1%
4,901
18.8%
2,450
9.4%
1,276
4.9%
16,870
64.8%
9,142
35.2%
16
0.1%
805
3.1%
9,931
38.2%
1,746
6.7%
8,185
31.5%
Year Ended
31 March 2018
Amount % Revenue
22,073
100.0%
138
0.6%
50
0.2%
7,365
33.4%
2,918
13.2%
2,263
10.3%
893
4.0%
13,627
61.7%
8,446
38.3%
23
0.1%
702
3.2%
9,125
41.4%
1,763
8.0%
7,362
33.4%
(` in Crores)
Growth % 17.8% 3.1% -55.4% 9.7% 67.9% 8.3% 42.8% 23.8% 8.2% -27.3% 14.7% 8.8% -1.0% 11.2%
Comments:
Revenue from operations increased to ` 26,012 crores in FY 2019 as compared to ` 22,073 crores in FY 2018 resulting in a growth of 17.8%.
Profit before tax (PBT) increased to ` 9,931 crores in FY 2019 as compared to ` 9,125 crores in FY 2018 resulting in a growth of 8.8%.
Profit for the year (PAT) increased to ` 8,185 crores in FY 2019 as compared to ` 7,362 crores in FY 2018 resulting in a growth of 11.2%.
FINANCIAL POSITION (Standalone)
ASSETS (a) Property, plant and equipment (b) Capital work in progress (c) Goodwill (d) Other intangible assets (e) Other non-current assets (f) Current assets
Investments Trade receivables Cash and bank balances Loans Other current assets TOTAL ASSETS
(` in Crores) 31 March 2019 31 March 2018
3,507 212 550
7,178 7,302
3,293 298 550
6,585 6,644
2,002 6,245 6,273 1,244 2,943 37,456
2,130 5,427 2,325 3,438 2,128 32,818
EQUITY (a) Equity share capital (b) Other equity TOTAL EQUITY
271 30,168 30,439
278 27,285 27,563
LIABILITIES (a) Non - current liabilities (b) Current liabilities TOTAL EQUITY AND LIABILITIES
638 6,379 37,456
562 4,693 32,818
Annual Report 2018-19 33
Comments:
Current and non-current Assets
Current and non current assets, excluding treasury assets increased by ` 4,948 crores (` 13,944 crores in fiscal 2018 to ` 18,892 crores in fiscal 2019); the increase is mainly on account of increase in balance with banks in current accounts by ` 2,606 crores(mainly due to increase in balance with EEFC account by ` 2,610 crores in fiscal 2019), trade receivables by ` 818 crores, deferred tax assets by ` 601 crores, unbilled receivable (previously classified as unbilled revenue) by ` 470 crores and deferred
contract cost (previously classified as deferred cost) by 171 crores.
Current and non-current Liabilities
Current and non-current liabilities, excluding borrowings, increased by ` 1,760 crores (` 5,207 crores in fiscal 2018 to ` 6,967 crores in fiscal 2019); the increased is mainly on account of increase in trade payable by ` 1,823 crores, contract liabilities (previously classified as revenue received in advance) by ` 224 crores and decrease in liabilities for expenses by ` 306 crores.
CASH FLOWS
A summary of the cash flow statement is given below:
Cash and cash equivalents at the beginning of the year Net cash generated from operating activities Net cash generated from / (used) in investing activities Cash flows used in financing activities Net increase / (decrease) in cash and cash equivalents Effect of exchange differences on cash and cash equivalents held in foreign currency Cash and cash equivalents at the end of the year
(` in crores)
Year Ended
31 March 2019 31 March 2018
210
352
8,676
6,339
995
(973)
(5,335)
(5,547)
4,336
(181)
(23)
39
4,523
210
Cash flow from operations
The Company generated net cash from operating activities of ` 8,676 crores in FY 2019 (6,339 crores in FY 2018) (` in crores)
Year Ended
31 March 2019 31 March 2018
Operating profit before working capital changes
10,523
9,532
Effect of working capital changes
231
(1,468)
Cash generated from operations
10,754
8,064
Tax payments made
(2,078)
(1,725)
Net cash generated from operating activities
8,676
6,339
Cash flow from investing activities
Purchase of property, plant and equipment and intangibles, including capital work in progress and capital advances, net (Purchase) / sale of investments Redemption / maturity of bank deposits (net) having maturity over three months Proceeds from equity instruments of subsidiary Proceeds from loan extended to group company Interest and dividend income Taxes paid Net cash generated from / used in investing activities
(` in crores) Year Ended 31 March 2019 31 March 2018
(2,312)
(4,339)
2,583 365 21 485
(147) 995
(2,477) 5,498 2 492 (149) (973)
34 Management Discussion and Analysis
In fiscal 2019 the Company generated net cash ` 995 crores from investing activities (net cash used ` 973 crores in fiscal 2018). The significant items of investing activities: -
The Company used ` 2,312 crores for purchase of property, plant and equipment and intangible assets (` 4,339 crores in fiscal 2018).
Fixed deposits with banks (net) of ` 365 crores have been realized during the year (` 5,498 crores in fiscal 2018). Interest on deposits and dividends from subsidiary company received in fiscal 2019 of ` 485 crores (` 492 crores in
fiscal 2018).
Cash flow from financing activities
Buyback of equity shares Expenses on buyback of equity shares Dividend paid (including taxes) Proceeds from borrowings (net) Interest paid Net cash used in financing activities
(` in crores)
Year Ended
31 March 2019 31 March 2018
(4,000)
(3,500)
(12)
(14)
(1,321)
(2,031)
2
3
(4)
(5)
(5,335)
(5,547)
In fiscal 2019 the Company used ` 5,335 crores in financing activities (` 5,547 crores in fiscal 2018). The significant items of financing activities are:-
Payment of dividends including taxes ` 1,321 crores (` 2,031 crores in fiscal 2018).
During the year, the Company has carried share buyback of 36,363,636 fully paid-up equity shares of face value of ` 2/- each at a price of ` 1,100/- per share paid in cash for an aggregate consideration of ` 4,000 crores.
Key financial ratio
Profitability Ratios Operating Profit Margin Net Profit Margin Return on Net Worth
Liquidity Ratio Current Ratio
Management Efficiency Ratio Debtors Turnover Ratio Inventory Turnover Ratio
Leverage Ratio Interest Coverage Ratio - Borrowings Debt Equity Ratio
Units
% % %
Times
Times Times
Times Times
(` in crores) Year Ended 31 March 2019 31 March 2018
35.2
38.3
31.5
33.4
26.9
26.7
2.9
3.3
4.5
4.5
5.7
2.9
2,222.2 0.0
1,917.8 0.0
Inventory Turnover Ratio Inventory turnover ratio has changed 49.4% as compared to previous year mainly on account of decrease in average inventory. Return on net worth The Company return on net worth has increased to 26.9% from 26.7% during the year mainly on account of profit earned by the Company ` 8,185 crores during the year.
Annual Report 2018-19 35
DIRECTORS' REPORT
Dear Shareholders,
Your Directors have immense pleasure in presenting the Twenty Seventh Annual Report of HCL Technologies Limited ("HCL" or the "Company") together with the audited financial statements for the financial year ended March 31, 2019.
1. FINANCIAL RESULTS
Key highlights of the financial results of your Company prepared as per the Indian Accounting Standards (Ind AS) for the financial year ended March 31, 2019 are as under:
Particulars
Consolidated Year ended March 31, 2019 March 31, 2018
(` in crore) Standalone Year ended March 31, 2019 March 31, 2018
Revenue from operations Other income Total Income
60,427 943
61,370
50,569 1,217
51,786
26,012 805
26,817
22,073 702
22,775
Total Expenditure
48,748
40,775
16,886
13,650
Profit before tax
12,622
11,024
9,931
9,125
Tax Expense
2,502
2,302
1,746
1,763
Profit for the year
10,120
8,722
8,185
7,362
Other comprehensive income / (loss)
Total comprehensive income / (loss) for the year
190 10,310
260 8,982
24 8,209
(226) 7,136
Earnings per share of ` 2 each Basic (in `) Diluted (in `)
73.58 73.55
2. BUSINESS OVERVIEW AND STATE OF AFFAIRS
The Company is a leading global IT services company that helps global enterprises reimagine and transform their businesses through Digital technology transformation. The Company focuses on providing an integrated portfolio of services underlined by its Mode 123 growth strategy. Mode 1 encompasses the core services in the areas of Applications, Infrastructure, BPO and Engineering and R&D services, leveraging DRYiCETM Autonomics to transform clients' business and IT landscape, making them `lean' and `agile'. Mode 2 focuses on experiencecentric and outcomeoriented integrated offerings of Digital & Analytics, IoT WoRKSTM, Cloud Native Services and Cyber security & GRC services to drive business outcomes and enable enterprise digitalization. Mode 3 strategy is ecosystemdriven, creating innovative IPpartnerships to build products and platforms business.
36 Directors' Report
62.23 62.19
59.69 59.66
52.54 52.50
The Company leverages its global network of integrated co-innovation labs and global delivery capabilities to provide holistic multiservice delivery in key industry verticals including Financial Services, Manufacturing, Telecommunications, Media, Publishing, Entertainment, Retail & CPG, Life Sciences & Healthcare, Oil & Gas, Energy & Utilities, Travel, Transportation & Logistics and Government.
During the financial year 2018-19, the Company achieved a revenue from operations of ` 26,012 crore on standalone basis and ` 60,427 crore on consolidated basis, as compared to ` 22,073 crore on standalone basis and ` 50,569 crore on consolidated basis for the financial year 2017-18.
During the financial year 2018-19, profit for the year was ` 8,185 crore on standalone basis and ` 10,120 crore on
consolidated basis, as compared to ` 7,362 crore on standalone basis and ` 8,722 crore on consolidated basis for the financial year 2017-18.
The state of affairs of the Company is presented as part of the Management Discussion and Analysis Report forming part of the Annual Report.
3. DIVIDEND
During the financial year ended March 31, 2019, your Directors had declared and paid four interim dividends as per the details given below:
Interim dividend
S. No.
paid during financial year ended
March 31, 2019
Date of Declaration
1 1st Interim Dividend May 2, 2018 2 2nd Interim Dividend July 27, 2018 3 3rd Interim Dividend October 23, 2018 4 4th Interim Dividend January 29, 2019
Rate of Dividend per share
(face value of ` 2 each)
2.00 2.00 2.00 2.00
Total
Amount of Dividend
paid
Dividend Distribution Tax paid by the
Company
(` in crore)
278.46
57.08
278.48
57.08
271.23
52.11
271.25
55.55
1,099.42
221.82
Total Outflow
335.54 335.56 323.34 326.80 1,321.24
The Board of Directors in its meeting held on May 9, 2019 declared an interim dividend of ` 2 per equity share of face value of ` 2 each fully paid-up, for the financial year 201920. The Board of Directors did not recommend any final dividend for the financial year ended March 31, 2019.
4. TRANSFER TO GENERAL RESERVES
No amount was transferred to the General Reserves for the financial year ended March 31, 2019.
5. SHARE CAPITAL
During the financial year under review, the Company issued and allotted 3,96,120 fully paid-up equity shares of ` 2 each under its Employees Stock Option Plan.
Also, the Company, on October 11, 2018, extinguished / physically destroyed its 3,63,63,636 fully paid-up equity shares of ` 2 each consequent to the Buy-back offer of the Company.
Consequently, the issued, subscribed and paid-up share capital of the Company as on March 31, 2019, was ` 2,71,25,57,736/- divided into 1,35,62,78,868 equity shares of face value of ` 2 each.
6. MANAGEMENT DISCUSSION AND ANALYSIS
The Management Discussion and Analysis Report, in terms of Regulation 34(3) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (the "Listing Regulations"), is attached and forms a part of this Report.
7. ACQUISITIONS
Acquisitions consummated during the financial year 2018-19 are summarized as below
Telerx Marketing, Inc.
The Company, through its step-down wholly-owned subsidiary HCL America Inc., acquired Telerx Marketing, Inc. (doing business as C3i Solutions), a Delaware company. C3i Solutions is a leader in multi-channel customer engagement services for life sciences and consumer packaged goods industries.
Pursuant to this acquisition, Telerx Marketing, Inc. and all its subsidiaries have become the wholly-owned stepdown subsidiaries of the Company with effect from April 06, 2018, being the date of completion of the acquisition.
Actian Corporation
The Company, through its step-down wholly-owned subsidiary HCL America Inc., entered into a Joint Venture agreement dated April 12, 2018 with Sumeru Equity Partners, a technology and growth-focused private equity firm. The purpose of the JV arrangement was to acquire Actian Corporation, a Delaware company. Actian Corporation is a leader in hybrid data management, cloud integration and analytics solutionspowers insight-driven enterprises around the globe.
In terms of the said JV agreement, 80% of the shareholding in the JV company named HCL Technologies SEP Holdings Inc., is held by HCL America Inc., 19.50% is held by Sumeru Equity Partners and the balance 0.5% is held by the CEO of Actian Corporation. The JV Company had a wholly-owned subsidiary, Octavian Acquisition Corp., which ultimately acquired 100% stake in Actian Corporation.
Annual Report 2018-19 37
Pursuant to this acquisition, Actian Corporation and its all subsidiaries have become the step-down subsidiaries of the Company with effect from July 17, 2018, being the date of completion of the acquisition.
Honigsberg & Duvel Datentechnik GmbH
The Company, through its step-down wholly-owned subsidiary HCL Technologies Germany GmbH, acquired Honigsberg & Duvel Datentechnik GmbH, an IT and engineering service provider headquartered in Wolfsburg, Germany.
Pursuant to this acquisition, Honigsberg & Duvel Datentechnik GmbH and all its subsidiaries have become the wholly-owned step-down subsidiaries of the Company with effect from October 2, 2018 being the date of completion of acquisition.
IBM Software Products
The Company entered into a definitive agreement with IBM Corporation, USA, for the asset purchase of IBM's seven software products for an aggregate amount of USD 1.8 billion, across three portfolios - Security AppScan and BigFix; Marketing Commerce Software, Unica and DX Software and Collaboration Solutions Notes/Domino and Connections.
The transaction is expected to close by mid-2019, subject to the completion of applicable regulatory approvals.
Acquisitions after the close of the financial year:
Strong-Bridge Holdings, Inc.
The Company, through its step-down wholly-owned subsidiary HCL America Inc., acquired Strong-Bridge Holdings, Inc. (doing business as Strong-Bridge Envision or SBE), a Delaware company. SBE is a provider of digital transformation strategy consulting, digital / agile program management and organizational change management.
Pursuant to this acquisition, Strong-Bridge Holdings, Inc. and its subsidiaries have become the wholly-owned stepdown subsidiaries of the Company with effect from April 1, 2019 being the date of completion of acquisition.
8. SUBSIDIARIES, ASSOCIATES AND JOINT VENTURES
As on March 31, 2019, the Company has 133 subsidiaries and 8 associate companies within the meaning of Sections 2(87) and 2(6) of the Companies Act, 2013 (the "Act") respectively. There has been no material change in the nature of business of the subsidiaries.
As per the provisions of Section 129(3) of the Act, a statement containing the salient features of the financial statements of the Company's subsidiaries, associates and
38 Directors' Report
joint ventures in Form AOC-1 forms part of this Annual Report.
In accordance with the provisions of Section 136 of the Act and Regulation 46 of the Listing Regulations, the standalone and consolidated financial statements of the Company along with relevant documents and the financial statements in respect of the subsidiaries, are available on the website of the Company. The Company would provide the financial statements of the subsidiaries and the related detailed information to the shareholders on specific request made in this regard by the shareholders.
Subsidiaries incorporated during the year
HCL Technologies Vietnam Company Limited, a private limited company, was incorporated under the laws of Vietnam.
HCL Guatemala, Sociedad Anónima, a private limited company, was incorporated under the laws of Guatemala.
Subsidiaries closed during the year
Pursuant to the Merger Agreement dated April 12, 2018, Octavian Acquisition Corp. was merged with and into its wholly-owned subsidiary Actian Corporation, upon the successful completion of the acquisition of Actian Corporation.
HCL Mortgage Holdings, LLC, a Delaware company, was incorporated by the Company as its step-down wholly-owned subsidiary, solely for the purposes of acquisition of Urban Fulfillment Services LLC. Since the acquisition was successfully completed during the previous financial year, HCL Mortgage Holdings, LLC was voluntarily dissolved during the year.
Ingres Canada Corporation, a subsidiary of Actian Corporation, became the step-down wholly-owned subsidiary of the Company pursuant to the acquisition of Actian Corporation. However, it was not in operation and was therefore voluntarily dissolved during the year.
Other restructurings during the year
Pursuant to the stock transfer agreement(s) executed between HCL America Inc. and HCL Technologies UK Limited, wholly-owned step-down subsidiaries of the Company, the entire shareholding of HCL Italy SRL and HCL Great Britain Limited was transferred from HCL America Inc. to HCL Technologies UK Limited.
HCL had entered into a joint venture agreement with DXC Technology (DXC) in July 2015 pursuant to which a joint venture company namely CeleritiFinTech Limited was formed, in which the Company held 51% stake through HCL Technologies UK Limited, a wholly-
owned step-down subsidiary of the Company and the balance stake was held by DXC. CeleritiFinTech Italy S.r.l was incorporated as a wholly-owned subsidiary of CeleritiFinTech Limited.
With a view to leveraging the capabilities of the Company and DXC, the joint venture arrangement was discontinued w.e.f. September 30, 2017 and the Company entered into a new arrangement (IP Partnership) with DXC. Pursuant to the termination of the JV agreement, the 51% stake held by HCL Technologies UK Limited in CeleritiFinTech Italy S.r.l was transferred to DXC.
9. DIRECTORS AND KEY MANAGERIAL PERSONNEL
The composition of the Board of Directors is in accordance with the provisions of Section 149 of the Act and Regulation 17 of the Listing Regulations, with an optimum combination of Executive, Non-Executive and Independent Directors.
BOARD OF DIRECTORS
As on the date of this Annual Report, the Board of Directors of the Company consists of ten members, of which three are Women Directors. The Board consists of one Wholetime Director and nine Non-Executive Directors of whom eight are Independent Directors. The Whole-time Director is the Promoter Director who is designated as the Chairman & Chief Strategy Officer of the Company.
Appointment(s) / Re-appointment(s)
The Board of Directors of your Company appointed / re-appointed the following Directors during the financial year:
a. Mr. James Philip Adamczyk (DIN - 08151025) was appointed as an Additional Director in the capacity of Independent Director by the Board of Directors of the Company w.e.f. July 26, 2018. Subsequently, at the Twenty Sixth Annual General Meeting (`AGM') of the Company held on September 18, 2018, Mr. James Philip Adamczyk was appointed as an Independent Director of the Company in terms of Section 149 of the Act, to hold office for a period of five years.
b. At the Twenty Second AGM of the Company held on December 4, 2014, Mr. R. Srinivasan, Ms. Robin Ann Abrams, Dr. Sosale Shankara Sastry and Mr. S. Madhavan were appointed as Independent Directors of the Company for a period of five consecutive years and therefore, their first term of appointment shall end at the conclusion of the ensuing Twenty Seventh AGM of the Company to be held in the year 2019. Considering their immense contributions towards the Company and pursuant to the recommendations of the Nomination & Remuneration Committee, the Board in its meeting held on May 9, 2019 recommended to the
shareholders of the Company, the re-appointment of Mr. R. Srinivasan, Ms. Robin Ann Abrams, Dr. Sosale Shankara Sastry and Mr. S. Madhavan as Independent Directors for a second term of five consecutive years from the conclusion of the Twenty Seventh AGM of the Company scheduled to be held in the year 2019 till the conclusion of the Thirty Second AGM to be held in the year 2024.
The Independent Directors have furnished the certificate of independence stating that they meet the criteria of independence as mentioned under Section 149 (6) of the Act and Regulation 16 (1)(b) of the Listing Regulations. Based on the disclosures received from all Independent Directors and also in the opinion of the Board, the Independent Directors fulfill the conditions as specified in the Act and the Listing Regulations and are independent of the Management.
Retirement by Rotation
In accordance with the provisions of Section 152 of the Act and the Articles of Association of the Company, Mr. Shiv Nadar was re-appointed as the Managing Director of the Company in the category of Non-Retiring Director in the AGM held on September 21, 2017 for a period of five years. However, pursuant to the Articles of Association of the Company, if at any time, the number of Directors liable to retire by rotation fall below one-third of the total number of Directors (excluding Independent Directors), the term of Mr. Shiv Nadar as a Director shall be liable to retire by rotation for the time such number is below one-third.
Currently, the number of Directors liable to retire by rotation has fallen below one-third. Accordingly, Mr. Shiv Nadar shall retire by rotation at the ensuing AGM and being eligible, has offered himself for re-appointment as Director of the Company. However, his term as the Managing Director of the Company would continue uninterrupted post his re-appointment as Director.
Necessary resolutions in respect of re-appointment of Directors mentioned above are included in the Notice convening the ensuing AGM. Your Board recommends the re-appointments of Mr. Shiv Nadar, Mr. R. Srinivasan, Ms. Robin Ann Abrams, Dr. Sosale Shankara Sastry and Mr. S. Madhavan. The particulars in respect of these Directors as required under Regulation 36(3) of the Listing Regulations, are mentioned elsewhere in the Notice of AGM.
Resignations
Mr. Sudhindar Krishan Khanna (DIN - 01529178), who was a Non-Executive Non-Independent Director of the Company, resigned from the Board of the Company w.e.f. April 8, 2019.
Annual Report 2018-19 39
The Board placed on record its sincere appreciation and gratitude for Mr. Khanna's valuable services, guidance and contribution to the Company during his tenure as a member of the Board and its Committees.
KEY MANAGERIAL PERSONNEL
During the financial year under review, Mr. Prateek Aggarwal was appointed as the Chief Financial Officer of the Company on October 1, 2018, in place of Mr. Anil Kumar Chanana, who stepped down from the position of Chief Financial Officer.
The Board placed on record its sincere appreciation and gratitude for Mr. Chanana's valuable services, guidance and contribution to the Company during his tenure as the Key Managerial Person of the Company.
10. NUMBER OF MEETINGS OF THE BOARD
During the year, nine meetings of the Board of Directors were held. The details of the meetings are provided in the Corporate Governance Report which forms part of this Annual Report.
11. BOARD COMMITTEES
The following 8 (eight) Committees have been constituted by the Board of Directors of the Company:
i) Audit Committee
ii) Corporate Social Responsibility Committee
iii) Nomination & Remuneration Committee
iv) Finance Committee
v) Stakeholders' Relationship Committee
vi) Employee Stock Options Allotment Committee
vii) Risk Management Committee
viii) Diversity Committee.
The composition of Committees as on March 31, 2019 was as under:
S. Name of the No. Committee
Composition
1 Audit Committee Mr. S. Madhavan (Chairman) Mr. Deepak Kapoor Ms. Nishi Vasudeva Ms. Robin Ann Abrams
2 Corporate Social Ms. Roshni Nadar Malhotra
Responsibility (Chairperson)
Committee
Mr. Shiv Nadar
Mr. S. Madhavan
S. Name of the No. Committee
Composition
3 Nomination & Remuneration
Mr. R. Srinivasan (Chairman) Mr. Shiv Nadar
Committee
Ms. Robin Ann Abrams Ms. Roshni Nadar Malhotra
4 Finance Committee
Mr. S. Madhavan (Chairman) Mr. Shiv Nadar Ms. Roshni Nadar Malhotra Mr. R. Srinivasan Mr. Sudhindar Krishan Khanna*
5 Stakeholders' Relationship Committee
Mr. S. Madhavan (Chairman) Mr. Shiv Nadar Ms. Roshni Nadar Malhotra
6 Employee Stock Mr. Shiv Nadar
Options Allotment Mr. S. Madhavan
Committee
Mr. Prateek Aggarwal
7 Risk Management Committee
Mr. S. Madhavan (Chairman) Mr. Deepak Kapoor Ms. Nishi Vasudeva Ms. Robin Ann Abrams
8 Diversity Committee
Ms. Robin Ann Abrams (Chairperson) Ms. Roshni Nadar Malhotra Mr. Shiv Nadar
*Mr. Sudhindhar Krishan Khanna resigned as a Director of the Company w.e.f. April 8, 2019.
The number of meetings held and other requisite details of the Board Committees are set out in the Corporate Governance Report which forms part of this Annual Report.
12. FAMILIARIZATION PROGRAMME
The details of the familiarization programme have been provided under the Corporate Governance Report which forms part of this Annual Report.
13. BOARD EVALUATION
Pursuant to the provisions of the Act and Listing Regulations, an Annual Performance Evaluation of the Board, its Committees and the individual Directors is to be carried out either by the Board or by the Nomination and Remuneration Committee or by an independent external agency and the Board is required to review its implementation and compliance.
In view of the above, the Annual Performance Evaluation was undertaken by the Board. The framework and criteria of evaluation has been approved by the Nomination & Remuneration Committee of the Company. The process and criteria of evaluation is explained in the Corporate Governance Report, which forms part of this Annual Report.
40 Directors' Report
14. STATUTORY AUDITORS AND STATUTORY AUDITORS' 18. POLICY ON DIRECTORS' APPOINTMENT AND
REPORT
REMUNERATION
Pursuant to Section 139 of the Act, and the rules made thereunder, it is mandatory to rotate the Statutory Auditors of the Company on the completion of two terms of five consecutive years, as permitted under the said Section.
M/s. S.R. Batliboi& Co. LLP, Chartered Accountants, have been the Statutory Auditors of your Company since the year 2009-10. Their first term of appointment ended at the AGM held on December 4, 2014, at which, they were reappointed as the Statutory Auditors for a second term of five consecutive years. Accordingly, their second term of appointment shall be concluding at the ensuing Twenty Seventh AGM of the Company to be held in the year 2019 and the new Statutory Auditors of the Company will be appointed at the said AGM.
Statutory Auditors' Report
There are no qualifications, reservations, adverse remarks or disclaimer made by M/s. S.R. Batliboi & Co. LLP, Statutory Auditors in their report for the financial year ended March 31, 2019. The Statutory Auditors have not reported any incident of fraud to the Audit Committee of the Company for the financial year under review.
15. SECRETARIAL AUDITOR AND SECRETARIAL AUDIT REPORT
In terms of Section 204 of the Act, M/s. Chandrasekaran Associates, Practicing Company Secretaries were appointed as the Secretarial Auditor of the Company for the financial year ended March 31, 2019. The report of the Secretarial Auditor is enclosed as Annexure 1 to this Report. The report is self-explanatory and does not call for any further comments. There are no qualifications, reservations, adverse remarks or disclaimer made by the Secretarial Auditor in its report for the financial year ended March 31, 2019.
16. MAINTAINENCE OF COST RECORDS
The Central Government has not prescribed the maintenance of cost records under sub-section (1) of section 148 of the Act, and accordingly, such cost accounts and records are not maintained by the Company.
17. EXTRACT OF ANNUAL RETURN
Pursuant to Section 134(3)(a) and Section 92(3) of the Act, the extract of the Annual Return in Form MGT-9, for the financial year ended March 31, 2019, is enclosed as Annexure 2 to this Report.
The Nomination & Remuneration Committee of the Company formulates the criteria for determining the qualifications, positive attributes and independence of Directors in terms of its charter. In evaluating the suitability of individual Board members, the Committee takes into account factors such as educational and professional background, general understanding of the Company's business dynamics, standing in the profession, personal and professional ethics, integrity and values, willingness to devote sufficient time and energy in carrying out their duties and responsibilities effectively.
The Committee also assesses the independence of Directors at the time of their appointment / re-appointment as per the criteria prescribed under the provisions of the Act and the rules made thereunder and the Listing Regulations.
The Remuneration Policy for Directors, Key Managerial Personnel and other employees is provided in the Corporate Governance Report forming part of this Report.
19. RISK MANAGEMENT POLICY
The Board of Directors of the Company have formed a Risk Management Committee to inter-alia assist the Board in overseeing the responsibilities with regard to identification, evaluation and mitigation of operational, strategic and external environmental risks. In addition, the Audit Committee is also empowered to oversee the areas of risks and controls.
The Company has developed and implemented a Risk Management Policy that ensures appropriate management of risks in line with its internal systems and culture.
20. INTERNAL FINANCIAL CONTROL SYSTEMS AND THEIR ADEQUACY
The Company's internal financial control systems are commensurate with its size and the nature of its operations. The controls are adequate for ensuring orderly and efficient conduct of the business and these controls are working effectively. These controls have been designed to provide reasonable assurance with regard to recording and providing reliable financial and operational information, adherence to the Company's policies, safeguarding of assets from unauthorized use and prevention and detection of frauds and errors.
21. SIGNIFICANT AND MATERIAL ORDERS
There are no significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and Company's operations in future.
Annual Report 2018-19 41
22. PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS
IEPF in the subsequent years are given in the Corporate Governance Report, annexed with this the Annual Report.
The particulars of loans, guarantees and investments have been disclosed in the financial statements which forms part of this Annual Report.
23. TRANSACTIONS WITH RELATED PARTIES
The particulars of transactions entered into with the related parties referred to in Section 188(1) and applicable rules of the Act, have been given in Annexure 3 in Form AOC-2 which forms part of this Annual Report. The Company also has in place a `Related Party Policy', which is available on the website of the Company at https://www.hcltech.com/ investors/governance-policies.
24. CORPORATE SOCIAL RESPONSIBILITY
The Corporate Social Responsibility (`CSR') committee comprises of three members, namely Ms. Roshni Nadar Malhotra, Mr. Shiv Nadar and Mr. S. Madhavan. The Committee is inter-alia responsible for formulating and monitoring the CSR Policy of the Company. A brief outline of the CSR Policy of the Company and the initiatives undertaken by the Company on CSR activities during the year are set out in Annexure 4 of this Report in the form as prescribed under the Companies (Corporate Social Responsibility Policy) Rules, 2014. The CSR Policy is available on the website of the Company at https://www. hcltech.com/investors/governance-policies.
25. DIVIDEND DISTRIBUTION POLICY
The Company has formulated and published a Dividend Distribution Policy which provides for the circumstances under which the shareholders may / may not expect dividend, the financial parameters, internal and external factors, utilization of retained earnings, parameters with regard to different classes of shares etc. The provisions of this Policy are in line with Regulation 43A of the Listing Regulations, and the Policy is available on the website of the Company at https://www.hcltech.com/ investors/governance-policies. The details of the Dividend Distribution Policy forms part of the Corporate Governance Report annexed with this Annual Report.
26. UNCLAIMED DIVIDENDS AND TRANSFER TO IEPF
Pursuant to the provisions of Section 124 of the Act, those dividend amounts which have remained unpaid or unclaimed for a period of seven consecutive years from the date of declaration have been transferred by the Company to the Investor Education and Protection Fund (`IEPF') established by the Central Government pursuant to Section 125 of the Act. The details of the unpaid / unclaimed dividend amounts which will be transferred to
Further, according to the IEPF Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 (the "IEPF Rules"), the shares in respect of which dividends have not been paid or claimed by the shareholders for seven consecutive years or more are also required to be transferred to the demat account created by the IEPF Authority. Accordingly, during the year, the Company transferred 5,945 equity shares to the demat account of the IEPF Authority. The details of such shares are available on the website of the Company at https://www.hcltech.com/investors/iepf-details.
27. DEPOSITS
The Company has not accepted any deposits from the public.
28. CORPORATE GOVERNANCE
The Corporate Governance Report in terms of Regulation 34(3) of the Listing Regulations, along with the Statutory Auditors' certificate is attached and forms part of this Annual Report.
29. BUSINESS RESPONSIBILITY REPORT
The Listing Regulations mandates the inclusion of Business Responsibility Report (`BRR') as part of the Annual Report for top 500 listed companies based on market capitalization. In Compliance with this regulation, the Company has prepared a BRR for the financial year 2018-19 which describes the initiatives taken by the Company from an environmental, social and governance perspective and the same forms part of this Annual Report.
30. INSIDER TRADING REGULATIONS
Pursuant to the provisions of SEBI (Prohibition of Insider Trading) Regulations, 2015 (as amended from time to time), the Company has formulated a Code of Conduct on Prohibition of Insider Trading (`Insider Trading Code') and a Code of Practices and Procedures for fair disclosure of Unpublished Price Sensitive Information (`Fair Disclosure Code') which are in force. The Fair Disclosure Code is available on the website of the Company at https://www. hcltech.com/investors/governance-policies.
31. AWARDS AND RECOGNITIONS
Your Company relentlessly pursues excellence and is delighted to receive phenomenal share of recognitions and awards this year, not only from the media, but also from analysts, governing bodies, academic institutions, partners and even customers. Some of the key honors received by the Company during the year include:
42 Directors' Report
Awards
1. The Company was awarded with Outstanding Achievement Award in Automation Implementation at the Asia Outsourcing Leadership Awards 2019 for EXACTOTM, which harnesses the latest innovations in AI, Machine Learning and Computer Vision techniques that integrate seamlessly with Robotic Process Automation to create differentiated solutions.
2. The Company was awarded the America's Partner of the Year award by Dell and was also included in the Dell's President's Circle.
3. The Company was awarded the Cisco 2018 Award for Excellence in Software and Cloud.
4. The Company's solution DRYiCETM XSM was conferred the `Award of Distinction' at the Open Group Awards for Innovation and Excellence in Kochi in February 2019.
5. The Company was awarded the NASSCOM BPM Customer Excellence Award 2018 in co-creation category for helping its customer, a leading multinational bank and a Financial Services company to bring in customer-centricity with an innovative digital transformation of its Asset Management business and NASSCOM Artificial Intelligence Game Changer Award 2018 for Best 50 Innovative Applications of Artificial Intelligence Solution.
6. HCL Foundation, a CSR arm of the Company, was positioned amongst the top 10 Responsible Businesses in India at the Social and Business Enterprise Responsible Awards 2018 (SABERA). This award is an acknowledgement for the work being done to create a positive and inclusive environment.
7. The Company was awarded the SAP Pinnacle Award 2018 as the `GSSP SAP Business Transformation Partner of the Year'.
8. The Company won Silver Award by Brandon Hall group for the Best inclusion & Diversity strategy, Gold Award for the Coaching & Mentoring Program, Silver Award for Best Advance in Employee Engagement Programmes, Bronze Award in Wellness & Benefits Program where we showcased our wellness & wellbeing initiative.
Recognitions
9. The Company was positioned as a `Leader' in Gartner MQ for Managed Workplace Services, North America and Europe.
10. The Company was positioned as a `Leader' in Gartner MQ for DCO & Hybrid Infrastructure Managed Services, North America and Europe.
11. The Company was positioned as a `Leader' in ISG Provider Lens SIAM / ITSM: Service Design and Transition / Service Information Management.
12. The Company was positioned as a `Leader' in ISG Provider Lens Next-Gen Application Development & Maintenance (ADM) Services Next Gen ADM, Agile Services and Continuous Testing 2019.
13. The Company was positioned as a `Leader' and `Star Performer' in Everest's Application Services in Global Banking PEAK Matrix 2018 Assessment.
14. The Company was positioned as a `Leader' in the Forrester WaveTM: Global IoT Services Wave for Connected Business Operations, Q4 2018.
15. The Company was positioned as a `Leader' in IDC Market Scape Worldwide DevOps Service, 2018.
16. The Company was positioned as a `Leader' in ISG Provider LensTM Research Quadrant for Digital Business Transformation 2019.
17. The Company was positioned as a `Leader' in ISG Provider LensTM Research Quadrant for Cyber Security Solutions & Services.
18. The Company was positioned as a `Leader' in Everest IT Infrastructure Services Automation PEAK, 2018.
32. SUSTAINABILITY
The Company believes in a better tomorrow and based on this strong belief has embarked on a sustainability programme. The Company's continuous focus on improving all aspects of sustainability demonstrates its commitment to a sustainable tomorrow without compromising on the well-being of its employees today. To do this, the Company partners with multiple stakeholders to form an inclusive working group to create policies, processes and other organizational measures. Today, the sustainability function runs a vital program to drive the sustainability vision within the organization.
The ongoing success of the programme depends on a consistent and sustainable vision, ease and flexibility of implementation and most importantly employee engagement. At HCL, sustainability actions are a part of everyday operations. It believes that responsible investments in sustainability will generate long term value for all the stakeholders by improving competitiveness and reducing risk.
Sustainability can be created when we are able to integrate broader societal concerns into business strategy and performance as part of the Company's business model. This common sense of ownership can be realized by
Annual Report 2018-19 43
incorporating the interests of all those with whom the Company has mutually dependent relationships.
33. ORGANIZATION EFFECTIVENESS
Employee Strength and Expansion
As we close out another successful year, the Company has reached impressive employee additions and an employee strength of 1,37,965 and continues to build and support the business strategy of "Mode 1, 2 and 3".
The emphasis and commitment to talent localization continues as can be seen in our employee expansion and tenure milestones in the course of the last financial year. The Company believes that this strategy confers competitive advantages in a tightening regulatory environment with respect to workforce mobility. The Company continues to focus on tapping the unique advantages of tier 2 cities in India. These cities enable higher operational resilience, stability and scalability.
Employee Experience Initiatives
The Company strives to enhance employee experience and equip the workforce with tools and platforms to help accelerate their professional growth. Through "Simplify HR", a suite of tools has been revamped with simplified functionality to provide an improved user experience. The tools have been simplified and enhanced to automate the talent acquisition, talent integration, talent assessment and employee travel processes. Virtual assistance and "botification" have been enabled across multiple tools.
Talent Acquisition, Talent Development and Career Management
The talent acquisition and talent management practices of the Company are aligned to its Mode 1-2-3 strategy. The Company has leveraged digital technologies to enhance the quality and experience of talent acquisition, talent development and career management programs.
Talent Acquisition
With an impressive gross hiring of about 51,680+ professionals across the globe, the Company leveraged artificial intelligence and data science to hire the right talent at the right time. "Intelligent Neural Network" engine was deployed that searches through the database of a million+ candidate records and supports our talent acquisition along with prescriptive insights.
Talent Development and Career Progression
Talent development offers integrated and comprehensive learning ecosystem focusing on development of HCL
44 Directors' Report
ideapreneurs and driving key business outcomes in alignment to the Company's Mode 1-2-3 strategy. It offers a robust and nurturing learning framework to empower the employees with the relevant skill sets and to become 21st century leaders.
In the past financial year, the Company used demand, fulfilment and learning analytics to create a governance framework that constantly align the demand and learning systems to identify focused skills for the next 2 years and build them at scale. Structured learning journeys have been curated and learning solutions have been designed in partnership with globally benchmarked learning partners offering world class content. An entire gamut of leadership and behavioral learning journeys have also been customized, covering all aspects of defined competencies. These learning programs act as touch-points during an employee's life-cycle, which positively impacts current performance and productivity in their respective roles and prepares them to be future ready.
The training approach at client and business line level has helped the employees to proactively identify training needs and deepen their skills in new technologies.
In the commitment to engage employees from diverse backgrounds meaningfully, the Company actively supports and fosters a number of Employee Resource Groups (`ERGs'). These ERGs are led and driven by employees themselves and act as platforms for employees to anchor organizational change and development. The Company also undertakes various employee welfare initiatives that extend to the families of the employees. Details of such initiatives have been given in the Business Responsibility Report, forming part of this Annual Report.
Career Management
The Company's prescriptive career recommendation platform, leveraging Artificial Intelligence and Big Data achieved further traction during the financial year.
9,000 employees progressed to their destinations in their career journeys during the financial year taking the launch to date count to 17,000.
Diversity and Inclusion
As an organization, the Company believes that diversity inspires creative thinking and leads to sustained innovation within the workplace. The Company prides itself on being an organization with an open, transparent, and inclusive culture. Our focus is to create an inclusive environment for employees with diverse backgrounds combined with concerted efforts from our leaders. It has enabled to improve the diversity ratio at all levels. Our overall gender diversity rate is currently at 24.90%. Our various programs
on networking, advocacy and professional development are helping to build an inclusive workforce which goes beyond demographic differences to include gender, nationality, culture, ethnicity, age and the differing abilities of individuals. The Company now has 39% more women in senior leadership roles directly aligned with business heads and gender ratio at senior leadership has just doubled. The Company ensures fair representation of diverse candidates in the hiring process to attract top talent and consider the cognitive diversity while hiring a candidate for the position.
The Company's Diversity and Inclusion strategy focuses on talent attraction, talent growth and talent retention. These 3 strategies work in tandem to ensure a unified experience in promoting gender diversity, cultural diversity and inclusivity across the enterprise.
With the aim of enabling strong career development for women, the Company has launched focused programs for women employees at all levels with a special focus on increasing the representation of women leaders in the leadership. These include -
Stepping Stones - enabling mid-level women managers to connect with leadership and experience learning from globally acclaimed vendors.
ASCEND Program - provides a platform to women leaders for their career development through range of experiential learning, powering up the network and creating visibility in the leadership forums. The program's key elements include mentoring by senior leaders, SME guided peer coaching, leadership connect session, virtual learnings enabled by LinkedIn and Harvard.
PRELUDE - a relatively new program launched with an objective to tap in to existing open positions and mapping with next level role of women leaders specifically in technical domains.
Senior Hire Integration - helps integration and assimilation of senior women hiring into the Company's ecosystem through upwards and lateral coaching by senior leaders, peer buddies and direct reports.
iBelieve - a program for women who wish to start or restart careers in IT. Eligible candidates enrolling into this program get trained for skilled job opportunities and post the successful completion of the training, they are employed with the Company. The program has received an overwhelming response.
Networking and Advocacy - iMotivate, Feminspiration, Women Connect, BlogHer are the platforms wherein successful women leaders address the aspiring young leaders, help the employees
gain insight into successful leadership as well as understand perspectives on gender matters.
The Company is making conscious efforts to create an environment which is more and more amenable and friendly to our employees. Some of our key initiatives include:
Facilitating work life balance and flexible work arrangement through policies like Telecommute and Day Care;
Quarterly lunch meet of senior women leaders with the Board Members;
Pre and post maternity counselling for managers and new mothers;
Workshop focusing on inclusion and unconscious biases, inclusion assessments and labs; and
Women connect group in each geo to promote gender diversity.
Recognition of HCL Culture and Engagement Practices across the world
To reinforce alignment of core beliefs and actions, the Company continues to transform its policies, processes and practices. This has further enabled and empowered the employees, a fact that has been well recognized by various industry forums and leading associations.
The Company was recognized as the Top Employer in the United Kingdom for the thirteenth consecutive year in recognition of its best-in-class employee engagement and people practices.
The People Capital Index (PCI) study 2019 announced the Company in the top 50 companies for developing their people capital organized by Jombay.
In continued recognition of its innovative HR best practices, the Company was felicitated with various Brandon Hall Group Excellence Awards under various categories including `Best Advance in Coaching & Mentoring Program', `Best Advance in Leadership Development Strategy', `Best Inclusion & Diversity Strategy', `Best Advance in Employee Engagement Programmes', `Best Advance in Career Management & Succession Planning at Workplace' and `Best in Wellness & Benefits Program'.
34. CONSERVATION OF ENERGY, RESEARCH AND DEVELOPMENT, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO
Disclosures of particulars as required under Section 134(3) (m) of the Act, read with the Companies (Accounts) Rules, 2014 to the extent applicable to the Company, are set out in Annexure 5 to this Annual Report.
Annual Report 2018-19 45
35. DIRECTORS' RESPONSIBILITY STATEMENT
A statement of responsibility of the Directors relating to compliance with the financial accounting and reporting requirements in respect of the financial statements, as specified under Section 134(3)(c) of the Act, is annexed as Annexure 6 to this Annual Report.
36. STOCK OPTIONS PLANS
1999 Stock Option Plan / 2000 Stock Option Plan / 2004 Stock Option Plan
The details of these plans have been annexed as Annexure 7 to this Annual Report.
37. PARTICULARS OF EMPLOYEES
The information required pursuant to Section 197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are given below:
a. The ratio of remuneration of each director to the median remuneration of the employees of the Company for the financial year:
Sl. No.
Name of Director
Executive Director(s) 1. Mr. Shiv Nadar(1)
Non-Executive Director(s) 2. Mr. Deepak Kapoor 3. Mr. James Philip Adamczyk(2) 4. Mr. Keki Mistry(3) 5. Mr. S. Madhavan 6. Ms. Nishi Vasudeva 7. Ms. Robin Ann Abrams 8. Ms. Roshni Nadar Malhotra 9. Dr. Sosale Shankara Sastry 10. Mr. R. Srinivasan 11. Mr. Sudhindar Krishan Khanna(4) 12. Mr. Thomas Sieber
Ratio to median remuneration of employees
52.52
7.00 -
9.01 6.94 13.12 8.38 10.29 12.26 6.44 10.29
The remuneration of Non-Executive Directors also includes sitting fees paid during the year.
(1) The ratio has been calculated after taking into account the remuneration drawn from the Company as well as the subsidiaries.
(2) Mr. James Philip Adamczyk was appointed as a Director of the Company w.e.f. July 26, 2018. Hence, the said information is incomparable and not provided.
(3) Mr. Keki Mistry resigned as a Director of the Company w.e.f. April 30, 2018. Hence, the said information is incomparable and not provided.
(4) Mr. Sudhindhar Krishan Khanna resigned as a Director of the Company w.e.f. April 8, 2019.
46 Directors' Report
b. The percentage increase in remuneration of each Director, Chief Executive Officer, Chief Financial Officer, Company Secretary in the financial year:
% increase in
Sl. No.
Name of Director / KMP
remuneration in the financial
year
Director(s)
1. Mr. Shiv Nadar(1)
(2.64)
2. Mr. Deepak Kapoor(2)
-
3. Mr. James Philip Adamczyk(3)
-
4. Mr. Keki Mistry(4)
-
5. Mr. S. Madhavan
4.25
6. Ms. Nishi Vasudeva
(0.31)
7. Ms. Robin Ann Abrams
4.04
8. Ms. Roshni Nadar Malhotra
1.04
9. Dr. Sosale Shankara Sastry
4.98
10. Mr. R. Srinivasan
3.77
11. Mr. Sudhindar Krishan Khanna (5)
0.34
12. Mr. Thomas Sieber
13.37
Key Managerial Personnel
13. Mr. C. Vijayakumar (President
(15.67)
& Chief Executive Officer)
14. Mr. Prateek Aggarwal (Chief
-
Financial Officer) (6)
15. Mr. Anil Kumar Chanana
-
(Chief Financial Officer) (6)
16. Mr. Manish Anand (Company
20.73
Secretary)
The remuneration of Non-Executive Directors also includes sitting fees paid during the year.
(1) The % has been calculated after taking into account the remuneration drawn from the Company as well as the subsidiaries and the change is on account of exchange rate difference.
(2) Mr. Deepak Kapoor was appointed as a Director of the Company w.e.f. July 26, 2017. Hence, the said information is incomparable and not provided.
(3) Mr. James Philip Adamczyk was appointed as a Director of the Company w.e.f. July 26, 2018. Hence, the said information is incomparable and not provided.
(4) Mr. Keki Mistry resigned as a Director of the Company w.e.f. April 30, 2018. Hence, the said information is incomparable and not provided.
(5) Mr. Sudhindhar Krishan Khanna resigned as a Director of the Company w.e.f. April 8, 2019.
(6) Mr. Prateek Aggarwal was appointed as the CFO of the Company w.e.f. October 1, 2018 in place of Mr. Anil Kumar Chanana who stepped down from the position of CFO. Accordingly, the said information is incomparable and not provided.
c. The percentage increase in the median remuneration of employees in the financial year:
6.4%
d. The number of permanent employees on the rolls of Company:
There were 69,853 permanent employees on the rolls of the Company. In addition, the Company had 68,112 employees on the rolls of its subsidiaries.
e. Average percentile increase already made in the salaries of employees other than the managerial personnel in the last financial year and its comparison with the percentile increase in the managerial remuneration and justification thereof and point out if there are any exceptional circumstances for increase in the managerial remuneration:
The average percentile increase made in the salaries of employees other than the managerial personnel in the last financial year was 4.2%.
Mr. Shiv Nadar, being the Managing Director is the managerial person of the Company. There has been no change in the overall remuneration of Mr. Shiv Nadar. Mr. Shiv Nadar receives remuneration from the overseas subsidiaries of the Company, hence, the difference in the remuneration as appearing above of -2.64% is on account of exchange rate difference.
f. Affirmation that the remuneration is as per the remuneration policy of the Company:
The Company affirms that the remuneration is as per the Remuneration Policy of the Company.
38. STATEMENT OF EMPLOYEES PURSUANT TO RULE 5(2) THE COMPANIES (APPOINTMENT AND REMUNERATION OF MANAGERIAL PERSONNEL) RULES, 2014
A list containing the top ten employees in terms of the remuneration drawn in the financial year 2018-19 and a statement containing the names of the employees employed throughout the financial year and in receipt of remuneration of ` 1.02 crore or more and employees employed for part of the year and in receipt of ` 8.50 lacs or more per month, pursuant to Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is provided as Annexure 8 to this Annual Report.
39. VIGIL MECHANISM / WHISTLEBLOWER POLICY
The Company has formulated and published a Whistleblower Policy to provide Vigil Mechanism for employees including the Directors of the Company to report genuine concerns and to ensure strict compliance with ethical and legal standards across the Company. The provisions of this Policy are in line with the provisions of the Section 177(9) of the Act and the Listing Regulations and is available on the website of the Company at https://www.hcltech. com/investors/governance-policies. The details of the Whistleblower Policy form part of the Corporate Governance Report annexed with this Annual Report.
40. DISCLOSURE UNDER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013
The Company has in place a Prevention and Redressal of Sexual Harassment at Work Place Policy in line with the requirements of Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. The Company has constituted an Internal Committee for the redressal of all sexual harassment complaints. These matters are also being reported to the Audit Committee. The details of the Policy and the complaints are given under Corporate Governance Report and the Business Responsibility Report respectively, annexed with this Annual Report.
41. ACKNOWLEDGEMENTS
The Board wishes to place on record its appreciation of the significant contributions made by the employees of the Company and its subsidiaries during the year under review. The Company has achieved impressive growth through competence, hard work, solidarity, cooperation and support of employees at all levels. Your Directors thank the customers, vendors and other business associates for their continued support in the Company's growth. Your Directors also wish to thank the government authorities, banks and shareholders for their cooperation and assistance extended to the Company.
For and on behalf of the Board of Directors
Place: Noida (U.P.), India Date: May 9, 2019
SHIV NADAR Chairman & Chief Strategy Officer
Annual Report 2018-19 47
Annexure 1 to the Directors' Report
The Members, HCL Technologies Limited 806, Siddharth 96, Nehru Place New Delhi-110019
SECRETARIAL AUDIT REPORT
FOR THE FINANCIAL YEAR ENDED MARCH 31, 2019
We have conducted the secretarial audit of the compliance of applicable statutory provisions and the adherence to good corporate practices by HCL Technologies Limited (hereinafter called the company). Secretarial Audit was conducted in a manner that provided us a reasonable basis for evaluating the corporate conducts/statutory compliances and expressing our opinion thereon.
Based on our verification of the Company's books, papers, minute books, forms and returns filed and other records maintained by the company and also the information provided by the Company, its officers, agents and authorized representatives during the conduct of secretarial audit, We hereby report that in our opinion, the company has, during the audit period covering the financial year ended on March 31, 2019 complied with the statutory provisions listed hereunder and also that the Company has proper Board-processes and compliance-mechanism in place to the extent, in the manner and subject to the reporting made hereinafter:
We have examined the books, papers, minute books, forms and returns filed and other records maintained by the Company for the financial year ended on March 31, 2019 according to the provisions of:
(i) The Companies Act, 2013 (the Act) and the rules made thereunder;
(ii) The Securities Contracts (Regulation) Act, 1956 (`SCRA') and the rules made thereunder;
(iii) The Depositories Act, 1996 and the Regulations and Bye-laws framed thereunder to the Regulation 76 of Securities and Exchange Board of India (Depositories and Participants) Regulations, 2018;
(iv) Foreign Exchange Management Act, 1999 and the rules and regulations made thereunder to the extent of Foreign Direct Investment, Overseas Direct Investment and External Commercial Borrowings;
(v) The following Regulations and Guidelines prescribed under the Securities and Exchange Board of India Act, 1992 (`SEBI Act'):-
a) The Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011;
b) The Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015
c) The Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2018;
d) The Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014;
e) The Securities and Exchange Board of India (Issue and Listing of Debt Securities) Regulations, 2008; Not Applicable
f) The Securities and Exchange Board of India (Registrars to an Issue and Share Transfer Agents) Regulations, 1993 regarding the Companies Act and dealing with client to the extent of securities issued;
g) The Securities and Exchange Board of India (Delisting of Equity Shares) Regulations, 2009; Not Applicable, and
h) The Securities and Exchange Board of India (Buyback of Securities) Regulations, 2018;
(vi) As confirmed and certified by the management specifically applicable to the Company based on their sector/ industry are:
(a) The Special Economic Zone Act, 2005
(b) Policy relating to Software Technology Parks of India and its regulations
(c) The Indian Copyright Act, 1957
(d) The Patents Act, 1970
(e) The Trade Marks Act, 1999
(f) The Indian Telegraph Act, 1885
(g) The Indian Wireless Telegraphy Act, 1933
48 Directors' Report
We have also examined compliance with the applicable clauses of the following:
(i) Secretarial Standards issued by The Institute of Company Secretaries of India and notified by Ministry of Corporate Affairs.
(ii) SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.
During the period under review the Company has generally complied with the provisions of the Act, Rules, Regulations, Guidelines, Standards, etc. mentioned above.
We further report that:
The Board of Directors of the Company is duly constituted with proper balance of Executive Directors, Non-Executive Directors and Independent Directors. The changes in the composition of the Board of Directors that took place during the period under review were carried out in compliance with the provisions of the Act.
Adequate notice is given to all directors to schedule the Board Meetings, agenda and detailed notes on agenda were sent at least seven days in advance (except in cases where meetings were convened at a shorter notice for which necessary approvals obtained as per applicable provisions), and a system exists for seeking and obtaining further information and clarifications on the agenda items before the meeting and for meaningful participation at the meeting.
All decisions at Board Meetings and Committee Meetings are carried out unanimously as recorded in the minutes of the meetings of the Board of Directors or Committee of the Board, as the case may be.
We further report that there are adequate systems and processes in the company commensurate with the size and operations of the company to monitor and ensure compliance with applicable laws, rules, regulations and guidelines.
We further report that during the audit period the Company had made a Buy Back of 3,63,63,636 equity shares of the Company and the said event deemed to have major bearing on the company's affairs in pursuance of the above referred laws, rules, regulations, guidelines, standards, etc.
Chandrasekaran Associates Company Secretaries
Dr. S. Chandrasekaran Senior Partner Membership No. FCS No.: 1644 Certificate of Practice No.: 715
Date: 09.05.2019 Place: Delhi
Note: This report is to be read with our letter of even date which is annexed as Annexure-A and form an integral part of this report.
Annual Report 2018-19 49
Annexure - A to the Secretarial Audit Report
The Members HCL Technologies Limited 806, Siddharth 96, Nehru Place New Delhi-110019 1. Maintenance of secretarial record is the responsibility of the management of the Company. Our responsibility is to express an
opinion on these secretarial records based on our audit. 2. We have followed the audit practices and processes as were appropriate to obtain reasonable assurance about the correctness
of the contents of the secretarial records. The verification was done on the random test basis to ensure that correct facts are reflected in secretarial records. We believe that the processes and practices, we followed provide a reasonable basis for our opinion. 3. We have not verified the correctness and appropriateness of financial records and Books of Accounts of the Company. 4. Where ever required, we have obtained the Management representation about the compliance of laws, rules and regulations and happening of events etc. 5. The compliance of the provisions of Corporate and other applicable laws, rules, regulations, standards is the responsibility of management. Our examination was limited to the verification of procedures on the random test basis. 6. The Secretarial Audit report is neither an assurance as to the future viability of the company nor of the efficacy or effectiveness with which the management has conducted the affairs of the Company. Chandrasekaran Associates Company Secretaries Dr. S. Chandrasekaran Senior Partner Membership No. FCS No.: 1644 Certificate of Practice No.: 715 Date: 09.05.2019 Place: Delhi
50 Directors' Report
Annexure 2 to the Directors' Report
FORM NO. MGT 9
EXTRACT OF ANNUAL RETURN As on financial year ended on 31.03.2019
(Pursuant to Section 92(3) of the Companies Act, 2013 and Rule 12(1) of the Companies (Management & Administration) Rules, 2014)
I. REGISTRATION & OTHER DETAILS:
1. CIN
L74140DL1991PLC046369
2. Registration Date
12 November 1991
3. Name of the Company
HCL Technologies Limited
4. Category / Sub-category of the Company
Public Company Limited by Shares
5. Address of the Registered Office and contact 806, Siddharth, 96, Nehru Place, New Delhi - 110019
details
Telefax: +91-11-26436336
6. Whether listed company
Yes
7. Name, address and contact details of the Registrar Alankit Assignments Limited
& Transfer Agent, if any
205-208, Anarkali Market,
Jhandewalan Extension,
New Delhi - 110055, India
Tel.: +91-11-42541234, 23541234
Fax: +91-11-42541967
II. PRINCIPAL BUSINESS ACTIVITIES OF THE COMPANY (All the business activities contributing 10% or more of the total turnover of the company shall be stated):
S.
Name and Description of main
No.
products / services
1 Computer Programming, Consultancy and Related Activities
NIC Code of the product / service
620
III. PARTICULARS OF HOLDING, SUBSIDIARY AND ASSOCIATE COMPANIES:
% to total turnover of the company
100
S. No.
Name and Address of the Company
CIN / GLN
1 HCL Comnet Systems and Services Ltd. 806, Siddharth, 96, Nehru Place, New Delhi-110019
U74899DL1993PLC056665
2 HCL Comnet Ltd. 806, Siddharth, 96, Nehru Place, New Delhi-110019
U74899DL2001PLC111951
3 HCL Global Processing Services Ltd. U72300DL1995PLC069891 806, Siddharth, 96, Nehru Place, New Delhi-110019
4 HCL Eagle Limited 806, Siddharth, 96, Nehru Place, New Delhi-110019
U72200DL2011PLC225052
5 HCL Foundation 806, Siddharth, 96, Nehru Place, New Delhi-110019
U85100DL2014NPL274786
Holding / Subsidiary / Associate Subsidiary
Subsidiary
Subsidiary
Subsidiary
Subsidiary
% of shares
held 100
100
100
100
100
Applicable Section 2(87)
2(87) 2(87) 2(87) 2(87)
Annual Report 2018-19 51
S. No.
Name and Address of the Company
CIN / GLN
6 HCL Bermuda Ltd. Canon's Court 22, Victoria Street, Hamilton HM 12, Bermuda
Not Applicable
7 HCL Great Britain Ltd. Axon Centre, Church Road, Egham, Surrey TW20 9QB, UK
Not Applicable
8 HCL (Netherlands) BV Prinses Beatrixlaan 532, unit C06.01, 2595 BM `s-Gravenhage, The Netherlands
Not Applicable
9 HCL GmbH Frankfurter Strasse 63-69, D-65760 ESCHBORN, Germany
Not Applicable
10 HCL Belgium NV Lozenberg 22 Bus 3, B-1932, Zaventem, Belgium
Not Applicable
11 HCL Sweden AB Sveavagen 21-23, 5 tr, 111 34 Stockholm, Sweden
Not Applicable
12 HCL Italy SRL Vimodrone (MI) via Luigi Cadorna n. 73, CAP 20090, Italy
Not Applicable
13 HCL Australia Services Pty. Ltd. C/0- Mitchell & Partners Suite 3, Level 2, 66 Clarence Street, Sydney NSW 2000, Australia
Not Applicable
14 HCL (New Zealand) Ltd. C/o ilumin Ltd,1st Floor, 79 Taranaki Street, Wellington 6011, New Zealand
Not Applicable
15 HCL Hong Kong SAR Ltd. 803A, Allied Kajima Building, No 138 Gloucester Road, Wanchai , Hong Kong
Not Applicable
16 HCL Japan Ltd. 19F, NBF Hibiya Building, 1-1-7, Uchisiwal-cho Chiyoda-Ku, Tokyo, Postal Code-100-0011, Japan
Not Applicable
17 HCL America Inc. 330, Potrero Ave, Sunnyvale, California 94085, USA
Not Applicable
18 HCL Technologies Austria GmbH Karlsplatz 3/19, 1010 Wien, Austria
Not Applicable
19 HCL Singapore Pte. Ltd. 8, Shenton Way, 33-03, AXA Tower, Singapore 068811
Not Applicable
20 HCL Technologies Solutions Ltd.
U72900KA1999PLC026077
501-503, Fourth Floor, Oxford House,
No. 15, Rustam Bagh, Main Road, off.
Airport Road (old), Behind Manipal
Hospital, Bangalore-560017
21 HCL Poland sp. z o.o Zabierzów 32-080, Krakowska 280 Street, Poland
Not Applicable
Holding / Subsidiary / Associate Subsidiary Subsidiary Subsidiary
Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary
Subsidiary Subsidiary Subsidiary
Subsidiary Subsidiary Subsidiary Subsidiary
Subsidiary
% of shares
held 100 100 100
100 100 100 100 100
100 100 100
100 100 100 100
100
Applicable Section 2(87) 2(87) 2(87)
2(87) 2(87) 2(87) 2(87) 2(87)
2(87) 2(87) 2(87)
2(87) 2(87) 2(87) 2(87)
2(87)
52 Directors' Report
S. No.
Name and Address of the Company
22 HCL Technologies (Shanghai) Limited Suites 301, Floor 3, Building No. 2, Lane 399, Shengxia Road, Zhangjiang Hi tech park, Free Trade Zone, Shanghai
23 HCL EAS Ltd. Axon Centre, Church Road, Egham, Surrey, TW20 9QB, England
24 Axon Group Ltd. Axon Centre, Church Road, Egham, Surrey, TW20 9QB, England
25 HCL Axon Technologies Inc. 55 City Centre Drive, Unit# 303 Mississauga Ontario L5B 1M3, Canada
26 HCL Technologies Solutions Gmbh Kirchgasse 24 8001 Zurich Switzerland
27 Axon Solutions Pty. Limited Mitchell & Partners, Suite 3, Level 2, 66 Clarence Street, Sydney, NSW 2000, Australia
28 Axon Solutions Limited Axon Centre, Church Road, Egham, Surrey, TW20 9QB, England
29 HCL Axon Malaysia Sdn. Bhd. L5E-1B Enterprise 4, Technology Park Malaysia, Lebuhraya Puchong Sg. Besi, Bukit Jalil, 57000 Kuala Lumpur, Malaysia
30 Axon Solutions Singapore Pte. Ltd. 519, Balestier Road, #03 - 01 Le Shantier Singapore 329852
31 Axon Solutions (Shanghai) Co. Ltd. Suites 401, Floor 4, Building No.2, Lane 399, Shengxia Road, Zhangjiang Hi tech park, Free Trade Zone, Shanghai
32 HCL Axon (Proprietary) Ltd. GMI House, Harlequins Office Park, 164, Totius Street, Groenkloof, Pretoria, 0027, South Africa
33 HCL Insurance BPO Services Limited HCL House, 28-36 Eastern Road, Romford, Essex, RM1 3PJ.
34 HCL Argentina s.a. 25 de Mayo 489, 3rd Floor, Buernos Aires, Argentina
35 HCL Mexico S. de R.L. Avenida Empresarios 135 Piso 2 COL. Puerta De Hierro Guadalajara Jalisco CP.45116, Mexico
36 HCL Technologies Romania s.r.l. Office 2, Room 5, Semi-basement, 15-17 Helesteului street, 1st District, Bucharest, Romania
CIN / GLN Not Applicable
Not Applicable Not Applicable Not Applicable Not Applicable Not Applicable Not Applicable Not Applicable
Not Applicable Not Applicable Not Applicable Not Applicable Not Applicable Not Applicable Not Applicable
Holding / Subsidiary / Associate
Subsidiary
% of shares
held
100
Applicable Section
2(87)
Subsidiary
100
Subsidiary
100
Subsidiary
100
Subsidiary
100
Subsidiary
100
Subsidiary
100
Subsidiary
100
2(87) 2(87) 2(87)
2(87) 2(87)
2(87) 2(87)
Subsidiary
100
Subsidiary
100
Subsidiary
100
Subsidiary
100
Subsidiary
100
Subsidiary
100
Subsidiary
100
2(87) 2(87) 2(87) 2(87) 2(87) 2(87) 2(87)
Annual Report 2018-19 53
S. No.
Name and Address of the Company
37 HCL Hungary kft H-1143 Budapest, Stefánia u. 101-103. Hungary
38 HCL Latin America Holding LLC 1209, Orange Street, Wilmington, Delaware 19808, USA
39 HCL (Brazil) Technologia da informacao EIRELI Rua das Olimpíadas, Nº 205, Conjunto 12 - Edificio Continental Square,Bairro Vila Olímpia São Paulo, São Paulo - Brasil CEP 04551-000
40 HCL Technologies Denmark Aps Tuborg Boulevard 12, 3, 2900 Hellerup, Denmark
41 HCL Technologies Norway AS Dronning Eufemias Gate 6, 0191 Oslo, Norway
42 PT HCL Technologies Indonesia GD One Pacific Place, LT 15 SCBD JL, Jend Sudirman KAV 52-53, Senayan, Kebayoran Baru, Jakarta, Selatan , DKI Jakarta 12190, Indonesia
43 HCL Technologies South Africa (Proprietary) Limited GMI House, Harlequins Office Park, 164, Toitus Street, Groenkloof, Pretoria 0027, South Africa
44 HCL Arabia LLC AL Olaya Street, Al Aqariya Plaza, Office NO.203, Riyadh-12244, Kingdom of Saudi Arabia
45 HCL Technologies Philippines, Inc. Net Cube Center, 3rd Avenue Corner, 30th Street, E-Square Zone, Bonifacio Global City, Taguig City, Metro, Manila 1634 Philippines
46 HCL Technologies France 22 rue de Caumartin 75009 Paris, France
47 Filial Espanola De HCL Technoloiges S.L. Paseo de la Castellana, 35, 2 Planta 28046 Madrid, Spain
48 Anzospan Investments Pty. Ltd GMI House, Harlequins Office Park, 164, Toitus Street, Groenkloof, Pretoria 0027, South Africa
49 HCL Investments (UK) Ltd. Axon Centre, Church Road, Egham, Surrey, TW20 9QB, England
50 HCL America Solutions Inc. 330, Potrero Ave, Sunnyvale, California 94085, USA
54 Directors' Report
CIN / GLN Not Applicable Not Applicable Not Applicable
Not Applicable Not Applicable Not Applicable
Not Applicable
Not Applicable Not Applicable
Not Applicable Not Applicable Not Applicable Not Applicable Not Applicable
Holding / Subsidiary / Associate
Subsidiary
% of shares
held
100
Applicable Section
2(87)
Subsidiary
100
2(87)
Subsidiary
100
2(87)
Subsidiary
100
Subsidiary
100
Subsidiary
100
2(87) 2(87) 2(87)
Subsidiary
100
2(87)
Subsidiary
100
Subsidiary
100
2(87) 2(87)
Subsidiary
100
Subsidiary
100
Subsidiary
100
Subsidiary
100
Subsidiary
100
2(87) 2(87) 2(87) 2(87) 2(87)
S. No.
Name and Address of the Company
51 HCL Technologies Chile SPA EL Golf 40 Piso, Las Condes, Santigo, CP 755-0107, Chile
52 HCL Technologies UK Ltd. Axon Centre, Church Road, Egham, Surrey, TW20 9QB, England
53 HCL Technologies B.V. Prinses Beatrixlaan 532, unit C06.01, 2595 BM `s-Gravenhage, The Netherlands
54 HCL Technologies Germany GmbH Frankfurter Strasse 63-69, 65760 ESCHBORN, Germany
55 HCL (Ireland Information) Systems Ltd. Telephone House, 43-46, Marlbourigh Street, Dublin 1, Ireland
56 HCL Technologies Finland Oy Keilaranta 6 02150 Espoo, Finland
57 HCL Technologies Belgium BVBA Lozenberg 22 Bus 3, B-1932, Zaventem, Belgium
58 HCL Technologies Sweden AB Sveavagen 21-23, 5 tr, 111 34 Stockholm, Sweden
59 HCL Technologies Italy S.P.A. Vimodrone (MI) via Luigi Cadorna n. 73, CAP 20090, Italy
60 HCL Technologies Columbia S.A.S. CR 7 NO. 71 - 52 TO A OF 706), Bogotá Colombia
61 HCL Technologies Middle East FZ-LLC, 215, Floor 2, Building 15, Dubai Internet City, Dubai, UAE
62 HCL Technologies Greece Single Member P.C. 62 Kifissias Avenue, 15125 Maroussi, Athens, Greece
63 HCL Istanbul Bilisim Teknolojileri Limited Sirketi Maslak Meydan District No:3 Veko Giz Plaza 13th Floor Apartment no:43 Room no:1302 Sariyer/Istanbul
64 HCL Technologies Egypt Ltd. Unit No. 01 2237, North Tower, Nile City Towers, 22nd Floor, Ramelt Beaulac Corniche el Nile Cairo, Egypt
65 HCL Technologies S.A. Eddificio Atrium, Piso 3, Av. Venezuela, El Rosal, Caracus, Venezuela
66 HCL Technologies Luxembourg SARL 42-44, Avenue de la Gare, L-1610 Grand Duchy of Luxembourg
CIN / GLN Not Applicable Not Applicable Not Applicable
Not Applicable Not Applicable Not Applicable Not Applicable Not Applicable Not Applicable Not Applicable Not Applicable Not Applicable
Not Applicable
Not Applicable
Not Applicable Not Applicable
Holding / Subsidiary / Associate
Subsidiary
% of shares
held
100
Applicable Section
2(87)
Subsidiary
100
2(87)
Subsidiary
100
2(87)
Subsidiary
100
Subsidiary
100
Subsidiary
100
Subsidiary
100
Subsidiary
100
Subsidiary
100
Subsidiary
100
Subsidiary
100
Subsidiary
100
2(87) 2(87) 2(87) 2(87) 2(87) 2(87) 2(87) 2(87) 2(87)
Subsidiary
100
2(87)
Subsidiary
100
2(87)
Subsidiary
100
Subsidiary
100
2(87) 2(87)
Annual Report 2018-19 55
S. No.
Name and Address of the Company
CIN / GLN
67 HCL Technologies Beijing Co. Ltd. 10F Building A, Qiming International Building, No.101 Wangjing Lize Zhongyuan, Chao Yang District, Beijing
Not Applicable
68 HCL Technologies (Thailand) Limited 89, AIA Capital Center, 20/F, Room 2005-2007, Ratchadapisek Road, Kwaeng Dindaeng, Khet Dindaeng, Bangkok 10400, Thailand
Not Applicable
69 HCL Technologies Estonia OU Väike-Karja 3/Sauna 2, Tallinn, Harju county-10140, Estonia
Not Applicable
70 HCL Technologies Czech Republic S.R.O. Praha 2 Nové Msto, Kateinská 466/40, 120 00, Czech Republic
Not Applicable
71 CeleritiFintech Limited Axon Centre, Chruch Road, Egham, Surrey, TW20 9QB, England
Not Applicable
72 CeleritiFinTech Australia Pty. Limited Mitchell & Partners Suite 3, Level 2, 66 Clarence Street, Sydney, NSW, 2000, Australia
Not Applicable
73 CeleritiFinTech USA Inc. 1209 Orange Street, Wilmington, Delaware 19801, New Castle County, USA
Not Applicable
74 PowerTeam LLC 718,Washington Avenue, N. Suite, Minneapolis, Minnesota, 55401, USA
Not Applicable
75 Concept2Silicon Systems Private Limited 501-503, 4th Floor, Oxford House No. 15, Rustam Bagh, Behind Manipal Hospital, Main Road, Bangalore 560017
U72200KA2009PTC050240
76 HCL Training & Staffing Services Private Limited 806, Siddharth, 96, Nehru Place, New Delhi-110019
U74140DL2015PTC281555
77 HCL Muscat Technologies LLC PO Box 29 PC 135, KOM, Sultanate of Oman
Not Applicable
78 CeleritiFinTech Germany GmbH Frankfurter Strasse 63-69, D-65760 ESCHBORN, Germany
Not Applicable
79 Point to Point Limited Axon Centre, Church Road, Egham, Surrey, TW20 9QB, England
Not Applicable
80 Point to Point Products Limited Axon Centre, Church Road, Egham, Surrey, TW20 9QB, England
Not Applicable
Holding / Subsidiary / Associate Subsidiary
Subsidiary
Subsidiary Subsidiary
Subsidiary Subsidiary
Subsidiary
Subsidiary Subsidiary
Subsidiary
Subsidiary Subsidiary Subsidiary Subsidiary
% of shares
held 100
100
100 100
51 51
51
100 100
100
100 51 100 100
Applicable Section 2(87) 2(87)
2(87) 2(87) 2 (87) 2 (87) 2 (87) 2(87) 2(87)
2(87) 2(87) 2(87) 2(87) 2(87)
56 Directors' Report
S. No.
Name and Address of the Company
81 HCL Technologies Lithuania UAB Vilnius City Municipality, Vilnius City, Jogailos 9, Lithuania
82 HCL Technologies (Taiwan) Ltd. (110) 18F., No. 460, Sec. 4, Xinyi, Road, Xinyi, Dist., Taipei, Taiwan
83 Geometric Americas, Inc. 50 Kirts Blvd., Suite A, Troy, MI 48084 USA
84 Butler America Aerospace LLC 330, Potrero Ave, Sunnyvale, California 94085, USA
85 Geometric Asia Pacific Pte. Ltd. 8 Shenton Way, #21-07 AXA Tower, Singapore 06881
86 Geometric Europe GmbH Frankfurter Ring 17, 80807 Munich, Germany
87 Geometric China Inc. Room 302, No 2 Building, Lane 399, Sheng Xia Road, Zhangjiang High-Tech Park, Pu Dong District, Shanghai PRC
88 Geometric SRL Parcul Mic 19-21, bl.2 sc.A Mezzanine, Brasov, 500386, Romania
89 Geometric SAS 17, Avenue Didier Daurat, Bâtiment Socrate, First Floor, 31702 Blagnac Cedex, Toulouse, France
90 HCL Technologies Corporate Services Limited Axon Centre, Church Road, Egham, United Kingdom, TW20 9QB
91 Urban Fulfilment Services, LLC 51 Little Falls Drive, Wilmington, Delaware, 19808, USA Principal Office: 8744 Lucent Blvd., Second Floor, Highlands Ranch, CO, 80129, USA
92 Datawave (An HCL Technologies Company) Limited Caledonian Exchange, 19a Canning Street, Edinburgh, Scotland, EH3 8HE.
93 Telerx Marketing Inc. 723 Dresher Road, Horsham, PA 19044-0 Montgomery, USA
94 C3i Europe Eood 1766, Business Park Sofia, Building 7, entr. B, 1st floor, Republic of Bulgaria
95 C3i Services &Technologies (Dalian) Co., Ltd Unit #01-08, No.7 Hui Xian Yuan, Dalian Hi-tech Industrial Zone, Dalian 116025, China
CIN / GLN Not Applicable Not Applicable Not Applicable Not Applicable Not Applicable Not Applicable Not Applicable Not Applicable Not Applicable Not Applicable Not Applicable
Not Applicable Not Applicable Not Applicable Not Applicable
Holding / Subsidiary / Associate
Subsidiary
% of shares
held
100
Applicable Section
2(87)
Subsidiary
100
2(87)
Subsidiary
100
2(87)
Subsidiary
100
2(87)
Subsidiary
100
2(87)
Subsidiary
100
2(87)
Subsidiary
100
2(87)
Subsidiary
100
Subsidiary
100
2(87) 2(87)
Subsidiary
100
2(87)
Subsidiary
100
2(87)
Subsidiary
100
Subsidiary
100
Subsidiary
100
Subsidiary
100
2(87) 2(87) 2(87) 2(87)
Annual Report 2018-19 57
S. No.
Name and Address of the Company
CIN / GLN
96 C3i Japan GK 19F, Hibiya U-1, Building 1-1-7, Uchisiwal-cho Chiyoda-Ku, Tokyo, Postal Code-100-0011, Japan
Not Applicable
97 C3i UK Limited C/o Penningtons Manches LLP 125 Wood Street London EC2V 7AN United Kingdom
Not Applicable
98 C3i Support Services Pvt Ltd. 2nd Floor, Orion Block, VITP, Software Units Layout, Madhapur, Hyderabad - 500 081
U72200TG2003PTC041797
99 HCL Technologies Vietnam Company Limited Regus Saigon Tower Tang 16, Saigon tower, 29 Lê Dun, Qun 1, H Chí Minh, Vietnam
Not Applicable
100 HCL Technologies SEP Holdings Inc. 251 Little Falls Drive ,Wilmington ,New Castle DE 19808, USA
Not Applicable
101 Actian Corporation. The Corporation Trust Company, 1209 Orange Street, Wilmington, DE 19801, New Castle County
Not Applicable
102 Pervasive Software, Inc. The Corporation Trust Company, 1209 Orange Street, Wilmington, DE 19801, New Castle County
Not Applicable
103 Actian Netherlands Holding B.V. Atrium Building, 8th floor, Strawinskylaan 3127, 1077 ZX, Amsterdam, the Netherlands
Not Applicable
104 Actian Netherlands B.V. Atrium Building, 8th floor, Strawinskylaan 3127, 1077 ZX, Amsterdam, the Netherlands
Not Applicable
105 Actian International, Inc. The Corporation Trust Company, 1209 Orange Street, Wilmington, DE 19801, New Castle County
Not Applicable
106 Actian Technology Private Limited 1st Floor, Fazal Manor No. 89, Richmond Road Bangalore, Karnataka - 560025
U72400KA2005PTC037200
107 Actian Australia Pty. Limited Suite 108, 460 Pacific Hwy St Leonards, NSW Australia 2065
Not Applicable
108 Actian Europe Limited Cannon Place, 78 Cannon Street, London, EC4N 6AF, UK
Not Applicable
109 Actian Germany GmbH Halenreie 42, 22359 Hamburg Germany
Not Applicable
Holding / Subsidiary / Associate Subsidiary Subsidiary
Subsidiary Subsidiary
Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary
% of shares
held 100 100
100 100
80 80 80 80 80 80 80 80 80 80
Applicable Section 2(87) 2(87)
2(87) 2(87)
2(87) 2(87) 2(87) 2(87) 2(87) 2(87) 2(87) 2(87) 2(87) 2(87)
58 Directors' Report
S. No.
Name and Address of the Company
CIN / GLN
110 ParAccel LLC The Corporation Trust Company, 1209 Orange Street, Wilmington, DE 19801, New Castle County
Not Applicable
111 Actian France 27 avenue de l'Opéra 75001 Paris, France
Not Applicable
112 Versant Software LLC 2300 Geng Road, Ste. 150, Palo Alto, California 94303
Not Applicable
113 POET Holdings, Inc. The Corporation Trust Company, 1209 Orange Street, Wilmington, DE 19801, New Castle County
Not Applicable
114 Versant GmbH Halenreie 42, 22359 Hamburg Germany
Not Applicable
115 Versant India Private Limited
U13102PN1998PTC013101
5 Ankur Society, Bhandarkar Road,
Pune 411004, Maharashtra India
116 Hönigsberg & Düvel Datentechnik GmbH John-F.-Kennedy Allee 62 38444 Wolfsburg, Germany
Not Applicable
117 H&D IT Solutions GmbH John-F.-Kennedy Allee 62 38444 Wolfsburg, Germany
Not Applicable
118 H&D Business Services GmbH John-F.-Kennedy Allee 62 38444 Wolfsburg, Germany
Not Applicable
119 H&D Training and Consulting GmbH John-F.-Kennedy Allee 62 38444 Wolfsburg, Germany
Not Applicable
120 H&D IT Professional Services GmbH John-F.-Kennedy Allee 62 38444 Wolfsburg, Germany
Not Applicable
121 H&D IT Automotive Services GmbH John-F.-Kennedy Allee 62 38444 Wolfsburg, Germany
Not Applicable
122 qmo-it GmbH August-Horch-Str. 1 38518 Gifhorn, Germany
Not Applicable
123 H&D Services for Engineering GmbH John-F.-Kennedy Allee 62 38444 Wolfsburg, Germany
Not Applicable
124 H&D International GmbH John-F.-Kennedy Allee 62 38444 Wolfsburg, Germany
Not Applicable
125 Hönigsberg & Düvel Corporation 8 East 7th Street 37402 Chattanooga, Tennessee, USA
Not Applicable
126 Hönigsberg & Düvel Datentechnik Czech s.r.o. Ceskobratrské námstí 1321 29301 Mladá Boleslav, Czech
Not Applicable
Holding / Subsidiary / Associate Subsidiary
Subsidiary Subsidiary Subsidiary
Subsidiary Subsidiary Subsidiary
Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary
% of shares
held 80
80 80 80
80 80 100
100 100 100 100 100 100 100 100 100 100
Applicable Section 2(87)
2(87) 2(87) 2(87)
2(87) 2(87) 2(87)
2(87) 2(87) 2(87) 2(87) 2(87) 2(87) 2(87) 2(87) 2(87) 2(87)
Annual Report 2018-19 59
S. No.
Name and Address of the Company
CIN / GLN
127 CATIS GmbH
Not Applicable
John-F.-Kennedy Allee 62
38444 Wolfsburg, Germany
128 H&D ITAS Application Services GmbH
Not Applicable
John-F.-Kennedy Allee 62
38444 Wolfsburg, Germany
129 H&D ITAS Client Services GmbH
Not Applicable
John-F.-Kennedy Allee 62
38444 Wolfsburg, Germany
130 H&D ITAS Süd GmbH
Not Applicable
Friedrich-Ebert-Str.78
85055 Ingolstadt, Germany
131 H&D ITAS Infrastructure Services GmbH
Not Applicable
John-F.-Kennedy Allee 62
38444 Wolfsburg, Germany
132 CA Management Services GmbH
Not Applicable
John-F.-Kennedy Allee 62
38444 Wolfsburg, Germany
133 HCL Guatemala, Sociedad Anónima
Not Applicable
Diagonal 6 10-50 Zona 10, Edificio
Interamericas World Financial Center,
Torre Norte, 8 nivel, Oficina 803, Ciudad
de Guatemala, Guatemala
134 StateStreet HCL Services (India)
U72900DL2012FTC229698
Pvt. Limited
806, Siddharth, 96, Nehru Place,
New Delhi - 110019
135 State Street HCL Holdings (UK) Ltd.
Not Applicable
Axon Centre, Church Road, Egham,
Surrey, TW20 9QB, England
136 State Street HCL Services (Philippines)
Not Applicable
Inc.
Science Hub, Tower 3,
Campus Avenue Corner Milano St,
Mckinley Hill Cyberpark,
Fort Bonifacio Taguig City, Philippines
137 CeleritiFintech Services Limited
Not Applicable
New Kings Court, Tollgate, Chandler's
Ford, Eastleigh, Hampshire,
SO53 3LG, UK
138 CeleritiFinTech Services USA Inc.
Not Applicable
1209 Orange Street, Wilmington,
Delaware 19801, County of New Castle,
USA
139 CeleritiFinTech Services Australia Pty.
Not Applicable
Limited
Mitchell & Partners, Suite 3, Level 2, 66
Clarence Street, Sydney, NSW 2000,
Australia
140 CeleritiFintech Services Germany,
Not Applicable
GmbH
Frankfurter Strasse 63-69, D-65760
ESCHBORN, Germany
141 CeleritiFintech Services India Pvt. Ltd U72200DL2016FTC289201
806, Siddharth, 96, Nehru Place, New
Delhi-110019, India
Holding / Subsidiary / Associate Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary
Associate
Associate Associate
Associate
Associate
Associate
Associate
Associate
60 Directors' Report
% of shares
held 100 100 100 100 100 100 100
49
49 49
49
49
49
49
49
Applicable Section 2(87) 2(87) 2(87) 2(87) 2(87) 2(87) 2(87)
2(6) 2(6) 2(6)
2 (6) 2 (6) 2 (6)
2(6) 2(6)
IV. SHARE HOLDING PATTERN (Equity Share Capital Breakup as percentage of Total Equity)
i) Category-wise Share Holding
Category & Name of the Shareholders (I)
A. Promoters (1) Indian
(a) Individuals / Hindu Undivided Family
(b) Central Government / State Government(s)
(c) Financial Institutions / Banks (d) Any Other (specify)
(i) Body Corporates (ii) Trust
Sub-Total (A)(1) (2) Foreign
(a) Individuals (Non-Resident Individuals / Foreign Individuals)
(b) Government (c) Institutions (d) Foreign Portfolio Investor (e) Any Other (specify)
(i) Bodies Corporate Sub-Total (A)(2)
Total Shareholding of Promoter and Promoter Group (A) = (A)(1)+(A)(2) B. Public Shareholding (1) Institutions -
(a) Mutual Funds (b) Venture Capital Funds (c) Alternate Investment Funds (d) Foreign Venture Capital Investors (e) Foreign Portfolio Investors (f) Financial Institutions / Banks (g) Insurance Companies (h) Provident Funds / Pension Funds (i) Any Other (specify)
Foreign Banks Sub-Total (B)(1) (2) Central Government / State Government(s) / President of India Sub-Total (B)(2) (3) Non-institutions (a) Individuals i. Individual shareholders holding nominal share capital up to ` 2 lacs ii. Individual shareholders holding nominal share capital in excess of ` 2 lacs (b) NBFCs registered with RBI (c) Employee Trusts (d) Overseas Depositories (holding DRs) (balancing figure) (e) Any Other (specify) (i) Bodies Corporate (ii) Trusts (iii) Foreign Nationals (iv) Non-Resident Indians (v) Overseas Corporate Bodies (vi) Clearing Members (vii) Hindu Undivided Families Sub-Total (B)(3) Total Public Shareholding (B) = (B) (1)+(B)(2)+(B)(3) Grand Total (A)+(B)
No. of Shares held at the beginning of the year [As on 01-April-2018]
Demat
Physical
Total
Shareholding %
788
-
-
60,39,92,011 -
60,39,92,799
-
-
23,38,87,811 23,38,87,811 83,78,80,610
0
788
-
-
-
-
0 60,39,92,011
-
-
0 60,39,92,799
-
-
-
-
-
-
-
-
0 23,38,87,811 0 23,38,87,811 0 83,78,80,610
0.00%
-
-
43.38% -
43.38%
-
-
16.80% 16.80% 60.18%
7,35,21,935 -
36,94,85,367 7,38,285
6,19,50,391 -
14,800 50,57,10,778
78,973
972 7,35,22,907
-
-
-
-
-
-
400 36,94,85,767
620
7,38,905
0 6,19,50,391
-
-
22
14,822
2,014 50,57,12,792
0
78,973
78,973
0
78,973
3,04,38,041 5,55,592 3,09,93,633
21,09,790
0 21,09,790
1,32,523 -
0
1,32,523
-
-
-
-
40,93,748 6,028
37,68,441
0
76,080
0
61,44,923 8,496
17,244
440
8,03,701
0
4,18,962
0
4,80,03,453 5,70,556
55,37,93,204 5,72,570
40,99,776 37,68,441
76,080 61,53,419
17,684 8,03,701 4,18,962 4,85,74,009 55,43,65,774
1,39,16,73,814 5,72,570 1,39,22,46,384
5.28% -
26.54% 0.05% 4.45%
-
0.00% 36.32% 0.01%
0.01%
2.23%
0.15%
0.01% -
0.29% 0.27% 0.01% 0.44% 0.00% 0.06% 0.03% 3.49% 39.82%
100.00%
No. of Shares held at the end of the year [As on 31-March-2019]
Demat
Physical
Total
Shareholding %
788
-
-
59,04,85,858 -
59,04,86,646
-
-
22,33,31,016 22,33,31,016 81,38,17,662
0
788
-
-
-
-
0 59,04,85,858
-
-
0 59,04,86,646
-
-
-
-
-
-
-
-
0 22,33,31,016 0 22,33,31,016 0 81,38,17,662
0.00%
-
-
43.54% -
43.54%
-
-
16.46% 16.46% 60.00%
6,09,83,468 -
1,67,480 -
38,98,11,787 2,04,121
4,26,29,526 -
14,800 49,38,11,182
84,918
950 6,09,84,418
-
-
0
1,67,480
-
-
400 38,98,12,187
620
2,04,741
0 4,26,29,526
-
-
22
14,822
1,992 49,38,13,174
0
84,918
84,918
0
84,918
2,84,79,224 4,95,521 2,89,74,745
14,16,486
0 14,16,486
1,09,395 -
0
1,09,395
-
-
-
-
36,64,400 5,962
51,43,261
0
74,148
0
61,79,995 7,996
17,244
440
25,65,288
0
4,03,754
0
4,80,53,195 5,09,919
54,19,49,295 5,11,911
36,70,362 51,43,261
74,148 61,87,991
17,684 25,65,288 4,03,754 4,85,63,114 54,24,61,206
1,35,57,66,957 5,11,911 1,35,62,78,868
4.50% -
0.01% -
28.74% 0.02% 3.14%
-
0.00% 36.41% 0.01%
0.01%
2.14%
0.10%
0.01% -
0.27% 0.38% 0.01% 0.46% 0.00% 0.18% 0.03% 3.58% 40.00%
100.00%
% Change during the year
0.00%
-
-
0.16% -
0.16%
-
-
-0.34% -0.34% -0.18%
-0.78% -
0.01% -
2.20% -0.03% -1.31%
-
0.00% 0.09% 0.00%
0.00%
-0.09%
-0.05%
0.00% -
-0.02% 0.11% 0.00% 0.02% 0.00% 0.12% 0.00% 0.09% 0.18%
0.00%
Annual Report 2018-19 61
(ii) Shareholding of Promoter-
S. No.
Shareholder's Name
Shareholding at the beginning of the
year (01-April-2018)
No. of Shares
% of total Shares of the
company
%of Shares pledged /
encumbered to total shares
Shareholding at the end of the year
(31-March-2019)
No. of Shares
% of total Shares of the
company
% of Shares pledged /
encumbered to total shares
% change in shareholding during the year
1 Mr. Shiv Nadar
368 0.00%
-
368 0.00%
-
NIL
2 Ms. Kiran Nadar
72 0.00%
-
72 0.00%
-
NIL
3 Ms. Roshni Nadar Malhotra
348 0.00%
-
348 0.00%
-
NIL
4
Vama Sundari Investments (Delhi) Pvt. Ltd.
58,76,47,744
42.21%
- 58,18,55,849 42.90%
- 0.69%
5
HCL Corporation Private Limited*
90,02,985 0.65%
- 45,89,052 0.34%
- -0.31%
6
HCL Holdings Private Limited
23,38,87,811 16.80%
- 22,33,31,016 16.46%
- -0.34%
7 HCL Avitas Pvt. Ltd.
73,41,282 0.53%
- 40,40,957 0.30%
- -0.23%
Total
83,78,80,610 60.18%
- 81,38,17,662 60.00%
- -0.18%
* This is an Overseas Corporate Body.
(iii) Change in Promoters' Shareholding (please specify, if there is no change)
Date
Shareholder's Name
Vama Sundari Investments (Delhi) Pvt. Ltd. 01-Apr-18 At the beginning of the year
Shares purchased under block deal through 05-Jun-18 stock exchange (Promoters' inter-se transfer
through stock exchange) 09-Oct-18 Buy-back of shares by the Company 30-Oct-18 Market purchase 02-Nov-18 Market purchase 07-Nov-18 Market purchase 31-Mar-19 At the end of the year
Shareholding
No. of Shares
% of total Shares of the company
58,76,47,744
42.21%
75,00,000
0.54%
(1,44,17,895) 5,45,000 5,70,000 11,000
58,18,55,849
1.04% 0.04% 0.04% 0.00% 0.34%
Cumulative Shareholding during the year
% of total No. of Shares Shares of the
company
58,76,47,744
42.21%
59,51,47,744
42.74%
58,07,29,849 58,12,74,849 58,18,44,849 58,18,55,849 58,18,55,849
42.82% 42.86% 42.90% 42.90%
0.34%
HCL Corporation Private Limited 01-Apr-18 At the beginning of the year
Shares sold under block deal through stock 05-Jun-18 exchange (Promoters' inter-se transfer
through stock exchange) 09-Oct-18 Buy-back of shares by the Company 31-Mar-19 At the end of the year
90,02,985
(43,00,000)
(1,13,933) 45,89,052
0.65%
0.31%
0.01% 0.34%
90,02,985
47,02,985
45,89,052 45,89,052
0.65%
0.34%
0.34% 0.34%
HCL Holdings Private Limited 01-Apr-18 At the beginning of the year 09-Oct-18 Buy-back of shares by the Company 31-Mar-19 At the end of the year
23,38,87,811 (1,05,56,795) 22,33,31,016
16.80% 0.76%
16.46%
23,38,87,811 22,33,31,016 22,33,31,016
16.80% 16.47% 16.46%
Mr. Shiv Nadar 01-Apr-18 At the beginning of the year 31-Mar-19 At the end of the year
62 Directors' Report
368
0.00%
368
0.00%
368
0.00%
368
0.00%
Date
Shareholder's Name
Ms. Kiran Nadar 01-Apr-18 At the beginning of the year 31-Mar-19 At the end of the year Ms. Roshni Nadar Malhotra 01-Apr-18 At the beginning of the year 31-Mar-19 At the end of the year HCL Avitas Private Ltd. 01-Apr-18 At the beginning of the year
Shares sold under block deal through stock 05-Jun-18 exchange (Promoters' inter-se transfer
through stock exchange) 09-Oct-18 Buy-back of shares by the Company 31-Mar-19 At the end of the year
Shareholding
Cumulative Shareholding during the year
No. of Shares
% of total
% of total
Shares of No. of Shares Shares of the
the company
company
72
0.00%
72
0.00%
72
0.00%
72
0.00%
348
0.00%
348
0.00%
348
0.00%
348
0.00%
73,41,282
0.53%
73,41,282
0.53%
(32,00,000)
0.23%
41,41,282
0.30%
(1,00,325) 40,40,957
0.01% 0.30%
40,40,957 40,40,957
0.30% 0.30%
(iv) Shareholding Pattern of top ten Shareholders (Other than Directors, Promoters and Holders of GDRs and ADRs):
S. No.
For each of the Top 10 Shareholders
1. At the beginning of the year
Shareholding at the beginning of
the year
No. of shares
% of total shares of the company
Cumulative Shareholding during
the year
No. of shares
% of total shares of the company
2. Date wise increase / decrease in shareholding during the year specifying the reasons for increase / decrease (e.g. allotment / transfer / bonus / sweat equity etc.):
3. At the end of the year (or on the date of separation, if separated during the year)
Refer Annexure 2A
(v) Shareholding of Directors and Key Managerial Personnel:
Dates
Shareholder's Name
Mr. Shiv Nadar, Managing Director 01-Apr-18 At the beginning of the year 31-Mar-19 At the end of the year
Shareholding at the beginning of the year
No. of Shares % of total Shares of the company
Cumulative Shareholding during the year
No. of Shares % of total Shares of the company
368
0.00%
368
0.00%
368
0.00%
368
0.00%
Ms. Roshni Nadar Malhotra 01-Apr-18 At the beginning of the year 31-Mar-19 At the end of the year
348
0.00%
348
0.00%
348
0.00%
348
0.00%
Mr. C. Vijayakumar, President &CEO 01-Apr-18 At the beginning of the year 20-Mar-19 Market Purchase 22-Mar-19 Market Purchase 31-Mar-19 At the end of the year
1,40,849 39,000 2,030
1,81,879
0.01% 0.00% 0.00% 0.01%
1,40,849 1,79,849 1,81,879 1,81,879
0.01% 0.01% 0.01% 0.01%
Annual Report 2018-19 63
Dates
Shareholder's Name
Mr. Prateek Aggarwal, CFO * 01-Oct-18 At the beginning of the term
as CFO 31-Mar-19 At the end of the year
Shareholding at the beginning of
the year
No. of Shares
% of total Shares of the company
NIL
0.00%
NIL
0.00%
Cumulative Shareholding during
the year
No. of Shares
% of total Shares of the company
NIL
0.00%
NIL
0.00%
Mr. Anil Chanana, CFO * 01-Apr-18 At the beginning of the year 14-Aug-18 Market Sale 16-Aug-18 Market Sale 20-Aug-18 Market Sale 21-Aug-18 Market Sale 01-Oct-18 At the end of the term as CFO
90,389 (20,000) (20,000)
(3,730) (20,000)
26,659
0.01% 0.00% 0.00% 0.00% 0.00% 0.00%
90,389 70,389 50,389 46,659 26,659 26,659
0.01% 0.01% 0.00% 0.00% 0.00% 0.00%
Mr. S. Madhavan, Director 01-Apr-18 At the beginning of the year 31-Mar-19 At the end of the year
2,500 2,500
0.00% 0.00%
2,500 2,500
0.00% 0.00%
Manish Anand, CS
01-Apr-18 At the beginning of the year
18,446
0.00%
18,446
0.00%
31-Mar-19 At the end of the year
18,446
0.00%
18,446
0.00%
* Mr. Prateek Aggarwal was appointed as the CFO of the Company w.e.f. October 1, 2018 in place of Mr. Anil Kumar Chanana who stepped down from the position of CFO.
V. INDEBTEDNESS
Indebtedness of the Company including interest outstanding / accrued but not due for payment
(` in crore)
Secured Loans
excluding deposits
Indebtedness at the beginning of the financial year
i) Principal Amount
48
ii) Interest due but not paid
-
iii) Interest accrued but not due
-
Total (i+ii+iii)
48
Change in Indebtedness during the financial year
* Addition
18
* Reduction
(16)
Unsecured Loans
-
-
Deposits
Total Indebtedness
-
48
-
-
-
-
-
48
-
18
-
(16)
Net Change Indebtedness at the end of the financial year
i) Principal Amount
2
-
50
-
-
2
-
50
ii) Interest due but not paid
-
-
-
-
iii) Interest accrued but not due
Total (i+ii+iii)
50
-
-
50
Note: The Company has availed term loans of ` 50 crore (previous year ` 48 crore) secured by hypothecation of gross block of vehicles.
64 Directors' Report
VI. REMUNERATION OF DIRECTORS AND KEY MANAGERIAL PERSONNEL
A. Remuneration to Managing Director, Whole-time Director and/or Manager:
(` in crore)
S. No.
Particulars of Remuneration
Name of MD/WTD / Manager Total Amount Mr. Shiv Nadar
1 Gross salary
(a) Salary as per provisions contained in section 17(1) of the
-
-
Income-tax Act, 1961
(b) Value of perquisites u/s 17(2) Income-tax Act, 1961
1.09
1.09
(c) Profits in lieu of salary under section 17(3) Income- tax
-
-
Act, 1961
2 Stock Option
-
-
3 Sweat Equity
-
-
4 Commission
- as % of profit
-
-
- others, specify...
5 Others, please specify
- Provident Fund
-
-
- Medical
0.02
0.02
- Gratuity
0.10
0.10
- Misc. Reimbursement
0.07
0.07
Total (A)
1.28
1.28
Ceiling as per the Act (5% of net profits of the Company calculated under section 198 of the
478.97
Companies Act, 2013)
Note: In addition, Mr. Shiv Nadar received salary and perquisites equivalent to `3.58 crore from a subsidiary of the Company.
B. REMUNERATION TO OTHER DIRECTORS
(` in crore)
S.
Particulars of Remuneration
No.
1 Independent Directors
Sitting Fee for attending board /
Commission Others, please
Total
committee meetings
specify
Amount
Mr. Deepak Kapoor
0.03
0.62
-
0.65
Mr. James Philip Adamczyk(1) Mr. Keki Mistry(2)
0.01
0.66
0.00
0.00
-
0.67
-
0.00
Mr. S. Madhavan Ms. Nishi Vasudeva
0.03
0.80
0.02
0.62
-
0.83
-
0.64
Ms. Robin Ann Abrams
0.02
1.19
-
1.21
Dr. Sosale Shankara Sastry
0.01
0.94
-
0.95
Mr. R. Srinivasan
0.01
1.12
-
1.13
Mr. Thomas Sieber Total (1)
0.01
0.94
0.14
6.89
-
0.95
-
7.03
2 Other Non-Executive Directors
Ms. Roshni Nadar Malhotra
0.03
0.75
-
0.78
Mr. Sudhindar Krishan Khanna(3) Total (2)
0.02
0.58
0.05
1.33
-
0.60
-
1.38
Total (B)=(1+2) Overall Ceiling as per the Act (1% of net
0.19
8.22
-
8.41
95.79
profits of the Company calculated under
Section 198 of the Companies Act, 2013)
Total Managerial Remuneration(A+B)
9.69
(1) Mr. James Philip Adamczyk was appointed as a Director of the Company w.e.f. July 26, 2018.
(2) Mr. Keki Mistry resigned as a Director of the Company w.e.f. April 30, 2018.
(3) Mr. Sudhindhar Krishan Khanna resigned as a Director of the Company w.e.f. April 8, 2019.
Annual Report 2018-19 65
C. REMUNERATION TO KEY MANAGERIAL PERSONNEL OTHER THAN MD / MANAGER / WTD
(` in crore)
Key Managerial Personnel
Mr. C
S. No.
Particulars of Remuneration
Vijayakumar, Chief
Executive
Officer *
1 Gross salary
-
(a) Salary as per provisions contained in
-
section 17(1) of the Income-tax Act, 1961
(b) Value of perquisites u/s 17(2) Income-tax
-
Act, 1961
(c) Profits in lieu of salary under section 17(3)
-
Income-tax Act, 1961
2 Stock Option
-
3 Sweat Equity
-
4 Commission
- as % of profit
- others, specify...
-
5 Others, please specify
-
Total
-
Mr. Anil Chanana,
Chief Financial Officer **
Mr. Prateek Aggarwal,
Chief Financial
Officer
Mr. Manish Anand,
Company Secretary
2.01
1.30
0.87
0.01
-
0.00
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
2.02
1.30
0.87
Total
4.18 0.01
-
4.19
Notes:
Mr. Prateek Aggarwal was appointed as the CFO of the Company w.e.f. October 1, 2018 in place of Mr. Anil Kumar Chanana who stepped down from the position of CFO. *Mr. C Vijayakumar is not getting any remuneration from the Company, however, he has received ` 27.94 crore as remuneration from a subsidiary of the Company. **Mr. Anil Chanana, apart from receiving remuneration from the Company, also received `1.97 crore as remuneration
from a subsidiary of the Company.
VII. PENALTIES / PUNISHMENT/ COMPOUNDING OF OFFENCES:
Type
A. COMPANY Penalty Punishment Compounding
B. DIRECTORS Penalty Punishment Compounding
C. OTHER OFFICERS IN DEFAULT Penalty Punishment Compounding
Section of the Companies
Act
Brief Description
Details of Penalty / Punishment /
Compounding fees imposed
Authority [RD / NCLT / COURT]
NIL
NIL
NIL
Appeal made, if any (give Details)
For and on behalf of the Board of Directors
Place: Noida (U.P.), India Date: May 9, 2019
66 Directors' Report
SHIV NADAR Chairman & Chief Strategy Officer
Annexure - 2A to the Directors' Report
Shareholding Pattern of top ten Shareholders (Other than Directors, Promoters and Holders of GDRs and ADRs)
Date
Sale / Purchase
Shareholding
No. of shares
% of total shares of the Company
Cumulative Shareholding during
the year
No. of shares
% of total shares of the Company
ICICI PRUDENTIAL MUTUAL FUND
01-Apr-18
Opening
2,10,11,582
1.51
06-Apr-18
Sale
(11,10,820)
(0.08)
1,99,00,762
1.43
13-Apr-18
Sale
(11,35,467)
(0.08)
1,87,65,295
1.35
20-Apr-18
Sale
(3,19,119)
(0.02)
1,84,46,176
1.32
27-Apr-18
Sale
(12,81,290)
(0.09)
1,71,64,886
1.23
04-May-18
Sale
(579)
0.00
1,71,64,307
1.23
10-May-18
Purchase
18,14,245
0.13
1,89,78,552
1.36
11-May-18
Purchase
80,179
0.01
1,90,58,731
1.37
18-May-18
Purchase
34,63,603
0.25
2,25,22,334
1.62
22-May-18
Purchase
2,54,291
0.02
2,27,76,625
1.64
23-May-18
Purchase
4,02,946
0.03
2,31,79,571
1.66
24-May-18
Purchase
1,304
0.00
2,31,80,875
1.66
25-May-18
Purchase
3,162
0.00
2,31,84,037
1.67
28-May-18
Purchase
225
0.00
2,31,84,262
1.67
29-May-18
Purchase
139
0.00
2,31,84,401
1.67
30-May-18
Purchase
1,38,330
0.01
2,33,22,731
1.68
31-May-18
Sale
(522)
0.00
2,33,22,209
1.67
01-Jun-18
Purchase
3,10,047
0.02
2,36,32,256
1.70
04-Jun-18
Purchase
97,915
0.01
2,37,30,171
1.70
06-Jun-18
Purchase
923
0.00
2,37,31,094
1.70
07-Jun-18 08-Jun-18 11-Jun-18
Sale Sale Sale
(31,563)
0.00
2,36,99,531
1.70
(12,551)
0.00
2,36,86,980
1.70
(49,660)
0.00
2,36,37,320
1.70
12-Jun-18
Sale
(10,239)
0.00
2,36,27,081
1.70
14-Jun-18
Purchase
219
0.00
2,36,27,300
1.70
15-Jun-18
Purchase
651
0.00
2,36,27,951
1.70
18-Jun-18
Purchase
1,54,692
0.01
2,37,82,643
1.71
19-Jun-18
Purchase
88,649
0.01
2,38,71,292
1.71
20-Jun-18
Purchase
2,64,937
0.02
2,41,36,229
1.73
21-Jun-18
Purchase
99
0.00
2,41,36,328
1.73
22-Jun-18
Purchase
92,198
0.01
2,42,28,526
1.74
26-Jun-18
Purchase
219
0.00
2,42,28,745
1.74
27-Jun-18
Purchase
1,32,145
0.01
2,43,60,890
1.75
28-Jun-18
Purchase
53,995
0.00
2,44,14,885
1.75
29-Jun-18
Sale
(3,102)
0.00
2,44,11,783
1.75
02-Jul-18
Sale
(61,519)
0.00
2,43,50,264
1.75
03-Jul-18
Purchase
35,630
0.00
2,43,85,894
1.75
04-Jul-18
Purchase
354
0.00
2,43,86,248
1.75
06-Jul-18
Purchase
144
0.00
2,43,86,392
1.75
11-Jul-18
Sale
(5,27,857)
(0.04)
2,38,58,535
1.71
12-Jul-18 13-Jul-18 17-Jul-18
Sale
(12,49,356)
(0.09)
2,26,09,179
1.62
Sale
(11,63,832)
(0.08)
2,14,45,347
1.54
Sale
(18,681)
0.00
2,14,26,666
1.54
18-Jul-18
Sale
(95,726)
(0.01)
2,13,30,940
1.53
19-Jul-18
Sale
(1,54,452)
(0.01)
2,11,76,488
1.52
20-Jul-18
Sale
(1,493)
0.00
2,11,74,995
1.52
23-Jul-18
Sale
(69,912)
(0.01)
2,11,05,083
1.52
Annual Report 2018-19 67
Date
Sale / Purchase
24-Jul-18 25-Jul-18 26-Jul-18 27-Jul-18 31-Jul-18 01-Aug-18 02-Aug-18 06-Aug-18 08-Aug-18 09-Aug-18 10-Aug-18 14-Aug-18 16-Aug-18 20-Aug-18 21-Aug-18 23-Aug-18 24-Aug-18 27-Aug-18 31-Aug-18 04-Sep-18 05-Sep-18 06-Sep-18 07-Sep-18 10-Sep-18 11-Sep-18 12-Sep-18 14-Sep-18 17-Sep-18 18-Sep-18 19-Sep-18 25-Sep-18 26-Sep-18 27-Sep-18 28-Sep-18 05-Oct-18 12-Oct-18 19-Oct-18 26-Oct-18 31-Oct-18 02-Nov-18 09-Nov-18 16-Nov-18 20-Nov-18 21-Nov-18 22-Nov-18 26-Nov-18 27-Nov-18 28-Nov-18 29-Nov-18 30-Nov-18 04-Dec-18
Sale Sale Purchase Sale Purchase Sale Purchase Purchase Sale Sale Purchase Sale Sale Sale Sale Sale Sale Sale Purchase Purchase Purchase Purchase Sale Purchase Sale Purchase Purchase Purchase Purchase Sale Sale Purchase Purchase Sale Sale Purchase Purchase Purchase Purchase Purchase Sale Sale Sale Sale Sale Purchase Sale Purchase Sale Purchase Purchase
68 Directors' Report
Shareholding
No. of shares
(89,834) (28,497)
73 (5,49,091)
146 (2,04,37,880)
2,03,83,594 1,85,484 (73) (2,482) 45,681 (10,275) (3,110) (16,694) (2,891)
(2,53,539) (2,77,523)
(6,044) 6,410 272 164 22
(1,04,369) 61
(1,726) 60,374
1,534 3,504
276 (1,96,616) (3,17,867)
202 139 (8,95,906) (22,103) 4,26,835 10,28,776 1,13,224 689 716 (1,26,376) (4,31,330) (1,84,415) (77,088) (40,008) 62,555 (381) 282 (67,227)
41 337
% of total shares of the Company
(0.01) 0.00 0.00
(0.04) 0.00
(1.47) 1.46 0.01 0.00 0.00 0.00 0.00 0.00 0.00 0.00
(0.02) (0.02)
0.00 0.00 0.00 0.00 0.00 (0.01) 0.00 0.00 0.00 0.00 0.00 0.00 (0.01) (0.02) 0.00 0.00 (0.06) 0.00 0.03 0.08 0.01 0.00 0.00 (0.01) (0.03) (0.01) (0.01) 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Cumulative Shareholding during
the year
No. of shares
% of total shares of the Company
2,10,15,249
1.51
2,09,86,752
1.51
2,09,86,825
1.51
2,04,37,734
1.47
2,04,37,880
1.47
-
-
2,03,83,594
1.46
2,05,69,078
1.48
2,05,69,005
1.48
2,05,66,523
1.48
2,06,12,204
1.48
2,06,01,929
1.48
2,05,98,819
1.48
2,05,82,125
1.48
2,05,79,234
1.48
2,03,25,695
1.46
2,00,48,172
1.44
2,00,42,128
1.44
2,00,48,538
1.44
2,00,48,810
1.44
2,00,48,974
1.44
2,00,48,996
1.44
1,99,44,627
1.43
1,99,44,688
1.43
1,99,42,962
1.43
2,00,03,336
1.44
2,00,04,870
1.44
2,00,08,374
1.44
2,00,08,650
1.44
1,98,12,034
1.42
1,94,94,167
1.40
1,94,94,369
1.40
1,94,94,508
1.40
1,85,98,602
1.34
1,85,76,499
1.33
1,90,03,334
1.40
2,00,32,110
1.48
2,01,45,334
1.49
2,01,46,023
1.49
2,01,46,739
1.49
2,00,20,363
1.48
1,95,89,033
1.44
1,94,04,618
1.43
1,93,27,530
1.43
1,92,87,522
1.42
1,93,50,077
1.43
1,93,49,696
1.43
1,93,49,978
1.43
1,92,82,751
1.42
1,92,82,792
1.42
1,92,83,129
1.42
Date
05-Dec-18 06-Dec-18 11-Dec-18 12-Dec-18 13-Dec-18 14-Dec-18 17-Dec-18 18-Dec-18 20-Dec-18 21-Dec-18 24-Dec-18 26-Dec-18 27-Dec-18 28-Dec-18 31-Dec-18 01-Jan-19 02-Jan-19 03-Jan-19 04-Jan-19 07-Jan-19 08-Jan-19 09-Jan-19 10-Jan-19 11-Jan-19 14-Jan-19 15-Jan-19 16-Jan-19 18-Jan-19 25-Jan-19 01-Feb-19 06-Feb-19 08-Feb-19 15-Feb-19 22-Feb-19 01-Mar-19 08-Mar-19 15-Mar-19 22-Mar-19 29-Mar-19 31-Mar-19
Sale / Purchase
Sale Sale Purchase Purchase Sale Purchase Purchase Purchase Purchase Purchase Purchase Purchase Sale Sale Purchase Purchase Sale Sale Sale Sale Purchase Purchase Sale Sale Sale Sale Purchase Sale Sale Sale Sale Sale Sale Sale Sale Sale Sale Sale Purchase Closing
Shareholding
No. of shares
(3,66,006) (95,602) 3,34,483 6,372 (13,265) 717 113 10,516 854 17,012 45,571 4,43,682 (1,394) (67,734) 578 557
(1,03,826) (1,40,295) (2,17,616)
(439) 95,090
72 (73,760)
(1,950) (3,61,120)
(8,434) 14,456 (36,609) (7,68,504) (12,90,153) (7,86,514) (4,80,102) (3,83,548) (66,080) (12,57,696) (56,176) (6,19,551)
(135) 7,72,160
% of total shares of the Company
(0.03) (0.01)
0.02 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.03 0.00 0.00 0.00 0.00 (0.01) (0.01) (0.02) 0.00 0.01 0.00 (0.01) 0.00 (0.03) 0.00 0.00 0.00 (0.06) (0.10) (0.06) (0.04) (0.03) 0.00 (0.09) 0.00 (0.05) 0.00 0.06
Cumulative Shareholding during
the year
No. of shares
% of total shares of the Company
1,89,17,123
1.39
1,88,21,521
1.39
1,91,56,004
1.41
1,91,62,376
1.41
1,91,49,111
1.41
1,91,49,828
1.41
1,91,49,941
1.41
1,91,60,457
1.41
1,91,61,311
1.41
1,91,78,323
1.41
1,92,23,894
1.42
1,96,67,576
1.45
1,96,66,182
1.45
1,95,98,448
1.45
1,95,99,026
1.45
1,95,99,583
1.45
1,94,95,757
1.44
1,93,55,462
1.43
1,91,37,846
1.41
1,91,37,407
1.41
1,92,32,497
1.42
1,92,32,569
1.42
1,91,58,809
1.41
1,91,56,859
1.41
1,87,95,739
1.39
1,87,87,305
1.39
1,88,01,761
1.39
1,87,65,152
1.38
1,79,96,648
1.33
1,67,06,495
1.23
1,59,19,981
1.17
1,54,39,879
1.14
1,50,56,331
1.11
1,49,90,251
1.11
1,37,32,555
1.01
1,36,76,379
1.01
1,30,56,828
0.96
1,30,56,693
0.96
1,38,28,853
1.02
1,38,28,853
1.02
NOMURA INDIA INVESTMENT FUND MOTHER FUND
01-Apr-18
Opening
1,12,66,798
0.81
20-Apr-18
Sale
(4,24,647)
(0.03)
1,08,42,151
0.78
18-May-18
Sale
(12,41,967)
(0.09)
96,00,184
0.69
01-Aug-18
Sale
(96,00,184)
(0.69)
-
-
02-Aug-18
Purchase
96,00,184
0.69
96,00,184
0.69
02-Nov-18
Sale
(2,50,000)
(0.02)
93,50,184
0.69
20-Dec-18
Sale
(49,000)
0.00
93,01,184
0.69
24-Dec-18
Sale
(6,50,000)
(0.05)
86,51,184
0.64
31-Mar-19
Closing
86,51,184
0.64
Annual Report 2018-19 69
Date
Sale / Purchase
ICICI PRUDENTIAL LIFE INSURANCE
01-Apr-18
Opening
06-Apr-18
Purchase
13-Apr-18
Purchase
20-Apr-18
Purchase
27-Apr-18
Sale
04-May-18
Sale
10-May-18
Sale
18-May-18
Sale
21-May-18
Sale
22-May-18
Sale
23-May-18
Sale
24-May-18
Sale
29-May-18
Purchase
30-May-18
Purchase
31-May-18
Purchase
04-Jun-18
Purchase
06-Jun-18
Sale
07-Jun-18
Purchase
11-Jun-18
Purchase
12-Jun-18
Purchase
13-Jun-18
Purchase
14-Jun-18
Purchase
15-Jun-18
Sale
18-Jun-18
Sale
19-Jun-18
Purchase
20-Jun-18
Sale
21-Jun-18
Sale
22-Jun-18
Sale
25-Jun-18
Sale
26-Jun-18
Purchase
27-Jun-18
Purchase
28-Jun-18
Sale
29-Jun-18
Sale
03-Jul-18
Purchase
05-Jul-18
Purchase
06-Jul-18
Purchase
11-Jul-18
Purchase
12-Jul-18
Purchase
13-Jul-18
Purchase
16-Jul-18
Purchase
17-Jul-18
Sale
18-Jul-18
Sale
23-Jul-18
Sale
24-Jul-18
Sale
25-Jul-18
Sale
26-Jul-18
Sale
27-Jul-18
Sale
30-Jul-18
Sale
31-Jul-18
Sale
Shareholding
No. of shares
% of total shares of the Company
Cumulative Shareholding during
the year
No. of shares
% of total shares of the Company
1,99,63,309
1.43
8,59,387
0.06
2,08,22,696
1.50
40,945
0.00
2,08,63,641
1.50
4,68,997
0.03
2,13,32,638
1.53
(9,49,171)
(0.07)
2,03,83,467
1.46
(44,42,271)
(0.32)
1,59,41,196
1.14
(1,07,310)
(0.01)
1,58,33,886
1.14
(2,32,969)
(0.02)
1,56,00,917
1.12
(17,655)
0.00
1,55,83,262
1.12
(30,045)
0.00
1,55,53,217
1.12
(35,391)
0.00
1,55,17,826
1.11
(26,204)
0.00
1,54,91,622
1.11
2,534
0.00
1,54,94,156
1.11
32,254
0.00
1,55,26,410
1.12
36,037
0.00
1,55,62,447
1.12
417
0.00
1,55,62,864
1.12
(36,072)
0.00
1,55,26,792
1.12
419
0.00
1,55,27,211
1.12
5,187
0.00
1,55,32,398
1.12
2,220
0.00
1,55,34,618
1.12
27,092
0.00
1,55,61,710
1.12
2,552
0.00
1,55,64,262
1.12
(11,523)
0.00
1,55,52,739
1.12
(1,10,943)
(0.01)
1,54,41,796
1.11
17,089
0.00
1,54,58,885
1.11
(14,624)
0.00
1,54,44,261
1.11
(1,860)
0.00
1,54,42,401
1.11
(30,452)
0.00
1,54,11,949
1.11
(33,355)
0.00
1,53,78,594
1.10
5,212
0.00
1,53,83,806
1.10
1,811
0.00
1,53,85,617
1.10
(2,07,467)
(0.01)
1,51,78,150
1.09
(15,239)
0.00
1,51,62,911
1.09
1,68,150
0.01
1,53,31,061
1.10
13,415
0.00
1,53,44,476
1.10
2,672
0.00
1,53,47,148
1.10
1,67,582
0.01
1,55,14,730
1.11
14,422
0.00
1,55,29,152
1.12
33,326
0.00
1,55,62,478
1.12
37,054
0.00
1,55,99,532
1.12
(66,835)
0.00
1,55,32,697
1.12
(1,17,074)
(0.01)
1,54,15,623
1.11
(26,055)
0.00
1,53,89,568
1.11
(1,29,657)
(0.01)
1,52,59,911
1.10
(56,463)
0.00
1,52,03,448
1.09
(2,80,176)
(0.02)
1,49,23,272
1.07
(1,71,521)
(0.01)
1,47,51,751
1.06
(1,34,569)
(0.01)
1,46,17,182
1.05
(114)
0.00
1,46,17,068
1.05
70 Directors' Report
Date
01-Aug-18 02-Aug-18 03-Aug-18 06-Aug-18 07-Aug-18 08-Aug-18 09-Aug-18 10-Aug-18 14-Aug-18 16-Aug-18 20-Aug-18 21-Aug-18 23-Aug-18 24-Aug-18 31-Aug-18 03-Sep-18 04-Sep-18 05-Sep-18 06-Sep-18 10-Sep-18 11-Sep-18 12-Sep-18 14-Sep-18 17-Sep-18 18-Sep-18 21-Sep-18 25-Sep-18 26-Sep-18 27-Sep-18 28-Sep-18 05-Oct-18 12-Oct-18 19-Oct-18 26-Oct-18 31-Oct-18 02-Nov-18 09-Nov-18 16-Nov-18 22-Nov-18 26-Nov-18 27-Nov-18 29-Nov-18 30-Nov-18 03-Dec-18 04-Dec-18 05-Dec-18 07-Dec-18 10-Dec-18 11-Dec-18 12-Dec-18
Sale / Purchase
Sale Purchase Purchase
Sale Sale Sale Sale Sale Sale Sale Purchase Sale Sale Sale Sale Sale Sale Sale Sale Sale Sale Sale Sale Sale Sale Sale Purchase Sale Purchase Sale Sale Purchase Purchase Sale Purchase Purchase Sale Sale Sale Sale Sale Sale Sale Sale Purchase Purchase Sale Sale Purchase Sale
Shareholding
No. of shares
(1,46,17,068) 1,42,84,502 5,673 (177) (60,812) (1,15,418) (88,978) (81,267) (1,20,793) (42,629) 2,012 (2,54,120) (3,52,073) (1,57,790) (2,81,034) (8,42,762) (5,01,902) (4,103) (1,25,031) (25,575) (17,025) (2,27,209) (22,891) (7,09,141) (33,867) (4,85,735) 8,788 (2,85,404) 79,045 (601) (1,92,677) 69,960 1,04,769 (7,42,904) 36,659 2,23,377 (81,792) (20,63,694) (57,940) (1,43,178) (1,66,678) (5,752) (1,10,408) (15,193) 1,634 9,246 (93,908) (15,291) 93,709 (770)
% of total shares of the Company
(1.05) 1.03 0.00 0.00 0.00
(0.01) (0.01) (0.01) (0.01)
0.00 0.00 (0.02) (0.03) (0.01) (0.02) (0.06) (0.04) 0.00 (0.01) 0.00 0.00 (0.02) 0.00 (0.05) 0.00 (0.03) 0.00 (0.02) 0.01 0.00 (0.01) 0.01 0.01 (0.05) 0.00 0.02 (0.01) (0.15) 0.00 (0.01) (0.01) 0.00 (0.01) 0.00 0.00 0.00 (0.01) 0.00 0.01 0.00
Cumulative Shareholding during
the year
No. of shares
% of total shares of the Company
-
-
1,42,84,502
1.03
1,42,90,175
1.03
1,42,89,998
1.03
1,42,29,186
1.02
1,41,13,768
1.01
1,40,24,790
1.01
1,39,43,523
1.00
1,38,22,730
0.99
1,37,80,101
0.99
1,37,82,113
0.99
1,35,27,993
0.97
1,31,75,920
0.95
1,30,18,130
0.93
1,27,37,096
0.91
1,18,94,334
0.85
1,13,92,432
0.82
1,13,88,329
0.82
1,12,63,298
0.81
1,12,37,723
0.81
1,12,20,698
0.81
1,09,93,489
0.79
1,09,70,598
0.79
1,02,61,457
0.74
1,02,27,590
0.73
97,41,855
0.70
97,50,643
0.70
94,65,239
0.68
95,44,284
0.69
95,43,683
0.69
93,51,006
0.67
94,20,966
0.69
95,25,735
0.70
87,82,831
0.65
88,19,490
0.65
90,42,867
0.67
89,61,075
0.66
68,97,381
0.51
68,39,441
0.50
66,96,263
0.49
65,29,585
0.48
65,23,833
0.48
64,13,425
0.47
63,98,232
0.47
63,99,866
0.47
64,09,112
0.47
63,15,204
0.47
62,99,913
0.46
63,93,622
0.47
63,92,852
0.47
Annual Report 2018-19 71
Date
13-Dec-18 14-Dec-18 17-Dec-18 18-Dec-18 19-Dec-18 20-Dec-18 21-Dec-18 24-Dec-18 27-Dec-18 28-Dec-18 31-Dec-18 01-Jan-19 02-Jan-19 04-Jan-19 07-Jan-19 08-Jan-19 09-Jan-19 10-Jan-19 11-Jan-19 15-Jan-19 25-Jan-19 01-Feb-19 06-Feb-19 08-Feb-19 15-Feb-19 22-Feb-19 01-Mar-19 08-Mar-19 15-Mar-19 22-Mar-19 29-Mar-19 31-Mar-19
Sale / Purchase
Sale Sale Sale Sale Sale Sale Purchase Sale Sale Purchase Purchase Sale Purchase Sale Purchase Sale Purchase Purchase Sale Purchase Purchase Purchase Purchase Purchase Sale Sale Purchase Purchase Purchase Purchase Purchase Closing
Shareholding
No. of shares
(33,226) (956)
(66,050) (108)
(1,584) (36,744)
932 (42,300) (16,766)
8 4,074 (31,052) 3,298 (32,825) 2,04,164 (544) 66,160
42 (136) 1,127 98,609 8,08,381 2,69,258 61,503 (38,664) (3,152) 3,36,918 3,52,965 14,505 3,75,490 5,35,111
% of total shares of the Company
0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.02 0.00 0.00 0.00 0.00 0.00 0.01 0.06 0.02 0.00 0.00 0.00 0.02 0.03 0.00 0.03 0.04
Cumulative Shareholding during
the year
No. of shares
% of total shares of the Company
63,59,626
0.47
63,58,670
0.47
62,92,620
0.46
62,92,512
0.46
62,90,928
0.46
62,54,184
0.46
62,55,116
0.46
62,12,816
0.46
61,96,050
0.46
61,96,058
0.46
62,00,132
0.46
61,69,080
0.45
61,72,378
0.46
61,39,553
0.45
63,43,717
0.47
63,43,173
0.47
64,09,333
0.47
64,09,375
0.47
64,09,239
0.47
64,10,366
0.47
65,08,975
0.48
73,17,356
0.54
75,86,614
0.56
76,48,117
0.56
76,09,453
0.56
76,06,301
0.56
79,43,219
0.59
82,96,184
0.61
83,10,689
0.61
86,86,179
0.64
92,21,290
0.68
92,21,290
0.68
LIFE INSURANCE CORPORATION OF INDIA
01-Apr-18
Opening
1,85,35,147
1.33
01-Aug-18
Sale
(1,85,35,147)
(1.33)
0
-
02-Aug-18
Purchase
1,85,35,147
1.33
1,85,35,147
1.33
08-Mar-19
Sale
(3,03,826)
(0.02)
1,82,31,321
1.34
15-Mar-19
Sale
(10,28,178)
(0.08)
1,72,03,143
1.27
22-Mar-19
Sale
(8,12,958)
(0.06)
1,63,90,185
1.21
29-Mar-19
Sale
(12,66,460)
(0.09)
1,51,23,725
1.12
31-Mar-19
Closing
1,51,23,725
1.12
GOVERNMENT OF SINGAPORE
01-Apr-18
Opening
60,98,920
0.44
06-Apr-18
Purchase
6,303
-
61,05,223
0.44
20-Apr-18
Purchase
6,27,512
0.05
67,32,735
0.48
27-Apr-18
Purchase
13,25,137
0.10
80,57,872
0.58
04-May-18
Sale
(5,749)
0.00
80,52,123
0.58
10-May-18
Sale
(5,592)
0.00
80,46,531
0.58
72 Directors' Report
Date
18-May-18 21-May-18 28-May-18 29-May-18 31-May-18 01-Jun-18 05-Jun-18 06-Jun-18 07-Jun-18 08-Jun-18 11-Jun-18 12-Jun-18 13-Jun-18 14-Jun-18 21-Jun-18 29-Jun-18 11-Jul-18 17-Jul-18 18-Jul-18 27-Jul-18 30-Jul-18 01-Aug-18 02-Aug-18 07-Aug-18 08-Aug-18 09-Aug-18 10-Aug-18 21-Aug-18 23-Aug-18 27-Aug-18 31-Aug-18 03-Sep-18 04-Sep-18 06-Sep-18 07-Sep-18 10-Sep-18 11-Sep-18 12-Sep-18 14-Sep-18 17-Sep-18 18-Sep-18 19-Sep-18 21-Sep-18 25-Sep-18 26-Sep-18 12-Oct-18 19-Oct-18 26-Oct-18 02-Nov-18 09-Nov-18
Sale / Purchase
Sale Sale Purchase Sale Purchase Purchase Purchase Purchase Purchase Purchase Purchase Purchase Purchase Purchase Purchase Sale Sale Purchase Sale Sale Sale Sale Purchase Sale Sale Sale Sale Purchase Sale Purchase Purchase Purchase Purchase Purchase Purchase Purchase Purchase Purchase Purchase Purchase Purchase Purchase Purchase Purchase Purchase Sale Purchase Sale Purchase Sale
Shareholding
No. of shares
(5,51,787) (3,152) 18,236
(3,66,164) 70,422 47,817 80,815 80,069 74,103 75,539 76,603 60,013 60,400 22,303 51,691
(1,60,270) (12,646) 64,273 (2,437) (4,411)
(2,62,310) (74,65,638)
74,60,004 (22,655) (22,677) (9,268) (4,533) 69,107
(4,39,727) 1,02,517 2,21,983 36,040 35,222 3,25,907 2,45,936 2,84,613 4,05,633 6,20,491 7,56,901 77,078 3,04,812 1,24,838 1,56,907 3,44,089 80,760
(12,13,935) 29,204
(1,62,669) 18,816
(41,391)
% of total shares of the Company
(0.04) 0.00 0.00
(0.03) 0.01 0.00 0.01 0.01 0.01 0.01 0.01 0.00 0.00 0.00 0.00
(0.01) 0.00 0.00 0.00 0.00
(0.02) (0.54)
0.54 0.00 0.00 0.00 0.00 0.00 (0.03) 0.01 0.02 0.00 0.00 0.02 0.02 0.02 0.03 0.04 0.05 0.01 0.02 0.01 0.01 0.02 0.01 (0.09) 0.00 (0.01) 0.00 0.00
Cumulative Shareholding during
the year
No. of shares
% of total shares of the Company
74,94,744
0.54
74,91,592
0.54
75,09,828
0.54
71,43,664
0.51
72,14,086
0.52
72,61,903
0.52
73,42,718
0.53
74,22,787
0.53
74,96,890
0.54
75,72,429
0.54
76,49,032
0.55
77,09,045
0.55
77,69,445
0.56
77,91,748
0.56
78,43,439
0.56
76,83,169
0.55
76,70,523
0.55
77,34,796
0.56
77,32,359
0.56
77,27,948
0.56
74,65,638
0.54
-
-
74,60,004
0.54
74,37,349
0.53
74,14,672
0.53
74,05,404
0.53
74,00,871
0.53
74,69,978
0.54
70,30,251
0.50
71,32,768
0.51
73,54,751
0.53
73,90,791
0.53
74,26,013
0.53
77,51,920
0.56
79,97,856
0.57
82,82,469
0.59
86,88,102
0.62
93,08,593
0.67
1,00,65,494
0.72
1,01,42,572
0.73
1,04,47,384
0.75
1,05,72,222
0.76
1,07,29,129
0.77
1,10,73,218
0.80
1,11,53,978
0.80
99,40,043
0.73
99,69,247
0.74
98,06,578
0.72
98,25,394
0.72
97,84,003
0.72
Annual Report 2018-19 73
Date
Sale / Purchase
16-Nov-18 20-Nov-18 22-Nov-18 26-Nov-18 28-Nov-18 29-Nov-18 30-Nov-18 03-Dec-18 07-Dec-18 12-Dec-18 14-Dec-18 18-Dec-18 20-Dec-18 27-Dec-18 01-Jan-19 14-Jan-19 25-Jan-19 06-Feb-19 08-Feb-19 22-Feb-19 01-Mar-19 08-Mar-19 22-Mar-19 29-Mar-19 31-Mar-19
Purchase Sale
Purchase Purchase Purchase Purchase Purchase
Sale Purchase
Sale Purchase Purchase
Sale Sale Purchase Purchase Sale Purchase Sale Purchase Sale Sale Purchase Sale Closing
BIRLA SUNLIFE TRUSTEE COMPANY
01-Apr-18
Opening
06-Apr-18
Sale
13-Apr-18
Sale
20-Apr-18
Sale
27-Apr-18
Sale
04-May-18
Purchase
11-May-18
Purchase
18-May-18
Purchase
22-May-18
Purchase
23-May-18
Purchase
24-May-18
Purchase
25-May-18
Purchase
28-May-18
Purchase
29-May-18
Purchase
30-May-18
Purchase
01-Jun-18
Purchase
04-Jun-18
Purchase
11-Jun-18
Purchase
14-Jun-18
Purchase
27-Jun-18
Purchase
28-Jun-18
Purchase
29-Jun-18
Purchase
11-Jul-18
Purchase
12-Jul-18
Purchase
Shareholding
No. of shares
19,120 (88,332)
65,547 69,390 46,061 1,38,603 69,265 (46,203) 31,504 (76,363) 23,599 90,863 (1,30,594) (4,773) 55,993 23,823 (1,08,412) 1,67,336 (44,740) 21,173 (2,59,200) (3,63,492) 52,742 (2,18,365)
% of total shares of the Company
0.00 (0.01)
0.00 0.01 0.00 0.01 0.01 0.00 0.00 (0.01) 0.00 0.01 (0.01) 0.00 0.00 0.00 (0.01) 0.01 0.00 0.00 (0.02) (0.03) 0.00 (0.02)
Cumulative Shareholding during
the year
No. of shares
% of total shares of the Company
98,03,123
0.72
97,14,791
0.72
97,80,338
0.72
98,49,728
0.73
98,95,789
0.73
1,00,34,392
0.74
1,01,03,657
0.74
1,00,57,454
0.74
1,00,88,958
0.74
1,00,12,595
0.74
1,00,36,194
0.74
1,01,27,057
0.75
99,96,463
0.74
99,91,690
0.74
1,00,47,683
0.74
1,00,71,506
0.74
99,63,094
0.73
1,01,30,430
0.75
1,00,85,690
0.74
1,01,06,863
0.75
98,47,663
0.73
94,84,171
0.70
95,36,913
0.70
93,18,548
0.69
93,18,548
0.69
86,84,513
0.62
(1,40,965)
(0.01)
85,43,548
0.61
(4,084)
0.00
85,39,464
0.61
(751)
0.00
85,38,713
0.61
(10,000)
0.00
85,28,713
0.61
8,29,370
0.06
93,58,083
0.67
20,000
0.00
93,78,083
0.67
2,12,000
0.02
95,90,083
0.69
65,080
0.00
96,55,163
0.69
45,000
0.00
97,00,163
0.70
3,64,640
0.03
1,00,64,803
0.72
3,05,000
0.02
1,03,69,803
0.74
10,00,000
0.07
1,13,69,803
0.82
23,400
0.00
1,13,93,203
0.82
15,000
0.00
1,14,08,203
0.82
46,542
0.00
1,14,54,745
0.82
1,58,419
0.01
1,16,13,164
0.83
50,000
0.00
1,16,63,164
0.84
15,000
0.00
1,16,78,164
0.84
20,000
0.00
1,16,98,164
0.84
8,000
0.00
1,17,06,164
0.84
7,75,000
0.06
1,24,81,164
0.90
7,51,000
0.05
1,32,32,164
0.95
2,00,000
0.01
1,34,32,164
0.96
74 Directors' Report
Date
13-Jul-18 25-Jul-18 26-Jul-18 27-Jul-18 31-Jul-18 01-Aug-18 02-Aug-18 08-Aug-18 16-Aug-18 20-Aug-18 21-Aug-18 23-Aug-18 06-Sep-18 12-Sep-18 19-Sep-18 27-Sep-18 05-Oct-18 12-Oct-18 19-Oct-18 26-Oct-18 02-Nov-18 09-Nov-18 16-Nov-18 21-Nov-18 22-Nov-18 26-Nov-18 27-Nov-18 28-Nov-18 06-Dec-18 07-Dec-18 10-Dec-18 20-Dec-18 24-Dec-18 26-Dec-18 28-Dec-18 31-Dec-18 18-Jan-19 25-Jan-19 01-Feb-19 06-Feb-19 08-Feb-19 22-Feb-19 15-Mar-19 22-Mar-19 29-Mar-19 31-Mar-19
Sale / Purchase
Purchase Sale Sale Sale Sale Sale
Purchase Sale
Purchase Purchase Purchase Purchase Purchase
Sale Sale Purchase Purchase Sale Sale Purchase Sale Sale Sale Sale Sale Purchase Sale Purchase Sale Sale Sale Sale Sale Sale Sale Purchase Purchase Purchase Purchase Purchase Sale Sale Purchase Purchase Sale Closing
Shareholding
No. of shares
5,00,000 (10,000) (6,01,300) (5,01,000) (92,000) (1,27,27,864) 1,27,08,864
(680) 237
8,000 1,00,000
80 24,000 (3,00,000) (30,000) 1,50,000 1,46,400 (2,66,700) (1,22,300)
160 (57,500) (1,45,000) (4,01,475) (5,10,000) (1,00,000)
46,200 (1,00,000)
92,900 (2,50,300) (1,06,200)
(18,900) (1,33,000)
(6,300) (20,579) (3,59,290)
1,222 25,000 3,87,900 1,65,100 2,29,700 (30,000) (18,000) 10,500
7,984 (2,22,011)
% of total shares of the Company
0.04 0.00 (0.04) (0.04) (0.01) (0.91) 0.91 0.00 0.00 0.00 0.01 0.00 0.00 (0.02) 0.00 0.01 0.01 (0.02) (0.01) 0.00 0.00 (0.01) (0.03) (0.04) (0.01) 0.00 (0.01) 0.01 (0.02) (0.01) 0.00 (0.01) 0.00 0.00 (0.03) 0.00 0.00 0.03 0.01 0.02 0.00 0.00 0.00 0.00 (0.02)
Cumulative Shareholding during
the year
No. of shares
% of total shares of the Company
1,39,32,164
1.00
1,39,22,164
1.00
1,33,20,864
0.96
1,28,19,864
0.92
1,27,27,864
0.91
-
-
1,27,08,864
0.91
1,27,08,184
0.91
1,27,08,421
0.91
1,27,16,421
0.91
1,28,16,421
0.92
1,28,16,501
0.92
1,28,40,501
0.92
1,25,40,501
0.90
1,25,10,501
0.90
1,26,60,501
0.91
1,28,06,901
0.92
1,25,40,201
0.92
1,24,17,901
0.92
1,24,18,061
0.92
1,23,60,561
0.91
1,22,15,561
0.90
1,18,14,086
0.87
1,13,04,086
0.83
1,12,04,086
0.83
1,12,50,286
0.83
1,11,50,286
0.82
1,12,43,186
0.83
1,09,92,886
0.81
1,08,86,686
0.80
1,08,67,786
0.80
1,07,34,786
0.79
1,07,28,486
0.79
1,07,07,907
0.79
1,03,48,617
0.76
1,03,49,839
0.76
1,03,74,839
0.76
1,07,62,739
0.79
1,09,27,839
0.81
1,11,57,539
0.82
1,11,27,539
0.82
1,11,09,539
0.82
1,11,20,039
0.82
1,11,28,023
0.82
1,09,06,012
0.80
1,09,06,012
0.80
VIRTUS VONTOBEL EMERGING MARKETS OPPORTUNITIES FUND
01-Apr-18
Opening
57,65,039
0.41
22-Jun-18
Sale
(1,47,843)
(0.01)
56,17,196
0.40
Annual Report 2018-19 75
Date
Sale / Purchase
27-Jun-18 28-Jun-18 11-Jul-18 12-Jul-18 13-Jul-18 16-Jul-18 17-Jul-18 18-Jul-18 19-Jul-18 20-Jul-18 01-Aug-18 02-Aug-18 21-Aug-18 23-Aug-18 17-Sep-18 19-Oct-18 02-Nov-18 16-Nov-18 10-Dec-18 11-Dec-18 12-Dec-18 17-Dec-18 18-Dec-18 19-Dec-18 20-Dec-18 31-Dec-18 04-Jan-19 31-Mar-19
SBI MUTUAL FUND 01-Apr-18 06-Apr-18 13-Apr-18 20-Apr-18 27-Apr-18 04-May-18 10-May-18 11-May-18 18-May-18 21-May-18 22-May-18 23-May-18 24-May-18 25-May-18 28-May-18 29-May-18 30-May-18 31-May-18 01-Jun-18 04-Jun-18
Purchase Purchase Purchase Purchase Purchase Purchase Purchase Purchase Purchase Purchase
Sale Purchase
Sale Sale Sale Sale Sale Purchase Sale Sale Sale Sale Sale Sale Sale Sale Sale Closing
Opening Sale
Purchase Sale
Purchase Sale Sale
Purchase Purchase Purchase
Sale Purchase Purchase Purchase Purchase Purchase Purchase Purchase Purchase Purchase
76 Directors' Report
Shareholding
No. of shares
2,30,724 15,10,413
6,75,706 7,54,340 5,29,219 5,75,519 6,27,876 1,17,776 1,86,951 2,35,018 (1,10,60,738) 1,10,60,738 (2,19,985) (40,529) (88,411) (1,07,850) (1,48,078) 11,27,997 (64,607) (74,284) (2,73,898) (1,12,361) (88,087) (1,05,564) (79,808) (1,19,304) (1,05,053)
% of total shares of the Company
0.02 0.11 0.05 0.05 0.04 0.04 0.05 0.01 0.01 0.02 (0.79) 0.79 (0.02) 0.00 (0.01) (0.01) (0.01) 0.08 0.00 (0.01) (0.02) (0.01) (0.01) (0.01) (0.01) (0.01) (0.01)
Cumulative Shareholding during
the year
No. of shares
% of total shares of the Company
58,47,920
0.42
73,58,333
0.53
80,34,039
0.58
87,88,379
0.63
93,17,598
0.67
98,93,117
0.71
1,05,20,993
0.76
1,06,38,769
0.76
1,08,25,720
0.78
1,10,60,738
0.79
-
-
1,10,60,738
0.79
1,08,40,753
0.78
1,08,00,224
0.78
1,07,11,813
0.77
1,06,03,963
0.78
1,04,55,885
0.77
1,15,83,882
0.85
1,15,19,275
0.85
1,14,44,991
0.84
1,11,71,093
0.82
1,10,58,732
0.82
1,09,70,645
0.81
1,08,65,081
0.80
1,07,85,273
0.80
1,06,65,969
0.79
1,05,60,916
0.78
1,05,60,916
0.78
1,46,44,444
1.05
(8,013)
0.00
1,46,36,431
1.05
11,149
0.00
1,46,47,580
1.05
(2,30,276)
(0.02)
1,44,17,304
1.04
2,131
0.00
1,44,19,435
1.04
(3,28,149)
(0.02)
1,40,91,286
1.01
(1,59,360)
(0.01)
1,39,31,926
1.00
10,574
0.00
1,39,42,500
1.00
37,901
0.00
1,39,80,401
1.00
10,052
0.00
1,39,90,453
1.00
(13,869)
0.00
1,39,76,584
1.00
10,477
0.00
1,39,87,061
1.00
6,177
0.00
1,39,93,238
1.00
8,591
0.00
1,40,01,829
1.01
5,486
0.00
1,40,07,315
1.01
8,101
0.00
1,40,15,416
1.01
7,224
0.00
1,40,22,640
1.01
5,263
0.00
1,40,27,903
1.01
4,866
0.00
1,40,32,769
1.01
5,040
0.00
1,40,37,809
1.01
Date
05-Jun-18 06-Jun-18 07-Jun-18 08-Jun-18 11-Jun-18 12-Jun-18 13-Jun-18 14-Jun-18 15-Jun-18 18-Jun-18 19-Jun-18 20-Jun-18 21-Jun-18 22-Jun-18 25-Jun-18 26-Jun-18 27-Jun-18 28-Jun-18 29-Jun-18 02-Jul-18 03-Jul-18 04-Jul-18 05-Jul-18 06-Jul-18 11-Jul-18 12-Jul-18 13-Jul-18 16-Jul-18 17-Jul-18 18-Jul-18 19-Jul-18 20-Jul-18 23-Jul-18 24-Jul-18 25-Jul-18 26-Jul-18 27-Jul-18 30-Jul-18 31-Jul-18 01-Aug-18 02-Aug-18 03-Aug-18 06-Aug-18 07-Aug-18 08-Aug-18 09-Aug-18 10-Aug-18 13-Aug-18 14-Aug-18 16-Aug-18
Sale / Purchase
Purchase Purchase Purchase Purchase Purchase Purchase Purchase Purchase Purchase Purchase
Sale Purchase Purchase Purchase Purchase Purchase Purchase
Sale Sale Sale Purchase Sale Sale Sale Sale Sale Sale Sale Purchase Purchase Purchase Purchase Purchase Purchase Purchase Purchase Purchase Purchase Purchase Sale Purchase Purchase Purchase Purchase Purchase Purchase Purchase Purchase Purchase Purchase
Shareholding
No. of shares
9,012 5,254 6,295 3,479 5,112 8,165 4,473 2,472 6,299 4,327 (1,68,606) 5,822 3,087 5,325 5,041
266 4,970 (4,02,793) (1,15,488) (2,46,383) 14,226 (68,312) (1,27,857) (2,62,645) (14,60,013) (2,46,701) (97,657) (4,91,764) 4,240 6,248 4,963 4,686 5,112 4,899 4,921 7,739 3,381
568 4,92,830 (1,09,82,802) 1,09,98,422
4,118 819
12,249 12,422
3,695 13,773
4,118 4,263 5,147
% of total shares of the Company
0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 (0.01) 0.00 0.00 0.00 0.00 0.00 0.00 (0.03) (0.01) (0.02) 0.00 0.00 (0.01) (0.02) (0.10) (0.02) (0.01) (0.04) 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.04 (0.79) 0.79 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Cumulative Shareholding during
the year
No. of shares
% of total shares of the Company
1,40,46,821
1.01
1,40,52,075
1.01
1,40,58,370
1.01
1,40,61,849
1.01
1,40,66,961
1.01
1,40,75,126
1.01
1,40,79,599
1.01
1,40,82,071
1.01
1,40,88,370
1.01
1,40,92,697
1.01
1,39,24,091
1.00
1,39,29,913
1.00
1,39,33,000
1.00
1,39,38,325
1.00
1,39,43,366
1.00
1,39,43,632
1.00
1,39,48,602
1.00
1,35,45,809
0.97
1,34,30,321
0.96
1,31,83,938
0.95
1,31,98,164
0.95
1,31,29,852
0.94
1,30,01,995
0.93
1,27,39,350
0.91
1,12,79,337
0.81
1,10,32,636
0.79
1,09,34,979
0.79
1,04,43,215
0.75
1,04,47,455
0.75
1,04,53,703
0.75
1,04,58,666
0.75
1,04,63,352
0.75
1,04,68,464
0.75
1,04,73,363
0.75
1,04,78,284
0.75
1,04,86,023
0.75
1,04,89,404
0.75
1,04,89,972
0.75
1,09,82,802
0.79
-
-
1,09,98,422
0.79
1,10,02,540
0.79
1,10,03,359
0.79
1,10,15,608
0.79
1,10,28,030
0.79
1,10,31,725
0.79
1,10,45,498
0.79
1,10,49,616
0.79
1,10,53,879
0.79
1,10,59,026
0.79
Annual Report 2018-19 77
Date
Sale / Purchase
20-Aug-18 21-Aug-18 23-Aug-18 24-Aug-18 27-Aug-18 31-Aug-18 03-Sep-18 04-Sep-18 05-Sep-18 06-Sep-18 07-Sep-18 10-Sep-18 11-Sep-18 12-Sep-18 14-Sep-18 17-Sep-18 18-Sep-18 19-Sep-18 21-Sep-18 25-Sep-18 26-Sep-18 27-Sep-18 28-Sep-18 05-Oct-18 12-Oct-18 19-Oct-18 26-Oct-18 31-Oct-18 02-Nov-18 09-Nov-18 16-Nov-18 20-Nov-18 21-Nov-18 22-Nov-18 26-Nov-18 27-Nov-18 28-Nov-18 29-Nov-18 30-Nov-18 03-Dec-18 04-Dec-18 05-Dec-18 06-Dec-18 07-Dec-18 10-Dec-18 11-Dec-18 12-Dec-18 13-Dec-18 14-Dec-18 17-Dec-18
Purchase Purchase Purchase Purchase Purchase
Sale Purchase Purchase Purchase Purchase Purchase Purchase Purchase Purchase
Sale Purchase Purchase Purchase Purchase Purchase Purchase Purchase
Sale Purchase Purchase Purchase Purchase Purchase Purchase Purchase Purchase Purchase Purchase Purchase Purchase Purchase Purchase Purchase Purchase Purchase
Sale Purchase Purchase
Sale Sale Sale Purchase Sale Purchase Purchase
78 Directors' Report
Shareholding
No. of shares
4,260 5,013 10,650 15,397 6,248 (75,983) 11,859 5,39,659 4,42,053 13,632 13,885 9,159 16,005 12,783 (1,35,374) 13,229 12,212 9,647 4,361 12,969 10,770 6,958 (43,713) 31,561 49,844 19,330 7,77,044 31,595 20,855 29,141 1,45,883 7,556 7,350 9,380 23,598
486 8,120 1,466
350 60,270 (2,327)
280 1,070 (7,148) (11,647) (11,851)
461 (2,804)
1,303 908
% of total shares of the Company
0.00 0.00 0.00 0.00 0.00 (0.01) 0.00 0.04 0.03 0.00 0.00 0.00 0.00 0.00 (0.01) 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.06 0.00 0.00 0.00 0.01 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Cumulative Shareholding during
the year
No. of shares
% of total shares of the Company
1,10,63,286
0.79
1,10,68,299
0.79
1,10,78,949
0.80
1,10,94,346
0.80
1,11,00,594
0.80
1,10,24,611
0.79
1,10,36,470
0.79
1,15,76,129
0.83
1,20,18,182
0.86
1,20,31,814
0.86
1,20,45,699
0.87
1,20,54,858
0.87
1,20,70,863
0.87
1,20,83,646
0.87
1,19,48,272
0.86
1,19,61,501
0.86
1,19,73,713
0.86
1,19,83,360
0.86
1,19,87,721
0.86
1,20,00,690
0.86
1,20,11,460
0.86
1,20,18,418
0.86
1,19,74,705
0.86
1,20,06,266
0.86
1,20,56,110
0.89
1,20,75,440
0.89
1,28,52,484
0.95
1,28,84,079
0.95
1,29,04,934
0.95
1,29,34,075
0.95
1,30,79,958
0.96
1,30,87,514
0.97
1,30,94,864
0.97
1,31,04,244
0.97
1,31,27,842
0.97
1,31,28,328
0.97
1,31,36,448
0.97
1,31,37,914
0.97
1,31,38,264
0.97
1,31,98,534
0.97
1,31,96,207
0.97
1,31,96,487
0.97
1,31,97,557
0.97
1,31,90,409
0.97
1,31,78,762
0.97
1,31,66,911
0.97
1,31,67,372
0.97
1,31,64,568
0.97
1,31,65,871
0.97
1,31,66,779
0.97
Date
18-Dec-18 19-Dec-18 20-Dec-18 21-Dec-18 24-Dec-18 26-Dec-18 27-Dec-18 28-Dec-18 31-Dec-18 01-Jan-19 02-Jan-19 03-Jan-19 04-Jan-19 07-Jan-19 08-Jan-19 09-Jan-19 10-Jan-19 11-Jan-19 14-Jan-19 15-Jan-19 16-Jan-19 18-Jan-19 25-Jan-19 01-Feb-19 06-Feb-19 08-Feb-19 15-Feb-19 22-Feb-19 01-Mar-19 08-Mar-19 15-Mar-19 22-Mar-19 29-Mar-19 31-Mar-19
Sale / Purchase
Purchase Purchase Purchase Purchase
Sale Purchase
Sale Sale Purchase Purchase Purchase Purchase Purchase Purchase Purchase Purchase Purchase Purchase Purchase Purchase Purchase Purchase Purchase Purchase Purchase Purchase Purchase Purchase Purchase Purchase Purchase Purchase Sale Closing
Shareholding
No. of shares
5,670 12,415
5,314 2,710 (12,07,367) 20,70,067 (1,359) (1,04,908) 13,618 18,692 16,855 28,622 17,596 19,054 35,337 18,058 17,072 16,143 15,633 13,932 8,290 33,947 78,684 83,757 62,061 28,383 46,529 45,536 86,396 77,923 6,00,366 34,073 (1,09,587)
% of total shares of the Company
0.00 0.00 0.00 0.00 (0.09) 0.15 0.00 (0.01) 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.01 0.01 0.00 0.00 0.00 0.00 0.01 0.01 0.04 0.00 (0.01)
Cumulative Shareholding during
the year
No. of shares
% of total shares of the Company
1,31,72,449
0.97
1,31,84,864
0.97
1,31,90,178
0.97
1,31,92,888
0.97
1,19,85,521
0.88
1,40,55,588
1.04
1,40,54,229
1.04
1,39,49,321
1.03
1,39,62,939
1.03
1,39,81,631
1.03
1,39,98,486
1.03
1,40,27,108
1.03
1,40,44,704
1.04
1,40,63,758
1.04
1,40,99,095
1.04
1,41,17,153
1.04
1,41,34,225
1.04
1,41,50,368
1.04
1,41,66,001
1.04
1,41,79,933
1.05
1,41,88,223
1.05
1,42,22,170
1.05
1,43,00,854
1.05
1,43,84,611
1.06
1,44,46,672
1.07
1,44,75,055
1.07
1,45,21,584
1.07
1,45,67,120
1.07
1,46,53,516
1.08
1,47,31,439
1.09
1,53,31,805
1.13
1,53,65,878
1.13
1,52,56,291
1.12
1,52,56,291
1.12
ARTISAN INTERNATIONAL VALUE FUND
01-Apr-18
Opening
2,06,00,398
1.48
27-Apr-18
Sale
(3,66,774)
(0.03)
2,02,33,624
1.45
01-Aug-18
Sale
(2,02,33,624)
(1.45)
-
-
02-Aug-18
Purchase
2,02,33,624
1.45
2,02,33,624
1.45
26-Oct-18
Sale
(2,14,173)
(0.02)
2,00,19,451
1.48
09-Nov-18
Sale
(1,57,145)
(0.01)
1,98,62,306
1.46
20-Dec-18
Purchase
2,52,179
0.02
2,01,14,485
1.48
21-Dec-18
Purchase
4,62,387
0.03
2,05,76,872
1.52
24-Dec-18
Purchase
1,94,580
0.01
2,07,71,452
1.53
29-Mar-19
Sale
(1,53,664)
(0.01)
2,06,17,788
1.52
31-Mar-19
2,06,17,788
1.52
STICHTING DEPOSITARY APG EMERGING MARKETS EQUITY POOL
01-Apr-18
Opening
68,46,597
0.49
06-Apr-18
Purchase
1,95,410
0.01
70,42,007
0.51
Annual Report 2018-19 79
Date
Sale / Purchase
13-Apr-18 20-Apr-18 04-May-18 10-May-18 21-May-18 22-May-18 25-May-18 01-Jun-18 21-Jun-18 30-Jul-18 01-Aug-18 02-Aug-18 09-Aug-18 13-Aug-18 21-Aug-18 24-Aug-18 12-Sep-18 14-Sep-18 17-Sep-18 18-Sep-18 19-Sep-18 21-Sep-18 25-Sep-18 26-Sep-18 05-Oct-18 12-Oct-18 19-Oct-18 26-Oct-18 31-Oct-18 02-Nov-18 21-Nov-18 26-Nov-18 29-Nov-18 14-Dec-18 20-Dec-18 10-Jan-19 15-Jan-19 16-Jan-19 18-Jan-19 25-Jan-19 01-Feb-19 06-Feb-19 15-Feb-19 22-Feb-19 01-Mar-19 08-Mar-19 22-Mar-19 29-Mar-19 31-Mar-19
80 Directors' Report
Purchase Purchase Purchase
Sale Purchase
Sale Purchase Purchase Purchase Purchase
Sale Purchase Purchase Purchase Purchase Purchase Purchase Purchase Purchase Purchase Purchase Purchase Purchase Purchase Purchase Purchase
Sale Purchase Purchase Purchase Purchase Purchase Purchase
Sale Purchase
Sale Sale Sale Sale Sale Sale Purchase Sale Purchase Sale Purchase Sale Sale Closing
Shareholding
No. of shares
11,610 61,096 93,161 (1,06,370)
3,250 (4,24,000)
11,967 9,508 24,197 10,972 (67,37,398) 67,37,398 41,320 26,552 31,691 44,367 6,01,731 6,72,024 2,24,102 7,52,517 4,05,497 2,59,127 10,50,496 2,54,018 34,271 4,40,690 (6,64,191) 1,45,422 78,000 2,27,159 1,37,395 3,250 34,669 (2,560) 32,190 (19,065) (1,46,428) (74,439) (22,557) (43,766) (2,37,758) 2,19,556 (1,32,000) 1,96,800 (5,13,720) 1,11,290 (81,251) (3,79,004)
% of total shares of the Company
0.00 0.00 0.01 (0.01) 0.00 (0.03) 0.00 0.00 0.00 0.00 (0.48) 0.48 0.00 0.00 0.00 0.00 0.04 0.05 0.02 0.05 0.03 0.02 0.08 0.02 0.00 0.03 (0.05) 0.01 0.01 0.02 0.01 0.00 0.00 0.00 0.00 0.00 (0.01) (0.01) 0.00 0.00 (0.02) 0.02 (0.01) 0.01 (0.04) 0.01 (0.01) (0.03)
Cumulative Shareholding during
the year
No. of shares
% of total shares of the Company
70,53,617
0.51
71,14,713
0.51
72,07,874
0.52
71,01,504
0.51
71,04,754
0.51
66,80,754
0.48
66,92,721
0.48
67,02,229
0.48
67,26,426
0.48
67,37,398
0.48
-
-
67,37,398
0.48
67,78,718
0.49
68,05,270
0.49
68,36,961
0.49
68,81,328
0.49
74,83,059
0.54
81,55,083
0.59
83,79,185
0.60
91,31,702
0.66
95,37,199
0.68
97,96,326
0.70
1,08,46,822
0.78
1,11,00,840
0.80
1,11,35,111
0.80
1,15,75,801
0.85
1,09,11,610
0.80
1,10,57,032
0.82
1,11,35,032
0.82
1,13,62,191
0.84
1,14,99,586
0.85
1,15,02,836
0.85
1,15,37,505
0.85
1,15,34,945
0.85
1,15,67,135
0.85
1,15,48,070
0.85
1,14,01,642
0.84
1,13,27,203
0.84
1,13,04,646
0.83
1,12,60,880
0.83
1,10,23,122
0.81
1,12,42,678
0.83
1,11,10,678
0.82
1,13,07,478
0.83
1,07,93,758
0.80
1,09,05,048
0.80
1,08,23,797
0.80
1,04,44,793
0.77
1,04,44,793
0.77
Annexure 3 to the Directors' Report
FORM NO. AOC-2
(Pursuant to clause (h) of sub-section (3) of Section 134 of the Companies Act, 2013 and Rule 8(2) of the Companies (Accounts) Rules, 2014
Form for disclosure of particulars of contracts / arrangements entered into by the Company with related parties referred to in sub-section (1) of Section 188 of the Companies Act, 2013 including certain arm's length transactions under third proviso thereto.
1. Details of contracts or arrangements or transactions not at arm's length basis
During the financial year ended March 31, 2019, HCL Technologies Limited (`HCLT') has not entered into any contract or arrangement or transaction with its related parties which is not at arm's length.
2. Details of material contracts or arrangement or transactions at arm's length basis
a) Name(s) of the related party and nature of relationship
HCL America Inc. (`HCLA'), a wholly-owned step-down subsidiary of the Company in the United States of America.
b) Nature of contracts / arrangements / transactions
Rendering / obtaining of services, product sales and other miscellaneous income.
c) Duration of the contracts / arrangements / transactions
Ongoing.
d) Salient terms of the contracts or arrangements or transactions including the value, if any:
HCLT shall (i) provide IT / ITES services to the existing and new clients of HCLA including various support and general administrative services as may be required from time to time; (ii) HCLA shall provide IT / ITES services including sales and marketing support services to HCLT; (iii) both the parties shall diligently perform their respective obligation under the contracts in timely manner and provide services in accordance with the work order issued by the customer; (iv) both the parties shall submit invoices on timely basis for the services provided for each project to each other as per the terms of contract and promptly pay the same; (v) be responsible for all the expenses incurred in connection with providing its services; and (vi) comply with the local, state and federal laws and regulations applicable while providing services. The total value of transactions entered into with HCLA during the period from April 1, 2018 to March 31, 2019 is `6,493.20 crore.
e) Date(s) of approval by the Board, if any:
Not applicable, since the contract was entered into in the ordinary course of business and on arm's length basis.
f) Amount paid as advances, if any:
Nil. For and on behalf of the Board of Directors
Place: Noida (U.P.), India Date: May 9, 2019
SHIV NADAR Chairman & Chief Strategy Officer
Annual Report 2018-19 81
82 Directors' Report
Annexure 4 to the Directors' Report
ANNUAL REPORT ON CORPORATE SOCIAL RESPONSIBILITY (CSR) ACTIVITIES
1. A brief outline of the Company's CSR policy, including overview of projects or programs proposed to be undertaken and a reference to the web-link to the CSR policy and projects or programs.
The objective of the CSR policy (the "Policy") of the Company is to lay down guidelines for proper execution of CSR activities of the Company so as to support the sustainable development of the society. The Company has set up HCL Foundation to focus on the CSR activities of the Company. The CSR activities, projects and programmes undertaken by the Company shall be those as approved by the CSR committee and are covered under the areas set out in Schedule VII of the Companies Act, 2013. The Company is doing CSR expenditure in Education, Infrastructure, Women Development, Health, Environment Sustainability, Benefit of Armed Forces, Promoting Gender Equality and Disaster Management. Details of the Policy are on the website of the Company at https://www.hcltech. com/investors/governance-policies.
2. The composition of the CSR Committee.
CSR Committee comprises of Ms. Roshni Nadar Malhotra (Chairperson), Mr. Shiv Nadar and Mr. S.Madhavan.
3. Average net profit of the Company for last three financial years.
` 7,212.27 crore
4. Prescribed CSR Expenditure (two per cent of the amount as in item 3 above)
5. Details of CSR spent during the financial year
(a) Total amount to be spent for the financial year: (b) Amount unspent, if any; (c) Manner in which the amount spent during the financial year is detailed below.
` 144.25 crore
` 144.25 crore ` 18.80 crore
Annual Report 2018-19 83
Sl.
CSR Project - NGO Partner / Direct
No
Implementation
Sector
Projects or Programs (1) Local area or
other (2) specify the state and district where projects or
programs was undertaken
Amount outlay (budget) project or program wise (` / crore)
Amount spent on the projects
or programs sub-heads (1) Direct expenditure (2) Overheads (` / crore)
1 Kochi Biennale Foundation
Improving the arts Kochi
0.49
0.33
and culture
2 Ankur Yuva Chetna Shivir, Aram Foundation
Improving the quality Lucknow,
19.35
19.35
Charitable Trust, Bhumi, Bodh Shiksha Samiti, of education
Coimbatore,
Childhood Enhancement Through Training
Chennai, Noida,
and Action, Community Aid and Sponsorship
Hyderabad,
Programme, Divya Disha, Don Bosco AnbuIllam,
Pali, Bihar,
Foundation for Education and Development,
Uttar Pradesh,
Going to School, Hope Foundation, Jnana
Jharkhand, Nagpur,
Prabodhini Sadashiv Path, Katha, Manavodaya,
Kolkata, Bangalore,
Masoom, Mukti Rehabilitation Centre, Myrada,
Madurai
Oferr-Organisation for Eelam Refugees-
Rehabilitation, Ramakrishna Vivekananda
Mission, Rasta, Reaching Hand, Rural
Development Council, Saksham Trust, Society for
Educational Improvement and Innovation, Society
for Educational Welfare and Economic (Seed),
Socio Economic Development Trust, Sparc-
India, Srijan Foundation, Study Hall Educational
Foundation, The Kutumb Foundation and United
Way of Delhi
3 Mamta Health Institute for Mother & Child, Improving the health Chennai, Noida and
2.73
2.73
Agragami India
care and education Lucknow
4 Ramakrishna Mission Students Home, Aide Et Improving the
Chennai, Noida,
11.16
9.46
Action (India), After school coaching centers, Skill quality of education Delhi, Madurai and
Development Training, IT Labs, Health Care and and livelihood
Bangalore
sanitation
enhancement
5 National Institute Of Women Child & Youth
Livelihood
Nagpur, Lucknow,
2.75
2.75
Developme, Noida Deaf Society, Self Employed enhancement
Noida, Hyderabad,
Women's Association, Society for Development Programme
Delhi
Alternative, Society of Public Safety & Habitat
Management, Aroha Multipurpose Society, Bright
Light Society, Centum Foundation, EFRAH, India
Vision Foundation
6 Bro Siga Social Service Guild
Providing Early
Chennai and
0.66
0.66
Childhood Care &
Madurai
Development (ECCD)
Cumulative expenditure
upto the reporting
period (` / crore)
Amount spent Direct or through
implementing agency
(` / crore)
0.33 Through Implementing Agency
19.35 Through Implementing Agency
2.73 Through Implementing Agency
9.46 Through Implementing Agency and Through HCL Foundation
2.75 Through Implementing Agency
0.66 Through Implementing Agency
84 Directors' Report
Sl.
CSR Project - NGO Partner / Direct
No
Implementation
Sector
7 Pravah
My scholar
Projects or Programs (1) Local area or
other (2) specify the state and district where projects or
programs was undertaken Noida and Chennai
Amount outlay (budget) project or program wise (` / crore)
0.50
Amount spent on the projects
or programs sub-heads (1) Direct expenditure (2) Overheads (` / crore)
0.50
8 Brookings Institution India Center, Child In Need Health care and
Noida, West
Institute, Community Health Education Society, medical facilities
Bengal, Chennai,
Desire Society, Ekjut, Family Planning Association
Hyderabad,
of India, George Institute for Global Health, Goyal
Jharkhand,
Trust, Gramoday Samajik Sansthan, Institute
Vijayawada, Tamil
of Health Management Research, Jaldhaara
Nadu, Lucknow,
Foundation, M S Chellamuthu Trust, Mobile
Bangalore, Nagpur,
Creches for Working Mothers Child, Pandit
Madurai, Kashmir
Deendayal Upadhyay Institute Of Medical, Saint
Hardayal Educational And Orphans Welfare
Society, Save the Childeren, She Hope Society
for Women Enterpreneurs, SIP Memorial Trust,
Sneha Care Home, Society for Community Health
Awareness Research & Action, Sustainable
Healthcare Advancement Trust (Suham), The
Banyan, Vatsalya, Youth Health Mela and Cancer
Institute (Wia)
9 Vasavya Mahila Mandali
Ensure Women
Vijayawada
Safety & Dignity
10 Project Samuday - a rural development program, Rural Development Hardoi (Uttar
working across agriculture, education, health,
Pradesh)
infrastructure, livelihood and water and sanitation
& hygiene (WASH); Currently implemented
in three blocks Kachhauna, Behender and
Kothawan in Uttar Pradesh HCL Samuday
is operational in 765 villages from 164 Gram
Panchayats, comprising of 90,000 households
and impacting around 600,000 people.
11 WASHI
Water, sanitation and Noida, Chennai,
Hygiene
Madurai
9.67
0.43 124.20
2.71
9.38
0.43 66.41
2.71
Cumulative expenditure
upto the reporting
period (` / crore)
Amount spent Direct or through
implementing agency
(` / crore)
0.50 Through Implementing Agency
9.38 Through Implementing Agency
0.43 Through Implementing
Agency
66.41
Through HCL
Foundation
2.71 Through Implementing Agency
Sl.
CSR Project - NGO Partner / Direct
No
Implementation
Sector
12 Blue Cross of India, Care Earth, Development of Environment Humane Action Foundation (Dhan), Foundation for Protection Ecological Security, Give Me Trees Trust, Indian National Trust of Art and Culture Haritage, Secmol University Wing, Siruthuli, Tarun Bharat Sangh and United Way of Banglore
13 Keystone Foundation
Enable a holistic landscape based approach to conserve and restore designated landscapes of the Nilgiri Biosphere Reserve (NBR).
14 Care India Solutions for Sustainable Development, Disaster relief Caritas India, Eleutheros Christian Society, Oxfam rehabilitation project India and Wildlife Trust Of India
15 Grant Selection Process and Power of One
Screening for Grant Awardees and Screening for Scholarships
16 Overhead expenses
Administration expenses
17 Consultancy Expenses
Consultancy Expenses
Total Expenditure
Projects or Programs (1) Local area or
other (2) specify the state and district where projects or
programs was undertaken Chennai, Coimbatore, Madurai, Gujarat, Rajasthan, Karnataka, Noida, Leh - Ladakh, Jharkhand, Bangalore
Nilgiris
Amount outlay (budget) project or program wise (` / crore)
6.67
0.98
Amount spent on the projects
or programs sub-heads (1) Direct expenditure (2) Overheads (` / crore)
6.29
0.98
Kerala, Assam, Nagaland
2.24 5.99
0.40 1.49 192.41
2.24 4.42
0.26 0.60 129.50
Cumulative expenditure
upto the reporting
period (` / crore)
Amount spent Direct or through
implementing agency
(` / crore)
6.29 Through Implementing Agency
0.98 Through Implementing Agency
2.24 Through Implementing Agency
4.42
Through HCL
Foundation
0.26 0.60 129.50
Through HCL Foundation
Through HCL Foundation
Annual Report 2018-19 85
Notes: The Company undertakes CSR activities through HCL Foundation, a Trust established by the Company and through implementing agencies. During the year, the Company has contributed ` 125.45 crore for CSR activities. The Trust, apart from Company's contribution, also collected CSR contribution from other Group Companies to the extent of ` 2.28 crore, employee contribution (including Power of One) amounting ` 1.18 crore and earned interest of ` 0.19 crore on savings bank account. The total amount spent towards CSR and other charitable activities during the year was ` 129.50 crore. The Cash balances as on April 1, 2018 and March 31, 2019 with HCL Foundation were ` 3.80 crore and ` 3.41
crore respectively.
86 Directors' Report
6. The reason for not spending the prescribed amount for CSR (two per cent of the average net profit of the last three financial years or any part thereof) is:
The Company has primarily identified various critical segments in the domains of rural and urban development, such as education, health, livelihood, art and culture and environment sustainability, including systemic reforms in agriculture and infrastructure development. The CSR agenda of the Company also includes disaster response and rehabilitation. The Company undertakes its CSR activities through HCL Foundation which is a charitable trust established by the Company. It is the intention of the Company that the stated objectives of its Policy are carried out in letter and spirit and for these reasons, the Company's CSR initiatives have been identified, funded and monitored with a view to create a long-term and sustainable impact.
HCL Foundation has rolled out three key flagship programs: HCL Samuday - a rural development program, working across agriculture, education, health, infrastructure, livelihood and water and sanitation and hygiene (WASH); HCL Uday - an urban development program impacting underprivileged communities including migrant workers and displaced people living in urban slums; and HCL Grant - a program which enables sustainable rural development by supporting NGOs doing path-breaking work across India in the thematic categories of environment, education and health. The NGO partners work with HCL Uday and HCL Grant on the respective thematic areas as mentioned in the table above.
HCL Foundation works very closely with the State Government in its development projects and also has MOU signed with the UP Government. Through its joint efforts, it helps the Government to channelize its social and development schemes in chosen areas more effectively and efficiently which have a significant positive impact on the outcome. Though this reduces the outlay by HCL Foundation to some extent but it is made sure that the funds are utilized in the most diligent and productive manner.
Some of the capital projects undertaken by HCL Foundation have a long gestation period due to technical complexities, stringent procurement process, requirement of land from the government and community participation issues. Accordingly, the Company has spent ` 125.45 crore on CSR activities during the year, which is nearly 87% of the total amount which the Company was required to spend on CSR.
The CSR spending by your Company has been exponentially increasing year on year, through development models that bring about lasting change in the lives of marginalized communities. To substantiate, the CSR spending in financial year 2016-17 increased by over 250% from financial year 2015-16 and further increased in financial year 2017-18 by over 133% from financial year 2016-17. Even in the current financial year 2018-19, the spending has increased by over 35% from financial year 2017-18.
As a socially responsible company, your Company is committed to continuously look for avenues to spend that could have a social impact and the CSR spending by the Company would further increase in the coming years.
7. A responsibility statement of the CSR Committee that the implementation and monitoring of CSR Policy, is in compliance with CSR objectives and Policy of the Company.
We hereby declare that implementation and monitoring of the CSR policy are in compliance with CSR objectives and policy of the Company.
C. Vijayakumar President & Chief Executive Officer
Place: Noida (U.P.), India Date: May 9, 2019
Roshni Nadar Malhotra Chairperson, Corporate Social Responsibility Committee
ANNEXURE 5 TO THE DIRECTORS' REPORT
Particulars pursuant to Section 134 (m) of the Companies Act, 2013 read with the Companies (Accounts) Rules, 2014
a) CONSERVATION OF ENERGY AND WATER
Renew Ecosystem
As a responsible corporate, we believe that we have got accountability to the future and an imperative role to play in addressing global energy challenges, climate change and environmental sustainability. The Company has made a commitment to conserve the environment by adopting the "Go Green Initiatives" and being responsible for energy management in its area of operations and perform energy efficiency by consuming energy in an efficient, economical and environment friendly manner throughout all its premises.
The initiatives and good practices as adopted by the Company during the financial year 2018-19 are described below:
1. Renewable Power Purchase
In continuation with our commitment to reduce "carbon footprint", we have procured renewable power equal to 18,969 MWh for our major campuses during the year. The source of this power was Wind, Solar and Hydel based electricity. This much of Green Power Purchase has enabled the organisation to reduce carbon footprint of 15,555 tCO2* (Ton of Carbon Emission) over the other available power resources like Grid and Captive.
2. Chiller and AHU Operational Performance Improvement
Effective operation of chillers and AHUs in all major facilities helped the Company to save energy of 3,037 MWh during the year, and also helped to reduce carbon footprint of 2,490 tCO2* (Ton of Carbon Emission).
Water cooled chillers are installed at most locations which consume lesser power than air cooled chillers, only in water deficit areas air cooled chillers are installed. VFDs (variable frequency drives) are also being used in AHUs which result in lower power consumption by regulating the frequency of the motor depending on the return air temperature which is an indicator of the occupancy and heat load.
3. Effective Utilization of UPS
Effective utilization of our existing UPS systems by increasing their efficiency through shut down of overcapacity UPSs at two major locations (i.e. Bangalore and Chennai) led to saving of 438 MWh
of absolute energy consumption during the year and also helped to reduce 360 tCO2e* (Ton of Carbon Emission) of carbon footprint.
4. Effective Utilization of Lighting
LED lights are being used in all areas including ODCs and common areas as well as the basements in all major campuses. Motion sensors which is operated based on occupancy and movement along with daylight harvesting feature have also been installed in these areas which result in optimum usage of lights and results in energy saving.
Energy savings accrued during the year towards "efficient lighting controls" led to the saving of 2,642 MWh of absolute energy consumption which helped to reduce carbon footprint of 2,167 tCO2e* (Ton of Carbon Emission).
5. Voltage Optimisation
The line voltage plays a major role on operating efficiency and power factor. The supply voltage is adjusted with the help of tap position in the transformer to optimize the power consumption in lightly loaded electrical systems. This helped to save 131 MWh of absolute energy consumption during the year in NCR which reduced 107 tCO2e* (Ton of Carbon Emission) of carbon footprint.
6. Lift Operations optimization
Revised operating schedule of lifts during week days and weekends in major campuses undertaken. This helped to save 44 MWh of absolute energy consumption during the year and reduce 36 tCO2e* (Ton of Carbon Emission) of carbon footprint.
7. Solar Water Heating
Solar Hot water system of 250 LPD capacity installed this year at one of the Madurai region facilities in the month of Feb'19 and helped to conserve 425 kWh of electric energy required from conventional heating (Electric Heater) to Heat water.
8. Water Conservation
Rain water collection and usage and use of aerators in hand wash taps led to the conservation of ground water of 20,660 KL during the year.
Annual Report 2018-19 87
A summary of above mentioned operational efficiency related interventions is tabulated as below: -
Sl.
No
Intervention Particulars
1 Renewable Power purchase
2 Chiller and AHU Operational Performance Improvement
3 Effective utilization of UPS
4 Effective utilization of lightings
5 Voltage optimization
6 Lift and STP Operations optimization
7 Solar water heater
8 Water conservation
Grand Total
FY18-19 MWh / ML
3,037 438
2,642 131 44 0.40
Carbon Foot Print reduction
15,555 2,490 360 2,167 107 36 0.33
6,292
20,715
Water Saved (KL)
20,660 20,660
b) TECHNOLOGY ABSORPTION, ADAPTATION AND INNOVATION
The Company has made significant investments in Digital Transformation which is focused on building persona based Digital Solutions for Processes, Analytics and Workplace of the future. The Company has built Digital Solutions to bring operational efficiencies and reduce cycle time in the area of talent management and development, talent supply chain Optimization and increase collaboration to foster innovation.
Key Platforms of Competitive Differentiation
An employee life cycles centric solution `emPower' is created for driving higher levels of engagement and motivation among the employees. This is augmented by an autobot `EVA' to support the daily transaction requirements in a conversational mode. Earlier persona specific solutions for sales, delivery and customer engagement were rolled out and are being extensively used by employees.
Adoption of data visualization self-service solution has increased multifold and even senior leadership reviews are now running out of this system as prediction and scenario building capabilities of the system have increased immensely. This solution was first rolled out last year for enabling actionable insights and decision support for senior management. Application landscape is being modernized and moved towards an integrated modern infrastructure platform which will provide higher agility, load flexibility, security and availability.
Digital Workplace for Future
While the Company had adopted Office 365 productivity suite as base stack for moving e-mail to cloud for all employee mailboxes with disaster recovery and archival capabilities, new workloads / capabilities of Office 365 suite for enhancing productivity and collaboration are rolled out with focused adoption strategy. Composite use cases were built around new gen collaboration capabilities of Microsoft teams with features like teams BOT integration with service desk and other applications. Additionally, the Company
has rolled out the Enterprise mobility + security suite for our mobile workforce to securely utilize cloud based productivity services. Employees now have more insights on their work trends and collaboration patterns which helps them in managing and optimizing their productivity.
Improved Resilience and Security posture
Balance between managing industrial grade enterprise security while providing consumer grade flexibility and user experience to our millennial workforce is critical for our operations, considering our scale, scope and diversity in environment. With continued focus on IT baseline control program and process adherence initiatives, the Company has further strengthened the security posture of complex heterogeneous business environment gearing towards project level compliance adherence. This is also reflected in our improved scores (consistently in top 3 among peer group) as per the benchmarking done by independent external security rating agencies.
Security posture has been further improved with two pronged strategies. On one side, the Company has made critical investments in next generation IT infrastructure security initiatives like Network Access Control (NAC), adaptive risk based authentication, Wireless IPS, Distributed Denial of Services (DDoS), deception and has also worked towards higher availability of security infrastructure. On another hand, the Company has worked on integrating the threat intelligence from various platforms to augment its capabilities in both proactive and reactive deterrence. The Company has provided capabilities like Privileged Access Management (PAM), enterprise mobility, data classification and leak protection to empower our employees with improved delivery capabilities.
c) RESEARCH AND DEVELOPMENT ("R&D")
(i) Specific areas in which R&D was carried out
a. Cochlear Implant Development
The Cochlear Implant (CI) medical device is an advanced hearing aid which can restore
88 Directors' Report
hearing to patients where normal hearing aids will not be effective.
There are 360 Million people worldwide who live with disabling hearing loss, of which 88 Million are in South Asia (India, Bangladesh, Nepal, Bhutan, Pakistan and Afghanistan). Approximately 17 Million in South Asia could benefit from CI.
This device consists of an external unit (that goes behind the ear) and an internal unit which is surgically implanted. It is expected that this CI device will give significant benefits to the hearing impaired at a highly affordable cost.
The key technologies used in this development are digital signal processing techniques for sound processing, noise cancellation, stimuli generation, RF power and data transfer, low power technologies, and miniaturized components such as analog ASIC and RF ASIC, electrodes and implant hardware.
b. Autonomous Vehicle Development
The aim of this initiative is to create solutions and technologies for autonomous vehicles. A gasoline sedan vehicle has been retrofitted with automotive engineering technologies to make it a Level-3 autonomous vehicle. This vehicle is equipped with cameras and sensors such as RADAR, LIDAR, satellite receivers from leading global technology companies.
The typical use cases implemented in this Level-3 vehicle demonstrators are: lane keep assist for curves and side lanes, vehicle and obstacle detection, pedestrian detection, traffic sign detection.
Includes predefined path planning using high precision maps and high precision GPS.
Advanced sensor fusion algorithms have been implemented to ensure that the car runs in different environmental conditions.
Benefits
Developed the Company's solutions in advanced platforms for autonomous vehicle development.
Helped global customers in faster development of algorithms for different applications.
Helped global customers improve quality, productivity and response times of their internal autonomous driving programs.
c. 5G Solutions
BluGenie The Company's framework to manage architectural, functional and operational telco cloud requirements in a unified way, solves business / automation challenges of telecom operators and allied industries for 5G core networks.
Manages VNF lifecycle (develop, deliver, deploy, use, manage and retire), onboard VNFs on target NFVI and performs life cycle automation.
Creation and validation of network services, handle multi-domain / hybrid network services, adapters for various orchestrator integration.
Micro-services based multi-tenant service portal, TM Forum / MEF API northbound for OSS / BSS integration, workflow management.
Caters to both design and runtime analytics use cases, cognitive troubleshooting, experiential AI analytics components for autonomic network management.
Multi-Band mmWave Modems
5G multi-band modem combines E-band high throughput with Microwave high availability as flexibility is key to meet the 5G Mobile transport requirements.
Scalable to V-band, E-band and beyond.
The multi-band modem supports customization and integration of OEM specific functions.
Benefits
Helped global customers launch solutions for deploying 5G networks and solutions.
Future Action Plan
Continue to invest in technologies for integrated 5G access points.
Annual Report 2018-19 89
d. Big Data Analytics Work bench
Analytics workbench to operationalize analytics faster.
Includes methods to optimize different lifecycle processes through data analytics using machine learning, natural language processing, optimization, forecasting and other data mining algorithms, includes video analytics and log file analysis by tokenizing and parsing, model monitoring post deployment and periodic redeployment.
Vertical specific analytic solutions built on top of the Company's analytical workbench.
Future Action Plan
Work on new analytical use cases to optimize product support / engineering such as knowledge extraction, management and utilization, methods to identify defects early in defect cycle, reduce troubleshooting time, utilizing knowledge available on different languages, methods to help customers to solve their queries and issues via self-service.
R&D in prescriptive, cognitive analytics and federated learning.
Automate more engineering activities such as validating defect report, defect localization, process audit, etc. using cognitive technologies; prediction analytics on rotating equipment, fail safe systems; onboard edge analytics in analytics workbench to operationalize edge analytics; service enablement of analytics predictions; deep learning-based analytics.
e. Automation for Hardware and Software Testing, Sustenance and Support
Autonomous lifecycle platform based on analytics framework for test design, execution and sustenance. BOT creation for Software Engineering Processes Automation (EPA) to optimize the core Software Development Lifecycle (SDLC) activities with minimal skills required.
Distributed innovation in BOTS Do-ItYourself cognitive and EPA BOTS; machine learning based knowledge BOTS; methods to improve customer experience by automating support processes via natural language BOTS, Q&A systems, multi-lingual knowledge access.
90 Directors' Report
Test automation to generate automation test scripts based on keywords for different types of applications like web, desktop, mobile, embedded applications from test cases written using keywords.
OCR quality improvement and enhancement, language additions.
Benefits
Improved productivity, quality and initial response time; usage of the company's IP to accelerate customer projects; cross leveraged the company's IPs to offer end to end solutions.
Provided single automation framework for geo-specific embedded application using OCR.
A framework called ATSG has been developed from extensive research which will: increase productivity and reduce timelines in creating /modifying test automation scripts in ongoing projects; provide value add in multiple customer propositions for competitive advantage; enable testers without automation skills to develop automation scripts.
Future Action Plan:
To integrate the automation framework with industry standard tools; enable `do-it-yourself' integration by exposing the APIS (application program interface).
Focus on non-functional testing by leveraging the Mode 3 products.
Focus on test data generation to increase the accuracy of analytical insights and thereby increase the scope of automation.
e. Platforms Acceleration Suite (PAS)
Platform Acceleration Suite (PAS) is a software platform that provides a robust framework needed to build next-generation software and services faster.
PAS brings together packaged application frameworks, re-usable software components, automation tools for developers and testers, architectural patterns and best practice templates that are required to accelerate software development.
PAS also enables remote device monitoring and control for medical devices. The PAS cloud migration factory is used for cloud agnostic migration.
Benefits
Rapid application development in less time which gives clients a competitive edge with significant margin improvements as well, especially in projects where IPs are leveraged.
(iv) Expenditure on R&D for the years ended March 31, 2019 and March 31, 2018 are as follows: (` in crore)
Particulars
Revenue expenditure Capital expenditure Total R&D expenditure R&D expenditure as a percentage of revenues
Year ended March 31, 2019 March 31, 2018
229
128
-
-
229
128
0.88
0.60
During the year, a substantial portion of the revenue of the Company was derived from the exports.
The foreign exchange earned and spent by the Company during the year under review is as follows:
(` in crore)
Particulars
Foreign exchange earnings Foreign exchange outgo - Expenditure in
foreign currency - CIF value of
imports Capital goods Others
- Dividend remitted in foreign currency
Year ended March 31, 2019 March 31, 2018
22,892
19,275
4,470
1,561 325 183
2,012
2,952 203 285
6,539
5,452
For and on behalf of the Board of Directors
d) FOREIGN EXCHANGE EARNINGS AND OUTGO
The Company is an export-oriented unit and the majority of the Information Technology and Business Process Outsourcing services by the Company are for clients outside India.
Activities relating to exports, initiatives taken to increase the exports, development of new export markets for products and services and export plans.
Place: Noida (U.P.), India Date: May 9, 2019
SHIV NADAR Chairman & Chief Strategy Officer
Annual Report 2018-19 91
ANNEXURE 6 TO THE DIRECTORS' REPORT
Directors' Responsibility Statement as required under Section 134(3)(c) of the Companies Act, 2013:
a) The financial statements have been prepared in accordance with the accounting standards issued by the Institute of Chartered Accountants of India and the requirements of the Companies Act, 2013 to the extent applicable to the Company. There have been no material departures from prescribed accounting standards while preparing these financial statements;
b) The Board of Directors has selected the accounting policies described in the notes to the accounts, which have been consistently applied, except where otherwise stated. The estimates and judgments relating to the financial statements have been made on a prudent basis, in order that the financial statements reflect in a true and fair manner, the state of affairs of the Company as at March 31, 2019 and the profit of the Company for the year ended on that date;
c) The Board of Directors has taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
d) The annual accounts have been prepared on the historical cost convention, as a going concern and on the accrual basis;
e) The Board of Directors has laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and are operating effectively; and
f) The Board of Directors has devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.
Place: Noida (U.P.), India Date: May 9, 2019
For and on behalf of the Board of Directors
SHIV NADAR Chairman & Chief Strategy Officer
92 Directors' Report
Annexure 7 to the Directors' Report DETAILS ON STOCK OPTION PLANS
Pursuant to the approval of the shareholders, your Company had instituted the 1999 Stock Option Plan ("1999 Plan"), 2000 Stock Option Plan ("2000 Plan") and 2004 Stock Option Plan ("2004 Plan") for all eligible employees of the Company and its subsidiaries. The 1999 Plan, 2000 Plan and 2004 Plan are administered by the Nomination & Remuneration Committee (erstwhile Compensation Committee) of the Board and provide for the issuance of 20,000,000; 15,000,000 and 20,000,000 options respectively.
The 1999 Plan and 2000 Plan were lapsed and 2004 Plan is active. The entitlement of the Stock Option holders under 2004 Plan is 8 equity Shares of ` 2 each against each option exercised. The Company has formed a `HCL Technologies Stock Options Trust' as per the SEBI (Share Based Employee Benefits) Regulations, 2014, to implement, manage, operate and/or administer the 2004 Stock Option Plan of the Company. The trustees of the trust are Mr. Vineet Vij, Mr. Mathew George and Mr. Subodh Jain as on the date of this Report. However, since the Company has been allotting shares directly, the said trust mechanism has not been used.
The details of the options granted under the 1999, 2000 and 2004 Plans are given below:
S No
Description
1 Date of shareholders' approval
2 Total number of options granted (gross)
3 The pricing formula
1999 Plan 13-Sep-1999 2,66,00,874
Market price / internal valuation
2000 Plan 20-Oct-2000 1,77,47,401 Market price
2004 Plan
17-Dec-2004
84,24,132
Market price / price determined
by Nomination & Remuneration Committee (erstwhile
Compensation Committee)
4 Number of options vested
1,75,29,862
1,04,66,138
58,20,927
5 Number of options exercised
1,39,57,786
74,70,809
56,42,959
6 Total number of shares arising as a result of exercise of options
11,16,62,288
5,97,66,472
4,51,43,672
7 Number of options lapsed and forfeited
1,26,43,088
1,02,76,592
27,11,963
8 Variation in terms of options
None
None
None
9 Money realized by exercise of options (` in crore)
516.19
434.43
14.31
10 Total number of options in force as on
-
-
69,210
March 31, 2019
11 Grant to Senior Management
Number of Options
19,67,175
2,54,904
29,87,600
Source of Shares
Combination
Combination
Primary
Vesting Period
110 Months
104 Months
96 Months
Vesting Requirements
Service Period / Company's performance on the basis of consolidated financial statements
The diluted earnings per share were ` 59.66 and ` 52.50 for the financial years ended March 31, 2019 and March 31, 2018 respectively.
Annual Report 2018-19 93
Details of Stock Option Plans for the year ended March 31, 2019
Particulars
1999 Plan
2000 Plan
2004 Plan
Total number of options outstanding as on April 1, 2018
-
-
1,23,645
Number of options granted during the year
-
-
-
Pricing formula
Market price /
Market price
Market price /
internal valuation
price determined
by Nomination
& Remuneration
Committee
(erstwhile
Compensation
Committee)
Number of options vested during the year
-
-
-
Number of options exercised during the year
-
-
49,515
Total number of shares arising as a result of exercise of options
-
-
3,96,120
during the year
Number of options lapsed and forfeited during the year
-
-
4,920
Variation in terms of options
None
None
None
Money realised by exercise of options during the year (` in crore) (includes issued through Trust)
-
-
0.08
Total number of options in force as on March 31, 2019
-
-
69,210
Total number of options exercisable as on March 31, 2019
-
-
69,210
Employees granted options equal to 5% or more of the total
None
None
None
number of options granted during the year
Employees granted options equal to or exceeding 1% of the
None
None
None
issued capital during the year
Fair value compensation cost for options granted (` in crore)
N.A.
N.A.
N.A.
Weighted average exercise price of options granted above
N.A.
N.A.
N.A.
market price
Weighted average fair value of options granted above market
N.A.
N.A.
N.A.
price
Weighted average exercise price of options granted at market
N.A.
N.A.
N.A.
price
Weighted average fair value of options granted at market price
N.A.
N.A.
N.A.
Weighted average exercise price of options granted below market price (`)
N.A.
N.A.
N.A.
Weighted average fair value of options granted below market price (`)
N.A.
N.A.
N.A.
Method and significant assumptions used during the year to estimate the fair values of options
Method
Black-Scholes Black-Scholes Black-Scholes
Significant assumptions
Risk free interest rate
7.80%
7.80%
7.80%
Expected life
upto 56 months upto 56 months upto 56 months
Expected Volatility
30.80%
30.80%
30.80%
Expected Dividend
2.02%
2.02%
2.02%
The price of the underlying options in market at the time of grant (`)
N.A.
N.A.
N.A.
Determination of expected Volatility
The expected term of the ESOP is estimated based on the
vesting term and contractual term of the ESOP. Expected
volatility during the expected term of the ESOP is based
on historical volatility of the observed market prices of the
Company's publically traded equity shares during a period
equivalent to the expected term of the ESOP.
94 Directors' Report
Pre IPO Details of Stock Option Plan
Particulars
Number of options granted pre IPO Pricing formula Number of options vested Number of options exercised Total number of shares arising as a result of exercise of options Number of options lapsed Variation in terms of options Money realised by exercise of options (` in crore) Total number of options in force as on March 31, 2019 Fair value compensation cost for options granted (` in crore) Weighted average exercise price of options granted (`) Weighted average fair value of options granted (`) Method used to estimate the fair values of options Significant assumptions Risk free interest rate Expected life Expected volatility Expected dividends
As on March 31, 2019 ESOP 1999 Plan 1,42,23,832 Internal valuation 1,16,48,957 1,02,34,702 4,09,38,808 39,89,130 None 259.41 43.96 255.00 36.65 Black-Scholes Method
10.00% 12 to 110 months
0.10%
Employee Compensation Cost based on fair value of the options
Particulars
Net income, as reported Add: Stock-based employee compensation expense included in reported net income Deduct: Total stock-based employee compensation expense determined under fair value based method for all awards Proforma net income Earnings per share
As reported - Basic - Diluted
Adjusted pro forma - Basic - Diluted
Method and significant assumptions used during the year estimate the fair values of options Significant assumptions Dividend yield % Expected life Risk free interest rates Volatility
Year ended March 31, 2019
(` in crore) 8,185.00 Nil Nil
8,185.00 `
59.69 59.66 59.69 59.66 Black-Scholes Method
2.02% upto 56 months
7.80% 30.80%
Annual Report 2018-19 95
Details of options granted to Senior Managerial Personnel of the Company during the year ended March 31, 2019 None
Details of options granted to employees amounting to 5% or more of the options granted during the year ended March 31, 2019 None
Details of options granted to employees during the year ended March 31, 2019, amounting to 1% or more of the issued capital of the company at the time of the grant None
Place: Noida (U.P.), India Date: May 9, 2019
For and on behalf of the Board of Directors
SHIV NADAR Chairman & Chief Strategy Officer
96 Directors' Report
ANNEXURE 8 TO THE DIRECTORS' REPORT
Information as per Rule 5(2) of Chapter XIII of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 A. List of top ten employees in terms of remuneration received during financial year 2018-19
S. No.
Name
1 Anil Kumar Chanana*
2 Ajit Krishnan Kutty Kumar 3 Prahlad Rai Bansal 4 Apparao V V
5 Gade Hanumantha Rao
6 Amit Roy
7 Prateek Aggarwal
8
Vineet Ved Prakash Sood
9
Varanasi Guru Venkata Subbaraya Sharma
10 Mathew George
Age
Designation
Educational Qualification
Remuneration
Received during the year (`)
Date of Joining
Experience in Years
Previous Employment
Designation held in previous
employment
Previous employment held since
61 Chief Financial Officer
CA
5,53,74,675 October 1, 1998
38
HCL Technologies America Inc.
Executive Vice President
December, 1985
55
President - Systems Integration MBA -
& Applications, Delivery
Marketing
2,63,07,441
July 1, 2013
31
Accenture Services Pvt. Ltd.
Managing Director June, 1988
62 Deputy Chief Financial Officer CA
2,60,49,494 August 30, 2000 40 HCL America Inc.
Vice President
November, 1997
57 Chief Human Resources Officer B.Tech, M.Tech
2,57,03,890 March 10, 2003
35
Ascend Technologies Director / Center
Ltd.
Head
August, 1996
61
President Engg. and R&D Services
B.Tech Electronics
2,26,63,014
July 1, 1996
38
HCL Hewlett Packard Senior Manager
Ltd.
- R&D
November, 1980
60
Executive Vice President Taxation
CA
1,95,57,740
July 16, 2007
35
Samsung India Electronics Pvt. Ltd.
Vice President Taxation
September, 2006
52 Chief Financial Officer
MBA - Finance
1,81,84,886 October 1, 2012
28
Hexaware Technologies Chief Financial
Ltd.
Officer
June, 2008
52
Executive Vice President Treasury
CWA
1,62,16,098 November 25, 2010
28
Tata Consultancy Services Ltd.
Treasurer
March, 2006
55
Senior Vice President - Internal Audit & Risk Management
CWA
1,57,20,186 January 24, 2011
32
ATG Tires Pvt. Ltd.
Vice President Internal Audit
June, 2010
51
Executive Vice President Central Support
CA
1,43,05,787
May 2, 2013
25
Cognizant Technology Director Solutions India Pvt. Ltd. Consulting
October, 2011
Annual Report 2018-19 97
98 Directors' Report
B. List of employees employed for full financial year and in receipt of remuneration more than Rupees One Crore and Two Lacs per annum
S. No.
Name
1 Ajit Krishnan Kutty Kumar
2 Amit Roy
3 Amitava Sengupta
4 Anup Dutta 5 Apparao V V 6 Gade Hanumantha Rao 7 Goutam Rungta
8 Maninder Singh Narang
9 Mathew George 10 Nalin Mittal
Age
Designation
Educational Qualification
Remuneration
Received during the year (`)
55
President - Systems Integration & Applications, Delivery
MBA - Marketing
2,63,07,441
60
Executive Vice President Taxation
CA
1,95,57,740
49
Executive Vice President Digital & Analytics
M Tech Computer Science
1,05,34,537
60
Corporate Vice President Engg. & R&D Services
M.Tech Electrical
1,17,18,580
57 Chief Human Resources Officer B.Tech, M.Tech
2,57,03,890
61
President Engg. and R&D Services
46
Executive Vice President Business Finance
Corporate Vice President 49 Cyber Security & Global Risk
Compliance
51
Executive Vice President Central Support
47
Senior Vice President - Corp. Administration
B.Tech Electronics CA, CWA
PGD - Marketing Management
CA
CA, CWA
2,26,63,014 1,35,73,730 1,30,55,572 1,43,05,787 1,08,22,588
Date of Joining
Experience in Years
Previous Employment
Designation held in previous
appointment
Previous employment held since
July 1, 2013
31
Accenture Services Pvt. Ltd.
Managing Director June, 1988
July 16, 2007
35
Samsung India Electronics Pvt. Ltd.
Vice President Taxation
September, 2006
October 26, 2009
25
Tata Consultancy Services Ltd.
Sr. Consultant / IOU Head
April, 1994
July 1, 1996
38
HCL Hewlett Packard Ltd.
Senior Manager
July, 1987
March 10, 2003
35
Ascend Technologies Director / Center
Ltd.
Head
August, 1996
July 1, 1996
38
HCL Hewlett Packard Senior Manager
Ltd.
- R&D
November, 1980
March 1, 2007
23
General Motors India Pvt. Ltd.
General Manager Finance
July, 2003
August 21, 1995 29 Fujitsu ICIM Ltd.
Major Account Manager
February, 1992
May 2, 2013
25
Cognizant Technology Director Solutions India Pvt. Ltd. Consulting
April 1, 1998
26
Pricewaterhouse Coopers
Article
October, 2011 July, 1993
11 Prahlad Rai Bansal
62 Deputy Chief Financial Officer CA
2,60,49,494 August 30, 2000 40 HCL America Inc.
Vice President
November, 1997
12 Prateek Aggarwal 13 Rahul Mohta 14 Rajesh Gupta
15 Rajesh Kumar
16
Rangarajan Vijayaraghavan
17 Sanjay Gupta
52 Chief Financial Officer
MBA - Finance
42 Vice President - CEO Office CA
59 Vice President - Taxation
CA
Senior Vice President 51 Campus Infrastructure
Development
Executive Vice President 54 - Applications & Systems
Integration, Delivery
MBA - Business Administration
MA
49
Executive Vice President, Program Director - New Vistas
B.Tech Electronics
1,81,84,886 October 1, 2012
28
Hexaware Technologies Chief Financial
Ltd.
Officer
June, 2008
1,13,22,266
September 16, 2013
19
Ondot Couriers & Cargo Ltd.
Strategic Investor August, 2012
1,20,82,522 March 17, 2010 33 JSL Limited
Vice President -Taxation
May, 2009
1,42,82,162 August 1, 2017 25 DLF Limited
Director - Technical August, 2002
1,09,49,425 1,08,40,559
May 22, 2009
32
Satyam Computer Services Ltd.
Vice President
May, 1999
April 20, 1995
26
Su-Kam Communication Pvt. Ltd.
Customer Support Engineer
November, 1993
Annual Report 2018-19 99
S. No.
Name
18 Srimathi Shivashankar
19
Subramanian Gopalakrishnan
20
Varanasi Guru Venkata Subbaraya Sharma
21
Venkata Ramana Samudrala
22 Vijay Anand Guntur
23 Vineet Vedprakash Sood
Age
Designation
Educational Qualification
Remuneration
Received during the year (`)
Date of Joining
Experience in Years
Previous Employment
Designation held in previous
appointment
Previous employment held since
51
Executive Vice President, Program Director - New Vistas
MBA - Business Administration
1,13,15,422
December 1, 2010
16 Infosys Ltd.
Senior LeadDiversity
January, 2003
52
Executive Vice President Business Finance
CA, CS, CWA 1,39,97,440
December 9, 2010
29
Satyam Computer Services Ltd.
Vice President Finance
June, 2005
55
Senior Vice President - Internal Audit & Risk Management
CWA
1,57,20,186
January 24, 2011
32
ATG Tires Pvt Ltd.
Vice President Internal Audit
June, 2010
55
Senior Vice President - Global Information Technology
B.Tech Electronics & 1,23,35,651 Communications
January 8, 2015
31 Genpact India
Senior Vice President
February, 2000
Corporate Vice President -
M.Sc (Computer
51 HNC Delivery, Engg. and R&D Science), MBA - 1,23,90,263
Services
Finance
July 14, 1994
30
HCL Hewlett Packard Ltd.
Deputy Manager
June, 1989
52
Executive Vice President Treasury
CWA
1,62,16,098
November 25, 2010
28
Tata Consultancy Services Ltd.
Treasurer
March, 2006
100 Directors' Report
C. List of employees employed for part of the financial year and in receipt of remuneration more than Rupees Eight Lacs and Fifty Thousand per month
S. No.
Name
Age
Designation
Educational Qualification
Remuneration
received during the year (`)
Date of Joining
Experience in Years
Previous Employment
Designation held in previous
appointment
Previous employment held since
1 Anil Kumar Chanana*
61
2 Ajay Kumar Davessar 50
3 Anand Rajaganesan
46
4 Ashutosh Kaushik
56
5 Ramesh Ganesh
53
6
Natesan Angarai
Krishnamurthy 56
Chief Financial Officer CA
Vice President & Global Head - Corporate Communications
BBA - General
MBA - Personnel, Senior Vice President - HR Human Relations &
Industrial Relations
Senior Vice President Global Administration
MBA - Marketing Management
Vice President - Engg. and ME / M. Tech -
R&D Services
Electrical
Operations Director Engg. and R&D Services
ME - Electronics
5,53,74,675 October 1, 1998 95,68,652 May 12, 2009
74,32,542 February 1, 2010 43,10,261 October 1, 2005 39,51,999 April 7, 1997 18,31,991 July 14, 1994
38
HCL Technologies America Inc.
Executive Vice President
December, 1985
27
Capgemini Technology Services India Limited
Associate Director
December, 2006
21 Bharti Airtel Ltd.
General Manager Talent Management & Organisation Effectiveness
October, 1999
35 HCL Comnet Ltd.
Deputy General Management
March, 1994
29
Tata Hydro Electric Power Supply Company Ltd.
Deputy Executive Engineer
September, 1990
32
CAIR DR & DO, Bangalore
Scientist `C'
February, 1988
Notes applicable to tables A, B and C above: 1. None of the employees listed above is a relative of any director of the Company. 2. The nature of employment is contractual in all the above cases. 3. None of the employees listed above owns 2% or more of the paid-up equity share capital of the Company. 4. Mr. Anil Kumar Chanana, apart from the above remuneration from the Company, also received ` 2.98 crore as remuneration from a subsidiary of the
Company. 5. Particulars of employees posted and working in a country outside India not being directors or their relatives, drawing more than one crore and two lacs
rupees per annum or eight lacs and fifty thousand rupees per month, as the case may be, have not been included in the above statement.
For and on behalf of the Board of Directors
Place: Noida (U.P.), India Date: May 9, 2019
SHIV NADAR Chairman & Chief Strategy Officer
CORPORATE GOVERNANCE REPORT 2018-19
Good governance facilitates efficient, effective and entrepreneurial management that can deliver stakeholder value over the longer term. It is about commitment to values and ethical business conduct. It is a set of laws, regulations, processes and customs affecting the way a company is directed, administrated, controlled or managed.
Good Corporate Governance underpins the success and integrity of the organizations, institutions and markets. It is one of the essential pillars for building an efficient and sustainable environment.
Corporate Governance is based on the principles of integrity, fairness, equity, transparency, accountability and commitment to values. Good governance practices stem from the culture and mind-set of the organization. The effectiveness of Corporate Governance in the company depends on regular review, preferably regular independent review. The Company considers fair and transparent Corporate Governance as one of its most core management tenets. The Company has adopted a Code of Conduct for its directors, employees, consultants, vendors and customers and has also adopted a Code of Conduct to regulate, monitor and report trading by insiders and also a Fair Disclosure Code. Some of the important best practices of Corporate Governance framework are timely and accurate disclosure of information regarding the financial position, performance, ownership and governance of the Company.
PHILOSOPHY ON CODE OF GOVERNANCE
The Corporate Governance philosophy of the Company is based on the following principles:
Follow the spirit of the law and not just the letter of the law. Corporate Governance standards should go beyond the law.
Be transparent and maintain high degree of disclosure levels. When in doubt, disclose it.
Make a clear distinction between personal convenience and corporate resources.
Communicate externally, in a truthful manner, about how the Company runs internally.
Have a simple and transparent corporate structure driven solely by business needs.
Comply with the laws in all the countries in which the Company operates.
Management is the trustee of shareholders' capital and not the owner.
Corporate Governance is an integral part of the philosophy of the Company in its pursuit of excellence, growth and value creation. In addition to complying with the statutory requirements, effective governance systems and practices towards improving transparency, disclosures, internal control and promotion of ethics at work place have been institutionalized. The Company recognizes that good governance is a continuing exercise and reiterates its commitment to pursue highest standards of Corporate Governance in the overall interest of all its stakeholders.
BOARD OF DIRECTORS ("BOARD")
The Board determines the purpose and values of the Company. The primary role of the Board is that of trusteeship so as to protect and enhance stakeholders' value through the strategic supervision of the Company and its subsidiaries.
The Company is headed by a Board that exercises leadership, integrity and judgment in directing so as to achieve continuing prosperity and to act in the best interest of the Company. The Board plays a critical role in overseeing how the management serves the short and long term interests of shareholders and other stakeholders. This is reflected in the Company's governance practices, through which it strives to maintain an active, informed and independent Board. The Board ensures that the Company complies with all relevant laws, regulations, governance practices, accounting and auditing standards. It identifies key risk areas and key performance indicators of the Company's business and constantly monitor these factors. The Board is entrusted with the ultimate responsibility of the management, general affairs direction and performance of the Company and has been vested with the requisite powers, authorities and duties.
BOARD SIZE AND COMPOSITION
The Board of Directors ("Board") is at the core of the Company's Corporate Governance practices and oversees how the management serves and protects the long term interests of all the stakeholders. The Company believes that an active, well informed and independent Board is necessary to ensure the highest standards of Corporate Governance.
The Board of the Company has an optimum combination of Executive, Non-Executive and Independent Directors who have an in-depth knowledge of business, in addition to the expertise in their areas of specialization. During the year, majority of the Board comprised of Independent Directors. Independent Directors play a critical role in imparting balance to the Board processes by bringing independent judgments on issues of strategy, performance, resources, standards of the Company, conduct etc.
Annual Report 2018-19 101
As on March 31, 2019, the Board consisted of 11 members, of which, one is the Promoter Director who is designated as the Chairman & Chief Strategy Officer of the Company. The other 10 Directors are Non-Executive Directors, of which 8 are Independent Non-Executive Directors. The Board also comprises of three Women Directors.
Resignation of Director(s)
Mr. Keki Mistry (DIN 00008886) resigned as a Director of the Company w.e.f. April 30, 2018 before the expiry of his first term of appointment in the Company. As confirmed by Mr. Keki Mistry vide his letter of resignation, the reason of his resignation was his inability to devote sufficient time to the Company in view of his increased commitment to HDFC and its group companies and due to travel constraints. There are no material reasons for his resignation, other than those stated herein. Further, Mr. Sudhindhar Krishan Khanna (DIN - 01529178) resigned as a Director of the Company w.e.f. April 8, 2019. As confirmed by Mr. Khanna in his letter of resignation, the reason of his resignation were health issues. There are no material reasons for his resignation, other than those stated herein.
Appointment of Director(s)
During the financial year under review, Mr. James Philip Adamczyk (DIN - 08151025) was appointed as an Additional Director in the capacity of Independent Director of the Company by the Board of Directors w.e.f. July 26, 2018. Subsequently, at the Twenty Sixth Annual General Meeting (`AGM') of the Company held on September 18, 2018, Mr. James Philip Adamczyk was appointed as an Independent Director of the Company in terms of Section 149 of the Companies Act, 2013 (the "Act"), to hold office for a period of five years.
Re-appointment of Independent Director(s)
At the Twenty Second AGM of the Company held on December 4, 2014, Mr. R. Srinivasan, Ms. Robin Ann Abrams, Dr. Sosale Shankara Sastry and Mr. S. Madhavan were appointed as Independent Directors of the Company for a period of five consecutive years and therefore, their first term of appointment shall end at the conclusion of the ensuing Twenty Seventh AGM of the Company to be held in the year 2019. Considering their immense contributions towards the Company and pursuant to the recommendations of the Nomination & Remuneration Committee, the Board in its meeting held on May 9, 2019 recommended the re-appointment of Mr. R. Srinivasan, Ms. Robin Ann Abrams, Dr. Sosale Shankara Sastry and Mr. S. Madhavan as Independent Directors for a second term of five consecutive years from the conclusion of the Twenty Seventh AGM of the Company to be held in the year 2019 till the conclusion of the Thirty Second AGM to be held in the year 2024, for approval of shareholders of the Company.
Board composition as on date
As on the date of this Report, the Board consists of 10 members, of which, one is the Promoter Director who is designated as the Chairman & Chief Strategy Officer of the Company. The other 9 Directors are Non-Executive Directors, of which 8 are Independent Non-Executive Directors. The Board also comprises of three Women Directors.
Composition of the Board and number of Directorship(s) / Committee Membership(s) / Chairmanship(s) held as on March 31, 2019 in other entities is as follows:
Name of Director
Mr. Shiv Nadar (DIN 00015850) Mr. Deepak Kapoor (DIN 00162957) Mr. James Philip Adamczyk (2) (DIN - 08151025)
Position in the Company
Chairman & Chief Strategy Officer Independent NonExecutive Director Independent NonExecutive Director
No. of Directorships in Public Limited
Companies (including HCL Technologies Ltd.)
No. of Committee memberships in Public Limited Companies (1) (including HCL Technologies Ltd.)
No. of Committee Chairmanships in Public Limited Companies (1) (including HCL Technologies Ltd.)
No. of shares held of HCL Technologies Limited (of
`2 each)
1
1
-
368
Other Listed Companies where the Director is appointed as a Non-Executive -
Independent Director
-
3
5
3
Nil 1. TATA Steel Limited
1
-
-
Nil
-
102 Corporate Governance Report
Name of Director
Position in the Company
No. of Directorships in Public Limited
Companies (including HCL Technologies Ltd.)
No. of Committee memberships in Public Limited Companies (1) (including HCL Technologies Ltd.)
No. of Committee Chairmanships in Public Limited Companies (1) (including HCL Technologies Ltd.)
No. of shares held of HCL Technologies Limited (of
`2 each)
Other Listed Companies where the Director is appointed as a Non-Executive -
Independent Director
Mr. S. Madhavan Independent,
5
5
3
2,500 1. UFO Moviez India Limited
(DIN 06451889)
Non-Executive
2. GlaxoSmithKline
Director
Consumer Healthcare
Limited
3. Transport Corporation of
India Limited
Ms. Nishi Vasudeva Independent,
5
6
1
Nil 1. L&T Infra Debt Fund
(DIN 03016991)
Non-Executive
Limited
Director
2. L&T Finance Holdings
Limited
Ms. Robin Ann
Independent,
1
1
-
Nil
-
Abrams
Non-Executive
(DIN 00030840)
Director
Ms. Roshni Nadar Non-Independent,
1
1
-
348
-
Malhotra
Non-Executive
(DIN 02346621)
Director
Dr. Sosale Shankara Independent,
1
-
-
Nil
-
Sastry
Non-Executive
(DIN 05331243)
Director
Mr. R. Srinivasan Independent,
2
-
-
Nil
-
(DIN 00575854)
Non-Executive
Director
Mr. Sudhindar
Non-Independent,
4
1
-
Nil 1. Peninsula Land Limited
Krishan Khanna (3) Non-Executive
2. Ashok Leyland Limited
(DIN 01529178)
Director
Mr. Thomas Sieber Independent,
1
-
-
Nil
-
(DIN 07311191)
Non-Executive
Director
Note: Mr. Shiv Nadar and Ms. Roshni Nadar Malhotra are related as Father and Daughter respectively. No other Director is related to any other Director on the Board. (1) In accordance with Regulation 26 of the Listing Regulations, Membership(s) / Chairmanship(s) of only Audit Committees and Stakeholders'
Relationship Committees in all public limited companies have been considered. (2) Mr. James Philip Adamczyk was appointed as a Director of the Company w.e.f. July 26, 2018. (3) Mr. Sudhindhar Krishan Khanna resigned as a Director of the Company w.e.f. April 8, 2019.
BRIEF PROFILE OF THE BOARD MEMBERS:
Mr. Shiv Nadar
Mr. Shiv Nadar, aged 74 years, is the Founder & Chairman of HCL Technologies Limited and Shiv Nadar Foundation. An Electrical Engineer from Coimbatore, South India, he established HCL as a start-up in 1976. Acknowledged as a visionary by the IT industry and his peers, Mr. Shiv Nadar has often made daring forays based on his conviction of the future. The University of Madras and IIT Kharagpur awarded him an Honorary Doctorate Degree in Science for his outstanding contribution to IT in India. In recognition of his pioneering role in business and philanthropy in India and across the globe, Mr. Nadar has received several honours and accolades, notable being the Padma Bhushan from the President of India in 2008 and the BNP Paribas Grand Prize for Individual Philanthropy in
2013, the AIMA Managing India Corporate Citizen Award, the ICSI Lifetime Achievement Award for excellence in Corporate Governance and the Golden Peacock Award for Social Leadership in 2014. He has been named as the Philanthropist of the Year by the Economic Times Family Business Awards in 2018 and as the Outstanding Philanthropist of the Year in 2015 by Forbes. Mr. Nadar was also featured as the most generous Indian by the Hurun India Philanthropy List 2016. Determined to give back to the society, Mr. Nadar has been quietly supporting several significant social causes through the Shiv Nadar Foundation. The Foundation has established the not-for-profit SSN College of Engineering in Chennai, ranked among India's top ranked private engineering colleges. A young and a unique research-led interdisciplinary Shiv Nadar University has been identified as India's first Ivy League institution. The Foundation has also established VidyaGyan schools in Uttar Pradesh
Annual Report 2018-19 103
that provide free world-class education to rural toppers from economically disadvantaged backgrounds and the Shiv Nadar Schools, the iconic Kiran Nadar Museum of Art and Shiksha, an innovative technology led intervention in education envisioned to eradicate illiteracy from India. With a vision to provide innovative medical services, products and training to meet the growing demand for quality healthcare, Mr. Nadar diversified HCL's business to set up HCL Healthcare, offering integrated care across India.
Mr. Deepak Kapoor
Mr. Deepak Kapoor, aged 60 years, is the former Chairman & CEO of PwC India. He took retirement from PwC in March 2017 after having been associated with it for 39 years. During his illustrious career with PwC, he served in various leadership and client service roles in India and overseas. He was also a member of the PwC Global Strategy Council, led the Deals practice for PwC India and was also the leader of Telecom, Entertainment and Media practice. He has extensive experience / expertise in areas relating to financial reporting, audit, mergers and acquisitions, crisis management and corporate advisory work. His experience in India and overseas encompasses multiple sectors including Consumer products, Manufacturing, Telecom, Technology, Healthcare and Entertainment and Media. He is a Fellow member of the Institute of Chartered Accountants of India, a Fellow member of the Institute of Company Secretaries of India and a member of the Certified Fraud Examiners, USA.
Mr. James Philip Adamczyk
Mr. James Philip Adamczyk, aged 60 years, has 36 years of experience in information technology, software engineering and technology consulting. He has a degree of Bachelor of Science in Civil Engineering from Purdue University, Master of Science in Civil Engineering from the Georgia Institute of Technology and MS in Industrial-Organizational Psychology from Capella University as well as certificates in Accounting from Columbia University and a Certificate in Financial Markets and Trading from the Illinois Institute of Technology. Mr. Adamczyk joined Accenture in 1982, became a partner in 1992 and later became a Senior Executive and Managing Director. In the late 1990's, he left Accenture to start a web-based food distribution business, which he sold in 2001 and returned to Accenture. In the second part of his career at Accenture, he led the technology architecture practice in the Financial Services consulting vertical and spearheaded Accenture's creation of a Business Process Management Automation consulting capability. He was appointed as the Chief Technology Officer of Accenture's software business. Since leaving Accenture in 2014, he served as an investor and adviser to a number of software and technology consulting start-ups. Mr. Adamczyk has extensive expertise in areas relating to software engineering for corporate systems, consulting and software company management, large scale systems integration, professional services company management and mergers and acquisitions.
Mr. S. Madhavan
Mr. S Madhavan, aged 62 years, is a fellow member of the Institute of Chartered Accountants of India and also holds a Post Graduate Diploma in Business Management from the Indian Institute of Management, Ahmedabad. He was a senior partner and Executive Director in PricewaterhouseCoopers for many years. He held several positions in that organization, ranging from indirect taxes to client delivery and leadership development. Mr. Madhavan started his career in Hindustan Unilever Ltd., India's largest multinational, where he spent several years in 1980s. He is currently the Co-Chairman of the GST Task Force in FICCI, has been the past President, Northern Region, Indo American Chamber of Commerce and the past Co-Chairman of the Taxation Committee, Assocham. Mr. Madhavan is on the board of several other listed companies such as ICICI Bank, GSK Consumer Healthcare Ltd., UFO Moviez Ltd. and Transport Corporation of India Ltd. and is a chairman/member of various board committees.
Ms. Nishi Vasudeva
Ms. Nishi Vasudeva, aged 63 years, is the first woman to chair an Oil & Gas company in India, and has extensive management and advisory experience. She is an MBA from the Indian Institute of Management, Calcutta, India and B.A. (Economics) from Lady Shri Ram College, University of Delhi, India. She has expertise in the areas like Corporate Strategy, Enterprise Resource Management, Retail & Marketing, Information Systems, Business Transformation & Margin Management and Regulatory Management. She is well known for her courage and dedication to making a difference, both at a company level and in the lives of employees and customers. Her awards and accomplishments include the prestigious Global `CEO of the Year' award by Platts Global Energy Awards 2015, Award for `Excellence & Outstanding contribution to Public Sector Management' under the Individual Leadership category by the Standing Committee on Public Sector Enterprises (SCOPE), Government of India, for the year 2013-14, `Exceptional Woman Achiever Award' from the Federation of Indian Chambers of Commerce and Industry in 2014. She has also been ranked one of the top five `Most Powerful Women in Asia Pacific' by FORTUNE magazine in the year 2014.
Ms. Robin Ann Abrams
Ms. Robin Ann Abrams, aged 68 years, holds both a Bachelor of Arts and a Juris Doctor degree from the University of Nebraska. She was the interim CEO at ZiLOG. She had been the President of Palm Computing and Senior Vice President at 3Com Corporation. She was formerly the President and CEO at VeriFone and also held a variety of senior management positions with Apple Computer including Vice President and General Manager of the Americas where she oversaw sales and channel management for U.S., Canada and Latin America. Ms. Abrams spent eight years with Unisys in several senior
104 Corporate Governance Report
level positions and served on several U.S. public company Boards, the Anita Borg Institute Board and several academic advisory committees.
Ms. Roshni Nadar Malhotra
Ms. Roshni Nadar Malhotra, aged 37 years, is the CEO and Executive Director of HCL Corporation Pvt. Ltd. She brings a global outlook, strategic vision and passion for business, social enterprise and institution-building to her varied roles at HCL Corporation and the Shiv Nadar Foundation. Ms. Roshni is a Trustee of the Shiv Nadar Foundation, which is committed to the process of nation building by driving transformational leadership through education. Ms. Roshni is also the Founder & Trustee of the Habitats Trust, a foundation working towards protecting habitats and their indigenous species. Passionate about wildlife and nature, Ms. Roshni founded the Trust with the mission of creating and conserving sustainable ecosystems through strategic partnerships and collaborations with all stakeholders at every level.
Ms. Roshni is the driving force behind the VidyaGyan schools in Uttar Pradesh, a radical initiative of the Shiv Nadar Foundation to induct and transform meritorious rural children from economically underprivileged backgrounds and create leaders of tomorrow. Under her leadership, VidyaGyan has started showing excellence in various fields, creating spirals of inspiration and delivering on the promise of creating catalytic leaders from rural India. As a representative of the Shiv Nadar Foundation, she was involved in a joint initiative with the Rajiv Gandhi Foundation to promote the education of the Dalit and Muslim girl child in some of the most backward districts in the State of Uttar Pradesh in India. Ms. Roshni is a part of the Forum of Young Global Leaders (YGL), a unique and diverse community of the world's most outstanding, next-generation leaders, an initiative of the World Economic Forum. She was conferred the prestigious NDTV Young Philanthropist - Indian of the Year award in 2014. In 2015, she was felicitated with the World's Most Innovative People Award for Philanthropic Innovation by the World Summit on Innovation & Entrepreneurship (WSIE), in partnership with the UN. In 2017, she was conferred with Lewis Institute Community Changemaker Award by Babson College. More recently, in September 2017, Vogue India felicitated her with the `Philanthropist of the Year' award. She has been featured in The World's 100 Most Powerful Women list compiled and released by Forbes in 2017 and 2018. Ms. Roshni holds an MBA from the Kellogg Graduate School of Management with a focus on Social Enterprise and Management & Strategy. At Kellogg, she received the Dean's Distinguished Service Award.
Dr. Sosale Shankara Sastry
Dr. Sosale Shankara Sastry, aged 63 years, is currently the Dean of Engineering at University of California, Berkeley. Dr. Sastry is B. Tech from Indian Institute of Technology,
Bombay; M.S. EECS (1979), University of California, Berkeley; M.A. Mathematics (1980), University of California, Berkeley and Ph.D. EECS, University of California, Berkeley. His areas of personal research are embedded control, cybersecurity, autonomous software for unmanned systems (especially aerial vehicles), computer vision, nonlinear and adaptive control, control of hybrid and embedded systems and network embedded systems and software. He has been concerned with cybersecurity and critical infrastructure protection. He has co-authored over 500 technical papers and 9 books. During his career, the positions held by him include Member, Scientific Advisory Board for Singapore National Research Foundation and Member of Science and Technology Advisory Board for the Thai Prime Minister.
Mr. R. Srinivasan
Mr. R. Srinivasan, aged 73 years, has an Electrical Engineering Degree from Madras University and MBA Degree from the IIM, Ahmedabad. He is the Founder of Redington (India) Limited, a Technology Products Supply Chain Solution Company operating in India, Middle East, Africa & Turkey, Sri Lanka, Bangladesh and CIS countries. He has served as the Managing Director from July 1, 2006 to October 17, 2014 and as the NonExecutive Vice Chairman from October 17, 2014 to February 2, 2017 of Redington (India) Limited. Prior to starting Redington in Singapore, he spent three years in Indonesia with a leading Textile Company. His experience also includes a number of years with Readers Digest and the Coca-Cola Corporation in India. He has over 30 years of management experience across the globe. He has been awarded the "Entrepreneur Award 2007" by CII, Tamil Nadu and "Outstanding contribution to the IT Channel Industry" by CRN in 2007.
Mr. Thomas Sieber
Mr. Thomas Sieber, aged 57 years, has a Business Administration degree from the University of St. Gallen, Switzerland. He is serving as the Chairman of Axpo Holding AG which is the largest national Energy provider in Switzerland. He is also a member of Board of Directors at Sierra Wireless, the Global leader in IoT ("Internet of Things") and at ITservices provider, Garaio AG. Former he was the CEO of Orange Switzerland (now Salt Mobile SA) and later on became the Chairman of the Board of Directors. He has an expertise in Leadership, Strategic and International Business Management.
SUMMARY OF DIRECTOR SKILLS / EXPERTISE
In order to effectively discharge its duties, it is necessary that collectively the Directors hold the appropriate balance of skills, experience and expertise. The Board seeks a complementary diversity of skills and experience across its members, ensuring that the Board is in compliance with the highest standards of corporate governance.
Annual Report 2018-19 105
The Board's current Skills Matrix includes the following attributes:
Skill Description
Mr. Shiv Nadar
Mr. Deepak Kapoor
Mr. James Philip
Adamczyk
Mr. S. Ms. Nishi Madhavan Vasudeva
Ms. Robin Ann
Abrams
Ms. Roshni Nadar
Malhotra
Dr. Sosale Shankara
Sastry
Mr. R. Srinivasan
Mr. Thomas Sieber
Leadership
Y
Y
-
Y
Y
Y
Y
Y
Y
Y
Innate leadership skills including the
ability to represent the organization and
set appropriate Board and organization
culture. Demonstrated strengths in talent
development, succession planning and
bringing change and long term future
growth.
Strategic Planning and Analysis
Y
Y
-
Y
Y
Y
Y
Y
Y
Y
Ability to critically identify and assess
strategic opportunities and threats and
develop effective strategies in the context of
long-term objectives and the organizations'
relevant policies and priorities.
Technology
Y
-
Y
-
Y
Y
Y
Y
Y
-
Reasonable knowledge and experience
in technology with an ability to foresee
technological trends and changes,
apply new technology and bring about
innovations in business strategies.
Governance
Y
Y
-
Y
Y
Y
Y
-
Y
-
Understanding of the various governance
and compliance requirements under
various applicable laws, supporting a
strong Board base and management
accountability, transparency, and protection
of shareholder interests.
Financial
Y
Y
-
Y
Y
Y
Y
-
Y
-
Wide ranging knowledge and financial
skills, oversight for risk management and
internal controls and proficiency in financial
management and financial reporting
processes.
Diversity
Y
-
Y
-
Y
Y
Y
Y
Y
Y
An appropriate mix of varied cultures,
ethnicity, geography, gender, age,
philosophies, life experiences and other
diversity perspectives that expand the
Board's understanding of the needs of
diverse stakeholders and a better ability to
respond to changes.
Mergers & Acquisitions
Y
Y
Y
-
Y
Y
Y
Y
Y
-
Significant experience in mergers
and acquisitions and other business
combinations, with strong insight of
risks and opportunities, valuations and
diligence processes, structural impact on
the organization, and ability to leverage
integration planning.
Global Business
Y
-
Y
Y
-
Y
Y
Y
Y
Y
Understanding of diversified business
environments, economic, political, cultural
and regulatory framework across the
globe, and a broad perspective on global
market opportunities.
Marketing and Communications
Y
-
-
-
Y
Y
Y
-
Y
-
Ability to analyze the market and
technological impacts, developing
strategies for brand awareness and brand
building and enhancing market share.
106 Corporate Governance Report
MEMBERSHIP ON OTHER BOARDS
Executive Directors are also allowed to serve on the Board / Committee of other Corporate(s) or Government bodies whose interest are germane to the future of software business or on the Board of key economic institutions of the nation or whose primary objective is benefiting society.
Independent Directors are expected not to serve on the Board / Committees of competing companies. Other than this, there is no limitation on the Directorships / Committee memberships except those imposed by law and good Corporate Governance.
DIRECTORS' RESPONSIBILITIES
a) In addition to the duties and responsibilities entrusted on the Directors of the Company as per the provisions of the Act, it is the elementary responsibility of the Board members to oversee the management of the Company and in doing so, serve the best interests of the Company and its stakeholders. This responsibility inter-alia shall include:
Reviewing and approving fundamental operating, financial and other corporate plans, strategies and objectives.
Evaluating whether the corporate resources are being used only for appropriate business purposes.
Establishing a corporate environment that promotes timely and effective disclosure (including robust and appropriate controls, procedures and incentives), fiscal responsibilty, high ethical standards and compliance with all applicable laws and regulations.
Evaluating the performance of the Company and its senior executives and taking appropriate action, including removal, where warranted.
Evaluating the overall effectiveness of the Board and its Committees.
To attend the Board, Committee and shareholders meetings.
b) Exercise business judgment: In discharging their fiduciary duties of care and loyalty, the directors are expected to exercise their business judgment to act in what they reasonably believe to be in the best interests of the Company and its stakeholders.
c) Understand the Company and its business: The directors have an obligation to remain informed about the Company and its business, including the principal operational and financial objectives, strategies and plans of the Company, relative standing of the business segments
within the Company and vis-a-vis the competitors of the Company, factors that determine the Company's success, results of operations and financial condition of the Company and the significant subsidiaries and business segments.
d) Establish effective systems: The directors are responsible for determining that effective systems are in place for periodic and timely reporting to the Board on important matters concerning the Company including the following:
Current business and financial performance, degree of achievement of approved objectives and the need to address forward-planning issues.
Compliance programs to assure the Company's compliance with laws and corporate polices.
Material litigation and governmental and regulatory matters.
BOARD MEETINGS - FUNCTIONING AND PROCEDURE
Board Meeting - Calendar: The probable dates of the board meetings for the forthcoming year are decided in advance and published as part of the Annual Report.
Board Meeting - Frequency: The Board meets at least once a quarter to review the quarterly results and other items of the agenda. Whenever necessary, additional meetings are held. In case of business exigencies or urgency of matters, resolutions are passed by circulation. The Company effectively uses teleconferencing facilities to enable the participation of Directors who could not attend the meetings due to some emergencies.
Board Meeting - Location: The location of the Board meetings are informed well in advance to all the Directors. Each director is expected to attend the Board meetings.
Board Meeting - Matters: All divisions / departments of the Company are advised to schedule their work plans in advance, particularly with regard to matters requiring discussions / approval / decision of the Board / Committee meetings. All such matters are communicated to the Company Secretary in advance so that the same could be included in the Agenda for the Board / Committee meetings.
Board material / Agenda distributed in advance: The agenda for each board meeting is circulated in advance to the Board members. All material information is incorporated in the agenda facilitating meaningful and focused discussions in the meeting. Where it is not practicable to attach any document in the agenda, the same is tabled before the meeting. Every board member is free to suggest items for inclusion in the agenda.
Annual Report 2018-19 107
Presentations by management: The Board is given presentations covering finance, sales, marketing, major business segments and operations of the Company, global business environment including business opportunities, business strategy and risk management practices before taking on record the financial results of the Company.
Access to employees: The directors are provided free access to communicate with the officers and employees of the Company. Management is encouraged to invite the Company personnel to any Board Meeting at which their presence and expertise would help the Board to have a full understanding of the matters being considered.
Availability of information to Board members: The information placed before the Board includes annual operating plans and budgets including operating & capital expenditure budgets, quarterly financial results of the Company both consolidated and standalone basis, financials of each of the subsidiaries and investments made by the subsidiaries, risk assessment and minimization procedures, update on the state of the market for the business as well as on the strategy, minutes of subsidiaries, minutes of all the Board committees, related party transactions, details of the treasury investments, details of foreign exchange exposure, update on statutory compliance report and reports of non-compliances, if any, information on recruitment / remuneration of senior officers, show cause / demand notices, if any, details of joint ventures or collaboration agreements, significant changes in the accounting policies, sale of any material nature etc.
Post meeting follow-up mechanism: The guidelines for Board and Committee(s) meetings facilitate an effective post meeting follow up review and reporting process for the decisions taken by the Board and Committee(s) thereof. The important decisions taken at the Board / Committee(s) meetings are promptly communicated to the concerned departments / divisions. Action taken report on the decisions of the previous meeting(s) is placed at the immediately succeeding meeting of the Board / Committee(s) for information and review by the Board / Committee(s).
NUMBER OF BOARD MEETINGS AND THE DATES ON WHICH THEY WERE HELD
Nine Board Meetings were held during the financial year ended March 31, 2019. These were held on April 30 May 2, 2018, July 12, 2018, July 26-27, 2018, September 7, 2018, October 22-23, 2018, December 1, 2018, January 12, 2019, January 28-29, 2019 and March 12, 2019. The necessary quorum was present for all the meetings. The maximum interval between any two meetings did not exceed 120 days.
The following table gives the attendance record of the Board Meetings and the last AGM:
Name of the Director
No. of
Board No. of
Meetings
Board
Whether last AGM
held during
Meetings attended
attended
tenure
Mr. Shiv Nadar
9
9 (4)
Yes
Mr. Deepak Kapoor
9
8
Yes
Mr. James Philip Adamczyk(1)
7
6 (5)
No
Mr. Keki Mistry(2)
1
0
No
Mr. S. Madhavan
9
9 (5)
Yes
Ms. Nishi Vasudeva
9
8 (5)
No
Ms. Robin Ann Abrams
9
9 (7)
No
Ms. Roshni Nadar Malhotra
9
9
Yes
Dr. Sosale Shankara Sastry
9
8 (7)
No
Mr. R. Srinivasan
9
9 (8)
No
Mr. Sudhindar Krishan Khanna(3)
9
8 (6)
Yes
Mr. Thomas Sieber
9
7 (6)
No
(1) Mr. James Philip Adamczyk was appointed as a Director of the Company w.e.f. July 26, 2018.
(2) Mr. Keki Mistry resigned as a Director of the Company w.e.f. April 30, 2018.
(3) Mr. Sudhindhar Krishan Khanna resigned as a Director of the Company w.e.f. April 8, 2019.
(4) Mr. Shiv Nadar attended one meeting through teleconference call. (5) Mr. James Philip Adamczyk, Mr. S. Madhavan and Ms. Nishi
Vasudeva attended two meetings through teleconference call. (6) Mr. Sudhindar Krishan Khanna and Mr. Thomas Sieber attended
three meetings through teleconference call. (7) Ms. Robin Abrams and Dr. Sosale Shankara Sastry attended four
meetings through teleconference call. (8) Mr. R. Srinivasan attended five meetings through teleconference
call.
Further, during the year under review, one meeting of the Board of Directors of the Company was held via teleconference call on June 4, 2018 and the decision was taken through resolution by circulation.
DECLARATION BY INDEPENDENT DIRECTORS
Every Independent Director, at the first meeting of the Board in which he participates as a Director and thereafter at the first meeting of the Board in every financial year, gives a declaration that he meets the criteria of Independence as provided under Section 149(6) of the Act and Regulation 16(1)(b) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (as amended from time to time) ("Listing Regulations"). The Company has received necessary declarations from
108 Corporate Governance Report
each Independent Director that he/she meets the criteria of Independence in terms of the said provisions.
Based on the disclosures received from all Independent Directors and also in the opinion of the Board, the Independent Directors fulfill the conditions as specified in the Act and the Listing Regulations and are independent of the Management.
INDEPENDENT DIRECTORS' MEETINGS
In terms of the provisions of the Act and the Listing Regulations, the Independent Directors of the Company shall meet at least once in a year, without the presence of Executive Directors and members of Management. The Independent Directors met on January 29, 2019 and inter-alia discussed:
The checklist for the evaluation of the performance of the Board, the Committees of the Board and the individual Directors, including the Chairman of the Board was approved by the Nomination & Remuneration Committee (`NRC') of the Company.
The performance of the Board was evaluated by the Board after seeking inputs from all the directors on the basis of the criteria such as the Board composition and structure, effectiveness of board processes, information and functioning, etc.
The performance of the Board Committees was evaluated by the Board after seeking inputs from the committee members on the basis of criteria such as the composition of committees, effectiveness of committee meetings, etc.
the performance of Non-Independent Directors and the Board as a whole;
the performance of the Chairperson of the Company, taking into account the views of the Executive Directors and Non-Executive Directors; and
the quality, quantity and timeliness of flow of information between the Company Management and the Board that is necessary for the Board to effectively and reasonably perform their duties.
FAMILIARISATION PROGRAMME FOR INDEPENDENT DIRECTORS
The Directors are provided with necessary documents, reports and internal policies to enable them to familiarize with the Company's procedures and practices. Further, periodic presentations are made at the Board and Committee Meetings, on business and performance updates of the Company, global business environment, business strategy and risks involved. Quarterly updates on relevant statutory changes are provided to the Directors in the Board Meetings.
Upon appointment, the Directors are issued a Letter of Appointment setting out in detail the terms of employment including their roles, function, responsibilities and their fiduciary duties as a Director of the Company.
The details of such familiarization programme for Independent Directors are posted on the website of the Company and are available at https://www.hcltech.com/investors/ governancepolicies.
The Board and the NRC reviewed the performance of the individual Directors on the basis of the criteria such as the contribution of the individual Director to the Board and Committee meetings, preparedness on the issues to be discussed, meaningful and constructive contribution and inputs in meetings, etc. In addition, the Chairman was also evaluated on the key aspects of his role.
In a separate meeting of the Independent Directors, the performance of the Non-Independent Directors, performance of the Board as a whole and performance of the Chairman was evaluated. The same was discussed in the Board meeting that followed the meeting of the Independent Directors, at which the performance of the Board, its committees and the individual directors was discussed.
BOARD DIVERSITY
The Company recognizes its obligation to maintain a Board with a diversity of Directors. The Company considers that the concept of diversity incorporates a number of different aspects, such as professional experiences, business perspectives, skills, knowledge, gender, age, cultural and educational background, ethnicity and length of service.
The Company believes that Board diversity enhances decision making capability and a diverse Board is more effective in dealing with organizational changes and less likely to suffer from group thinking. The Board has adopted the Policy on Board Diversity which sets out the approach for the diversity of the Board of Directors.
BOARD COMMITTEES
BOARD EVALUATION
The Board of Directors, pursuant to the provisions of the Act and Regulation 17(10) of the Listing Regulations has carried out an Annual Evaluation of its own performance, performance of the Board Committees and of the individual Directors (including the Independent Directors and the Chairperson).
The Board Committees play a crucial role in the governance structure of the Company and are being set out to deal with specific areas / activities which concern the Company and need a closer review. They are set up under the formal approval of the Board to carry out their clearly defined roles. The Board supervises the execution of its responsibilities by the committees and is responsible for their action.
Annual Report 2018-19 109
As on March 31, 2019, the Company had eight Board Committees viz. Audit Committee, Nomination & Remuneration Committee, Finance Committee, Stakeholders' Relationship Committee, Corporate Social Responsibility Committee, Employees' Stock Options Allotment Committee, Risk Management Committee and Diversity Committee.
During the year under review, a "Buy-back Committee" was formed by the Board of Directors of the Company in its meeting held on July 12, 2018, to consider and approve the various operational matters in regard to the Buy-back offer of the Company. The Committee ceased to exist post the completion of Buy-back.
Keeping in view the requirements of the Act as well as the Listing Regulations, the Board decides the terms of reference of the various committees which set forth the purposes, goals
and responsibilities of the Committees. All observations, recommendations and decisions of the committees are placed before the Board for information or for approval.
All the recommendations made by the various Board Committees during the financial year ended March 31, 2019 were accepted by the Board.
FREQUENCY AND LENGTH OF MEETING OF THE COMMITTEES OF THE BOARD AND AGENDA
The Chairman of each Committee of the Board, in consultation with the Chairman of the Board and appropriate members of the management determine the frequency and length of the meetings of the Committees and develop the Committees agenda. The agenda of the Committee meetings is shared with all the members of the Committee.
CHAIRMANSHIP/ MEMBERSHIP OF DIRECTORS IN COMMITTEES OF THE BOARD OF DIRECTORS OF THE COMPANY AS ON MARCH 31, 2019:
S. No.
Director
Audit Committee
Nomination & Remuneration
Committee
Stakeholders' Relationship Committee
Corporate Social
Responsibility Committee
Finance Committee
Employees' Stock Option
Allotment Committee
Risk Management Committee
Diversity Committee
Executive Director(s)
1. Mr. Shiv Nadar
N.A.
Member
Member
Member Member Member
N.A.
Member
Non-Independent, Non-Executive Director(s)
2. Ms. Roshni Nadar Malhotra
N.A.
Member
Member Chairperson Member
N.A.
N.A.
Member
3. Mr. Sudhindar Krishan Khanna (1) N.A.
N.A.
N.A.
N.A.
Member
N.A.
N.A.
N.A.
Independent, Non-Executive Director(s)
4. Mr. Deepak Kapoor
Member
N.A.
N.A.
N.A.
N.A.
N.A.
Member
N.A.
5. Mr. James Philip Adamczyk (2)
N.A.
N.A.
N.A.
N.A.
N.A.
N.A.
N.A.
N.A.
6. Mr. S. Madhavan (3)
Chairman
N.A.
Chairman
Member Chairman Member Chairman
N.A.
7. Ms. Nishi Vasudeva
Member
N.A.
N.A.
N.A.
N.A.
N.A.
Member
N.A.
8. Ms. Robin Ann Abrams
Member
Member
N.A.
N.A.
N.A.
N.A.
Member Chairperson
9. Dr. Sosale Shankara Sastry
N.A.
N.A.
N.A.
N.A.
N.A.
N.A.
N.A.
N.A.
10. Mr. R. Srinivasan
N.A.
Chairman
N.A.
N.A.
Member
N.A.
N.A.
N.A.
11. Mr. Thomas Sieber
N.A.
N.A.
N.A.
N.A.
N.A.
N.A.
N.A.
N.A.
(1) Mr. Sudhindhar Krishan Khanna resigned as a Director of the Company w.e.f. April 8, 2019.
(2) Mr. James Philip Adamczyk was appointed as a Director of the Company w.e.f. July 26, 2018.
(3) Mr. S. Madhavan was appointed as the Chairman of the Audit Committee and Risk Management Committee in place of Mr. Keki Mistry who
resigned from the Board of the Company w.e.f. April 30, 2018.
1. Audit Committee
As on March 31, 2019, the Audit Committee comprised of four Independent Directors namely:
a) Mr. S. Madhavan (Chairman) b) Mr. Deepak Kapoor c) Ms. Nishi Vasudeva d) Ms. Robin Ann Abrams
The Company Secretary acts as a Secretary to the Committee.
During the year under review, Mr. S. Madhavan was appointed as the Chairman of the Committee in place of Mr. Keki Mistry who resigned from the Board of the Company w.e.f. April 30, 2018.
110 Corporate Governance Report
Terms of Reference
The terms of reference of Audit Committee are as under:
a) Statutory Auditors
Recommend to the Board the appointment, re-appointment and if required, the replacement or removal of the statutory auditors, including filing of a casual vacancy, fixation of audit fee / remuneration, terms of appointment and also provide prior approval of the appointment of and the fees for any other services rendered by the statutory auditors. Provided that the statutory auditors shall not render services prohibited to them by Section 144 of the Companies Act, 2013 or by professional regulations.
The Committee shall take into consideration the qualifications and experience of the Firm proposed to be considered for appointment as auditors as specified under Section 141 of the Companies Act, 2013 and whether these are commensurate with the size, nature of business and requirements of the Company and also consider any completed and pending proceedings against the proposed firm of Auditors before the Institute of Chartered Accountants of India or any competent authority or any Court.
The Committee shall recommend to the Board, the name of the audit firm who may replace the incumbent auditor on the expiry of their term.
b) Review and monitor independence and performance of Statutory Auditors and Effectiveness of Audit Process.
In connection with recommending the firm to be retained as the Company's statutory auditors, review and monitor the information provided by the management relating to the independence of such firm and performance and effectiveness of audit process, including, among other things, information relating to the non-audit services provided and expected to be provided by the statutory auditors.
The Committee is also responsible for:
1) Actively engaging in dialogue with the statutory auditors with respect to any disclosed relationship or services that may impact the objectivity and independence of the statutory auditors; and
2) Recommending that the Board takes appropriate action in response to the statutory auditors' Report to satisfy itself of their independence.
c) Review audit plan
Review with the statutory auditors their plans for, and the scope of, their annual audit and other examinations.
d) Conduct of Audit
Discuss with the statutory auditors the matters required to be discussed for the conduct of the audit.
e) Review and examination of Audit Results
Review and examination with the statutory auditors the proposed report on the annual audit, areas of concern, the accompanying management letter, if any, the reports of their reviews of the Company's interim financial statements and the reports of the results of such other examinations outside of the course of the statutory auditors' normal audit procedures that they may from time to time undertake.
f) Review and examination of Financial Statements
Review and examination of the Company's financial reporting process and the disclosure of its financial information to ensure that the financial statements are accurate, sufficient and credible and evaluation of internal financial controls and risk management systems, to obtain reasonable assurance based on evidence regarding processes followed and their appropriate testing that such systems are adequate and comprehensive and are working effectively. The Audit Committee shall review with appropriate officers of the Company and the statutory auditors, the annual financial statements of the Company prior to submission to the Board or public release thereof, focusing primarily on:
1) Matters required to be included in the Directors' Responsibility Statement to be included in the Board's Report in terms of Section 134(5) of the Companies Act, 2013;
2) Any changes in accounting policies and practices and reasons for the same;
3) Major accounting entries based on exercise of judgment by management;
4) Qualifications in draft audit report;
5) Significant adjustments made in the financial statements arising out of audit;
6) The going concern assumption;
7) Compliance with accounting standards;
8) Compliance with stock exchange and legal requirements concerning financial statements;
9) Any related party transactions i.e. transactions of the Company with its subsidiaries, promoters or the management, or their relatives, etc. that may have conflict with the interest of the Company at large;
Annual Report 2018-19 111
10) Contingent liabilities;
11) Status of litigations by or against the Company; and
12) Claims against the Company and their effect on the accounts.
The definition of the term "Financial Statement" shall be the same as under Section 2(40) of the Companies Act, 2013.
g) Review Quarterly Financial Statements
Reviewing with the management, the quarterly / interim financial statements before submission to the Board for approval.
h) The Audit Committee shall perform the following Risk Management Functions:
1) Assist the Board in overseeing the responsibilities with regard to the identification, evaluation and mitigation of operational, strategic and external environmental risks.
2) Review and approve the Risk Management Policy and associated framework, processes and practices.
3) Assist the Board in taking appropriate measures to achieve a prudent balance between risk and reward in both ongoing and new business activities.
4) Evaluate significant risk exposures including business continuity planning and disaster recovery planning.
5) Assess management's actions in mitigating the risk exposures in a timely manner.
6) Promote Enterprise-wide Risk Management and obtain comfort based on adequate and appropriate evidence that the Management of the Company ensures the implementation and effective functioning of the entire risk management process and embedding of a comprehensive risk management culture in the Company at every stage of its operations.
7) Assist the Board in maintenance and development of a supportive culture, in relation to the management of risk, appropriately embedded through procedures, training and leadership actions so that all employees are alert to the wider impact on the whole organization of their actions and decisions.
8) Maintaining an aggregated view on the risk profile of the Company / Industry in addition to the profile of individual risks.
112 Corporate Governance Report
9) Ensure the implementation of and compliance with the objectives set out in the Risk Management Policy.
10) Advise the Board on acceptable levels of risk appetite, tolerance and strategy appropriate to the size and nature of business and the complexity and geographic spread of the Company's operations.
11) Review and reassess the adequacy of this charter periodically and recommend any proposed changes to the Board for approval from time to time.
12) The Committee shall have access to any internal information necessary to fulfill its oversight role. As and when required the Committee may assign tasks to the Internal Auditor, the Company's internal Risk management team and any external expert advisors considered necessary for any task and they will provide their findings to the Committee.
i) Review the performance of the Internal and External Auditors
Review with the management the performance of the statutory and internal auditors and the existence, adequacy and effective functioning of the internal control systems including internal control system over financial reporting, based on appropriate and effective evidence and such other matters as may be required.
j) Oversight Role
Oversight of the Company's financial reporting process and the disclosure of its financial information to ensure the financial statements are correct, sufficient and credible.
k) Review Internal Audit Function
Review the adequacy of the internal audit function, including the structure of the internal audit department, adequate staffing and the qualifications, experience, authority and autonomy of the person heading the department, the reporting structure, coverage and frequency of internal audit.
l) Review Internal Audit Plans
Review with the senior internal audit executive and appropriate members of the staff of the internal auditing department the plans for and the scope of their ongoing audit activities and also review and approve the periodicity and programme for conducting the internal audit.
m) Review Internal Audit Reports
Review with the senior internal auditing executive and appropriate members of the staff of the internal auditing department the periodic reports of the findings of the audit and reports and the necessary follow up and implementation of correction of errors and other necessary actions required. The Audit Committee shall also review the findings of any internal investigations by the internal auditors into the matters where there is suspected fraud or irregularity or a failure of the internal control system of a material nature and ensure that proper corrective action is taken. Any such matters shall be reported to the Board if necessary and appropriate.
n) Review systems of Internal Financial Controls
Review with the statutory auditors, and the senior internal auditor to the extent deemed appropriate by the Chairman of the Committee, the adequacy of the Company's internal financial controls as defined in Section 134 of the Companies Act, 2013.
o) Review and ensure the existence, adequacy and effective functioning of a Vigil Mechanism / Whistleblower Policy appropriate to the size, complexity and geographic spread of the Company and its operations
The vigil mechanism / Whistleblower Policy shall provide for adequate safeguards against victimization of all persons referring any matter under the mechanism and shall also provide for direct access to the Chairman of the Audit Committee in appropriate or exceptional cases. Matters referred and the action taken shall be regularly reported to the Committee once a quarter or more frequently. The mechanism and policy shall cover whistleblower and complaint references of all kinds, including alleged fraud by or against the Company, abuse of authority, misbehaviour and ill treatment and unfair treatment of all kinds including all allegations and charges of harassment, sexual or otherwise, whether made by a named complainant or anonymously. Complaints which are prima facie frivolous in the view of the Ethics Committee Ombudsperson Function or the Whistleblower Committee of the Company or other Committee or group of individuals responsible for investigating complaints and taking suitable action may be closed with appropriate reasons recorded. If any of the members of the Committee have a conflict of interest in a given case, they should recuse themselves and the others on the Committee would deal with the matter on hand.
p) Review other matters
Review such other matters in relation to the accounting, auditing and financial reporting practices and procedures of the Company as the Committee may, in its own discretion, deem desirable in connection with the review functions described above.
q) Reporting to Board
Report its activities to the Board in such manner and at such times, as it deems appropriate.
r) Investigation
The Audit Committee has the authority to investigate any matter in relation to the items specified in Section 177 of the Companies Act, 2013 or referred to it by the Board and for this purpose. It shall have full access to the information contained in the records of the Company. It may also investigate any activity within its term of reference. It has the authority to look into the reasons for substantial defaults in the payment to the depositors, debentureholders, shareholders (for nonpayment of declared dividends) and creditors, if any and any other instance of a failure of legal compliance.
s) Seek Information / Advice
The Audit Committee may seek information from any employee and may obtain from external independent sources any legal or other professional advice it considers necessary in the performance of its duties. It may also secure attendance of independent professional persons with suitable qualifications and relevant experience in specific matters, if it considers this necessary.
t) Approval for appointment of Chief Financial Officer
The Committee shall approve the appointment of the CFO (the whole-time Finance Director or any other person heading the finance function) after assessing the qualifications, experience and background etc. of the candidate.
u) Review and monitor the Statement of Uses and Application of Funds
Review and monitor, with the management, the statement of uses / application of funds raised through an issue (public, rights, preferential issue etc.), the statement of funds utilized for purposes other than those stated in the offer document / prospectus / notice and the report submitted by the monitoring agency monitoring the utilization of proceeds of the public issue or rights issue and make appropriate recommendations to the Board.
Annual Report 2018-19 113
v) Review of other Information
The Audit Committee shall mandatorily review the following information:
1) Management discussion and analysis of financial condition and results of operation.
2) Statement of related party transaction submitted by the Management.
3) Management letters / letters of internal control weaknesses issued by the statutory auditors.
4) Internal audit reports relating to internal control weaknesses.
5) The appointment, removal and terms of remuneration of the Chief Internal Auditor.
6) Inter-corporate loans and investments including review of utilization of loans and/or advances from / investment by the Company in any of its subsidiary exceeding the prescribed limit of the asset size of the subsidiary as provided in SEBI (Listing Obligations & Disclosure Requirements), Regulations, 2015.
7) Valuation of undertakings and assets of the Company whenever necessary.
8) Internal control system in regard to prevention of insider trading.
w) Basis of Related Party Transactions
1) The statement in summary form of transactions with related parties in the ordinary course of business shall be placed periodically before the Audit Committee.
2) Details of individual transactions with related parties, which are not in the normal course of business, shall be placed before the Audit Committee.
3) Details of individual transactions with related parties or others, which are not on an arm's length basis shall be placed before the Audit Committee together with the management's is justification for the selection of the related party and the price and other terms agreed.
4) Approval or any subsequent modification of ALL transactions of the Company with related parties.
5) On satisfying itself adequately regarding the reasons for the related party transactions undertaken and the terms and conditions agreed including price and the observation of the arms'
114 Corporate Governance Report
length principle, with suitable explanations for any departures, the Committee shall periodically approve the related party transactions.
Explanation:
a) "Related Party Transaction" means a transaction envisaged as a related party transaction defined under the Companies Act, 2013 or under SEBI (Listing Obligations and Disclosure Requirements), Regulation, 2015 (including any amendments thereof).
b) "Related Party" means a related party as defined under the Companies Act, 2013, rules made thereunder and under applicable accounting standards and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (including any amendments thereof).
x) To attend Annual General Meeting
The Chairman of the Audit Committee shall attend the Annual General Meetings of the Company to provide any clarification on matters relating to its scope sought by the members of the Company.
The statutory auditors of the Company shall be special invitees to the Audit Committee meetings and they shall participate in discussions related to the audit and reviews of the financial statements of the Company and any other matter that in the opinion of the statutory auditors needs to be brought to the notice of the Committee or any matter in which they are invited by the Committee to participate.
y) Subsidiary Companies
The Audit Committee of the holding company shall also review the financial statements, in particular the inter-corporate loans and investments made by or in the subsidiary companies.
z) Reporting of Fraud by the Auditors
In case the auditor has sufficient reason to believe that an offence involving fraud is being or has been committed against the Company by officers or employees of the Company or by the Company the Auditor shall forward his report to the Committee and the Committee shall send its reply or observations to the Auditor and such matters shall be reported to the Board by the Committee.
aa) Cost Auditor
If the Company is required by the Companies Act, 2013 or other legal provision to appoint a Cost Auditor to have a cost audit conducted, the Committee
shall take into consideration the qualifications and experience of the person proposed for appointment as the cost auditor and recommend such appointment to the Board, together with the remuneration to be paid to the cost auditor.
ab) Review of the Terms of Reference of the Audit Committee
The Committee shall review and reassess the adequacy of the terms of reference of the Audit Committee on a periodical basis and where necessary obtain the assistance of the Management the Group's external auditors and external legal counsel.
ac) Registered Valuer
The Audit Committee shall prescribe the terms and conditions and the appointment of a registered valuer having the requisite qualifications and experience.
Six meetings of the Audit Committee were held during the financial year under review. These were held on April 27, 2018, July 25-26, 2018, October 18-22, 2018, October 23, 2018, January 11, 2019 and January 29, 2019. The necessary quorum was present for all the meetings.
Attendance details of each member at the Audit Committee meetings held during the financial year ended March 31, 2019 are as follows:
Name of the Committee
Member
Position
No. of Meetings
held during tenure
Number of
Meetings attended
Mr. S. Madhavan (1) Chairman
6
6
Mr. Deepak Kapoor Member
6
6
Mr. Keki Mistry (1) Member
1
0
Ms. Nishi Vasudeva Member
6
5
Ms. Robin Ann Abrams
Member
6
6(2)
(1) Mr. S. Madhavan was appointed as the Chairman of the Committee in place of Mr. Keki Mistry who resigned from the Board of the Company w.e.f. April 30, 2018.
(2) Ms. Robin Abrams attended one meeting through teleconference call.
Further, during the year under review, one meeting of the Board of Directors of the Company was held via teleconference call on March 29, 2019 and the decision was taken through resolution by circulation.
2. Corporate Social Responsibility Committee
As on March 31, 2019, the Corporate Social Responsibility (`CSR') Committee comprised of three members including one Independent Director namely:
a) Ms. Roshni Nadar Malhotra (Chairperson)
b) Mr. Shiv Nadar
c) Mr. S. Madhavan
Terms of Reference
The Terms of Reference of the CSR Committee are as under:
1. Formulate and recommend to the Board, a CSR Policy.
2. Recommend the amount of expenditure to be incurred on CSR activities.
3. Institute a transparent monitoring mechanism for implementation of CSR projects or programs or activities undertaken by the Company.
4. Monitor CSR policy from time to time.
During the financial year ended March 31, 2019, the CSR Committee met two times on April 19, 2018 and October 17, 2018. The necessary quorum was present for both the meetings.
3. Nomination & Remuneration Committee
As on March 31, 2019, the Nomination & Remuneration Committee (`NRC') comprised of four members, with two of its members as Independent Directors, namely:
a) Mr. R. Srinivasan (Chairman)
b) Mr. Shiv Nadar
c) Ms. Robin Ann Abrams
d) Ms. Roshni Nadar Malhotra
Terms of Reference
The Terms of Reference of the Nomination & Remuneration Committee are as under:
a) Succession planning for certain key positions in the Company viz. Directors, Chief Executive Officer (CEO), Chief Operating Officer (COO), Chief Financial Officer (CFO) and Senior Management. The Committee to identify, screen and review candidates, inside or outside the Company and provide its recommendations to the Board.
b) Review and recommend to the Board the appointment and removal of Directors / Key Managerial Personnel and persons in Senior Management.
Annual Report 2018-19 115
"Senior Management" shall mean corporate officers of the Company.
c) Carry out the performance evaluation of the Board as a whole and individual Directors.
d) Recommend to the Board a policy relating to remuneration of Directors, Key Managerial Personnel and other employees.
The Nomination & Remuneration Committee while formulating the aforesaid policy shall ensure that
1. The level and composition of remuneration is reasonable and sufficient to attract, retain and motivate Directors of the quality required to run the company successfully;
2. Relationship of remuneration to performance is clear and meets appropriate performance benchmarks;
3. Remuneration to Directors, Key Managerial Personnel and Senior Management involves a balance between fixed and incentive pay reflecting short and long-term performance objectives appropriate to the working of the company and its goals;
e) Formulate the criteria for determining the qualifications, positive attributes and independence of Directors;
f) Devise a Policy on Board Diversity;
g) Review and approve / recommend the remuneration for the Corporate Officers / Whole-Time Directors of the Company;
h) Approve inclusion of senior officers of the Company as Corporate Officers;
i) Approve promotions within the Corporate Officers;
j) Regularly review the Human Resource function of the Company;
k) Approve grant of stock options to the employees and / or Directors (excluding Independent Directors and Promoter Directors) of the Company and subsidiary companies and perform such other functions and take such decisions as are required under the various Employees Stock Option Plans of the Company;
l) Discharge such other function(s) or exercise such power(s) as may be delegated to the Committee by the Board from time to time;
m) Make reports to the Board as appropriate; and
n) Review and reassess the adequacy of this charter periodically and recommend any proposed changes to the Board for approval from time to time.
During the financial year ended March 31, 2019, NRC met five times on April 27, 2018, July 24, 2018, July 26, 2018, October 22, 2018 and January 28, 2019. The necessary quorum was present for all the meetings.
Attendance details of each member at NRC, during the year ended March 31, 2019 are as follows:
Name of the Committee Member
Number
of
Number
Position
Meetings held
of Meetings
during attended
tenure
Mr. R. Srinivasan
Chairman
5
5(1)
Mr. Shiv Nadar
Member
5
5
Ms. Robin Ann Abrams
Member
5
5
Ms. Roshni Nadar Malhotra
Member
5
5
(1) Mr. R. Srinivasan attended two meetings through teleconference call.
Further, during the year under review, two meetings of the NRC were held via teleconference call on November 19, 2018 and February 25, 2019 and the decisions were taken through resolution by circulation.
Remuneration Policy and criteria of making payments to Executive and Non-Executive Directors
The Remuneration Policy of the Company is aimed at rewarding performance, based on a review of achievements on a regular basis and is in consonance with existing industry practices.
The criteria for making payments to Executive and Non-Executive Directors of the Company are as under:
Executive Directors:
The remuneration of the Executive Directors is recommended by the Nomination & Remuneration Committee to the Board and after approval by the Board the same is put up for shareholders' approval. Executive Directors do not receive any sitting fees for attending the Board and Committee meetings.
During the year, the Board comprised of one Executive Director viz. Mr. Shiv Nadar. There are no separate provisions for the service of notice period and payment of severance fee by the Executive Directors at the time of their termination.
116 Corporate Governance Report
The remuneration paid to Mr. Shiv Nadar for the year ended March 31, 2019 from the Company / subsidiaries is as under:
Particulars Salary Perquisites Others:
- Medical
- Gratuity
- Misc. reimbursement Contribution to Provident Fund Total
` in crore -
1.09
0.02 0.10 0.07
1.28
In addition, Mr. Shiv Nadar received salary and perquisites equivalent to `3.58 crore from a subsidiary of the Company. The overall compensation is in accordance with the approval given by the Board and Shareholders of the Company.
Non-Executive Directors:
During the year, the Company paid sitting fees to its NonExecutive Directors for attending the meetings of the Board of Directors, Audit Committee and Finance Committee of the Company. The Company also paid commission to its Non-Executive Directors as approved by the Board within the limits approved by the shareholders of the Company. The amount of such commission, taken together for all Non-Executive Directors, does not exceed 1% of the net profits of the Company in a financial year. The said commission is decided each year by the Board of Directors and distributed amongst the Non-Executive Directors based on their attendance and contribution at the Board and certain Committee meetings, as well as the time spent on operational matters other than at meetings.
The sitting fees and commission paid / payable to the NonExecutive Directors for the year ended March 31, 2019 are as under:
Name of the Director
Sitting Commission
Fees for FY
for FY
2018-19 (` in crore)
2018-19 (` in crore)
Mr. Deepak Kapoor
0.03
0.62
Mr. James Philip Adamczyk(1)
0.01
0.66
Mr. S. Madhavan
0.03
0.80
Ms. Nishi Vasudeva
0.02
0.62
Ms. Robin Ann Abrams
0.02
1.19
Ms. Roshni Nadar Malhotra
0.03
0.75
Dr. Sosale Shankara Sastry
0.01
0.94
Mr. R. Srinivasan
0.01
1.12
Mr. Sudhindar Krishan Khanna(2)
0.02
0.58
Mr. Thomas Sieber
0.01
0.94
Note: Mr. Keki Mistry resigned as a Director of the Company w.e.f. April 30, 2018.
(1) Mr. James Philip Adamczyk was appointed as a Director of the Company w.e.f. July 26, 2018.
(2) Mr. Sudhindhar Krishan Khanna resigned as a Director of the Company w.e.f. April 8, 2019.
There were no other pecuniary relationships or transactions of the Non-Executive Directors vis-à-vis the Company.
The Remuneration Policy is provided herewith pursuant to Section 178(4) of the Act and Regulation 19 of the Listing Regulations.
Remuneration Policy for Directors, Key Managerial Personnel and other employees
I. Scope of the Policy
The Remuneration Policy ("Policy") applies to the Directors and Key Managerial Personnel of the Company and other employees of the Company and its subsidiaries.
II. Background
A transparent, fair and reasonable process for determining the appropriate remuneration at all career levels and roles as prevalent in the Company is required to ensure that the shareholders remain informed and confident about the management of the Company.
III. Objective
The objectives of this Policy are:
a) To create a transparent system of determining the appropriate level of remuneration throughout all career levels and roles of the Company.
b) Motivate the Directors, Key Managerial Personnel and other employees, to perform to their maximum potential.
c) To reward performance and meritocracy, based on review of achievements on a regular basis and is in consonance and benchmarked with the existing industry practices.
d) Allow the Company to compete in each relevant employment market.
e) Provide consistency in remuneration and benefits throughout the Company.
f) Align the performance of the business with the performance of key individuals and teams within the Company.
Annual Report 2018-19 117
IV. Remuneration Policy for Directors
(a) Executive Directors
The remuneration of the Executive Directors will be recommended by the Nomination & Remuneration Committee ("Committee") to the Board of Directors ("Board") and after approval by the Board the same will be put up for the shareholder's approval.
(b) Non-Executive Directors
Non-Executive Directors will be paid commission as approved by the Board within the limits approved by the shareholders of the Company. The amount of such commission, taken together for all Non-Executive Directors, will not exceed 1% of the net profits of the Company in a financial year calculated as per the requirements of Section 198 of the Companies Act, 2013 (the "Act"). The said commission shall be decided each year by the Board of Directors and distributed amongst the Non-Executive Directors based on their attendance, contribution at the Board and certain Committee meetings and the time spent on operational matters other than at meetings.
The Company shall reimburse the travelling, hotel and other out-of-pocket expenses incurred by the Directors for attending the meetings and for other work on behalf of the Company.
V. Remuneration Policy for Key Managerial Personnel
The Company's Remuneration Policy of Key Managerial Personnel (other than Executive Directors covered above) and other employees is driven by their success and performance of the Company. Through its compensation programme, the Company endeavors to attract, retain, develop and motivate a high performance workforce. The Company follows a compensation mix of fixed pay, performance based variable pay, benefits and perquisites, long term cash incentive plans and equity based reward plans. The Company may grant loans to the employees as per its Employees' Personal Loan Policy. Individual performance pay is determined by business performance and the performance of the individuals measured through periodic appraisal process. The Company will ensure that level and composition of remuneration is reasonable and sufficient to attract, retain and motivate all employees to contribute to their potential and in turn run the Company successfully.
VI. Disclosure
The Remuneration Policy shall be disclosed in the Directors' Report, Annual Report and such other
places as may be required by the Act and Rules framed thereunder, Equity Listing Agreement entered into with the Stock Exchanges (including any statutory modification(s) or re-enactment thereof) and such other laws for the time being in force.
VII. Implementation
This Policy has been approved and adopted by the Board of the Company after the recommendation of the Committee of the Company. Any revisions to the Policy will be submitted to the Board for consideration and approval upon recommendation by the Committee.
4. Finance Committee
As on March 31, 2019, the Finance Committee comprised of the following members:
a) Mr. S. Madhavan (Chairman) b) Mr. Shiv Nadar c) Ms. Roshni Nadar Malhotra d) Mr. R. Srinivasan e) Mr. Sudhindar Krishan Khanna
Note: Mr. Sudhindhar Krishan Khanna resigned as a Director of the Company w.e.f. April 8, 2019. Accordingly, as on the date of this Report, the Finance Committee comprises of the following members:
a) Mr. S. Madhavan (Chairman) b) Mr. Shiv Nadar c) Ms. Roshni Nadar Malhotra d) Mr. R. Srinivasan
Terms of Reference
The Terms of Reference of the Finance Committee are as under:
a. To review and approve the capital structure plans and specific equity and debt financings and recommend the same for approval to the Board.
b. To review and approve the annual budgets and other financial estimates and provide its recommendations to the Board.
c. To review the actual performance of the Company against the budgets.
d. To review and approve the capital expenditure plans and specific capital projects and recommends the same to the Board for approval.
e. To evaluate the performance of and returns on approved capital expenditure.
118 Corporate Governance Report
f. To consider and approve the proposal which involves funding assets on operating and/or financial lease in the normal course of business.
g. To review and approve the proposals for mergers, acquisitions and divestitures and provide its recommendations to the Board.
h. To evaluate the performance of acquisitions.
i. To consider and approve the proposals for fresh investments by way of infusion of capital and/or providing of loan and any further investments (by capital / loan) in wholly-owned subsidiaries / Branches and providing any guarantees for funding the same.
j. To evaluate the performance of subsidiaries / JVs / Branches.
k. To plan and prepare strategies for managing the foreign exchange exposure The Committee to approve the hedging policy and monitor its performance.
l. To approve the investment policy and review the performance thereof.
m. To recommend dividend policy to the Board.
n. To review and approve the insurance coverage and program for the Company.
o. To consider and approve the guarantees / bonds provided by the Company either directly or through banks in connection with the Company's business.
p. To approve opening / closing of bank accounts of the Company and change in signatories for operating the bank accounts.
q. To perform any other activities or responsibilities assigned to the Committee by the Board of Directors from time to time.
r. To delegate authorities from time to time to the Executives / Authorised persons to implement the decisions of the Committee within the powers authorised above.
During the financial year ended March 31, 2019, the Committee met four times on April 24, 2018, October 17, 2018, January 28, 2019 and March 5, 2019. The necessary quorum was present for all the meetings.
Further, during the year under review, three meetings of the Finance Committee were held via teleconference call on July 6, 2018, November 30, 2018 and March 14, 2019 and the decisions were taken through resolution by circulation.
5. Stakeholders' Relationship Committee
As on March 31, 2019, the Stakeholders' Relationship Committee comprised of the following members:
a) Mr. S. Madhavan (Chairman) b) Mr. Shiv Nadar c) Ms. Roshni Nadar Malhotra
The Chairman of the Committee, Mr. S. Madhavan is an Independent, Non-Executive Director on the Board of the Company.
Terms of Reference
The Stakeholders' Relationship Committee has been formed to undertake the following activities:
a. To review and take all necessary actions for redressal of grievances and complaints of securityholders as may be required in the interests of the securityholders.
b. To approve requests of re-materialisation of shares / securities, issuance of split and duplicate shares / security certificates.
During the year under review, the Committee met eleven times on May 16, 2018, July 25, 2018, August 17, 2018, September 7, 2018, October 30, 2018, November 23, 2018, December 13, 2018, January 23, 2019, February 5, 2019, February 28, 2019 and March 29, 2019. The necessary quorum was present for all the meetings.
Name, Designation and Address of Compliance Officer
Mr. Manish Anand Sr. Vice President & Company Secretary HCL Technologies Limited Plot No.: 3A, Sector 126, Noida-201 304, UP, India Telephone: +91-120-6125000 E-mail: manishanand@hcl.com
Investors' Grievances
The following table shows the Shareholders' complaints received during the financial year ended March 31, 2019:
Source of Complaint Received Resolved Pending
Directly from the
24
24
0
Investors
Through SEBI,
5
5
0
Stock Exchanges, etc.
Total
29
29
0
6. Employees' Stock Option Allotment Committee
As on March 31, 2019, the Employees' Stock Option Allotment Committee comprised of the following members:
a) Mr. Shiv Nadar b) Mr. S. Madhavan c) Mr. Prateek Aggarwal
Annual Report 2018-19 119
Mr. Prateek Aggarwal was appointed as a member of the Committee in place of Mr. Anil Kumar Chanana w.e.f. October 1, 2018.
This Committee has been formed to allot shares to the employees who have exercised their stock options under the Stock Option Plans of the Company.
During the financial year under review, the Committee met seven times on April 24, 2018, May 16, 2018, June 20, 2018, August 14, 2018, November 23, 2018, February 15, 2019 and March 18, 2019. The necessary quorum was present for all the meetings.
7. To assist the Board in maintenance and development of a supportive culture, in relation to the management of risk, appropriately embedded through procedures, training and leadership actions so that all employees are alert to the wider impact on the whole organization of their actions and decisions.
8. To maintain an aggregated view on the risk profile of the Company / Industry in addition to the profile of individual risks.
9. To ensure the implementation of and compliance with the objectives set out in the Risk Management Policy.
7. Risk Management Committee
As on March 31, 2019, the Risk Management Committee comprised of the following members:
a) Mr. S. Madhavan (Chairman) b) Mr. Deepak Kapoor c) Ms. Nishi Vasudeva d) Ms. Robin Ann Abrams
During the year under review, Mr. S. Madhavan was appointed as the Chairman of the Committee in place of Mr. Keki Mistry who resigned from the Board of the Company w.e.f. April 30, 2018.
Terms of Reference
1. To assist the Board of Directors ("Board") in overseeing the responsibilities with regard to the identification, evaluation and mitigation of operational, strategic and external environmental risks including cyber security risks.
2. To assist the Board in taking appropriate measures to achieve a prudent balance between risk and reward in both ongoing and new business activities.
3. To review and approve the Risk Management Policy and associated framework, processes and practices.
4. To evaluate significant risk exposures including business continuity planning and disaster recovery planning.
5. To assess management's actions in mitigating the risk exposures in a timely manner.
6. To promote Enterprise-wide Risk Management and obtain comfort based on adequate and appropriate evidence that the Management of the Company ensures the implementation and effective functioning of the entire risk management process and embedding of a comprehensive risk management culture in the Company at every stage of its operations.
10. To advise the Board on acceptable levels of risk appetite, tolerance and strategy appropriate to the size and nature of business and the complexity and geographic spread of the Company's operations.
11. To review and reassess the adequacy of this charter periodically and recommend any proposed changes to the Board for approval from time to time.
12. The Committee shall have access to any internal information necessary to fulfill its oversight role. As and when required, the Committee may assign tasks to the Internal Auditor the Company's internal Risk management team and any external expert advisors considered necessary for any task and they will provide their findings to the Committee.
During the year under review, the Committee met once on January 11, 2019. The necessary quorum was present for the meeting.
Further, a meeting of the Risk Management Committee was held via teleconference call on November 2, 2018 and the decisions were taken through resolutions by circulation.
8. Diversity Committee
During the year under review, in order to affirm, guide and support the commitment of the Company to drive gender diversity, the Board of Directors formed a Committee of the Board of Directors named as Diversity Committee.
As on March 31, 2019, the Diversity Committee comprised of the following members:
a) Ms. Robin Ann Abrams (Chairperson) b) Ms. Roshni Nadar Malhotra c) Mr. Shiv Nadar
Terms of Reference
1. To serve in an advisory capacity to provide management with appropriate guidance on gender diversity.
120 Corporate Governance Report
2. To review and evaluate the efforts of HR and other departments with respect to the initiatives relating to gender diversity and provide oversight with respect to matters of strategy and progress in this regard.
3. To address specific issues or problems relating to diversity or inclusion that may arise with the objective of identifying which procedures or policies to be enhanced, changed or discarded and to ensure that senior management has a timely and reasonable action plan to promote gender diversity.
relatives, except for those disclosed in the financial statements for the financial year 2018-19. Detailed information on materially significant related party transactions is enclosed in Annexure 2 to the Directors' Report. A Policy on Related Party Transactions formulated pursuant to the provisions of the Act and the Listing Regulations entered into by the Company with the Stock Exchanges and approved by the Board is available on the website of the Company at https://www.hcltech.com/ investors/governance-policies.
CODE OF BUSINESS ETHICS AND CONDUCT
4. To monitor and oversee the development and implementation of diversity policies, programs and actions and procedures so as to ensure that they are appropriate to, and assist in the fulfilment of, the Company's duties and responsibilities to provide equal opportunities to female candidates / employees.
5. To provide periodic reports to the Board.
During the year under review, the Committee met four times on April 27, 2018, July 25, 2018, October 16, 2018 and January 16, 2019. The necessary quorum was present for all the meetings.
SUCCESSION PLANNING
Succession Planning aids the Company in identifying and developing internal people with the potential to fill certain key positions in the Company viz. Chief Executive Officer, Chief Operating Officer, Chief Financial Officer and Company Secretary. It increases the availability of experienced and capable employees that are prepared to assume these roles as they become available. Succession Planning is a part of the charter of the Nomination & Remuneration Committee of the Company. The Committee shall identify, screen and review candidates, inside or outside the Company and provide its recommendations to the Board.
INDEPENDENCE OF STATUTORY AUDITORS
The Board ensures that the statutory auditors of the Company are independent and have an arm's length relationship with the Company.
TOTAL FEES PAID TO STATUTORY AUDITORS
A total fee of ` 25.68 crore was paid by the Company and its subsidiaries for all audit and non-audit services availed, on a consolidated basis, to the Statutory Auditors and all entities in the network firm / network entity of which the Statutory Auditors is a part, for the financial year ended March 31, 2019.
MATERIALLY SIGNIFICANT RELATED PARTY TRANSACTIONS
There have been no materially significant related party transactions, monetary transactions or relationships between the Company and its Directors, management, subsidiary or
The Board has prescribed a Code of Business Ethics and Conduct (COBEC) that provides for transparency, ethical conduct, a gender friendly workplace, legal compliance and protection of Company's property and information. COBEC is a set of guiding principles and covers all directors, employees, third party vendors, consultants and customers across the world. COBEC also includes the duties of Independent Directors as mentioned in Schedule IV of the Act. COBEC is periodically reviewed taking into account the prevailing business and ethical practices. The Code is also posted on the website of the Company https://www.hcltech.com/investors/governancepolicies.
All Board members and senior management personnel have confirmed compliance with the Code for the financial year ended March 31, 2019. A declaration to this effect signed by the Chairman & Chief Strategy Officer and CEO of the Company is provided elsewhere in this Annual Report.
CODE FOR PREVENTION OF INSIDER TRADING
The Company has comprehensive guidelines on prevention of Insider Trading in line with the SEBI (Prohibition of Insider Trading) Regulations, 2015 (as amended from time to time). The Code of Conduct on Prohibition of Insider Trading (`Insider Trading Code') for prevention of Insider Trading inter-alia prohibits purchase / sale of shares of the Company by the Designated Persons (as defined under the Insider Trading Code) while in possession of unpublished price sensitive information in relation to the Company. The Company, within two working days of receipt of the information under the Initial and Continual Disclosures from the Designated Persons (as defined under the Insider Trading Code), discloses the same to all the Stock Exchanges, where the shares of the Company are listed.
ANTI-BRIBERY POLICY AND ANTI-CORRUPTION POLICY
To ensure the Company's policy for conducting its business activities with honesty, integrity and highest possible ethical standards and company's commitment towards prevention, deterrence and detection of fraud, bribery and other corrupt business practices, the Company has in place an Anti-Bribery and Anti-Corruption Policy that applies to the employees at all levels, directors, consultants, agents and other persons
Annual Report 2018-19 121
associated with the Company, its affiliates and subsidiaries. This Policy covers matters relating to hospitality, offset obligations, employment of relatives, guidance on gifts, political / charitable contributions, extortion / blackmail responses etc. The policy is available on the website of the Company at https:// www.hcltech.com/investors/governance-policies.
PREVENTION AND REDRESSAL OF SEXUAL HARASSMENT AT WORK PLACE POLICY
In order to provide a safe and healthy work environment free of any hassles and all kinds of harassment including sexual harassment and to prevent and redress such harassment complaints, the Company has in place a Prevention and Redressal of Sexual Harassment at Work Place Policy. This policy applies to all employees of the Company, its group companies and joint ventures operating out of India like regular, temporary, ad hoc, daily wagers, contractual staff, vendors, clients, consultants, trainees, probationers, apprentices, contract labour and also all visitors to the Company. Any complaint about harassment shall be treated under this Policy. This Policy is not confined to the actual working place of the employees in the sense of the physical space in which paid work may be performed as per the prescribed duty hours but also includes any place visited by the employee arising out of or during the course of employment. The Company has constituted an Internal Committee for the redressal of all sexual harassment complaints. These matters are also being reported to the Audit Committee. During the year ended March 31, 2019, the Company has received 11 (eleven) complaints on sexual harassment that were classified as significant incidents for investigation, all of which were disposed of and appropriate actions were taken and no complaints remain pending as of March 31, 2019.
WHISTLEBLOWER POLICY
The principles of trust through transparency and accountability are at the core of the Company's existence. To ensure strict compliance with ethical and legal standards across
GENERAL BODY MEETINGS
the company, a Whistleblower Policy is in place to provide appropriate avenues to the Directors, employees, contractors, contractors' employees, clients, vendors, internal or external auditors, consultants, law enforcement / regulatory agencies or other third parties to bring to the attention of the management any issues which are perceived to be of unethical behaviour, actual or suspected fraud or violation of the Company's Code of Business Ethics and Conduct. All cases registered under the Whistleblower Policy of the Company are reported to the external Ombudsperson who carries out preliminary investigations.
Complaints received against "C" Level Officers (CEO/CFO/ CHRO/President/Corporate Officers) or complaints against any Director or Chairman of the Company are overseen by the Chairman of the Audit Committee and disciplinary action is decided by the Audit Committee. Complaints against other employees are overseen by the Head of Internal Audit and disciplinary action is decided by the Whistleblower Committee. The Whistleblower has direct access to the Chairman of the Audit Committee in appropriate or exceptional cases and the Chairman of the Audit Committee is authorized to prescribe suitable directions in this regard. The identity of the Whistleblower is kept confidential.
The Audit Committee reviews the policy and its implementation on periodic basis and is provided a quarterly update on the status of various complaints received and investigated. The policy is available on the website of the Company at https:// www.hcltech.com/investors/governance-policies.
OBSERVANCE OF THE SECRETARIAL STANDARDS ISSUED BY THE INSTITUTE OF COMPANY SECRETARIES OF INDIA
The Institute of Company Secretaries of India has issued Secretarial Standards on Board Meeting (SS-1) and General Meeting (SS-2) which were made compulsory for all companies by the Ministry of Corporate Affairs. The Institute has also issued Secretarial Standards on Dividend (SS-3), which is however not compulsory. The Company adheres to these standards.
The location and time of the AGMs held and details of Special Resolution(s) passed thereat during the preceding 3 years are as follows:
Financial Year
2015-16
2016-17
2017-18
Date
Time
Venue
Details of Special Resolution passed
September 27, 2016 11:00 A.M. September 21, 2017 11:00 A.M. September 18, 2018 11:00 A.M.
The `Stein Auditorium', Habitat World, at India Habitat Centre, Lodhi Road, New Delhi-110003 The `Stein Auditorium', Habitat World, at India Habitat Centre, Lodhi Road, New Delhi-110003 The `Stein Auditorium', Habitat World, at India Habitat Centre, Lodhi Road, New Delhi-110003
No special resolution passed
Re-appointment of Mr. Shiv Nadar as the Managing Director of the Company No special resolution passed
122 Corporate Governance Report
DETAILS OF RESOLUTIONS PASSED THROUGH POSTAL BALLOT
During the year, the Company sought the approval of the shareholders by way of a Special Resolution through postal ballot / remote e-voting facility for approving the Buy-back of Equity Shares of the Company. The special resolution was duly approved with requisite majority on August 20, 2018.
No special resolution is proposed to be conducted through postal ballot on or before the ensuing AGM.
Person conducting the Postal Ballot
Mr. Nityanand Singh, Practicing Company Secretary, FCS No. 2668 was appointed as the Scrutinizer for conducting the Postal Ballot / remote e-voting process in accordance with the Act and Companies (Management and Administration) Rules, 2014 (the "Management Rules") made thereunder in a fair and transparent manner.
Procedure followed for Postal Ballot / E-voting
In Compliance with the Listing Regulations and Section 110 and other applicable provisions of the Act, read with the rules made thereunder, the Company completed the dispatch of postal ballot notice on July 14, 2018 along with the postal ballot forms and postage pre-paid business reply envelopes to the members whose names appeared in the register of members / list of beneficiaries as on the cut-off date i.e. July 12, 2018. The Company also published a notice in the newspaper declaring the details of completion of dispatch and other requirements as mandated under the Act and applicable rules.
The Company also provided the facility of remote e-voting to the members to cast their votes electronically, in accordance with Section 108 of the Act and Rule 20 of the Management Rules and Regulation 44 of the Listing Regulations. The Company engaged the services of National Securities Depositary Limited for the purpose of providing remote e-voting facility. The members had the option to vote either by postal ballot forms or remote e-voting.
Members were advised to carefully read the instructions printed on the postal ballot form before casting their vote and return the duly completed form in the attached self-addressed business reply envelope so as to reach the Scrutinizer on or before the close of working hours of August 16, 2018 in case of members desiring to exercise their votes by postal ballot forms. Members voting through electronic mode were requested to follow the instructions for remote e-voting and could vote from 9:00 A.M. (IST) on July 18, 2018 till 5:00 P.M. (IST) on August 16, 2018.
After due scrutiny of all the postal ballot forms / remote e-voting received upto the close of working hours of August 16, 2018, the Scrutinizer submitted his final report on August 20, 2018.
The results of the postal ballot / remote e-voting were declared on August 20, 2018. The results were published in the newspapers within 48 hours of the declaration and were also placed on the website of the Company at www.hcltech.com, besides being intimated to the Stock Exchanges and National Securities Depository Limited.
Details of Voting Pattern
Based on the Scrutinizers' Report, the details of voting pattern in respect of the Special Resolution is as under:
Votes in favour of the Resolution
Votes against the Resolution
Invalid Votes
Description of the
Resolution
Number of members voted through remote e-voting system
and through postal ballot
forms
Number of valid votes cast (shares)
% of
Number of
total
members voted through remote
number of valid
e-voting system
votes
and through postal ballot
cast
forms
Number of valid votes
cast (shares)
Total
Total
% of total number of number
number members
of
of valid whose invalid
votes votes were votes
cast declared cast
invalid (shares)
Approval for Buy-back of Equity Shares
2,921 1,23,71,42,925 99.59
184 50,86,334
0.41
59 4,958
Annual Report 2018-19 123
SUBSIDIARY COMPANIES AND POLICY ON MATERIAL SUBSIDIARY
The Company has formulated and adopted a Policy for determining Material Subsidiary in line with the requirements of the Listing Regulations. The Policy aims to set out the principles for determining a material subsidiary. The Policy on the Material Subsidiary is available on the website of the Company at https://www.hcltech.com/investors/governancepolicies.
During the financial year under review, HCL America, Inc. was a material subsidiary of the Company as per the criteria given under Regulation 16 of the Listing Regulations. Further, in accordance with the SEBI (Listing Obligations and Disclosure Requirements) (Amendment) Regulations, 2018, pursuant to the change in the definition of "material subsidiary", HCL Bermuda Limited is also a material subsidiary of the Company w.e.f. April 1, 2019.
The Audit Committee of the Company reviews the financial statements and investments made by the unlisted subsidiaries. The minutes of the board meetings as well as the statement of significant transactions and arrangements entered into by the unlisted subsidiary companies, if any, are placed before the Board of Directors of the Company from time to time.
CEO / CFO CERTIFICATION
The Certificate as stipulated in Regulation 17(8) of the Listing Regulations read with Part B of Schedule II was placed before the Board along with the financial statements for the financial year ended March 31, 2019 and the Board reviewed the same. The said Certificate is provided elsewhere in this Annual Report.
DISCLOSURES
a) Related party transactions
During the year under review, the Company has not entered into any transaction of a material nature with its subsidiaries, promoters, Directors, the management, senior management personnel, their relatives etc., that may have any potential conflict with the interest of the Company. The Company has obtained requisite declarations from all Directors and senior management personnel in this regard and the same were placed before the Board of Directors.
b) Compliances by the Company
The Company has complied with the requirements of the Stock Exchanges, SEBI and other statutory authorities on all matters relating to capital markets during the last three years. No penalties or strictures have been imposed on the Company by the Stock Exchanges, SEBI or any other statutory authorities relating to the above.
c) Other Disclosures
1. The Company has in place the Whistleblower Policy and it provides for direct access to the Chairman of the Audit Committee in appropriate or exceptional cases.
2. During the year, the Company did not raise any money through public issue, right issues, preferential issue or qualified institutional placement and there was no unspent money raised through such issues.
3. Maintenance of cost records has not been specified by the Central Government under Section 148(1) of the Act and accordingly such accounts and records are not made and maintained by the Company.
4. In terms of the provisions of the Listing Regulations, the Company has in place an "Archival Policy" and a "Policy for Determination of Materiality of Events or Information". Both the policies are available on the website of the Company at https://www. hcltech.com/investors/governance-policies.
MEANS OF COMMUNICATION
a) Financial Results, Newspapers in which results normally published: The quarterly, half-yearly and annual financial results of the Company are generally published in leading newspapers in India inter-alia, in Mint and Hindustan. The results are also displayed on the Company's website www.hcltech.com.
b) Website: The Company's corporate website i.e. www.hcltech.com provides comprehensive information on the Company's portfolio of businesses. The website has an entire section dedicated to Company's profile, its core values, corporate governance, business lines and industry sections. An exclusive section on `Investors' enables them to access information at their convenience. The entire Annual Report as well as quarterly, half yearly, annual financial statements, releases and shareholding pattern are available in downloadable format as a measure of added convenience to the investors.
c) News Releases, Presentations etc.: Official news releases, detailed presentations made to media, analysts, institutional investors etc. are displayed on the Company's website www.hcltech.com. Official media releases are also sent to the Stock Exchanges.
d) Annual Report: The Annual Report containing, inter-alia, the Audited Annual Accounts, Consolidated Financial Statements, Directors' Report, Auditor's Report, Management Discussion and Analysis Statement, Corporate Governance Report and other important information is circulated to members and others entitled
124 Corporate Governance Report
thereto. The Annual Report of the Company is available on the Company's website in a user-friendly and downloadable form.
e) Intimation to the Stock Exchanges: The Company intimates to the Stock Exchanges all price sensitive information or such other matters which in its opinion are material and of relevance to the shareholders.
f) NSE Electronic Application Processing System: As per the mandate received from National Stock Exchange of India Limited (`NSE'), the Company has been uploading its financial information, shareholding pattern, Report on Corporate Governance and press releases on the dedicated website of NSE i.e. https:// connect2nse.com/ LISTING.
g) Online Portal-BSE Corporate Compliance & Listing Centre: As per the mandate received from BSE Limited (`BSE'), the Company has been uploading its financial information, shareholding pattern, Report on Corporate Governance and press releases on the dedicated website of BSE i.e. http://listing.bseindia.com.
h) Designated Exclusive e-mail ID: The Company has the following designated e-mail ID: investors@hcl.com exclusively for investors servicing.
GREEN INITIATIVES DRIVE BY THE MINISTRY OF CORPORATE AFFAIRS, GOVERNMENT OF INDIA
The Company, as a corporate entity, is committed to protect and conserve the natural environment in its operations and services. As a responsible corporate citizen, the Company welcomes and supports the `Green Initiative' taken by the Ministry of Corporate Affairs, Government of India, enabling electronic delivery of documents to the shareholders at their e-mail addresses registered with the Depository participants / Registrar & Share Transfer Agent.
INVESTOR RELATIONS - ENHANCING INVESTOR DIALOGUE
As a listed entity and a responsible corporate citizen, the Company recognizes the imperative need to maintain continuous dialogue with the investor community. The objective of Investor Relations is to keep investors abreast of significant developments that determine Company's overall performance while at the same time addressing investor concerns. This translates into disseminating timely, accurate and relevant information that helps investors in making informed investment decisions.
To ensure effective communication, the Investor Relations Division provides comprehensive information in the form of Annual Reports, Quarterly Earnings Reports, Investor Releases on the Company's Website under `Investors' section at https:// www.hcltech.com/investors.
Additionally, Conference Calls, Management Interviews, Face to Face Investor Meetings and AGM(s) ensure a direct interaction of market participants with the Management Team.
A comprehensive Code of Practices and Procedures for Fair Disclosure of Unpublished Price Sensitive Information ("Fair Disclosure Code"), for the fair disclosure of Unpublished Price Sensitive Information for all stakeholders, has also been formulated and implemented in line with the SEBI guidelines to ensure the compliance with the SEBI (Prohibition of Insider Trading) Regulations, 2015 (as amended from time to time).
The management is committed to build investor relations on the pillars of trust, consistency and transparency. Its proactive approach has enabled the investor community to better understand the nature of the Company's business, management strategies and operational performance over a period of time.
Electronic copies of the Annual Report 2018-19 and notice of the Twenty Seventh AGM will be sent to all the members whose e-mail addresses are registered with the Company / Depository Participant(s). For members who have not registered their e-mail addresses, physical copies of the Annual Report 201819 and notice of Twenty Seventh AGM shall be sent in the permitted mode. Members requiring physical copies can send a request to the Company Secretary.
The Company sends the communications to the shareholders by electronic mode. The shareholders of the Company are requested to register their e-mail addresses with their depository participants to ensure that the annual report and other documents reach them on their preferred e-mail address. Shareholders who hold shares in physical form are requested to register their e-mail addresses with the Registrar & Share Transfer Agent, by sending a letter duly signed by the first / sole holder quoting details of Folio no.
CERTIFICATE FROM PRACTICING COMPANY SECRETARY ON QUALIFICATION OF DIRECTORS
As required under Part C of Schedule V the Listing Regulations, certificate dated May 9, 2019 obtained from M/s. Chandrasekaran Associates, Practicing Company Secretaries confirming that none of the Directors on the Board of the Company have been debarred or disqualified from being appointed or continuing as directors of companies by SEBI / Ministry of Corporate Affairs or any such statutory authority, is annexed hereto.
ANNUAL SECRETARIAL COMPLIANCE REPORT
As required under Regulation 24A of the Listing Regulations, the Annual Secretarial Compliance Report dated May 9, 2019 issued by M/s. Chandrasekaran Associates, Practicing Company Secretaries, is annexed hereto.
Annual Report 2018-19 125
GENERAL SHAREHOLDER INFORMATION
Annual General Meeting:
a.
Date Time
Venue
: August 6, 2019 : 11:00 A.M. : The Stein Auditorium, Habitat World at Indian Habitat Centre,
Lodhi Road, New Delhi 110 003
b. Financial Year
: 01st April, 2018 to 31st March, 2019
c. Date of Book Closure
: July 31, 2019 to August 2, 2019 (both days inclusive)
d.
Dividend Payment Date (subject to approval of shareholders)
: N.A.
The National Stock Exchange of India Ltd. (NSE)
Exchange Plaza, 5th Floor, Plot No. C/1, G Block,
Bandra Kurla Complex, Bandra East, Mumbai 400 051, India.
e.
Listing of Equity Shares on stock exchanges in India at
: Tel.: +91-22-26598236, Fax: +91-22-26598237 BSE Limited (BSE)
Phiroze Jeejeebhoy Towers, Dalal Street, Mumbai 400 001, India Tel.: +91-22-22721233, Fax: +91-22-22723121
f. Stock Codes
:
NSE HCLTECH BSE 532281
g. ISIN for Equity Shares
: INE860A01027
h.
Listing of Non-Convertible Debentures on stock exchanges in India at
: N.A.
i. Debenture Trustee
: N.A.
j. ISIN for Debentures
: N.A.
k. Listing Fees
: Paid to all Stock Exchanges for the year 2019-20
l.
Corporate Identification Number (CIN) of the Company
: L74140DL1991PLC046369
m. Registered Office
806, Siddharth, 96, Nehru Place,
:
New Delhi 110 019, India Telefax.: +91-11-26436336
Website: www.hcltech.com
n. Stock Market Data
The details of the monthly high and low prices of the Equity Shares of the Company and its comparison to broad based indices BSE Sensex and NSE Nifty for period April 1, 2018 to March 31, 2019 are as follows:
Month
April 2018 May 2018 June 2018 July 2018 August 2018 September 2018 October 2018 November 2018 December 2018 January 2019 February 2019 March 2019
Share price on BSE
High (`)
Low (`)
1,106.60
943.85
1,060.00
887.00
970.00
880.00
1,019.70
920.00
1,055.00
953.00
1,124.50
1,044.35
1,104.70
946.40
1,057.95
963.50
1,065.45
930.75
1,034.75
920.15
1,096.10
1,005.00
1,099.00
1,001.45
BSE-Sensex High
(`) 35,213.30 35,993.53 35,877.41 37,644.59 38,989.65 38,934.35 36,616.64 36,389.22 36,554.99 36,701.03 37,172.18 38,748.54
Source: This information is compiled from the data available from the website of BSE.
Low (`)
32,972.56 34,302.89 34,784.68 35,106.57 37,128.99 35,985.63 33,291.58 34,303.38 34,426.29 35,375.51 35,287.16 35,926.94
126 Corporate Governance Report
Month
April 2018 May 2018 June 2018 July 2018 August 2018 September 2018 October 2018 November 2018 December 2018 January 2019 February 2019 March 2019
Share price on NSE
High (`)
Low (`)
1,108.00
943.55
1,051.95
887.00
957.35
880.05
1,019.80
917.15
1,055.00
953.00
1,125.05
1,044.60
1,101.70
945.80
1,059.00
963.00
1,065.50
930.70
1,035.00
920.00
1,095.95
1,010.50
1,098.45
1,000.05
NSE-Nifty High
(`) 10,759.00 10,929.20 10,893.25 11,366.00 11,760.20 11,751.80 11,035.65 10,922.45 10,985.15 10,987.45 11,118.10 11,630.35
Source: This information is compiled from the data available from the website of NSE.
Low (`)
10,111.30 10,417.80 10,550.90 10,604.65 11,234.95 10,850.30 10,004.55 10,341.90 10,474.95 10,583.65 10,585.65 10,817.00
o. Registrar & Shares Transfer Agent:
The Company has appointed M/s. Link Intime India Private Limited as its Registrar and Share Transfer Agent ("RTA"), in place of M/s. Alankit Assignments Limited, with effect from April 29, 2019. The details are as below -
M/s. Alankit Assignment Limited 205-208, Anarkali Market Jhandawalan Extension New Delhi, India - 110055 SEBI Registration No.: INR000002532 Telephone: +91-11-42541234, 23541234 Fax: +91-11-42541967
M/s. Link Intime India Private Limited C-101, 247 Park, L.B.S. Marg, Vikhroli (West), Mumbai, Maharashtra - 400 083 SEBI Registration No.: INR000004058 Telephone: 022-49186270 Fax: 022-4918 6060 E-mail: rnt.helpdesk@linkintime.co.in
Note : The No-objection Certificate from M/s. Alankit Assignment Limited to transfer the electronic connectivity from the Depositories is awaited. Accordingly, the final date on which the RTA activities would be transferred to Link Intime shall be notified to the shareholder in due course.
p. Share Transfer System
99.96% of the equity shares of the Company are in dematerialized form. Transfer of these shares are done
through the depositories with no involvement of the Company. For the transfer of shares held in physical form, the authority has been delegated to the Company's officials who generally consider and approve the share transfer requests on a fortnightly basis.
The shares sent for physical transfer are generally registered and returned within a period of 15 days from the date of receipt of request, subject to documents being valid and complete in all respects. As per the requirement of Regulation 40 (9) of the Listing Regulations, the Company has obtained half-yearly certificates from Practising Company Secretary for due compliance of share transfer formalities and filed the same with the Stock Exchanges.
As on March 31, 2019, no equity share was pending for transfer.
q. Reconciliation of Share Capital Audit Report
As required under Regulation 76 of the Securities and Exchange Board of India (Depositories and Participants) Regulations, 2018 (erstwhile Regulation 55A of SEBI (Depositories and Participants), Regulations, 1996), the reconciliation of share capital audit report on the total admitted capital with National Securities Depository Limited ("NSDL") and Central Depository Services (India) Ltd. ("CDSL") and the total issued and listed capital for each of the quarter in the financial year ended March 31, 2019 was carried out. The audit reports confirm that the total issued / paid-up share capital is in agreement with the total number of shares in physical form and the total number of dematerialized shares held with NSDL and CDSL.
Annual Report 2018-19 127
r. Shareholding as on March 31, 2019
i) Distribution of shareholding as on March 31, 2019:
Number of Equity Shares held
1 100 101 200 201 500 501 1000 1001 5000 5001 10000 10001 and above
Total
No. of Shareholders
1,21,446 14,365 10,006 3,503 2,878 715 1,787
1,54,700
Shareholders (%) 78.50% 9.29% 6.47% 2.26% 1.86% 0.46% 1.16% 100.00%
No. of Shares
35,09,922 22,62,421 34,39,212 26,26,303 65,65,116 52,47,525 1,33,26,28,369 1,35,62,78,868
Shares (%) 0.26% 0.17% 0.25% 0.19% 0.48% 0.39% 98.26% 100.00%
ii) Categories of equity shareholders as on March 31, 2019:
Category Promoters Mutual Funds / UTI Financial Institutions / Banks Insurance Companies Foreign Portfolio Investors Alternate Investment Funds Foreign Banks Bodies Corporate Individuals NRIs / OCBs NBFC's registered with RBI Foreign Nationals Trusts Central Government / State Government(s) / President of India* HUF Clearing Members
Grand Total
Number of shares held 81,38,17,662 6,09,84,418 2,04,741 4,26,29,526 38,98,12,187 1,67,480 14,822 36,70,362 3,03,91,231 62,05,675 1,09,395 74,148 51,43,261 84,918 4,03,754 25,65,288
1,35,62,78,868
Voting Strength (%) 60.00% 4.50% 0.02% 3.14% 28.74% 0.01% 0.00% 0.27% 2.24% 0.46% 0.01% 0.01% 0.38% 0.01% 0.03% 0.19%
100.00%
*These represent shares which were transferred to Investor Education and Protection Fund by the Company during the year.
s. Dematerialization of Shares and Liquidity
The shares of the Company are under compulsory dematerialization ("Demat") category and consequently, shares of the Company can be traded only in electronic form.
The system for getting the shares dematerialized is as under:
a. Share certificate(s) along with Demat Requisition Form (DRF) is to be submitted by the shareholder to the Depository Participant (DP) with whom he / she has opened a Depository Account.
b. DP processes the DRF and generates a unique number viz. DRN.
c. DP forwards the DRF and share certificates to the Company's Registrar & Shares Transfer Agent.
d. The Company's Registrar & Shares Transfer Agent after processing the DRF confirms or rejects the request to the Depositories.
e. Upon confirmation, the Depository gives the credit to shareholder in his / her depository account maintained with DP.
As on March 31, 2019, about 99.96% of the equity shares issued by the Company are held in dematerialized form.
The Company's equity shares are regularly traded on NSE and BSE, in dematerialized form.
The Company's ISIN in NSDL & CDSL for Equity Shares is INE860A01027.
128 Corporate Governance Report
Since the trading in the shares of the Company can be done only in electronic form, it is advisable that the shareholders who have the shares in physical form get their shares dematerialized.
t. Outstanding GDRs / ADRs / Warrants or any Convertible Instruments, conversion date and likely impact on equity
The Company has not issued any GDRs / ADRs / warrants or other instruments, which are pending for conversion.
u. Commodity price risk or foreign exchange risk and hedging activities
Please refer to Management Discussion and Analysis Report for the same.
v. Transfer of Unpaid / Unclaimed Dividend to Investor Education and Protection Fund (IEPF)
Pursuant to the provisions of Section 124 of the Act, the dividend amount(s) which have remain unpaid or unclaimed for a period of seven consecutive years from the date of declaration have been transferred by the Company to the Investor Education and Protection Fund (`IEPF') established by the Central Government pursuant to Section 125 of the said Act. Shareholders who have not enchased their dividend warrants relating to the dividend specified in table below are requested to immediately send their request for issue of duplicate warrants. Once the unclaimed dividend is transferred to the IEPF, the same can be claimed from the IEPF Authority after following the procedures prescribed in the IEPF Rules.
Year
Dividend Type
Date of Declaration
Record Date / Book Closure Dates
Dividend Payment Dates
Dividend
Amount per share (`)
Due Date of Transfer to IEPF
2011-2012 2012-2013 2013-2014 2014-2015 2015-2016 2016-2017 2017-2018 2018-2019
Interim Final Interim Interim Interim Final Interim Interim Interim Interim Interim Interim Interim Interim Interim Interim Interim Interim Interim Interim Interim Interim Interim Interim Interim Interim Interim Interim
April 18, 2012 October 22, 2012 October 17, 2012 January 17, 2013 April 17, 2013 December 27, 2013 October 17, 2013 January 16, 2014 April 17, 2014 July 31, 2014 October 17, 2014 January 30, 2015 April 21, 2015 Aug 3, 2015 October 19, 2015 Jan 19, 2016 April 28, 2016 August 3, 2016 October 21, 2016 January 24, 2017 May 11, 2017 July 27, 2017 October 25, 2017 Jan 19, 2018 May 2, 2018 July 27, 2018 October 23, 2018 January 29, 2019
April 24, 2012 October 23 - 24, 2012 * October 23 - 24, 2012 * January 22, 2013 April 23, 2013 December 20 - 23, 2013 * October 23, 2013 January 23, 2014 April 23, 2014 August 6, 2014 October 23, 2014 February 5, 2015 April 27, 2015 August 10, 2015 October 26, 2015 January 28, 2016 May 13, 2016 August 19, 2016 November 7, 2016 February 9, 2017 May 11, 2017 August 4, 2017 October 25, 2017 January 30, 2018 May 10, 2018 August 6 to August 6, 2018 * October 31, 2018 February 6, 2019
May 2, 2012 October 31, 2012 October 31, 2012 January 30, 2013 April 30, 2013 December 31, 2013 October 31, 2013 January 31, 2014 April 30, 2014 August 14, 2014 November 3, 2014 February 11, 2015 May 5, 2015 August 17, 2015 November 2, 2015 February 4, 2016 May 13, 2016 August 19, 2016 November 7, 2016 February 9, 2017 June 2, 2017 August 11, 2017 November 2, 2017 February 5, 2018 May 17, 2018 August 14, 2018 November 9, 2018 February 14, 2019
2.00 4.00 2.00 2.00 2.00 6.00 2.00 4.00 4.00 12.00 6.00 8.00 4.00 5.00 5.00 6.00 6.00 6.00 6.00 6.00 6.00 2.00 2.00 2.00 2.00 2.00 2.00 2.00
May 21, 2019 November 24, 2019 November 19, 2019 February 17, 2020 May 17, 2020 January 30, 2021 November 16, 2020 February 15, 2021 May 17, 2021 August 30, 2021 November 16, 2021 March 1, 2022 May 21, 2022 September 2, 2022 November 9, 2022 February 18, 2023 May 29, 2023 September 3, 2023 November 21, 2023 February 24, 2024 May 28, 2024 August 26, 2024 November 24, 2024 February 18, 2025 June 1, 2025 August 26, 2025 November 22, 2025 February 28, 2026
* Book Closure dates
Pursuant to the provisions of Investor Education and Protection Fund (Uploading of information regarding unpaid and unclaimed amounts lying with companies) Rules, 2012, the Company has uploaded the details of unpaid and unclaimed amounts lying with the Company as on September 18, 2018 (date of the last AGM) on the website of the Company at https:// www.hcltech.com/investors/iepf-details and on the website of the Ministry of Corporate Affairs.
Annual Report 2018-19 129
w. Financial Calendar (tentative and subject to change)
Financial reporting for the first quarter ending June 30, 2019 Financial reporting for the second quarter ending September 30, 2019 Financial reporting for the third quarter and year ending December 31, 2019 Financial reporting for the fourth quarter and year ending March 31, 2020 AGM for the year ending March 31, 2020
x. Address for Shareholders' correspondence
August 6-7, 2019 October 22-23, 2019 January 29-30, 2020 April 29-May 1, 2020 August, 2020
The Secretarial Department HCL Technologies Limited 14th Floor, Tower- 6, Plot No.3A, Sector -126, Noida-201 304, UP, India Telephone: + 91-120-6125000 E-mail ID: investors@hcl.com
y. Compliance Certificate on the Corporate Governance from the Auditors
The certificate dated May 9, 2019 obtained from the Statutory Auditors of the Company, M/s S.R. Batliboi & Co. LLP, confirming compliance with the Corporate Governance requirements as stipulated under Schedule V read with Regulation 34 (3) of the Listing Regulations, is annexed hereto.
z. Centres' Locations
Chennai STPI
RMZ Millenia Business Park,
D-12, Sidco Industrial Estate,
(Campus 5, 3rd floor)
Ambattur Industrial Estate,
Dr. MGR Veeranam Road, No:143,
Ambattur (AMB-1)
Perungudi Village, Sholinganallur Taluk, Chennai 600058. T.N. India
Kancheepuram District, Tamil Nadu, Telephone: +(91) 44 66874800
Chennai - 600096
Fax: +(91) 44 26244213
Telephone: +(91) 44 24540999;
+(91) 44 61059900
94, South Phase Ambattur Industrial 73-74, South Phase,
Estate, Ambattur (AMB-4)
Ambattur Industrial Estate Ambattur
Chennai- 600 058, India
(AMB-5),
Telephone: +(91) 44 66892000
Chennai- 600 058, India
Fax: +(91) 44 42153333
Telephone: +(91) 044 43935000
Fax: +(91) 044 42060441
SP Info city, Block A,1st Floor
Arihant Technopolis
Module 4 No: 40 MGR Main Road,
4/293 Old Mahabalipuram Road,
Kodandarama Nagar, Perungudi,
Kandanchavadi
Chennai, Tamil Nadu 600096
Perungundi Chennai,
Telephone: +(91) 44 42955600
Tamil Nadu - 600 096,
Telephone: +(91) 44 43957777
64 & 65, Second Main Road, Ambattur Industrial Estate, Ambattur (AMB-3) Chennai- 600 058, India Telephone: +(91) 44 66483000 Fax: +(91) 44 42180653
8, South Phase, MTH Road, Ambattur Industrial Estate Ambattur (AMB-6) Chennai- 600 058, India Telephone: +(91) 44 43968000 Fax: +(91) 44 43967004 ETL- Chennai 1 1st Floor, Tower-1, "Chennai One", IT Park, Pallavaram-Thoraipakkam 200 Feet road, Thoraipakkam, Chennai-600097 Telephone: +(91)044 49528436
Chennai SEZ ELCOTSEZ Special Economic Zone, 602 / 3, 138, Shollinganallur Village, Shollinganallur Medavakkam High Road, Tambaram Tamil Nadu, Kancheepuram (Dist.) Chennai - 600 119, India Telephone: +(91) 44 61050000
ETA-Techno Park, Special Economic Zone 33, Rajiv Gandhi Salai, Navallur Village and Panchayat, Thiruporur Panchayat Union, Chengalpet Taluk Kanchipuram Dist. Chennai - 600119 Telephone: +(91) 44 47461000
130 Corporate Governance Report
Madurai SEZ SEZ- Unit 1 , Tower-1 ELCOT Special Economic Zone, Survey No : ½,4/2 & 5, Plot No. 5&7, Ilandaikulam village, Madurai 625020 Telephone: +(91) 452-6667201
Madurai- STPI SPA IT Towers, Survey No. 155/1 and 155/2, 120 Feet Road, Near Preethi, Hospital, Opp. Mattuthavani Bus Stand, Madurai-625020, Tamil Nadu Telephone: +(91) 452 4022600
Coimbatore-STPI Rathinam Techno Park, Block B2 ,1st Floor, Pollachi Rd, Eachanari, Coimbatore, Tamil Nadu 641008 Telephone: +(91) 422 6647502
Hyderabad SEZ Plot H-01B and H08, Sy.No.30,34,35 & 38, Avinash Hitech City 2 Society, Gachibowli Village, Serillimgampally Mandal Ranga Reddy District Hyderabad- 500081 Telephone: +(91) 40-30904000
Hyderabad STPI Plot#17, Software Units Layout, Inorbit Mall Road, Vittal Rao Nagar, HITEC City, Hyderabad, Telangana - 500081
Kochi SEZ Athulya Building SDB Block, Ground Floor, Infopark Kochi PO Kakkanad - 682042
Bangalore STPI No-137, Ground Floor, Vayu Block `B' Wing, Salarpuria GR Tech Park, Whitefield, Bangalore - 560066 Telephone: +(91) 80 49214600
"Surya Sapphire",
HCL-Oxford House
Plot No.3, Survey House No 20 & 22, # 501- 503, IV Floor,
Konappanan Agrahara Village
Oxford House, No.15,
Electronic City, Hosur Road
Rustom Bagh Main Road,
Bangalore - 560100.
Behind Manipal Hospital
Telephone: + (91) 80 66267000
Old Airport
Fax: +(91) 80 28529100
Bangalore - 560017
Bangalore SEZ Special Economic Zone, 129, Jigani Industrial Area, Bommasandra Jigani Link Road, Bangalore - 562106 Telephone: +(91) 80 67810000 Fax: +(91) 80 66311111
Cessana Business Park- SEZ, Ground & 1st Floor, Building 9 Kadubeesanahalli, Bengalure - 560087 Telephone: +(91) 80 61485000
Manyata Embassy Business Park SEZ, Block C4(ELM), 1st Floor Wing A & Wing B, Outer Ring Road, Nagavara & Rachenahalli Villages, KR Puram Hobli Bangalore - 560045
Karle Town Centre Survey Nos. 72, 91/3 and 91/4, NagavaraVill, Kasaba Hobli, Bangalore North Taluk Bangalore - 560045 Telephone: + (91) 80 66390100
Noida STPI A- 8 & 9, Sector 60, Noida-201301, U.P., India Telephone: +(91) 120 4384000 Fax: +(91) 120 4384606 A- 9, 10 &11, Sector 3 Noida-201301, U.P., India Telephone: +(91) 120 2520917 Fax: +(91) 120 2520907
A11, Sector 16, Noida-201301 U.P., India Telephone: +(91) 120 4383000 Fax: +(91) 120 2510713 B-34 / 3, Sector 59, Noida 201301, U.P., India Telephone: +(91) 120 4364488 Fax: +(91) 120 2589688
A-2, Sec-3, Noida- 201301, U.P., India Telephone: +(91) 120 7313345
A - 22, Sector 60, Noida-201301, U.P., India Telephone: +(91) 120 4365700 Fax: +(91) 120 4347485
Noida SEZ Noida Technology Hub (SEZ) Plot No: 3A, Sector - 126, Noida - 201303, U.P., India Telephone: +(91)120-6126000 Fax: +(91) 11 26436336
Lucknow SEZ
MANESAR -STPI
Village Kanjehara & Mastemau Chuck CP3, Sector 8,
Gajaria Farms, Sultanpur Road,
IMT Manesar, Manesar, Gurgaon,
Lucknow - 262002, U.P., India
Haryana, 122050
Telephone: +(91) 0522 6788000
Telephone: +(91) 124-6186000
Annual Report 2018-19 131
Kolkata SEZ CANDOR Kolkata One Hi-Tech Structure Pvt. Ltd, SEZ-IT/ITES Plot No 1, Block No. A2 & A3, DH Street No:316, 3rd & 4th Floor New Town, Rajarhat, Dist.: North 24 Parganas, Kolkata 700 156 Telephone: +(91) 33 66052430/2386
+(91) 33 30272341/2350
Kolkata STPI SDF Building, 1st & 3rd Floors, Module Nos. 212-214, 228-230, Block-GP Sector-V, Salt Lake Kolkata - 700091, India Telephone: +(91) 33 40308200
+(91) 33 23573024/3025/3209
Pune STPI Plot 6 & 8, Rajiv Gandhi Infotech Park, MIDC Phase 1, Hinjawadi, Pune - 411057 Telephone: +(91) 20 40284445
World Trade centre, Survey No: 1, Tower - 3, 9th floor Kharadi, Pune - 411014, Maharashtra, India Telephone: + (91) 20 67128800. Extn.: 7228875
1st Floor, Wing 1, Tower - A, Business Bay, Survey No 103, Hissa No. 2 Airport Road, Yerwada Pune - 411006, Maharashtra, India Telephone: + (91) 20 67411251 Extn.: 7211251, 7211001
Pune SEZ Qubix Business Park Pvt. Ltd. Block IT-5, 5th & 6th floor, S. No. 154/6, Rajiv Gandhi Infotech Park (MIDC) Hinjawadi, Pune - 411057 Telephone: + (91) 20-40284090/4444 Fax: + (91) 20-46751018
Tower 7, Level Upper Ground Floor, (Wing A & B) Hadapsar Magarpatta, SEZ Pune - 411013, MH, India Telephone: +(91) 20 30910001 Extn: 6300, 6301
Nagpur SEZ Plot no. 5, Sector-12, Unit-1 MIHAN SEZ, Nagpur Maharashtra India - 441108 Telephone: +(91) 7126780000
Mumbai STPI 703, A & B Wing 7th floor, Reliable Tech Park, Airoli 400708 Telephone: +(91) 22 67056556
COMPLIANCE WITH MANDATORY AND NON-MANDATORY REQUIREMENTS
The Listing Regulations provides certain mandatory requirements which have to be fulfilled by the Company. The Company has complied with all the mandatory requirements of the Listing Regulations. Specifically, the Company confirms compliance with corporate governance requirements specified in regulation 17 to 27 and clauses (b) to (i) of Regulation 46(2) of the Listing Regulations.
The Listing Regulations further states certain non-mandatory requirements which may be implemented as per the discretion of the Company. The Company complies with the following non-mandatory requirements:
1. Shareholders' Rights
The Clause states that half-yearly declaration of financial performance including summary of the significant events in the last six months, may be sent to each shareholder.
The Company communicates with investors regularly through e-mail, telephone and face to face meetings either in investor's conferences, Company visits or on road shows.
The Company leverages the internet in communicating with its investors. After the announcement of the quarterly results, a business television channel in India telecasts discussions with the management. This enables a large number of retail investors in India to understand the Company's operations better. The announcement of quarterly results is followed by media briefing in press conferences and earning conference calls. The earning calls are also webcast live on the internet. Further, transcripts of the earnings calls are posted on the website www.hcltech.com.
The quarterly financial results are also published in English and Hindi daily newspapers.
132 Corporate Governance Report
2. Audit Qualifications
It is always the Company's endeavour to present unqualified financial statements. There is no audit qualification in the Company's financial statements for the year ended March 31, 2019.
3. Separate posts of Chairman and CEO
separate individuals. Mr. Shiv Nadar is the Chairman of the Company and Mr. C Vijayakumar is the CEO of the Company.
4. Reporting of Internal Auditor
The Internal Auditor of the Company directly reports to the Audit Committee on the functional matters.
The positions of the Chairman and the CEO are held by
CERTIFICATE UNDER SCHEDULE V OF SEBI (LISTING OBLIGATIONS AND DISCLOSURE REQUIREMENTS)REGULATIONS, 2015
To, The Members HCL Technologies Limited 806, Siddharth, 96, Nehru Place New Delhi-110019
Based on the disclosures/declarations received from Directors appointed on the Board of HCL Technologies Limited ("Company"), we hereby certify that as on March 31, 2019, none of the Directors on the Board of Company have been debarred or disqualified from being appointed or continuing as director of the Company by Securities and Exchange Board of India, Ministry of Corporate Affairs or any such statutory authority.
For Chandrasekaran Associates Company Secretaries
Dr. S Chandrasekaran Senior Partner Membership No. 1644 Certificate of Practice No. 715
Date: 09.05.2019 Place: Delhi
Annual Report 2018-19 133
ANNUAL SECRETARIAL COMPLIANCE REPORT
To, The Board of Directors HCL Technologies Limited 806, Siddharth, 96, Nehru Place New Delhi-110019
We M/s. Chandrasekaran Associates have examined:
(a) All the documents and records made available to us and explanation provided by HCL Technologies Limited. ("the listed entity"),
(b) The filings/ submissions made by the listed entity to the stock exchanges,
(c) Website of the listed entity,
(d) Any other document/ filing, as may be relevant, which has been relied upon to make this certification, for the year ended on 31st March, 2019 ("Review Period") in respect of compliance with the provisions of:
(a) the Securities and Exchange Board of India Act, 1992 ("SEBI Act") and the Regulations, circulars, guidelines issued thereunder; and
(b) the Securities Contracts (Regulation) Act, 1956 ("SCRA"), rules made thereunder and the Regulations, circulars, guidelines issued thereunder by the Securities and Exchange Board of India ("SEBI");
The specific Regulations, whose provisions and the circulars/ guidelines issued thereunder, have been examined, include: -
(a) Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015;
(b) Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2018;
(c) Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011;
(d) Securities and Exchange Board of India (Buyback of Securities) Regulations, 2018;
(e) Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014;
(f) Securities and Exchange Board of India (Issue and Listing of Debt Securities) Regulations, 2008; Not Applicable during the year under review.
(g) Securities and Exchange Board of India (Issue and Listing of Non- Convertible and Redeemable Preference Shares) Regulations, 2013; Not Applicable during the year under review.
(h) Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015;
(i) The Depositories Act, 1996 and the Regulations and Bye-laws framed thereunder to the extent of Regulation 76 of Securities and Exchange Board of India (Depositories and Participants) Regulations, 2018;
(j) The Securities and Exchange Board of India (Registrars to an Issue and Share Transfer Agents) Regulations, 1993 regarding the Companies Act and dealing with client to the extent of securities issued;
(k) Securities and Exchange Board of India (Investor Protection and Education Fund) Regulations, 2009. and based on the above examination, we hereby report that, during the Review Period:
(a) The listed entity has complied with the provisions of the above Regulations and circulars/ guidelines issued thereunder, except in respect of matters specified below:
Sr. Compliance Requirement (Regulations/ circulars / Deviations Observations/ Remarks of the
No
guidelines including specific clause)
Practicing Company Secretary
NIL
NIL
NIL
134 Corporate Governance Report
(b) The listed entity has maintained proper records under the provisions of the above Regulations and circulars/ guidelines issued thereunder insofar as it appears from my/our examination of those records.
(c) The following are the details of actions taken against the listed entity/ its promoters/ directors/ material subsidiaries either by SEBI or by Stock Exchanges (including under the Standard Operating Procedures issued by SEBI through various circulars) under the aforesaid Acts/ Regulations and circulars/ guidelines issued thereunder:
Sr. Action No. taken by
NIL
Details of violation
NIL
Details of action taken E.g. fines, warning letter, debarment, etc. NIL
Observations/ remarks of the Practicing Company Secretary, if any
NIL
(d) The listed entity has taken the following actions to comply with the observations made in previous reports:
Sr. Observations of the No. Practicing Company
Secretary in the previous reports
Observations made in the secretarial compliance report
for the year ended... (The years are to be mentioned)
Actions taken by the listed entity, if any
Not Applicable during the year under review
Comments of the Practicing Company Secretary on the actions taken by the listed entity
For Chandrasekaran Associates Company Secretaries
Dr. S Chandrasekaran Senior Partner Membership No. 1644 Certificate of Practice No. 715
Date: 09.05.2019 Place: Delhi
Annual Report 2018-19 135
Independent Auditor's Report on compliance with the conditions of Corporate Governance as per provisions of Chapter IV of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015
The Members of HCL Technologies Limited, 806, Siddharth, 96, Nehru Place, New Delhi -110019
1. The Corporate Governance Report prepared by HCL Technologies Limited (hereinafter the "Company"), contains details as stipulated in Regulations 17-27, clauses (b) to (i) of Regulation 46 (2) and paragraphs C, D and E of Schedule V of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended ("the Listing Regulations") (`Applicable criteria') with respect to Corporate Governance for the year ended March 31, 2019. This report is required by the Company for annual submission to the Stock exchange and to be sent to the Shareholders of the Company.
Management's Responsibility
2. The preparation of the Corporate Governance Report is the responsibility of the Management of the Company including the preparation and maintenance of all relevant supporting records and documents. This responsibility also includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the Corporate Governance Report.
3. The Management along with the Board of Directors are also responsible for ensuring that the Company complies with the conditions of Corporate Governance as stipulated in the Listing Regulations, issued by the Securities and Exchange Board of India.
Auditor's Responsibility
4. Pursuant to the requirements of the Listing Regulations, our responsibility is to express a reasonable assurance in the form of an opinion whether the Company has complied with the specific requirements of the Listing Regulations referred to in paragraph 3 above.
5. We conducted our examination of the Corporate Governance Report in accordance with the Guidance Note on Reports or Certificates for Special Purposes and the Guidance Note on Certification of Corporate Governance, both issued by the Institute of Chartered Accountants of India ("ICAI"). The Guidance Note on Reports or Certificates for Special Purposes requires that we comply with the ethical requirements of the Code of Ethics issued by ICAI.
6. We have complied with the relevant applicable requirements of the Standard on Quality Control (SQC) 1, Quality Control for Firms that Perform Audits and Reviews of Historical Financial Information, and Other Assurance and Related Services Engagements.
7. The procedures selected depend on the auditor's judgement, including the assessment of the risks associated in compliance of the Corporate Governance Report with the applicable criteria. Summary of key procedures performed include:
i. Reading and understanding of the information prepared by the Company and included in its Corporate Governance Report;
ii. Obtained and verified that the composition of the Board of Directors w.r.t executive and non-executive directors has been met throughout the reporting period;
iii. Obtained and read the Directors Register as on March 31, 2019 and verified that at least one women director was on the Board during the year;
iv. Obtained and read the minutes of the following committee meetings held April 1, 2018 to March 31, 2019:
(a) Board of Directors meeting; (b) Audit committee; (c) Annual General meeting; (d) Nomination and remuneration committee; (e) Stakeholders Relationship Committee; (f) Independent directors meeting; and (g) Risk management committee;
136 Corporate Governance Report
v. Obtained necessary representations and declarations from directors of the Company including the independent directors; and
vi. Performed necessary inquiries with the management and also obtained necessary specific representations from management.
The above-mentioned procedures include examining evidence supporting the particulars in the Corporate Governance Report on a test basis. Further, our scope of work under this report did not involve us performing audit tests for the purposes of expressing an opinion on the fairness or accuracy of any of the financial information or the financial statements of the Company taken as a whole. Opinion 8. Based on the procedures performed by us as referred in paragraph 7 above, and according to the information and explanations given to us we are of the opinion that the Company has complied with the conditions of Corporate Governance as stipulated in the Listing Regulations, as applicable for the year ended March 31, 2019, referred to in paragraph 1 above. Other matters and Restriction on Use 9. This report is neither an assurance as to the future viability of the Company nor the efficiency or effectiveness with which the management has conducted the affairs of the Company. 10. This report is addressed to and provided to the members of the Company solely for the purpose of enabling it to comply with its obligations under the Listing Regulations with reference to compliance with the relevant regulations of Corporate Governance and should not be used by any other person or for any other purpose. Accordingly, we do not accept or assume any liability or any duty of care or for any other purpose or to any other party to whom it is shown or into whose hands it may come without our prior consent in writing. We have no responsibility to update this report for events and circumstances occurring after the date of this report.
For S.R. Batliboi & Co. LLP Chartered Accountants ICAI Firm Registration Number: 301003E/E300005
per Nilangshu Katriar Partner Membership Number: 058814 Place of Signature: Gurugram Date: May 9, 2019 UDIN: 19058814AAAAAC9605
Annual Report 2018-19 137
DECLARATION BY THE CHIEF EXECUTIVE OFFICER PURSUANT TO SCHEDULE V(D) READ WITH REGULATION 34(3) OF SEBI (LISTING OBLIGATIONS AND DISCLOSURE REQUIREMENTS) REGULATIONS, 2015
We, Shiv Nadar, Chairman & Chief Strategy Officer and C. Vijayakumar, President & Chief Executive Officer of HCL Technologies Limited (the "Company") confirm that the Company has adopted a Code of Business Ethics and Conduct ("Code of Conduct") for its Board members and senior management personnel and the Code of Conduct is available on the Company's web site.
We, further confirm that the Company has in respect of the financial year ended March 31, 2019, received from its Board members as well as senior management personnel affirmation as to compliance with the Code of Conduct.
Shiv Nadar Chairman & Chief Strategy Officer
C Vijayakumar President & Chief Executive Officer
Place: Noida (U.P.), India Date: May 9, 2019
CERTIFICATE BY THE CHIEF EXECUTIVE OFFICER (CEO) AND CHIEF FINANCIAL OFFICER (CFO) PURSUANT TO PART B SCHEDULE II READ WITH REGULATION 17 (8) of SEBI (LISTING OBLIGATIONS AND DISCLOSURE REQUIREMENTS) REGULATIONS, 2015
The Board of Directors HCL Technologies Limited New Delhi Dear members of the Board,
1. We have reviewed the financial statements and the cash flow statement of the Company for the year ended March 31, 2019 and to the best of our knowledge and belief
a) these statements do not contain any materially untrue statement or omit any material fact or contain statements that might be misleading;
b) these statements together present a true and fair view of the Company's affairs and are in compliance with existing accounting standards, applicable laws and regulations.
2. There are, to the best of our knowledge and belief, no transactions entered into by the Company during the year which are fraudulent, illegal or violative of the Company's code of conduct.
3. We accept responsibility for establishing and maintaining internal controls for financial reporting and we have evaluated the effectiveness of internal control systems of the Company pertaining to financial reporting. We have not come across any reportable deficiencies in the design or operation of such internal controls.
4. We have indicated to the Auditors and the Audit Committee
a) that there are no significant changes in internal control over financial reporting during the year;
b) that there are no significant changes in accounting policies during the year; and
c) that there are no instances of significant fraud of which we have become aware and that there is no involvement of the management or employee having a significant role in the Company's internal control system over financial reporting.
C. Vijayakumar President & Chief Executive Officer
Shiv Nadar Chairman & Chief Strategy Officer
Prateek Aggarwal Chief Financial Officer
Prahlad Rai Bansal Deputy Chief Financial Officer
Place: Noida (U.P.), India Date: May 9, 2019
138 Corporate Governance Report
HCL Technologies Limited : Business Responsibility Report 2018-19
With our strong commitment towards an adherence on sustainability and sustainable best practices across our ecosystem, we are delighted to present herewith, the Business Responsibility Report of the Company for the financial year ended March 31, 2019. This report is prepared pursuant to Regulation 34(2)(f) of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 and follows the National Voluntary Guidelines on Social, Environmental and Economical Responsibilities of Business, as stipulated by the Ministry of Corporate Affairs, Govt. of India.
This Business Responsibility Report covers the responses towards the governance, stakeholders' relations and environmental parameters for the various business units directly under HCL Technologies Limited.
Introduction:
HCL Technologies Limited ("HCL" or the "Company") is a leading global technology company that helps global enterprises reimagine and transform their businesses through digital technology transformation. HCL operates out of 44 countries and has consolidated revenues of ` 60,427 crore for the year ended March 31, 2019. HCL focuses on providing an
integrated portfolio of services underlined by its Mode 1-2-3 growth strategy.
Mode 1 encompasses the core services in the areas of Applications, Infrastructure, BPO, and Engineering and R&D services, leveraging DRYiCE Autonomics to transform clients' business and IT landscape, making them `lean' and `agile'.
Mode 2 focuses on experience-centric and outcome-oriented integrated offerings of Digital and Analytics, IoT WoRKSTM, Cloud Native Services and Cyber security and GRC services to drive business outcomes and enable enterprise digitalization.
Mode 3 strategy is ecosystem-driven, creating innovative IPpartnerships to build products and platforms business. HCL leverages its global network of integrated co-innovation labs and global delivery capabilities to provide holistic multi-service delivery in key industry verticals, including Financial Services, Manufacturing, Telecommunications, Media, Publishing, Entertainment, Retail and CPG, Life Sciences and Healthcare, Oil and Gas, Energy and Utilities, Travel, Transportation and Logistics and Government.
With 1,37,965 professionals from diverse nationalities, HCL focuses on creating real value for customers by taking `Relationships Beyond the Contract'.
Section A: General Information about the Company
1 Corporate Identity Number (CIN) of the Company
L74140DL1991PLC046369
2 Name of the Company
HCL Technologies Limited
3 Registered address:
806, Siddharth, 96, Nehru Place, New Delhi - 110019 India
4 Website:
www.hcltech.com
5 E-mail id:
investors@hcl.com
6 Financial year reported: April 1, 2018 to March 31, 2019
7 Sector(s) that the Company is engaged in (industrial IT Infrastructure Services, Software Application Services,
activity code-wise):
Engineering and R&D Services and Business Process
Services.
8 List three key products / services that the Company Mode 1 Core services: HCL delivers core services in the
manufactures / provides (as in balance sheet):
areas of Applications, Infrastructure, Engineering and R&D
and Business Services, leveraging DRYiCETM Autonomics
to transform clients' business and IT landscape, making
them `lean' and `agile'.
Mode 2 Next-Gen services: HCL delivers experience centric and outcomeoriented integrated offerings across Digital and Analytics, IoT WoRKSTM, Cloud Native Services and Cybersecurity and GRC services.
Mode 3 Products and Platforms: HCL leverages its expertise in building software IP-led businesses over the last forty years, like IT Automation, Orchestration, Hybrid Data, Security and Collaboration.
Annual Report 2018-19 139
9 Total number of locations where business activity is a) International Locations - The Company records
undertaken by the Company-
its presence across 44 countries across the globe
(a) Number of International Locations (Provide details of
including India.
major 5):
5 Major International Locations are: Americas, Poland,
(b) Number of National Locations:
Mexico, Philippines and U.K.
For more details, refer - https://www.hcltech.com/geo-
presence
b) National Locations - The Company is located across 18 states in India having 77 offices in totality.
10 Markets served by the Company
Americas Europe Rest of the World (RoW) For details, refer https://www.hcltech.com/geo-presence
SECTION B: FINANCIAL DETAILS OF THE COMPANY
1 Paid up Capital (INR): (as on March 31, 2019)
INR 271 crore
2 Total Turnover (INR) (as per the consolidated Financial INR 60,427 crore Statements for the year ended March 31, 2019)
3 Total Profit After Taxes (INR) (as per the consolidated INR 10,120 crore Financial Statements on March 31, 2019)
4 Total Spending on Corporate Social Responsibility (CSR) During the year, the Company has contributed ` 125.45
as percentage of profit after tax
crore for CSR activities.
For details, refer to Annexure 4 on of the Directors' Report which forms part of the Annual Report.
5 List of CSR Activities in which expenditure has been Refer to Annexure 4 on of the Directors' Report which
Incurred
forms part of the Annual Report.
SECTION C: OTHER DETAILS
1 Does the Company have any subsidiary company / Yes. companies?
2 Do the subsidiary company / companies participate in the Yes. As on March 31, 2019 the Company has 133 BR Initiatives of the parent company? If yes, then indicate subsidiaries and 8 associates. the number of such subsidiary company(s)
3 Do any other entity / entities (e.g. suppliers, distributors Being a responsible organization, the Company believes
etc.) that the Company does business with, participate in in educating its suppliers and distributors on the BR
the BR initiatives of the Company? If yes, then indicate initiatives of the organization.
the percentage of such entity / entities? [Less than 30%,
30-60%, More than 60%]
The Company conducts vendor meets and participates in
various knowledge sharing platforms with an objective to
share BR initiatives with its suppliers.
140 Business Responsibility Report
SECTION D: BR INFORMATION
Details of Director / Directors responsible for BR
1 Details of the Director / Directors responsible for implementation of the BR policy / policies
DIN Number
00030840
Name
Ms. Robin Ann Abrams
Designation
Independent Director
2 Details of BR Head of the Company
DIN Number (if applicable)
N.A.
Name
Mr. Ravi Kathuria
Designation
Global Head - Communications, Corporate Affairs and
Advocacy, Senior Vice President, Marketing (EMEA and
APAC)
Telephone number
0120 - 6125000
E-mail id
Ravi.Kathuria@hcl.com
Principle-wise (as per NVGs) BR Policy / policies (Reply in Y / N)
BRR Principle Mapping to the policies of the organisation
Principle-wise (as per NVGs) BR Policy / policies (Reply in Y/N)
Sl. No.
Questions
P1 P2 P3 P4 P5 P6 P7 P8 P9
1. Do you have a policy / policies for P1 to P9
Y
Y
Y
Y
Y
Y
Y
Y
Y
2. Have the policy been formulated in consultation Y
Y
Y
Y
Y
Y
Y
Y
Y
with the relevant stakeholders?
3. Does the policy conform to any national / Y
Y
Y
Y
Y
Y
Y
Y
Y
international standards?
4. Has the policy been approved by the Board? If Y
Y
Y
Y
Y
Y
Y
Y
Y
yes, has it been signed by MD / owner / CEO /
appropriate Board Director?
5. Does the Company have a specified committee Y
Y
Y
Y
Y
Y
Y
Y
Y
of the Board / Director / Official to oversee the
implementation of the policy?
6. Indicate the link for the policy to be viewed online? https://www.hcltech.com/socially-responsible-business#other-policies
https://www.hcltech.com/investors/corporategovernance-hcl
Some policies are listed on the Company's intranet https://www.myhcl >> HR Studio >> Policies Hub
7. Has the policy been formally communicated to all Y
Y
Y
Y
Y
Y
Y
Y
Y
relevant internal and external stakeholders?
8. Does the Company have in-house structure to Y
Y
Y
Y
Y
Y
Y
Y
Y
implement the policy / policies?
9. Does the Company have a grievance redressal Y
Y
Y
Y
Y
Y
Y
Y
Y
mechanism related to the policy / policies to
address stakeholders' grievances related to the
policy / policies?
10. Has the Company carried out independent audit Y
Y
Y
Y
Y
Y
Y
Y
Y
/ evaluation of the working of this policy by an
internal or external agency?
Annual Report 2018-19 141
Sl. Policy Name No. 1. Employee Code of Business Ethics and Conduct 2. Equal Opportunity Employer 3. Environment Policy 4. Occupational Health and Safety Policy 5. Anti-Bribery and Anti-Corruption Policy 6. Prevention and Redressal of Sexual Harassment 7. Whistleblower Policy 8. Procurement Policy 9. Siting Policy 10. Social Media Policy 11. Supplier Diversity Policy 12. Stakeholder Engagement Framework 13. Business Gifts and Entertainment Policy
Principal Mapping
P1 P4, P5 P6, P2 P3, P5 P1 P3, P5 P1, P5 P2 P8 P7 P4 P4, P9 P1
P. No.
BRR Principle
1. Businesses should conduct and govern themselves with Ethics, Transparency and Accountability
2. Businesses should provide goods and services that are safe and contribute to sustainability throughout their life cycle
3. Businesses should promote the well-being of all employees
4. Businesses should respect the interests of and be responsive towards all stakeholders, especially those who are disadvantaged, vulnerable and marginalized
5. Businesses should respect and promote human rights
6. Businesses should respect, protect and make efforts to restore environment
7. Businesses, when engaged in influencing public and regulatory policy, should do so in a responsible manner
8. Businesses should support inclusive growth and equitable development
9. Businesses should engage with and provide value to their customers and consumers in a responsible manner
Governance related to BR
A. Indicate the frequency with which the Board of Within the Company, the Board Committees play a very significant Directors, Committee of the Board or CEO to role in the governance structure. They are essentially meant to deal assess the BR performance of the Company. with specific areas / activities of the organization. There is a Corporate Social Responsibility (CSR) Committee of the Board which monitors and reviews the CSR activities.
For details on the frequency of the CSR Committee meetings, kindly refer the "Frequency and length of meeting of the Committees of the Board and Agenda" section in the Corporate Governance Report which forms part of the Annual Report.
B. Does the Company publish a BR or a Yes, the Company publishes BRR on an annual basis. Given below are
Sustainability Report? What is the hyperlink the links:
for viewing this report? How frequently it is https://www.hcltech.com/investors/results reports?year=2018-19
published?
https://www.hcltech.com/socially-responsible-business#sustainability
142 Business Responsibility Report
SECTION E: PRINCIPLE-WISE PERFORMANCE
Principle 1: Businesses should conduct and govern themselves with Ethics, Transparency and Accountability
1 Does the policy relating to ethics, bribery and corruption Yes, the Company has an anti-bribery and anti-corruption policy
cover only the Company? Yes / No. Does it extend to in place that governs the ethics, bribery and corruption related
the Group / Joint Ventures / Suppliers / Contractors / matters at HCL. The mentioned policies are applicable to the
NGOs / Others?
employees across all grades including senior executives, the
members of the Board and fixed-term or temporary employees
like contractors, consultants, trainees, interns, volunteers, third-
party agents or any other person associated with the organization.
These policies are also applicable to all the affiliates and
subsidiaries of the Company and also across the entire value
chain of the Company.
The policy document has been uploaded on HCL's web portal https://www.hcltech.com/investors/governance-policies 2 How many stakeholder complaints have been received The company has 3 open Stakeholder Complaints, as on in the past financial year and what percentage was March 31, 2019. satisfactorily resolved by the Management? If so, provide details thereof, in about 50 words or so.
Principle 2: Businesses should provide goods and services that are safe and contribute to sustainability throughout
their life cycle 1 List up to 3 of your products or services whose HCL offers multiple IT related services and while designing these
design has incorporated social or environmental services, social and environmental concerns and related risks and
concerns, risks and / or opportunities.
opportunities are well taken care of. The company's services are
offered under HCL's strategy as presented below.
HCL's Mode 1-2-3 strategy helps future proof customers' business, by deploying a concurrent, three-point spotlight on the existing core of their business, new growth areas as well as the ecosystems of the future. As detailed below, each of the three modes have distinct outcomes and growth potential.
Mode 1: Core Services
Under Mode 1, HCL delivers core services in the areas of Applications, Infrastructure, BPO and Engineering and R&D, leveraging DRYiCE autonomics and orchestration to transform clients' business and IT landscape making them "lean" and "agile".
Mode 2: Next Generation Services
Under Mode 2, HCL delivers experience-centric and outcomeoriented integrated offerings of Digital and Analytics, IoT WoRKSTM, Cloud Native Services and Cyber-security and GRC services.
Mode 3: Products and Platforms
HCL continues to explore and enter into innovative IP-based partnerships, targeting specific next-generation opportunities. Mode 3 includes the external IP partnership with IBM extending now to half a dozen products. HCL also continues to invest in its internal IP creation strategy and expansion of capabilities and markets for DRYiCE, the next-generation autonomics and orchestration products and platform.
Annual Report 2018-19 143
2 For each such product, provide the following details Yes, HCL has been undertaking various initiatives in the field of
in respect of resource use (energy, water, raw clean technology, energy efficiency and renewable energy.
material etc.) per unit of product (optional):
The Organization has taken initiatives to procure renewable power
a) Reduction during sourcing / production / through Open Access System and On-site installations. In total,
distribution achieved since the previous year 18,969 MWh of Renewable Power has been consumed in the
throughout the value chain?
financial year 2018-19.
b) Reduction during usage by consumers (energy, In addition to the above, Measurable Energy Conservation
water) has been achieved since the previous plan, implemented by the Organization, led to energy saving of
year?
6,292 MWh. Heating, Ventilation and Air conditioning (HVAC) related
interventions contributed to 48% of the overall energy savings from
measurable activities.
Summary of above mentioned operational efficiency related interventions are tabulated below:
Sl.
Intervention
No
Particulars
1
Renewable Power purchase
Chiller and AHU
2
Operational Performances
Improvement
3
Effective utilization of UPS
4
Effective utilization of lightings
5 Voltage optimization
Lift and STP
6 Operations
Optimization
7 Water conservation
8 Solar water heater
Grand Total
2018-19 MWh
3,037
438 2,642
131 44
0.40 6,292
Carbon Foot Print reduction
(tCO2) 15,555
2,490
360 2,167
107 36
0.33 20,715
Water Saved (KL)
20,660 20,660
3 Does the Company have procedures in place for Yes, the organization has Procurement Policy in place which
sustainable sourcing (including transportation)? If discourages discrimination with any vendor on the basis of gender,
yes, what percentage of your inputs was sourced nationality, ethnicity, religion, disability etc. In accordance with
sustainably? Also, provide details thereof, in about local legislations and best practices, HCL's procurement process
50 words or so.
is transparent, objective and non-discriminatory in the selection of
its vendors. The company works towards sustainable sourcing and
ensure that our company's social and environmental performance
extends to our supply chain by sharing our expectations with our
vendors from time to time. We also promote localization of business by giving preferences to local vendors. HCL is committed to do
business with environmentally responsible vendors with an objective
to minimize the adverse effects on the community, the environment
and natural resources while safeguarding health and safety of the
public.
We are in the process of reviewing this policy and the updated policy will replace the existing one.
We intend to procure 5% of our goods and services from marginalized and vulnerable sections of society e.g. women and people with disabilities.
144 Business Responsibility Report
4 Has the Company taken any steps to procure Yes, HCL encourages to on-board suppliers / vendors who comply
goods and services from local and small producers, with local laws and policies to maintain and balance diversity
including communities surrounding their place requirements.
of work? If yes, what steps have been taken to
improve their capacity and capability of local and HCL's Procurement Policy particularly focusses on local vendors.
small vendors?
While selecting the vendors, preference is given to local vendors for
outsourcing jobs pertaining to facilities management, procurement
of materials for infrastructure development and other operations with
an objective of creating employment and economic opportunities in
the area HCL operates in.
The Company also maintains Minority and Women based vendors'
data in CL (Contingent Labour) vendors' database to fulfil business
need wherever needed as per business demand.
5 Does the Company have a mechanism to recycle Yes, the company has established various mechanisms to recycle
products and waste? If yes what is the percentage of products and waste.
recycling of products and waste (separately as <5%, 5-10%, >10%). Also, provide details thereof, in about Some of the key steps adopted by the Company are listed below:
50 words or so.
Water Management
Installation of sensor taps to optimize water usage. Installation of dual flush system to minimize water wastage. Installation of Sewer Treatment Plant (STP) within campus to
treat the sewer water and reuse for flushing, landscaping and HVAC. No water discharge from campus. Installation of timer-based automatic controls for water
sprinklers to conserve water used for lawn maintenance. 100% replacement of plastic and paper cups with ceramic mugs. 100% replacement of tissue towels from washroom with
blowers. Printer pin deployment to save paper. Installation of environment friendly refrigerants. Creation of rain water harvesting pits.
Waste Management
E-waste Conventional lights have been replaced with LED based lights, thereby reducing the harmful effects of mercury and reducing the health and environmental concerns. Projectors have also been replaced with LEDs, thus contributing significantly to power consumption and at the same time reducing the waste.
Paper The campus strives to become a paperless campus and thus, suitable measures like, printer pin deployment, printer on alternate floors, setting up maximum printing limit, double side printing and reduction in font size are encouraged. These measures have resulted in significant conservation of paper.
Reduce, Recycle, Reuse The waste management programs are based on the principles of 3R. All the waste generated by us is measured and quantified. The waste is categorized according to the source and disposal.
The hazardous waste is disposed of in environment friendly manner and paper waste is recycled and reused. Bio medical waste is disposed of in a safe manner. Food remains and garden waste are reused to make manure.
Annual Report 2018-19 145
Principle 3: Businesses should promote the well-being of all employees 1 Please indicate the total number of employees. The global full time employee count stands at 1,37,965 as on March 31, 2019.
2 Please indicate the total number of employees The contract employee count stands at 9,587 as on March
hired on temporary / contractual / casual basis 31, 2019.
3 Please indicate the number of permanent women 24.90% of the total full-time workforce at the organization is
employees.
comprised of women employees.
4 Please indicate the number of permanent Being an equal opportunity employer, the Company does not
employees with special-abilities.
discriminate specially-abled people at the time of recruitment.
As per Company's policies, disclosure of special ability is not
mandatory. However, as on March 31, 2019, 253 specially-abled
people have voluntarily declared their status.
5 Do you have an employee association that is While the Company does not restrict any employee from being
recognized by Management?
a member of any employee related association and gives all the
freedom, the Company also ensures to abide by the local laws
present across the geographies that it operates in.
6 What percentage of your permanent employees All the employees are free to join any employee related
is members of this recognized employee associations. The Company does not prohibit them and hence
association?
this becomes a matter of employee(s) own choice.
7 Please indicate the number of complaints relating In order to provide a safe and healthy work environment free
to child labour, forced labour, involuntary labour, of any hassles and all kinds of harassment including sexual
sexual harassment in the last financial year and harassment and to prevent and redress such harassment
pending, as on the end of the financial year.
complaints, the Company has in place Prevention and Redressal
of Sexual Harassment at Work Place Policy. This policy applies
to all employees of the Company, its group companies and joint
ventures operating out of India like regular, temporary, ad hoc,
daily wagers, contractual staff, vendors, clients, consultants,
trainees, probationers, apprentices, contract labour and also
all visitors to the Company. Any complaints about harassment
shall be treated under this Policy. This Policy is not confined to
the actual working place of the employees in the sense of the
physical space in which paid work may be performed as per the
prescribed duty hours but also includes any place visited by the
employee arising out of or during the course of employment.
The Company has constituted a committee for the redressal of
all sexual harassment complaints. These matters are also being
reported to the Audit Committee. During the reporting year, the
Company has received 11 complaints on sexual harassment that
were classified as significant incidents for investigation, all of
which were disposed and appropriate actions were taken and no
complaints remain pending as of March 31, 2019.
The details of the number of complaints received through `Secure' channel during the reporting period are as follows:
Number of cases pending at the beginning of the financial Nil year 2018-19 i.e. on March 31, 2018
Number of cases received during financial year 2018-19 11
Number of cases disposed during financial year 2018-19 11
Number of cases pending at the end of the financial year Nil 2018-19 i.e. on March 31, 2019
Child labour / Forced labour / Involuntary labour
N.A.
Discriminatory Employment
Nil
146 Business Responsibility Report
8 What percentage of your under mentioned During the financial year 2018-19, over 79,970+ employees employees were given safety and skill up-gradation availed 3.02 million hours of training for enhancing their current
training in the last year?
skills and learning new skills. Over 31,130 employees were also
a) Permanent Employees
trained in digital skills during this period.
b) Permanent Women Employees c) Casual / Temporary / Contractual Employees d) Employees with Disabilities
FTE employees' headcount Permanent Women
1,37,965 24.90%
Employees
Contractual employees'
9,587
headcount
Employees with
Being an equal opportunity
Disabilities
employer and following the law,
the Company does not mandate
disclosure of disability. As on
March 31, 2019, 253 persons
with disabilities have voluntarily
declared their status.
Principle 4: Businesses should respect the interests of, and be responsive towards all stakeholders, especially those who are disadvantaged, vulnerable and marginalized.
1 Has the Company mapped its internal and Yes, the Company has mapped its internal and external stakeholders.
external stakeholders? Yes / No
Internal Stakeholders of the Company include employees, senior
leaders, managers, Board of Directors, members of HCL Foundation
and the support staff.
The external stakeholders of the Company include the communities the Company engages with, like the rural communities, urban slum communities and government schools. The external stakeholders also include customers, investors, regulatory bodies and media.
The stakeholder engagement exercise helped in reconfirming the materiality matrix against the below mentioned four pillars:
Responsible Business Redefine Workplace Renew Ecosystem Repay Society
The priorities, whether high, medium or low, are based on what the stakeholders and the Company value collectively on a mutual sustainable journey. The issues that are mentioned toward the core of this matrix are of high significance to the organization and also to stakeholders. The significance of material issues is determined by the measure of two parameters:
Importance to stakeholders Importance to the business
The stakeholders' engagement at the Company is a continuous process and there has been no change in the materiality matrix identified by the Company for reporting.
Annual Report 2018-19 147
148 Business Responsibility Report
Details of the stakeholder engagement and outcomes are provided below:
Stakeholder
Employees
Customers
Vendors and Suppliers Immediate Communities in which we operate
Investors and Shareholders
NGOs and Advocacy Groups
Key Sustainability Priority Sections in which priorities are addressed
Wellness and well-being, Redefine
career development,
Workplace, Repay
learning forums, grievance Society
channels, and hobby clubs,
community volunteering
Innovative IT solutions,
Responsible
Green IT, CSR Partnerships Business, Repay
with customers
Society
Adherence to quality norms Responsible and ethical procurement Business, Redefine
Workplace
Education, employability trainings, women empowerment and health / sanitation, environmental initiatives
Repay Society
Transparency and
Responsible
maintenance of high degree Business
of disclosure levels and
focus on good corporate
governance
Community development, Renew Ecosystem, capacity building, advocacy Repay Society on human rights issues such as diversity, safety, advocacy on environment and climate change
2 Out of the above, has the Company The following groups have been identified as disadvantaged, vulnerable
identified the disadvantaged, vulnerable and and marginalized stakeholders:
marginalized stakeholders?
Rural and urban slum communities living below poverty line
Children, women and youth
People with disabilities
Senior citizens
HCL support staff
3 Are there any special initiatives taken by the The Company aims at addressing the needs of the disadvantaged,
Company to engage with the disadvantaged, vulnerable and marginalized sections of the society through its CSR
vulnerable and marginalized stakeholders? programs. These programs are as follows:
If so, provide words or so.
details
thereof,
in
about
50
HCL Samuday HCL Grant
HCL Uday
Power of One
Details of the above initiatives are provided under Principle 8.
Annual Report 2018-19 149
Principle 5: Businesses should respect and promote human rights
1 Does the policy of the Company on human rights Human Rights Policy at HCL is applicable to all the employees
cover only the Company or extend to the Group / Joint (both permanent and contractual) across the Company.
Ventures / Suppliers / Contractors / NGOs / Others? This policy further extends to all third party vendors and
suppliers, contractors, NGOs as well as to all the affiliates
and subsidiaries of the Company.
2 How many stakeholder complaints have been The Company has received total 14 overall complaints
received in the past financial year and what percent from various stakeholders that includes customers, vendors
was satisfactorily resolved by the Management?
and employment related cases during the subject financial
year.
In addition, 29 complaints were received from various shareholders in the financial year 2018-19. All the complaints have been successfully resolved as on March 31, 2019. Details provided in table below:
Source of Complaint Directly from the Investors Through SEBI, Stock Exchanges, etc. Total
Received Resolved Pending
24
24
0
5
5
0
29
29
0
Principle 6: Businesses should respect, protect and make efforts to restore the environment
1 Does the policy relate to The Company has a dedicated Environmental Policy that serves as the guideline for
Principle 6 cover only the developing initiatives for protecting and restoring environment.
Company or extends to
the Group / Joint Ventures This policy is applicable across the Company and its subsidiaries for achieving excellence
/ Suppliers / Contractors / in environmental performance. This policy also applies to the suppliers, contractors
NGOs / others?
and all other partners across the value chain for addressing the global environmental
challenges.
2 Does the Company have Yes, HCL being environmentally conscious and socially responsible organization follows
strategies / initiatives
a thoroughly responsible approach towards the environmental causes and has thus
to address global
undertaken various initiatives internally that help reduce the carbon footprints, pollution
environmental issues such and help maintain the energy conservation. To cite some are HCL transportation initiatives
as climate change, global of cab pooling, CNG driven cabs etc. The details of many other such initiatives could be
warming, etc.? Y / N. If yes, found in the next set of responses in the Report.
please give hyperlink for webpage etc.
HCL promotes Reduce, Reuse, Recycle philosophy which reflects its Go-Green approach.
Please refer to the following link for policy context-
https://www.hcltech.com/socially-responsible-business
3 Does the Company identify The Company identifies and assesses potential environment risk in all areas of its
and assess potential
operations. The effective Environmental Management System is in place which is in line
environmental risks? Y / N with ISO 14001 Standard's requirements.
4 Does the Company have The Company has not participated in Clean Development Mechanism project. Having
any project related to Clean mentioned so, as a responsible organization, the Company has voluntarily setup its goal
Development Mechanism? If to reduce carbon emission by 33% by the financial year ended March 31, 2020 over the
so, provide details thereof, base year 2011.
in about 50 words or so. Also, if Yes, whether any environmental compliance report is filed?
The Company regularly participates in "Carbon Disclosure Project" run by global organization CDP which enables the companies, cities, states and regions to measure and manage their environmental impacts.
The Company is also working on a "Green IT Report" which is under pipeline.
150 Business Responsibility Report
5 Has the Company undertaken any other initiatives on clean technology, energy efficiency, renewable energy, etc.?
Yes, the Company strives to improve energy efficiency, switch to renewable energy and promote clean technology. Given below is a detailed list of initiatives taken in this regard.
As a responsible corporate, the Company owns accountability for the future and plays an imperative role in addressing global challenges in the areas of energy, climate change and sustainability. The Company has made a commitment to conserve the environment by adopting "Go Green Initiatives" and be responsible for Energy Management in its area of operations and perform energy efficiency by consuming energy in an efficient, economical and environment friendly manner throughout all its premises.
In this context, the Company has adopted "Go Green Initiatives" and has attributed towards reduction in carbon footprint during the financial year 2018-19. Some of the key initiatives are described below:
a) Renewable Power Purchase
In continuation with Company's commitment to reduce "Carbon footprint", the Company has procured Renewable Power equal to 18,969 MWh for the major campuses during financial year 2018-19. The source of this power was Wind, Solar and Hydel based electricity. The Green Power Purchase has enabled the organisation to reduce carbon footprint of 15,555 tCO2* (Ton of Carbon Emission).
Measurable Energy Conservation plan also led to energy saving of 6,292 MWh. The HVAC related interventions contributed around 48% of the total energy savings from measurable activities.
b) Chiller and AHU Operational Performance Improvement
Effective Operation of Chiller and AHUs in all Major facilities including "Chiller interconnection between two substations to operate either of chillers from both the substations at SEZ CHN" helped the Company to save energy of 3,037 MWh during the financial year 2018-19 and further reduce carbon footprint of 2,490 tCO2* (Ton of Carbon Emission).
Water cooled chillers have been installed at most locations which consume lesser power than air cooled chillers. Air cooled chillers are installed only in water deficit areas. VFDs (Variable Frequency Drives) are also being used in AHUs which result in lower power consumption by regulating the frequency of the motor depending on the return air temperature which is an indicator of the occupancy and heat load.
c) Effective Utilization of UPS
Effective utilization of existing UPS systems by increasing their efficiency through shutdown of overcapacity UPSs at two major locations (i.e. Bangalore and Chennai) led to saving of 438 MWh of absolute energy consumption in this financial year and helped to reduce 360 tCO2e* (Ton of Carbon Emission) of carbon footprint.
d) Effective Utilization of Lighting
Energy savings accrued in the financial year 2018-19 towards "Efficient lighting controls" led to saving of 2,642 MWh of absolute energy consumption in the financial year 2018-19 which helped the organization to reduce carbon footprint of 2,167 tCO2e* (Ton of Carbon Emission).
Annual Report 2018-19 151
e) Voltage Optimisation
The line voltage plays a major role on operating efficiency and power factor. The voltage optimization is possible, whenever electrical operates in lightly loaded condition to improve its efficiency. The supply voltage is adjusted with the help of tap position in the transformer to optimize the power consumption in lightly loaded electrical systems. This helped the organization to save 131 MWh of absolute energy consumption in the financial year 2018-19 in NCR and reduce 107 tCO2e* (Ton of Carbon Emission) of carbon footprint.
f) Lift Operations optimization
To conserve the environment by adopting "Go Green Initiatives" and increase operational efficiency, revised operating schedule of lifts during week days and weekends in major campuses undertaken. This helped the Company to save 44 MWh of absolute energy consumption in the financial year 2018-19 and reduce 36 tCO2e* (Ton of Carbon Emission) of carbon footprint.
g) Solar Water Heating
Installation of Solar Hot Water System of 250 LPD capacity at one of the Madurai region facilities in Feb'19 helped to conserve 425 kWh of electric energy required from conventional heating (Electric Heater) to Heat water.
h) Water Conservation
Rain Water collection and usage and use of aerators in hand wash taps led to conserve ground water of 20,660 KL in the financial year 2018-19.
The above initiative helped the Company to reduce carbon foot print of 20,715 tCo2 due to its business activities as specified above in Section 2 b) of Principle 2.
6 Are the Emissions / Waste Yes, the emissions and waste generated at the Company are within the permissible generated by the Company limits. within the permissible limits given by CPCB / SPCB for An annual report of the total emission and total waste generated by the organization is the financial year being submitted by the Company to both CPCB and SPCB. reported?
7 Number of show cause / The Company has not received any show cause or legal notices from CPCB or SPCB legal notices received from during the financial year 2018-19. CPCB / SPCB which are pending (i.e. not resolved to satisfaction) as on end of Financial Year.
Principle 7: Businesses, when engaged in influencing public and regulatory policy, should do so in a responsible manner
1 Is your Company a member of any trade and Yes, the Company is the member of various Industry Associations
chamber or association? If Yes, Name only those / Chambers and bodies, of which the first mention comes of:
major ones that your business deals with.
World Economic Forum (WEF)
Ever since the Company has joined WEF at Davos, HCL has
always made its presence felt at the global platform of Thought
Leadership, Innovation and Technological Dialogues towards
the Humanitarian and Socio-Economic World Order. The latest
exaltation at WEF witnessed HCL launching its Vision 2030 and
host the choicest of the Global Leaders at HCL Pavilion.
152 Business Responsibility Report
NASSCOM HCL has been one of the founding members of National Association of Software Services Companies since 1999 and has extended its vitality towards the apex Chamber of Software Service Companies in India as well as across its Global Trade contours.
Confederation of Indian Industry (CII) The Company has remained members of CII from 1999; thereby abiding by the rules and regulations that cover the operations of CII as the apex chamber of commerce in India.
In addition, the Company is also an active member of most of the country specific trade bodies and associations like IGCC, IFCCI, AIMA and works very closely with DIT, Invest India, Sweden Trade and Invest, Invest in Denmark, Australian Trade and Investment Commission.
2 Have you advocated / lobbied through above Yes, the Company believes in the public good and rightly so as
associations for the advancement or improvement part of its responsible socio-economic behavior that is carried
of public good? Y / N. If yes specify the broad forward towards various platforms, advocacy channels and
areas (drop box: Governance and Administration, forums by way of lending Company's ideas, visions expertise and
Economic Reforms, Inclusive Development thought leadership.
Policies, Energy security, Water, Food Security,
Sustainable Business Principles, Others).
The Company has aligned itself with relevant organizations
who work in the larger business / social / environmental and
community interests. In addition, the Company also creates and
owns innovative pieces of work and solutions.
Principle 8: Businesses should support inclusive growth and equitable development
1 Does the Company have specified programmes / Yes, there are 4 flagship programs of HCL aimed at supporting
initiatives / projects in pursuit of the policy related inclusive growth and equitable development of the society. These
to Principle 8? If yes details thereof.
programs are as follows:
Annual Report 2018-19 153
154 Business Responsibility Report
HCL Foundation continues to realize its core belief of achieving inclusive socio-economic development through its four flagship programs:
1. HCL Samuday: This program is an outcome of HCL's commitment to uplift rural India. Started in 2015, HCL Samuday intends to develop a sustainable, scalable, and replicable model a source code for economic and social development of rural areas in partnership with Central and State Governments, local communities, NGOs, knowledge institutions and allied partners. The objective of this program is achieved through optimal interventions across Agriculture, Education, Health, Infrastructure, Livelihood, and WASH (Water, Sanitation and Hygiene) sectors in selected villages. The program is designed to help local communities identify their problems, co-create solutions, and then implement these solutions with professional support from team Samuday. This approach helps lending the dimension of sustainability and ownership to the whole vision of development.
HCL Samuday is currently implemented in three blocks in Uttar Pradesh Kachhauna, Behender and Kothawana and is operational in 765 villages across 164 Gram Panchayats. The program is impacting over 600,000 people comprising of 90,000 households.
2. HCL Grant: This program aims at achieving sustainable rural development by supporting NGOs involved in pathbreaking work in India across three thematic categories of Environment, Education and Health. A grant of ` 5 crore is awarded to one NGO in each of the three categories every year. From Edition IV (2018-19) of HCL Grant, the Foundation has increased its annual commitment from ` 15 crore to ` 16.5 crore. Besides the ` 5 crore grant to recipient NGOs in each category, HCL Foundation also rewards the HCL Grant finalists with ` 25 lacs for a 1-year project which is mutually agreed with HCL Foundation.
Since its inception, HCL Grant has been able to commit ` 51.5 crore (US $ 7.25 Million) towards various high impact projects for community development. Through this commitment, HCL Grant aims to reach 10,15,033 people in 7,577 villages in 42 districts across 14 states of India through 15 HCL Grant partners. Out of this target the projects under this program have already covered 4,64,088 people. The projects financed under this program are operational in the states of Bihar, Uttar Pradesh, Rajasthan, Gujarat, West Bengal, Karnataka, Andhra Pradesh, Odisha, Jharkhand, Maharashtra, Tamil Nadu, Nagaland, Meghalaya, Jammu & Kashmir and Madhya Pradesh.
3. HCL Uday: HCL addresses its corporate social responsibility towards its immediate neighborhood through `HCL Uday'. This program reaches out to the areas that are faced with challenges of urbanization and inability of communities to cope up. HCL Uday is currently reaching out to 3,48,939 people through operations across 11 cities of India where HCL has a presence. The programs follows an Integrated Community Development Approach (ICDA) to design inclusive and sustainable community based solutions through interventions focused on Education, Health (including WASH), Livelihood and Environment using the Life Cycle Approach to break the cycle of poverty. This is achieved through the following projects:
i) My Community ii) My School iii) My Scholar iv) My Worth
In the financial year 2018-19, 1,16,011 people benefited through the education related initiatives of HCL Foundation that focus on early childhood care, development of children below 6 years, bridge and remediation support to out of school children, comprehensive technology-based quality enhancement of government schools, adult literacy and life skill based transformation programs for youth and adolescents.
Through the skill development initiatives, 4,041 youth were trained in various trades like mechanical, Information Technology Enabled Services (ITES) / Customer Relationship Management (CRM), fashion designing and nursing. 1,55,442 people benefited through the health, nutrition and WASH interventions that include monthly health camps, weekly checkups, community healthcare programs, mass sanitation and cleanliness drives.
Under the environment pillar, 46,520 trees were planted in schools, residential spaces, public spaces and at the Sorkha Uday Upvan. 7.5 ton materials have been provided as assistance in the form of immediate relief in the recent floods in the Assam, Kerala and the Gaja Cyclone affected region in Tamil Nadu, supporting a total number of 73,445 people in the financial year 2018-19.
4. Power of One:This is a voluntary payroll giving program under which over 36,000 employees contribute ` 1/2/5 per day towards the social and economic upliftment of vulnerable communities. These funds are used to provide scholarship support to 188 (16 with special need) academically bright students from low income families from NCR, Chennai, Bangalore, Madurai, Hyderabad, Vijayawada, and 50 sports scholars for exceptional performance across various sports such as football, chess, badminton, kabaddi and athletics. The HCL Community Champions have shown great commitment towards all volunteer-based activities of HCL Foundation and have clocked over 1,00,000 volunteering hours.
Annual Report 2018-19 155
Community Initiatives in other geographies:
The Company also reached out to local communities in different geographies. Details of the initiatives adopted in different geographies are given below:
The United States
HCL America Inc. (HCLA) is supporting SOS Children's Villages by: · providing medical and nutrition support · undertaking educational programs (STEM programming) · providing emergency relief to children and families vulnerable
to natural disasters
HCLA's sponsorship of Code the Dream, an initiative by Uniting NC, is supporting free coding education classes for youth from socially and economically compromised backgrounds. HCLA is supporting NPower Technologies for improving employability of youth and war veterans by providing them skill development trainings and opportunities through internships and job placements. HCLA employees also contribute to the local community by taking part in autism and breast cancer awareness walks, food packaging events, building houses through Habitat for Humanity, blood donation drives as well as food and toy distribution drives.
The United Kingdom
HCL Great Britain Ltd.has been working with The Prince's Trust for the past 5 years by helping disadvantaged young people in getting trained in technology, life skills and career skills. Through the `Get Started with Technology' series, young people were trained in mobile application development and digital learning skills. This is aimed at improving their employability in the long run.
South Africa
HCL is promoting a high-quality technology-enabled environment for students at the University of Johannesburg (UJ). This is being done through a fully-equipped Electrical Engineering Computer Lab and supporting bursaries to Computer Science students. HCL is supporting Nelson Mandela Foundation by sponsoring the Mandela Day Library Project as part of Literacy program in local schools and training of teachers to use the space to educate community children. 2 Are the programmes / projects undertaken through All the programmes and projects are undertaken through HCL in-house team / own foundation / external NGO / Foundation in collaboration with HCL employees, customers and government structures / any other organization? external NGOs. For details, please refer http://www.hclfoundation. org/
156 Business Responsibility Report
3 Have you done any impact assessment of your Yes, HCL Foundation carries out impact assessment of various
initiative?
initiatives undertaken by it. For the purpose of assessing the
impact of these initiatives, HCL Foundation has identified various
indicators under different focus areas. It has also developed
various tools and monitoring mechanisms to ensure the
achievement of these indicators. Stakeholders' engagement and
consultation is also taken during all such impact assessments.
Funds Utilization Certificates (FUC) and Audit Reports are two primary instruments used to monitor the expenditure of the projects undertaken. The quarterly reports and half-yearly reports furnished by Company's implementing partners are studied carefully and verified through field visits by field and programme officers. Case studies are collected for all the projects and informal feedback sessions are held with the beneficiaries to understand their satisfaction levels. Besides this, members of the senior management of the Company undertake surprise visits to understand the overall impact of community initiatives. The periodic field audits are supplemented by the regular interaction between HCL volunteers and the community members. All these checks help HCL Foundation in understanding gaps in the implementation of the community initiatives and to timely bridge these identified gaps.
During the reporting period, the Company engaged an external agency for evaluation of its urban community development programs. The objectives of the external evaluation were:
To appreciatively enquire all interventions under the urban community development program;
To understand the approaches and processes undertaken by the partner NGOs in implementing these interventions; and
To evaluate the impact created by these interventions.
The research process consisted of primary and secondary research involving interviews with HCL Foundation, senior management, project staff, partner NGOs, nodal officer in charge of implementation, external stakeholders and beneficiaries. It further involved evaluation of project documents of HCL Foundation and partner NGOs. The findings were presented to HCL Foundation for making necessary changes in the intervention and for future reference.
4 What is your Company's direct contribution to During the year, the Company has contributed ` 125.45 crore for
community development projects- Amount in INR CSR activities. For details of the expenditure, refer to Annexure
and the details of the projects undertaken?
4 of the Director's Report which forms part of the Annual Report.
The community development initiatives undertaken by HCL
Foundation are aligned to Schedule VII of the Companies Act,
2013, sustainable development goals and various national
missions.
Annual Report 2018-19 157
List of all such community initiatives undertaken by HCL Foundation are given below: Eradicating hunger, poverty and malnutrition, promoting
healthcare including preventive health care and sanitation and making available safe drinking water; Promoting education including special education and skill development trainings for children, women, elderly and the differently abled besides livelihood enhancement projects; Promoting gender equality, empowering women, setting up homes and hostels for women and orphans, setting up old age homes, day care centres and such other facilities for senior citizens; Undertaking measures for reducing inequalities faced by socially and economically backward groups; Ensuring environmental sustainability and ecological balance, protecting flora and fauna, promoting animal welfare and agro-forestry, conserving natural resources and maintaining quality of soil, air and water; Protecting national heritage, art and culture including restoration of monuments and sites of historical importance and works of art, setting up public libraries, promoting and developing traditional arts and handicrafts; Undertaking measures for the benefit of armed forces veterans, war widows and their dependents; Providing trainings for promotion of rural sports, nationally recognized sports, Paralympics' sports and Olympic sports through HCL Uday and HCL Samuday; and Undertaking rural development projects through HCL Grant and HCL Samuday
5 Have you taken steps to ensure that this community The objective of the community initiatives undertaken by HCL development initiative is successfully adopted by Foundation is to create positive and sustainable impacts in the the community? Please explain in 50 words, or so. lives of the communities in the long run. This is possible only when the communities adopt the initiatives of HCL Foundation and incorporate them in their daily lives. Various measures taken by the Foundation to facilitate this successful adoption of community initiatives are:
Improving community ownership through identification and capacity building of community leaders for sustaining and perpetuating these initiatives;
Linking available systems like government initiatives and plans with the HCL's community initiatives by promoting convergence; and
Developing action plan to promote community awareness and exposure, building road map for creating positive impact, engaging HCL volunteers, creating manuals for various sectors etc.
158 Business Responsibility Report
Principle 9: Businesses should engage with and provide value to their customers and consumers in a responsible manner
1 What percentage of customer complaints / The Company has 8 customer cases open as on March 31, consumer cases are pending as on the end of 2019. financial year?
2 Does the Company display product information NA on the product label, over and above what is mandated as per local laws? Yes / No / N.A. / Remarks (additional information).
3 Is there any case filed by any stakeholder against The Company has not registered any significant complaints in
the Company regarding unfair trade practices, the said category during the financial year 2018-19.
irresponsible advertising and / or anti-competitive behavior during the last five years and pending as on end of financial year? If so, provide details thereof, in about 50 words or so.
Besides, the robust mechanism of Company's internal checks and balances places an un-denying responsibility on the leadership and teams to drive the soul of the policies on sustainable basis. This reduces the possibility of any pilferages.
4 Did your Company carry out any consumer survey Yes, the Company completely understands the criticality and
/ consumer satisfaction trends?
significance of the knowledge pertaining to its presence, markets,
key market drivers, customer line-up and their satisfaction. It
is henceforth, of utmost importance for the Company to place
extreme and necessary imperatives on its consumer segment.
The Company has Customer Advisory Council that meets twice a year to deliberate upon and present their recommendations on Company's strategies. The Company has been awarded with Forrester Groundwell Award in the "Business-to-Business Embracing Category". The surveys that we do are carried out by the 3rd party.
It is indeed a matter of pride for the Company that in the subject financial year, HCL concluded the annual CSAT for over 500+ key accounts covering over 3000+ global customers.
High responses have been received from industry in each of the LOB with the organization clocking a record 78% response.
The Company has been able to sustain high CSAT in over 80% of the top accounts. The CSAT score in the financial year 2018-19 stands at 63.6 vis-à-vis 66.6 for the financial year 2017-18; on a scale of -100 to +100.
Annual Report 2018-19 159
Standalone Ind AS
Financial Statements
INDEPENDENT AUDITOR'S REPORT
To the Members of HCL Technologies Limited
Report on the Audit of the Standalone Financial Statements
Opinion We have audited the accompanying standalone financial statements (Ind AS financial statement) of HCL Technologies Limited ("the Company"), which comprise the Balance sheet as at March 31,2019, the Statement of Profit and Loss, including the statement of Other Comprehensive Income, the Cash Flow Statement and the Statement of Changes in Equity for the year then ended, and notes to the financial statements, including a summary of significant accounting policies and other explanatory information.
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, as amended ("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 March 31, 2019, its profit including other comprehensive income its cash flows and the changes in equity for the year ended on that date.
Basis for Opinion We conducted our audit of the standalone financial statements in accordance with the Standards on Auditing (SAs),as specified under section 143(10) of the Act. Our responsibilities under those Standards 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 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 audit 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 for the financial year ended March 31, 2019. 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. For each matter below, our description of how our audit addressed the matter is provided in that context.
We have determined the matters described below to be the key audit matters to be communicated in our report. We have fulfilled the responsibilities described in the Auditor's responsibilities for the audit of the standalone financial statements section of our report, including in relation to these matters. Accordingly, our audit included the performance of procedures designed to respond to our assessment of the risks of material misstatement of the standalone financial statements. The results of our audit procedures, including the procedures performed to address the matters below, provide the basis for our audit opinion on the accompanying standalone financial statements.
Key audit matters
How our audit addressed the key audit matter
Accuracy of recognition, measurement, presentation and disclosures of revenues and impact of adoption of Ind AS 115 "Revenue from Contracts with Customers" (new revenue accounting standard)(as described in note 1(f) and 2.19 of
the standalone financial statements)
The Company has adopted Ind AS 115 "Revenue from We assessed the company's process to identify the recognition
Contracts with Customers" starting 1 April 2018. The application of revenue for fixed price contract, accounting for distinctive
of the new revenue accounting standard involves certain key terms in arrangements and impact of adoption of the new
judgements and principles for evaluating various distinctive revenue accounting standard. Our audit approach consisted
terms/matters.
testing of the design and operating effectiveness of the internal
controls and substantive testing on sample as follows:
The Company also derives portion of its revenue from long-term Evaluated the design of internal controls.
and fixed price projects. Estimated effort is a critical estimate to determine revenues for fixed price contract. This estimate has a high inherent uncertainty as it requires consideration of
Selected samples and tested the operating effectiveness of the internal control.
progress of the contract, efforts incurred till date, efforts required Tested relevant information technology systems' controls
to complete the remaining contract performance obligations.
relating to contracts and related information used in
recording and disclosing revenue.
Tested continuing and new contracts and performed the following procedures to assess management analysis and impact of Ind AS 115 adoption:
Annual Report 2018-19 161
Key audit matters
How our audit addressed the key audit matter Read, analyzed and identified the distinct performance obligations in these contracts.
Compared these performance obligations with that identified and recorded by the Company.
Considered the terms of the contracts and assessed the transaction price including any variable consideration to test revenue.
Further, In respect of fixed price contracts, progress towards completion of performance obligation used to compute revenue was verified based on actual cost relative to estimated cost from the information technology systems. Also reviewed cost incurred with estimated cost to identify significant variations and reasons and to verify whether those variations have been considered in estimating the remaining cost to complete the contract.
Assessed management analysis of various distinctive terms in order to test appropriateness of revenue recognition.
Assessed the appropriateness of the disclosure made
pursuant to new revenue accounting standard.
Evaluation of tax positions (as described in note 2.33 of the standalone financial statements)
The Company has material tax positions and matters under We performed the following procedures:
dispute which involves significant judgment to determine the possible outcomes and are complex in nature. Accordingly,
these positions and disputed matters are determined to be a
key audit matter in our audit.
Assessed the company's process for identifying tax positions and disputed matters the related accounting policy of provisioning for these exposures.
Obtained details of tax positions and disputed matters for
the year and as at March 31, 2019 from management.
Involved our internal specialist to test the management's underlying assumptions in estimating the tax provision/ benefits and the possible outcome of the tax positions and matters.
Our internal specialist also considered legal precedence and other rulings and legal opinions obtained by the management in evaluating position on these tax positions.
Discussed disputed matters with management and obtained management specialist opinion for significant matters.
We have also assessed the impact of any change in existing positions as of April 1, 2018 to evaluate whether any change was required to management's position.
Impairment assessment of intangible (as described in note 1(i), 1(n) and 2.3 of the Standalone financial statements) As required by Ind AS 38 Intangible Assets, the Company tests For impairment of intangibles we reviewed impairment analysis Licensed IPR's and customer relationships for impairment performed by the management. In addition, we considered annually in accordance with Ind AS 36 Impairment of Assets. whether any indicators of impairment were present by
understanding the business rationale for intangibles. The risk for the standalone financial statements relates to the appropriateness of the determination and recognition of impairments.
162 Standalone Financial Statements
Other Information
The Company's Board of Directors is responsible for the other information. The other information comprises the information included in the Management Discussion and Analysis, Director's Report including annexures, Corporate Governance Report and Business Responsibility Report, but does not include the standalone financial statements and our auditor's 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 such 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.
Responsibilities of Management for the Standalone Financial Statements
The Company's Board of Directors is 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 financial position, financial performance including other comprehensive income, cash flows and changes in equity 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 read with the Companies (Indian Accounting Standards) Rules, 2015, as amended. 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 the 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 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, management is 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 management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.
Those Board of Directors are 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 the Company has adequate internal financial controls system 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 made by management.
Conclude on the appropriateness of management's 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 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.
Annual Report 2018-19 163
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 for the financial year ended March 31, 2019 and are therefore the key audit matters. We describe these matters in our auditor's 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 (Auditor's Report) Order, 2016 ("the Order"), issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act, we give in the "Annexure 1"a statement on the matters specified in paragraphs 3 and 4 of the Order.
2. 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;
specified under Section 133 of the Act, read with Companies (Indian Accounting Standards) Rules, 2015, as amended;
(e) On the basis of the written representations received from the directors as on March 31, 2019 taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2019 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 over financial reporting of the Company with reference to these standalone financial statements and the operating effectiveness of such controls, refer to our separate Report in "Annexure 2" to this report;
(g) In our opinion, the managerial remuneration for the year ended March 31, 2019 has been paid / provided by the Company to its directors in accordance with the provisions of section 197 read with Schedule V to the Act;
(h) With respect to the other matters to be included in the Auditor's Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, as amended 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 on its financial position in its standalone financial statements;
ii. The Company has made provision, as required under the applicable law or accounting standards, for material foreseeable losses, if any, on longterm contracts including derivative contracts;
iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company;
(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 including the Statement of Other Comprehensive Income, the Cash Flow Statement and Statement of Changes in Equity dealt with by this Report are in agreement with the books of account;
For S.R. Batliboi & CO. LLP Chartered Accountants ICAI Firm Registration Number: 301003E/E300005
per Nilangshu Katriar Partner Membership Number: 58814
(d) In our opinion, the aforesaid standalone financial Place of Signature: Gurugram statements comply with the Accounting Standards Date: May 9, 2019
164 Standalone Financial Statements
Annexure 1 referred to in paragraph 1 of the section on "Report on Other Legal and Regulatory Requirements" of our report of even date Re: HCL Technologies Limited (the Company)
(i) (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets.
records under clause 148(1) of the Companies Act, 2013, for the products/services of the Company.
(vii) (a) The Company is regular in depositing with appropriate authorities undisputed statutory dues including provident fund, employees' state insurance, incometax, goods and service tax, duty of custom, cess and other statutory dues applicable to it.
(b) All fixed assets were physically verified by the management in accordance with a planned programme of verifying them in phased manner 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. No material discrepancies were noticed on such verification conducted during the financial year.
(c) According to the information and explanations given by the management, the title deeds of immovable properties included in property, plant and equipment are held in the name of the Company.
(ii) The inventory has been physically verified by the management during the year. In our opinion, the frequency of verification is reasonable. No material discrepancies were noticed on such physical 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 confirmations.
(b) According to the information and explanations given to us, no undisputed amounts payable in respect of provident fund, employees' state insurance, incometax, goods and service tax,duty of custom, 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 except for service tax as below:
Name of the Statute
Nature of Dues
Amount
(in Crores of `)
Period to which the amount
relates
Finance Act 1994, read with Service Tax Rules, 1994*
Service tax
6.00
2010-11 to 2014-15
Due Date
06-Feb-17
Date of Payment
Not Paid
* As informed by Management, the Company has filed a writ petition before the Bombay High Court on 19 March 2018 which is not yet accepted by the High Court yet. The writ petition has been filed because time limit to file appeal with the Commissioner, Appeals was lapsed.
(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 Companies Act, 2013. Accordingly, the provisions of clause 3(iii)(a), (b) and (c) of the Order are not applicable to the Company and hence not commented upon.
(iv) In our opinion and according to the information and explanations given to us, provisions of section 186 of the Companies Act 2013 in respect of loans given have been complied with by the Company. In our opinion and according to the information and explanations given to us, there are no loans, investments, guarantees, and securities given in respect of which provisions of section 185 of the Companies Act 2013 are applicable and hence not commented upon.
(v) The Company has not accepted any deposits within the meaning of Sections 73 to 76 of the Act and the Companies (Acceptance of Deposits) Rules, 2014 (as amended). Accordingly, the provisions of clause 3(v) of the Order are not applicable.
(vi) To the best of our knowledge and as explained, the Central Government has not specified the maintenance of cost
(c) According to the records of the Company, the dues of income-tax, service tax, duty of custom, duty of excise and provident fund on account of any dispute, are as follows:
Name of the Statute
Nature of Dues
Income Tax Act, 1961 Income Tax Income Tax Act, 1961 Income Tax Income Tax Act, 1961 Income Tax Income Tax Act, 1961 Income Tax Income Tax Act, 1961 Income Tax Income Tax Act, 1961 Income Tax Income Tax Act, 1961 Income Tax Income Tax Act, 1961 Income Tax Income Tax Act, 1961 Income Tax Income Tax Act, 1961 Income Tax Income Tax Act, 1961 Income Tax
Period to
Amount (in which the Forum where Crores of `) amount dispute is pending
relates
3.71
2014-15
Commissioner of Income Tax (Appeals)
4.06 2013-14 CIT(A), New Delhi
2.10
2012-13
Commissioner of Income Tax (Appeals)
21.58
2011-12
Commissioner of Income Tax (Appeals)
2.46
2010-11
Income Tax Appellate Tribunal
72.41
2009-10
Income Tax Appellate Tribunal
67.28
2008-09
Income Tax Appellate Tribunal
0.69
2008-09
Income Tax Appellate Tribunal
245.77
2006-07
Income Tax Appellate Tribunal
217.10
2005-06
Income Tax Appellate Tribunal
18.74
2004-05
Income Tax Appellate Tribunal
Annual Report 2018-19 165
Name of the Statute
Nature of Dues
Income Tax Act, 1961 Income Tax Income Tax Act, 1961 Income Tax Income Tax Act, 1961 Income Tax Income Tax Act, 1961 Income Tax Income Tax Act, 1961 Income Tax Income Tax Act, 1961 Income Tax Income Tax Act, 1961 Income Tax Income Tax Act, 1961 Income Tax Income Tax Act, 1961 Income Tax Income Tax Act, 1961 Income Tax Income Tax Act, 1961 Income Tax Income Tax Act, 1961 Income Tax Income Tax Act, 1961 Income Tax Income Tax Act, 1961 # Income Tax Income Tax Act, 1961 # Income Tax Income Tax Act, 1961 # Income Tax Income Tax Act, 1961 # Income Tax Income Tax Act, 1961 # Income Tax Income Tax Act, 1961 # Income Tax Income Tax Act, 1961 # Income Tax Income Tax Act, 1961 * Income Tax Income Tax Act, 1961 * Income Tax Income Tax Act, 1961 * Income Tax Income Tax Act, 1961 * Income Tax Income Tax Act, 1961 * Income Tax Income Tax Act, 1961 * Income Tax Income Tax Act, 1961 * Income Tax Income Tax Act, 1961 * Income Tax
Customs Act, 1962
Custom Duty
Customs Act, 1962 *
Custom Duty
Amount (in Crores of `)
Period to which the amount
relates
Forum where dispute is pending
1.83
2004-05
Income Tax Appellate Tribunal
15.95
2004-05
Income Tax Appellate Tribunal
6.97 2004-05 Supreme Court
0.55
2004-05
Commissioner of Income Tax (Appeals)
2.24 2003-04 Delhi High Court
4.22
2003-04
Income Tax Appellate Tribunal
2.34 2003-04 Supreme Court
7.28
2003-04
Commissioner of Income Tax (Appeals)
3.09 2002-03 Supreme Court
13.75
2002-03
Income Tax Appellate Tribunal
0.21 2002-03 Delhi High Court
9.14
2001-02
Income Tax Appellate Tribunal
0.36 2000-01 Delhi High Court
0.01
2011-12
Income Tax Appellate Tribunal
1.40
2010-11
Income Tax Appellate Tribunal
20.72
2009-10
Income Tax Appellate Tribunal
0.32
2008-09
Income Tax Appellate Tribunal
0.46
2007-08
Income Tax Appellate Tribunal
13.66
2005-06
Income Tax Appellate Tribunal
0.08
2004-05
Income Tax Appellate Tribunal
15.66
2013-14
Income Tax Appellate Tribunal
6.39
2012-13
Income Tax Appellate Tribunal
13.13
2011-12
Income Tax Appellate Tribunal
5.01
2010-11
Income Tax Appellate Tribunal
20.84
2009-10
Income Tax Appellate Tribunal
32.15
2008-09
Income Tax Appellate Tribunal
6.99
2007-08
Income Tax Appellate Tribunal
20.28
2006-07
Income Tax Appellate Tribunal
Common Adjudicating
0.27
2006-07
Authority (Directorate of Revenue
Intelligence)
Office of Assistant 0.12 2009-14 Commissioner of
Customs
Name of the Statute
Nature of Dues
Customs Act, 1962 *
Custom Duty
Customs Act, 1962 *
Custom Duty
Customs Act, 1962 *
Custom Duty
Customs Act, 1962 *
Custom Duty
Customs Act, 1962 *
Custom Duty
Customs Act, 1962 *
Custom Duty
Customs Act, 1962 *
Custom Duty
Finance Act 1994, read with Service Tax Rules, Service Tax 1994
Finance Act 1994, read with Service Tax Rules, Service Tax 1994
Finance Act 1994, read with Service Tax Rules, Service Tax 1994
Finance Act 1994, read with Service Tax Rules, Service Tax 1994
Finance Act 1994, read with Service Tax Rules, Service Tax 1994
Finance Act 1994, read with Service Tax Rules, Service Tax 1994
Finance Act 1994, read with Service Tax Rules, Service Tax 1994
Finance Act 1994, read with Service Tax Rules, Service Tax 1994*
Central Excise Act 1944 Excise Duty
Central
Board Trustees
*
Provident fund
Amount (in Crores of `)
Period to which the amount
relates
Forum where dispute is pending
Office of Assistant 0.26 2009-14 Commissioner of
Customs
Office of Assistant 6.87 2007-08 Commissioner of
Customs
Office of Assistant 0.01 1999-00 Commissioner of
Customs
Office of Assistant 1.12 1998-99 Commissioner of
Customs
Office of Assistant 2.41 1997-99 Commissioner of
Customs
Office of Assistant 6.88 1997-98 Commissioner of
Customs
Office of Assistant 0.08 1997-98 Commissioner of
Customs
4.04 2013-15 High Court
0.13 2012-15
Commissioner, Appeals
14.52 2010-13 High Court
Customs, Excise, 0.10 2009-10 Service Tax Appellant
Tribunal, Allahabad
Customs, Excise, 0.30 2006-11 Service Tax Appellant
Tribunal, Allahabad
7.21 2006-07
Commissioner (Appeals)
0.94 2006-07 High Court
0.48
2007-08 to 2011-12
Commissioner (Appeals)
Commissioner 3.22 2011-12 Appeals, Central
Excise, Chennai
4.30 1996-14 Bombay High Court
Above amount represents total demand inclusive of interest. Total amount deposited / adjusted in respect of Income tax is ` 139.48 Crores, Custom Duty ` 7.13 Crores, Service tax is ` 4.44 Crores and Provident Fund is ` 0.89 Crores.
# Pursuant to scheme for demerger of IT enabled business of HCL Comnet Systems & Services Limited in FY 2012 13.
* Pursuant to acquisition of demerged business of Geometric Limited in FY 2016-17.
166 Standalone Financial Statements
(viii) In our opinion and according to the information and explanations given by the management, the Company has not defaulted in repayment of loans or borrowing to a bank. The Company did not have any outstanding loans or borrowing dues in respect of financial institution or government or dues to debenture holders during the year.
(xiii) According to the information and explanations given by the management, transactions with the related parties are in compliance with section 177 and 188 of Companies Act, 2013 where applicable and the details have been disclosed in the notes to the financial statements, as required by the applicable accounting standards.
(ix) According to the information and explanations given by the management, the Company has not raised any money way of initial public offer / further public offer / debt instruments hence, reporting under clause (ix)is not applicable to the Company and hence not commented upon. In our opinion and according to information and explanations given by the management, term loans were applied for the purpose for which they were raised.
(x) Based upon the audit procedures performed for the purpose of reporting the true and fair view of the financial statements and according to the information and explanations given by the management, we report that no fraud by the Company or no fraud / material fraud on the Company by the officers and employees of the Company has been noticed or reported during the year.
(xiv) According to the information and explanations given to us and on an overall examination of the balance sheet, the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year under review and hence, reporting requirements under clause 3(xiv) are not applicable to the Company and, not commented upon.
(xv) According to the information and explanations given by the management, the Company has not entered into any noncash transactions with directors or persons connected with him as referred to in section 192 of Companies Act, 2013.
(xvi) According to the information and explanations given to us, the provisions of section 45-IA of the Reserve Bank of India Act, 1934 are not applicable to the Company.
(xi) According to the information and explanations given by the management, the managerial remuneration has been paid / provided in accordance with the requisite approvals mandated by the provisions of section 197 read with Schedule V to the Companies Act, 2013.
(xii) In our opinion, the Company is not a nidhi Company. Therefore, the provisions of clause 3(xii) of the order are not applicable to the Company and hence not commented upon.
For S.R. Batliboi & CO. LLP Chartered Accountants ICAI Firm Registration Number: 301003E/E300005
per Nilangshu Katriar Partner Membership Number: 58814
Place of Signature: Gurugram Date: May 9, 2019
Annual Report 2018-19 167
ANNEXURE 2 TO THE INDEPENDENT AUDITOR'S REPORT OF EVEN DATE ON THE STANDALONE FINANCIAL STATEMENTS OF HCL TECHNOLOGIES LIMITED
Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013, as amended ("the Act")
We have audited the internal financial controls over financial reporting of HCL Technologies Limited ("the Company") as of March 31, 2019 in conjunction with our audit of the standalone financial statements of the Company for the year ended on that date.
Management's Responsibility for Internal Financial Controls
The Company's Management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting 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. 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 the 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, as amended.
Auditor's Responsibility
Our responsibility is to express an opinion on the Company's internal financial controls over financial reporting with reference to these standalone financial statements based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the "Guidance Note") and the Standards on Auditing as specified under section 143(10) of the Companies Act, 2013, as amended, to the extent applicable to an audit of internal financial controls and, both issued by the Institute of Chartered Accountants of India. 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 over financial reporting with reference to these standalone financial statements was established and maintained and if 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 over financial reporting with reference to these standalone financial statements and their operating effectiveness. Our audit
of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting with reference to these standalone financial statements, 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 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 internal financial controls over financial reporting with reference to these standalone financial statements.
Meaning of Internal Financial Controls Over Financial Reporting With Reference to these Financial Statements
A company's internal financial control over financial reporting with reference to these standalone financial statements is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company's internal financial control over financial reporting with reference to these standalone financial statements includes 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 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 financial statements.
Inherent Limitations of Internal Financial Controls Over Financial Reporting with Reference to these Standalone Financial Statements
Because of the inherent limitations of internal financial controls over financial reporting with reference to these 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 over financial reporting with reference to these standalone financial statements to future periods are subject to the risk that the internal financial control over financial reporting with reference to these standalone financial statements may become inadequate because of changes in conditions, or that
168 Standalone Financial Statements
the degree of compliance with the policies or procedures may Over Financial Reporting issued by the Institute of Chartered
deteriorate.
Accountants of India.
Opinion
In our opinion, the Company has, in all material respects, adequate internal financial controls over financial reporting with reference to these standalone financial statements and such internal financial controls over financial reporting with reference to these standalone financial statements were operating effectively as at March 31, 2019, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls
For S.R. Batliboi & CO. LLP Chartered Accountants ICAI Firm Registration Number: 301003E/E300005
per Nilangshu Katriar Partner Membership Number: 58814
Place of Signature: Gurugram Date: May 9, 2019
Annual Report 2018-19 169
Balance Sheet as at 31 March 2019
(All amounts in crores of `)
I. ASSETS (1) Non-current assets (a) Property, plant and equipment (b) Capital work in progress (c) Goodwill (d) Other intangible assets (e) Financial assets (i) Investments (ii) Loans (iii) Others (f) Deferred tax assets (net) (g) Other non-current assets (2) Current assets (a) Inventories (b) Financial assets (i) Investments (ii) Trade receivables (iii) Cash and cash equivalents (iv) Other bank balances (v) Loans (vi) Others (c) Other current assets
TOTAL ASSETS
II. EQUITY (a) Equity share capital (b) Other equity
TOTAL EQUITY
III. LIABILITIES (1) Non - current liabilities (a) Financial liabilities (i) Borrowings (ii) Others (b) Provisions (c) Other non-current liabilities (2) Current liabilities (a) Financial liabilities (i) Trade payables (ii) Others (b) Other current liabilities (c) Provisions (d) Current tax liabilities (net)
TOTAL EQUITY AND LIABILITIES Summary of significant accounting policies The accompanying notes are an integral part of the financial statements
Note No.
As at 31 March 2019
As at 31 March 2018
2.1
2.2 2.3
2.4 2.5 2.6 2.25 2.7
2.8
2.4 2.9 2.10(a) 2.10(b) 2.5 2.6 2.11
2.12
3,507 212 550
7,178
3,808 355 309
2,107 723
18
2,002 6,245 4,523 1,750 1,244 2,275
650
37,456
271 30,168 30,439
3,293 298 550
6,585
4,068 235 166
1,506 669
40
2,130 5,427
210 2,115 3,438 1,541
547
32,818
278 27,285 27,563
2.13
32
33
2.14
1
2
2.15
553
471
2.16
52
56
2.17
2,367
544
2.14
2,301
2,866
2.18
901
608
2.15
141
129
669
546
37,456
32,818
1
As per our report of even date
FOR S. R. BATLIBOI & CO. LLP ICAI Firm Registration Number : 301003E/E300005 Chartered Accountants
per Nilangshu Katriar Partner Membership Number: 58814
For and on behalf of the Board of Directors of HCL Technologies Limited
Shiv Nadar Chairman and Chief Strategy Officer
S. Madhavan Director
C. Vijayakumar President and Chief Executive Officer
Gurugram, India 9 May 2019
Prateek Aggarwal Chief Financial Officer
Noida (UP), India 9 May 2019
Prahlad Rai Bansal Deputy Chief Financial Officer
Manish Anand Company Secretary
170 Standalone Financial Statements
Statement of Profit and Loss for the year ended 31 March 2019
(All amounts in crores of `)
I Revenue Revenue from operations Other income Total income
II Expenses Purchase of stock-in-trade Changes in inventories of stock-in-trade Employee benefits expense Finance costs Depreciation and amortization expense Outsourcing costs Other expenses Total expenses
Note No.
2.19 2.20
2.21 2.22 2.23 2.1 & 2.3 2.24
Year ended 31 March 2019
Year ended 31 March 2018
26,012 805
26,817
22,073 702
22,775
142 22
8,079 16
1,276 4,901 2,450 16,886
138 50
7,365 23
893 2,918 2,263 13,650
III Profit before tax IV Tax expense
Current tax Deferred tax credit Total tax expense
9,931
9,125
2.25
2,354
1,987
(608)
(224)
1,746
1,763
V Profit for the year
8,185
7,362
VI Other comprehensive income
2.26
(A) (i) Items that will not be reclassified to statement of profit and loss
(ii) Income tax on items that will not be reclassified to statement of profit and loss
(B) (i) Items that will be reclassified subsequently to statement of profit and loss
(ii) Income tax on items that will be reclassified subsequently to statement of profit and loss
VII Total other comprehensive income
13
35
(3)
(7)
18
(332)
(4)
78
24
(226)
VIII Total comprehensive income for the year
8,209
7,136
Earnings per equity share of ` 2 each
2.27
Basic (in `)
Diluted (in `)
Summary of significant accounting policies
1
The accompanying notes are an integral part of the financial statements
59.69 59.66
52.54 52.50
As per our report of even date
FOR S. R. BATLIBOI & CO. LLP ICAI Firm Registration Number : 301003E/E300005 Chartered Accountants
per Nilangshu Katriar Partner Membership Number: 58814
For and on behalf of the Board of Directors of HCL Technologies Limited
Shiv Nadar Chairman and Chief Strategy Officer
S. Madhavan Director
C. Vijayakumar President and Chief Executive Officer
Gurugram, India 9 May 2019
Prateek Aggarwal Chief Financial Officer
Noida (UP), India 9 May 2019
Prahlad Rai Bansal Deputy Chief Financial Officer
Manish Anand Company Secretary
Annual Report 2018-19 171
172 Standalone Financial Statements
Statement of Changes in Equity for the year ended 31 March 2019
(All amounts in crores of ` except share data and as stated otherwise)
Balance as at 1 April 2017 Profit for the year Other comprehensive income (refer note 2.26) Total comprehensive income for the year Dividend of ` 12 per share (including tax on dividend of ` 340 crores) Buyback of equity shares Expenses on buyback of equity shares Transfer to special economic zone re-
investment reserve Shares issued for exercised options Balance as at 31 March 2018 Balance as at 1 April 2018 Profit for the year Other comprehensive income (refer note 2.26) Total comprehensive income for the year Dividend of ` 8 per share (including tax on dividend of ` 222 crores) Buyback of equity shares Expenses on buyback of equity shares Transfer to special economic zone
re-investment reserve Transfer from special economic zone
re-investment reserve Shares issued for exercised options Balance as at 31 March 2019
Equity share capital
Other equity
Reserves and Surplus
Other comprehensive income
Number of Shares
Share capital
Retained earnings
General reserve
Securities premium
Capital reserve
Capital redemption
reserve
Share based payment reserve
Special economic zone reinvestment reserve
Foreign currency translation reserve"
Cash flow hedging reserve
Debt instruments through other comprehensive
income
Total other equity
1,426,783,424 285 19,268 2,639 3,244 120
-
21
-
(49) 445
- 25,688
-
- 7,362
-
-
-
-
-
-
-
-
- 7,362
-
-
28
-
-
-
-
-
-
54 (308)
- (226)
-
- 7,390
-
-
-
-
-
-
54 (308)
- 7,136
-
- (2,032)
-
-
-
-
-
-
-
-
- (2,032)
(35,000,000)
(7)
- (252) (3,248)
-
7
-
-
(14)
-
-
-
-
-
- (310)
-
-
-
-
-
-
-
-
-
310
-
-
-
-
-
-
- (3,493) (14) -
462,960 1,392,246,384 1,392,246,384
-
-
-
278 24,302
278 24,302
- 8,185
-
10
- 8,195
- (1,321)
2,387 2,387
-
9
-
5 120
5 120
-
-
-
-
-
-
-
-
-
(9)
-
-
-
7
12
310
5 137
7
12
310
5 137
-
-
-
-
-
-
-
-
(22)
34
-
-
-
(22)
34
-
-
-
-
-
-
-
- 27,285
- 27,285
- 8,185
2
24
2 8,209
- (1,321)
(36,363,636)
(7) (1,603) (2,387)
(10)
-
7
-
-
(12)
-
-
-
-
-
- (440)
-
-
-
-
-
-
-
-
-
440
-
-
-
-
-
-
- (3,993)
- (12)
-
-
-
-
310
-
-
-
-
-
(310)
-
-
-
-
396,120
-
-
-
7
-
-
1,356,278,868 271 29,431
-
2 120
14
(7)
-
-
-
5
440
(17) 171
-
-
2 30,168
Refer note 1 for summary of significant accounting policies
The accompanying notes are an integral part of the financial statements
As per our report of even date
FOR S. R. BATLIBOI & CO. LLP ICAI Firm Registration Number : 301003E/E300005 Chartered Accountants
per Nilangshu Katriar Partner Membership Number: 58814
For and on behalf of the Board of Directors of HCL Technologies Limited
Shiv Nadar Chairman and Chief Strategy Officer
S. Madhavan Director
C. Vijayakumar President and Chief Executive Officer
Gurugram, India 9 May 2019
Prateek Aggarwal Chief Financial Officer
Noida (UP), India 9 May 2019
Prahlad Rai Bansal Deputy Chief Financial Officer
Manish Anand Company Secretary
Statement of Cash flows
(All amounts in crores of `)
A. Cash flows from operating activities
Profit before tax
Adjustment for:
Depreciation and amortization
Interest income
Dividend income from subsidiaries
Provision for doubtful debts / bad debts (written back) written off, net
Income on investments carried at fair value through profit and loss
Profit on sale of investments carried at fair value through other comprehensive income
Interest expenses
Loss (profit) on sale of property, plant and equipment (net)
Other non cash charges (net)
Operating profit before working capital changes
Movement in working capital
(Increase) decrease in trade receivables
(Increase) decrease in inventories
(Increase) decrease in other financial assets and other assets
Increase (decrease) in trade payables
Increase (decrease) in provisions, other financial liabilities and other liabilities
Cash generated from operations
Direct taxes paid (net of refunds)
Net cash flow from operating activities
(A)
Year ended 31 March 2019
9,931
1,276 (531)
(17) (4)
(121) (17) 4 (3) 5
10,523
(820) 22
(1,006) 1,831 204
10,754 (2,078)
8,676
B. Cash flows from investing activities Investments in bank deposits Proceeds from bank deposits on maturity Purchase of investments in securities Proceeds from sale/maturity of investments in securities Deposits placed with body corporate Proceeds from maturity of deposits placed with body corporate Purchase of property, plant and equipment and intangibles Proceeds from sale of property, plant and equipment Proceeds from disposal off investment in subsidiary Proceeds from loans extended to group company Dividend received from subsidiaries Interest received Taxes paid Net cash flow from (used) in investing activities (B)
(1,750) 2,115
(23,188) 23,718 (1,355) 3,408 (2,326) 14 21 17 468 (147) 995
C. Cash flows from financing activities
Proceeds from long term borrowings
Repayment of long term borrowings
Buyback of equity shares
Expenses on buyback of equity shares
Dividend paid
Corporate dividend tax
Interest paid
Net cash flow used in financing activities
(C)
18 (16) (4,000) (12) (1,099) (222)
(4) (5,335)
Year ended 31 March 2018
9,125
893 (444)
(16) 25
(143) 5
(4) 91 9,532
(994) 50
(244) 48
(328) 8,064 (1,725) 6,339
(2,117) 7,615
(19,514) 18,180 (3,643) 2,500 (4,354) 15 2 16 476 (149) (973)
19 (16) (3,500) (14) (1,691) (340)
(5) (5,547)
Annual Report 2018-19 173
Statement of Cash flows
(All amounts in crores of )
Net increase (decrease) in cash and cash equivalents (A+B+C) Effect of exchange differences on cash and cash equivalents held in foreign currency Cash and cash equivalents at the beginning of the year Cash and cash equivalents at the end of the year as per note 2.10 (a)
Year ended 31 March 2019
4,336 (23) 210
4,523
Year ended 31 March 2018
(181) 39
352 210
Notes: 1. The total amount of income taxes paid is ` 2,225 crores (31 March 2018, ` 1,874 crores) 2. Cash and cash equivalents include investor education and protection fund-unclaimed dividend of ` 5 crores (31 March 2018,
` 5 crores). The Company can utilize these balances only towards settlement of the above mentioned liabilities.
As per our report of even date
FOR S. R. BATLIBOI & CO. LLP ICAI Firm Registration Number : 301003E/E300005 Chartered Accountants
per Nilangshu Katriar Partner Membership Number: 58814
For and on behalf of the Board of Directors of HCL Technologies Limited
Shiv Nadar Chairman and Chief Strategy Officer
S. Madhavan Director
C. Vijayakumar President and Chief Executive Officer
Gurugram, India 9 May 2019
Prateek Aggarwal Chief Financial Officer
Noida (UP), India 9 May 2019
Prahlad Rai Bansal Deputy Chief Financial Officer
Manish Anand Company Secretary
174 Standalone Financial Statements
Notes to financial statements for the year ended 31 March 2019
(All amounts in crores of `, except share data and as stated otherwise)
ORGANIZATION AND NATURE OF OPERATIONS
HCL Technologies Limited (hereinafter referred to as "the Company") is primarily engaged in providing a range of software development services, business process outsourcing services and IT infrastructure services. The Company was incorporated under the provisions of the Companies Act applicable in India in November 1991, having its registered office at 806, Siddharth, 96, Nehru Place, New Delhi- 110019. The Company leverages its extensive infrastructure and professionals to deliver solutions across select verticals including financial services, manufacturing (automotive, aerospace, Hi-tech, semi-conductors), life sciences & healthcare, public services (oil and gas, energy and utility, travel, transport and logistics), retail and consumer products, telecom, media, publishing and entertainment.
The financial statements for the year ended 31 March 2019 were approved and authorized for issue by the Board of Directors on 9 May 2019.
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(a) Basis of preparation
The financial statements of the Company have been prepared in accordance with Indian Accounting Standards (Ind AS) notified under the Companies (Indian Accounting Standards) Rules, 2015 (as amended from time to time.) and presentation requirements of Schedule III (Division II) to the Companies Act, 2013, as applicable to the financial statements.
These financial statements have been prepared under the historical cost convention on an accrual and going concern basis except for the following assets and liabilities which have been measured at fair value:
a) Derivative financial instruments,
b) Certain financial assets and liabilities (refer accounting policy regarding financial instruments),
The accounting policies adopted in the preparation of these financial statements are consistent with those of the previous year except where a newly issued accounting standard is initially adopted or a revision to an existing accounting standard requires a change in the accounting policy.
The Company uses the Indian rupee (``') as its reporting currency.
(b) Use of estimates
The preparation of financial statements in conformity with Ind AS requires the management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, expenses and other comprehensive income (OCI) that are reported and disclosed in the financial statements and accompanying notes. These estimates are based on the management's best knowledge of current events, historical experience, actions that the Company may undertake in the future and on various other assumptions that are believed to be reasonable under the circumstances. Significant estimates and assumptions are used for, but not limited to, accounting for costs expected to be incurred to complete performance under fixed price projects, allowance for uncollectible accounts receivables, accrual of warranty costs, income taxes, valuation of share-based compensation, future obligations under employee benefit plans, the useful lives of property, plant and equipment, intangible assets, impairment of goodwill,and other contingencies and commitments. Changes in estimates are reflected in the financial statements in the year in which the changes are made. Actual results could differ from those estimates.
(c) Business combinations and goodwill
Business combinations are accounted for using the acquisition method. The cost of an acquisition is the aggregate of the consideration transferred measured at fair value at the acquisition date. Acquisition related costs are expensed as incurred.
Any contingent consideration to be transferred by the acquirer is recognized at fair value at the acquisition date. Contingent consideration classified as financial liability is measured at fair value with changes in fair value recognized in the statement of profit and loss.
Annual Report 2018-19 175
Notes to financial statements for the year ended 31 March 2019
(All amounts in crores of `, except share data and as stated otherwise)
Goodwill is initially measured at cost, being the excess of the aggregate of the consideration transferred over the net identifiable assets acquired and liabilities assumed. If the fair value of the net assets acquired is in excess of the aggregate consideration transferred, the excess is recognized as capital reserve after reassessing the fair values of the net assets.
(d) Foreign currency and translation
The financial statements are presented in Indian Rupee (`) which is also the Company's functional currency. For each foreign operation, the Company determines the functional currency which is its respective local currency.
Transactions in foreign currencies are initially recorded by the Company at their respective functional currency spot rates at the date of the transaction. Foreign-currency denominated monetary assets and liabilities are translated to the relevant functional currency at exchange rates in effect at the balance sheet date. Exchange differences arising on settlement or translation of monetary items are recognized in the statement of profit and loss. Non-monetary assets and non-monetary liabilities denominated in a foreign currency and measured at historical cost are translated at the exchange rate prevalent at the date of initial transaction. Non-monetary assets and non-monetary liabilities denominated in a foreign currency and measured at fair value are translated at the exchange rate prevalent at the date when the fair value was determined.
Transaction gains or losses realized upon settlement of foreign currency transactions are included in determining net profit for the year. Revenue, expenses and cash-flow items denominated in foreign currencies are translated into the relevant functional currencies using the exchange rate in effect on the date of the transaction.
The translation of foreign operations from respective functional currency into INR (the reporting currency) for assets and liabilities is performed using the exchange rates in effect at the balance sheet date, and for revenue, expenses and cash flows is performed using an appropriate daily weighted average exchange rate for the respective years. The exchange differences arising on translation are reported as a component of `other comprehensive income (loss)'. On disposal of a foreign operation, the component of OCI relating to that particular foreign operation is recognized in the statement of profit and loss.
(e) Fair value measurement
The Company records certain financial assets and liabilities at fair value on a recurring basis. The Company determines fair values based on the price it would receive to sell an asset or pay to transfer a liability in an orderly transaction between market participants at the measurement date in the principal or most advantageous market for that asset or liability.
The Company holds certain fixed income securities, equity securities and derivatives, which must be measured using the guidance for fair value hierarchy and related valuation methodologies. The guidance specifies a hierarchy of valuation techniques based on whether the inputs to each measurement are observable or unobservable. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect the Company's assumptions about current market conditions. The fair value hierarchy also requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value.The prescribed fair value hierarchy and related valuation methodologies are as follows:
Level 1 - Quoted inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets.
Level 2 - Quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active and model-derived valuations, in which all significant inputs are directly or indirectly observable in active markets.
Level 3 - Valuations derived from valuation techniques, in which one or more significant inputs are unobservable inputs which are supported by little or no market activity.
In accordance with Ind AS 113, assets and liabilities are to be measured based on the following valuation techniques:
a) Market approach Prices and other relevant information generated by market transactions involving identical or comparable assets or liabilities.
176 Standalone Financial Statements
Notes to financial statements for the year ended 31 March 2019
(All amounts in crores of `, except share data and as stated otherwise)
b) Income approach Converting the future amounts based on market expectations to its present value using the discounting method.
c) Cost approach Replacement cost method.
Certain assets are measured at fair value on a non-recurring basis. These assets consist primarily of non-financial assets such as goodwill and intangible assets. Goodwill and intangible assets recognized in business combinations are measured at fair value initially and subsequently when there is an indicator of impairment, the impairment is recognized.
A fair value measurement of a non-financial asset takes into account a market participant's ability to generate economic benefits by using the asset in its highest and best use or by selling it to another market participant who would use the asset in its highest and best use.
(f) Revenue recognition
Adoption of new accounting principles
Effective 1 April 2018, the Company has adopted Ind AS 115 using the cumulative effect method. The standard is applied retrospectively only to contracts that are not completed as at the date of initial application and the comparative information is not restated in the financial statement. The adoption of the standard did not have any material impact to the financial statements of the Company.
Contracts involving provision of services and material
Revenue is recognized when, or as, control of a promised service or good transfers to a customer, in an amount that reflects the consideration to which the Company expects to be entitled in exchange for transferring those products or services. To recognize revenues, the following five step approach is applied: (1) identify the contract with a customer, (2) identify the performance obligations in the contract, (3) determine the transaction price, (4) allocate the transaction price to the performance obligations in the contract, and (5) recognize revenues when a performance obligation is satisfied. Contract is accounted when it is legally enforceable through executory contracts, approval and commitment from all parties, the rights of the parties are identified, payment terms are defined, the contract has commercial substance and collectability of consideration is probable.
Time-and-material / Volume based / Transaction based contracts
Revenue with respect to time-and-material, volume based and transaction based contracts is recognized as the related services are performed through efforts expended, volume serviced transactions are processed etc. that correspond with value transferred to customer till date which is related to our right to invoice for services performed.
Fixed Price contracts
Revenue related to fixed price contracts where performance obligations and control are satisfied over a period of time like technology integration, complex network building contracts, ERP implementations and Application development are recognized based on progress towards completion of the performance obligation using a cost-to-cost measure of progress (i.e., percentage-of-completion (POC) method of accounting). Revenue is recognized based on the costs incurred to date as a percentage of the total estimated costs to fulfill the contract. Any revision in cost to complete would result in increase or decrease in revenue and such changes are recorded in the period in which they are identified. Provisions for estimated losses, if any, on contracts-in-progress are recorded in the period in which such losses become probable based on the current contract estimates. Contract losses are determined to be the amount by which the estimated incremental cost to complete exceeds the estimated future revenues that will be generated by the contract and are included in cost of revenues and recorded in other accrued liabilities.
Revenue related to other fixed price contracts providing maintenance and support services, are recognized based on our right to invoice for services performed for contracts in which the invoicing is representative of the value being delivered. If our invoicing is not consistent with value delivered, revenues are recognized as the service is performed based on the cost to cost method described above.
Annual Report 2018-19 177
Notes to financial statements for the year ended 31 March 2019
(All amounts in crores of `, except share data and as stated otherwise)
In arrangements involving sharing of customer revenues, revenue is recognized when the right to receive is established.
Revenue from product sales are shown net of sales tax and applicable discounts and allowances. Revenue related to product with installation services that are critical to the product is recognized when installation of product at customer site is completed and accepted by the customer. If the revenue for a delivered item is not recognized for non-receipt of acceptance from the customer, the cost of the delivered item continues to be in inventory.
Multiple performance obligation
When a sales arrangement contains multiple performance, such as services, hardware and Licensed IPs (software) or combinations of each of them revenue for each element is based on a five step approach as defined above. To the extent a contract includes multiple promised deliverables, judgment is applied to determine whether promised deliverables are capable of being distinct and are distinct in the context of the contract. If these criteria are not met, the promised deliverables are accounted for as a combined performance obligation. For arrangements with multiple distinct performance obligations or series of distinct performance obligations, consideration is allocated among the performance obligations based on their relative standalone selling price. Standalone selling price is the price at which group would sell a promised good or service separately to the customer. When not directly observable, we typically estimate standalone selling price by using the expected cost plus a margin approach. We typically establish a standalone selling price range for our deliverables, which is reassessed on a periodic basis or when facts and circumstances change. If the arrangement contains obligations related to License of Intellectual property (Software) or Lease deliverable, the arrangement consideration allocated to the Software deliverables, lease deliverable as a group is then allocated to each software obligation and lease deliverable.
Revenue recognition for delivered elements is limited to the amount that is not contingent on the future delivery of products or services, future performance obligations or subject to customer-specified return or refund privileges.
Revenue from certain activities in transition services in outsourcing arrangements are not capable of being distinct or represent separate performance obligation. Revenues relating to such transition activities are classified as Contract liabilities and subsequently recognized over the period of the arrangement. Direct and incremental costs in relation to such transition activities which are expected to be recoverable under the contract are considered as contract fulfillment costs classified as Deferred contract cost and recognized over the period of arrangement. Certain upfront non-recurring incremental contract acquisition costs incurred in the initial phases of outsourcing contracts are deferred and recorded as Deferred contract cost and amortized, usually on a straight line basis, over the term of the contract unless revenues are earned and obligations are fulfilled in a different pattern. The undiscounted future cash flows from the arrangement are periodically estimated and compared with the unamortized costs. If the unamortized costs exceed the undiscounted cash flow, a loss is recognized.
In instances when revenue is derived from sales of third-party vendor services, material or licenses, revenue is recorded on a gross basis when the Company is a principal to the transaction and net of costs when the Company is acting as an agent between the customer and the vendor. Several factors are considered to determine whether the Company is a principal or an agent, most notably being company control the goods or service before it is transferred to customer, latitude in deciding the price being charged to customer. Revenue is recognized net of discounts and allowances, valueadded and service taxes, and includes reimbursement of out-of-pocket expenses, with the corresponding out-of-pocket expenses included in cost of revenues.
Volume discounts, or any other form of variable consideration is estimated using either the sum of probability weighted amounts in a range of possible consideration amounts (expected value), or the single most likely amount in a range of possible consideration amounts (most likely amount), depending on which method better predicts the amount of consideration realizable. Transaction price includes variable consideration only to the extent it is probable that a significant reversal of revenues recognized will not occur when the uncertainty associated with the variable consideration is resolved. Our estimates of variable consideration and determination of whether to include estimated amounts in the transaction price may involve judgment and are based largely on an assessment of our anticipated performance and all information that is reasonably available to us.
178 Standalone Financial Statements
Notes to financial statements for the year ended 31 March 2019
(All amounts in crores of `, except share data and as stated otherwise)
Revenue recognized but not billed to customers is classified either as contract assets or unbilled receivable in our statements of financial position, contract assets primarily relate to unbilled amounts on those contracts utilizing the cost to cost method of revenue recognition. Unbilled receivables represent contracts where right to consideration is unconditional (i.e. only the passage of time is required before the payment is due).
Revenue from sales-type leases is recognized when risk of loss has been transferred to the client and there are no unfulfilled obligations that affect the final acceptance of the arrangement by the client. Interest attributable to sales-type leases and direct financing leases included therein is recognized on an accrual basis using the effective interest method and is recognized as other income.
Interest income
Interest income for all financial instruments measured at amortized cost is recorded using the effective interest rate (EIR). EIR is the rate that exactly discounts the estimated future cash payments or receipts over the expected life of the financial instrument or a shorter period, where appropriate, to the gross carrying amount of the financial asset or to the amortized cost of a financial liability. When calculating the EIR, the Company estimates the expected cash flows by considering all the contractual terms of the financial instrument but does not consider the expected credit losses. Interest income is included in other income in the statement of profit and loss.
(g) Income taxes
Income tax expense comprises current and deferred income tax.
Income tax expense is recognized in the statement of profit and loss except to the extent that it relates to items recognized directly in equity, in which case it is recognized in equity. Current income tax for current and prior periods is recognized at the amount expected to be paid to or recovered from the tax authorities, using the tax rates and tax laws that have been enacted or substantively enacted by the balance sheet date. Provision for income tax includes the impact of provisions established for uncertain income tax positions.
Deferred income tax assets and liabilities recognized for all temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements. Deferred income tax assets and liabilities are recognized for those temporary differences which originate during the tax holiday period are reversed after the tax holiday period. For this purpose, reversal of timing differences is determined using first in first out method.
Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realized. Deferred income tax assets and liabilities are measured using tax rates and tax laws that have been enacted or substantively enacted by the balance sheet date and are expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled.
Deferred tax assets and deferred tax liabilities are offset, if a legally enforceable right exists to set off current tax assets against current tax liabilities and the deferred taxes relate to the same taxable entity and the same taxation authority.
The effect of changes in tax rates on deferred income tax assets and liabilities is recognized as income or expense in the year that includes the enactment or the substantive enactment date. A deferred income tax asset is recognized to the extent that it is probable that future taxable profit will be available against which the deductible temporary differences and tax losses can be utilized. Deferred income taxes are not provided on the undistributed earnings of branches where it is expected that the earnings of the branch will not be distributed in the foreseeable future.
Tax benefits acquired as part of a business combination, but not satisfying the criteria for separate recognition at that date, are recognized subsequently if new information about facts and circumstances change. The adjustment is either treated as a reduction in goodwill (as long as it does not exceed goodwill) if it was incurred during the measurement period or recognized in the statement of profit and loss.
Annual Report 2018-19 179
Notes to financial statements for the year ended 31 March 2019
(All amounts in crores of `, except share data and as stated otherwise)
(h) Property, plant and equipment
Property, plant and equipment are stated at cost less accumulated depreciation and impairment losses if any. Cost comprises the purchase price and directly attributable cost of bringing the asset to its working condition for its intended use. Any trade discounts and rebates are deducted in arriving at the purchase price. The Company identifies and determines separate useful lives for each major component of the property, plant and equipment, if they have a useful life that is materially different from that of the asset as a whole.
Expenses on existing property, plant and equipment, including day-to-day repairs, maintenance expenditure and cost of replacing parts, are charged to the statement of profit and loss for the year during which such expenses are incurred.
Gains or losses arising from derecognition of assets are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognized in the statement of profit and loss when the asset is derecognized
Property, plant and equipment under construction and cost of assets not ready for use at the year-end are disclosed as capital work- in- progress.
Depreciation on property, plant and equipment is provided on the straight-line method over their estimated useful lives, as determined by the management. Depreciation is charged on a pro-rata basis for assets purchased/sold during the year.
The management's estimates of the useful lives of various assets for computing depreciation are as follows:
Asset description Buildings Plant and equipment (including air conditioners, electrical installations) Office equipment Computers and networking equipment Furniture and fixtures Vehicles
Asset life (in years) 20 10 5 4-5 7 5
The useful lives as given above best represent the period over which the management expects to use these assets, based on technical assessment. The estimated useful lives for these assets are therefore different from the useful lives prescribed under Part C of Schedule II of the Companies Act 2013.
The residual values, useful lives and methods of depreciation of property, plant and equipment are reviewed at each financial year-end and adjusted prospectively, if appropriate.
(i) Intangible assets
Intangible assets acquired separately are measured on initial recognition at cost. The cost of intangible assets acquired in a business combination is their fair value at the date of acquisition. Following initial recognition, intangible assets are carried at cost less any accumulated amortization and accumulated impairment losses.
Intangible assets are amortized over the useful life and assessed for impairment whenever there is an indication that the intangible asset may be impaired. The amortization period and the amortization method for an intangible asset with a finite useful life are reviewed at least at the end of each reporting year. Changes in the expected useful life or the expected pattern of consumption of future economic benefits embodied in the asset are considered to modify the amortization period or method, as appropriate, and are treated as changes in accounting estimates. The amortization expense on intangible assets with finite lives is recognized in the statement of profit and loss.
Gains or losses arising from derecognition of an intangible asset are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognized in the statement of profit and loss when the asset is derecognized.
The intangible assets are amortized over the estimated useful life of the assets as mentioned below except certain Licensed IPRs which include the right to modify, enhance or exploit are amortized in proportion to the expected benefits over the useful life which could range up to 15 years:
180 Standalone Financial Statements
Notes to financial statements for the year ended 31 March 2019
(All amounts in crores of `, except share data and as stated otherwise)
Asset description Software Licensed IPRs Customer relationships Customer contracts Intellectual property rights
Asset life (in years) 3
5 to 15 11 1 6
(j) Research and development costs
Research costs are expensed as incurred. Development expenditure, on an individual project, is recognized as an
intangible asset when the Company can demonstrate: The technical feasibility of completing the intangible asset so that it will be available for use or sale Its intention to complete and its ability and intention to use or sell the asset How the asset will generate future economic benefits The availability of resources to complete the asset The ability to measure reliably the expenditure during development
Following initial recognition of the development expenditure as an asset, the cost model is applied requiring the asset to be carried at cost less any accumulated amortization and accumulated impairment losses. Amortization of the asset begins when development is complete and the asset is available for use. It is amortized over the period of expected future benefit. Amortization expense is recognized in the statement of profit and loss. During the period of development, the asset is tested for impairment annually.
(k) Borrowing costs
Borrowing costs directly attributable to the acquisition, construction or production of an asset that necessarily takes a substantial period of time to get ready for its intended use are capitalized as part of the cost of the asset. All other borrowing costs are expensed in the period in which they occur.
Borrowing costs consist of interest and other costs that an entity incurs in connection with the borrowing of funds. Borrowing costs also includes exchange differences to the extent regarded as an adjustment to the borrowing costs.
(l) Leases
Company as a lessee
A lease is classified at the inception date as a finance lease or an operating lease. A lease that transfers substantially all the risks and rewards incidental to ownership to the Company is classified as a finance lease.
Finance leases are capitalized at the commencement of the lease at the fair value of the leased property or, if lower, at the present value of the minimum lease payments. Lease payments are apportioned between finance charges and reduction of the lease liability so as to achieve a constant rate of interest on the remaining balance of the liability. Finance charges are recognized in finance costs in the statement of profit and loss.
A leased asset is depreciated over the useful life of the asset. However, if there is no reasonable certainty that the Company will obtain ownership by the end of the lease term, the asset is depreciated over the shorter of the estimated useful life of the asset or the lease term.
Operating lease payments are recognized as an expense in the statement of profit and loss on a straight-line basis over the lease term.
Company as a lessor
Leases in which the Company does not transfer substantially all the risks and benefits of ownership of the asset are classified as operating leases. Initial direct costs incurred in negotiating an operating lease are added to the carrying
Annual Report 2018-19 181
Notes to financial statements for the year ended 31 March 2019
(All amounts in crores of `, except share data and as stated otherwise)
amount of the leased asset and recognized over the lease term on the same basis as rental income. Contingent rents are recognized as revenue in the year in which they are earned.
Leases in which the Company transfers substantially all the risk and benefits of ownership of the asset are classified as finance leases. Assets given under finance lease are recognized as a receivable at an amount equal to the present value of lease receivable. After initial recognition, the Company apportions lease rentals between the principal repayment and interest income so as to achieve a constant periodic rate of return on the net investment outstanding in respect of the finance leases. The interest income is recognized in the statement of profit and loss. Initial direct costs such as legal cost, brokerage cost etc. are recognized immediately in the statement of profit and loss.
(m) Inventory
Stock-in-trade, stores and spares are valued at the lower of the cost or net realizable value. Cost includes cost of purchase and other costs incurred in bringing the inventories to their present location and condition. Net realizable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and estimated costs necessary to make the sale.
Cost of stock-in-trade procured for specific projects is assigned by identifying individual costs of each item. Cost of stockin-trade, that are interchangeable and not specific to any project and cost of stores and spare parts are determined using the weighted average cost formula.
(n) Impairment of non-financial assets
Goodwill
Goodwill is tested annually on March 31, for impairment, or sooner whenever there is an indication that goodwill may be impaired, relying on a number of factors including operating results, business plans and future cash flows. For the purpose of impairment testing, goodwill acquired in a business combination is allocated to the Company's cash generating units (CGU) expected to benefit from the synergies arising from the business combination. A CGU is the smallest identifiable group of assets that generates cash inflows that are largely independent of the cash inflows from other assets or group of assets. Impairment occurs when the carrying amount of a CGU including the goodwill, exceeds the estimated recoverable amount of the CGU. The recoverable amount of a CGU is the higher of its fair value less cost to sell and its value-in-use. Value-in-use is the present value of future cash flows expected to be derived from the CGU. Total impairment loss of a CGU is allocated first to reduce the carrying amount of goodwill allocated to the CGU and then to the other assets of the CGU, pro-rata on the basis of the carrying amount of each asset in the CGU.
An impairment loss on goodwill recognized in the statement of profit and loss is not reversed in the subsequent period.
Intangible assets and property, plant and equipment
Intangible assets and property, plant and equipment are evaluated for recoverability whenever events or changes in circumstances indicate that their carrying amounts may not be recoverable. For the purpose of impairment testing, the recoverable amount (i.e. the higher of the fair value less cost to sell and the value-in-use) is determined on an individual asset basis unless the asset does not generate cash flows that are largely independent of those from other assets. In such cases, the recoverable amount is determined for the CGU to which the asset belongs. If such assets are considered to be impaired, the impairment to be recognized in the statement of profit and loss is measured by the amount by which the carrying value of the asset exceeds the estimated recoverable amount of the asset.
(o) Provisions
A provision is recognized if, as a result of a past event, the Company has a present legal or constructive obligation that can be estimated reliably, and it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation. If the effect of the time value of money is material, provisions are determined by discounting the expected future cash flows.
182 Standalone Financial Statements
Notes to financial statements for the year ended 31 March 2019
(All amounts in crores of `, except share data and as stated otherwise)
(p) Retirement and other employee benefits
i. Provident fund: Employees of the Company receive benefits under the provident fund, a defined benefit plan. The employee and employer each make monthly contributions to the plan. A portion of the contribution is made to the provident fund trust managed by the Company or Government administered provident fund; while the balance contribution is made to the Government administered pension fund. For the contribution made by the Company to the provident fund trust managed by the Company, the Company has an obligation to fund any shortfall on the yield of the Trust's investments over the administered interest rates. The liability is actuarially determined (using the projected unit credit method) at the end of the year. The funds contributed to the Trust are invested in specific securities as mandated by law and generally consist of federal and state government bonds, debt instruments of governmentowned corporations and other eligible market securities.
ii. In respect of superannuation, a defined contribution plan for applicable employees, the Company contributes to a scheme administered on its behalf by an insurance company and such contributions for each year of service rendered by the employees are charged to the statement of profit and loss. The Company has no further obligations to the superannuation plan beyond its contributions.
iii. Gratuity liability: The Company provide for gratuity, a defined benefit plan (the "Gratuity Plan") covering eligible employees. The Gratuity Plan provides a lump sum payment to vested employees at retirement, death, incapacitation or termination of employment, of an amount based on the respective employee's base salary and the tenure of employment (subject to a maximum of ` 20 lacs per employee). The liability is actuarially determined (using the projected unit credit method) at the end of each year. Actuarial gains/losses are recognized immediately in the balance sheet with a corresponding debit or credit to retained earnings through other comprehensive income in the year in which they occur.
In respect to certain employees in India, the Company contributes towards gratuity liabilities to the Gratuity Fund Trust. Trustees of the Company administer contributions made to the Trust and contributions are invested in a scheme with Life Insurance Corporation of India as permitted by law.
iv. Compensated absences: The employees of the Company are entitled to compensated absences which are both accumulating and non-accumulating in nature. The employees can carry forward up to the specified portion of the unutilized accumulated compensated absences and utilize it in future periods or receive cash at retirement or termination of employment. The expected cost of accumulating compensated absences is determined by actuarial valuation (using the projected unit credit method) based on the additional amount expected to be paid as a result of the unused entitlement that has accumulated at the balance sheet date. The expense on non-accumulating compensated absences is recognized in the statement of profit and loss in the year in which the absences occur. Actuarial gains/losses are immediately taken to the statement of profit and loss and are not deferred.
v. State Plan: The contribution to State Plans in India, a defined contribution plan namely Employee State Insurance Fund is charged to the statement of profit and loss as and when employees render related services.
vi. Contributions to other foreign defined contribution plans are recognized as expense when employees have rendered services entitling them to such benefits.
(q) Equity settled stock based compensation
Stock-based compensation represents the cost related to stock-based awards granted to employees. The Company measures stock-based compensation cost at grant date, based on the estimated fair value of the award and recognizes the cost (net of estimated forfeitures) on a straight line basis over the requisite service period for each separately vesting portion of the award, as if award was in substance, multiple awards. The Company estimates the fair value of stock options using the Black-Scholes valuation model. The cost is recorded under the head employee benefit expense in the statement of profit and loss with corresponding increase in "Share Based Payment Reserve".
(r) Financial Instruments
A financial instrument is a contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity.
Annual Report 2018-19 183
Notes to financial statements for the year ended 31 March 2019
(All amounts in crores of `, except share data and as stated otherwise)
i. Financial assets All financial assets are recognized initially at fair value. Transaction costs that are directly attributable to the acquisition of financial assets (other than financial assets at fair value through profit or loss) are added to the fair value measured on initial recognition of financial asset. Purchase and sale of financial assets are accounted for at trade date.
Cash and short-term deposits Cash and short-term deposits in the balance sheet comprise cash in banks and short-term deposits and investments with an original maturity of three months or less, which are subject to an insignificant risk of changes in value.
Financial assets at amortized cost A financial asset is measured at the amortized cost if both the following conditions are met:
a) The asset is held within a business model whose objective is to hold assets for collecting contractual cash flows, and
b) Contractual terms of the asset give rise on specified dates to cash flows that are solely payments of principal and interest (SPPI) on the principal amount outstanding.
After initial measurement, such financial assets are subsequently measured at amortized cost using the effective interest rate (EIR) method. Amortized cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortization is included in other income in the statement of profit and loss. The losses arising from impairment are recognized in the statement of profit and loss. This category includes cash and bank balances, loans, unbilled receivables, trade and other receivables.
Financial asset at Fair Value through Other Comprehensive Income (OCI) A financial asset is classified and measured at fair value through OCI if both of the following criteria are met:
a) The objective of the business model is achieved both by collecting contractual cash flows and selling the financial assets, and
b) The asset's contractual cash flows represent solely payments of principal and interest.
Financial asset included within the OCI category are measured initially as well as at each reporting date at fair value. Fair value movements are recognized in OCI. Interest income is recognized in statement of profit and loss for debt instruments. On derecognition of the asset, cumulative gain or loss previously recognized in OCI is reclassified from OCI to statement of profit and loss.
Financial assets at Fair Value through Profit and Loss Any financial asset, which does not meet the criteria for categorization at amortized cost or at fair value through other comprehensive income, is classified at fair value through profit and loss. Financial assets included at the fair value through profit and loss category are measured at fair value with all changes recognized in the statement of profit and loss.
Equity investments Equity investments in subsidiaries are measured at cost.
Derecognition of financial assets A financial asset is primarily derecognized when the rights to receive cash flows from the asset have expired, or the Company has transferred its rights to receive cash flows from the asset.
Impairment of financial assets The Company recognizes loss allowances using the expected credit loss (ECL) model for the financial assets which are not fair valued through profit and loss. Lifetime ECL allowance is recognized for trade receivables with no significant financing component. For all other financial assets, expected credit losses are measured at an amount equal to the 12-month ECL, unless there has been a significant increase in credit risk from initial recognition in which case they are measured at lifetime ECL. The amount of expected credit losses (or reversal) that is required to adjust the loss allowance at the reporting date is recognized in the statement of profit and loss.
184 Standalone Financial Statements
Notes to financial statements for the year ended 31 March 2019
(All amounts in crores of `, except share data and as stated otherwise)
ii. Financial liabilities All financial liabilities are recognized initially at fair value and, in the case of loans and borrowings and payables, net of directly attributable transaction costs.
The subsequent measurement of financial liabilities depends on their classification, as described below:
Financial liabilities at fair value through profit or loss Financial liabilities designated upon initial recognition at fair value through profit or loss are designated as such at the initial date of recognition, and only if the criteria in Ind AS 109 are satisfied. Changes in fair value of such liability are recognized in the statement of profit or loss.
Financial liabilities at amortized cost The Company's financial liabilities at amortized cost includes trade payables, borrowings including bank overdrafts and other payables.
After initial recognition, financial liabilities are subsequently measured at amortized cost using the effective interest rate (EIR) method. Gains and losses are recognized in the statement of profit and loss when the liabilities are derecognized as well as through the EIR amortization process.
Amortized cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortization is included as finance costs in the statement of profit and loss.
Derecognition A financial liability is derecognized when the obligation under the liability is discharged or cancelled or expires.
iii. Derivative financial instruments and hedge accounting Foreign exchange forward contracts and options are purchased to mitigate the risk of changes in foreign exchange rates associated with forecast transactions denominated in certain foreign currencies.
The Company recognizes all derivatives as assets or liabilities measured at their fair value. Changes in fair value for derivatives not designated in a hedge accounting relationship are marked to market at each reporting date and the related gains (losses) are recognized in the statement of profit and loss as `foreign exchange gains (losses)'.
The foreign exchange forward contracts and options in respect of forecast transactions which meet the hedging criteria are designated as cash flow hedges. Changes in the derivative fair values (net of tax) that are designated as effective cash flow hedges are deferred and recorded in the hedging reserve account as a component of accumulated `other comprehensive income (loss)' until the hedged transaction occurs and are then recognized in the statement of profit and loss. The ineffective portion of hedging derivatives is immediately recognized in the statement of profit and loss.
In respect of derivatives designated as hedges, the Company formally documents all relationships between hedging instruments and hedged items, as well as its risk management objective and strategy for undertaking various hedge transactions. The Company also formally assesses both at the inception of the hedge and on an ongoing basis, whether each derivative is highly effective in offsetting changes in fair values or cash flows of the hedged item.
Hedge accounting is discontinued prospectively from the last testing date when (1) it is determined that the derivative financial instrument is no longer effective in offsetting changes in the fair value or cash flows of the underlying exposure being hedged; (2) the derivative financial instrument matures or is sold, terminated or exercised; or (3) it is determined that designating the derivative financial instrument as a hedge is no longer appropriate. When hedge accounting is discontinued the deferred gains or losses on the cash flow hedge remain in `other comprehensive income (loss)' until the forecast transaction occurs. Any further change in the fair value of the derivative financial instrument is recognized in current year earnings.
Annual Report 2018-19 185
Notes to financial statements for the year ended 31 March 2019
(All amounts in crores of `, except share data and as stated otherwise)
Offsetting of financial instruments Financial assets and financial liabilities are offset and the net amount is reported in the balance sheet if there is a currently enforceable legal right to offset the recognized amounts and there is an intention to settle on a net basis to realize the assets and settle the liabilities simultaneously.
(s) Dividend
Final dividend proposed by the Board of Directors is recognized upon approval by the shareholders who have the right to decrease but not increase the amount of dividend recommended by the Board of Directors. Interim dividends are recognized on declaration by the Board of Directors.
(t) Earnings per share (EPS)
Basic EPS amounts are computed by dividing the net profit attributable to the equity holders of the Company by the weighted average number of equity shares outstanding during the year.
Diluted EPS amounts are computed by dividing the net profit attributable to the equity holders of the Company by the weighted average number of equity shares considered for deriving basic earnings per share and also the weighted average number of equity shares that could have been issued upon conversion of all dilutive potential equity shares. The diluted potential equity shares are adjusted for the proceeds receivable had the shares been actually issued at fair value (i.e. the average market value of the outstanding shares). Dilutive potential equity shares are deemed converted as at the beginning of the year, unless issued at a later date. Dilutive potential equity shares are determined independently for each year presented.
(u) Nature and purpose of reserves
Securities premium reserve Securities premium reserve is used to record the premium on issue of shares. The reserve can be utilized only for limited purposes such as issuance of bonus shares and buyback of shares in accordance with the provisions of the Companies Act, 2013.
Special economic zone re-investment reserve The Company has created Special economic zone reinvestment reserve out of profits of the eligible SEZ Units in terms of the specific provisions of Section 10AA(1) of the Income Tax Act, 1961 ("the Act"). The said reserve should be utilized by the Company for acquiring plant and machinery in terms of Section 10AA(2) of the Act.
Debt instruments through other comprehensive income The Company recognizes changes in the fair value of debt instruments held with business objective of collect and sell in other comprehensive income. The Company transfers amounts from this reserve to the statement of profit and loss when the debt instrument is sold.
Cash flow hedging reserve For hedging foreign currency risk, the Company uses foreign currency forward and option contracts. To the extent these hedges are effective, the change in fair value of the hedging instrument is recognized in the cash flow hedging reserve. Amounts recognized in the cash flow hedging reserve is reclassified to the statement of profit or loss when the hedged item affects profit or loss.
General reserve Under the erstwhile Companies Act 1956, general reserve was created through an annual transfer of net income at a specified percentage in accordance with applicable regulations. Consequent to introduction of Companies Act 2013, the requirement to mandatorily transfer a specified percentage of the net profit to general reserve has been withdrawn.
Foreign currency translation reserve Exchange differences arising on translation of the foreign operations are recognized in other comprehensive income as described in accounting policy and accumulated in a separate reserve within equity. The cumulative amount is reclassified to profit or loss when the net investment is disposed-off.
186 Standalone Financial Statements
Notes to financial statements for the year ended 31 March 2019
(All amounts in crores of `, except share data and as stated otherwise)
Share based payment reserve The share options based payment reserve is used to recognize the grant date fair value of options issued to employees under Employee stock option plan.
Capital redemption reserve The Company recognizes cancellation of the Company's own equity instruments to capital redemption reserve
(v) Recently issued accounting pronouncements
Ind AS 116 - Leases
Ind AS 116 Leases was notified in October 2018 and it replaces Ind AS 17 Leases, including appendices thereto. Ind AS 116 is effective for annual periods beginning on or after 1 April 2019. Ind AS 116 sets out the principles for the recognition, measurement, presentation and disclosure of leases and requires lessees to account for all leases under a single onbalance sheet model similar to the accounting for finance leases under Ind AS 17.
The Company is currently evaluating the impact that the adoption of this new standard will have on its financial statements.
Appendix C to Ind AS 12 Uncertainty over Income Tax Treatment
The amendment to Appendix C of Ind AS 12 specifies that the amendment is to be applied to the determination of taxable profit (tax loss), tax bases, unused tax losses, unused tax credits and tax rates, when there is uncertainty over income tax treatments under Ind AS 12.
The Company is currently evaluating the impact that the adoption of this new standard will have on its financial statements.
2. Notes to financial statements
2.1 Property, plant and equipment
The changes in the carrying value for the year ended 31 March 2019
Freehold land
Buildings
Plant and equipment
Computers
Office
and
equipment networking
equipmement
Furniture and
fixtures
Vehicles
Total
Gross block as at 1 April 2018 Additions Disposals Translation exchange differences Gross block as at 31 March 2019 Accumulated depreciation as at 1 April 2018 Charge for the year Deduction/other adjustments Translation exchange differences Accumulated depreciation as at 31 March 2019 Net block as at 31 March 2019
48
2,736
1,246
231
1,449
482
117
6,309
19
165
98
39
-
-
15
6
327
25
33
706
115
25
26
187
-
-
-
-
-
-
-
-
67
2,901
1,329
264
1,661
482
124
6,828
-
627
734
180
1,042
380
-
140
88
21
177
32
-
-
15
5
112
24
53
3,016
23
481
20
176
-
-
-
-
-
-
-
-
-
767
807
196
1,107
388
56
3,321
67
2,134
522
68
554
94
68
3,507
Note 1: Capital work in progress includes ` 8 crores interest on extended interest bearing suppliers credit and during the year ` 9 crores
have been capitalised by the Company.
Annual Report 2018-19 187
Notes to financial statements for the year ended 31 March 2019
(All amounts in crores of `, except share data and as stated otherwise)
The changes in the carrying value for the year ended 31 March 2018
Gross block as at 1 April 2017 Additions Disposals Translation exchange differences Gross block as at 31 March 2018 Accumulated depreciation as at 1 April 2017 Charge for the year Deduction/other adjustments Translation exchange differences Accumulated depreciation as at 31 March 2018 Net block as at 31 March 2018 Net block as at 1 April 2017
Freehold land
Buildings
Plant and equipment
Computers
Office
and
equipment networking
equipmement
Furniture and
fixtures
48
2,491
1,172
210
1,285
472
-
245
81
21
-
-
5
3
203
21
41
12
-
-
(2)
3
2
1
48
2,736
1,246
231
1,449
482
-
494
657
165
-
133
82
17
-
-
4
3
934
360
143
31
36
12
-
-
(1)
1
1
1
-
627
734
180
1,042
380
48
2,109
512
51
407
102
48
1,997
515
45
351
112
Vehicles
108 34 25 -
117 50 22 19 53 64 58
Total
5,786 605 86 4
6,309 2,660
428 74 2
3,016 3,293 3,126
Note 1 : Capital work in progress includes ` 9 crores interest on extended interest bearing suppliers credit and during the year ` 25 crores have been capitalised by the Company.
2.2 Goodwill
The changes in the carrying value of goodwill by reportable segment, for the year ended 31 March 2019
Opening balance as at 1 April 2018 Effect of exchange rate changes Closing balance as at 31 March 2019
Software Services
Infrastructure services
532
18
-
-
532
18
Business process outsourcing services
-
The changes in the carrying value of goodwill by reportable segment, for the year ended 31 March 2018
Total
550 -
550
Opening balance as at 1 April 2017 Effect of exchange rate changes Closing balance as at 31 March 2018
Software Services
Infrastructure services
535
18
(3)
-
532
18
Business process outsourcing services
-
Total
553 (3) 550
For the purpose of impairment testing, goodwill acquired in a business combination is allocated to the cash generating units (CGU), which benefit from the synergies of the acquisition.
188 Standalone Financial Statements
Notes to financial statements for the year ended 31 March 2019
(All amounts in crores of `, except share data and as stated otherwise)
Goodwill is tested for impairment at least annually. Impairment is recognised, when the carrying amount of cash generating units (CGU) including goodwill, exceeds the estimated recoverable amount of CGU. Future cash flows are forecast for 5 years & then on perpetuity on the basis of certain assumptions which includes revenue growth, earnings before interest and taxes, taxes, capital outflow and working capital requirements. The assumptions are taken on the basis of past trends and management estimates and judgement. Future cash flows are discounted with "Weighted Average Cost of Capital". The key assumptions are as follows:
Terminal growth rate (%) Discount rate (%)
As at
31 March 2019 31 March 2018
2.50
2.50
9.50
10.80
As at 31 March 2019 and 31 March 2018 the estimated recoverable amount of CGU exceeded its carrying amount and accordingly, no impairment was recognized.
An analysis of the sensitivity of the computation to a change in key assumptions based on reasonable probability did not identify any probable scenario in which the recoverable amount of the CGU would decrease below its carrying amount.
2.3 Other intangible assets The changes in the carrying value for the year ended 31 March 2019
Gross block as at 1 April 2018 Additions Disposals Translation exchange differences Gross block as at 31 March 2019 Accumulated depreciation as at 1 April 2018 Charge for the year Deduction/other adjustments Translation exchange differences Accumulated depreciation as at 31 March 2019 Net block as at 31 March 2019 Estimated remaining useful life (in years)
Software
623 51 13 -
661 514
70 13
571
90 3
Licensed Customer
IPRs
relationships
6,966
151
1,337
-
-
-
-
-
8,303
151
607
39
703
21
-
-
-
-
1,310
60
6,993
91
14
8
Customer contracts
19 -
19
Intellectual property rights 7 7
19
2
-
1
-
-
-
-
19
3
-
4
-
3
The changes in the carrying value for the year ended 31 March 2018
Total
7,766 1,388
13 -
9,141
1,181
795 13 -
1,963
7,178
Gross block as at 1 April 2017 Additions Disposals Translation exchange differences Gross block as at 31 March 2018 Accumulated depreciation as at 1 April 2017 Charge for the year
Software
553 73 4 1
623
459
58
Licensed Customer
IPRs
relationships
4,213
151
2,753
-
-
-
-
-
6,966
151
Customer contracts
19 -
19
Intellectual property rights 7 7
139
15
19
1
382
24
-
1
Total
4,943 2,826
4 1 7,766
633
465
Annual Report 2018-19 189
Notes to financial statements for the year ended 31 March 2019
(All amounts in crores of `, except share data and as stated otherwise)
Deduction/other adjustments Translation exchange differences Accumulated depreciation as at 31 March 2018 Net block as at 31 March 2018 Net block as at 1 April 2017 Estimated remaining useful life (in years)
Software
4 1 514 109 94 3
Licensed Customer
IPRs
relationships
(86)
-
-
-
Customer contracts
-
Intellectual property rights
-
-
607
39
19
2
6,359
112
4,074
136
-
5
-
6
15
9
-
4
Total
(82) 1
1,181 6,585 4,310
2.4 Investments
Financial assets Non-current Quoted Investment Carried at fair value through other comprehensive income Investment in debentures or bonds Unquoted Investment Equity investment in subsidiary companies carried at cost (fully paid up) 445,492,500 (31 March 2018, 445,492,500) equity shares of USD 1 each in HCL Bermuda Limited, Bermuda 1,280 (31 March 2018, 1,280) equity shares of ` 10,000 each, in HCL Comnet Systems & Services Limited 949,900 (31 March 2018, 949,900) equity shares of ` 10 each, in HCL Comnet Limited HCL Technologies (Shanghai) Limited (issued & registered capital) 1,033,384 (31 March 2018, 1,033,384) equity shares of SGD 1 each, in HCL Singapore Pte. Limited 30,000,000 (31 March 2018, 30,000,000) equity shares of Pound 1 each fully paid up, in HCL EAS Limited 1 (31 March 2018, 1) equity shares of Euro 100 each, in HCL GmbH * 100,000 (31 March 2018, 100,000) equity shares of ` 10 each in HCL Eagle Limited [refer note below]* 50,000 (31 March 2018, 50,000) equity shares of ` 10 each in HCL Foundation* 100,000 (31 March 2018, 100,000) equity shares of SGD 1 each, in Geometric Asia Pacific Pte. Ltd., Singapore Euro 14.05 million (31 March 2018, 14.05 million) invested in equity share capital of Geometric Europe GmbH, Germany 1,432 (31 March 2018, 1,432) non assessable shares of USD 1 each, in Geometric Americas, Inc., U.S.A
Current Quoted investments
Carried at fair value through other comprehensive income Investment in debentures or bonds
As at
31 March 2019
31 March 2018
-
3,194 11 55 10 5
225 -
17 67 224 3,808
1,226
260
3,194 11 55 10 5
225 -
17 67 224 4,068
-
190 Standalone Financial Statements
Notes to financial statements for the year ended 31 March 2019
(All amounts in crores of `, except share data and as stated otherwise)
Unquoted Investments Carried at fair value through profit and loss Investment in mutual funds
As at
31 March 2019
31 March 2018
776 2,002
2,130 2,130
Total Investment - Financial assets
5,810
6,198
Aggregate amount of quoted investments Aggregate amount of unquoted investments Market value of quoted investments
1,226 4,584 1,226
260 5,938
260
Equity instruments carried at cost
3,808
3,808
Investment carried at fair value through other comprehensive income
1,226
260
Investment carried at fair value through profit and loss
776
2,130
Note:During the previous year the Company has acquired the remaining 8,000 equity shares of ` 10/- each of HCL Eagle Limited for a purchase consideration of ` 80,000/- thereby making it a wholly owned subsidiary.
* Represent value less than ` 0.50 crore.
2.5 Loans
Non - current Carried at amortized cost Unsecured , considered good Inter corporate deposits
Current Carried at amortized cost Unsecured , considered good Inter corporate deposits Loans to related parties (refer note 2.31)
As at
31 March 2019
31 March 2018
355
235
355
235
1,235 9
1,244
3,408 30
3,438
Annual Report 2018-19 191
Notes to financial statements for the year ended 31 March 2019
(All amounts in crores of `, except share data and as stated otherwise)
2.6 Other financial assets
Non - current Carried at amortized cost Finance lease receivables [refer note 2.28(ii)] Security deposits Security deposits - related parties (refer note 2.31) Unbilled receivable (previous year : unbilled revenue)
Carried at fair value through other comprehensive income Unrealized gain on derivative financial instruments [refer note 2.29(a)]
Current Carried at amortized cost Unbilled receivable (previous year : unbilled revenue) Unbilled receivables-related parties (previous year : unbilled revenue - related parties) (refer note 2.31) Contract assets Interest receivable Interest receivable - related parties (refer note 2.31) Security deposits Security deposits - related parties (refer note 2.31) Finance lease receivables [refer note 2.28(ii)] Other receivables
Carried at fair value through other comprehensive income Unrealized gain on derivative financial instruments [refer note 2.29(a)]
As at
31 March 2019
31 March 2018
72
30
59
52
12
8
63
53
206
143
103
23
309
166
771 862
38 91
5 22
7 49 219 2,064
132
444 729
31
2 26
4 15 112 1,363
178
Carried at fair value through profit and loss Unrealized gain on derivative financial instruments [refer note 2.29(a)]
2.7 Other non- current assets
79 2,275
1,541
Unsecured considered good Capital advances Advances other than capital advances Security deposits Others Prepaid expenses Prepaid rentals for leasehold land Prepaid expenses - related parties (refer note 2.31) Deferred contract cost (previous year : deferred cost) (refer note 2.19)
As at
31 March 2019
31 March 2018
23
63
33
35
68
69
281
285
7
3
311
214
723
669
192 Standalone Financial Statements
Notes to financial statements for the year ended 31 March 2019
(All amounts in crores of `, except share data and as stated otherwise)
2.8 Inventories
Stock-in-trade
As at
31 March 2019
31 March 2018
18
40
18
40
2.9 Trade receivables
As at
31 March 2019
31 March 2018
Unsecured, considered good (refer note below)
6,280
5,452
Trade receivables which have significant increase in credit risk
77
89
Trade receivables - credit impaired
13
16
6,370
5,557
Impairment allowance for bad and doubtful debts
- Unsecured, considered good
(35)
(25)
- Trade receivables which have significant increase in credit risk
(77)
(89)
-Trade receivables - credit impaired
(13)
(16)
6,245
5,427
Note : Includes receivables from related parties amounting to ` 2,954 crores (31 March 2018, ` 3,570 crores).
2.10 Cash and bank balances
(a) Cash and cash equivalent Balance with banks - in current accounts - deposits with original maturity of less than 3 months Remittances in transit Unclaimed dividend account
(b) Other bank balances Deposits with remaining maturity up to 12 months
As at
31 March 2019
31 March 2018
2,734 1,775
9 5 4,523
1,750 6,273
128 -
77 5
210
2,115 2,325
2.11 Other current assets
Unsecured, considered good Advances other than capital advances
Security deposits Advances to supplier-related parties (refer note 2.31) Advances to employees Advances to suppliers Others Deferred contract cost (previous year : deferred cost) (refer note 2.19) Deferred contract cost-related parties (refer note 2.19 and 2.31) Prepaid expenses Prepaid rentals for leasehold land Prepaid expenses - related parties (refer note 2.31) Advance tax (refundable) Goods and service tax receivable Other advances
As at
31 March 2019
31 March 2018
11
9
85
61
27
24
34
33
96
41
19
-
213
207
4
4
20
4
1
2
86
48
54
114
650
547
Annual Report 2018-19 193
Notes to financial statements for the year ended 31 March 2019
(All amounts in crores of `, except share data and as stated otherwise)
Unsecured, considered doubtful Advances other than capital advances
Advances to employees Other advances Less: Provision for doubtful advances
2.12 Share capital
As at
31 March 2019
31 March 2018
39
38
5
5
(44)
(43)
-
-
650
547
Authorized 1,500,000,000 (31 March 2018, 1,500,000,000) equity shares of ` 2 each
Issued, subscribed and fully paid up 1,356,278,868(31 March 2018, 1,392,246,384) equity shares of ` 2 each
As at
31 March 2019
31 March 2018
300
300
271
278
Terms / rights attached to equity shares
The Company has only one class of shares referred to as equity shares having a par value of ` 2/-. Each holder of equity shares is entitled to one vote per share.
In the event of liquidation of the Company, the holders of equity shares will be entitled to receive the remaining assets of the Company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.
Reconciliation of the number of shares outstanding at the beginning and at the end of the financial year
Number of shares at the beginning Add: Shares issued on exercise of employee stock options Less: Shares extinguished on buyback Number of shares at the end
As at
31 March 2019
31 March 2018
No. of shares ` in Crores No. of shares ` in Crores
1,392,246,384
278 1,426,783,424
285
396,120
-
462,960
-
(36,363,636)
(7) (35,000,000)
(7)
1,356,278,868
271 1,392,246,384
278
The Company does not have any holding/ ultimate holding company.
Details of shareholders holding more than 5 % shares in the company
Name of the shareholder
Equity shares of ` 2 each fully paid Vama Sundari Investments (Delhi) Private Limited HCL Holdings Private Limited
As at
31 March 2019
31 March 2018
No. of shares
% holding in the class
No. of shares
% holding in the class
581,855,849 223,331,016
42.90% 16.47%
587,647,744 233,887,811
42.21% 16.80%
As per the records of the Company, including its register of shareholders/members and other declarations received from shareholders regarding beneficial interest, the above shareholding represents both legal and beneficial ownership of shares.
194 Standalone Financial Statements
Notes to financial statements for the year ended 31 March 2019
(All amounts in crores of `, except share data and as stated otherwise)
Aggregate number of bonus shares issued, shares issued for consideration other than cash and shares bought back during the period of five years immediately preceding the reporting date
Aggregate number and class of shares allotted as fully paid up pursuant to contract(s) without payment being received in cash. Aggregate number and class of shares allotted as fully paid up by way of bonus shares.
Aggregate number and class of shares bought back
As at
31 March 2019
31 March 2018
15,563,430 Equity shares
15,573,555 Equity shares
702,847,961 Equity Shares
702,847,961 Equity Shares
71,363,636 Equity Shares
35,000,000 Equity Shares
During the year ended 31 March 2019, the Company has carried out the share buyback of 36,363,636 fully paid-up equity shares of face value of ` 2 each at a price of ` 1,100 per share paid in cash for an aggregate consideration of ` 4,000 crores. Same has been recorded as reduction in equity share capital by ` 7 crores, securities premium by ` 10 crores, general reserve by ` 2,387 crores and retained earnings by ` 1,596 crores.
As required by the Companies Act, 2013, capital redemption reserve of ` 7 crores has been created out of general reserve to the extent of share capital extinguished. The expenses of ` 12 crores relating to buyback has been adjusted against retained earnings.
During the previous year ended 31 March 2018, the Company carried out the share buyback of 35,000,000 fully paid-up equity shares of face value of ` 2 each at a price of ` 1,000 per share paid in cash for an aggregate consideration of ` 3,500 crores. Same was recorded as reduction in equity share capital by ` 7 crores, securities premium by ` 3,248 crores and general reserve by ` 245 crores.
As required by the Companies Act, 2013, capital redemption reserve of ` 7 crores was created out of general reserve to the extent of share capital extinguished. The expenses of ` 14 crores relating to buyback has been adjusted against retained earnings.
Capital management
The primary objective of the Company's capital management is to support business continuity and growth of the company while maximizing the shareholder value. The company has been declaring quarterly dividend for last 16 years. The Company determines the capital requirement based on long-term and other strategic investment plans. The funding requirements are generally met through operating cash flows generated.
Employee Stock Option Plan (ESOP)
The Company has provided share-based payment schemes to its employees. During the year ended 31 March 2019 and 31 March 2018, the following scheme was in operation:
Maximum number of options under the plan Method of settlement (cash/equity) Vesting period (maximum) Exercise period from the date of vesting (maximum)
Vesting conditions
ESOP 2004 20,000,000
Equity 96 months
5 years Service period /
Company performance
Each option granted under the above plans entitles the holder to eight equity shares of the Company at an exercise price, which is approved by the Nomination and Remuneration Committee.
Annual Report 2018-19 195
Notes to financial statements for the year ended 31 March 2019
(All amounts in crores of `, except share data and as stated otherwise)
The details of activity under the plan has been summarized below:-
ESOP 2004
Outstanding at the beginning of the year Add: Granted during the year Less: Forfeited during the year
Exercised during the year Expired during the year Options outstanding at the end of the year Options exercisable at the end of the year
Year ended
31 March 2019
31 March 2018
No of options
Weighted average exercise price (`)
No of options
Weighted average exercise price (`)
123,645
16
183,915
16
-
-
-
-
(4,800)
16
(2,400)
16
(49,515)
16
(57,870)
16
(120)
-
-
-
69,210
16
123,645
16
69,210
118,845
The weighted average option price at the date of exercise for stock options exercised during the year was ` 7,897 (31 March 2018, ` 6,962)
The details of exercise price for outstanding stock options is as below:
Name of the plan
Employee stock option plan - 2004 31 March 2019 31 March 2018
Range of exercise prices
` 16 ` 16
Number of options outstanding
Weighted average remaining contractual life of options (in years)
Weighted average exercise price (`)
69,210
0.50
16
123,645
1.38
16
There are no options granted during the current year and previous year.
2.13 Borrowings
Long term borrowings Secured Term loan from banks (refer note 1 below) Current maturities of long term borrowings disclosed under Note 2.14 "Other financial liabilities"
Non-current
As at
31 March 2019
31 March 2018
32
33
-
-
32
33
Current
As at
31 March 2019
31 March 2018
18
15
(18)
(15)
-
-
Note:1. The Company has availed of term loans of ` 50 crores (31 March 2018, ` 48 crores) secured by hypothecation of gross block
of vehicles of ` 113 crores (31 March 2018, ` 109 crores) at interest rates ranging from 8.50% p.a. to 10.40% p.a. The loans are repayable over a period of 3 to 5 years on a monthly basis.
196 Standalone Financial Statements
Notes to financial statements for the year ended 31 March 2019
(All amounts in crores of `, except share data and as stated otherwise)
2.14 Other financial liabilities
Non - current Carried at amortized cost Employee bonuses accrued Carried at fair value through other comprehensive income Unrealized loss on derivative financial instruments [refer note 2.29(a)]
Current Carried at amortized cost Current maturities of long term borrowings Unclaimed dividends Accrued salaries and benefits Employee bonuses accrued Other employee costs Others Liabilities for expenses Liabilities for expenses-related parties (refer note 2.31) Capital accounts payables [includes supplier credit ` 166 crores (31 March 2018, ` 168 crores)] Capital accounts payables-related parties [includes supplier credit ` 3 crores (31 March 2018, ` 2 crores)] (refer note 2.31) Supplier credit Supplier credit -related parties (refer note 2.31)
Carried at fair value through profit and loss Unrealized loss on derivative financial instruments [refer note 2.29(a)]
As at
31 March 2019
31 March 2018
1
1
-
1
1
2
18 5
429 228
583 346 472
3
56 161 2,301
2,301
15 5
314 198
912 323 880
2
88 123 2,860
6 2,866
2.15 Provisions
Non - Current Provision for employee benefits
Provision for gratuity (refer note 2.30) Provision for leave benefits
Current Provision for employee benefits
Provision for gratuity (refer note 2.30) Provision for leave benefits
2.16 Other non-current liabilities
As at
31 March 2019
31 March 2018
375
317
178
154
553
471
73
63
68
66
141
129
Contract liabilities (previous year : revenue received in advance) (refer note 2.19) Contract liabilities - related parties (previous year : revenue received in advancerelated parties) (refer note 2.19 and 2.31) Others
As at
31 March 2019
31 March 2018
20
24
5
8
27
24
52
56
Annual Report 2018-19 197
Notes to financial statements for the year ended 31 March 2019
(All amounts in crores of `, except share data and as stated otherwise)
2.17 Trade payables
Trade payables Trade payables-related parties (refer note 2.31)
2.18 Other current liabilities
As at
31 March 2019
31 March 2018
156
91
2,211
453
2,367
544
Contract liabilities (previous year : revenue received in advance) (refer note 2.19) Contract liabilities-related parties (previous year : revenue received in advancerelated parties) (refer note 2.19 and 2.31) Other Advances
Advances received from customers Advances received from customers- related parties (refer note 2.31) Others Withholding and other taxes payable
As at
31 March 2019
31 March 2018
166
144
535
326
2
25
49
-
149
113
901
608
2.19 Revenue from operations
Sale of services Sale of hardware and software
Year ended
31 March 2019
31 March 2018
25,834
21,859
178
214
26,012
22,073
Disaggregate Revenue Information
The disaggregated revenue from contracts with the customers for the year ended 31 March 2019.
Contract type Fixed price Time and material Total
Year ended 31 March 2019
18,312 7,700
26,012
Geography wise America Europe India* Rest of world
* includes revenue billed to India based captive of global customers
14,770 7,135 1,924 2,183
26,012
Remaining performance obligations
As at 31 March 2019, the aggregate amount of transaction price allocated to remaining performance obligations as per the requirements of Ind AS 115 was ` 17,413 crores out of which, approximately 43% is expected to be recognized as revenues within one year and the balance beyond one year. This is after exclusions of below:
198 Standalone Financial Statements
Notes to financial statements for the year ended 31 March 2019
(All amounts in crores of `, except share data and as stated otherwise)
a) Contracts for which we recognize revenues based on the right to invoice for services performed,
b) Variable consideration allocated entirely to a wholly unsatisfied performance obligation or to a wholly unsatisfied promise to transfer a distinct good or service that forms part of a single performance obligation,or
c) Variable consideration in the form of a sales-based or usage-based royalty promised in exchange for a license of intellectual property.
Contract balances
Contract assets : A contract asset is a right to consideration that is conditional upon factors other than the passage of time. Contract assets are recognized where there is excess of revenue over the billings. Revenue recognized but not billed to customers is classified either as contract assets or unbilled receivable in our balance sheet. Contract assets primarily relate to unbilled amounts on fixed price contracts using the cost to cost method of revenue recognition. Unbilled receivable represents contracts where right to consideration is unconditional (i.e. only the passage of time is required before the payment is due).
During the year, out of ` 36 crores contract assets as on 1 April 2018, invoicing for 100 % has been done.
Contract liablities : A contract liability arises when there is excess billing over the revenue recognized.
The below table discloses the significant movement in contract liabilities :
Balance as at 1 April 2018 Additional amounts billed but not recognized as revenue Deduction on account of revenues recognized during the year Balance as at 31 March 2019
Contract liabilities 502 596
(372) 726
Deferred contract cost : Deferred contract cost represents the contract fulfilment cost and cost for obtaining the contract.
The below table discloses the significant movement in deferred contract cost :
Balance as at 1 April 2018 Additional cost capitalised during the year Deduction on account of cost amortised during the year Balance as at 31 March 2019
Deferred
contract cost 255 240 (69) 426
2.20 Other income
Year ended
Interest income
31 March 2019
31 March 2018
- On investments carried at fair value through other comprehensive income
93
3
- On others financial instruments carried at amortized cost Profit on sale of investments carried at fair value through other comprehensive income
438
441
17
-
Income on investments carried at fair value through profit and loss - Gains on fair value changes on mutual funds - Profit on sale of mutual funds
(3)
2
124
141
Dividends from subsidiary companies Profit on sale of property, plant and equipments (refer note below)
17
16
3
4
Provision for doubtful debts/bad debts written back
4
-
Exchange differences (net) Miscellaneous income
101
88
11
7
805
702
Note: Net of loss on sale of property, plant & equipment ` 2 crores (previous year, ` 1 crore).
Annual Report 2018-19 199
Notes to financial statements for the year ended 31 March 2019
(All amounts in crores of `, except share data and as stated otherwise)
2.21 Changes in inventories of stock-in-trade
Opening stock Less : Closing stock
2.22 Employee benefits expense
Salaries, wages and bonus Contribution to provident fund and other employee funds Staff welfare expenses
2.23 Finance cost
Interest - on loans from banks - others
Bank charges
2.24 Other expenses
Rent Power and fuel Insurance Repairs and maintenance
- Plant and machinery - Buildings - Others Communication costs Travel and conveyance Legal and professional charges Software license fee Rates and taxes CSR expenditure Provision for doubtful debts/bad debts written off Miscellaneous expenses
2.25 Income taxes
Income tax charged to statement of profit and loss Current income tax charge Deferred tax credit
200 Standalone Financial Statements
Year ended
31 March 2019
31 March 2018
40
90
18
40
22
50
Year ended
31 March 2019
31 March 2018
7,728
7,038
303
285
48
42
8,079
7,365
Year ended
31 March 2019
31 March 2018
4
5
9
15
3
3
16
23
Year ended
31 March 2019
31 March 2018
246
217
234
236
38
23
52 97 207 89 792 103 282 26 125
159 2,450
56 76 168 110 686 95 275 30 91 25 175 2,263
Year ended
31 March 2019
31 March 2018
2,354 (608) 1,746
1,987 (224) 1,763
Notes to financial statements for the year ended 31 March 2019
(All amounts in crores of `, except share data and as stated otherwise)
Income tax charged to other comprehensive income Expense (benefit) on re-measurements of defined benefit plans Expense (benefit) on revaluation of cash flow hedges Expense (benefit) on unrealized gain on debt instruments
Year ended
31 March 2019
31 March 2018
3
7
3
(78)
1
-
7
(71)
The reconciliation between the Company's provision for income tax and amount computed by applying the statutory income tax rate in India is as follows:
Profit before income tax Statutory tax rate in India Expected tax expense Non-taxable export income Non-taxable other income Reversal of prior year provision (net) MAT credit entitlement Permanent differences Others Total taxes Effective income tax rate
Year ended
31 March 2019
31 March 2018
9,931
9,125
34.94%
34.61%
3,470
3,158
(1,549)
(1,405)
(29)
-
(176)
-
-
(70)
-
32
30
48
1,746
1,763
17.6%
19.3%
The company has benefited from certain tax incentives that the Government of India has provided for the units situated in Special Economic Zones (SEZs) under the Special Economic Zone Act, 2005, which began providing services on or after April 1, 2005. The eligible units are eligible for a deduction of 100% of profits or gains derived from the export of services for the first five years from commencement of provision of services and 50% of such profits and gains for a further five years. Certain tax benefits are also available for a further five years subject to the unit meeting defined conditions. The aforesaid tax benefits will not be available to Units commencing operations on or after April 1, 2020.
The Company is subject to Minimum Alternate Tax (MAT) on its book profits, which gives rise to future economic benefits in the form of adjustment of future income tax liability. MAT paid for a year can be set-off against the normal tax liability within fifteen subsequent years, expiring between the years 2023 to 2034.
Components of deferred tax assets and liabilities as on 31 March 2019
Deferred tax assets MAT credit entitlement Provision for doubtful debts Accrued employee costs Depreciation and amortization Others Gross deferred tax assets (A) Deferred tax liabilities Depreciation and amortization Unrealized gain on derivative
financial instruments Others Gross deferred tax liabilities (B) Net deferred tax assets (A-B)
Opening balance
Recognized in profit and
loss
Recognised in /
reclassified from OCI
Acquisitions
Exchange difference
1,341
617
-
-
-
54
(2)
-
-
-
148
24
-
-
-
2
6
-
-
-
42
(15)
-
-
-
1,587
630
-
-
-
40
15
-
-
-
33
-
3
-
-
8
7
4
-
-
81
22
7
-
-
1,506
608
(7)
-
-
Closing balance
1,958 52
172 8
27 2,217
55
36
19 110 2,107
Annual Report 2018-19 201
Notes to financial statements for the year ended 31 March 2019
(All amounts in crores of `, except share data and as stated otherwise)
Components of deferred tax assets and liabilities as on 31 March 2018
Deferred tax assets MAT credit entitlement Provision for doubtful debts Accrued employee costs Depreciation and amortization Others Gross deferred tax assets (A) Deferred tax liabilities Depreciation and amortization Unrealized gain on derivative financial instruments Others Gross deferred tax liabilities (B) Net deferred tax assets (A-B)
Opening balance
Recognized in profit and
loss
Recognised in /
reclassified from OCI
Acquisitions
Exchange difference
1,120
221
-
-
-
50
4
-
-
-
146
3
(1)
-
-
2
-
-
-
-
50
(8)
-
-
-
1,368
220
(1)
-
-
28
12
-
-
-
111
-
(78)
-
-
18
(16)
6
-
-
157
(4)
(72)
-
-
1,211
224
71
-
-
2.26 Components of other comprehensive income
Closing balance
1,341 54
148 2
42 1,587
40
33
8 81 1,506
A. Items that will not be reclassified to statement of profit and loss Retained earnings (Actuarial gain relating to defined benefit plan) Opening balance (net of tax) Actuarial gains Income tax expense Closing balance (net of tax)
For the year ended
31 March 2019
31 March 2018
31
3
13
35
(3)
(7)
41
31
B. Items that will be reclassified subsequently to statement of profit and loss Foreign currency translation reserve Opening balance Foreign currency translation Reclassification adjustments into other (income) expense, net Closing balance
5
(49)
(22)
54
-
-
(17)
5
Cash flow hedging reserve Opening balance (net of tax) Unrealized gains (losses) Reclassification adjustments into revenue Income tax benefit (expense) Closing balance (net of tax)
137
445
82
131
(45)
(517)
(3)
78
171
137
Unrealized gain debt instruments Opening balance (net of tax) Unrealized gains (losses) Income tax benefit (expense) Closing Balance (net of tax) TOTAL (B)
-
-
3
-
(1)
-
2
-
156
142
202 Standalone Financial Statements
Notes to financial statements for the year ended 31 March 2019
(All amounts in crores of `, except share data and as stated otherwise)
2.27 Earnings per share The computation of earnings per share is as follows:
Net profit as per statement of profit and loss for computation of EPS Weighted average number of equity shares outstanding in calculating Basic EPS Dilutive effect of stock options outstanding Weighted average number of equity shares outstanding in calculating dilutive EPS Nominal value of equity shares (in `) Earnings per equity share (in `)
- Basic - Diluted
Year ended
31 March 2019
31 March 2018
8,209
7,362
1,375,363,202
1,401,349,735
552,567
986,925
1,375,915,769
1,402,336,660
2
2
59.69 59.66
52.54 52.50
2.28 Leases
i) Operating lease
The Company's significant leasing arrangements are in respect of operating leases for office spaces and accommodation for its employees. The aggregate lease rental expense recognized in the statement of profit and loss for the year amounts to ` 246 crores (previous year, ` 217 crores).
The lease equalization amount for non-cancellable operating lease payable in future years and accounted for by the Company is ` 90 crores (31 March 2018, ` 85 crores). Future minimum lease payments and the payment profile of non-cancellable operating leases are as follows:
Not later than one year Later than one year and not later than 5 years Later than five years
ii) Finance lease: In case of assets given on lease
Year ended
31 March 2019 31 March 2018
188
139
556
445
184
187
928
771
The Company has given IT equipments to its customers on a finance lease basis. The future lease receivables in respect of assets given on finance lease are as follows:
As on 31 March 2019 Not later than one year Later than one year and not later than 5 years
As on 31 March 2018 Not later than one year Later than one year and not later than 5 years
Total minimum lease Interest included
Present value of
payments receivable
in minimum lease payments receivable
minimum lease payments receivable
51
2
49
75
3
72
126
5
121
32
1
31
3
-
3
35
1
34
2.29 Financial instruments (a) Derivatives
The Company is exposed to foreign currency fluctuations on foreign currency assets / liabilities and forecast cash flows denominated in foreign currency. The use of derivatives to hedge foreign currency forecast cash flows is governed by the Company's strategy, which provides principles on the use of such forward contracts and currency options consistent with the
Annual Report 2018-19 203
Notes to financial statements for the year ended 31 March 2019
(All amounts in crores of `, except share data and as stated otherwise)
Company's Risk Management Policy. The counterparty in these derivative instruments is a bank and the Company considers the risks of non-performance by the counterparty as insignificant. The Company has entered into a series of foreign exchange forward contracts and options that are designated as cash flow hedges and the related forecasted transactions extend through June 2023. The Company does not use forward covers and currency options for speculative purposes.
The following table presents the aggregate notional principal amounts of the outstanding derivative forward covers together with the related balance sheet exposure:
Foreign exchange forward denominated in
Sell covers USD / INR GBP / INR EUR / INR CHF / INR SEK / INR AUD / INR NOK / INR GBP / USD NOK / USD NZD / USD JPY / USD RUB / USD AUD / USD CHF / USD EUR / USD ZAR / USD MXN / USD CNH / USD
Buy covers GBP / USD SEK/ USD NOK / USD
Notional currency
USD GBP EUR CHF SEK AUD NOK GBP NOK NZD JPY RUB AUD CHF EUR ZAR MXN CNH
GBP SEK NOK
Notional principal amounts (amount in thousands)
31 March 2019 31 March 2018
Balance sheet exposure Asset (Liability) (`)
31 March 2019 31 March 2018
680,470 14,200 72,500 20,900
145,000 16,171
201,000 -
42,000 -
244,000 2,680
18,133 20,079 45,000 75,000
-
246,394 9,760
67,895 21,000 315,100 34,350 160,000
2,230 -
3,560 939,069 198,000
6,600 1,500
195,000
2,800
76
23
5
-
43
(14)
7
3
16
6
6
6
14
2
-
-
-
-
-
-
-
-
-
-
-
1
-
-
1
-
-
1
-
-
-
-
10,000
19,000
1
(1)
20,000
-
-
-
-
27,000
-
-
169
27
The following table presents the aggregate notional principal amounts of the outstanding forward options together with the related balance sheet exposure:
Range forward USD / INR GBP / INR EUR / INR AUD / INR CHF / INR EUR / USD SEK / INR
PUT USD / INR
Seagull USD / INR GBP / INR EUR / INR
Notional currency
Notional principal amounts (amount in thousands)
31 March 2019 31 March 2018
Balance sheet exposure Asset (Liability) (`)
31 March 2019 31 March 2018
USD
1,216,487
1,099,485
105
186
GBP
15,500
60,800
6
(6)
EUR
44,250
110,380
23
(16)
AUD
16,950
10,580
6
2
CHF
1,500
-
1
-
EUR
-
3,500
-
-
SEK
15,000
-
1
-
USD
14,000
50,000
3
1
USD GBP EUR
7,000
14,750
-
-
-
6,000
-
-
-
14,200
-
-
145
167
204 Standalone Financial Statements
Notes to financial statements for the year ended 31 March 2019
(All amounts in crores of `, except share data and as stated otherwise)
The notional amount is a key element of derivative financial instrument agreements. However, notional amounts do not represent the amount exchanged by counterparties and do not measure the Company's exposure to credit risk as these contracts are settled at their fair values at the maturity date.
The balance sheet exposure denotes the fair values of these contracts at the reporting date and is presented in ` crores. The Company presents its foreign exchange derivative instruments on a net basis in the financial statements due to the right of offset by its individual counterparties under master netting agreements.
The fair value of the derivative instruments presented on a gross basis as at each date indicated below is as follows:
Derivatives designated as hedging instruments Foreign exchange contracts in an asset position Foreign exchange contracts in an liability position Net asset (liability)
Derivatives not designated as hedging instruments Foreign exchange contracts in an asset position Foreign exchange contracts in an liability position Net asset (liability)
Total derivatives at fair value
As at 31 March 2019
Financial assets
Financial liabilities
Current Non current Current Non current
Total fair value
142
113
10
10
275
(10)
(10)
(10)
(10)
(40)
132
103
-
-
235
86
-
7
(7)
-
(7)
79
-
-
211
103
-
-
93
-
(14)
-
79
-
314
Derivatives designated as hedging instruments Foreign exchange contracts in an asset position Foreign exchange contracts in an liability position Net asset (liability)
Derivatives not designated as hedging instruments Foreign exchange contracts in an asset position Foreign exchange contracts in an liability position Net asset (liability)
Total derivatives at fair value
As at 31 March 2018
Financial assets
Financial liabilities
Current Non current Current Non current
Total fair value
197
44
19
21
281
(19)
(21)
(19)
(22)
(81)
178
23
-
(1)
200
4
-
4
-
8
(4)
-
(10)
-
(14)
-
-
(6)
-
(6)
178
23
(6)
(1)
194
The following tables set forth the fair value of derivative instruments included in the balance sheets as at each date indicated:
Derivatives designated as hedging instruments Unrealized gain on financial instruments classified under current assets Unrealized gain on financial instruments classified under non-current assets Unrealized loss on financial instruments classified under non-current liabilities
Derivatives not designated as hedging instruments Unrealized gain on financial instruments classified under current assets Unrealized loss on financial instruments classified under current liabilities
As at
31 March 2019
31 March 2018
132
178
103
23
-
(1)
235
200
79
-
-
(6)
79
(6)
Annual Report 2018-19 205
Notes to financial statements for the year ended 31 March 2019
(All amounts in crores of `, except share data and as stated otherwise)
Maturity profile of derivative liabilities based on contractual payments is as below:
Within one year One to two years Two to three years
The following table summarizes the activities in the statement of profit and loss:
As at
31 March 2019
31 March 2018
-
6
-
-
-
1
-
7
Derivatives in hedging relationships Effective portion of gain or (loss) recognized in OCI on derivatives Effective portion of gain or (loss) reclassified from OCI into statement of profit and loss as "revenue" Derivatives not in hedging relationships Gain or (loss) recognized into statement of profit and loss as "exchange differences"
Year ended
31 March 2019
31 March 2018
82
131
45
517
(18)
18
The following table summarizes the activity in the accumulated `Other comprehensive income' within equity related to all derivatives classified as cash flow hedges:
Gain as at the beginning of the year Unrealized gain on cash flow hedging derivatives during the year Net loss (gain) reclassified into net income on occurrence of hedged transactions Gain as at the end of the year Deferred tax Cash flow hedging reserve (net of tax)
Year ended
31 March 2019
31 March 2018
170
556
82
131
(45)
(517)
207
170
(36)
(33)
171
137
The estimated net amount of existing gain that is expected to be reclassified into the statement of profit and loss within the next twelve months is ` 110 crores (31 March 2018, gain of ` 156 crores).
(b) Financial assets and liabilities
The carrying value of financial instruments by categories as at 31 March 2019 is as follows:
Financial assets Investments (other than in subsidiaries) Trade receivables Cash and cash equivalents Other bank balances Loans Others (refer note 2.6)
Total
Fair value through profit and loss
Fair value through
other comprehensive
income
Amortized cost
776
1,226
-
-
-
6,245
-
-
4,523
-
-
1,750
-
-
1,599
79
235
2,270
855
1,461
16,387
Total carrying
value
2,002 6,245 4,523 1,750 1,599 2,584 18,703
206 Standalone Financial Statements
Notes to financial statements for the year ended 31 March 2019
(All amounts in crores of `, except share data and as stated otherwise)
Financial liabilities Borrowings Trade payables Others (refer note 2.14)
Total
Fair value through profit and loss
Fair value through
other comprehensive
income
-
-
-
-
-
-
-
-
Amortized cost
32 2,367 2,302 4,701
The carrying value of financial instruments by categories as at 31 March 2018 is as follows:
Total carrying
value
32 2,367 2,302 4,701
Financial assets Investments (other than in subsidiaries) Trade receivables Cash and cash equivalents Other bank balances Loans Others (refer note 2.6)
Total Financial liabilities
Borrowings Trade payables Others (refer note 2.14) Total
Fair value through profit and loss
Fair value through
other comprehensive
income
Amortized cost
2,130 -
2,130
260
-
-
5,427
-
210
-
2,115
-
3,673
201
1,505
461
12,930
-
-
33
-
-
544
6
1
2,860
6
1
3,437
Total carrying
value
2,390 5,427
210 2,115 3,673 1,706 15,521
33 544 2,867 3,444
Transfer of financial assets
The Company and its subsidiaries have revolving accounts receivables based facilities of ` 767 crores permitting it to sell certain accounts receivables to banks on a non-recourse basis in the normal course of business. The aggregate maximum capacity utilized by the Company at any time during the year was ` 140 crores (previous year, nil). Outstanding utilization by the company against this facility as of 31 March 2019 is ` 140 crores (previous year, nil).
Fair value hierarchy
The assets and liabilities measured at fair value on a recurring basis as at 31 March 2019 and the basis for that measurement is as below:
Assets Investments carried at fair value through profit
Fair value Level 1 inputs
776
776
and loss Investments carried at fair value through other
1,226
1,226
comprehensive income
Unrealized gain on derivative financial instruments
314
-
Liabilities
Unrealized loss on derivative financial
-
-
instruments
There have been no transfers between Level 1 and Level 2 during the year.
Level 2 inputs -
314 -
Level 3 inputs -
Annual Report 2018-19 207
Notes to financial statements for the year ended 31 March 2019
(All amounts in crores of `, except share data and as stated otherwise)
The following table discloses the assets and liabilities measured at fair value on a recurring basis as at 31 March 2018 and the basis for that measurement:
Assets Investments carried at fair value through profit and loss Investments carried at fair value through other
Fair value Level 1 inputs
2,130
2,130
260
260
comprehensive income
Unrealized gain on derivative financial instruments
201
-
Liabilities
Unrealized loss on derivative financial
7
-
instruments
There have been no transfers between Level 1 and Level 2 during the year.
Level 2 inputs -
201 7
Level 3 inputs -
Valuation methodologies
Investments: The Company's investments consist of investment in debt securities in the form of bonds,debentures and mutual funds which are determined using quote prices or identical quoted prices of assets or liabilities in active markets and are classified as Level 1.
Derivative financial instruments: The Company's derivative financial instruments consist of foreign currency forward exchange contracts. Fair values for derivative financial instruments are based on broker quotations and are classified as Level 2.
The Company assessed that fair value of cash and short-term deposits, trade receivables, trade payables, bank overdrafts and other current liabilities approximate their carrying amounts largely due to the short-term maturities of these instruments.
(c) Financial risk management
The Company is exposed to market risk, credit risk and liquidity risk which may impact the fair value of its financial instruments. The Company has a risk management policy to manage & mitigate these risks.
The Company's risk management policy aims to reduce volatility in financial statements while maintaining balance between providing predictability in the Company's business plan along with reasonable participation in market movement.
Market risk
Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises of currency risk and interest rate risk. The Company is primarily exposed to fluctuation in foreign currency exchange rates.
(i) Foreign currency risk
Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate because of changes in exchange rates. The Company's exposure to the risk of changes in exchange rates relates primarily to the Company's operations and the Company's net investments in foreign branches.
The exchange rate risk primarily arises from assets and liabilities denominated in currencies other than the functional currency of the respective branches and foreign currency forecasted revenue and cash flows. A significant portion of the Company revenue is in US Dollar, Pound Sterling (GBP) and Euro while a large portion of costs are in Indian rupees. The fluctuation in exchange rates in respect to the Indian rupee may have potential impact on the statement of profit and loss and other comprehensive income and equity.
To mitigate the foreign currency risk the Company uses derivatives as governed by the Company's strategy, which provides principles on the use of such forward contracts and currency options consistent with the Company's Risk Management Policy.
208 Standalone Financial Statements
Notes to financial statements for the year ended 31 March 2019
(All amounts in crores of `, except share data and as stated otherwise)
Appreciation/depreciation of 1% in respective foreign currencies with respect to functional currency of the Company and its branches would result in decrease/increase in the Company's profit before tax by approximately ` 12 crores for the year ended 31 March 2019.
The rate sensitivity is calculated by aggregation of the net foreign exchange rate exposure and a simultaneous parallel foreign exchange rates shift of all the currencies by 1% against the respective functional currencies of the Company and its branches. The sensitivity analysis presented above may not be representative of the actual change.
Non-derivative foreign currency exposure as of 31 March 2019 and 31 March 2018 in major currencies is as below:
USD / INR GBP / INR EURO / INR
(ii) Interest rate risk
Net financial assets
31 March 2019
31 March 2018
7,548
3,652
205
297
405
404
Net financial liabilities
31 March 2019
31 March 2018
2,196
1,366
80
44
91
158
Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company's investments are primarily in fixed rate interest bearing investments. Hence the Company is not significantly exposed to interest rate risk.
Credit risk
Financial instruments that potentially subject the Company to concentration of credit risk consist principally of cash and bank balances, inter-corporate deposits, trade receivables, unbilled revenue, finance lease receivables, investment securities and derivative instruments. The cash resources of the Company are invested with mutual funds, banks, financial institutions and corporations after an evaluation of the credit risk. By their nature, all such financial instruments involve risks, including the credit risk of non-performance by counterparties.
The customers of the Company are primarily corporations based in the United States of America and Europe and accordingly, trade receivables and finance lease receivables are concentrated in the respective countries. The Company periodically assesses the financial reliability of customers, taking into account the financial condition, current economic trends, analysis of historical bad debts and ageing of accounts receivables.
The allowance for lifetime expected credit loss on customer balances is as below:
Balance at the beginning of the year Additional provision during the year Deductions on account of write offs and collections Effect of exchange rates changes Balance at the end of the year
Liquidity risk
As at
31 March 2019
31 March 2018
130
120
39
55
(44)
(46)
-
1
125
130
Liquidity risk is the risk that the Company will encounter difficulty in meeting its obligations associated with financial liabilities. The investment philosophy of the Company is capital preservation and liquidity in preference to returns. The Company consistently generates sufficient cash flows from operations and has access to multiple sources of funding to meet the financial obligations and maintain adequate liquidity for use.
Annual Report 2018-19 209
Notes to financial statements for the year ended 31 March 2019
(All amounts in crores of `, except share data and as stated otherwise)
Maturity profile of the Company's non-derivative long term financial liabilities based on contractual payments is as below:
As at 31 March 2019 Borrowings Employee bonuses accrued Total As at 31 March 2018 Borrowings Employee bonuses accrued Total
Year 1 (Current)
18 429 447
15 314 329
Year 2
15 1
16
15 1
16
Year 3
Year 4-5
10
7
-
-
10
7
11
7
-
-
11
7
Total
50 430 480
48 315 363
2.30 Employee benefits
The Company has calculated the various benefits provided to employees as given below:
A. Defined contribution plans and state plans
Superannuation Fund Employer's contribution to Employees State Insurance Employer's contribution to Employee Pension Scheme
During the year the Company has recognized the following amounts in the statement of profit and loss :-
Superannuation Fund Employer's contribution to Employees State Insurance Employer's contribution to Employee's Pension Scheme Total
Year ended
31 March 2019
31 March 2018
4
3
12
14
105
95
121
112
The Company has contributed ` 19 crores (previous year, ` 18 crores) towards other foreign defined contribution plans.
B. Defined benefit plans
a) Gratuity b) Employer's contribution to provident fund
Gratuity The following table sets out the status of the gratuity plan :
Statement of profit and loss
Current Service cost Past service cost Interest cost (net) Net benefit expense
Year ended
31 March 2019
31 March 2018
82
75
3
11
26
21
111
107
210 Standalone Financial Statements
Notes to financial statements for the year ended 31 March 2019
(All amounts in crores of `, except share data and as stated otherwise)
Balance Sheet
Defined benefit obligations Fair value of plan assets
Less: Unrecognized past service cost Net plan liability Current defined benefit obligations Non-current defined benefit obligations
Changes in present value of the defined benefit obligations are as follows:
As at
31 March 2019
31 March 2018
464
394
16
14
448
380
-
-
448
380
73
63
375
317
Opening defined benefit obligations Current service cost Past Service Cost Interest cost Re-measurement gains (losses) in OCI
Actuarial changes arising from changes in financial assumptions Experience adjustments Benefits paid Closing defined benefit obligations
Changes in fair value of the plan assets are as follows:
Year ended
31 March 2019
31 March 2018
394
343
82
75
3
11
27
22
13
(18)
(27)
(16)
(28)
(23)
464
394
Opening fair value of plan assets Interest income Contributions Re-measurement gains (losses) in OCI
Return on plan assets, excluding amount recognized in interest income Benefits paid Closing fair value of plan assets
Year ended
31 March 2019
31 March 2018
14
16
1
1
26
-
(1)
(1)
(24)
(2)
16
14
The overall expected rate of return on assets is determined based on the market prices prevailing on that date, applicable to the period over which the obligation is to be settled.
The principal assumptions used in determining gratuity for the Company's plans are shown below:
Discount rate Estimated Rate of salary increases Employee Turnover Expected rate of return on assets
As at
31 March 2019
31 March 2018
7.20%
7.60%
7.00%
7.00%
22.00%
22.00%
7.20%
7.60%
The estimates of future salary increases, considered in the actuarial valuation, take account of inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market.
Annual Report 2018-19 211
Notes to financial statements for the year ended 31 March 2019
(All amounts in crores of `, except share data and as stated otherwise)
Discount rate and future salary escalation rate are the key actuarial assumptions to which the defined benefit obligations are particularly sensitive. The following table summarizes the impact on defined benefit obligations as at 31 March 2019 arising due to an increase/decrease in key actuarial assumptions by 50 basis points:
Impact of increase Impact of decrease
Discount rate
(13) 14
Salary escalation rate
14 (13)
The sensitivity analysis presented may not be representative of the actual change in the defined benefit obligations as sensitivities have been calculated to show the movement in defined benefit obligations in isolation and assuming there are no other changes in market conditions. There have been no changes from the previous years in the methods and assumptions used in preparing the sensitivity analysis.
The defined benefit obligations are expected to mature after 31 March 2019 as follows:
Year ending 31 March - 2020 - 2021 - 2022 - 2023 - 2024 - Thereafter The weighted average duration of the payment of these cash flows is 6.05 years.
Cash flows 80 82 92
104 113 1,938
Employer's contribution to provident fund
The actuary has provided a valuation and based on the assumptions mentioned below, there is no shortfall as at 31 March 2019 and 31 March 2018.
The details of the fund and plan asset position are given below:-
Plan assets at the year end Present value of benefit obligation at year end Asset recognized in balance sheet
31 March 2019 3,391 3,391 -
31 March 2018 2,738 2,738 -
Assumptions used in determining the present value obligation of the interest rate guarantee under the Deterministic Approach:
Government of India (GOI) bond yield Remaining term of maturity Expected guaranteed interest rate
31 March 2019 7.20%
8.00 years 8.65%
31 March 2018 7.60%
8.51 years 8.55%
During the year ended 31 March 2019, the Company has contributed ` 141 crores (previous year, ` 121 crores) towards employer's contribution to provident fund.
212 Standalone Financial Statements
Notes to financial statements for the year ended 31 March 2019
(All amounts in crores of `, except share data and as stated otherwise)
2.31 Related party transactions a) Related parties where control exists
List of subsidiaries as at 31 March 2019 and 31 March 2018 is as below:
S. No.
Name of the Subsidiaries
Direct subsidiaries
1 HCL Comnet Systems & Services Limited
2 HCL Comnet Limited
3 HCL Bermuda Limited
4 HCL Technologies (Shanghai) Limited
5 HCL Eagle Limited
6
HCL Foundation (Company incorporated under Section 8 of the Companies Act, 2013) $
7 HCL Singapore Pte. Limited
8 Geometric Americas, Inc.
9 Geometric Asia Pacific Pte. Ltd
10 Geometric Europe GmbH
Step down subsidiaries of direct subsidiaries
11 HCL Great Britain Limited
12 HCL (Netherlands) BV
13 HCL Belgium NV
14 HCL Sweden AB
15 HCL GmbH
16 HCL Italy SRL
17 HCL Australia Services Pty. Limited
18 HCL (New Zealand) Limited
19 HCL Hong Kong SAR Limited
20 HCL Japan Limited
21 HCL America Inc.
22 HCL Technologies Austria GmbH
23 HCL Global Processing Services Limited
24 HCL Technologies Solutions Limited
25 HCL Poland Sp.z.o.o
26 HCL EAS Limited
27 HCL Insurance BPO Services Limited
28 Axon Group Limited
29 HCL Axon Technologies Inc.
30 HCL Technologies Solutions GmbH
31 Axon Solutions Pty. Limited
32 Axon Solutions Limited
33 HCL Axon Malaysia Sdn. Bhd.
34 Axon Solutions Singapore Pte. Limited
35 Axon Solutions (Shanghai) Co. Limited
36 HCL Axon (Proprietary) Limited
37 HCL Argentina s.a.
Country of Incorporation
India India Bermuda China India
India
Singapore USA
Singapore Germany
UK Netherlands
Belgium Sweden Germany
Italy Australia New Zealand Hong Kong
Japan USA Austria India India Poland UK UK UK Canada Switzerland Australia UK Malaysia Singapore China South Africa Argentina
Percentage holding as at
31 March 2019
31 March 2018
100% 100% 100% 100% 100%
100%
100% 100% 100% 100%
100% 100% 100% 100% 100%
100%
100% 100% 100% 100%
100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100%
100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100%
Annual Report 2018-19 213
Notes to financial statements for the year ended 31 March 2019
(All amounts in crores of `, except share data and as stated otherwise)
S. No.
Name of the Subsidiaries
38 HCL Mexico S. de R.L. 39 HCL Technologies Romania s.r.l. 40 HCL Hungary Kft 41 HCL Latin America Holding LLC 42 HCL (Brazil) Technologia da informacao Ltda. 43 HCL Technologies Denmark Aps 44 HCL Technologies Norway AS 45 PT. HCL Technologies Indonesia Limited 46 HCL Technologies Philippines Inc. 47 HCL Technologies South Africa (Proprietary) Limited 48 HCL Arabia LLC 49 HCL Technologies France SAS 50 Filial Espanola De HCL Technologies S.L 51 Anzospan Investments Pty Limited 52 HCL Investments (UK) Limited 53 Statestreet HCL Holding UK Limited ** 54 Statestreet HCL Services (Phillipines) Inc. ** 55 Statestreet HCL Services (India) Private Limited ** 56 HCL America Solutions Inc. 57 HCL Technologies Chile Spa 58 HCL Technologies UK Limited 59 HCL Technologies B.V. 60 HCL (Ireland) Information Systems Limited 61 HCL Technologies Germany GmbH 62 HCL Technologies Belgium BVBA 63 HCL Technologies Sweden AB 64 HCL Technologies Finland Oy 65 HCL Technologies Italy S.P.A 66 HCL Technologies Columbia S.A.S 67 HCL Technologies Middle East FZ-LLC 68 HCL Istanbul Bilisim Teknolojileri Limited Sirketi 69 HCL Technologies Greece Single Member P.C 70 HCL Technologies S.A. 71 HCL Technologies Beijing Co., Ltd 72 HCL Technologies Luxembourg S.a r.l 73 HCL Technologies Egypt Limited 74 HCL Technologies Estonia OÜ 75 HCL Technologies (Thailand) Ltd. 76 HCL Technologies Czech Republic s.r.o. 77 HCL Muscat Technologies L.L.C. 78 Concept2Silicon Systems Private Limited 79 Powerteam, LLC 80 Point to Point Limited 81 Point to Point Products Limited
Country of Incorporation
Mexico Romania Hungary
USA Brazil Denmark Norway Indonesia Philippines South Africa Saudi Arabia France Spain South Africa
UK UK Philippines India USA Chile UK Netherlands Ireland Germany Belgium Sweden Finland Italy Columbia UAE Turkey Greece Venezuela China Luxembourg Egypt Estonia Thailand Czech Republic Oman India USA UK UK
Percentage holding as at
31 March 2019
31 March 2018
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
214 Standalone Financial Statements
Notes to financial statements for the year ended 31 March 2019
(All amounts in crores of `, except share data and as stated otherwise)
S. No.
Name of the Subsidiaries
82 HCL Technologies Lithuania UAB
83 HCL Technologies (Taiwan) Ltd.
84 Geometric China, Inc.
85 Geometric SRL
86 Geometric SAS
87 Butler America Aerospace LLC
88 HCL Mortgage Holding LLC !
89 Urban Fulfillment Services LLC
90
Datawave (An HCL Technologies Company) Limited (formely known as "ETL Factory Limited")
91 HCL Technologies Corporate Services Limited ^
92 HCL Training & Staffing Services Private Limited
93 C3i Support Services Private Limited #
94 Telerx Marketing, Inc. #
95 C3i Europe Eood #
96 C3i (UK) Limited #
97 C3i Japan GK #
98 C3i Services &Technologies (Dalian) Co., Ltd #
99 HCL Technologies SEP Holdings Inc ^
100 Actian Corporation #
101 Actian Australia Pty Ltd #
102 Actian Europe Limited #
103 Actian France #
104 Actian Germany GmbH #
105 Actian International, Inc. #
106 Actian Netherlands B.V. #
107 Actian Netherlands Holding B.V. #
108 Actian Technology Private Limited #
109 Ingres Canada Corporation ! #
110 ParAccel LLC #
111 Pervasive Software, Inc. #
112 POET Holdings, Inc. #
113 Versant GmbH #
114 Versant India Private Limited #
115 Versant Software LLC #
116 Honisgberg & Duvel Datentichnik GMBH #
117 H&D Business Services GmbH #
118 H&D IT Solutions GmbH #
119 H&D Training und Consulting GmbH #
120 H&D International GmbH #
121 H&D IT Professional Services GmbH #
122 qmo-it GmbH #
123 H&D Services for Engineering GmbH #
124 Hönigsberg & Düvel Datentechnik Czech s.r.o. #
Country of Incorporation
Lithuania China China
Romania France
USA USA USA
Scotland
UK India India USA Bulgaria UK Japan China USA USA Australia UK France Germany USA Netherlands Netherlands India Canada USA USA USA Germany India USA Germany Germany Germany Germany Germany Germany Germany Germany Czech Republic
Percentage holding as at
31 March 2019
31 March 2018
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100% 100% 100% 100% 100% 100% 100% 100% 80% 80% 80% 80% 80% 80% 80% 80% 80% 80% 80% 80% 80% 80% 80% 80% 80% 100% 100% 100% 100% 100% 100% 100% 100% 100%
100% 100%
-
Annual Report 2018-19 215
Notes to financial statements for the year ended 31 March 2019
(All amounts in crores of `, except share data and as stated otherwise)
S. No.
Name of the Subsidiaries
Country of Incorporation
Percentage holding as at
31 March 2019
31 March 2018
125 Hönigsberg & Düvel Corporation #
USA
100%
-
126 catis GmbH #
Germany
100%
-
127 H&D IT Automotive Services GmbH #
Germany
100%
-
128 ca Management Services GmbH #
Germany
100%
-
129 H&D ITAS Infrastructure Services GmbH #
Germany
100%
-
130 H&D ITAS Application Services GmbH #
Germany
100%
-
131 H&D ITAS Client Services GmbH #
Germany
100%
-
132 H&D ITAS Süd GmbH #
Germany
100%
-
133 HCL Technologies Vietnam Company Limited ^
Vietnam
100%
-
134 HCL Guatemala, Sociedad Anonima ^
Guatemala
100%
-
$ The objective of the parent is not to obtain economic benefit from the Company, it has not been considered for the purpose of preparation of consolidated financial statements. ! Dissolved during the year ** The Group has equity interest of 49% and 100% dividend rights and control ^ Incorporated during the year # Acquired during the year
Employee benefit trusts Hindustan Instruments Limited Employees Provident Fund Trust HCL Consulting Limited Employees Superannuation Scheme HCL Comnet System and Services Limited Employees Provident Fund Trust. Geometric Gratuity Trust HCL South Africa Share Ownership Trust HCL Technologies Stock Options Trust C3i Support Services Employees Gratuity Trust
Key Management Personnel Mr. Shiv Nadar Chairman and Chief Strategy Officer Mr. C. Vijayakumar President and Chief Executive Officer Mr. Prateek Aggarwal Chief Financial Officer (w.e.f. 1 October 2018) Mr. Manish Anand Company Secretary Mr. Anil Chanana Chief Financial Officer (upto 1 October 2018)
Non-Executive & Independent Directors Mr. Ramanathan Srinivasan Mr. Keki Mistry (ceased to be Director w.e.f. 30 April 2018) Ms. Robin Ann Abrams Dr. Sosale Shankara Sastry Mr. Subramanian Madhavan Mr. Thomas Sieber Ms. Nishi Vasudeva Mr. Deepak Kapoor Mr. James Philip Adamczyk (appointed w.e.f. 26 July 2018)
Non-Executive & Non-Independent Directors Ms. Roshni Nadar Malhotra Mr. Sudhindar Krishan Khanna (ceased to be Director w.e.f. 8 April 2019)
216 Standalone Financial Statements
Notes to financial statements for the year ended 31 March 2019
(All amounts in crores of `, except share data and as stated otherwise)
b) Related parties with whom transactions have taken place during the current year Others (Significant influence)
HCL Infosystems Limited
HCL Insys. Pte. Limited, Singapore
HCL Avitas Private Limited
SSN Trust
Vama Sundari Investments (Delhi) Private Limited
HCL IT City Lucknow Private Limited
HCL Corporation Private Limited
HCL Infotech Limited
SSN Investments (Pondi) Private Limited
Shiv Nadar University
Naksha Enterprises Private Limited
HCL Holding Private Limited
HCL Learning Limited
Shiv Nadar Foundation
HCL Services Limited (ceased to be related party w.e.f. 15 June 2018)
Transactions with related parties during the normal course of business
Subsidiaries
Year ended
31 March 2019
31 March 2018
Revenues from operations
11,341
12,862
Other expenses (refer below note)
4,430
2,097
Dividend paid
-
-
Corporate guarantee fees
-
1
Interest income
3
-
Dividend income
17
16
Receipt for use of facilities
1
3
Purchase of capital equipments
-
-
Proceeds from loan extended
21
-
Note: Other expenses include outsourcing cost and cost of goods sold also.
Significant influence
Year ended
31 March 2019
31 March 2018
23
12
262
179
656
993
-
-
1
-
-
-
-
-
-
10
-
-
Transactions with Key Managerial personnel during the year
Compensation - Short-term employee benefits from company - Short-term employee benefits from subsidiaries - Other long term benefits from subsidiaries - Termination benefits from company
Year ended
31 March 2019
31 March 2018
5
16
34
23
-
16
1
-
Transactions with Directors during the year Commission & other benefits to Directors (includes sitting fees)
Year ended
31 March 2019
31 March 2018
8
8
Outstanding balances
Trade receivables Unbilled receivable (previous year : unbilled revenue) Unsecured loans* Deferred contract cost Advance to supplier
Subsidiaries
As at
31 March 2019
31 March 2018
2,945
3,565
861
729
Significant influence
As at
31 March 2019
31 March 2018
9
5
1
-
9
30
-
-
-
-
19
-
85
61
-
-
Annual Report 2018-19 217
Notes to financial statements for the year ended 31 March 2019
(All amounts in crores of `, except share data and as stated otherwise)
Outstanding balances
Interest receivables Security deposits Prepaid expenses Trade payables Advance from customers Contract liabilities (previous year : revenue received in advance) Capital accounts payables (including supplier credit) Guarantee outstanding** Liabilities for expense Supplier credit
Subsidiaries
As at
31 March 2019
31 March 2018
5
2
-
-
-
-
2,209
451
49
-
539
320
-
-
352
471
316
303
-
-
Significant influence
As at
31 March 2019
31 March 2018
-
-
19
12
27
7
2
2
-
-
1
14
3
2
-
-
30
20
161
123
* Unsecured loan includes loan outstanding with Geometric Europe GmbH which is given for working capital management and repayable on demand.
** Detail of guarantee outstanding
HCL America Inc. HCL Insurance BPO Services Ltd. Others
31 March 2019 35
317 -
352
31 March 2018 130 321 20 471
2.32 Research and development expenditure
Revenue Capital
Year ended
31 March 2019
31 March 2018
229
128
-
-
229
128
2.33 Commitments and contingent liabilities
i) Capital and other commitments
Capital commitments
Estimated amount of contracts remaining to be executed on capital account and not provided for (net of advances) [includes related party nil (31 March 2018, ` 1 crore)]
As at
31 March 2019
31 March 2018
262
201
ii) Contingent liabilities Others
1
1
263
202
218 Standalone Financial Statements
Notes to financial statements for the year ended 31 March 2019
(All amounts in crores of `, except share data and as stated otherwise)
The Company is involved in various lawsuits, claims and proceedings that arise in the ordinary course of business, the outcome of which is inherently uncertain. Some of these matters include speculative and frivolous claims for substantial or indeterminate amounts of damages. The Company records a liability when it is both probable that a loss has been incurred and the amount can be reasonably estimated. Significant judgment is required to determine both probability and the estimated amount. The Company reviews these provisions at least quarterly and adjusts these provisions accordingly to reflect the impact of negotiations, settlements, rulings, advice of legal counsel, and updated information. The Company believes that the amount or estimable range of reasonably possible loss, will not, either individually or in the aggregate, have a material adverse effect on its business, financial position, results of the Company, or cash flows with respect to loss contingencies for legal and other contingencies as at 31 March 2019.
Guarantees have been given by the Company on behalf of various subsidiaries against credit facilities, financial assistance and office premises taken on lease amounting to ` 352 crores (31 March 2018, ` 471 crores). These guarantees have been given in the normal course of the Company's operations and are not expected to result in any loss to the Company, on the basis of the beneficiaries fulfilling their ordinary commercial obligations.
The Company is required to comply with the transfer pricing regulations, which are contemporaneous in nature. The Company appoints independent consultant annually for conducting transfer pricing studies to determine whether transactions with associate enterprises undertaken during the financial year, are on an arm's length basis. Adjustments, if any, arising from the transfer pricing studies will be accounted for when the study is completed for the current financial year. The management is of the opinion that its transactions with associates are at arm's length so that the outcome of the studies to corroborate compliance with legislation will not have any material adverse impact on the financial statements.
2.34 Payment to auditors
Audit fees Other services (Tax audit fees, certification and out of pocket expenses)
Year ended
31 March 2019
31 March 2018
4
4
1
1
5
5
2.35 Micro and small enterprises
As per information available with the management, the dues payable to enterprises covered under "The Micro, Small and Medium Enterprises Development Act, 2006" are as follows:
Amount due to vendors Principal amount paid beyond the appointed date Interest under normal credit terms -
Accrued and unpaid during the year Total interest payable -
Accrued and unpaid during the year
For the year ended 31 March 2019
Principal
Interest
2
-
-
-
For the year ended 31 March 2018
Principal
Interest
-
-
-
-
-
-
-
-
-
-
-
-
This has been determined on the basis of responses received from vendors on specific confirmation sought by the Company.
2.36 Corporate social responsibility
As required by the Companies Act, 2013, the gross amount required to be spent by the Company on CSR activities is ` 144 crores (31 March 2018, ` 134 crores) and the amount spent during the year is ` 125 crores (31 March 2018, ` 91 crores).
Annual Report 2018-19 219
Notes to financial statements for the year ended 31 March 2019
(All amounts in crores of `, except share data and as stated otherwise)
2.37 Segment Reporting
As per Ind AS 108 `Operating Segments', the Company has disclosed the segment information only as part of the consolidated financial results.
As per our report of even date
FOR S. R. BATLIBOI & CO. LLP ICAI Firm Registration Number : 301003E/E300005 Chartered Accountants
For and on behalf of the Board of Directors of HCL Technologies Limited
per Nilangshu Katriar Partner Membership Number: 58814
Shiv Nadar Chairman and Chief Strategy Officer
S. Madhavan Director
C. Vijayakumar President and Chief Executive Officer
Gurugram, India 9 May 2019
Prateek Aggarwal Chief Financial Officer
Noida (UP), India 9 May 2019
Prahlad Rai Bansal Deputy Chief Financial Officer
Manish Anand Company Secretary
220 Standalone Financial Statements
Consolidated Ind AS
Financial Statements
INDEPENDENT AUDITOR'S REPORT
To the Members of HCL Technologies Limited
Report on the Audit of the Consolidated Financial Statements
Opinion
We have audited the accompanying consolidated financial statements (Ind AS financial statement) of HCL Technologies Limited (hereinafter referred to as "the Holding Company") and its subsidiaries (the Holding Company and its subsidiaries together referred to as "the Group") comprising of the consolidated Balance sheet as at March 31 2019, the consolidated Statement of Profit and Loss, including other comprehensive income, the consolidated Cash Flow Statement and the consolidated Statement of Changes in Equity for the year then ended, and notes to the consolidated financial statements, including a summary of significant accounting policies and other explanatory information (hereinafter referred to as "the consolidated financial statements").
In our opinion and to the best of our information and according to the explanations given to us, the aforesaid consolidated financial statements give the information required by the Companies Act, 2013, as amended ("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 consolidated state of affairs of the Group as at March 31, 2019, their consolidated profit including other comprehensive income,their consolidated cash flows and the consolidated statement of changes in equity for the year ended on that date.
Basis for Opinion
We conducted our audit of the consolidated financial statements in accordance with the Standards on Auditing (SAs),as specified under section 143(10) of the Act. Our responsibilities under those Standards are further described in the `Auditor's
Responsibilities for the Audit of the 'Consolidated Financial Statements' section of our report. We are independent of the Group 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 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 audit opinion on the consolidated 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 consolidated financial statements for the financial year ended March 31, 2019. These matters were addressed in the context of our audit of the consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. For each matter below, our description of how our audit addressed the matter is provided in that context.
We have determined the matters described below to be the key audit matters to be communicated in our report. We have fulfilled the responsibilities described in the Auditor's responsibilities for the audit of the consolidated financial statements section of our report, including in relation to these matters. Accordingly, our audit included the performance of procedures designed to respond to our assessment of the risks of material misstatement of the consolidated financial statements. The results of audit procedures performed by us, including those procedures performed to address the matters below, provide the basis for our audit opinion on the accompanying consolidated financial statements.
Key audit matters
How our audit addressed the key audit matter
Accuracy of recognition, measurement, presentation and disclosures of revenues and impact of adoption of Ind AS 115
"Revenue from Contracts with Customers" (new revenue accounting standard)(as described in note 1 (g) and 3.19 of the
consolidated financial statements)
The group has adopted Ind AS 115 "Revenue from Contracts We assessed the Group's process to identify the recognition of
with Customers" starting 1 April 2018. The application of the new revenue for fixed price contract, accounting for distinctive terms
revenue accounting standard involves certain key judgements in arrangements and impact of adoption of the new revenue
and principles for evaluating various distinctive terms/matters. accounting standard. Our audit approach consisted testing of
the design and operating effectiveness of the internal controls
and substantive testing on sample basis as follows:
The group also derives portion of its revenue from long-term Evaluated the design of internal controls.
and fixed price projects. Estimated effort is a critical estimate to determine revenues for fixed price contract. This estimate Tested the operating effectiveness of the internal control.
has a high inherent uncertainty as it requires consideration of progress of the contract, efforts incurred till date, efforts required to complete the remaining contract performance obligations.
Tested relevant information technology systems' controls relating to contracts and related information used in recording and disclosing revenue.
222 Consolidated Financial Statements
Key audit matters
How our audit addressed the key audit matter
Tested continuing and new contracts and performed the
following procedures to assess management analysis and
impact of Ind AS 115 adoption :
Read, analyzed and identified the distinct
performance obligations in these contracts.
Compared these performance obligations with
that identified and recorded by the Group.
Considered the terms of the contracts and
assessed the transaction price including any
variable consideration to test revenue.
Further, in respect of fixed price contracts, progress towards
completion of performance obligation, used to compute
revenue, was verified based on actual cost relative to
estimated cost from the information technology systems.
Also reviewed cost incurred with estimated cost to identify
significant variations and reasons and to verify whether
those variations have been considered in estimating the
remaining cost to complete the contract.
Assessed management analysis of various distinctive
terms/matters in order to test appropriateness of revenue
recognition.
Assessed the appropriateness of the disclosure made
pursuant to new revenue accounting standard.
Business combinations (as described in note 2(a) of the consolidated financial statements)
During the year ended March 31, 2019, the Group made a With respect to the accounting for the acquisition, we:
number of acquisitions totaling INR 2,803 crores as detailed in
Note 2 (a) of the consolidated financial statement.
Read purchase/ sale agreements, obtained an
understanding of the deal structure.
The assets and liabilities acquired were recognized at fair value at the date of acquisition. Goodwill was recognized as the remaining portion of the purchase price that was not allocated
Evaluated whether the accounting treatment is in accordance with Ind AS 103 and Ind AS 32.
to the acquired assets and liabilities as part of the purchase Evaluated interpretation of specific sections of the
price allocation.
agreements and the application of accounting policies to
To determine the fair values of individual assets acquired
thereon.
including order backlog and customer relationships, complex Involved internal valuation specialists to assess the
valuation models based on assumptions were used. This
appropriateness of the methodology applied by the
measurement was dependent on estimates of future cash flows
management in determining the fair valuation of assets
as well as the cost of capital applied and, due to judgment,
and liabilities acquired. Key assumptions considered were
subject to considerable uncertainty.
discount rates, growth rates including terminal growth,
Further, certain embedded features such as cumulative dividend rights with participating dividend rights, conversion rights into equity, Put Option and Call Option requires judgements.
cash flow projections, net assets acquired and useful lives assigned and have tested the valuation for mathematical accuracy.
In this context and due to the underlying complexity of the In addition we have assessed whether the disclosures in
valuation models, there is a risk that the fair values have not
the notes to the financial statements are in line with the
been determined appropriately.
requirements of Ind AS 103 and Ind AS 32.
We performed procedures to assess appropriateness of opening balance sheet and evaluated the harmonization of the company's accounting policies with those of the Group.
Annual Report 2018-19 223
Key audit matters
How our audit addressed the key audit matter
Evaluation of tax positions (as described in note 3.34 of the consolidated financial statements)
The Group has material tax positions and matters under We performed the following procedures:
disputes which involves significant judgment to determine the
possible outcomes and are complex in nature. Accordingly, Assessed the Group's process for identifying tax positions
these positions and disputed matters are determined to be a
and disputed matters and the related accounting policy of
key audit matter in our audit.
provisioning for these exposures.
Obtained details of tax positions and disputed matters for the year and as at March 31, 2019 from management.
Involved our internal specialist to test the management's underlying assumptions in estimating the tax provision/ benefits and the possible outcome of the tax positions and matters.
Our internal specialist also considered legal precedence and other rulings and legal opinions obtained by the management in evaluating position on these tax positions.
Discussed disputed matters with management and obtained management specialist opinion for significant matters.
We have also assessed the impact of any change in existing positions as of April 1, 2018 to evaluate whether any change was required to management's position.
Impairment assessment of goodwill and intangible assets (as described in note 1 (j), 1 (o),3.2 and 3.3 of the consolidated financial statements)
The Group performed the annual goodwill impairment test. The Group has implemented controls designed to ensure that
Acquisitions executed in prior periods led to a material goodwill the calculation of the recoverable amount is appropriate.
in the Software service segment in which the Company provides
application development & maintenance, enterprise application We evaluated the design and operating effectiveness of
and engineering services.
these controls.
The respective impairment test is complex and involves We involved our valuation specialists to assess the
significant judgment. The key assumptions relate to the
valuation methodologies applied and key assumptions
budgeted revenue growth, budgeted operating margins, pre-tax
used in measuring the fair value.
discount rates and terminal growth rates.
We further assessed the historical accuracy of
Further, as required by Ind AS 38 Intangible Assets, the Group
management's estimates.
tests Licensed IPR's, customer relationships and technology for We also assessed the recoverable value headroom by
impairment annually in accordance with Ind AS 36 Impairment performing sensitivity testing of key assumptions used.
of Assets.
We evaluated the appropriateness of financial statement
This impairment assessment requires judgment. The risk for the disclosures, including disclosures of key assumptions,
consolidated financial statements relates to the appropriateness judgements and sensitivities.
of the determination and recognition of impairments.
We tested the arithmetical accuracy.
For impairment of intangibles we reviewed impairment analysis performed by the management. In addition, we considered whether any indicators of impairment were present by understanding the business rationale for intangibles.
224 Consolidated Financial Statements
Other Information
The Holding Company's Board of Directors is responsible for the other information. The other information comprises the information included in the Management Discussion and analysis, Director's report including annexures, Corporate Governance and Business Responsibility Report, but does not include the consolidated financial statements and our auditor's report thereon.
Our opinion on the consolidated 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 consolidated financial statements, our responsibility is to read the other information and, in doing so, consider whether such other information is materially inconsistent with the consolidated 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.
Responsibilities of Management for the Consolidated Financial Statements
The Holding Company's Board of Directors is responsible for the preparation and presentation of these consolidated financial statements in terms of the requirements of the Act that give a true and fair view of the consolidated financial position, consolidated financial performance including other comprehensive income, consolidated cash flows and consolidated statement of changes in equity of the Group in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) specified under section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015, as amended. The respective Board of Directors of the companies included in the Group are responsible for maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Group 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 the 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 consolidated financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error, which have been used for the purpose of preparation of the consolidated financial statements by the Directors of the Holding Company, as aforesaid.
In preparing the consolidated financial statements, the respective Board of Directors of the companies included in the Group are responsible for assessing the ability of the Group to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Group or to cease operations, or has no realistic alternative but to do so.
Those respective Board of Directors of the companies included in the Group are also responsible for overseeing the financial reporting process of the Group.
Auditor's Responsibilities for the Audit of the Consolidated Financial Statements
Our objectives are to obtain reasonable assurance about whether the consolidated 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 consolidated 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 consolidated 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 the Holding Company and its subsidiaries incorporated in India has adequate internal financial controls system 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 made by management.
· Conclude on the appropriateness of management's use of the going concern basis of accounting and, based
Annual Report 2018-19 225
on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the ability of the Group 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 consolidated 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 Group to cease to continue as a going concern.
· Evaluate the overall presentation, structure and content of the consolidated financial statements, including the disclosures, and whether the consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
· Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group of which we are the independent auditors and whose financial information we have audited, to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the audit of the financial statements of such entities included in the consolidated financial statements of which we are the independent auditors.
We communicate with those charged with governance of the Holding Company and such other entities included in the consolidated financial statements of which we are the independent auditors 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 consolidated financial statements for the financial year ended March 31, 2019 and are therefore the key audit matters. We describe these matters in our auditor's 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
As required by Section 143(3) of the Act, we report, to the extent applicable, 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 of the aforesaid consolidated financial statements;
(b) In our opinion, proper books of account as required by law relating to preparation of the aforesaid consolidation of the financial statements have been kept so far as it appears from our examination of those books;
(c) The Consolidated Balance Sheet, the Consolidated Statement of Profit and Loss including the Statement of Other Comprehensive Income, the Consolidated Cash Flow Statement and Consolidated Statement of Changes in Equity dealt with by this Report are in agreement with the books of account maintained for the purpose of preparation of the consolidated financial statements;
(d) In our opinion, the aforesaid consolidated financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Companies (Indian Accounting Standards) Rules, 2015, as amended;
(e) On the basis of the written representations received from the directors of the Holding Company as on March 31, 2019 taken on record by the Board of Directors of the Holding Company and on the basis of written representations received from directors of its subsidiaries incorporated in India none of the directors of the Group's companies incorporated in India is disqualified as on March 31, 2019 from being appointed as a director in terms of Section 164 (2) of the Act;
(f) With respect to the adequacy and the operating effectiveness of the internal financial controls over financial reporting with reference to these consolidated financial statements of the Holding Company and its subsidiary companies incorporated in India, refer to our separate Report in "Annexure 1" to this report;
(g) In our opinion, the managerial remuneration for the year ended March 31, 2019 has been paid / provided by the Holding Company and its subsidiaries incorporated in India to their directors in accordance with the provisions of section 197 read with Schedule V to the Act;
(h) With respect to the other matters to be included in the Auditor's Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, as amended, in our opinion and to the best of our information and according to the explanations given to us:
226 Consolidated Financial Statements
i. The consolidated financial statements disclose the impact of pending litigations on its consolidated financial position of the Group in its consolidated financial statements;
ii. Provision has been made in the consolidated financial statements, as required under the applicable law or accounting standards, for material foreseeable losses, if any, on long-term contracts including derivative contracts;
iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Holding Company during the year ended March 31, 2019.There were no amounts which were required to be transferred to the Investor Education and Protection Fund by its subsidiaries during the year ended March 31, 2019.
For S.R. Batliboi & CO. LLP Chartered Accountants ICAI Firm Registration Number: 301003E/E300005
per Nilangshu Katriar Partner Membership Number: 58814
Place of Signature: Gurugram Date: May 9, 2019
ANNEXURE 1 TO THE INDEPENDENT AUDITOR'S REPORT OF EVEN DATE ON THE CONSOLIDATED FINANCIAL STATEMENTS OF HCL TECHNOLOGIES LIMITED
Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013, as amended ("the Act")
In conjunction with our audit of the consolidated financial statements of HCL Technologies Limited as of and for the year ended March 31, 2019, we have audited the internal financial controls over financial reporting of HCL Technologies Limited (hereinafter referred to as the "Holding Company") and its subsidiary companies, which are companies incorporated in India, as of that date.
Management's Responsibility for Internal Financial Controls
The respective Board of Directors of the Holding Company and its subsidiary companies, which are companies incorporated in India, are responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Holding 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. 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 the respective 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 Act.
Auditor's Responsibility
Our responsibility is to express an opinion on the company's internal financial controls over financial reporting with reference to these consolidated financial statements based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the "Guidance Note") and the Standards on Auditing, both, issued by Institute of Chartered Accountants of India, and deemed to be prescribed under section 143(10) of the Act, to the extent applicable to an audit of internal financial controls. 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 over financial reporting with reference to these consolidated financial statements was established and maintained and if such controls operated effectively in all material respects.
Annual Report 2018-19 227
Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls over financial reporting with reference to these consolidated financial statements and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting with reference to these consolidated financial statements, 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 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 internal financial controls over financial reporting with reference to these consolidated financial statements.
Meaning of Internal Financial Controls Over Financial Reporting with Reference to these Consolidated Financial Statements
A company's internal financial control over financial reporting with reference to these consolidated financial statements is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company's internal financial control over financial reporting with reference to these consolidated financial statements includes 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 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 financial statements.
Inherent Limitations of Internal Financial Controls Over Financial Reporting with Reference to these Consolidated Financial Statements
Because of the inherent limitations of internal financial controls over financial reporting with reference to these consolidated 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 over financial reporting with reference to these consolidated financial statements to future periods are subject to the risk that the internal financial control over financial reporting with reference to these consolidated financial statements may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Opinion
In our opinion, the Holding Company and its subsidiary companies, which are companies incorporated in India, have, maintained in all material respects, adequate internal financial controls over financial reporting with reference to these consolidated financial statements and such internal financial controls over financial reporting with reference to these consolidated financial statements were operating effectively as at March 31,2019, based on the internal control over financial reporting criteria established by the Holding 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.
For S.R. Batliboi & CO. LLP Chartered Accountants ICAI Firm Registration Number: 301003E/E300005
per Nilangshu Katriar Partner Membership Number: 58814
Place of Signature: Gurugram Date: May 9, 2019
228 Consolidated Financial Statements
Consolidated Balance Sheet as at 31 March 2019
(All amounts in crores of `)
I. ASSETS (1) Non-current assets (a) Property, plant and equipment (b) Capital work in progress (c) Goodwill (d) Other intangible assets (e) Financial assets (i) Investments (ii) Loans (iii) Others (f) Deferred tax assets (net) (g) Other non-current assets (2) Current assets (a) Inventories (b) Financial assets (i) Investments (ii) Trade receivables (iii) Cash and cash equivalents (iv) Other bank balances (v) Loans (vi) Others (c) Other current assets
TOTAL ASSETS
II. EQUITY (a) Equity share capital (b) Other equity Equity attributable to shareholders of the Company Non controlling interest TOTAL EQUITY
III. LIABILITIES (1) Non - current liabilities (a) Financial liabilities (i) Borrowings (ii) Others (b) Provisions (c) Deferred tax liabilities (net) (d) Other non-current liabilities (2) Current liabilities (a) Financial liabilities (i) Borrowings (ii) Trade payables (iii) Others (b) Other current liabilities (c) Provisions (d) Current tax liabilities (net)
TOTAL EQUITY AND LIABILITIES Summary of significant accounting policies
The accompanying notes are an integral part of the financial statements
Note No.
3.1
3.2 3.3
3.4 3.5 3.6 3.25 3.7
3.8
3.4 3.9 3.10(a) 3.10(b) 3.5 3.6 3.11
3.12
As at 31 March 2019
As at 31 March 2018
5,293 235
9,061 8,534
85 355 1,201 2,455 1,634
91
2,220 11,706 5,934 1,938 1,312 4,569 1,952
58,575
4,560 320
6,799 7,394
303 235 857 1,837 1,160
172
2,357 9,639 1,699 2,319 3,410 3,456 1,506
48,023
271 41,095 41,366
103 41,469
278 36,108 36,386
36,386
3.13
2,977
338
3.14
536
246
3.15
821
700
3.25
226
34
3.16
247
212
3.13
724
42
3.17
1,305
918
3.14
6,950
6,606
3.18
1,810
1,325
3.15
586
530
924
686
58,575
48,023
1
As per our report of even date
FOR S. R. BATLIBOI & CO. LLP ICAI Firm Registration Number : 301003E/E300005 Chartered Accountants
per Nilangshu Katriar Partner Membership Number: 58814
For and on behalf of the Board of Directors of HCL Technologies Limited
Shiv Nadar Chairman and Chief Strategy Officer
S. Madhavan Director
C. Vijayakumar President and Chief Executive Officer
Gurugram, India 9 May 2019
Prateek Aggarwal Chief Financial Officer
Noida (UP), India 9 May 2019
Prahlad Rai Bansal Deputy Chief Financial Officer
Manish Anand Company Secretary
Annual Report 2018-19 229
Consolidated Statement of Profit and Loss for the year ended 31 March 2019
(All amounts in crores of `)
Note No.
I Revenue
Revenue from operations
Other income
Total income
II Expenses
Purchase of stock-in-trade
Changes in inventories of stock-in-trade
Employee benefits expense
Finance costs
Depreciation and amortization expense
Outsourcing costs
Other expenses
Total expenses
III Profit before share of profit of associates and tax
IV Share of profit of associates
V Profit before tax
VI Tax expense
Current tax
Deferred tax credit
Total tax expense
VII Profit for the year
VIII Other comprehensive income
(A) (i) Items that will not be reclassified to statement of profit and loss
(ii) Income tax on items that will not be reclassified to statement of profit and
loss
(B)
(i)
Items that will be reclassified subsequently to statement of profit and loss
(ii) Income tax on items that will be reclassified subsequently to statement
of profit and loss
IX Total other comprehensive income
3.19 3.20
3.21 3.22 3.23 3.1 & 3.3 3.24
3.25
3.26
X Total comprehensive income for the year
Profit for the year attributable to Shareholders of the Company Non-controlling interest
Total comprehensive income for the year attributable to Shareholders of the Company Non-controlling interest
Earnings per equity share of ` 2 each
3.27
Basic (in `)
Diluted (in `)
Summary of significant accounting policies
1
The accompanying notes are an integral part of the financial statements
Year ended 31 March 2019
60,427 943
61,370
1,615 81
29,283 174
2,073 9,761 5,761 48,748 12,622
12,622
3,094 (592) 2,502 10,120
10
(2)
186
(4)
190
10,310
Year ended 31 March 2018
50,569 1,217
51,786
1,251 104
24,729 69
1,383 8,620 4,619 40,775 11,011
13 11,024
2,386 (84)
2,302 8,722
34
(7)
155
78
260
8,982
10,120 -
10,120
10,310 -
10,310
73.58 73.55
8,721 1
8,722
8,981 1
8,982
62.23 62.19
As per our report of even date
FOR S. R. BATLIBOI & CO. LLP ICAI Firm Registration Number : 301003E/E300005 Chartered Accountants
per Nilangshu Katriar Partner Membership Number: 58814
For and on behalf of the Board of Directors of HCL Technologies Limited
Shiv Nadar Chairman and Chief Strategy Officer
S. Madhavan Director
C. Vijayakumar President and Chief Executive Officer
Gurugram, India 9 May 2019
Prateek Aggarwal Chief Financial Officer
Noida (UP), India 9 May 2019
Prahlad Rai Bansal Deputy Chief Financial Officer
Manish Anand Company Secretary
230 Consolidated Financial Statements
Consolidated Statement of Changes in Equity for the year ended 31 March 2019
(All amounts in crores of ` except share data and as stated otherwise)
Balance as at 1 April 2017 Profit for the year Other comprehensive income (refer note 3.26) Total comprehensive income for the year Dividend of ` 12 per share (including tax on dividend of
` 340 crores) Buyback of equity shares Expenses on buyback of equity shares Transfer to special economic zone re-investment reserve Shares issued for exercised options Change in non-controlling interest [refer note 2(b)(ii)] Excess tax benefit from share-based payments Balance as at 31 March 2018 Balance as at 1 April 2018 Profit for the year Other comprehensive income (refer note 3.26) Total comprehensive income for the year Dividend of ` 8 per share (including tax on dividend of
` 222 crores) Buyback of equity shares Expenses on buyback of equity shares Transfer to special economic zone re-investment reserve Transfer from special economic zone re-investment
reserve Transfer to retained earnings Shares issued for exercised options Change in non-controlling interest Excess tax benefit from share-based payments Balance as at 31 March 2019
Equity share capital
Number of Share shares capital
1,426,783,424 285
-
-
-
-
-
-
-
-
(35,000,000) (7)
-
-
-
-
462,960
-
-
-
-
-
1,392,246,384 278
1,392,246,384 278
-
-
-
-
-
-
-
-
(36,363,636) (7)
-
-
-
-
-
-
-
-
396,120
-
-
-
-
-
1,356,278,868 271
Retained earnings
25,240 8,721
27 8,748
(2,032)
(14) (310)
1 1 31,634 31,634 10,120 8 10,128
(1,321)
(1,603) (12) (440)
310
265 3
38,964
Reserves and Surplus
General Reserve
Securities premium
Capital redemption
reserve
2,859 3,244
45
-
-
-
-
-
-
-
-
-
-
-
-
(252) (3,248)
7
-
-
-
-
-
-
-
9
-
-
-
-
-
-
-
2,607
5
52
2,607
5
52
-
-
-
-
-
-
-
-
-
-
-
-
(2,387)
(10)
7
-
-
-
-
-
-
-
-
-
(220)
-
(45)
-
7
-
-
-
-
-
-
-
-
2
14
Other equity
Other comprehensive income
Share based payment reserve
Special economic zone reinvestment reserve
Foreign currency translation reserve
Cash flow hedging reserve
Debt
instruments Attributable
Non
through other to Shareholders Controlling
comprehensive of the Company Interests
income
21
-
810
445
-
32,664
173
-
-
-
-
-
8,721
-
-
-
541
(308)
-
260
-
-
-
541
(308)
-
8,981
-
-
-
-
-
-
(2,032)
-
-
-
-
-
-
-
-
-
-
310
-
-
(9)
-
-
-
-
-
-
-
-
-
-
-
12
310 1,351
137
12
310 1,351
137
-
-
-
-
-
-
146
34
-
-
146
34
-
(3,493)
-
-
(14)
-
-
-
-
-
-
-
-
1
(173)
-
1
-
-
36,108
-
-
36,108
-
-
10,120
-
2
190
-
2
10,310
-
-
-
-
-
-
(1,321)
-
-
-
-
-
-
-
-
-
-
440
-
-
-
(3,993)
-
-
(12)
-
-
-
-
-
(310)
-
-
-
-
-
-
-
-
-
(7)
-
-
-
-
-
-
-
-
-
-
-
5
440 1,497
171
-
-
-
-
-
-
-
-
103
-
3
-
2
41,095
103
Total Equity
32,837 8,721
260 8,981
(2,032)
(3,493) (14) (172) 1
36,108 36,108 10,120
190 10,310
(1,321)
(3,993) (12) -
-
103 3 41,198
Refer note 1 for summary of significant accounting policies
The accompanying notes are an integral part of the financial statements
As per our report of even date
Annual Report 2018-19 231
FOR S. R. BATLIBOI & CO. LLP ICAI Firm Registration Number : 301003E/E300005 Chartered Accountants
per Nilangshu Katriar Partner Membership Number: 58814
For and on behalf of the Board of Directors of HCL Technologies Limited
Shiv Nadar Chairman and Chief Strategy Officer
S. Madhavan Director
C. Vijayakumar President and Chief Executive Officer
Gurugram, India 9 May 2019
Prateek Aggarwal Chief Financial Officer
Noida (UP), India 9 May 2019
Prahlad Rai Bansal Deputy Chief Financial Officer
Manish Anand Company Secretary
Consolidated Statement of Cash flows
(All amounts in crores of `)
A. Cash flows from operating activities Profit before tax Adjustment for: Depreciation and amortization Interest income Provision for doubtful debts / bad debts written off, net Income on investments carried at fair value through profit and loss Profit on sale of investments carried at fair value through other comprehensive income Interest expenses Loss (profit) on sale of property, plant and equipment (net) Share of profit of an associate Other non cash charges (net) Operating profit before working capital changes Movement in working capital (Increase) decrease in trade receivables (Increase) decrease in inventories (Increase) decrease in other financial assets and other assets Increase (decrease) in trade payables Increase (decrease) in provisions, other financial liabilities and other liabilities Cash generated from operations Direct taxes paid (net of refunds) Net cash flow from operating activities (A)
Year ended 31 March 2019
Year ended 31 March 2018
12,622
11,024
2,073 (572)
22 (143)
(17)
1,383 (467)
80 (162)
-
124 (3)
(48) 14,058
22 (1) (13) 52 11,918
(1,458) 108
(2,168) 377 675
11,592 (2,621)
8,971
(1,126) 117 3 243
(471) 10,684 (2,356)
8,328
B. Cash flows from investing activities Investments in bank deposits Proceeds from bank deposits on maturity Purchase of investments in securities Proceeds from sale/maturity of investments in securities Investment in equity instruments carried at cost Deposits placed with body corporate Proceeds from maturity of deposits placed with body corporate Net cash in subsidiaries being disposed off [refer note 2(b)(ii)] Payments for business acquisitions, net of cash acquired Investment in limited liability partnership Purchase of property, plant and equipment and intangibles Proceeds from sale of property, plant and equipment Interest received Taxes paid Net cash flow used in investing activities (B)
(1,951) 2,331
(24,220) 24,777 (33) (1,430) 3,408 (2,828) (4) (3,465) 31 511 (200) (3,073)
(2,328) 7,731
(20,027) 18,714 (3) (3,643) 2,500 (144) (107) (2) (5,344) 23 500 (153) (2,283)
C. Cash flows from financing activities Proceeds from long term borrowings Repayment of long term borrowings Proceeds from short term borrowings Repayment of short term borrowings Payments for deferred consideration on business acquisitions Buyback of equity shares Expenses on buyback of equity shares
3,105 (188) 1,404 (698)
(26) (4,000)
(12)
19 (134)
(33) (16) (3,500) (14)
232 Consolidated Financial Statements
Consolidated Statement of Cash flows
(All amounts in crores of `)
Dividend paid Corporate dividend tax Capital contribution from non-controlling interests Interest paid Increase (decrease) in principal on finance lease obligations, net Net cash flow used in financing activities (C)
Year ended 31 March 2019
(1,099) (222) 292 (71) 53
(1,462)
Year ended 31 March 2018
(1,691) (340) (14) 9
(5,714)
Net increase (decrease) in cash and cash equivalents (A+B+C) Effect of exchange differences on cash and cash equivalents held in foreign currency Cash and cash equivalents at the beginning of the year Cash and cash equivalents at the end of the year as per note 3.10(a)
4,436 (201)
1,699 5,934
331 47
1,321 1,699
Notes: 1. Reconciliation of liabilities arising from financing activities
Particulars
Long term borrowings (including current maturities) Short term borrowings Deferred consideration
As at 31 March
2018
395
42 116 553
Cash flows
Non cash changes
Business combination
Effect of foreign currency translation
Fair value changes
2,917
-
(49)
-
706 (26) 3,597
-
(24)
-
8
1
(78)
8
(72)
(78)
As at 31 March
2019
3,263
724 21
4,008
2. The total amount of income taxes paid is ` 2,821 crores (31 March 2018, ` 2,509 crores)
3. Cash and cash equivalents includes Investor education and protection fund-unclaimed dividend of ` 5 crores (previous period, ` 5 crores). The Company can utilize these balances only towards settlement of the above mentioned liabilities.
As per our report of even date
FOR S. R. BATLIBOI & CO. LLP ICAI Firm Registration Number : 301003E/E300005 Chartered Accountants
per Nilangshu Katriar Partner Membership Number: 58814
For and on behalf of the Board of Directors of HCL Technologies Limited
Shiv Nadar Chairman and Chief Strategy Officer
S. Madhavan Director
C. Vijayakumar President and Chief Executive Officer
Gurugram, India 9 May 2019
Prateek Aggarwal Chief Financial Officer
Noida (UP), India 9 May 2019
Prahlad Rai Bansal Deputy Chief Financial Officer
Manish Anand Company Secretary
Annual Report 2018-19 233
Notes to consolidated financial statements for the year ended 31 March 2019
(All amounts in crores of `, except share data and as stated otherwise)
ORGANIZATION AND NATURE OF OPERATIONS
HCL Technologies Limited (hereinafter referred to as "the Company" or "the Parent Company") and its subsidiaries (hereinafter collectively referred to as "the Group") are primarily engaged in providing a range of software development services, business process outsourcing services and IT infrastructure services. The Company was incorporated under the provisions of the Companies Act applicable in India in November 1991, having its registered office at 806, Siddharth, 96, Nehru Place, New Delhi- 110019. The Group leverages its offshore infrastructure and professionals to deliver solutions across select verticals including financial services, manufacturing (automotive, aerospace, Hi-tech, semi-conductors), life sciences & healthcare, public services (oil and gas, energy and utility, travel, transport and logistics), retail and consumer products, telecom, media, publishing and entertainment.
The consolidated financial statements for the year ended 31 March 2019 were approved and authorized for issue by the Board of Directors on 9 May 2019.
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(a) Basis of preparation
The consolidated financial statements of the Group have been prepared in accordance with Indian Accounting Standards (Ind AS) notified under the Companies (Indian Accounting Standards) Rules, 2015 (as amended from time to time) and presentation requirements of Schedule III (Division II) to the Companies Act, 2013, as applicable to the consolidated financial statements.
These consolidated financial statements have been prepared under the historical cost convention on an accrual and going concern basis, except for the following assets and liabilities which have been measured at fair value:
a) Derivative financial instruments,
b) Certain financial assets and liabilities (refer accounting policy regarding financial instruments),
The accounting policies adopted in the preparation of these consolidated financial statements are consistent with those of the previous year except where a newly issued accounting standard is initially adopted or a revision to an existing accounting standard requires a change in the accounting policy.
The Group uses the Indian rupee (``') as its reporting currency.
(b) Basis of Consolidation
The consolidated financial statements comprise the financial statements of HCL Technologies Limited, the Parent Company, and its subsidiaries. Consolidation of a subsidiary begins when the Group obtains control over the subsidiary and ceases when the Group loses control of the subsidiary.
Control is achieved when the Group is exposed, or has rights to variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee. Specifically, the Group controls an investee if and only if the Group has:
a) Power over the investee (i.e. existing rights that give it the current ability to direct the relevant activities of the investee)
b) Exposure, or rights, to variable returns from its involvement with the investee, and
c) The ability to use its power over the investee to affect its returns.
Generally, there is a presumption that a majority of voting rights result in control. To support this presumption and when the Group has less than a majority of the voting or similar rights of an investee, the Group considers all relevant facts and circumstances in assessing whether it has power over an investee, including:
a) The contractual arrangement with the other vote holders of the investee
b) Rights arising from other contractual arrangements
c) The Group's voting rights and potential voting rights
234 Consolidated Financial Statements
Notes to consolidated financial statements for the year ended 31 March 2019
(All amounts in crores of `, except share data and as stated otherwise)
The Group re-assesses whether or not it controls an investee if facts and circumstances indicate that there are changes to one or more of the three elements of control.
The financial statements of the subsidiaries in the Group are added on a line-by-line basis and inter-company balances and transactions including unrealized gain/loss from such transactions, are eliminated upon consolidation. The consolidated financial statements are prepared by applying uniform accounting policies in use by the Group.
An associate is an entity over which the Group has significant influence. Significant influence is the power to participate in the financial and operating policy decisions of the investee, but is not in control or joint control over those policies. The aggregate of the Group's share of profit and loss of an associate is shown on the face of the consolidated statement of profit and loss.
(c) Use of estimates
The preparation of consolidated financial statements in conformity with Ind AS requires the management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, expenses and other comprehensive income (OCI) that are reported and disclosed in the consolidated financial statements and accompanying notes. These estimates are based on the management's best knowledge of current events, historical experience, actions that the Group may undertake in the future and on various other assumptions that are believed to be reasonable under the circumstances. Significant estimates and assumptions are used for, but not limited to, accounting for costs expected to be incurred to complete performance under fixed price projects, allowance for uncollectible accounts receivables, accrual of warranty costs, income taxes, valuation of share-based compensation, future obligations under employee benefit plans, the useful lives of property, plant and equipment, intangible assets, impairment of goodwill,and other contingencies and commitments. Changes in estimates are reflected in the consolidated financial statements in the year in which the changes are made. Actual results could differ from those estimates.
(d) Business combinations and goodwill
Business combinations are accounted for using the acquisition method. The cost of an acquisition is the aggregate of the consideration transferred measured at fair value at the acquisition date and the amount of any non-controlling interest in the acquiree. For each business combination, the Group measures the non-controlling interest in the acquiree at fair value. Acquisition related costs are expensed as incurred.
Any contingent consideration to be transferred by the acquirer is recognized at fair value at the acquisition date. Contingent consideration classified as financial liability is measured at fair value with changes in fair value recognized in the statement of profit and loss.
Goodwill is initially measured at cost, being the excess of the aggregate of the consideration transferred and the amount recognized for non-controlling interest, and any previous interest held, over the net identifiable assets acquired and liabilities assumed. If the fair value of the net assets acquired is in excess of the aggregate consideration transferred, the excess is recognized as capital reserve after reassessing the fair values of the net assets.
(e) Foreign currency and translation
The Group's consolidated financial statements are presented in Indian Rupee (`), which is also the parent company's functional currency. For each entity, the Group determines the functional currency, and items included in the financial statements of each entity are measured using that functional currency. The Group uses the direct method of consolidation and on disposal of a foreign operation the gain or loss that is reclassified to the statement of profit and loss reflects the amount that arises from using this method.
Transactions in foreign currencies are initially recorded by the Group's entities at their respective functional currency spot rates at the date of the transaction. Foreign currency denominated monetary assets and liabilities are translated to the relevant functional currency at exchange rates in effect at the balance sheet date. Exchange differences arising on settlement or translation of monetary items are recognized in the statement of profit and loss. Non-monetary assets and non-monetary liabilities denominated in a foreign currency and measured at historical cost are translated at the exchange
Annual Report 2018-19 235
Notes to consolidated financial statements for the year ended 31 March 2019
(All amounts in crores of `, except share data and as stated otherwise)
rate prevalent at the date of initial transaction. Non-monetary assets and non-monetary liabilities denominated in a foreign currency and measured at fair value are translated at the exchange rate prevalent at the date when the fair value was determined.
Transaction gains or losses realized upon settlement of foreign currency transactions are included in determining net profit for the year. Revenue, expenses and cash-flow items denominated in foreign currencies are translated into the relevant functional currencies using the exchange rate in effect on the date of the transaction.
The translation of foreign operations from respective functional currency into INR (the reporting currency) for assets and liabilities is performed using the exchange rates in effect at the balance sheet date, and for revenue, expenses and cash flows is performed using an appropriate daily weighted average exchange rate for the respective years. The exchange differences arising on translation for consolidation are reported as a component of `other comprehensive income (loss)'. On disposal of a foreign operation, the component of OCI relating to that particular foreign operation is recognized in the statement of profit and loss.
(f) Fair value measurement
The Group records certain financial assets and liabilities at fair value on a recurring basis. The Group determines fair values based on the price it would receive to sell an asset or pay to transfer a liability in an orderly transaction between market participants at the measurement date in the principal or most advantageous market for that asset or liability.
The Group holds certain fixed income securities, equity securities and derivatives, which must be measured using the guidance for fair value hierarchy and related valuation methodologies. The guidance specifies a hierarchy of valuation techniques based on whether the inputs to each measurement are observable or unobservable. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect the Group's assumptions about current market conditions. The fair value hierarchy also requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The prescribed fair value hierarchy and related valuation methodologies are as follows:
Level 1 - Quoted inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets.
Level 2 - Quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active and model-derived valuations, in which all significant inputs are directly or indirectly observable in active markets.
Level 3 - Valuations derived from valuation techniques, in which one or more significant inputs are unobservable inputs which are supported by little or no market activity.
In accordance with Ind AS 113, assets and liabilities are to be measured based on the following valuation techniques:
a) Market approach Prices and other relevant information generated by market transactions involving identical or comparable assets or liabilities.
b) Income approach Converting the future amounts based on market expectations to its present value using the discounting method.
c) Cost approach Replacement cost method.
Certain assets are measured at fair value on a non-recurring basis. These assets consist primarily of non-financial assets such as goodwill and intangible assets. Goodwill and intangible assets recognized in business combinations are measured at fair value initially and subsequently when there is an indicator of impairment, the impairment is recognized.
A fair value measurement of a non-financial asset takes into account a market participant's ability to generate economic benefits by using the asset in its highest and best use or by selling it to another market participant who would use the asset in its highest and best use.
236 Consolidated Financial Statements
Notes to consolidated financial statements for the year ended 31 March 2019
(All amounts in crores of `, except share data and as stated otherwise)
(g) Revenue recognition
Adoption of new accounting principles
Effective 1 April 2018, the Group has adopted Ind AS 115 using the cumulative effect method. The standard is applied retrospectively only to contracts that are not completed as at the date of initial application and the comparative information is not restated in the financial statement. The adoption of the standard did not have any material impact to the consolidated financial statements of the Group.
Contracts involving provision of services and material
Revenue is recognized when, or as, control of a promised service or good transfers to a customer, in an amount that reflects the consideration to which the Group expects to be entitled in exchange for transferring those products or services. To recognize revenues, the following five step approach is applied: (1) identify the contract with a customer, (2) identify the performance obligations in the contract, (3) determine the transaction price, (4) allocate the transaction price to the performance obligations in the contract, and (5) recognize revenues when a performance obligation is satisfied. Contract is accounted when it is legally enforceable through executory contracts, approval and commitment from all parties, the rights of the parties are identified, payment terms are defined, the contract has commercial substance and collectability of consideration is probable.
Time-and-material/Volume based/ Transaction based contracts
Revenue with respect to time-and-material, volume based and transaction based contracts is recognized as the related services are performed through efforts expended, volume serviced transactions are processed etc. that correspond with value transferred to customer till date which is related to our right to invoice for services performed.
Fixed Price contracts
Revenue related to fixed price contracts where performance obligations and control are satisfied over a period of time like technology integration, complex network building contracts, ERP implementations and Application development are recognized based on progress towards completion of the performance obligation using a cost-to-cost measure of progress (i.e., percentage-of-completion (POC) method of accounting). Revenue is recognized based on the costs incurred to date as a percentage of the total estimated costs to fulfill the contract. Any revision in cost to complete would result in increase or decrease in revenue and such changes are recorded in the period in which they are identified. Provisions for estimated losses, if any, on contracts-in-progress are recorded in the period in which such losses become probable based on the current contract estimates. Contract losses are determined to be the amount by which the estimated incremental cost to complete exceeds the estimated future revenues that will be generated by the contract and are included in cost of revenues and recorded in other accrued liabilities
Revenue related to other fixed price contracts providing maintenance and support services, are recognized based on our right to invoice for services performed for contracts in which the invoicing is representative of the value being delivered. If our invoicing is not consistent with value delivered, revenues are recognized as the service is performed based on the cost to cost method described above.
In arrangements involving sharing of customer revenues, revenue is recognized when the right to receive is established.
Revenue from product sales are shown net of sales tax and applicable discounts and allowances. Revenue related to product with installation services that are critical to the product is recognized when installation of product at customer site is completed and accepted by the customer. If the revenue for a delivered item is not recognized for non-receipt of acceptance from the customer, the cost of the delivered item continues to be in inventory.
Multiple performance obligation
When a sales arrangement contains multiple performance, such as services, hardware and Licensed IPs (software) or combinations of each of them revenue for each element is based on a five step approach as defined above. To the extent
Annual Report 2018-19 237
Notes to consolidated financial statements for the year ended 31 March 2019
(All amounts in crores of `, except share data and as stated otherwise)
a contract includes multiple promised deliverables, judgment is applied to determine whether promised deliverables are capable of being distinct and are distinct in the context of the contract. If these criteria are not met, the promised deliverables are accounted for as a combined performance obligation. For arrangements with multiple distinct performance obligations or series of distinct performance obligations, consideration is allocated among the performance obligations based on their relative standalone selling price. Standalone selling price is the price at which group would sell a promised good or service separately to the customer. When not directly observable, we typically estimate standalone selling price by using the expected cost plus a margin approach. We typically establish a standalone selling price range for our deliverables, which is reassessed on a periodic basis or when facts and circumstances change. If the arrangement contains obligations related to License of Intellectual property (Software) or Lease deliverable, the arrangement consideration allocated to the Software deliverables, lease deliverable as a group is then allocated to each software obligation and lease deliverable.
Revenue recognition for delivered elements is limited to the amount that is not contingent on the future delivery of products or services, future performance obligations or subject to customer-specified return or refund privileges.
Revenue from certain activities in transition services in outsourcing arrangements are not capable of being distinct or represent separate performance obligation. Revenues relating to such transition activities are classified as Contract liabilities and subsequently recognized over the period of the arrangement. Direct and incremental costs in relation to such transition activities which are expected to be recoverable under the contract are considered as contract fulfillment costs classified as Deferred contract cost and recognized over the period of arrangement. Certain upfront non-recurring incremental contract acquisition costs incurred in the initial phases of outsourcing contracts are deferred and recorded as Deferred contract cost and amortized, usually on a straight line basis, over the term of the contract unless revenues are earned and obligations are fulfilled in a different pattern. The undiscounted future cash flows from the arrangement are periodically estimated and compared with the unamortized costs. If the unamortized costs exceed the undiscounted cash flow, a loss is recognized.
In instances when revenue is derived from sales of third-party vendor services, material or licenses, revenue is recorded on a gross basis when the Group is a principal to the transaction and net of costs when the Group is acting as an agent between the customer and the vendor. Several factors are considered to determine whether the Group is a principal or an agent, most notably being group control the goods or service before it is transferred to customer, latitude in deciding the price being charged to customer. Revenue is recognized net of discounts and allowances, value-added and service taxes, and includes reimbursement of out-of-pocket expenses, with the corresponding out-of-pocket expenses included in cost of revenues.
Volume discounts, or any other form of variable consideration is estimated using either the sum of probability weighted amounts in a range of possible consideration amounts (expected value), or the single most likely amount in a range of possible consideration amounts (most likely amount), depending on which method better predicts the amount of consideration realizable. Transaction price includes variable consideration only to the extent it is probable that a significant reversal of revenues recognized will not occur when the uncertainty associated with the variable consideration is resolved. Our estimates of variable consideration and determination of whether to include estimated amounts in the transaction price may involve judgment and are based largely on an assessment of our anticipated performance and all information that is reasonably available to us.
Revenue recognized but not billed to customers is classified either as contract assets or unbilled receivable in our consolidated statements of financial position, contract assets primarily relate to unbilled amounts on those contracts utilizing the cost to cost method of revenue recognition. Unbilled receivables represent contracts where right to consideration is unconditional (i.e. only the passage of time is required before the payment is due).
Revenue from sales-type leases is recognized when risk of loss has been transferred to the client and there are no unfulfilled obligations that affect the final acceptance of the arrangement by the client.
Interest attributable to sales-type leases and direct financing leases included therein is recognized on an accrual basis using the effective interest method and is recognized as other income.
238 Consolidated Financial Statements
Notes to consolidated financial statements for the year ended 31 March 2019
(All amounts in crores of `, except share data and as stated otherwise)
Interest income
Interest income for all financial instruments measured at amortized cost is recorded using the effective interest rate (EIR). EIR is the rate that exactly discounts the estimated future cash payments or receipts over the expected life of the financial instrument or a shorter period, where appropriate, to the gross carrying amount of the financial asset or to the amortized cost of a financial liability. When calculating the EIR, the Group estimates the expected cash flows by considering all the contractual terms of the financial instrument but does not consider the expected credit losses. Interest income is included in other income in the statement of profit and loss.
(h) Income taxes
Income tax expense comprises current and deferred income tax.
Income tax expense is recognized in the statement of profit and loss except to the extent that it relates to items recognized directly in equity, in which case it is recognized in equity. Current income tax for current and prior periods is recognized at the amount expected to be paid to or recovered from the tax authorities, using the tax rates and tax laws that have been enacted or substantively enacted by the balance sheet date. Provision for income tax includes the impact of provisions established for uncertain income tax positions.
Deferred income tax assets and liabilities recognized for all temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements. Deferred income tax assets and liabilities are recognized for those temporary differences which originate during the tax holiday period are reversed after the tax holiday period. For this purpose, reversal of timing differences is determined using first-in-first-out method.
Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realized. Deferred income tax assets and liabilities are measured using tax rates and tax laws that have been enacted or substantively enacted by the balance sheet date and are expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled.
Deferred tax assets and deferred tax liabilities are offset, if a legally enforceable right exists to set off current tax assets against current tax liabilities and the deferred taxes relate to the same taxable entity and the same taxation authority.
The effect of changes in tax rates on deferred income tax assets and liabilities is recognized as income or expense in the year that includes the enactment or the substantive enactment date. A deferred income tax asset is recognized to the extent that it is probable that future taxable profit will be available against which the deductible temporary differences and tax losses can be utilized. Deferred income taxes are not provided on the undistributed earnings of subsidiaries and branches where it is expected that the earnings of the subsidiary or branch will not be distributed in the foreseeable future.
Tax benefits acquired as part of a business combination, but not satisfying the criteria for separate recognition at that date, are recognized subsequently if new information about facts and circumstances change. The adjustment is either treated as a reduction in goodwill (as long as it does not exceed goodwill) if it was incurred during the measurement period or recognized in the statement of profit and loss.
In some tax jurisdictions, tax deductions on share based payments to employees are different from the related cumulative remuneration expenses. If the amount of the tax deduction (or estimated future tax deduction) exceeds the amount of the related cumulative remuneration expense, the excess of the associated tax is recognized directly in retained earnings.
(i) Property, plant and equipment
Property, plant and equipment are stated at cost less accumulated depreciation and impairment losses, if any. Cost comprises the purchase price and directly attributable cost of bringing the asset to its working condition for its intended use. Any trade discounts and rebates are deducted in arriving at the purchase price. The Group identifies and determines separate useful lives for each major component of the property, plant and equipment, if they have a useful life that is materially different from that of the asset as a whole.
Annual Report 2018-19 239
Notes to consolidated financial statements for the year ended 31 March 2019
(All amounts in crores of `, except share data and as stated otherwise)
Expenses on existing property, plant and equipment, including day-to-day repairs, maintenance expenditure and cost of replacing parts, are charged to the statement of profit and loss for the year during which such expenses are incurred.
Gains or losses arising from derecognition of assets are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognized in the statement of profit and loss when the asset is derecognized.
Property, plant and equipment under construction and cost of assets not ready for use at the year-end are disclosed as capital work- in- progress.
Depreciation on property, plant and equipment is provided on the straight-line method over their estimated useful lives, as determined by the management. Depreciation is charged on a pro-rata basis for assets purchased/sold during the year.
The management's estimates of the useful lives of various assets for computing depreciation are as follows:
Asset description Buildings Plant and equipment (including air conditioners, electrical installations) Office equipment Computers and networking equipment
Furniture and fixtures Vehicles
Asset life (in years) 20 10 5
4-5 or over the period of lease, whichever is lower 7 5
The useful lives as given above best represent the period over which the management expects to use these assets, based on technical assessment. The estimated useful lives for these assets are therefore different from the useful lives prescribed under Part C of Schedule II of the Companies Act 2013.
The residual values, useful lives and methods of depreciation of property, plant and equipment are reviewed at each financial year-end and adjusted prospectively, if appropriate.
(j) Intangible assets
Intangible assets acquired separately are measured on initial recognition at cost. The cost of intangible assets acquired in a business combination is their fair value at the date of acquisition. Following initial recognition, intangible assets are carried at cost less any accumulated amortization and accumulated impairment losses.
Intangible assets are amortized over the useful life and assessed for impairment whenever there is an indication that the intangible asset may be impaired. The amortization period and the amortization method for an intangible asset with a finite useful life are reviewed at least at the end of each reporting year. Changes in the expected useful life or the expected pattern of consumption of future economic benefits embodied in the asset are considered to modify the amortization period or method, as appropriate, and are treated as changes in accounting estimates. The amortization expense on intangible assets with finite lives is recognized in the statement of profit and loss.
Gains or losses arising from derecognition of an intangible asset are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognized in the statement of profit and loss when the asset is derecognized.
The intangible assets are amortized over the estimated useful life of the assets as mentioned below except certain Licensed IPRs which include the right to modify, enhance or exploit are amortized in proportion to the expected benefits over the useful life which could range up to 15 years:
240 Consolidated Financial Statements
Notes to consolidated financial statements for the year ended 31 March 2019
(All amounts in crores of `, except share data and as stated otherwise)
Asset description Software Licensed IPRs Customer relationships Customer contracts Technology Intellectual property rights including Brand Non-compete agreements
Asset life (in years) 3
5 to 15 1 to 11 1 to 2 5 to 15 2 to 6
5
(k) Research and development costs
Research costs are expensed as incurred. Development expenditure, on an individual project, is recognized as an intangible asset when the Group can demonstrate:
The technical feasibility of completing the intangible asset so that it will be available for use or sale Its intention to complete and its ability and intention to use or sell the asset How the asset will generate future economic benefits The availability of resources to complete the asset The ability to measure reliably the expenditure during development
Following initial recognition of the development expenditure as an asset, the cost model is applied requiring the asset to be carried at cost less any accumulated amortization and accumulated impairment losses. Amortization of the asset begins when development is complete and the asset is available for use. It is amortized over the period of expected future benefit. Amortization expense is recognized in the statement of profit and loss. During the period of development, the asset is tested for impairment annually.
(l) Borrowing costs
Borrowing costs directly attributable to the acquisition, construction or production of an asset that necessarily takes a substantial period of time to get ready for its intended use are capitalized as part of the cost of the asset. All other borrowing costs are expensed in the period in which they occur.
Borrowing costs consist of interest and other costs that an entity incurs in connection with the borrowing of funds. Borrowing costs also includes exchange differences to the extent regarded as an adjustment to the borrowing costs.
(m) Leases
Group as a lessee
A lease is classified at the inception date as a finance lease or an operating lease. A lease that transfers substantially all the risks and rewards incidental to ownership to the Group is classified as a finance lease.
Finance leases are capitalized at the commencement of the lease at the fair value of the leased property or, if lower, at the present value of the minimum lease payments. Lease payments are apportioned between finance charges and reduction of the lease liability so as to achieve a constant rate of interest on the remaining balance of the liability. Finance charges are recognized in finance costs in the statement of profit and loss.
A leased asset is depreciated over the useful life of the asset. However, if there is no reasonable certainty that the Group will obtain ownership by the end of the lease term, the asset is depreciated over the shorter of the estimated useful life of the asset or the lease term.
Operating lease payments are recognized as an expense in the statement of profit and loss on a straight-line basis over the lease term.
Annual Report 2018-19 241
Notes to consolidated financial statements for the year ended 31 March 2019
(All amounts in crores of `, except share data and as stated otherwise)
Group as a lessor
Leases in which the Group does not transfer substantially all the risks and benefits of ownership of the asset are classified as operating leases. Initial direct costs incurred in negotiating an operating lease are added to the carrying amount of the leased asset and recognized over the lease term on the same basis as rental income. Contingent rents are recognized as revenue in the year in which they are earned.
Leases in which the Group transfers substantially all the risk and benefits of ownership of the asset are classified as finance leases. Assets given under finance lease are recognized as a receivable at an amount equal to the present value of lease receivable. After initial recognition, the Group apportions lease rentals between the principal repayment and interest income so as to achieve a constant periodic rate of return on the net investment outstanding in respect of the finance leases. The interest income is recognized in the statement of profit and loss. Initial direct costs such as legal cost, brokerage cost etc. are recognized immediately in the statement of profit and loss.
(n) Inventory
Stock-in-trade, stores and spares are valued at the lower of the cost or net realizable value. Cost includes cost of purchase and other costs incurred in bringing the inventories to their present location and condition. Net realizable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and estimated costs necessary to make the sale.
Cost of stock-in-trade procured for specific projects is assigned by identifying individual costs of each item. Cost of stockin-trade, that are interchangeable and not specific to any project and cost of stores and spare parts are determined using the weighted average cost formula.
(o) Impairment of non-financial assets
Goodwill
Goodwill is tested annually on March 31, for impairment, or sooner whenever there is an indication that goodwill may be impaired, relying on a number of factors including operating results, business plans and future cash flows. For the purpose of impairment testing, goodwill acquired in a business combination is allocated to the Group's cash generating units (CGU) expected to benefit from the synergies arising from the business combination. A CGU is the smallest identifiable group of assets that generates cash inflows that are largely independent of the cash inflows from other assets or group of assets. Impairment occurs when the carrying amount of a CGU including the goodwill, exceeds the estimated recoverable amount of the CGU. The recoverable amount of a CGU is the higher of its fair value less cost to sell and its value-in-use. Value-in-use is the present value of future cash flows expected to be derived from the CGU. Total impairment loss of a CGU is allocated first to reduce the carrying amount of goodwill allocated to the CGU and then to the other assets of the CGU, pro-rata on the basis of the carrying amount of each asset in the CGU.
An impairment loss on goodwill recognized in the statement of profit and loss is not reversed in the subsequent period.
Intangible assets and property, plant and equipment
Intangible assets and property, plant and equipment are evaluated for recoverability whenever events or changes in circumstances indicate that their carrying amounts may not be recoverable. For the purpose of impairment testing, the recoverable amount (i.e. the higher of the fair value less cost to sell and the value-in-use) is determined on an individual asset basis unless the asset does not generate cash flows that are largely independent of those from other assets. In such cases, the recoverable amount is determined for the CGU to which the asset belongs. If such assets are considered to be impaired, the impairment to be recognized in the statement of profit and loss is measured by the amount by which the carrying value of the asset exceeds the estimated recoverable amount of the asset.
(p) Provisions
A provision is recognized if, as a result of a past event, the Group has a present legal or constructive obligation that can be estimated reliably, and it is probable that an outflow of resources embodying economic benefits will be required to settle
242 Consolidated Financial Statements
Notes to consolidated financial statements for the year ended 31 March 2019
(All amounts in crores of `, except share data and as stated otherwise)
the obligation. If the effect of the time value of money is material, provisions are determined by discounting the expected future cash flows.
(q) Retirement and other employee benefits
i. Provident fund: Employees of the Company and its subsidiaries in India receive benefits under the provident fund, a defined benefit plan. The employee and employer each make monthly contributions to the plan. A portion of the contribution is made to the provident fund trust managed by the Group or Government administered provident fund; while the balance contribution is made to the Government administered pension fund. For the contribution made by the Company and its subsidiaries in India to the provident fund trust managed by the Group, the Company has an obligation to fund any shortfall on the yield of the Trust's investments over the administered interest rates. The liability is actuarially determined (using the projected unit credit method) at the end of the year. The funds contributed to the Trust are invested in specific securities as mandated by law and generally consist of federal and state government bonds, debt instruments of government-owned corporations and other eligible market securities.
ii. In respect of superannuation, a defined contribution plan for applicable employees, the Company contributes to a scheme administered on its behalf by an insurance company and such contributions for each year of service rendered by the employees are charged to the statement of profit and loss. The Company has no further obligations to the superannuation plan beyond its contributions.
iii. Gratuity liability: The Company and its subsidiaries in India provide for gratuity, a defined benefit plan (the "Gratuity Plan") covering eligible employees. The Gratuity Plan provides a lump sum payment to vested employees at retirement, death, incapacitation or termination of employment, of an amount based on the respective employee's base salary and the tenure of employment (subject to a maximum of ` 20 lacs per employee). The liability is actuarially determined (using the projected unit credit method) at the end of each year. Actuarial gains/losses are recognized immediately in the balance sheet with a corresponding debit or credit to retained earnings through other comprehensive income in the year in which they occur.
In respect to certain employees in India, the Company contributes towards gratuity liabilities to the Gratuity Fund Trust. Trustees of the Company administer contributions made to the Trust and contributions are invested in a scheme with Life Insurance Corporation of India as permitted by law.
iv. Compensated absences: The employees of the Group are entitled to compensated absences which are both accumulating and non-accumulating in nature. The employees can carry forward up to the specified portion of the unutilized accumulated compensated absences and utilize it in future periods or receive cash at retirement or termination of employment. The expected cost of accumulating compensated absences is determined by actuarial valuation (using the projected unit credit method) based on the additional amount expected to be paid as a result of the unused entitlement that has accumulated at the balance sheet date. The expense on non-accumulating compensated absences is recognized in the statement of profit and loss in the year in which the absences occur. Actuarial gains/losses are immediately taken to the statement of profit and loss and are not deferred.
v. State Plan: The contribution to State Plans in India, a defined contribution plan namely Employee State Insurance Fund is charged to the statement of profit and loss as and when employees render related services.
vi. Contributions to other foreign defined contribution plans are recognized as expense when employees have rendered services entitling them to such benefits.
(r) Equity settled stock based compensation
Stock-based compensation represents the cost related to stock-based awards granted to employees. The Company measures stock-based compensation cost at grant date, based on the estimated fair value of the award and recognizes the cost (net of estimated forfeitures) on a straight line basis over the requisite service period for each separately vesting portion of the award, as if award was in substance, multiple awards. The Company estimates the fair value of stock options using the Black-Scholes valuation model. The cost is recorded under the head employee benefit expense in the statement of profit and loss with corresponding increase in "Share Based Payment Reserve".
Annual Report 2018-19 243
Notes to consolidated financial statements for the year ended 31 March 2019
(All amounts in crores of `, except share data and as stated otherwise)
(s) Financial Instruments
A financial instrument is a contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity.
i. Financial assets
All financial assets are recognized initially at fair value. Transaction costs that are directly attributable to the acquisition of financial assets (other than financial assets at fair value through profit or loss) are added to the fair value measured on initial recognition of financial asset. Purchase and sale of financial assets are accounted for at trade date.
Cash and short-term deposits Cash and short-term deposits in the balance sheet comprise cash in banks and short-term deposits and investments with an original maturity of three months or less, which are subject to an insignificant risk of changes in value.
Financial assets at amortized cost A financial asset is measured at the amortized cost if both the following conditions are met:
a) The asset is held within a business model whose objective is to hold assets for collecting contractual cash flows, and
b) Contractual terms of the asset give rise on specified dates to cash flows that are solely payments of principal and interest (SPPI) on the principal amount outstanding.
After initial measurement, such financial assets are subsequently measured at amortized cost using the effective interest rate (EIR) method. Amortized cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortization is included in other income in the statement of profit and loss. The losses arising from impairment are recognized in the statement of profit and loss. This category includes cash and bank balances, loans, unbilled receivables, trade and other receivables.
Financial asset at Fair Value through Other Comprehensive Income (OCI) A financial asset is classified and measured at fair value through OCI if both of the following criteria are met:
a) The objective of the business model is achieved both by collecting contractual cash flows and selling the financial assets, and
b) The asset's contractual cash flows represent solely payments of principal and interest.
Financial asset included within the OCI category are measured initially as well as at each reporting date at fair value. Fair value movements are recognized in OCI. Interest income is recognized in statement of profit and loss for debt instruments. On derecognition of the asset, cumulative gain or loss previously recognized in OCI is reclassified from OCI to statement of profit and loss.
Financial assets at Fair Value through Profit and Loss Any financial asset, which does not meet the criteria for categorization at amortized cost or at fair value through other comprehensive income, is classified at fair value through profit and loss. Financial assets included at the fair value through profit and loss category are measured at fair value with all changes recognized in the statement of profit and loss.
Equity investments Equity investments,for which sufficient, more recent, information to measure fair value is not available, are measured at cost. Other equity investments in scope of Ind AS 109 are measured at fair value through profit and loss.
Equity investments included within the fair value through profit and loss category are measured at fair value with all changes recognized in the statement of profit and loss.
244 Consolidated Financial Statements
Notes to consolidated financial statements for the year ended 31 March 2019
(All amounts in crores of `, except share data and as stated otherwise)
Derecognition of financial assets A financial asset is primarily derecognized when the rights to receive cash flows from the asset have expired, or the Group has transferred its rights to receive cash flows from the asset.
Impairment of financial assets The Group recognizes loss allowances using the expected credit loss (ECL) model for the financial assets which are not fair valued through profit and loss. Lifetime ECL allowance is recognized for trade receivables with no significant financing component. For all other financial assets, expected credit losses are measured at an amount equal to the 12-month ECL, unless there has been a significant increase in credit risk from initial recognition in which case they are measured at lifetime ECL. The amount of expected credit losses (or reversal) that is required to adjust the loss allowance at the reporting date is recognized in statement of profit and loss.
ii. Financial liabilities
All financial liabilities are recognized initially at fair value and, in the case of loans and borrowings and payables, net of directly attributable transaction costs.
The subsequent measurement of financial liabilities depends on their classification, as described below:
Financial liabilities at fair value through profit or loss Financial liabilities designated upon initial recognition at fair value through profit or loss are designated as such at the initial date of recognition, and only if the criteria in Ind AS 109 are satisfied. Changes in fair value of such liability are recognized in the statement of profit or loss.
Financial liabilities at amortized cost The Group's financial liabilities at amortized cost includes trade payables, borrowings including bank overdrafts and other payables.
After initial recognition, financial liabilities are subsequently measured at amortized cost using the effective interest rate (EIR) method except for deferred consideration recognized in a business combination which is subsequently measured at fair value through profit and loss. Gains and losses are recognized in the statement of profit and loss when the liabilities are derecognized as well as through the EIR amortization process.
Amortized cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortization is included as finance costs in the statement of profit and loss.
Derecognition A financial liability is derecognized when the obligation under the liability is discharged or cancelled or expires.
iii. Derivative financial instruments and hedge accounting
Foreign exchange forward contracts and options are purchased to mitigate the risk of changes in foreign exchange rates associated with forecast transactions denominated in certain foreign currencies.
The Group recognizes all derivatives as assets or liabilities measured at their fair value. Changes in fair value for derivatives not designated in a hedge accounting relationship are marked to market at each reporting date and the related gains (losses) are recognized in the statement of profit and loss as `foreign exchange gains(losses)'.
The foreign exchange forward contracts and options in respect of forecast transactions which meet the hedging criteria are designated as cash flow hedges. Changes in the derivative fair values (net of tax) that are designated as effective cash flow hedges are deferred and recorded in the hedging reserve account as a component of accumulated `other comprehensive income (loss)' until the hedged transaction occurs and are then recognized in the statement of profit and loss. The ineffective portion of hedging derivatives is immediately recognized in the statement of profit and loss.
Annual Report 2018-19 245
Notes to consolidated financial statements for the year ended 31 March 2019
(All amounts in crores of `, except share data and as stated otherwise)
In respect of derivatives designated as hedges, the Group formally documents all relationships between hedging instruments and hedged items, as well as its risk management objective and strategy for undertaking various hedge transactions. The Group also formally assesses both at the inception of the hedge and on an ongoing basis, whether each derivative is highly effective in offsetting changes in fair values or cash flows of the hedged item.
Hedge accounting is discontinued prospectively from the last testing date when (1) it is determined that the derivative financial instrument is no longer effective in offsetting changes in the fair value or cash flows of the underlying exposure being hedged; (2) the derivative financial instrument matures or is sold, terminated or exercised; or (3) it is determined that designating the derivative financial instrument as a hedge is no longer appropriate. When hedge accounting is discontinued the deferred gains or losses on the cash flow hedge remain in `other comprehensive income (loss)' until the forecast transaction occurs. Any further change in the fair value of the derivative financial instrument is recognized in current year earnings.
Offsetting of financial instruments
Financial assets and financial liabilities are offset and the net amount is reported in the consolidated balance sheet if there is a currently enforceable legal right to offset the recognized amounts and there is an intention to settle on a net basis to realize the assets and settle the liabilities simultaneously.
(t) Dividend
Final dividend proposed by the Board of Directors are recognized upon approval by the shareholders who have the right to decrease but not increase the amount of dividend recommended by the Board of Directors. Interim dividends are recognized on declaration by the Board of Directors.
(u) Earnings per share (EPS)
Basic EPS amounts are computed by dividing the net profit attributable to the equity holders of the parent company by the weighted average number of equity shares outstanding during the year.
Diluted EPS amounts are computed by dividing the net profit attributable to the equity holders of the parent company by the weighted average number of equity shares considered for deriving basic earnings per share and also the weighted average number of equity shares that could have been issued upon conversion of all dilutive potential equity shares. The diluted potential equity shares are adjusted for the proceeds receivable had the shares been actually issued at fair value (i.e. the average market value of the outstanding shares). Dilutive potential equity shares are deemed converted as at the beginning of the year, unless issued at a later date. Dilutive potential equity shares are determined independently for each year presented.
(v) Nature and purpose of reserves
General reserve Under the erstwhile Companies Act 1956, general reserve was created through an annual transfer of net income at as pecified percentage in accordance with applicable regulations. Consequent to introduction of Companies Act 2013,the requirement to mandatorily transfer a specified percentage of the net profit to general reserve has been with drawn.
Securities premium reserve Securities premium reserve is used to record the premium on issue of shares. The reserve can be utilized only for limited purposes such as issuance of bonus shares and buyback of shares in accordance with the provisions of the Companies Act, 2013.
Capital redemption reserve The Group recognizes cancellation of the Group's own equity instruments to capital redemption reserve
246 Consolidated Financial Statements
Notes to consolidated financial statements for the year ended 31 March 2019
(All amounts in crores of `, except share data and as stated otherwise)
Share based payment reserve The share options based payment reserve is used to recognize the grant date fair value of options issued to employees under Employee stock option plan.
Special economic zone re-investment reserve The Company has created Special economic zone reinvestment reserve out of profits of the eligible SEZ Units in terms of the specific provisions of Section 10AA(1) of the Income Tax Act, 1961 ("the Act"). The said reserve should be utilized by the Company for acquiring plant and machinery in terms of Section 10AA(2) of the Act.
Foreign currency translation reserve Exchange differences arising on translation of the foreign operations are recognized in other comprehensive income as described in accounting policy and accumulated in a separate reserve within equity. The cumulative amount is reclassified to profit or loss when the net investment is disposed-off.
Cash flow hedging reserve For hedging foreign currency risk, the Group uses foreign currency forward and option contracts. To the extent these hedges are effective, the change in fair value of the hedging instrument is recognized in the cash flow hedging reserve. Amounts recognized in the cash flow hedging reserve is reclassified to the statement of profit or loss when the hedged item affects profit or loss.
Debt instruments through other comprehensive income The Group recognizes changes in the fair value of debt instruments held with business objective of collect and sell in other comprehensive income. The Group transfers amounts from this reserve to the statement of profit and loss when the debt instrument is sold.
(w) Recently issued accounting pronouncements
Ind AS 116 - Leases
Ind AS 116 Leases was notified in October 2018 and it replaces Ind AS 17 Leases, including appendices thereto. Ind AS 116 is effective for annual periods beginning on or after 1 April 2019. Ind AS 116 sets out the principles for the recognition, measurement, presentation and disclosure of leases and requires lessees to account for all leases under a single on-balance sheet model similar to the accounting for finance leases under Ind AS 17.
The Group is currently evaluating the impact that the adoption of this new standard will have on its consolidated financial statements.
Appendix C to Ind AS 12 Uncertainty over Income Tax Treatment
The amendment to Appendix C of Ind AS 12 specifies that the amendment is to be applied to the determination of taxable profit (tax loss), tax bases, unused tax losses, unused tax credits and tax rates, when there is uncertainty over income tax treatments under Ind AS 12. The Group is currently evaluating the impact that the adoption of this new standard will have on its consolidated financial statements.
2. ACQUISITIONS / DISINVESTMENTS
a) Acquisitions / disinvestment in the current year
Acquisition of Actian Corporation
In terms of definitive agreement entered on 12 April 2018 by the Group and Sumeru Equity Partners (SEP) to acquire Actian Corporation, through a joint venture company, the acquisition has been consummated on 17 July 2018.
The Group has paid ` 1,133 crores to acquire 80.39% stake and SEP has paid ` 276 crores to acquire 19.61% stake and CEO of Actian has paid ` 7 crores to acquire 0.49% stake in the joint venture company and the balance purchase consideration has been funded through inter-company loan by the Group. The acquisition is part of the Group's strategy to augment its capabilities in the products and platforms business.
Annual Report 2018-19 247
Notes to consolidated financial statements for the year ended 31 March 2019
(All amounts in crores of `, except share data and as stated otherwise)
Total purchase consideration of ` 2,412 crores (including fair value of options ` 177 crores) has been preliminarily allocated based on management estimates to the acquired assets and liabilities as follows:
Net working capital (including cash of ` 36 crores) Deferred tax liability Property plant and equipment (including software) Intangible assets
Customer relationships Technology Goodwill(including fair value of options ` 177 crores) Total purchase consideration
The resultant goodwill is not considered tax deductible and has been allocated to software segment.
The table below shows the values and lives of intangibles recognized on acquisition:
Amount (104) (165) 10
354 406 1,911 2,412
Customer relationship Technology Total Intangibles
Amount 354 406 760
Life (Years) 10.0 7.0
The Group is in the process of making a final determination of the fair value of assets and liabilities. Finalization of the purchase price allocation may result in certain adjustments to the above allocation.
In addition to the purchase consideration, ` 20 crore is payable to employee of the acquired entity in respect of unvested options, the amount payable in respect of such options is retained by acquirer and will be released upon the individual employee continued service upto 1 October 2019.
As part of the joint venture agreement, SEP have contributed ` 276 crores in form of preferred stock qualified as "compound financial instrument" (equity and financial liability) in the books of joint venture company carrying 11% cumulative dividend rights with participating dividend rights, conversion rights into equity, voting rights and has a put option, after the expiry of 3 years to require the Group to repurchase all the stake owned by SEP at a price dependent upon performance of the acquiree. The Group also have a call option to purchase all stake held by SEP after the expiry of 4.5 years at a price dependent upon the performance of the acquiree.
The contribution by SEP of ` 276 crores, including the value of options have been fair valued at ` 453 crores as compound financial instrument and equity portion has been segregated and recorded as non-controlling interest of`96 crores and financial liability of ` 357 crores in the consolidated balance sheet.
Subsequent to deal consummation, CEO of Actian have paid ` 7 crores to acquire 0.49% stake in the Joint Venture Company. Post this investment, the Group and SEP stake in the joint venture company is 80.00% and 19.51%, respectively.
Other acquisitions
During the year ended 31 March 2019, the Group has made other acquisitions at a total purchase price of ` 674 crores including fair value of earn out. The Group has paid ` 666 crores and holdback of ` 8 crores is payable at the end of two years from the acquisition date.
Total purchase consideration of ` 674 crores has been preliminarily allocated based on management estimates to the acquired assets and liabilities as follows:
248 Consolidated Financial Statements
Notes to consolidated financial statements for the year ended 31 March 2019
(All amounts in crores of `, except share data and as stated otherwise)
Net working capital (including cash of ` 85 crores) Property plant and equipment Goodwill Total purchase consideration
Amount 401 89 184 674
The resultant goodwill is not considered tax deductible and has been allocated to all three segments.
In addition to the purchase consideration, ` 24 crore is payable to key employees over a two-year period. Payment of this amount is contingent upon achieving certain specified targets and these employees continuing to be the employees of the Company on the payment date. This consideration is being accounted for as post acquisition employee compensation expense.
The Group is in the process of making a final determination of the fair value of assets and liabilities. Finalization of the purchase price allocation may result in certain adjustments to the above allocation.
Acquisition of Select IBM Software products
On 7 December 2018, the Company has signed a definitive agreement to acquire select IBM software products for ` 12,267 crores ($1,775 million) including earn out, ` 6,134 crores ($888 million) of the same will be paid at close and balance within one year from closing date. It is an asset carve-out deal with 100% control on the assets being acquired.
The transaction is expected to close by mid-2019, subject to completion of applicable regulatory approvals.
b) Acquisitions / disinvestment in the previous year
i. Acquisitions
During the previous year, the Group made three acquisitions at a total purchase price of ` 285 crores, including deferred earn-out component of ` 157 crores which is dependent on achievement of certain specified performance obligations as set out in the agreements. The Group has paid ` 126 crores and ` 2 crores is payable at 31March 2019.
Earn-out liability of ` 157 crores has been initially fair valued at ` 82 crores and recorded as part of the preliminary purchase price allocation. The purchase price of ` 210 crores has been preliminarily allocated to the acquired assets and liabilities as follows:
Net working capital (including cash of ` 15 crores) Property plant and equipment Intangible assets
Customer relationships Technology Customer contracts Goodwill Total purchase consideration
Amount 5 8
113 30
9 45 210
Out of total goodwill of ` 45 crores, goodwill of ` 23 crores is tax deductible over the period of 15 years.
Annual Report 2018-19 249
Notes to consolidated financial statements for the year ended 31 March 2019
(All amounts in crores of `, except share data and as stated otherwise)
The table below shows the values and lives of intangibles recognized on acquisition:
Customer relationship Technology Customer contract Total Intangibles
Amount 113 30 9 152
Life (Years) 4.3 - 9.7 4.7 5.7 0.3 - 0.4
During the year ended 31 March 2019, the Group has finalised purchase price allocations including earn-out liability for these acquisitions to adjust for certain factors related to pre-acquisition period, which has resulted in reduction in fair value of earn out liability to ` 17 crores against ` 91 crores and reduction in value of Intangibles from ` 152 crores to ` 81 crores as at acquisition date.
During the year ended 31 March 2019, the group has made earn-out payment of `11 crores.
As at 31 March 2019, earn out liability has been fair valued at ` 14 crores with finance expense of `5 crores and other income of ` 19 crores on fair valuation recognized in the statement of profit and loss.
ii. Arrangement with DXC
In November 2015, the Group entered into a joint venture arrangement with DXC Technology Company(DXC) to operate and expand the existing Core Banking business of DXC. Under the joint venture arrangement, two entities, Celeritifintech Limited and Celeritifintech Services Limited were formed, where Celeritifintech Limited was focusing on account management and delivery governance and Celeritifintech Services Limited was focusing on service delivery and product development.
With a view to better leverage the capabilities of the Group and DXC Technology Company (DXC), on September 30, 2017, the Group terminated its existing arrangements with DXC. Accordingly, the balance sheet and statement of income of CeleritiFinTech Limited (and its step down subsidiaries) has not been consolidated with the Group from that date.
As at 31 March 2019, the net amount estimated to be received by the Group, on winding up of these joint venture entities, as per terms of the termination agreement has been shown as receivable under other financial assets amounting to ` 48 crores (31 March 2018,` 89 crores).
250 Consolidated Financial Statements
Notes to consolidated financial statements for the year ended 31 March 2019
(All amounts in crores of `, except share data and as stated otherwise)
3. Notes to consolidated financial statements
3.1 Property, plant and equipment
The changes in the carrying value for the year ended 31 March 2019
Freehold land
Buildings
Plant and Office equipment Equipment
Computers and networking equipment
Owned Leased
Furniture and
fixtures
Vehicles
Total
Gross block as at 1 April 2018
55
2,827
1,565
296 3,194
-
718
119
8,774
Additions
19
165
120
55 1,151
47
100
34
1,691
Acquisitions through business combinations
-
-
22
-
74
-
110
1
207
Disposals
-
-
17
12 201
-
104
27
361
Translation exchange differences
-
4
2
1
4
-
4
-
15
Gross block as at 31 March 2019
74
2,996
1,692
340 4,222
47
828
127 10,326
Accumulated depreciation as at 1 April 2018
-
674
925
227 1,808
-
526
54
4,214
Charge for the year
-
144
119
34 590
9
62
23
981
Acquisitions through business combinations
-
-
15
-
45
-
90
-
150
Deduction/other adjustments
-
-
16
12 165
-
100
20
313
Translation exchange differences
-
1
(3)
2
(1)
-
2
-
1
Accumulated depreciation as at 31 March 2019
-
819
1,040
251 2,277
9
580
57
5,033
Net block as at 31 March 2019
74
2,177
652
89 1,945
38
248
70
5,293
Note: Capital work in progress includes ` 8 crores interest on extended interest bearing suppliers credit and during the year ` 9
crores have been capitalized by the Group.
The changes in the carrying value for the year ended 31 March 2018
Freehold land
Buildings
Computers and
Plant and Office
networking
equipment Equipment equipment
Owned Leased
Furniture and
fixtures
Vehicles
Total
Gross block as at 1 April 2017
55
2,581
1,464
270 2,584
-
701
110
7,765
Additions
-
246
108
33 816
-
51
34
1,288
Acquisitions through business combinations
-
-
6
-
3
-
1
-
10
Disposals
-
3
26
12 296
-
49
25
411
Translation exchange differences
-
3
13
5
87
-
14
-
122
Gross block as at 31 March 2018 Accumulated depreciation as at 1 April 2017 Charge for the year Acquisitions through business combinations Deduction/other adjustments Translation exchange differences
55
2,827
1,565
296 3,194
-
718
119
8,774
-
537
832
209 1,627
-
511
51
3,767
-
137
114
24 405
-
49
23
752
-
-
1
-
1
-
-
-
2
-
3
25
11 281
-
46
20
386
-
3
3
5
56
-
12
-
79
Accumulated depreciation as at 31 March 2018
-
674
925
227 1,808
-
526
54
4,214
Net block as at 31 March 2018
55
2,153
640
69 1,386
-
192
65
4,560
Net block as at 1 April 2017
55
2,044
632
61 957
-
190
59
3,998
Note: Capital work in progress includes ` 9 crores interest on extended interest bearing suppliers credit and during the year ` 25
crores have been capitalized by the Group.
Annual Report 2018-19 251
Notes to consolidated financial statements for the year ended 31 March 2019
(All amounts in crores of `, except share data and as stated otherwise)
3.2 Goodwill The changes in the carrying value of goodwill by reportable segment, for the year ended 31 March 2019
Opening balance as at 1 April 2018 Acquisitions through business combinations Effect of exchange rate changes Closing balance as at 31 March 2019
Software services
5,967 1,976
183 8,126
Infrastructure services
Business process outsourcing services
647
185
98
21
(25)
9
720
215
The changes in the carrying value of goodwill by reportable segment, for the year ended 31 March 2018
Total
6,799 2,095
167 9,061
Opening balance as at 1 April 2017 Acquisitions through business combinations Deconsolidation of subsidiary [refer note 2(b)(ii)] Purchase price adjustment Effect of exchange rate changes Closing balance as at 31 March 2018
Software services
5,747
21
Infrastructure services
Business process outsourcing services
597
160
1
23
(59)
-
-
15
-
-
243
49
2
5,967
647
185
Total
6,504 45
(59) 15
294 6,799
For the purpose of impairment testing, goodwill acquired in a business combination is allocated to the cash generating units (CGU), which benefit from the synergies of the acquisition.
Goodwill is tested for impairment at least annually. Impairment is recognized, when the carrying amount of a cash generating units (CGU) including the goodwill, exceeds the estimated recoverable amount of the CGU. Future cash flows are forecast for 5 years & then on perpetuity on the basis of certain assumptions which includes revenue growth, earnings before interest and taxes, taxes, capital outflow and working capital requirement. The assumptions are taken on the basis of past trends and management estimates and judgement. Future cash flows are discounted with "Weighted Average Cost of Capital". The key assumptions are as follows:
Terminal growth rate (%) Discount rate (%)
As at
31 March 2019
31 March 2018
2.50
2.50
9.50
10.80
As at 31 March 2019 and 31 March 2018 the estimated recoverable amount of the CGU exceeded its carrying amount and accordingly, no impairment was recognized.
An analysis of the sensitivity of the computation to a change in key assumptions based on reasonable probability did not identify any probable scenario in which the recoverable amount of the CGU would decrease below its carrying amount.
252 Consolidated Financial Statements
Notes to consolidated financial statements for the year ended 31 March 2019
(All amounts in crores of `, except share data and as stated otherwise)
3.3 Other intangible assets
The changes in the carrying value for the year ended 31 March 2019
Gross block as at 1 April 2018 Additions Acquisitions through business combinations Disposals/other adjustments Translation exchange differences Gross block as at 31 March 2019 Accumulated depreciation as at 1 April 2018 Charge for the year Acquisitions through business combinations Deduction/other adjustments Translation exchange differences Accumulated depreciation as at 31 March 2019 Net block as at 31 March 2019 Estimated remaining useful life (in years)
Software
1,083 145 115 37 10
1,316 847 175 73 35 6
1,066 250 3
Licensed IPRs 7,410 1,337 1 8,748 642 759 (1) 1,400 7,348 14
Customer relation-
ships 458 -
354
68 11 755
105
101
-
1
207
548
9
Customer contracts
Intellectual NonTechnology property compete
rights agreements
53
46
13
3
-
-
-
-
-
406
-
-
-
-
-
-
2
-
-
1
55
452
13
4
53
17
7
1
-
54
2
1
-
-
-
-
-
-
-
-
2
(1)
-
-
55
70
9
2
-
382
4
2
-
6
3
3
The changes in the carrying value for the year ended 31 March 2018
Total
9,066 1,482
875 105 25 11,343 1,672 1,092 73 35
7 2,809 8,534
Gross block as at 1 April 2017 Additions Acquisitions through business combinations Disposals Translation exchange differences Gross block as at 31 March 2018 Accumulated depreciation as at 1 April 2017 Charge for the year Acquisitions through business combinations Deduction/other adjustments Translation exchange differences Accumulated depreciation as at 31 March 2018 Net block as at 31 March 2018 Net block as at 1 April 2017 Estimated remaining useful life (in years)
Software
928 172
37 20 1,083 749 117
36 17 847 236 179 3
Licensed IPRs
4,255 3,153
-
2 7,410
144
411
-
(85) 2
642
6,768 4,111
15
Customer relation-
ships 389 -
113
57 13 458
43
71
-
12 3
105
353 346
9
Customer contracts
Intellectual NonTechnology property compete
rights agreements
44
99
13
3
-
-
-
-
9
30
-
-
-
91
-
-
-
8
-
-
53
46
13
3
39
18
5
-
14
15
2
1
-
-
-
-
-
13
-
-
-
(3)
-
-
53
17
7
1
-
29
6
2
5
81
8
3
1
5
4
4
Total
5,731 3,325
152 185 43 9,066 998 631
(24)
19 1,672 7,394 4,733
Annual Report 2018-19 253
Notes to consolidated financial statements for the year ended 31 March 2019
(All amounts in crores of `, except share data and as stated otherwise)
3.4 Investments
Financial assets Non - current Quoted investments Carried at fair value through other comprehensive income Investment in debentures or bonds Unquoted investments Equity instruments carried at cost Carried at fair value through profit and loss Investment in limited liability partnership
Current Quoted investments
Carried at fair value through other comprehensive income Investment in debentures or bonds
Unquoted investments Carried at fair value through profit and loss Investment in mutual funds
Total investments - financial assets
Aggregate amount of quoted investments Aggregate amount of unquoted investments Market value of quoted investments
Equity instruments carried at cost Investment carried at fair value through other comprehensive income Investment carried at fair value through profit and loss
3.5 Loans
Non - current Carried at amortized cost Unsecured , considered good Inter corporate deposits
Current Carried at amortized cost Unsecured , considered good Inter corporate deposits Loans to employees
254 Consolidated Financial Statements
As at
31 March 2019
31 March 2018
-
260
48
16
37
27
85
303
1,226
994 2,220
2,305
1,226 1,079 1,226
48 1,226 1,031
-
2,357 2,357
2,660
260 2,400
260
16 260 2,384
As at
31 March 2019
31 March 2018
355
235
355
235
1,309 3
1,312
3,408 2
3,410
Notes to consolidated financial statements for the year ended 31 March 2019
(All amounts in crores of `, except share data and as stated otherwise)
3.6 Other financial assets
Non - current Carried at amortized cost Finance lease receivables [refer note 3.28(iii)] Security deposits Security deposits - related parties (refer note 3.32) Unbilled receivable (previous year : unbilled revenue) Contract assets
Carried at fair value through other comprehensive income Unrealized gain on derivative financial instruments [refer note 3.29(a)]
Current Carried at amortized cost Unbilled receivable (previous year : unbilled revenue) Unbilled receivable - related parties (refer note 3.32) Contract assets Interest receivable Security deposits Security deposits - related parties (refer note 3.32) Finance lease receivables [refer note 3.28(iii)] Other receivable
Carried at fair value through other comprehensive income Unrealized gain on derivative financial instruments [refer note 3.29(a)]
Carried at fair value through profit and loss Unrealized gain on derivative financial instruments [refer note 3.29(a)]
3.7 Other non- current assets
Unsecured considered good Capital advances Advances other than capital advances Security deposits Others Prepaid expenses Prepaid rentals for leasehold land Prepaid expenses - related parties (refer note 3.32) Deferred contract cost (previous year : deferred cost) (refer note 3.19) Others
3.8 Inventories
Stock-in-trade
As at
31 March 2019
31 March 2018
850
515
108
93
12
10
112
216
16
-
1,098
834
103
23
1,201
857
2,903 1
420 94 60 9
554 316 4,357
132
2,618 -
33 53
4 341 229 3,278
178
80 4,569
3,456
As at
31 March 2019
31 March 2018
25
71
43
37
441 281
7 833
4 1,634
287 285
3 477
1,160
As at
31 March 2019
31 March 2018
91
172
91
172
Annual Report 2018-19 255
Notes to consolidated financial statements for the year ended 31 March 2019
(All amounts in crores of `, except share data and as stated otherwise)
3.9 Trade receivables
As at
31 March 2019
31 March 2018
Unsecured, considered good (refer note below)
11,822
9,730
Trade receivables which have significant increase in credit risk
162
148
Trade receivables - credit impaired
31
52
12,015
9,930
Impairment allowance for bad and doubtful debts
- Unsecured, considered good
(116)
(96)
- Trade receivables which have significant increase in credit risk
(162)
(148)
- Trade receivables - credit impaired
(31)
(47)
(309)
(291)
11,706
9,639
Note: Includes receivables from related parties amounting to ` 10 crores (31 March 2018, ` 6 crores)
3.10 Cash and bank balances
(a) Cash and cash equivalent Balance with banks - in current accounts - deposits with original maturity of less than 3 months Remittances in transit Unclaimed dividend account
(b) Other bank balances Deposits with remaining maturity up to 12 months (refer note below)
Note: Pledged with banks as security for guarantees ` 5 crores (31 March 2018, Nil)
As at
31 March 2019
31 March 2018
3,972 1,947
10 5
5,934
1,938 7,872
1,396 203 95 5
1,699
2,319 4,018
3.11 Other current assets
Unsecured , considered good Advances other than capital advances
Security deposits Advances to employees Advances to suppliers Others Deferred contract cost (previous year : deferred cost) (refer note 3.19) Deferred contract cost - related parties (refer note 3.19 and 3.32) Prepaid expenses Prepaid rentals for leasehold land Prepaid expenses - related parties (refer note 3.32) Advance tax (refundable) Goods and service tax receivable Other advances
As at
31 March 2019
31 March 2018
30 51 86
378 19
996 4
20 128
97 143 1,952
30 41 84
224 -
732 4 4
140 60
187 1,506
256 Consolidated Financial Statements
Notes to consolidated financial statements for the year ended 31 March 2019
(All amounts in crores of `, except share data and as stated otherwise)
Unsecured , considered doubtful Advances other than capital advances
Advances to employees Other advances Less: provision for doubtful advances
As at
31 March 2019
31 March 2018
64 10 (74)
1,952
59 9
(68) -
1,506
3.12 Share capital
Authorized 1,500,000,000 (31 March 2018, 1,500,000,000) equity shares of ` 2 each
Issued, subscribed and fully paid up 1,356,278,868 (31 March 2018, 1,392,246,384) equity shares of ` 2 each
As at
31 March 2019
31 March 2018
300
300
271
278
Terms / rights attached to equity shares
The Company has only one class of shares referred to as equity shares having a par value of ` 2/-. Each holder of equity shares is entitled to one vote per share.
In the event of liquidation of the Company, the holders of equity shares will be entitled to receive the remaining assets of the Company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.
Reconciliation of the number of shares outstanding at the beginning and at the end of the financial year
As at
31 March 2019
No. of shares
` in Crores
31 March 2018
No. of shares
` in Crores
Number of shares at the beginning
1,392,246,384
278
1,426,783,424
285
Add: Shares issued on exercise of employee stock options
396,120
-
462,960
-
Less: Shares extinguished on buyback
(36,363,636)
(7)
(35,000,000)
(7)
Number of shares at the end
1,356,278,868
271
1,392,246,384
278
The Company does not have any holding / ultimate holding company.
Details of shareholders holding more than 5 % shares in the company
Name of the shareholder
Equity shares of ` 2 each fully paid Vama Sundari Investments (Delhi) Private Limited HCL Holdings Private Limited
As at
31 March 2019
31 March 2018
No. of shares
% holding in the class
No. of shares
% holding in the class
581,855,849 223,331,016
42.90% 16.47%
587,647,744 233,887,811
42.21% 16.80%
As per the records of the Company, including its register of shareholders/members and other declarations received from shareholders regarding beneficial interest, the above shareholding represents both legal and beneficial ownership of shares.
Annual Report 2018-19 257
Notes to consolidated financial statements for the year ended 31 March 2019
(All amounts in crores of `, except share data and as stated otherwise)
Aggregate number of bonus shares issued, shares issued for consideration other than cash and shares bought back during the period of five years immediately preceding the reporting date:
Aggregate number and class of shares allotted as fully paid up pursuant to contract(s) without payment being received in cash Aggregate number and class of shares allotted as fully paid up by way of bonus shares
Aggregate number and class of shares bought back
As at
31 March 2019
31 March 2018
15,563,430
15,573,555
Equity shares
Equity shares
702,847,961
702,847,961
Equity shares
Equity shares
71,363,636
35,000,000
Equity shares
Equity shares
During the year ended 31 March 2019, the Company carried out share buyback of 36,363,636 fully paid-up equity shares of face value of ` 2 each at a price of ` 1,100 per share paid in cash for an aggregate consideration of ` 4,000 crores. Same has been recorded as reduction in equity share capital by ` 7 crores, securities premium by ` 10 crores, general reserve by ` 2,387 crores and retained earnings by ` 1,596 crores.
As required by the Companies Act, 2013, capital redemption reserve of ` 7 crores has been created out of retained earnings to the extent of share capital extinguished. The expenses of ` 12 crores relating to buyback has been adjusted against retained earnings.
During the previous year ended 31 March 2018, the Company carried out share buyback of 35,000,000 fully paid-up equity shares of face value of ` 2/- each at a price of ` 1,000/- per share paid in cash for an aggregate consideration of ` 3,500 crores. Same was recorded as reduction in equity share capital by ` 7 crores, securities premium by ` 3,248 crores and general reserve by ` 245 crores.
As required by the Companies Act, 2013, capital redemption reserve of ` 7 crores was created out of general reserve to the extent of share capital extinguished. The expenses of ` 14 crores relating to buyback was adjusted against retained earnings.
Capital management
The primary objective of the Group's capital management is to support business continuity and growth of the company while maximizing the shareholder value. The Group has been declaring quarterly dividend for last 16 years. The Group determines the capital requirement based on annual operating plans and long-term and other strategic investment plans. The funding requirements have been generally met through operating cash flows generated. The Company have also resorted to borrowing to meet local funding requirements in certain foreign subsidiaries.
Employee Stock Option Plan (ESOP)
The Company has provided share-based payment schemes to its employees. During the year ended 31 March 2019 and 2018, the following scheme was in operation:
Maximum number of options under the plan Method of settlement (cash/equity) Vesting period (maximum) Exercise period from the date of vesting (maximum)
Vesting conditions
ESOP 2004 20,000,000
Equity 96 months
5 years Service period / Group performance
Each option granted under the above plan entitles the holder to eight equity shares of the Company at an exercise price, which is approved by the Nomination and Remuneration Committee.
258 Consolidated Financial Statements
Notes to consolidated financial statements for the year ended 31 March 2019
(All amounts in crores of `, except share data and as stated otherwise)
The details of activity under the plan have been summarized below:-
Year ended
ESOP 2004
31 March 2019
No of options
Weighted average exercise price (`)
31 March 2018
No of options
Weighted average exercise price (`)
Outstanding at the beginning of the year
123,645
16
183,915
16
Add: Granted during the year
-
-
-
-
Less: Forfeited during the year
(4,800)
16
(2,400)
16
Exercised during the year
(49,515)
16
(57,870)
16
Expired during the year
(120)
-
-
-
Options outstanding at the end of the year
69,210
16
123,645
16
Options exercisable at the end of the year
69,210
118,845
The weighted average option price at the date of exercise for stock options exercised during the year was ` 7,897 (31 March 2018, ` 6,962)
The details of exercise price for outstanding stock options is as below:
Name of the plan
Employee stock option plan - 2004 31 March 2019 31 March 2018
Range of exercise prices
` 16 ` 16
Number of options outstanding
Weighted average remaining
contractual life of options (in years)
Weighted average exercise price (`)
69,210
0.50
16
123,645
1.38
16
There are no options granted during the current year and previous year.
3.13 Borrowings
Long term borrowings Secured Term loans from banks (refer note 1 below) Finance lease obligations (refer note 2 below) Unsecured Term loans from banks (refer note 3 below) Other loans (refer note 4 below)
Current maturities of long term borrowings disclosed under Note 3.14 "Other financial liabilities"
Short term borrowings Unsecured Bank overdraft (refer note 5 below) Term loans from banks (refer note 6 below)
Non-current
As at
31 March 2019
31 March 2018
32
33
103
75
2,839
221
3
9
2,977
338
-
-
2,977
338
-
-
-
-
-
-
Current
As at
31 March 2019
31 March 2018
18 105
365 6
494 (494)
-
33 691 724
15 45
111 6
177 (177)
-
42 -
42
Annual Report 2018-19 259
Notes to consolidated financial statements for the year ended 31 March 2019
(All amounts in crores of `, except share data and as stated otherwise)
Note:-
1. The Group has availed of term loans of ` 50 crores (31 March 2018, ` 48 crores) secured by hypothecation of gross block of vehicles of ` 114 crores (31 March 2018, ` 110 crores) at interest rates ranging from 8.5% p.a. to 10.4% p.a. The loans are repayable over a period of 3 to 5 years on a monthly basis.
2. The Finance lease obligations are secured against network equipment acquired by the Group on finance lease at interest rates ranging from 0% p.a. to 5.25% p.a. The same is repayable over a period of 5 years on a monthly/quarterly rest.
3. An unsecured long term loan of ` 3,204 crores (31 March 2018, ` 332 crores) borrowed from banks at interest rate ranging from 0.85% p.a. to 3.76% p.a. The scheduled principal repayments of loans are as follows:
Within one year One to two years Two to three years Three to five years
As at
31 March 2019
31 March 2018
365
111
364
111
259
110
2,216
-
3,204
332
4. The other loan of ` 9 crores represents long term loan taken for purchase of plant and equipment (31 March 2018, ` 15 crores) at interest rates of 0% p.a.. The loans are repayable till October 2020 on quarterly/yearly rest.
5. Current borrowings were primarily on account of bank overdrafts required for management of working capital. The Group has availed bank line of credit at interest rate ranging from 0.64% p.a. to 9.60% p.a. which is repayable on demand.
6. Unsecured short term loan of ` 691 crores (31 March 2018, ` Nil) borrowed from banks at interest rate of 3.27% p.a. is repayable in June 2019.
3.14 Other financial liabilities
Non - current Carried at amortized cost Employee bonuses accrued Capital accounts payables Deferred consideration
As at
31 March 2019
31 March 2018
7
6
170
166
8
-
185
172
Carried at fair value through other comprehensive income Unrealized loss on derivative financial instruments [refer note 3.29(a)]
-
1
Carried at fair value through profit and loss Deferred consideration Liability towards non-controlling interest
4
73
347
-
351
73
536
246
260 Consolidated Financial Statements
Notes to consolidated financial statements for the year ended 31 March 2019
(All amounts in crores of `, except share data and as stated otherwise)
Current Carried at amortized cost Current maturities of long term borrowings Interest accrued but not due on borrowings Unclaimed dividends Accrued salaries and benefits Employee bonuses accrued Other employee costs
Others Liabilities for expenses Liabilities for expenses-related parties (refer note 3.32) Capital accounts payables [includes supplier credit ` 187 crores (31 March 2018, ` 297 crores)] Capital accounts payables-related parties [includes supplier credit ` 3 crores (31 March 2018, ` 2 crores)] (refer note 3.32) Supplier credit Supplier credit-related parties (refer note 3.32) Book overdraft
Carried at fair value through profit and loss Unrealized loss on derivative financial instruments [refer note 3.29(a)] Deferred consideration Liability towards non-controlling interest
3.15 Provisions
Non - current Provision for employee benefits
Provision for gratuity (refer note 3.31) Provision for leave benefits
Current Provision for employee benefits
Provision for gratuity (refer note 3.31) Provision for leave benefits
3.16 Other non-current liabilities
Contract liabilities (previous year : revenue received in advance) (refer note 3.19) Others
As at
31 March 2019
31 March 2018
494 18 5
1,335 846
3,040 30
646
3
318 164
7 6,906
4 9 31 44 6,950
177 5
846 730
3,089 20
1,081
2
478 125
2 6,555
8 43
51 6,606
As at
31 March 2019
31 March 2018
384
324
437
376
821
700
80
68
506
462
586
530
As at
31 March 2019
31 March 2018
213
179
34
33
247
212
Annual Report 2018-19 261
Notes to consolidated financial statements for the year ended 31 March 2019
(All amounts in crores of `, except share data and as stated otherwise)
3.17 Trade payables
Trade payables Trade payables-related parties (refer note 3.32) 3.18 Other current liabilities
As at
31 March 2019
31 March 2018
1,303
913
2
5
1,305
918
Contract liabilities (previous year : revenue received in advance) (refer note 3.19) Contract liabilities-related parties (previous year : revenue received in advancerelated parties) (refer note 3.19 and 3.32) Other advances
Advances received from customers Others
Withholding and other taxes payable
3.19 Revenue from operations
As at
31 March 2019
31 March 2018
1,051
656
2
15
3
754 1,810
65
589 1,325
Sale of services Sale of hardware and software
Year ended
31 March 2019
31 March 2018
58,434
49,031
1,993
1,538
60,427
50,569
Disaggregate Revenue Information The disaggregated revenue from contracts with the customers for the year ended 31 March 2019 by contract type
Fixed price Time and material
Year ended 31 March 2019
37,905 22,522 60,427
Of the above fixed price revenue, IT Infrastructure services and Software services businesses account for 52% and 45% respectively. For time and material revenue Software services business accounts for 79% revenue and balance about equally between other two businesses.
Revenue disaggregation as per geography has been included in segment information (Refer note 30).
262 Consolidated Financial Statements
Notes to consolidated financial statements for the year ended 31 March 2019
(All amounts in crores of `, except share data and as stated otherwise)
Remaining performance obligations
As at 31 March 2019, the aggregate amount of transaction price allocated to remaining performance obligations as per the requirements of Ind AS 115 was ` 49,310 crores out of which, approximately 40% is expected to be recognized as revenues within one year and the balance beyond one year. This is after exclusions of below:
a) Contracts for which we recognize revenues based on the right to invoice for services performed,
b) Variable consideration allocated entirely to a wholly unsatisfied performance obligation or to a wholly unsatisfied promise to transfer a distinct good or service that forms part of a single performance obligation, or
c) Variable consideration in the form of a sales-based or usage-based royalty promised in exchange for a license of intellectual property.
Contract balances
Contract assets : A contract asset is a right to consideration that is conditional upon factors other than the passage of time. Contract assets are recognized where there is excess of revenue over the billings. Revenue recognized but not billed to customers is classified either as contract assets or unbilled receivable in our consolidated balance sheet. Contract assets primarily relate to unbilled amounts on fixed price contracts using the cost to cost method of revenue recognition. Unbilled receivable represents contracts where right to consideration is unconditional (i.e. only the passage of time is required before the payment is due).
During the year, out of ` 488 crores contract assets as on 1 April 2018, invoicing for 87% has been done and balance is pending for invoicing.
Contract liablities : A contract liability arises when there is excess billing over the revenue recognized (also referred to as deferred revenue).
The below table discloses the significant movement in contract liabilities :
Balance as at 1 April 2018 Additional amounts billed but not recognized as revenue Deduction on account of revenues recognized during the year Addition on account of acquisitions Effect of exchange fluctuations Balance as at 31 March 2019
Contract liabilities
850 976 (668) 100
8 1,266
Deferred contract cost : Deferred contract cost represents the contract fulfilment cost and cost for obtaining the contract.
The below table discloses the significant movement in deferred contract cost:
Balance as at 1 April 2018 Additional cost capitalised during the year Deduction on account of cost amortised during the year Effect of exchange fluctuations Balance as at 31 March 2019
Deferred contract cost
701 801 (274)
2 1,230
Annual Report 2018-19 263
Notes to consolidated financial statements for the year ended 31 March 2019
(All amounts in crores of `, except share data and as stated otherwise)
3.20 Other income
Year ended
31 March 2019
31 March 2018
Interest income
- On investments carried at fair value through other comprehensive income
93
3
- On others financial instruments carried at amortized cost
479
464
Profit on sale of investments carried at fair value through other comprehensive income
17
-
Income on investments carried at fair value through profit and loss
- Unrealized gains (loss) on fair value changes on mutual funds
(8)
6
- Profit on sale of mutual funds
147
154
- Share of profit in limited liability partnership
4
2
Profit on sale of property, plant and equipments (refer note below)
3
1
Exchange differences (net)
182
581
Miscellaneous income
26
6
943
1,217
Note : Net of loss on sale of property, plant and equipment ` 2 crores (previous year, ` 7 crores).
3.21 Changes in inventories of stock-in-trade
Opening stock Less : Closing stock
Year ended
31 March 2019
31 March 2018
172
276
91
172
81
104
3.22 Employee benefits expense
Salaries, wages and bonus Contribution to provident fund and other employee funds Staff welfare expenses
Year ended
31 March 2019
31 March 2018
25,649
21,506
3,511
3,115
123
108
29,283
24,729
3.23 Finance cost
Interest - on loans from banks - on financial liability carried at fair value through profit and loss - others
Bank charges
Year ended
31 March 2019
31 March 2018
90
14
34
-
31
39
19
16
174
69
264 Consolidated Financial Statements
Notes to consolidated financial statements for the year ended 31 March 2019
(All amounts in crores of `, except share data and as stated otherwise)
3.24 Other expenses
Rent Power and fuel Insurance Repairs and maintenance
- Plant and equipment - Buildings - Others Communication costs Travel and conveyance Legal and professional charges Software license fee Rates and taxes Donations CSR expenditure Provision for doubtful debts / bad debts written off Miscellaneous expenses
3.25 Income taxes
Year ended
31 March 2019
31 March 2018
761
566
336
313
68
50
108 130 354 306 1,815 478 509
91 17 128 22 638 5,761
89 94 262 285 1,461 397 323 51
93 80 555 4,619
Income tax charged to statement of profit and loss Current income tax charge Deferred tax charge (credit)
Income tax charged to other comprehensive income Expense (benefit) on re-measurements of defined benefit plans Expense (benefit) on revaluation of cash flow hedges Expense (benefit) on unrealized gain on debt instruments
Year ended
31 March 2019
31 March 2018
3,094 (592) 2,502
2,386 (84)
2,302
2
7
3
(78)
1
-
6
(71)
The reconciliation between the Group's provision for income tax and amount computed by applying the statutory income tax rate in India is as follows:
Profit before income tax Statutory tax rate in India Expected tax expense Non-taxable export income Non-taxable other income Reduction in deferred tax assets due to change in US federal tax rate Additional provision created in books Reversal of prior year provision (net) Differences between Indian and foreign tax rates MAT credit entitlement Provision for deemed branch taxes Others (net) Total taxes Effective income tax rate
Year ended
31 March 2019
31 March 2018
12,622
11,024
34.94%
34.61%
4,411
3,815
(1,560)
(1,418)
(42)
(6)
-
61
115
24
(323)
(75)
(177)
(41)
-
(70)
-
4
78
8
2,502
2,302
19.83%
20.88%
Annual Report 2018-19 265
Notes to consolidated financial statements for the year ended 31 March 2019
(All amounts in crores of `, except share data and as stated otherwise)
In India, the company has benefited from certain tax incentives that the Government of India has provided for the units situated in Special Economic Zones (SEZs) under the Special Economic Zone Act, 2005, which began providing services on or after 1 April 2005. The eligible units are eligible for a deduction of 100% of profits or gains derived from the export of services for the first five years from commencement of provision of services and 50% of such profits and gains for a further five years. Certain tax benefits are also available for a further five years subject to the unit meeting defined conditions. The aforesaid tax benefits will not be available to Units commencing operations on or after 1 April 2020.
The Company and its subsidiaries in India are subject to Minimum Alternate Tax (MAT) on its book profits, which gives rise to future economic benefits in the form of adjustment of future income tax liability. MAT paid for a year can be set-off against the normal tax liability within fifteen subsequent years, expiring between the years 2023 to 2034.
Components of deferred tax assets and liabilities as on 31 March 2019
Deferred tax assets Business losses MAT credit entitlement Provision for doubtful debts Accrued employee costs Depreciation and amortization Employee stock compensation Others Gross deferred tax assets (A) Deferred tax liabilities Depreciation and amortization Unrealized gain on derivative financial instruments Intangibles Others Gross deferred tax liabilities (B) Net deferred tax assets (A-B)
Opening balance
Recognized in profit and
loss
Recognised in /
reclassified from OCI
Acquisitions/ De consolid
-ation
Recognized directly in equity
against tax liability
Exchange difference
25
(10)
1,378
625
84
7
357
108
22
4
12
(2)
181
(12)
2,059
720
-
45
-
1
-
-
-
-
-
-
-
-
1
1
-
9
-
-
-
1
-
-
(4)
1
-
39
-
2
1
85
(4)
14
103
91
-
-
-
3
33
-
3
-
-
-
48
26
-
198
-
-
72
11
4
49
-
5
256
128
7
247
-
8
1,803
592
(6)
(162)
(4)
6
Closing balance
61 2,003
91 476
27 7
210 2,875
197
36
272 141 646 2,229
266 Consolidated Financial Statements
Notes to consolidated financial statements for the year ended 31 March 2019
(All amounts in crores of `, except share data and as stated otherwise)
Components of deferred tax assets and liabilities as on 31 March 2018
Deferred tax assets Business losses MAT credit entitlement Provision for doubtful debts Accrued employee costs Unrealized loss on derivative financial instruments Depreciation and amortization Employee stock compensation Others Gross deferred tax assets (A) Deferred tax liabilities Depreciation and amortization Unrealized gain on derivative financial instruments Intangibles Others Gross deferred tax liabilities (B) Net deferred tax assets (A-B)
Opening balance
Recognized in profit and
loss
Recognised in /
reclassified from OCI
Acquisitions
Recognized directly in equity
against tax liability
Exchange difference
43
(18)
-
-
1,159
219
-
-
84
-
-
-
484
(112)
(7)
(1)
-
-
-
-
5
17
-
-
24
(13)
-
-
163
22
-
-
1,962
115
(7)
(1)
-
-
-
-
-
-
-
(7)
-
-
-
-
1
-
-
(4)
1
(11)
80
30
-
(7)
111
-
(78)
-
24
24
-
-
95
(23)
-
-
310
31
(78)
(7)
1,652
84
71
6
-
-
-
-
-
-
-
-
-
-
1
(11)
Closing balance
25 1,378
84 357
22 12 181 2,059
103 33 48 72
256 1,803
The Company's subsidiaries have recognized deferred tax assets on such portion of the carry forward business losses which can be utilized against profits within the limit and carryover period permitted under laws of respective jurisdictions.
Above table represent the Gross deferred tax assets and liabilities. Amounts of deferred tax assets and liabilities presented in statement of condensed consolidated balance sheet has been offset, wherever the Group has legally enforceable right and is related to same taxable authority.
Undistributed earnings of the subsidiaries aggregate approximately ` 10,037 crores (31 March 2018, ` 7,743 crores). The Group has the intent to reinvest the undistributed foreign earning indefinitely in its significant overseas operations and consequently did not record a deferred tax liability on the undistributed earnings.
3.26 Components of other comprehensive income attributable to shareholders of the Company
A. Items that will not be reclassified to statement of profit and loss Retained earnings (Actuarial gain relating to defined benefit plan) Opening balance (net of tax) Actuarial gains Income tax expense Closing balance (net of tax)
For the year ended
31 March 2019
31 March 2018
30
3
10
34
(2)
(7)
38
30
Annual Report 2018-19 267
Notes to consolidated financial statements for the year ended 31 March 2019
(All amounts in crores of `, except share data and as stated otherwise)
B. Items that will be reclassified subsequently to statement of profit and loss Foreign currency translation reserve Opening balance Foreign currency translation Reclassification adjustments into other (income) expense, net Closing balance
For the year ended
31 March 2019
31 March 2018
1,351 146 -
1,497
810 581 (40) 1,351
Cash flow hedging reserve Opening balance (net of tax) Unrealized gains (losses) Reclassification adjustments into other (income) expense, net Income tax benefit (expense) Closing balance (net of tax)
137
445
82
131
(45)
(517)
(3)
78
171
137
Unrealized gain on debt instruments Opening balance (net of tax) Unrealized gains (losses) Income tax benefit (expense) Closing balance (net of tax) TOTAL (B)
3.27 Earnings Per Share
3 (1) 2 1,670
1,488
The computation of earnings per share is as follows:
Profit for the year attributable to shareholders of the Company Weighted average number of equity shares outstanding in calculating Basic EPS Dilutive effect of stock options outstanding Weighted average number of equity shares outstanding in calculating dilutive EPS Nominal value of equity shares (in `) Earnings per equity share (in `)
- Basic - Diluted
Year ended
31 March 2019
31 March 2018
10,120
8,721
1,375,363,202
1,401,349,735
552,567
986,925
1,375,915,769
1,402,336,660
2
2
73.58 73.55
62.23 62.19
3.28 Leases
i) Finance lease: In case of assets taken on lease
The Group has acquired IT equipments on finance leases. Total minimum lease payments and the maturity profile of finance leases at the balance sheet date, the element of interest included in such payments, and the present value of the minimum lease payments are as follows:
As on 31 March 2019 Not later than one year Later than one year and not later than 5 years
Total minimum lease payments
outstanding
Interest included in minimum lease payments
Present value of minimum lease
payments
107
2
105
104
1
103
211
3
208
268 Consolidated Financial Statements
Notes to consolidated financial statements for the year ended 31 March 2019
(All amounts in crores of `, except share data and as stated otherwise)
As on 31 March 2018 Not later than one year Later than one year and not later than 5 years
ii) Operating lease
Total minimum lease payments
outstanding
Interest included in minimum lease payments
Present value of minimum lease
payments
47
2
45
76
1
75
123
3
120
The Group's significant leasing arrangements are in respect of operating leases for office spaces and accommodation for its employees. The aggregate lease rental expense recognized in the statement of profit and loss for the year amounts to ` 761 crores [previous year ` 566 crores].
The lease equalization amount for non-cancellable operating lease payable in future years and accounted for by the Group is ` 140 crores (31 March 2018, ` 129 crores). Future minimum lease payments and the payment profile of non-cancellable operating leases are as follows:
Not later than one year Later than one year and not later than 5 years Later than five years
iii) Finance Lease: In case of assets given on lease
Year ended
31 March 2019
31 March 2018
509
410
1,311
1,090
332
426
2,152
1,926
The Group has given IT equipments to its customers on a finance lease basis. The future lease receivables in respect of assets given on finance lease are as follows:
As on 31 March 2019 Not later than one year Later than one year and not later than 5 years
As on 31 March 2018 Not later than one year Later than one year and not later than 5 years Later than 5 years
Total minimum lease payments
receivable
Interest included in minimum
lease payments receivable
Present value of minimum lease payments receivable
592 904 1,496
38
554
54
850
92
1,404
366
25
341
547
37
510
5
-
5
918
62
856
3.29 Financial instruments
(a) Derivatives
The Group is exposed to foreign currency fluctuations on foreign currency assets / liabilities and forecast cash flows denominated in foreign currency. The use of derivatives to hedge foreign currency forecasted cash flows is governed by the Group's strategy, which provides principles on the use of such forward contracts and currency options consistent with the Group's Risk Management Policy. The counterparty in these derivative instruments is a bank and the Group considers the risks of non-performance by the counterparty as insignificant. The Group has entered into a series of foreign exchange forward contracts and options that are designated as cash flow hedges and the related forecasted transactions extend through June 2023. The Group does not use forward covers and currency options for speculative purposes.
Annual Report 2018-19 269
Notes to consolidated financial statements for the year ended 31 March 2019
(All amounts in crores of `, except share data and as stated otherwise)
The following table presents the aggregate notional principal amounts of the outstanding derivative forward covers together with the related balance sheet exposure:
Foreign exchange forward denominated in
Sell covers USD / INR GBP / INR EURO / INR CHF / INR SEK / INR AUD / INR NOK / INR EURO / USD GBP / USD NOK / USD MXN / USD JPY / USD RUB / USD AUD / USD CHF / USD ZAR / USD PLN / USD CNY / USD NZD / USD BRL / USD
Buy covers PLN / USD JPY / USD SEK/USD CAD/USD RUB / USD GBP / USD CZK / USD CHF / USD DKK / USD SGD / USD NOK / USD PHP / USD
Notional Currency
Notional principal amounts (amount in thousands)
Balance sheet exposure Asset (Liability) (`)
31 March 2019 31 March 2018 31 March 2019 31 March 2018
USD GBP EUR CHF SEK AUD NOK EUR GBP NOK MXN JPY RUB AUD CHF ZAR PLN CNY NZD BRL
680,470 14,200 72,500 20,900
145,000 16,171
201,000 75,979 45,250 42,000
262,000 -
244,000 5,680
18,133 92,500 17,750 57,500
36,500
246,394 9,760
67,895 21,000 315,100 34,350 160,000 45,700 14,730
197,500 939,069 198,000
9,100 1,500 195,000
67,550
4,560 24,500
77
24
4
-
44
(14)
7
3
16
6
5
6
14
2
3
3
-
1
-
-
-
(1)
-
-
-
-
-
1
-
-
-
1
-
-
-
(1)
-
-
(1)
-
PLN
20,950
-
-
-
JPY
1,500,000
-
-
-
SEK
368,500
60,000
(1)
(2)
CAD
29,300
23,000
(2)
(3)
RUB
14,000
-
-
-
GBP
10,000
19,000
1
(1)
CZK
111,000
-
-
-
CHF
-
1,700
-
-
DKK
24,500
58,000
-
-
SGD
41,000
35,650
(1)
-
NOK
84,000
81,000
1
-
PHP
580,000
335,000
(1)
-
166
25
270 Consolidated Financial Statements
Notes to consolidated financial statements for the year ended 31 March 2019
(All amounts in crores of `, except share data and as stated otherwise)
The following table presents the aggregate notional principal amounts of the outstanding forward options together with the related balance sheet exposure:
Range Forward USD / INR GBP / INR EURO / INR AUD / INR EURO / USD CHF / INR SEK / INR
PUT USD / INR
Seagull USD / INR GBP / INR EURO / INR
Notional Currency
Notional principal amounts (amount in thousands)
Balance sheet exposure Asset (Liability) (`)
31 March 2019 31 March 2018 31 March 2019 31 March 2018
USD
1,216,487
1,099,485
105
186
GBP
15,500
60,800
6
(6)
EUR
44,250
110,380
23
(16)
AUD
16,950
10,580
6
2
EUR
-
3,500
-
-
CHF
1,500
-
1
-
SEK
15,000
-
1
-
USD
14,000
50,000
3
1
USD GBP EUR
7,000
14,750
-
-
-
6,000
-
-
-
14,200
-
-
145
167
The notional amount is a key element of derivative financial instrument agreements. However, notional amounts do not represent the amount exchanged by counterparties and do not measure the Group's exposure to credit risk as these contracts are settled at their fair values at the maturity date.
The balance sheet exposure denotes the fair values of these contracts at the reporting date and is presented in ` crores. The Group presents its foreign exchange derivative instruments on a net basis in the consolidated financial statements due to the right of offset by its individual counterparties under master netting agreements.
The fair value of the derivative instruments presented on a gross basis as at each date indicated below is as follows:
Derivatives designated as hedging instruments
Foreign exchange contracts in an asset position Foreign exchange contracts in an liability position Net asset (liability) Derivatives not designated as hedging instruments Foreign exchange contracts in an asset position Foreign exchange contracts in an liability position Net asset (liability) Total Derivatives at fair value
As at 31 March 2019
Financial assets
Financial liabilities
Current
Non current
Current
Non current
Total fair value
142
113
10
10
275
(10)
(10)
(10)
(10)
(40)
132
103
-
-
235
92
-
12
(12)
-
(16)
80
-
(4)
212
103
(4)
-
104
-
(28)
-
76
-
311
Annual Report 2018-19 271
Notes to consolidated financial statements for the year ended 31 March 2019
(All amounts in crores of `, except share data and as stated otherwise)
Derivatives designated as hedging instruments
Foreign exchange contracts in an asset position Foreign exchange contracts in an liability position Net asset (liability) Derivatives not designated as hedging instruments Foreign exchange contracts in an asset position Foreign exchange contracts in an liability position Net asset (liability) Total Derivatives at fair value
As at 31 March 2018
Financial assets
Financial liabilities
Current
Non current
Current
Non current
Total fair value
197
44
19
21
281
(19)
(21)
(19)
(22)
(81)
178
23
-
(1)
200
10
-
10
-
20
(10)
-
(18)
-
(28)
-
-
(8)
-
(8)
178
23
(8)
(1)
192
The following tables set forth the fair value of derivative instruments included in the consolidated balance sheets as at each date indicated:
Derivatives designated as hedging instruments Unrealized gain on financial instruments classified under current assets Unrealized gain on financial instruments classified under non-current assets Unrealized loss on financial instruments classified under non-current liabilities
Derivatives not designated as hedging instruments Unrealized gain on financial instruments classified under current assets Unrealized loss on financial instruments classified under current liabilities
As at
31 March 2019
31 March 2018
132
178
103
23
-
(1)
235
200
80
-
(4)
(8)
76
(8)
Maturity profile of derivative liabilities based on contractual payments is as below:
Within one year One to two years Two to three years
As at
31 March 2019
31 March 2018
4
8
-
-
-
1
4
9
The following table summarizes the activities in the consolidated statement of profit and loss:
Derivatives in hedging relationships Effective portion of gain or (loss) recognized in OCI on derivatives Effective portion of gain or (loss) reclassified from OCI into statement of profit and loss as "exchange differences" Derivatives not in hedging relationships Gain or (loss) recognized into statement of profit and loss as "exchange differences"
Year ended
31 March 2019
31 March 2018
82
131
45
517
4
14
272 Consolidated Financial Statements
Notes to consolidated financial statements for the year ended 31 March 2019
(All amounts in crores of `, except share data and as stated otherwise)
The following table summarizes the activity in the accumulated `Other comprehensive income' within equity related to all derivatives classified as cash flow hedges:
(Loss) gain as at the beginning of the year Unrealized gain on cash flow hedging derivatives during the year Net loss (gain) reclassified into net income on occurrence of hedged transactions Gain as at the end of the year Deferred tax Cash flow hedging reserve (net of tax)
Year ended
31 March 2019
31 March 2018
170
556
82
131
(45)
(517)
207
170
(36)
(33)
171
137
The estimated net amount of existing gain that is expected to be reclassified into the statement of profit and loss within the next twelve months is ` 110 crores (previous year gain of ` 156 crores).
(b) Financial assets and liabilities
The carrying value of financial instruments by categories as at 31 March 2019 is as follows:
Financial assets Investments Trade receivables Cash and cash equivalents Other bank balances Loans Others (refer note 3.6)
Total Financial liabilities
Borrowings Trade payables Others (refer note 3.14) Total
Fair value through profit and loss
Fair value through other comprehensive
income
1,031 -
80 1,111
1,226 -
235 1,461
-
-
-
-
395
-
395
-
Amortized cost
48 11,706 5,934 1,938 1,667 5,455 26,748
3,701 1,305 7,091 12,097
The carrying value of financial instruments by categories as at 31 March 2018 is as follows:
Total carrying
value
2,305 11,706 5,934 1,938 1,667 5,770 29,320
3,701 1,305 7,486 12,492
Financial assets Investments Trade receivables Cash and cash equivalents Other bank balances Loans Others (refer note 3.6)
Total Financial liabilities
Borrowings Trade payables Others (refer note 3.14) Total
Fair value through
Fair value through
other
profit and loss comprehensive
income
2,384
260
-
-
-
-
-
-
-
-
-
201
2,384
461
-
-
-
-
124
1
124
1
Amortized cost
16 9,639 1,699 2,319 3,645 4,112 21,430
380 918 6,727 8,025
Total carrying
value
2,660 9,639 1,699 2,319 3,645 4,313 24,275
380 918 6,852 8,150
Annual Report 2018-19 273
Notes to consolidated financial statements for the year ended 31 March 2019
(All amounts in crores of `, except share data and as stated otherwise)
Transfer of financial assets
The Group has revolving accounts receivables based facilities of ` 767 crores permitting it to sell certain accounts receivables to banks on a non-recourse basis in the normal course of business. The aggregate maximum capacity utilized by the Group at any time during the year was ` 545 crores (previous year, ` 148 crores). Outstanding utilization against this facility as of 31 March 2019 is ` 545 crores (previous year, nil).
During the year ended 31 March 2019, the Group has also sold finance lease receivables of ` 94 crores (previous year, ` 53 crores) on non-recourse basis. Gains or losses on the sale are recorded at the time of transfer of these receivables and are immaterial. The Group has immaterial outstanding service obligations.
Fair value hierarchy
The assets and liabilities measured at fair value on a recurring basis as at 31 March 2019 and the basis for that measurement is as below:
Assets Investments carried at fair value through profit and loss Investments carried at fair value through other comprehensive income Unrealized gain on derivative financial instruments Liabilities Unrealized loss on derivative financial instruments Liability towards non-controlling interest Deferred consideration
Fair Value Level 1 inputs Level 2 inputs Level 3 inputs
1,031
994
37
-
1,226
1,226
-
-
315
-
315
-
4
-
4
-
378
-
-
378
13
-
-
13
There have been no transfers between Level 1 and Level 2 during the year
The following table discloses the assets and liabilities measured at fair value on a recurring basis as at 31 March 2018 and the basis for that measurement:
Assets Investments carried at fair value through profit and loss Investments carried at fair value through other comprehensive income Unrealized gain on derivative financial instruments Liabilities Unrealized loss on derivative financial instruments Deferred consideration
Fair Value Level 1 inputs Level 2 inputs Level 3 inputs
2,384
2,357
27
-
260
260
-
-
201
-
201
-
9
-
9
-
116
-
-
116
There have been no transfers between Level 1 and Level 2 during the year.
Valuation Methodologies
Investments: The Group's investments consist of investment in debt securities in the form of bonds, debentures and mutual funds which are determined using quoted prices or identical quoted prices of assets or liabilities in active markets and are classified as Level 1. The investment in limited liability partnership (LLP) is classified as fair value through profit and loss. The share of profit/loss in limited liability partnership (LLP) is accounted for in the books of the company as and when it is credited/ debited to the partners' capital account and is classified as Level 2.
Derivative financial instruments: The Group's derivative financial instruments consist of foreign currency forward exchange contracts. Fair values for derivative financial instruments are based on broker quotations and are classified as Level 2.
274 Consolidated Financial Statements
Notes to consolidated financial statements for the year ended 31 March 2019
(All amounts in crores of `, except share data and as stated otherwise)
Fair value of earn-out consideration: The fair value measurement of earn-out consideration is determined using Level 3 inputs. The Group earn-out consideration represents a component of the total purchase consideration for its various acquisitions. The measurement is calculated using unobservable inputs based on the Group's own assessment of achievement of certain performance goals. During the year ended 31 March 2019, the Group has charged finance cost of ` 5 crores, recognized other income of ` 19 crores and has fair valued the earn-out liability. During the year ended 31 March 2019, the group has made eanrout payment of ` 26 crores and has reduced the fair value of earnout liability estimated as at acquisition date by ` 64 crores. The Group estimated the total fair value of the earn out consideration to be ` 14 crores and ` 116 crores as of 31 March 2019 and 31 March 2018 respectively for acquisitions consummated in current and previous periods.
The Group assessed that fair value of cash and short-term deposits, trade receivables, trade payables, bank overdrafts and other current liabilities approximate their carrying amounts largely due to the short-term maturities of these instruments.
(c) Financial risk management
The Group is exposed to market risk, credit risk and liquidity risk which may impact the fair value of its financial instruments. The Group has a risk management policy to manage & mitigate these risks.
The Group's risk management policy aims to reduce volatility in financial statements while maintaining balance between providing predictability in the Group's business plan along with reasonable participation in market movement.
Market risk
Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises of currency risk and interest rate risk. The Group is primarily exposed to fluctuation in foreign currency exchange rates.
(i) Foreign currency risk
Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate because of changes in exchange rates. The Group's exposure to the risk of changes in exchange rates relates primarily to the Group's operations and the Group's net investments in foreign subsidiaries.
The exchange rate risk primarily arises from assets and liabilities denominated in currencies other than the functional currency of the respective entities and foreign currency forecasted revenue and cash flows. A significant portion of the Group revenue is in US Dollar, Pound Sterling (GBP) and Euro while a large portion of costs are in Indian rupees. The fluctuation in exchange rates in respect to India rupee may have potential impact on the statement of profit and loss and other comprehensive income and equity.
To mitigate the foreign currency risk the Group uses derivatives as governed by the Group's strategy, which provides principles on the use of such forward contracts and currency options consistent with the Group's Risk Management Policy.
Appreciation / depreciation of 1% in respective foreign currencies with respect to functional currency of the Company and its subsidiaries would result in decrease / increase in the Group's profit before tax by approximately ` 13 crores for the year ended 31 March 2019.
The rate sensitivity is calculated by aggregation of the net foreign exchange exposure and a simultaneous parallel foreign exchange rates shift of all the currencies by 1% against the respective functional currencies of the Company and its subsidiaries. The sensitivity analysis presented above may not be representative of the actual change.
Non-derivative foreign currency exposure as of 31 March 2019 and 31 March 2018 in major currencies is as below:
USD / INR GBP / INR EURO / INR
Net financial assets
31 March 2019
31 March 2018
7,732
3,686
205
300
405
439
Net financial liabilities
31 March 2019
31 March 2018
2,207
1,371
80
44
91
158
Annual Report 2018-19 275
Notes to consolidated financial statements for the year ended 31 March 2019
(All amounts in crores of `, except share data and as stated otherwise)
(ii) Interest rate risk
Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Group's exposure to the risk of changes in market interest rates arises on borrowings with floating interest rate which is not material.
Credit risk
Financial instruments that potentially subject the Group to concentration of credit risk consist principally of cash and bank balances, inter-corporate deposits, trade receivables, unbilled revenue, finance lease receivables, investment securities and derivative instruments. The cash resources of the Group are invested with mutual funds, banks, financial institutions and corporations after an evaluation of the credit risk. By their nature, all such financial instruments involve risks, including the credit risk of non-performance by counterparties.
The customers of the Group are primarily corporations based in the United States of America and Europe and accordingly, trade receivables and finance lease receivables are concentrated in the respective countries. The Group periodically assesses the financial reliability of customers, taking into account the financial condition, current economic trends, analysis of historical bad debts and ageing of accounts receivables.
The allowance for lifetime expected credit loss on customer balances is as below:
Balance at the beginning of the year Additional provision during the year Deductions on account of write offs and collections Effect of exchange rates changes Balance at the end of the year
Liquidity risk
As at
31 March 2019
31 March 2018
291
296
133
133
(120)
(142)
5
4
309
291
Liquidity risk is the risk that the Group will encounter difficulty in meeting its obligations associated with financial liabilities. The investment philosophy of the Group is capital preservation and liquidity in preference to returns. The Group consistently generates sufficient cash flows from operations and has access to multiple sources of funding to meet the financial obligations and maintain adequate liquidity for use.
Maturity profile of the Group's non-derivative long term financial liabilities based on contractual payments is as below:
As at 31 March 2019 Borrowings Employee bonuses accrued Deferred Consideration Total
Year 1 (Current)
1,218 1,335
9 2,562
Year 2
439 4
12 455
Year 3
Year 4-5
299
2,239
3
-
-
-
302
2,239
Total
4,195 1,342
21 5,558
As at 31 March 2018 Borrowings Employee bonuses accrued Deferred Consideration Total
219
168
143
846
4
-
43
28
26
1,108
200
169
27
557
2
852
19
116
48
1,525
276 Consolidated Financial Statements
Notes to consolidated financial statements for the year ended 31 March 2019
(All amounts in crores of `, except share data and as stated otherwise)
Offsetting of financial instruments Under cash pooling arrangements with banks outside India, the contractual terms of arrangements preclude individual bank accounts within the arrangement from being considered separate units of account. Accordingly, the balances of all such bank accounts subject to the arrangements are presented on net basis. The impact of such netting on gross bank balances of ` 6,438 crores (31 March 2018, ` 1,830 crores) and gross bank overdraft of ` 537 crores (31 March 2018, ` 173 crores) is ` 504 crores (31 March 2018, ` 131 crores). 3.30 Segment Reporting The Group's operations predominantly relate to providing a range of IT & BPO services targeted at Global 2000 companies spread across America, Europe & Rest of the World. IT services include software services & IT infrastructure management services. Within software services, the Group provides application development & maintenance, enterprise application, next generation SAAS (Software As A Service) application services and engineering and R&D (Research and Development) services to several global customers. Infrastructure management services involve managing customer's IT assets effectively. Business process outsourcing services include the traditional contact centre & help desk services and the next generation services around platform BPO & BPAAS (Business Process As A Service) delivered through a global delivery model. The Chief Operating Decision Maker ("CODM") evaluates the Group's performance by business segment, comprising software services, infrastructure management services and business process outsourcing services. Accordingly, the above stated business segments have been identified as reportable segments for the purpose of segment reporting. The CODM assesses the performance of the operating segments based on a measure of segment earnings. Segment accounting policies The accounting principles used in the preparation of the financial statements are consistently applied to record revenue and expenditure in individual segments and are as set out in note 1 to the financial statements on significant accounting policies. The accounting policies in relation to segment accounting are as under: a) Segment revenue and expenses Segment revenue is directly attributable to the segment and segment expenses have been allocated to various segments on the basis of specific identification. However, segment revenue does not include other income. Segment expenses do not include finance cost. b) Segment assets and liabilities Assets and liabilities are not identified to any reportable segments, since these are increasingly used interchangeably across segments and consequently, the management believes that it is not practicable or meaningful to provide segment disclosures relating to assets and liabilities.
Annual Report 2018-19 277
Notes to consolidated financial statements for the year ended 31 March 2019
(All amounts in crores of `, except share data and as stated otherwise)
Financial information about the business segments for the year ended 31 March 2019 is as follows:
Segment revenues Less : Inter-segment revenue Net revenue of operations from external customers Segment results Finance cost Other income Interest income Profit before share of profit (loss) of associate and tax Share of profit of associates Profit before tax Tax expense Profit for the year Significant non-cash items Depreciation and amortization Provision for doubtful debts / bad debts written off
Software services
IT Infrastructure
services
34,911 -
34,911 7,016
22,476 -
22,476 4,476
Business process outsourcing services
3,040 -
3,040 361
1,363
621
89
Total
60,427 -
60,427 11,853
(174) 371 572
12,622 -
12,622 (2,502) 10,120
2,073 22
Financial information about the business segments for the year ended 31 March 2018 is as follows:
Segment revenues Less : Inter-segment revenue Net revenue of operations from external customers Segment results Finance cost Other income Interest income Profit before share of profit (loss) of associate and tax Share of profit of associates Profit before tax Tax expense Profit for the year Significant non-cash items Depreciation and amortization Provision for doubtful debts / bad debts written off
Software services
IT Infrastructure
services
29,611 -
29,611 5,904
19,095 -
19,095 3,786
Business process outsourcing services
1,863 -
1,863 173
882
439
62
Total
50,569 -
50,569 9,863 (69) 750 467 11,011 13
11,024 (2,302)
8,722
1,383 80
Segment revenue from customers by geographic area based on location of the customer is as follows:
America Europe India * Rest of the world
Year ended
31 March 2019
31 March 2018
35,972
29,463
16,136
13,843
2,118
1,995
6,201
5,268
60,427
50,569
* includes revenue billed to India based captive of global customers
278 Consolidated Financial Statements
Notes to consolidated financial statements for the year ended 31 March 2019
(All amounts in crores of `, except share data and as stated otherwise)
During the years ended 31 March 2019 and 2018, no single customer represents 10% or more of the Group's total revenue and the top five customers accounted for 17.0% and 16.3% of the revenue of the Group respectively.
3.31 Employee benefits
The Group has calculated the various benefits provided to employees as shown below:
A. Defined contribution plans and state plans Superannuation Fund Employer's contribution to Employees State Insurance Employer's contribution to Employee Pension Scheme
During the year the Company and its subsidiaries in India have recognized the following amounts in the statement of profit and loss :-
Superannuation Fund Employer's contribution to Employees State Insurance Employer's contribution to Employee's Pension Scheme Total
Year ended
31 March 2019
31 March 2018
4
3
14
16
109
99
127
118
The Group has contributed ` 511 crores (previous year ` 448 crores) towards other foreign defined contribution plans.
B. Defined benefit plans a) Gratuity b) Employer's contribution to provident fund
Gratuity
The following table sets out the status of the gratuity plan
Statement of profit and loss
Current service cost Past service cost Interest cost (net) Net benefit expense
Year ended
31 March 2019
31 March 2018
89
78
3
11
26
22
118
111
Balance Sheet
Defined benefit obligations Fair value of plan assets Net plan liability Current defined benefit obligations Non-current defined benefit obligations
As at
31 March 2019
31 March 2018
480
406
16
14
464
392
80
68
384
324
Annual Report 2018-19 279
Notes to consolidated financial statements for the year ended 31 March 2019
(All amounts in crores of `, except share data and as stated otherwise)
Changes in present value of the defined benefit obligations are as follows:
Opening defined benefit obligations Current service cost Past service cost Interest cost Re-measurement gains (losses) in OCI
Actuarial changes arising from changes in financial assumptions Experience adjustments Benefits paid Closing defined benefit obligations
Changes in fair value of the plan assets are as follows:
Year ended
31 March 2019
31 March 2018
406
353
89
78
3
11
27
23
11
(18)
(22)
(17)
(34)
(24)
480
406
Opening fair value of plan assets Interest income Contributions Re-measurement gains (losses) in OCI
Return on plan assets, excluding amount recognized in interest income Benefits paid Closing fair value of plan assets
Year ended
31 March 2019
31 March 2018
14
16
1
1
26
-
(1)
(1)
(24)
(2)
16
14
The overall expected rate of return on assets is determined based on the market prices prevailing on that date, applicable to the period over which the obligation is to be settled.
The principal assumptions used in determining gratuity for the Group's plans are shown below:
Discount rate Estimated Rate of salary increases Employee Turnover Expected rate of return on assets
As at
31 March 2019
31 March 2018
7.20%
7.60%
7.00%
7.00%
22.00%
22.00%
7.20%
7.60%
The estimates of future salary increases, considered in the actuarial valuation, take account of inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market.
Discount rate and future salary escalation rate are the key actuarial assumptions to which the defined benefit obligation are particularly sensitive. The following table summarizes the impact on defined benefit obligation as at 31 March 2019 arising due to increase / decrease in key actuarial assumptions by 50 basis points:
Impact of increase Impact of decrease
Discount rate
(13) 14
Salary escalation rate
14 (13)
The sensitivity analysis presented may not be representative of the actual change in the defined benefit obligations as sensitivities have been calculated to show the movement in defined benefit obligations in isolation and assuming there are no other changes in market conditions. There have been no changes from the previous years in the methods and assumptions used in preparing the sensitivity analyses.
280 Consolidated Financial Statements
Notes to consolidated financial statements for the year ended 31 March 2019
(All amounts in crores of `, except share data and as stated otherwise)
The defined benefit obligations are expected to mature after 31 March 2019 as follows:
Year ending 31 March, - 2020 - 2021 - 2022 - 2023 - 2024 - Thereafter
The weighted average duration to the payment of these cash flows is 6.05 years.
Cash flows 83 85 95
107 116 1,961
Employers Contribution to Provident Fund
The actuary has provided a valuation and based on the assumptions mentioned below, there is no shortfall as at 31 March 2019 and 31 March 2018.
The details of the fund and plan asset position are given below:-
Plan assets at the year end Present value of benefit obligation at year end Asset recognized in balance sheet
31 March 2019 3,477 3,477 -
31 March 2018 2,826 2,826 -
Assumptions used in determining the present value obligation of the interest rate guarantee under the Deterministic Approach:
Government of India (GOI) bond yield Remaining term of maturity Expected guaranteed interest rate
31 March 2019 7.20% 8 years 8.65%
31 March 2018 7.60%
8.51 years 8.55%
During the year ended 31 March 2019, the Group has contributed ` 144 crores (previous year, ` 124 crores) towards employer's contribution to provident fund.
3.32 Related party transactions
a) Related parties where control exists
Employee benefit trusts Hindustan Instruments Limited Employees Provident Fund Trust HCL Consulting Limited Employees Superannuation Scheme HCL Comnet System and Services Limited Employees Provident Fund Trust. Geometric Gratuity Trust HCL South Africa Share Ownership Trust HCL Technologies Stock Options Trust C3i Support Services Employees Gratuity Trust
Key Management Personnel Mr. Shiv Nadar Chairman and Chief Strategy Officer Mr. C. Vijayakumar President and Chief Executive Officer Mr. Prateek Aggarwal Chief Financial Officer (w.e.f. 1 October 2018) Mr. Manish Anand Company Secretary Mr. Anil Chanana Chief Financial Officer (upto 1 October 2018)
Annual Report 2018-19 281
Notes to consolidated financial statements for the year ended 31 March 2019
(All amounts in crores of `, except share data and as stated otherwise)
Non-Executive & Independent Directors Mr. Ramanathan Srinivasan Mr. Keki Mistry (ceased to be Director w.e.f. 30 April 2018) Ms. Robin Ann Abrams Dr. Sosale Shankara Sastry Mr. Subramanian Madhavan Mr. Thomas Sieber Ms. Nishi Vasudeva Mr. Deepak Kapoor Mr. James Philip Adamczyk (appointed w.e.f. 26 July 2018)
Non-Executive & Non-Independent Directors Ms. Roshni Nadar Malhotra Mr. Sudhindar Krishan Khanna (ceased to be Director w.e.f. 8 April 2019)
Associates CeleritiFintech Services Limited (and its subsidiaries) [refer note 2(b)(ii)]
b) Related parties with whom transactions have taken place during the current year
Others (Significant influence)
HCL Infosystems Limited
HCL Insys. Pte. Limited, Singapore
HCL Avitas Private Limited
HCL IT City Lucknow Private Limited
Vama Sundari Investments (Delhi) Private Limited HCL Infotech Limited
HCL Corporation Private Limited
Shiv Nadar University
SSN Investments (Pondi) Private Limited
HCL Holding Private Limited
Naksha Enterprises Private Limited
Digilife Distribution and Marketing Services Ltd.
SSN Trust
HCL Learning Limited
Shiv Nadar Foundation
HCL Services Limited (ceased to be related party w.e.f 15 June 2018)
Transactions with related parties during the normal course of business
Revenue from operations Interest income Purchase of materials and services Payment for use of facilities Purchase of capital equipments Dividend paid Other expenses
Significant influence
Year ended
31 March 2019
31 March 2018
27
16
1
-
190
137
Associates
Year ended
31 March 2019
31 March 2018
-
-
-
-
-
262
47
35
-
-
-
10
-
-
656
993
-
-
37
10
-
-
Transactions with Key Managerial personnel during the year
Compensation - Short-term employee benefits - Other long-term employee benefits - Termination benefits
Year ended
31 March 2019
31 March 2018
39
39
-
16
1
-
282 Consolidated Financial Statements
Notes to consolidated financial statements for the year ended 31 March 2019
(All amounts in crores of `, except share data and as stated otherwise)
Transactions with Directors during the year Commission & other benefits to Directors (includes sitting fees)
Year ended
31 March 2019
31 March 2018
8
8
Outstanding balances
Security deposits Unbilled receivable Trade receivables Prepaid expenses Deferred contract cost Capital accounts payable [includes supplier credit] Supplier Credit Liabilities for expenses Contract liabilities (previous year : revenue received in advance) Trade payables 3.33 Research and development expenditure
Revenue Capital
3.34 Commitments and contingent liabilities
Significant influence
As at
31 March 2019
31 March 2018
21
14
1
-
10
6
27
7
19
-
3
2
164
125
30
20
2
15
2
5
Year ended
31 March 2019
31 March 2018
925
128
6
13
931
141
i) Capital and other commitments Capital commitments Estimated amount of contracts remaining to be executed on capital account and not provided for (net of advances) [includes related party ` Nil (31 March 2018, ` 1 crores)] Uncalled liability on other investments partly paid Capital commitment in limited liability partnership
ii) Contingent liabilities Others
As at
31 March 2019
31 March 2018
462
361
13
3
1
1
476
365
The Group is involved in various lawsuits, claims and proceedings that arise in the ordinary course of business, the outcome of which is inherently uncertain. Some of these matters include speculative and frivolous claims for substantial or indeterminate amounts of damages. The Group records a liability when it is both probable that a loss has been incurred and the amount can be reasonably estimated. Significant judgment is required to determine both probability and the estimated amount. The Group reviews these provisions at least quarterly and adjusts these provisions accordingly to reflect the impact of negotiations, settlements, rulings, advice of legal counsel, and updated information. The Group believes that the amount or estimable range of reasonably possible loss, will not, either individually or in the aggregate, have a material adverse effect on its business, consolidated financial position, results of the Group, or cash flows with respect to loss contingencies for legal and other contingencies as at 31 March 2019.
Annual Report 2018-19 283
Notes to consolidated financial statements for the year ended 31 March 2019
(All amounts in crores of `, except share data and as stated otherwise)
The Company and its various subsidiaries are required to comply with the local transfer pricing regulations, which are contemporaneous in nature. The Group appoints independent consultants annually for conducting transfer pricing studies to determine whether transactions with associate enterprises undertaken during the financial year, are on an arm's length basis. Adjustments, if any, arising from the transfer pricing studies in the respective jurisdictions will be accounted for when the study is completed for the current financial year. The management is of the opinion that its transactions with associates are at arm's length so that the outcome of the studies to corroborate compliance with legislation will not have any material adverse impact on the financial statements.
3.35 Additional information under general instructions for the preparation of consolidated financial statements of
Schedule III to the Companies Act, 2013
S. No.
Name of the Entity
Country of incorporation
Percentage
holding as at
31 March 2019
Net Assets, i.e. total assets minus liabilities as at
As %
of
Amount
consolidate
Share in profit and loss
Share in other comprehensive
income
Share in total comprehensive
income
31 March 2019
As %
As %
As %
of
Amount
of
Amount
of
Amount
consolidate
consolidate
consolidate
Parent HCL Technologies Limited Subsidiaries
India
NA
62.63 25,970
81.14 8,212 100.00
44
81.23 8,256
Indian
1
HCL Comnet Systems & Services Limited
India
100%
0.06
27
0.05
5
-
-
0.05
5
2 HCL Comnet Limited
3
Statestreet HCL Services (India) Private Limited *
India India
100% 100%
0.62
256
0.83
346
0.06
6
1.24 125
-
-
0.06
6
-
-
1.23 125
4 HCL Eagle Limited
India
100%
0.03
12
-
-
-
-
-
-
5
HCL Global Processing Services Limited
6
HCL Technologies Solutions Limited
India India
100% 100%
0.10
42
0.05
5
0.01
6
(0.01)
(1)
-
-
0.05
5
-
-
(0.01)
(1)
7
Concept2Silicon Systems Private Limited
India
100%
0.02
9
-
-
-
-
-
-
8
HCL Training & Staffing Services Private Limited
India
100%
0.06
26
(0.10) (11)
-
-
(0.11) (11)
9
C3i Support Services Private Limited
Foreign
India
100%
0.02
8
0.05
5
-
-
0.05
5
10 HCL Bermuda Limited
Bermuda 100%
0.01
3
0.03
3
-
-
0.03
3
11
HCL Technologies (Shanghai) Limited
12
HCL Singapore Pte. Limited
13 HCL Great Britain Limited
China Singapore
UK
100% 100% 100%
0.12
51
0.52
214
0.10
42
0.13
13
0.57
58
0.38
38
-
-
0.13
13
-
-
0.57
58
-
-
0.38
38
14 HCL (Netherlands) BV
Netherlands 100%
0.15
64
0.12
12
-
-
0.12
12
15 HCL Belgium NV 16 HCL Sweden AB 17 HCL GmbH
Belgium Sweden Germany
100% 100% 100%
0.16
64
0.25
102
0.12
50
0.06
6
0.13
13
0.11
12
-
-
0.06
6
-
-
0.13
13
-
-
0.11
12
18 HCL Italy SRL
Italy
100%
0.04
16
0.01
1
-
-
0.01
1
19
HCL Australia Services Pty. Limited
Australia
20 HCL (New Zealand) Limited New Zealand
100% 100%
0.38
157
0.08
32
0.62
63
0.10
10
-
-
0.62
63
-
-
0.10
10
21
HCL Hong Kong SAR Limited
Hong Kong 100%
0.03
14
0.12
12
-
-
0.12
12
22 HCL Japan Limited
Japan
100%
0.26
109
0.22
22
-
-
0.22
22
23 HCL America Inc.
USA
100%
6.46 2,679
7.01 710
-
-
6.98 710
284 Consolidated Financial Statements
Notes to consolidated financial statements for the year ended 31 March 2019
(All amounts in crores of `, except share data and as stated otherwise)
S. No.
Name of the Entity
Country of incorporation
24
HCL Technologies Austria GmbH
Austria
25 HCL Poland Sp.z.o.o
Poland
26 HCL EAS Limited
UK
27
HCL Insurance BPO Services Limited
UK
28 Axon Group Limited
UK
29
HCL Axon Technologies Inc.
Canada
30
HCL Technologies Solutions GmbH
Switzerland
31
Axon Solutions Pty. Limited
Australia
32 Axon Solutions Limited
UK
33
HCL Axon Malaysia Sdn. Bhd.
Malaysia
34
Axon Solutions Singapore Pte. Limited
Singapore
35
Axon Solutions (Shanghai) Co. Limited
China
36
HCL Axon (Proprietary) Limited
South Africa
37 HCL Argentina s.a.
Argentina
38 HCL Mexico S. de R.L.
Mexico
39
HCL Technologies Romania s.r.l.
Romania
40 HCL Hungary Kft
Hungary
41
HCL Latin America Holding LLC
USA
42
HCL (Brazil) Technologia da informacao Ltda.
Brazil
43
HCL Technologies Denmark Aps
Denmark
44
HCL Technologies Norway AS
Norway
45
PT. HCL Technologies Indonesia Limited
Indonesia
46
HCL Technologies Philippines Inc.
Philippines
47
HCL Technologies South Africa (Proprietary) Limited
South Africa
48 HCL Arabia LLC
Saudi Arabia
49
HCL Technologies France SAS
France
50
Filial Espanola De HCL Technologies S.L
Spain
51
Anzospan Investments Pty Limited
South Africa
52
HCL Investments (UK) Limited
UK
Percentage
holding as at
31 March 2019
100% 100% 100% 100% 100% 100%
100%
100% 100% 100%
100%
100%
100% 100% 100% 100% 100% 100%
100%
100%
100%
100%
100%
100% 100% 100%
100%
100%
100%
Net Assets, i.e. total assets minus liabilities as at
As %
of
Amount
consolidate
Share in profit and loss
Share in other comprehensive
income
Share in total comprehensive
income
31 March 2019
As %
As %
As %
of
Amount
of
Amount
of
Amount
consolidate
consolidate
consolidate
0.06
23
0.09
9
-
-
0.09
9
0.01
5
0.18
75
0.31
31
0.19
19
-
-
0.31
31
-
-
0.19
19
(0.06) (23)
0.07
7
-
-
0.07
7
0.05
20
(0.01)
(1)
-
-
(0.01)
(1)
0.46
192
0.46
47
-
-
0.46
47
0.09
37
0.04
4
-
-
0.04
4
0.03
13
4.31 1,787
0.16
64
-
-
0.59
60
0.29
30
-
-
-
-
-
-
0.59
60
-
-
0.29
30
0.01
5
-
-
-
-
-
-
0.30
122
0.33
34
-
-
0.33
34
0.82
342
0.28
28
0.02
8
(0.01)
(1)
0.22
92
(0.07)
(7)
0.01
2
0.01
1
0.01
6
0.01
1
-
1
-
-
-
-
0.28
28
-
-
(0.01)
(1)
-
-
(0.07)
(7)
-
-
0.01
1
-
-
0.01
1
-
-
-
-
0.15
64
(0.05)
(5)
-
-
(0.05)
(5)
0.53
220
0.29
29
-
-
0.29
29
0.44
184
0.42
43
-
-
0.42
43
0.04
18
0.02
2
-
-
0.02
2
0.12
50
0.22
22
-
-
0.22
22
0.05
21
(0.06)
(6)
0.05
19
-
-
0.56
232
0.10
10
-
-
(0.06)
(6)
-
-
-
-
-
-
0.10
10
0.16
66
0.04
4
-
-
0.04
4
0.01
4
-
-
-
-
-
-
0.26
106
0.06
6
-
-
0.06
6
Annual Report 2018-19 285
Notes to consolidated financial statements for the year ended 31 March 2019
(All amounts in crores of `, except share data and as stated otherwise)
S. No.
Name of the Entity
Country of incorporation
53
HCL America Solutions Inc.
USA
54 HCL Technologies Chile Spa Chile
55
HCL Technologies UK Limited
UK
56
Statestreet HCL Holding UK Limited *
UK
57
Statestreet HCL Services (Phillipines) Inc. *
Philippines
58 HCL Technologies B.V. Netherlands
59
HCL (Ireland) Information Systems Limited
Ireland
60
HCL Technologies Germany Gmbh
Germany
61
HCL Technologies Belgium BVBA
Belgium
62
HCL Technologies Sweden AB
Sweden
63
HCL Technologies Finland Oy
Finland
64
HCL Technologies Italy S.P.A
Italy
65
HCL Technologies Columbia S.A.S
Columbia
66
HCL Technologies Middle East FZ-LLC
UAE
67
HCL Istanbul Bilisim Teknolojileri Limited Sirketi
Turkey
68
HCL Technologies Greece Single Member P.C
Greece
69 HCL Technologies S.A.
Venezuela
70
HCL Technologies Beijing Co., Ltd
China
71
HCL Technologies Luxembourg S.a r.l
Luxembourg
72
HCL Technologies Egypt Limited
Egypt
73
HCL Technologies Estonia OÜ
Estonia
74
HCL Technologies (Thailand) Ltd.
Thailand
75
HCL Technologies Czech Republic s.r.o.
Czech Republic
76
HCL Muscat Technologies L.L.C.
Oman
77 Powerteam, LLC
USA
78 Point To Point Limited
UK
79
Point To Point Products Limited
UK
80
HCL Technologies Lithuania UAB
Lithuania
Percentage
holding as at
31 March 2019
100% 100% 100%
100%
100% 100% 100%
100%
100%
100%
100%
100%
100%
100%
100%
100% 100% 100%
100%
100%
100%
100%
100%
100% 100% 100% 100%
100%
Net Assets, i.e. total assets minus liabilities as at
As %
of
Amount
consolidate
Share in profit and loss
Share in other comprehensive
income
Share in total comprehensive
income
31 March 2019
As %
As %
As %
of
Amount
of
Amount
of
Amount
consolidate
consolidate
consolidate
0.26
108
0.05
5
-
-
0.05
5
0.10
41
0.04
4
-
-
0.04
4
0.71
294
0.30
30
-
-
0.30
30
-
-
-
-
-
-
-
-
0.07
28
(0.02)
(2)
(0.02) (10)
0.26
26
0.12
51
0.38
38
-
-
(0.02)
(2)
-
-
0.26
26
-
-
0.38
38
0.13
53
0.44
45
-
-
0.43
45
0.09
37
0.05
5
-
-
0.05
5
1.44
598
1.95 198
-
-
1.93 198
0.79
329
0.45
46
-
-
0.45
46
0.05
23
0.12
12
-
-
0.12
12
0.03
14
(0.02)
(2)
-
-
(0.02)
(2)
0.06
23
0.04
4
-
-
0.04
4
0.03
12
0.03
3
-
-
0.03
3
0.02
7
0.01
1
-
-
(0.02)
(2)
-
-
0.05
5
-
-
0.01
1
-
-
(0.02)
(2)
-
-
0.05
5
-
1
0.01
1
-
-
0.01
1
0.02
7
0.01
1
-
-
0.01
1
0.01
6
0.01
1
-
-
0.01
1
0.05
21
0.02
2
-
-
0.01
2
(0.01)
(3)
0.09
9
-
-
0.09
9
0.01
4
0.02
2
0.56
233
0.18
18
0.09
39
(0.01)
(1)
0.02
6
0.01
1
-
-
0.02
2
-
-
0.18
18
-
-
(0.01)
(1)
-
-
0.01
1
0.02
7
0.06
6
-
-
0.06
6
286 Consolidated Financial Statements
Notes to consolidated financial statements for the year ended 31 March 2019
(All amounts in crores of `, except share data and as stated otherwise)
S. No.
Name of the Entity
Country of incorporation
81
HCL Technologies (Taiwan) Ltd.
82 Geometric Americas, Inc.
83
Geometric Asia Pacific Pte. Ltd
84 Geometric Europe GmbH
85 Geometric China, Inc.
86 Geometric SRL
87 Geometric SAS
88
Butler America Aerospace LLC
89 HCL Mortgage Holding LLC
90
Urban Fulfillment Services LLC
Datawave (An HCL
91
Technologies Company) Limited (formely known as
"ETL Factory Limited")
HCL Technologies 92 Corporate Services
Limited
93 Telerx Marketing, Inc.
94 C3i Europe Eood
95 C3i (UK) Limited
96 C3i Japan GK
C3i Services 97 &Technologies (Dalian)
Co., Ltd
98
HCL Technologies SEP Holdings Inc.
99
Actian Corporation (and including its subsidiaries)
100
Honisgberg & Duvel Corporation
101
Honisgberg & Duvel Datentichnik GMBH
102
H&D Business Services GmbH
103 H&D IT Solutions GmbH
104
H&D Training und Consulting GmbH
105
H&D IT Professional Services GmbH
106 qmo-it GmbH
107
H&D Services for Engineering GmbH
108 catis GmbH
109
H&D IT Automotive Services GmbH
110
ca Management Services GmbH
China USA Singapore Germany China Romania France USA USA USA
Scotland
UK
USA Bulgaria
UK Japan
China
USA
USA
USA
Germany
Germany Germany Germany
Germany Germany Germany Germany Germany
Germany
Percentage
holding as at
31 March 2019
Net Assets, i.e. total assets minus liabilities as at
As %
of
Amount
consolidate
Share in profit and loss
Share in other comprehensive
income
Share in total comprehensive
income
31 March 2019
As %
As %
As %
of
Amount
of
Amount
of
Amount
consolidate
consolidate
consolidate
100%
0.01
4
-
-
-
-
-
-
100%
0.63
261
0.08
8
-
-
0.08
8
100%
0.05
23
0.08
8
-
-
0.08
8
100% 100% 100% 100%
0.22
91
0.04
4
0.04
15
(0.02)
(2)
0.01
6
0.01
1
0.08
35
0.05
5
-
-
0.04
4
-
-
(0.02)
(2)
-
-
0.01
1
-
-
0.05
5
100%
1.46
604
(0.10) (10)
-
-
(0.10) (10)
100%
-
-
0.06
6
-
-
0.06
6
100%
0.11
43
(0.60) (61)
-
-
(0.60) (61)
100%
0.29
118
(0.10) (10)
-
-
(0.10) (10)
100%
100% 100% 100% 100%
100%
80%
80%
100%
100%
100% 100% 100%
100% 100% 100% 100% 100%
100%
3.84 1,591
0.89
369
(0.01)
(4)
-
-
-
1
-
1
(0.38) (157)
5.44 2,254
0.01
3
0.60
246
(0.01)
(3)
(0.03) (11)
-
-
-
(1)
-
1
(0.01)
(4)
-
-
(0.01)
(3)
(0.01)
(4)
0.17
17
0.18
18
0.06
6
-
-
-
-
0.04
4
(0.56) (57)
0.31
32
(0.01)
(1)
0.04
5
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
0.17
17
-
-
0.18
18
-
-
0.06
6
-
-
-
-
-
-
-
-
-
-
0.04
4
-
-
(0.56) (57)
-
-
0.31
32
-
-
(0.01)
(1)
-
-
0.04
5
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Annual Report 2018-19 287
Notes to consolidated financial statements for the year ended 31 March 2019
(All amounts in crores of `, except share data and as stated otherwise)
S. No.
Name of the Entity
Country of incorporation
Percentage
holding as at
31 March 2019
Net Assets, i.e. total assets minus liabilities as at
As %
of
Amount
consolidate
Share in profit and loss
Share in other comprehensive
income
Share in total comprehensive
income
31 March 2019
As %
As %
As %
of
Amount
of
Amount
of
Amount
consolidate
consolidate
consolidate
111
H&D ITAS Infrastructure Services GmbH
Germany
100%
(0.01)
(5)
-
-
-
-
-
-
112
H&D ITAS Application Services GmbH
Germany 100%
(0.01)
(2)
-
-
-
-
-
-
113
H&D ITAS Client Services GmbH
Germany
100%
(0.01)
(5)
-
-
-
-
-
-
114 H&D ITAS Sud GmbH
Germany 100%
-
(1)
-
-
-
-
-
-
115 H&D International GmbH Germany 100%
0.01
3
0.02
2
-
-
0.02
2
116
Honisgberg & Duvel Datentechnik Czech s.r.o.
Czech Republic
100%
0.04
17
0.03
3
-
-
0.03
3
117
HCL Technologies Vietnam Company Limited
Vietnam
100%
-
-
-
-
-
-
-
-
118
HCL Guatemala, Sociedad Anonima
Guatemala
100%
-
-
-
-
-
-
-
-
Total
100.00 41,469 100.00 10,120 100.00
44 100.00 10,164
Non controlling interest
(103)
-
-
-
Consolidation adjustments
-
-
146
146
Consolidated Net assets / Profit after tax
41,366
10,120
190
10,310
Note: Dividend received from subsidiaries has been excluded from profits.
* The Group has equity interest of 49% and 100% dividend rights and control
S. No.
Name of the Entity
Parent
HCL Technologies Limited
Subsidiaries
Indian
1 HCL Comnet Systems & Services Limited
2 HCL Comnet Limited
3 Statestreet HCL Services (India) Private Limited *
4 HCL Eagle Limited **
5 HCL Global Processing Services Limited
6 HCL Technologies Solutions Limited
7 Concept2Silicon Systems Private Limited
8 HCL Training & Staffing Services Private Limited
Country of incorporation
India
India India India India India India India India
Percentage
holding as at
31 March 2018
Net Assets, i.e. total assets minus liabilities as at
As %
of
Amount
consolidate
Share in profit and loss
Share in other comprehensive
income
Share in total comprehensive
income
31 March 2018
As %
As %
As %
of
Amount
of
Amount
of
Amount
consolidate
consolidate
consolidate
NA
56.54 20,572
83.88 7,316 100.00 (281)
83.34 7,035
100% 100% 100% 100% 100% 100% 100% 100%
0.07
26
(0.07)
(6)
0.65
236
0.88 319
0.79
69
0.93
81
0.03
12
0.01
1
0.10
36
0.06
5
0.02
7
0.01
1
0.03
9
-
-
0.10
38
-
-
-
-
(0.08)
(6)
-
-
0.82
69
-
-
0.97
81
-
-
0.01
1
-
-
0.06
5
-
-
0.01
1
-
-
-
-
-
-
-
-
288 Consolidated Financial Statements
Notes to consolidated financial statements for the year ended 31 March 2019
(All amounts in crores of `, except share data and as stated otherwise)
S. No.
Name of the Entity
Country of incorporation
Percentage
holding as at
31 March 2018
Foreign
9 HCL Bermuda Limited
Bermuda
10 HCL Technologies (Shanghai) Limited
China
11 HCL Singapore Pte. Limited
Singapore
12 HCL Great Britain Limited
UK
13 HCL (Netherlands) BV
Netherlands
14 HCL Belgium NV
Belgium
15 HCL Sweden AB
Sweden
16 HCL GmbH
Germany
17 HCL Italy SRL
Italy
18 HCL Australia Services Pty. Limited
Australia
19 HCL (New Zealand) Limited
New Zealand
20 HCL Hong Kong SAR Limited
Hong Kong
21 HCL Japan Limited
Japan
22 HCL America Inc.
USA
23 HCL Technologies Austria GmbH
Austria
24 HCL BPO Services (NI)
UK
Limited
25 HCL Poland Sp.z.o.o
Poland
26 HCL EAS Limited
UK
27 HCL Insurance BPO
UK
Services Limited
28 HCL Expense Management Services Inc.
USA
29 Axon Group Limited
UK
30 HCL Axon Technologies Inc.
Canada
31 HCL Technologies Solutions GmbH
Switzerland
32 Axon Solutions Pty. Limited
Australia
33 Axon Solutions Limited
UK
34 HCL Axon Malaysia Sdn. Bhd.
Malaysia
35 Axon Solutions Singapore Singapore Pte. Limited
36 Axon Solutions (Shanghai) Co. Limited
China
37 HCL Axon (Proprietary) Limited
South Africa
38 HCL Argentina s.a.
Argentina
39 HCL Mexico S. de R.L.
Mexico
40 HCL Technologies Romania s.r.l.
Romania
100% 100%
100%
100% 100% 100% 100% 100% 100% 100%
100%
100%
100% 100% 100%
-
100% 100% 100%
-
100% 100%
100%
100%
100% 100%
100%
100%
100%
100% 100% 100%
Net Assets, i.e. total assets minus liabilities as at
As %
of
Amount
consolidate
Share in profit and loss
Share in other comprehensive
income
Share in total comprehensive
income
31 March 2018
As %
As %
As %
of
Amount
of
Amount
of
Amount
consolidate
consolidate
consolidate
(0.01)
1
0.15
59
0.33
121
0.40
147
0.05
18
0.19
68
0.21
76
0.28
104
0.05
17
0.76
275
0.14
50
0.09
33
0.27 18.41
0.02
100 6,700
8
-
-
(0.08) (32)
0.17
63
(0.03) (11)
-
-
0.02
8
0.46
166
0.03
8
0.03
12
5.02 1,826
0.15
55
0.01
5
0.41
150
1.18
429
0.01
4
0.24
85
0.01
2
(0.01)
(1)
0.02
2
0.49
42
0.58
51
0.14
12
0.07
6
0.11
10
0.08
7
0.02
1
0.51
44
0.12
10
0.06
6
0.10
8
4.41 385
0.08
7
-
-
0.13
11
0.31
27
(0.39) (34)
0.46
40
0.03
2
0.32
28
0.06
5
-
-
0.85
75
0.22
19
-
-
0.08
7
0.46
40
(0.02)
(2)
(0.01)
(1)
-
-
-
-
(0.01)
(1)
-
-
0.02
2
-
-
0.50
42
-
-
0.60
51
-
-
0.15
12
-
-
0.07
6
-
-
0.12
10
-
-
0.08
7
-
-
0.02
1
-
-
0.53
44
-
-
0.12
10
-
-
0.07
6
-
-
0.10
8
-
-
4.56 385
-
-
0.08
7
-
-
-
-
-
-
0.14
11
-
-
0.32
27
-
-
(0.40) (34)
-
-
0.47
40
-
-
0.03
2
-
-
0.33
28
-
-
0.06
5
-
-
-
-
-
-
0.88
75
-
-
0.23
19
-
-
-
-
-
-
0.08
7
-
-
0.47
40
-
-
(0.02)
(2)
-
-
(0.01)
(1)
-
-
-
-
Annual Report 2018-19 289
Notes to consolidated financial statements for the year ended 31 March 2019
(All amounts in crores of `, except share data and as stated otherwise)
S. No.
Name of the Entity
Country of incorporation
41 HCL Hungary Kft
Hungary
42 HCL Latin America Holding LLC
USA
43 HCL (Brazil) Technologia da informacao Ltda.
Brazil
44 HCL Technologies Denmark Aps
Denmark
45 HCL Technologies Norway Norway AS
46 PT. HCL Technologies Indonesia Limited
Indonesia
47 HCL Technologies Philippines Inc.
Philippines
48 HCL Technologies South South Africa Africa (Proprietary) Limited
49 HCL Arabia LLC
Saudi Arabia
50 HCL Technologies France SAS
France
51 Filial Espanola De HCL Technologies S.L
Spain
52 Anzospan Investments Pty South Africa Limited
53 HCL Investments (UK)
UK
Limited
54 HCL America Solutions Inc.
USA
55 HCL Technologies Chile Spa
Chile
56 HCL Technologies UK
UK
Limited
57 Statestreet HCL Holding
UK
UK Limited *
58 Statestreet HCL Services Philippines (Phillipines) Inc. *
59 HCL Technologies B.V. Netherlands
60 HCL (Ireland) Information Systems Limited
Ireland
61 HCL Technologies Germany Gmbh
Germany
62 HCL Technologies Belgium Belgium BVBA
63 HCL Technologies Sweden Sweden AB
64 HCL Technologies Finland Oy
Finland
65 HCL Technologies Italy
Italy
S.P.A
66 HCL Technologies Columbia S.A.S
Columbia
67 HCL Technologies Middle East FZ-LLC
UAE
Percentage
holding as at
31 March 2018 100% 100%
100%
100%
100%
100%
100%
100%
100% 100%
100%
100%
100%
100%
100%
100%
100%
100%
100% 100%
100%
100%
100%
100%
100%
100%
100%
Net Assets, i.e. total assets minus liabilities as at
Share in profit and loss
Share in other comprehensive
income
Share in total comprehensive
income
31 March 2018
As %
As %
As %
As %
of
Amount
of
Amount
of
Amount
of
Amount
consolidate
consolidate
consolidate
consolidate
0.03
8
0.01
1
-
-
0.01
1
-
1
-
-
-
-
-
-
0.15
54
0.09
8
-
-
0.09
8
0.37
136
0.18
16
-
-
0.19
16
0.11
41
0.31
27
-
-
0.32
27
0.04
15
0.01
1
-
-
0.01
1
0.11
38
0.06
5
-
-
0.06
5
0.08
30
(0.01)
(1)
-
-
(0.01)
(1)
0.03
11
0.50
182
0.02
2
0.34
29
-
-
0.02
2
-
-
0.35
29
0.04
14
0.03
2
-
-
0.03
2
0.01
3
(0.02)
(2)
-
-
(0.02)
(2)
-
-
-
-
-
-
-
-
0.94
341
0.01
1
-
-
0.02
1
0.08
28
0.04
3
-
-
0.04
3
2.20
797
0.82
72
-
-
0.86
72
-
-
-
-
-
-
-
-
0.08
29
0.06
5
-
-
0.06
5
0.23
83
0.32
117
0.22
19
0.15
13
-
-
0.23
19
-
-
0.15
13
0.42
153
0.35
31
-
-
0.36
31
0.08
30
0.08
7
-
-
0.08
7
1.92
700
1.37 120
-
-
1.41 120
0.35
128
0.14
13
-
-
0.15
13
0.11
38
0.05
4
-
-
0.05
4
0.01
5
-
-
-
-
-
-
0.07
24
0.04
4
-
-
0.04
4
290 Consolidated Financial Statements
Notes to consolidated financial statements for the year ended 31 March 2019
(All amounts in crores of `, except share data and as stated otherwise)
S. No.
Name of the Entity
Country of incorporation
68 HCL Istanbul Bilisim Teknolojileri Limited Sirketi
Turkey
69 HCL Technologies Greece Single Member P.C
Greece
70 HCL Technologies S.A.
Venezuela
71 HCL Technologies Beijing Co., Ltd
China
72 HCL Technologies Luxembourg S.a r.l
Luxembourg
73 HCL Technologies Egypt Limited
Egypt
74 HCL Technologies Estonia Estonia OÜ
75 HCL Technologies (Thailand) Ltd.
Thailand
76 HCL Technologies Czech Republic s.r.o.
Czech Republic
77 HCL Muscat Technologies L.L.C.
Oman
78 CeleritiFintech Limited
UK
79 CeleritiFintech USA, Inc.
USA
80 CeleritiFintech Australia Pty Limited
Australia
81 CeleritiFintech Italy S.R.L. Germany
82 CeleritiFintech Germany
Italy
GmbH
83 Powerteam, LLC
USA
84 Point To Point Limited
UK
85 Point To Point Products
UK
Limited
86 HCL Technologies Lithuania UAB
Lithuania
87 HCL Technologies (Taiwan) Ltd.
China
88 Geometric Americas, Inc.
USA
89 Geometric Asia Pacific Pte. Ltd
Singapore
90 Geometric Europe GmbH Germany
91 Geometric China, Inc.
China
92 Geometric SRL
Romania
93 Geometric SAS
France
94 Butler America Aerospace LLC
USA
95 HCL Mortgage Holding LLC
USA
96 Urban Fulfillment Services LLC
USA
97 ETL Factory Limited
Scotland
98 HCL Technologies
UK
Corporate Services
Limited
Percentage
holding as at
31 March 2018 100%
100%
100% 100%
100%
100%
100%
100%
100%
100%
-
-
100% 100% 100%
100%
100%
100% 100%
100% 100% 100% 100% 100%
100%
100%
100% 100%
Net Assets, i.e. total assets minus liabilities as at
Share in profit and loss
Share in other comprehensive
income
Share in total comprehensive
income
31 March 2018
As %
As %
As %
As %
of
Amount
of
Amount
of
Amount
of
Amount
consolidate
consolidate
consolidate
consolidate
0.03
10
0.03
2
-
-
0.03
2
0.02
6
-
-
-
-
-
-
-
-
(0.01)
(1)
-
-
(0.04)
(4)
-
-
(0.01)
(1)
-
-
(0.05)
(4)
-
2
-
-
-
-
-
-
0.01
4
-
-
-
-
-
-
0.01
5
(0.02)
(2)
-
-
(0.02)
(2)
0.06
21
0.02
2
-
-
0.02
2
-
1
-
-
-
-
-
-
0.01
4
0.01
1
-
-
0.01
1
-
-
0.02
1
-
-
0.01
1
-
-
(0.01)
(1)
-
-
0.02
1
-
-
0.01
1
-
-
(0.01)
(1)
-
-
0.01
1
-
-
0.01
1
-
-
0.01
1
-
-
0.01
1
0.68
249
0.31
27
0.13
48
(0.02)
(2)
0.03
11
0.01
1
-
-
0.32
27
-
-
(0.02)
(2)
-
-
0.01
1
0.01
5
0.01
1
-
-
0.02
1
-
1
-
-
-
-
-
-
0.83
301
0.09
33
0.11
10
0.10
9
-
-
0.11
10
-
-
0.10
9
0.35
128
0.12
11
0.03
13
(0.02)
(2)
0.01
4
-
-
0.07
27
0.03
3
1.58
574
0.24
21
-
-
0.12
11
-
-
(0.02)
(2)
-
-
-
-
-
-
0.03
3
-
-
0.25
21
(0.19) (70)
(0.07)
(6)
-
-
(0.07)
(6)
0.37
130
(0.27) (23)
-
-
(0.27) (23)
0.20
71
0.04
4
-
-
-
-
-
-
0.04
4
-
-
-
-
Annual Report 2018-19 291
Notes to consolidated financial statements for the year ended 31 March 2019
(All amounts in crores of `, except share data and as stated otherwise)
S. No.
Name of the Entity
Country of incorporation
Percentage
holding as at
31 March 2018
Net Assets, i.e. total assets minus liabilities as at
As %
of
Amount
consolidate
Share in profit and loss
Share in other comprehensive
income
Share in total comprehensive
income
31 March 2018
As %
As %
As %
of
Amount
of
Amount
of
Amount
consolidate
consolidate
consolidate
Associates Foreign
99 CeleritiFintech Services
UK
Limited
-
-
-
0.14
13
-
-
0.14
13
Total Non controlling interest Consolidation adjustments
100.00
36,386 -
100.00
8,722 (1) -
100.00
(281) -
541
100.00
8,441 (1) 541
Consolidated Net assets / Profit after tax
36,386
8,721
260
8,981
Note: Dividend received from subsidiaries has been excluded from profits.
* The Group has equity interest of 49% and 100% dividend rights and control
** During the year the Company has acquired the remaining 8,000 equity shares of ` 10/- each of HCL Eagle Limited for a purchase consideration of ` 80,000/- thereby making it a wholly owned subsidiary.
3.36 Subsequent events
Acquisition of Strong-Bridge Envision
On 13 March 2019, the Group through a wholly owned subsidiary has entered into an agreement to acquire 100% shareholding of Strong-Bridge Holdings, Inc.(doing business as Strong-Bridge Envision or SBE), a provider of digital and analytics (digital consulting services) across various industry verticals for the purchase consideration of ` 311 crores payable in cash. The acquisition is a step towards enhancing HCL's Digital Consulting capabilities which are an integral part of Digital and Analytics business by adding digital strategy development, agile program management and organizational change management capabilities.
The acquisition is consummated on 1 April 2019.
As per our report of even date
FOR S. R. BATLIBOI & CO. LLP ICAI Firm Registration Number : 301003E/E300005 Chartered Accountants
per Nilangshu Katriar Partner Membership Number: 58814
For and on behalf of the Board of Directors of HCL Technologies Limited
Shiv Nadar Chairman and Chief Strategy Officer
S. Madhavan Director
C. Vijayakumar President and Chief Executive Officer
Gurugram, India 9 May 2019
Prateek Aggarwal Chief Financial Officer
Noida (UP), India 9 May 2019
Prahlad Rai Bansal Deputy Chief Financial Officer
Manish Anand Company Secretary
292 Consolidated Financial Statements
Statement containing the salient features of the financial statements of subsidiaries / associates companies [Pursuant to first proviso to sub-section (3) of section 129 of the Companies Act, 2013, read with rule 5 of Companies (Accounts) Rules, 2014 in the prescribed Form AOC-I]
(Amount in ` Thousand)
S. No.
Name of the Subsidiary Company
1 HCL Comnet Systems & Services Limited 2 HCL Comnet Limited 3 HCL Bermuda Limited 4 HCL Technologies (Shanghai) Limited 5 HCL Eagle limited 6 HCL Singapore Pte. Limited 7 HCL Training & Staffing Services Private
Limited
Date of acquisition / incorporation
24-Aug-99 8-Aug-01 10-Dec-97 23-Jul-07 14-Sep-11 1-Jan-03 29-Feb-16
Financial period ended
31-Mar-19 31-Mar-19 31-Mar-19 31-Dec-18 31-Mar-19 31-Mar-19 31-Mar-19
Exchange
Reporting Currency
Rate as on respective balance
sheet date
Share Capital
Reserves & Surplus
INR
1.00 12,800 173,859
INR
1.00 9,500 2,760,700
USD
69.11 30,788,566 18,458,217
CNY
10.15 155,432 351,690
INR
1.00 1,000 123,266
SGD
51.01 103,809 2,767,666
INR
1.00 17,513 249,108
Total Assets
Investments
Total
(other
Liabilities than in
subsidiaries)
595,001 4,263,800 52,148,173 1,475,410
128,435 5,753,137
459,984
408,342 1,493,600 2,901,390
968,288 4,169
2,881,662 193,363
124,679 1,183,921
126,310 283,408
Turnover
465,792 1,780,000
1,213,109
9,752,901
376,919
Profit/ (Loss) before taxation
Provision for
taxation
58,579 330,100 929,386 81,220
8,733 700,263 (97,880)
12,652 205,000
38,810 2,524 119,122 (24,734)
Profit/ (Loss) after taxation
Proposed Dividend
Extent of shareholding (in percentage)
45,927
-
100%
125,100
-
100%
929,386
-
100%
42,410
-
100%
6,209
-
100%
581,141
-
100%
(73,146)
-
100%
8 HCL Great Britain Limited
7-Jan-97 31-Mar-19 GBP
90.62 957,671 2,143,434 6,031,391 2,930,286
- 8,986,416 355,049 74,580 280,469
-
100%
9 HCL (Netherlands) BV
5-Mar-98 31-Mar-19 EUR
77.68 1,410 304,930 2,077,341 1,771,001
- 3,067,629 160,591 45,541 115,050
-
100%
10 HCL Belgium NV
6-Mar-98 31-Mar-19 EUR
77.68 277,165 136,380 890,487 476,942
- 1,220,268 88,677 28,208 60,469
-
100%
11 HCL Sweden AB
12-Jan-98 31-Mar-19 SEK
7.47
747 848,355 2,333,723 1,484,621
- 2,872,191 90,757 8,751 82,006
-
100%
12 HCL GmbH
23-Feb-98 31-Mar-19 EUR
77.68 1,996 608,360 1,353,440 743,084
- 3,274,033 166,867 46,678 120,189
-
100%
13 HCL Italy SRL
2-Jul-98 31-Mar-19 EUR
77.68
792 225,569 251,302 24,941
- 114,494 11,497 (19,772) 31,269
-
100%
14 HCL Australia Services Pty. Limited
21-May-98 31-Mar-19 AUD
49.01 24,507 1,450,209 5,801,353 4,326,637
- 17,956,547 879,576 266,606 612,970
-
100%
15 HCL (New Zealand) Limited
28-Jan-98 31-Mar-19 NZD
47.01 2,182 184,048 555,826 369,596
- 1,878,551 135,272 38,104 97,168
-
100%
16 HCL Hong Kong SAR Limited
5-Jun-98 31-Mar-19 HKD
8.81 1,701 346,565 760,682 412,416
- 1,209,797 127,168 20,760 106,408
-
100%
17 HCL Japan Limited
10-Feb-98 31-Mar-19 JPY
0.62 137,434 387,911 2,628,919 2,103,574
- 7,353,966 337,971 80,263 257,708
-
100%
18 HCL America Inc.
17-Jan-95 31-Mar-19 USD
69.11 517,000 67,667,000 145,903,000 77,719,000 366,000 226,418,000 15,214,000 2,993,000 12,221,000
-
100%
19 HCL Technologies Austria GmbH
1-Mar-97 31-Mar-19 EUR
77.68 36,693 6,640,175 7,018,481 341,613
- 645,328 111,401 7,528 103,873
-
100%
20 HCL Global Processing Services Limited
22-Feb-99 31-Mar-19 INR
1.00 1,061 444,885 453,515
7,569
415,310 78,370 78,811 23,770 55,041
-
100%
21 HCL Technologies (Taiwan) Ltd.
15-Dec-16 31-Mar-19 TWD
2.24 11,211
7,345 64,511 45,955
- 55,169 8,735 1,748 6,987
-
100%
22 HCL Technologies Lithuania UAB
26-Aug-16 31-Mar-19 EUR
77.68 27,964 69,391 130,564 33,209
- 319,636 61,637 9,476 52,161
-
100%
23 HCL Technologies Solutions Limited
1-Jul-08 31-Mar-19 INR
1.00 10,501 49,846 60,521
174
40,721
- 2,310
572 1,738
-
100%
24 HCL Poland Sp.z.o.o
31-May-07 31-Mar-19 PLN
18.07 250,277 635,184 2,246,829 1,361,368
- 4,264,511 330,936 68,802 262,134
-
100%
25 HCL EAS Limited
11-Sep-08 31-Mar-19 USD
69.11 10,889,246
- 54,131,149 43,241,903
- 271,607 521,307 (111,545) 632,852
-
100%
26 HCL Insurance BPO Services Limited
1-Sep-08 31-Mar-19 GBP
90.62 734,928 (140,733) 1,250,102 655,907
- 1,882,448 73,312 1,360 71,952
-
100%
27 Axon Group Limited
15-Dec-08 31-Mar-19 GBP
90.62 61,442 17,382,028 17,518,153 74,683
-
- (97,805)
- (97,805)
-
100%
28 HCL Axon Technologies Inc.
15-Dec-08 31-Mar-19 CAD
51.50 10,700 3,035,600 5,834,600 2,788,300
- 8,593,300 611,000 161,600 449,400
-
100%
29 HCL Technologies Solutions GmbH
15-Dec-08 31-Mar-19 CHF
69.42 8,330 128,142 1,147,671 1,011,199
- 1,411,454 62,478 22,351 40,127
-
100%
30 Axon Solutions Limited
15-Dec-08 31-Mar-19 GBP
90.62
91 3,821,533 5,588,531 1,766,907
- 7,180,361 670,859 144,085 526,774
-
100%
31 HCL Axon Malaysia Sdn. Bhd.
15-Dec-08 31-Dec-18 MYR
16.89 371,554 2,352,199 3,435,310 711,557
- 1,901,486 1,368,164 124,746 1,243,418
-
100%
32 Axon Solutions Singapore Pte. Limited
15-Dec-08 31-Mar-19 SGD
51.01 5,101 (62,934) 72,135 129,968
- 57,850 1,182
308
874
-
100%
33 Axon Solutions (Shanghai) Co. Limited
15-Dec-08 31-Dec-18 CNY
10.15 20,999 904,869 2,347,851 1,421,983
- 2,694,451 224,529 59,141 165,388
-
100%
34 HCL Axon (Proprietary) Limited
15-Dec-08 31-Mar-19 ZAR
4.77 415,347 2,423,718 3,999,341 1,160,276
- 4,047,973 378,917 105,443 273,474
-
100%
35 HCL Argentina s.a.
27-Jul-09 31-Mar-19 ARS
1.58 12,087
- 189,029 176,942
- 169,151 5,289 7,897 (2,608)
-
100%
36 HCL Mexico S. de R.L.
25-Jun-09 31-Dec-18 MXN
3.55 162,437 13,452 1,937,894 1,762,005
- 3,558,770 90,183 122,483 (32,300)
-
100%
37 HCL Technologies Romania s.r.l.
28-May-09 31-Dec-18 RON
17.14 6,049 15,130 83,974 62,795
- 93,385 8,824 1,690 7,134
-
100%
38 HCL Hungary Kft
12-May-09 31-Mar-19 HUF
0.24 2,177 17,839 236,682 216,666
- 174,412 3,066
451 2,615
-
100%
39 HCL Latin America Holding LLC
30-Mar-09 31-Mar-19 INR
1.00 864,998 (9,704) 980,813 125,519
-
- (9,716)
- (9,716)
-
100%
40 HCL (Brazil) Technologia da informacao Ltda. 30-Dec-08 31-Dec-18 BRL
17.99 548,640 (377,244) 1,275,814 1,104,418
- 1,862,195 35,261 41,114 (5,853)
-
100%
41 HCL Technologies Denmark Apps
23-Jun-10 31-Mar-19 DKK
10.40 33,996 634,308 2,914,187 2,245,883
- 6,258,750 358,760 79,102 279,658
-
100%
42 HCL Technologies Norway AS
9-Jun-10 31-Mar-19 NOK
8.01 23,988 1,319,015 4,844,302 3,501,299
- 8,650,709 524,054 115,825 408,229
-
100%
43 PT. HCL Technologies Indonesia Limited
13-Aug-10 31-Mar-19 IDR
0.00 44,009 11,254 295,077 239,814
- 310,378 19,726 9,956 9,770
-
100%
Annual Report 2018-19 293
294 Statement under Section 129
(Amount in ` Thousand)
S. No.
Name of the Subsidiary Company
Date of acquisition / incorporation
Financial period ended
Reporting Currency
Exchange Rate as on respective
balance sheet date
Share Capital
Reserves & Surplus
Total Assets
Investments
Total
(other
Liabilities than in
subsidiaries)
Turnover
Profit/ (Loss) before taxation
Provision for
taxation
Profit/ (Loss) after taxation
Proposed Dividend
Extent of shareholding (in percentage)
44 HCL Technologies Philippines Inc.
24-Nov-10 31-Mar-19 PHP
1.31 357,211 567,596 1,390,503 465,696
- 2,429,062 235,552 (11,344) 246,896
-
100%
45 HCL Technologies South Africa (Proprietary) 14-Sep-10 31-Mar-19 ZAR Limited
4.77 14,203 200,458 235,110 20,449
- 48,436 14,908 4,222 10,686
-
100%
46 HCL Arabia LLC
8-May-11 31-Dec-18 SAR
18.61 113,509 19,000 218,016 85,507
- 150,873 7,898 1,697 6,201
-
100%
47 HCL Technologies France SAS
7-Mar-11 31-Mar-19 EUR
77.68 195,436 820,731 4,955,743 3,939,576
- 8,276,671 343,846 105,531 238,315
-
100%
48 Filial Espanola De HCL Technologies S.L
12-Jan-11 31-Mar-19 EUR
77.68 23,303 115,332 1,004,232 865,597
- 1,261,099 66,333 16,635 49,698
-
100%
49 Anzospan Investments Pty Limited
15-Mar-11 31-Mar-19 ZAR
4.77 293,321 144,084 465,919 28,514
-
- 150,049
- 150,049
-
100%
50 HCL Investments (UK) Limited
9-Nov-11 31-Mar-19 GBP
90.62 580,392 56,751 1,732,130 1,094,987
- 1,073,310 73,777 14,155 59,622
-
100%
51 HCL America Solutions Inc.
26-Jun-12 31-Mar-19 USD
69.11
700 37,800 3,050,300 3,011,800
- 8,675,900 56,200 7,500 48,700
-
100%
52 HCL Technologies Chile Spa
10-Jun-13 31-Dec-18 CLP
0.10 60,531 157,767 596,833 378,535
- 620,260 67,981 32,598 35,383
-
100%
53 HCL Technologies UK Limited
20-Aug-13 31-Mar-19 GBP
90.62 4,824,877 2,088,064 30,239,599 23,326,658 478,201 31,834,238 699,767 119,618 580,149
-
100%
54 HCL Technologies B.V.
19-Sep-13 31-Mar-19 EUR
77.68 7,768 542,316 2,985,890 2,435,806
- 7,494,403 344,489 87,899 256,590
-
100%
55 HCL (Ireland) Information Systems Limited
29-Oct-13 31-Mar-19 EUR
77.68 7,768 590,645 2,547,272 1,948,859
- 5,665,706 413,289 46,778 366,511
-
100%
56 HCL Technologies Germany Gmbh
21-Nov-13 31-Mar-19 EUR
77.68 7,768 854,936 7,237,318 6,374,614
- 10,907,553 635,845 177,657 458,188
-
100%
57 HCL Technologies Belgium BVBA
25-Nov-13 31-Mar-19 EUR
77.68 7,768 (11,560) 1,125,018 1,128,810
- 1,456,492 24,822 30,093 (5,271)
-
100%
58 HCL Technologies Sweden AB
18-Dec-13 31-Mar-19 SEK
7.47 10,304 6,014,091 19,992,974 13,968,579
- 32,674,580 1,871,966 406,123 1,465,843
-
100%
59 HCL Technologies Finland Oy
14-Jan-14 31-Mar-19 EUR
77.68 7,768 489,083 8,986,185 8,489,334
- 4,979,885 318,456 63,952 254,504
-
100%
60 HCL Technologies Italy S.P.A
29-Jul-14 31-Mar-19 EUR
77.68 220,603 240,103 2,003,744 1,543,038
- 3,632,814 102,421 45,018 57,403
-
100%
61 HCL Technologies Columbia S.A.S
6-Aug-14 31-Dec-18 COP
0.02 9,897 (71,261) 152,569 213,933
- 90,700 (29,305) 21,461 (50,766)
-
100%
62 HCL Technologies Middle East FZ-LLC
19-Aug-14 31-Mar-19 AED
18.85 68,795 15,339 365,456 281,322
- 516,318 33,282
- 33,282
-
100%
63 HCL Istanbul Bilisim Teknolojileri Limited Sirketi
30-Sep-14 31-Mar-19 TRY
12.25 1,225 81,575 203,362 120,562
- 261,905 29,593 3,993 25,600
-
100%
64 HCL Technologies Greece Single Member P.C 30-Sep-14 31-Mar-19 EUR
77.68 34,256 12,941 220,096 172,899
- 174,342 11,804 3,614 8,190
-
100%
65 HCL Technologies S.A.
20-Nov-14 31-Mar-19 VES
0.02
25 (1,616)
4,002
5,593
- 53,596 (1,589)
- (1,589)
-
100%
66 HCL Technologies Beijing Co. Ltd
6-Feb-15 31-Dec-18 CNY
10.15 64,145 50,130 456,840 342,565
- 608,124 51,537 18,628 32,909
-
100%
67 HCL Technologies Luxembourg S.a r.l
12-Feb-15 31-Mar-19 EUR
77.68 3,884 31,475 84,154 48,795
- 116,429 6,687 1,560 5,127
-
100%
68 HCL Technologies Egypt Limited
22-Mar-15 31-Mar-19 EGP
3.99 18,578 (3,345) 86,282 71,049
- 71,942 7,500 1,688 5,812
-
100%
69 HCL Technologies Estonia OÜ
8-Jun-15 31-Mar-19 EUR
77.68 15,535 (18,241) 66,036 68,742
- 16,880
822
-
822
-
100%
70 HCL Technologies (Thailand) Ltd.
10-Jun-15 31-Mar-19 THB
2.18 42,764 36,752 277,098 197,582
- 296,959 23,697 6,773 16,924
-
100%
71 HCL Technologies Czech Republic s.r.o.
28-Aug-15 31-Dec-18 CZK
3.11 103,372 31,817 816,359 681,170
- 1,257,205 66,418 11,442 54,976
-
100%
72 HCL Muscat Technologies L.L.C.
17-Dec-15 31-Mar-19 OMR
179.51 31,181 24,898 93,926 37,847
- 109,219 16,563 2,360 14,203
-
100%
73 Concept2Silicon Systems Private Limited
15-Oct-15 31-Mar-19 INR
1.00
150 18,633 26,955
8,172
- 16,879 (702) 1,864 (2,566)
-
100%
74 Powerteam, LLC
28-Oct-15 31-Mar-19 USD
69.11
86 2,621,365 3,453,040 831,589
- 5,415,217 157,410 55,307 102,103
-
100%
75 Point To Point Limited
22-Jan-16 31-Mar-19 GBP
90.62 14,909 88,997 113,669
9,763
- 11,838 (391) (722)
331
-
100%
76 Point to Point Products Limited #
22-Jan-16 31-Mar-19 GBP
90.62
- 47,239 206,248 159,009
- 139,639 10,774 2,051 8,723
-
100%
77 Statestreet HCL Holding UK Limited (Note 10) 9-Dec-11 31-Mar-19 GBP
90.62 579,554 (3,705) 579,391
3,542
-
-
(508)
(96)
(412)
-
100%
78 Statestreet HCL Services (India) Private Limited (Note 10)
6-Jan-12 31-Mar-19 INR
1.00 393,693 3,957,630 4,874,541 523,218
- 3,714,875 1,492,828 237,019 1,255,809
-
100%
79 Statestreet HCL Services (Phillipines) Inc. (Note 10)
20-Jun-13 31-Mar-19 PHP
1.31 112,799 159,107 364,138 92,232
- 281,240 (22,359) 3,274 (25,633)
-
100%
80 Geometric Europe GmbH
1-Apr-16 31-Mar-19 EUR
77.68 1,091,363 (811,515) 758,543 478,695
- 1,237,224 96,859 28,974 67,885
-
100%
81 Geometric Asia Pacific Pte. Ltd
1-Apr-16 31-Mar-19 SGD
51.01 5,101 271,925 577,082 300,056
- 582,323 87,100 31,834 55,266
-
100%
82 Geometric China, Inc.
1-Apr-16 31-Dec-18 CNY
10.15 33,297 (54,437) 147,354 168,494
- 132,256 (53,900)
85 (53,985)
-
100%
83 Geometric Americas, Inc.
1-Apr-16 31-Mar-19 USD
69.11 833,675 229,969 2,266,288 1,202,644
- 4,175,038 134,533 68,557 65,976
-
100%
84 Geometric SRL
1-Apr-16 31-Dec-18 RON
17.14
6 76,953 91,764 14,805
- 81,503 13,127 2,040 11,087
-
100%
85 Geometric SAS
1-Apr-16 31-Mar-19 EUR
77.68 189,299 (11,719) 482,995 305,415
- 860,125 30,618
- 30,618
-
100%
86 Butler America Aerospace LLC
3-Jan-17 31-Mar-19 USD
69.11
- 793,524 1,314,002 520,478
- 4,989,943 (30,074) 6,315 (36,389)
-
100%
(Amount in ` Thousand)
S. No.
Name of the Subsidiary Company
Date of acquisition / incorporation
Financial period ended
Reporting Currency
Exchange Rate as on respective
balance sheet date
Share Capital
Reserves & Surplus
Total Assets
Investments
Total
(other
Liabilities than in
subsidiaries)
Turnover
Profit/ (Loss) before taxation
Provision for
taxation
Profit/ (Loss) after taxation
Proposed Dividend
Extent of shareholding (in percentage)
87 HCL Foundation
30-Dec-14 31-Mar-19 INR
1.00
500
(221)
329
50
-
-
(32)
-
(32)
-
100%
88 Urban Fulfillment Services LLC
23-Aug-17 31-Dec-18 USD
69.81 513,684 (383,825) 305,081 175,222
- 1,584,446 (383,825)
- (383,825)
-
100%
89 Datawave (An HCL Technologies Company) Limited (formely known as "ETL Factory Limited")
1-Sep-17 31-Mar-19 GBP
90.62
11 252,025 843,510 591,474
- 1,223,488 15,162 3,443 11,719
-
100%
90 HCL Technologies Corporate Services Limited #
5-Mar-18 31-Mar-19 USD
69.11
-
- 20,505 20,505
- 35,866,449
-
-
-
-
100%
91 C3i Support Services Private Limited (Note 6) 6-Apr-18 31-Mar-19 INR
1.00 15,421 552,410 669,484 101,653
- 690,690 135,054 47,463 87,591
-
100%
92 Telerx Marketing, Inc. (Note 6)
6-Apr-18 31-Dec-18 USD
69.81
2 51,161 77,995 26,832
- 146,911 8,627 2,460 6,167
-
100%
93 C3i Europe Eood (Note 6)
6-Apr-18 31-Dec-18 BGN
40.86 6,149 406,160 565,689 153,380
- 1,363,578 86,608 8,718 77,890
-
100%
94 C3i (UK) Limited (Note 6) #
6-Apr-18 31-Dec-18 GBP
89.07
-
3,415
4,767
1,352
- 17,872 1,228
233
995
-
100%
95 C3i Japan GK (Note 6) #
6-Apr-18 31-Dec-18 JPY
0.63
-
7,740 12,474
4,734
- 68,642 5,297 1,613 3,684
-
100%
96 C3i Services &Technologies (Dalian) Co., Ltd (Note 6)
6-Apr-18 31-Dec-18 CNY
10.15 19,894 241,493 278,420 17,033
- 330,770 51,260 7,981 43,279
-
100%
97 HCL Technologies SEP Holdings Inc (Note 4) 28-Mar-18 31-Dec-18 USD
69.81
1 11,673,917 15,535,394 3,861,476
-
- (483,549)
- (483,549)
-
80%
98 Actian Corporation (Note 7) #
17-Jul-18 31-Dec-18 USD
69.81
- (3,049,837) 10,759,524 13,809,361
- 7,634,366 (300,307) (31,483) (268,824)
-
80%
99 Actian Australia Pty Ltd (Note 7) #
17-Jul-18 31-Dec-18 AUD
49.27
- (9,126) 165,270 174,396
- 484,948 13,574 4,623 8,951
-
80%
100 Actian Europe Limited (Note 7) #
17-Jul-18 31-Dec-18 GBP
89.07
- 44,295 1,145,231 1,100,936
- 1,736,644 55,215 11,065 44,150
-
80%
101 Actian France (Note 7)
17-Jul-18 31-Dec-18 EUR
79.98 2,959 18,129 319,523 298,435
- 216,328 5,045
973 4,072
-
80%
102 Actian Germany GmbH (Note 7)
17-Jul-18 31-Dec-18 EUR
79.98 1,999
9,306 340,783 329,478
- 426,468 22,303 11,456 10,847
-
80%
103 Actian International, Inc. (Note 7) #
17-Jul-18 31-Dec-18 USD
69.81
- (80,518)
6,735 87,253
-
-
-
-
-
-
80%
104 Actian Netherlands B.V. (Note 7)
17-Jul-18 31-Dec-18 EUR
79.98 1,440 44,245 62,090 16,405
- 23,777 1,681
337 1,344
-
80%
105 Actian Netherlands Holding B.V. (Note 7)
17-Jul-18 31-Dec-18 EUR
79.98 1,440 (433,992) 57,629 490,181
-
- (4,803) (337) (4,466)
-
80%
106 Actian Technology Private Limited (Note 7)
17-Jul-18 31-Mar-19 INR
1.00 1,000 11,496 13,605
1,109
-
1,191
853
228
625
-
80%
107 ParAccel LLC (Note 7)
17-Jul-18 31-Dec-18 USD
69.81 1,663,060 (850,624) 812,436
-
-
-
-
-
-
-
80%
108 Pervasive Software, Inc. (Note 7) #
17-Jul-18 31-Dec-18 USD
69.81
- 14,216,380 14,216,380
-
-
-
-
-
-
-
80%
109 POET Holdings, Inc. (Note 7) #
17-Jul-18 31-Dec-18 USD
69.81
- (35,952) 748,679 784,631
-
- (9,463)
- (9,463)
-
80%
110 Versant GmbH (Note 7)
17-Jul-18 31-Dec-18 EUR
79.98 14,396 983,233 1,266,297 268,668
- 550,147 162,960 10,552 152,408
-
80%
111 Versant India Private Limited (Note 7)
17-Jul-18 31-Mar-19 INR
1.00 1,000
7,079 10,230
2,151
-
- (194) (474)
280
-
80%
112 Versant Software LLC (Note 7)
17-Jul-18 31-Dec-18 USD
69.81 2,553,008 (410,415) 2,444,099 301,506
- 135,095 (116,898)
- (116,898)
-
80%
113 Honisgberg & Duvel Datentichnik GMBH
2-Oct-18 31-Dec-18 EUR
79.98 32,870 842,927 1,929,453 1,053,656
- 5,029,436 (295,826) 3,361 (299,187)
-
100%
(Note 8)
114 H&D Business Services GmbH (Note 8)
2-Oct-18 31-Dec-18 EUR
79.98 1,999
- 50,126 48,127
- 500,832
-
-
-
-
100%
115 H&D IT Solutions GmbH (Note 8)
2-Oct-18 31-Dec-18 EUR
79.98 1,999
- 83,446 81,447
- 1,201,383
-
-
-
-
100%
116 H&D Training und Consulting GmbH (Note 8) 2-Oct-18 31-Dec-18 EUR
79.98 1,999 (1,381)
624
6
-
-
-
-
-
-
100%
117 H&D International GmbH (Note 8)
2-Oct-18 31-Dec-18 EUR
79.98 1,999 16,522 64,158 45,637
- 194,053 10,572 2,876 7,696
-
100%
118 H&D IT Professional Services GmbH (Note 8) 2-Oct-18 31-Dec-18 EUR
79.98 1,899
100 17,648 15,649
- 280,451
-
-
-
-
100%
Annual Report 2018-19 295
119 qmo-it GmbH (Note 8)
2-Oct-18 31-Dec-18 EUR
79.98 59,981
6,467 71,020
4,572
- 73,460 5,833 1,669 4,164
-
100%
120 H&D Services for Engineering GmbH (Note 8) 2-Oct-18 31-Dec-18 EUR
79.98 1,999
- 51,721 49,722
- 816,619
-
-
-
-
100%
121 Hönigsberg & Düvel Datentechnik Czech s.r.o. (Note 8)
2-Oct-18 31-Dec-18 CZK
3.11 18,656 161,562 247,304 67,086
- 548,359 125,131 16,355 108,776
-
100%
122 Hönigsberg & Düvel Corporation (Note 8)
2-Oct-18 31-Dec-18 USD
69.81 6,981 (7,734) 53,726 54,479
- 203,072 (14,920) (4,203) (10,717)
-
100%
123 catis GmbH (Note 8)
2-Oct-18 31-Dec-18 EUR
79.98 1,999
5 21,125 19,121
- 94,603
-
-
-
-
100%
124 H&D IT Automotive Services GmbH (Note 8) 2-Oct-18 31-Dec-18 EUR
79.98 1,999
- 56,746 54,747
- 145,766
-
-
-
-
100%
125 ca Management Services GmbH (Note 8)
2-Oct-18 31-Dec-18 EUR
79.98 1,999
- 40,101 38,102
- 424,415
-
-
-
-
100%
126 H&D ITAS Infrastructure Services GmbH (Note 8)
2-Oct-18 31-Dec-18 EUR
79.98 1,999
- 57,147 55,148
- 874,965
-
-
-
-
100%
296 Statement under Section 129
Exchange
S. No.
Name of the Subsidiary Company
Date of acquisition / incorporation
Financial period ended
Reporting Currency
Rate as on respective balance
Share Capital
Reserves & Surplus
sheet date
127 H&D ITAS Application Services GmbH
2-Oct-18 31-Dec-18 EUR
79.98 1,999
-
(Note 8)
128 H&D ITAS Client Services GmbH (Note 8)
2-Oct-18 31-Dec-18 EUR
79.98 1,999
-
129 H&D ITAS Süd GmbH (Note 8)
2-Oct-18 31-Dec-18 EUR
79.98 1,999
-
130 HCL Technologies Vietnam Company Limited 27-Apr-18 31-Mar-19 VND
0.00 3,411
2,158
(Note 5)
(Amount in ` Thousand)
Total Assets
Investments
Total
(other
Liabilities than in
subsidiaries)
Turnover
Profit/ (Loss) before taxation
Provision for
taxation
Profit/ (Loss) after taxation
Proposed Dividend
Extent of shareholding (in percentage)
34,129 32,130
- 266,968
-
-
-
-
100%
91,372 14,225 26,145
89,373 12,226 20,576
- 1,429,749
-
-
-
-
100%
- 102,591
-
-
-
-
100%
- 34,396 2,697
539 2,158
-
100%
Notes: 1 Indian rupee equivalents of the figures given in foreign currencies in the accounts of the subsidiary companies, are based on the exchange rates as mentioned above for respective subsidiary. 2 # Refer table given below for absolute amount of share capital in the following company:
Name of the Subsidiary Company
Share Capital(`)
Point to Point Products Limited
181
HCL Technologies Corporate Services Limited
87
C3i (UK) Limited
89
C3i Japan GK
1
Actian Corporation
70
Actian Australia Pty Ltd
49
Actian Europe Limited
89
Actian International, Inc.
70
Pervasive Software, Inc.
70
POET Holdings, Inc.
70
3 HCL Guatemala, Sociedad Anonima, a subsidiary of HCL Bermuda Limited, was incorporated on 22 February 2019 and is yet to commence operations.
4 HCL Technologies SEP Holdings Inc, a subsidiary of HCL America Inc., was incorporated on 28 March 2018, the capital was contributed by the group in 2018-19.
5 HCL Technologies Vietnam Company Limited , a subsidiary of HCL Technologies UK Limited, was incorporated on 27 April 2018.
6 Telerx Marketing, Inc. (and its subsidiaries) was acquired on 6 April 2018.
7 Actian Corporation (and its subsidiaries) was acquired on 17 July 2018.
8 Honisgberg & Duvel Datentichnik GMBH (H&D International Group including its subsidiaries) was acquired on 2 October 2018.
9 Following subsidiaries were dissolved during the year:
* HCL Mortgage Holding LLC was dissolved on 31 October 2018.
* Ingres Canada Corporation was acquired on 17 July 2018 and was dissolved on 18 December 2018.
10 The Group has equity interest of 49% and 100% dividend rights and control.
11 During the year Axon Solutions Pty. Limited went into liquidation hence, no financial statement has been prepared as per their local laws.
12 On 30 September 2017, the Group has terminated its existing arrangements with DXC. Accordingly, CeleritiFinTech Limited (and its step down subsidiaries) and Celeritifintech Services Limited (and its step down subsidiaries) has not been consolidated with the Group from that date. Accordingly, their standalone financial statements are not considered for the purpose of this statement.
For HCL Technologies Limited
Shiv Nadar Chairman and Chief Strategy Officer
S. Madhavan Director
C. Vijayakumar President and Chief Executive Officer
Prateek Aggarwal Chief Financial Officer
Place: Noida, UP (India) Date: 4 July 2019
Prahlad Rai Bansal Deputy Chief Financial Officer
Manish Anand Company Secretary
Website : www.hcltech.com; E-mail : investors@hcl.com Telefax : +91 11 26436336 27th Annual General Meeting held on Tuesday, 6th August, 2019 at 11:00 A.M. at The Stein Auditorium, Habitat World, at the India Habitat Centre, Gate No. 3, Lodhi Road, New Delhi-110 003.
I hereby record my presence at the 27th Annual General Meeting on Tuesday, 6th August, 2019 at 11:00 A.M. at The Stein Auditorium, Habitat World, at the India Habitat Centre, Gate No. 3, Lodhi Road, New Delhi-110 003. I am a member of the Company / I am a Proxy / Authorised Representative of the member(s)*.
Website : www.hcltech.com; E-mail : investors@hcl.com Telefax : +91 11 26436336
: ...................................................................................
: ...................................................................................
: ...................................................................................
as my/our Proxy to attend and vote (on a poll) for me/us and my/our behalf at the 27th Annual General Meeting of the Company, to be held on Tuesday, 6th August, 2019 at 11:00 A.M. at The Stein Auditorium, Habitat World, at the India Habitat Centre, Gate No. 3, Lodhi Road, New Delhi-110 003 and at adjournment(s) thereof in respect of such resolutions as are indicated below :
Resolution Description
1.
Adoption of Financial Statements along with the Reports of the Board of Directors and of the Auditors thereon.
2.
Re-appointment of Mr. Shiv Nadar as Director liable to retire by rotation.
3.
Appointment of Statutory Auditors.
4.
Appointment of Mr. R. Srinivasan as an Independent Director of the Company (Special Resolution).
5.
Appointment of Mr. S. Madhavan as an Independent Director of the Company (Special Resolution).
6.
Appointment of Ms. Robin Ann Abrams as an Independent Director of the Company (Special Resolution).
7.
Appointment of Dr. Sosale Shankara Sastry as an Independent Director of the Company (Special Resolution).
8.
Payment of Commission to Non-executive Directors (Special Resolution).
Signed this .................................. day of ................................. 2019
THIS FORM OF PROXY IN ORDER TO BE EFFECTIVE SHOULD BE DULY COMPLETED AND DEPOSITED AT THE REGISTERED OFFICE OF THE COMPANY, NOT LESS THAN 48 HOURS BEFORE THE COMMENCEMENT OF THE MEETING. A proxy need not to be a member of the Company. In case of multiple proxies, proxy later in time shall be accepted.
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