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HCL Technologies Ltd.
Market Cap. (Rs.) 151408.88 Cr. P/BV 4.16 Book Value (Rs.) 261.30
52 Week High/Low (Rs.) 1108/825 FV/ML 2/1 P/E(X) 17.36
Bookclosure 14/09/2018 EPS (Rs.) 62.63 Div Yield (%) 1.10
DIRECTOR'S REPORT
You can view full text of the latest Director's Report for the company.
Year End :2017-03 

Dear Shareholders,

The Directors have immense pleasure in presenting the Twenty Fifth Annual Report together with the audited financial statements for the financial year ended March 31, 2017.

1. FINANCIAL RESULTS

Key highlights of the financial results of your Company prepared as per Indian Accounting Standards (“Ind AS”) for the financial year ended March 31, 2017 are as under:

(Rs. in crores)

Particulars

Consolidated

Standalone

Year ended

Year ended

March 31, 2017 (Twelve months)

March 31, 2016 (Nine months)

March 31, 2017 (Twelve months)

March 31, 2016 (Nine months)

Total Income

48,640.85

32,002.07

20,273.64

14,403.06

Total Expenditure

38,100.20

24,966.15

11,997.57

8,621.51

Profit before tax

10,540.65

7,035.92

8,276.07

5,781.55

Provision for tax

(1,936.28)

(1,439.00)

(1,403.38)

(1,062.47)

Share of profit of associates

2.10

4.76

-

-

Profit for the year

8,606.47

5,601.68

6,872.69

4,719.08

Other Comprehensive Income

(301.49)

127.76

405.59

70.25

Total Comprehensive Income

8,304.98

5,729.44

7,278.28

4,789.33

Total Comprehensive Income attributable to Owners of the Company

8,343.11

5,730.19

-

-

Note: The Company has adopted Ind AS in accordance with Ind AS 101 for the first time, using July 1, 2015 as the transition date. Accordingly, there are differences in the figures provided for March 31, 2016 in the Annual Report 2016 and in this Annual Report. The detailed explanation in this regard has been provided in the Financial Statements, forming part of this Annual Report.

2. RESULTS OF OPERATIONs AND THE STATE OF COMPANY’S AFFAIRS

On a standalone basis, the Company achieved revenue of Rs.19,318.31 crores in the financial year 2016-17 and the profit for the financial year 2016-17 is Rs.6,872.69 crores .

On a consolidated basis, the Company achieved revenue of Rs.47,567.53 crores in the financial year 2016-17 and the profit for the financial year 2016-17 is Rs.8,606.47 crores.

The state of affairs of the Company is presented as part of Management Discussion and Analysis Report forming part of this report.

In accordance with the provisions of Companies Act, 2013 (“the Act”), SEBI (Listing Obligation and Disclosure Requirements) Regulations, 2015, Indian Accounting Standards (“Ind AS”) 110 on Consolidated Financial Statements, Ind AS 111 on Joint Arrangements and Ind AS 112 on Disclosure of Interests in Other Entities read with Ind AS 28 on Accounting for Investments in Associates and Joint Ventures, the audited consolidated financial statement is provided in the Annual Report.

The previous financial year of the Company was for a nine months’ period from July 1, 2015 to March 31, 2016. The figures for the current financial year are therefore not comparable with those of the previous year.

3. DIVIDEND

During the financial year ended March 31, 2017, your directors had declared and paid four interim dividends as per the details given below:

S.No.

Interim dividend paid during the financial year ended March 31, 2017

Date of Declaration

Rate of dividend per share (face value of Rs.2 each)

Dividend Amount

Dividend Distribution tax

Total Outflow

( Rs. in crores)

1

1st Interim Dividend

April 28, 2016

Rs.6

846.34

172.01

1,018.35

2

2nd Interim Dividend

August 3, 2016

Rs.6

846.50

166.72

1,013.22

3

3rd Interim Dividend

October 21, 2016

Rs.6

846.55

171.94

1,018.49

4

4th Interim Dividend

January 24, 2017

Rs.6

846.72

171.95

1,018.67

Total

3,386.11

682.62

4,068.73

The Board of Directors in its meeting held on May 9-11, 2017 has declared an interim dividend of Rs.6 per equity share of face value of Rs.2 each for the year 2017-18. The Directors did not recommend final dividend for the year ended March 31, 2017.

4. TRANSFER TO RESERVES

No amount was transferred to the General Reserve Account for the Financial Year.

5. COMPOSITE SCHEME OF ARRANGEMENT AND AMALGAMATION (“SCHEME”)

In terms of the Composite Scheme of Arrangement and Amalgamation amongst Geometric Limited (“Geometric”), HCL Technologies Limited (“Company”) and 3D PLM Software Solutions Limited and their respective shareholders and creditors (referred to as “the Scheme” or “the Scheme of Arrangement”), as sanctioned by the Hon’ble High Courts of Bombay and Delhi vide their Orders dated December 2, 2016 and January 18, 2017 respectively, the business undertaking of Geometric relating to IT enabled engineering services, Product Lifecycle Management services and engineering design productivity software tools has been demerged from Geometric as a going concern and vested to your Company.

The appointed date of the Scheme was March 31, 2016. The Scheme became effective on March 2, 2017. Pursuant to the Scheme, the Company has issued and allotted 1,55,63,430 equity shares to the shareholders of Geometric, details of which have been provided in point no. 6 to this report.

6. CHANGES IN CAPITAL STRUCTURE

- Shares allotted under Employees stock option plans

During the year, the Company allotted 8,38,680 equity shares of Rs.2 each fully paid-up under its Employees Stock Option Plans.

- Shares Allotted pursuant to the composite scheme of Arrangement and Amalgamation

Pursuant to the Scheme, the Board of Directors of the Company in its meeting held on March 20, 2017, has allotted 1,55,63,430 equity shares of face value Rs.2/each, fully paid-up to the equity shareholders of the Geometric. In terms of the Scheme, the shareholders of Geometric have been allotted 10 equity shares of face value of Rs.2/- of the Company for every 43 equity shares of face value of Rs.2/- each held by them in Geometric as on the Record date of March 15, 2017.

Issued and paid-up share capital as on March 31, 2017

As on March 31, 2017, the issued, subscribed and paid-up share capital of the Company was Rs.285,35,66,848/divided into 142,67,83,424 equity shares of face value of Rs.2/- each.

Buyback of Equity shares

The Board of Directors of the Company in its meeting held on March 20, 2017 approved the proposal for Buyback of upto 3,50,00,000 fully paid-up Equity Shares of Rs.2/- each of the Company representing upto 2.48 % of the total paid-up Equity Share capital of the Company as on March 31, 2016, at a price of Rs.1,000 / - (Rupees One Thousand Only) per Equity Share payable in cash for an aggregate amount of up to Rs.3,500 crores (Rupees Three Thousand Five Hundred Crores Only) excluding any expenses incurred or to be incurred for the Buyback like filing fees payable to the Securities and Exchange Board of India (referred to as SEBI), advisors’ fees, public announcement publication expenses, printing and dispatch expenses, transaction costs viz. brokerage, applicable taxes such as securities transaction tax, service tax, stamp duty, etc., which is 16.39% and 13.62%, of the aggregate of the fully paid-up Equity Share capital and free reserves as per the standalone and consolidated audited accounts of the Company for the financial year ended March 31, 2016 respectively (the last audited Financial Statements availbale as on the date of the Board Meeting approving the Buyback), through the “Tender Offer” route as prescribed under the Buyback Regulations using the “Mechanism for acquisition of shares through Stock Exchange” notified by SEBI vide circular no. CIR / CFD / POLICYCELL / 1 / 2015 dated April 13, 2015 read with circular no. CFD / DCR2 / CIR / P / 2016 / 131 dated December 9, 2016 or such other mechanism as may be applicable, on a proportionate basis, from the equity shareholders / beneficial owners of the Equity Shares of the Company as on the Record Date.

The Buyback is subject to the approval of the shareholders of the Company which is being taken through Postal Ballot. The results of the Postal Ballot will be declared on May 17, 2017.

Post the approval of the shareholders, the approval of SEBI and such other approvals, as may be required will be taken for the said Buyback.

7. DEBENTURES

Your Company has not issued any fresh debentures during the financial year under review.

8. 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, forms part of this Annual Report.

9. SUSIDIARIES / ACQUISITIONS

As on March 31, 2017, the Company has 92 subsidiaries and 9 associate companies within the meaning of Sections 2(87) and 2(6) of the Companies Act, 2013 (“Act”) respectively. There has been no material change in the nature of the business of the subsidiaries.

As per the provisions of Section 129(3) of the Act, a statement containing salient features of the financial statements of the Company’s subsidiaries (which includes associate companies and joint ventures) in Form AOC-1 forms part of the Annual Report.

As per the provisions of Section 136 of the Act, the standalone financial statements of the Company, consolidated financial statements along with relevant documents and separate audited accounts in respect of subsidiaries, shall be available on the website of the Company. The Company would provide the annual accounts of the subsidiaries and the related detailed information to the shareholders of the Company on specific request made to it in this regard by the shareholders.

During the year, the Company had incorporated the following step down subsidiaries companies :

Sl No.

Name of subsidiaries

Country of incorporation

1.

HCL Technologies Lithuania UAB

Lithuania

2.

HCL Technologies (Taiwan) Ltd.

Taiwan

In addition to the above, pursuant to the Scheme following subsidiaries and branches of Geometric has become the subsidiaries and branches of the Company effective from March 2, 2017:

Sl.No.

Name of subsidiaries

Country of incorporation

1.

Geometric Americas, Inc.

USA

2.

Geometric Asia Pacific Pte. Ltd.

Singapore

3.

Geometric Europe GmbH

Germany

4.

Geometric China Inc.

China

5.

Geometric SRL

Romania

6.

Geometric SAS

France

Sl. No.

Name of Branches

country of Establishment

1.

Geometric Limited - Germany Branch

Germany

2.

Geometric Limited - France Branch

France

3.

Geometric Europe GmbH - UK Branch

United Kingdom

4.

Geometric Europe GmbH -Netherland Branch

Netherland

5.

Geometric Europe GmbH -Sweden Branch

Sweden

6.

Geometric Americas, Inc. -Canada Branch

Canada

7.

Geometric Asia Pacific Pte. Ltd. - Japan Branch

Japan

8.

Geometric Asia Pacific Pte. Ltd. - Korea Branch

Korea

9.

Geometric Asia Pacific Pte. Ltd. - Australia Branch

Australia

During the year under review, the Company, through its step down subsidiary, HCL America Inc., has acquired the Aerospace and Defense Division of Butler America LLC pursuant to which the following entity formed under the laws of the State of Delaware, became the wholly owned subsidiary of HCL America Inc.

Sl.No.

Name of subsidiary

country of incorporation

1.

Butler America Aerospace LLC

USA

During the year under review, following step-down subsidiaries of the Company which were not in operation were voluntarily dissolved:

Sl.No.

Name of subsidiaries

Effective date of dissolution

1.

HCL Malaysia Sdn. Bhd.

June 27, 2016

2.

HCL BPO Services (NI) Limited

January 24, 2017

3.

HCL Joint Venture Holding Inc.

March 9, 2017

10. DIRECTORS AND KEY MANAGERIAL PERSONNEL

The Board of Directors consists of ten members, of whom three are women Directors. The Board consists of one (1) Whole-time Director and nine (9) non-executive Directors of whom seven (7) are independent Directors. The Wholetime Director is the promoter director who is designated as the Chairman and Chief Strategy Officer of the Company.

Ms. Nishi Vasudeva (DIN - 03016991) was appointed as an additional director by the Board of Directors of the Company w.e.f. August 1, 2016. Subsequently, at the Annual General Meeting of the Company held on September 27, 2016, Ms. Nishi Vasudeva 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.

Mr. Amal Ganguli (DIN-00013808) who was a Non Executive, Independent Director of the Company, ceased to be a Director of the Company due to his demise on May 8, 2017.

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 SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

Mr. C. Vijayakumar was appointed as the President and Chief Executive Officer of the Company w.e.f. October 20, 2016. Mr. Anant Gupta who held the position of President and Chief Executive Officer, resigned from the Company w.e.f. October 20, 2016.

As per the provisions of Section 152(6) of the Act, Mr. Sudhindar Krishan Khanna (DIN-01529178) shall retire by rotation at the ensuing Annual General Meeting and being eligible, has offered himself for reappointment as the Director of the Company.

Pursuant to the recommendation of Nomination and Remuneration Committee, the Board of Directors at its meeting held on January 23, 2017 has approved the reappointment of Mr. Shiv Nadar as Managing Director of the Company under the designation of Chairman and Chief Strategy Officer for a further period of 5 years from February 1, 2017 to January 31, 2022. Such appointment is subject to the approval of the shareholders of the Company.

11. NUMBER OF MEETINGs OF THE BOARD

During the year, six meetings of the Board were held. The details of the meetings are provided in the Corporate Governance Report.

12. FAMILIARIZATION PROGRAMME

The details of familiarization programme have been provided under the Corporate Governance Report.

13. BOARD EVALUATION

Pursuant to the provisions of the Companies Act, 2013 and SEBI (Listing Obligation and Disclosure Requirements) Regulations, 2015, an Annual Performance evaluation is to be made by the Board of its own performance and that of the Committees and individual Directors.

In view of the above, the annual performance evaluation was undertaken by the Board. The framework and criteria of evaluation was approved by the Nomination and Remuneration Committee of the Company after considering the Guidance note on Board evaluation issued by SEBI on January 5, 2017. The process and criteria of evaluation is explained in the Corporate Governance Report, which forms part of this Annual Report.

14. AUDITORS

M/s. S. R. Batliboi & Co. LLP, Chartered Accountants, were appointed as the Statutory Auditors of your Company in the AGM held on December 4, 2014 for a term of five years until the conclusion of the Twenty Seventh AGM of the Company to be held in the year 2019. As per the provisions of Section 139 of the Act, the appointment of the Statutory Auditors is required to be ratified by the members at every AGM of the Company. Accordingly, the appointment of M/s. S. R. Batliboi & Co. LLP, Chartered Accountants, as Statutory Auditors of the Company, shall be placed for ratification by the members in the ensuing AGM. In this regard, the Company has received a certificate from the Auditors to the effect that their re-appointment, if made, would be within the limits prescribed under Section 141 of the Act and that they are not disqualified for such reappointment within the meaning of the said Section.

15. AUDITORS’ REPORT

There are no qualifications, reservations, disclaimer or adverse remarks made by M/s. S. R. Batliboi & Co. LLP, Statutory Auditors in their report for the financial year ended March 31, 2017. The Statutory Auditors have not reported any incident of fraud to the Audit Committee of the Company in the year under review.

16. 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. 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, disclaimer or adverse remarks made by the Secretarial Auditor in their report for the financial year ended March 31, 2017.

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 is enclosed as Annexure 2 to this Report.

18. DIRECTORS’ APPOINTMENT AND REMUNERATION

In accordance with the provisions of Companies Act, 2013, the Nomination and Remuneration Committee 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 appointment / re-appointment as per the criteria prescribed under the provisions of the Companies Act, 2013 and rules made thereunder and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

The Remuneration Policy for Directors, Key Managerial Personnel and other employees are provided in the Corporate Governance Report forming part of this report.

19. AUDIT COMMITTEE

The Audit Committee comprises of four Independent Directors viz. Mr. Keki Mistry, Ms. Robin Ann Abrams, Mr. Subramanian Madhavan and Ms. Nishi Vasudeva.

During the year under review, Ms. Nishi Vasudeva was co-opted as a member of the Committee w.e.f. January 3, 2017. Mr. Keki Mistry was appointed as a Chairman of the Committee in place of Mr. Amal Ganguli, who continued to be the member of the Committee effective from January 23, 2017. However, Mr. Amal Ganguli ceased to be a Director of the Company due to his demise on May 8, 2017.

All the recommendations made by the Audit Committee, during the financial year 2016-17, were accepted by the Board.

20. RISK MANAGEMENT COMMITTEE

The Risk Management Committee comprises of four Independent Directors viz. Mr. Keki Mistry, Ms. Robin Ann Abrams, Mr. Subramanian Madhavan and Ms. Nishi Vasudeva.

During the year under review, Ms. Nishi Vasudeva was coopted as a member of the Committee w.e.f. January 23, 2017. Mr. Keki Mistry was appointed as a Chairman of the Committee in place of Mr. Amal Ganguli, who continued to be the member of the Committee effective from January 23, 2017. However, Mr. Amal Ganguli ceased to be a Director of the Company due to his demise on May 8, 2017.

All the recommendations made by the Risk Management Committee, during the financial year 2016-17, were accepted by the Board.

21. RISK MANAGEMENT POLICY

The Board of the Company has formed a Risk Management Committee to inter-alia assist the Board in overseeing the responsibilities with regard to the 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 the appropriate management of risks in line with its internal systems and culture.

22. 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 the 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.

23. 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.

24. PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS

The particulars of loans, guarantees and investments have been disclosed in the financial statements.

25. TURANSACTIONS WITH RELATED PARTIES

None of the transactions with related parties falls under the provisions of Section 188(1) of the Act. Information on transactions with related parties pursuant to Section 134(3)(h) of the Act read with rule 8(2) of the Companies (Accounts) Rules, 2014 are given in Annexure 3 in Form AOC-2 and the same forms part of this 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.

26. CORPORATE SOCIAL RESPONSIBILITY

The Corporate Social Responsibility (CSR) committee comprises of three members, namely Mr. Shiv Nadar, Ms. Roshni Nadar Malhotra and Mr. Subramanian Madhavan. The Committee is inter alia responsible for formulating and monitoring the CSR Policy of the Company. A brief outline of the Corporate Social Responsibility (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 in the Companies (Corporate Social Responsibility Policy) Rules, 2014. The Policy is available on the website of the Company at https:// www.hcltech.com/investors/governance-policies.

27. DIVIDEND DISTRIBUTION POLICY

The Company has formulated and published a Dividend Distribution Policy which provides for the circumstances under which 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. The provisions of this Policy are in line with Regulation 43A of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, and the Policy is available on the website of the Company at https://www.hcltech.com/investors/governance-policies. The details of Dividend Distribution Policy form part of the Corporate Governance Report annexed with this Report.

28. TRANSFER OF UNPAID AND UNCLAIMED AMOUNTS TO IEPF

Pursuant to the provisions of Section 124 of the Act, the dividend amounts which have remained unpaid or unclaimed for a period of seven 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 unpaid / unclaimed dividend that will be transferred to IEPF in subsequent years are given in the Corporate Governance Report. Further, according to the IEPF Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 (“the IEPF Rules”), the shares in respect of which dividend has not been paid or claimed by the shareholders for seven consecutive years or more shall also be transferred to the demat account created by the IEPF Authority. Accordingly, the Company will transfer the corresponding shares for which the unpaid and unclaimed dividend has been transferred, as per the requirements of the IEPF Rules. The details of such shares are available on the website of the Company at https://www. hcltech.com/investors/iepf-details.

29. DEPOSITS

Your Company has not accepted any deposits from public.

30. CPRPORATE GOVERNANCE

The Corporate Governance Report, in terms of Regulation 34(3) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, along with the Statutory Auditors certificate forms part of this Annual Report.

31. BUSINESS RESPONSIBILITY REPORT

The SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (“Regulations”) mandates inclusion of Business Responsibility Report (“BRR”) as part of Annual Report for top 500 listed companies based on market capitalization. In Compliance with the regulation, the Company has prepared a Business Responsibility Report (“BRR”) which describes the initiatives taken by the Company from an environmental, social and governance perspective for the financial year 2016-17 and forms part of this Annual Report.

32. INSIDER TRADING REGULATIONS

Pursuant to the provision under SEBI (Prohibition of Insider Trading) Regulations, 2015, the Company has formulated a Code of Conduct to Regulate, Monitor and Report Trading by Insiders (‘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 https://www. hcltech.com/investors/governance-policies.

33. 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 during the year include:

- HCL has been recognized for its global Internet of Things (IoT) leadership and strengths by the IoT Solutions World Congress (IoTSWC). At the First IoT Awards organized by the IoTSWC at Barcelona, ‘IoT WoRKS™ by HCL’ won the ‘Best Testbed’ award for its industrial IoT Surgical Kit Track and Trace solution.

- HCL’s innovative HR Practices and policies continued to be recognized. Universum Global listed HCL in “The World’s Most Attractive Employers 2016” Top 100 list and HCL won the LeapVault CLO Gold Award for ‘Certified HCL Leader Practice for Best Coaching Program’.

- HCL has been certified as a Top Employer in the UK for the Eleventh Consecutive Year by the Top Employers institute in recognition of its best-in-class employee engagement and people practices.

- HCL continues to be recognized for its innovative HR practices and policies. At the HR Innovation Awards 2016, organized by The Guild and Hindustan Times Mint and presented by Talent Vouch, HCL was awarded for ‘GetAJob social media campaign’ in the category of ‘Most Innovative Use of HR Social Media’. Further, HCL was awarded the Silver Award for Innovation, at the Workforce 26 Annual 2016 Optimas Awards, for harnessing mobile technology to empower employees.

- HCL ranked at 8 position in LinkedIn’s ‘Top Attractors List’ for India. The list is a ranking done by analyzing preferences of over 400 million user-base of LinkedIn, showing where employees want to work. HCL has been recognized for its work culture and employee-led initiatives such as “Inspire” and “Ideapreneurship”.

- HCL has emerged as the fastest growing global IT services brand in the world moving upwards by 122 ranks over the last year, in the 2017 Brand Finance Global 500 report released on February 1st, 2017. HCL’s brand value has surged by 38% over the last year. HCL now ranks at number 378th with a brand value of $4,463 million and AA brand rating.

- HCL won the 2016 ACEF Gold Awards for ‘UnitedByHCL’ campaign and ‘Ideapreneurship Premier and Champions League’. HCL also won the ‘Drivers of Digital Awards 2016’.

- HCL won the ITSMA Diamond Award for ‘Building Brand differentiation’ at the 2016 Marketing Excellence Awards, for its innovative “GetAJob@HCLTech” campaign, a first ever in its category. As a result of this campaign, HCL became India’s most preferred millennial employer, surpassing established brands across ecommerce, telecom, technology and FMCG. Further, at the Drivers of Digital Awards 2016, HCL won the Silver Award for ‘Digital Integrated Campaign’ under the digital marketing category. At the Third edition of the World Marketing Congress, HCL was awarded at the Content Marketing awards for the ‘Website Personalization Program’ in the category of ‘best use of intelligent content’.

- HCL won the 2016 APEX Awards for Electronic Media (Recruiter’s Handbook), Social Media - Special Purpose and Website Content.

- HCL won the Rs.2016 BMA B2 Awards’ under various categories for its integrated campaign “UnitedByHCL”. The B2 Awards recognize the work that business marketers and agencies do “2” engage with customers, employees, channel partners and government. CTO Straight Talk, HCL’s thought leadership community platform, won the 2016 BMA B2 Awards under the category of ‘Custom Publishing - Magazine, Print or Electronic’.

- HCL won the ATD Rs.2016 Excellence in Practice’ award in the category of career development, for its flagship social career navigation platform “Career Connect”.

- HCL has been placed among leaders in the IAOP Global Outsourcing 100TM rankings for 2017, an annual listing of the world’s best service providers by the IAOP®. Additionally, HCL achieved the distinction of being ‘Super Star of the Global Outsourcing 100®’, attributed to exceptional performance and scores achieved in IAOP® evaluation.

- In continued recognition of its best-in-class marketing and communications practices, HCL won the Paul Writer’s ‘Marketing Team of the year Award’ at the 2017 Marketing Excellence Awards and also got recognized for ‘Customer Acquisition’ for its official digital transformation partnership with Manchester United. Further, HCL was honored with the Gold Award for ‘Website Experience Personalization’ in the category of ‘Most Innovative Use of Content’ at the Internet and Mobile Association of India (IAMAI), 6th India Digital Awards.

34. SUSTAINABILITY

Your Company believes in a better tomorrow and based on this strong belief has embarked on a Sustainability 2020 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 Department runs a multi-layered corporate program to drive the sustainability vision.

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 incorporating the interests of all those with whom the Company has mutually dependent relationships.

35. ORAGANIZATION EFFECTIVENESS

In the last financial year, the human resource function aligned its focus to the strategy of the organization – Mode 1, 2 and 3. Our various initiatives were focused on creating distinctive experiences and people practices around the theme of digital HR with a persona centric approach. This enhances business value through increasing Passion, Proficiency and Value by enabling our employees to drive Performance, Productivity and Innovation. The Company is anchoring its employee happiness and experience proposition around Persona driven Digital journey for people practices, processes and technology.

- HCL has moved from re-design of process and re-implementation of technology, moved from on premises system to cloud systems, shifted from user-interface to a more digital approach of things, keeping a much more mobile environment.

- The transition of making things easier for employee experience at HCL, we over the last few months articulated the mode 3 employee experience architecture, which is aimed at offering employees a distinctive work experience.

- We are focusing on digital technology for delivering people services with a persona centric mind-set.

Talent Acquisition, career and Learning Management

Intelligent Neural network engine that sifts through over a database of over 5 million candidate records provides prescriptive insights to hire right talent.

- More than 6% new joinee attrition which is best in industry with over 90% new joinee happiness.

Career Connect 2.0 or Intelligent Career Maps, which is a prescriptive and predictive platform leveraging big data of employees suggesting career paths, mentors and jobs at HCL relevant to the employee’s profile.

- At HCL, the value is to power up the intelligence of 100 thousand employees and codify it to predictive analytics insight for the employee.

- The career-connect 2.0 not only helps employees to choose career paths as a prescriptive analytics engine but also suggests shortlisted internal jobs basis their profile, instead of looking from a whole list of jobs available.

- The platform pulls data for the employee through internal systems, profile and feeds it to them giving details about suggested career paths and internal job most suitable for them.

Empowering learning teams to cater right learning modules to employees for cross skilling and training for current and future roles.

- Significant percentage of our demand is fulfilled through re-skilling.

- This enables us to continue to invest in developing employees for future with future ready skills.

Recognition of HCL Culture and Engagement Practices across the world.

To reinforce alignment of our beliefs, intentions, promises and actions, we continue to transform policies, processes and practices to strengthen the capabilities to enable, empower, and engage each one of our employees which has been well recognized by various industry leading associations.

In FY’.17 our Distinctive People Practices pillared on our philosophies of Ideapreneurship. These ideologies of differentiated Talent attracting strategies and our entire experience delivered continue to and ranked among top 100 for “Most attractive employer” by Universum.

HCL is an organization belonging to Gen- Y, this has been reflected via digital Job recruiting initiative / campaign -Get a Job, which was awarded as ”Most innovative use of HR social media” by HR innovation awards. Superior learning experience delivered through Certified HCL Career Program enables leaders to manage projects effectively through gamified learning to nurture better leaders has been recognized by Leap vault.

Career connect has been recognized as Excellence in Practice by ATD (Association of Talent development) as it enables crowdsourced career management for our employees through their peers, colleagues and managers to design a disruptive career path Similarly workforce practice tools / applications like Go-Mobile recognized as ”Best innovative Practice” by Workforce Optimus awards as it helps millennial’s to access information on a click of button.

Distinctive employee retention delivered through our turnover analytics work and our Predictive data analytics model which helped sustain employee turnover in FYRs.16 and FYRs.17 in all segments which were under scope of the model recognized under ”Best advance in Data analytics” by Brandon Hall Group.

36. 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 your Company, are set out in Annexure 5 to this Report.

37. DIRECTO RS’ 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 Report.

38. 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 Report.

39. MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY

Except, as disclosed elsewhere in the Report, there have been no material changes and commitments, which can affect the financial position of the Company between the end of the financial year and the date of this Report.

40. 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 the remuneration of each Director to the median remuneration of the employees of the Company for the financial year:

Sl. No.

Name of Director

Ratio to median remuneration of employees

Executive Director

1.

Mr. Shiv Nadar1

177.71

Non-Executive Directors

2.

Mr. Amal Ganguli**

7.09

3.

Mr. Keki Mistry

7.69

4.

Mr. Ramanathan Srinivasan

12.62

5.

Ms. Robin Ann Abrams

13.82

6.

Ms. Roshni Nadar Malhotra

7.81

7.

Mr. Subramanian Madhavan

9.13

8.

Mr. Sudhindar Krishan Khanna

7.09

9.

Dr. Sosale Shankara Sastry

10.45

10.

Mr. Thomas Sieber

10.45

11.

Ms. Nishi VasudevaA

-

The remuneration of Non-Executive Directors also includes sitting fees paid during the year.

*The ratio has been calculated after taking into account the remuneration drawn from the Company as well as the subsidiaries.

**Mr. Amal Ganguli ceased to be a Director of the Company due to his demise on May 8, 2017.

AMs. Nishi Vasudeva was appointed as Director during the year. Hence the said information is incomparable and not provided.

b. The percentage increase in remuneration of each Director, Chief Executive Officer, Chief Financial Officer, Company Secretary in the financial year:

The previous financial year of the Company was for the nine months’ period from July 1, 2015 to March 31, 2016. Therefore, the figures of the current financial year are not comparable with those of the previous year.

c. The percentage increase in the median remuneration of employees in the financial year: 5%.

d. The number of permanent employees on the rolls of the Company: There were 81,706 permanent employees on the rolls of the Company. In addition, the Company had 34,267 number of 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 annual increase was 4%. There is 4.2% increase in the managerial remuneration during the year.

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.

41. STATEMENT OF EMPLOYEEs PURSUANT TO RULE 5(2) THE COMPANIES (APPOINTMENT AND REMUNERATION OF MANAGERIAL PERSONNEL) RULES, 2014

A list containing top ten employees in terms of the remuneration drawn in the financial year 2016-17 and a statement containing the names of the employees employed throughout the financial year and in receipt of remuneration of Rs.1.02 crores or more and employees employed for part of the year and in receipt of Rs.8.5 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 Report.

42. VIGIL MECHANISM / WHISTLE BLOWER POLICY

The Company has formulated and published a Whistle Blower Policy to provide Vigil Mechanism for employees including 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 SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, and is available on the website of the Company at https://www.hcltech.com/ investors/governance-policies. The details of Whistle Blower Policy forms part of the Corporate Governance Report annexed with this Report.

43. 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 a 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 Business Responsibility Report respectively.

44. 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 the competence, hard work, solidarity, cooperation and support of employees at all levels. Your Directors thank the customers, clients, vendors and other business associates for their continued support in the Company’s growth. The 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

Shiv Nadar

Chairman and Chief Strategy Officer

Place: Noida (U.P.), India

Date: May 11, 2017

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