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 fi nancial statements for the fi nancial
year ended March 31, 2019.
1. FINANCIAL RESULTS
Key highlights of the fi nancial results of your Company prepared as
per the Indian Accounting Standards (Ind AS) for the fi nancial year ended March 31, 2019
are as under:
|
|
|
|
(र in crore) |
|
Consolidated |
Standalone |
| Particulars |
Year ended |
Year ended |
|
March 31, 2019 |
March 31, 2018 |
March 31, 2019 |
March 31, 2018 |
| Revenue from operations |
60,427 |
50,569 |
26,012 |
22,073 |
| Other income |
943 |
1,217 |
805 |
702 |
| Total Income |
61,370 |
51,786 |
26,817 |
22,775 |
| Total Expenditure |
48,748 |
40,775 |
16,886 |
13,650 |
| Profi t before tax |
12,622 |
11,024 |
9,931 |
9,125 |
| Tax Expense |
2,502 |
2,302 |
1,746 |
1,763 |
| Profi t for the year |
10,120 |
8,722 |
8,185 |
7,362 |
| Other comprehensive income / (loss) |
190 |
260 |
24 |
(226) |
| Total comprehensive income / |
10,310 |
8,982 |
8,209 |
7,136 |
| (loss) for the year |
|
|
|
|
| Earnings per share of र 2 each |
|
|
|
|
| Basic (in र) |
73.58 |
62.23 |
59.69 |
52.54 |
| Diluted (in र) |
73.55 |
62.19 |
59.66 |
52.50 |
2. BUSINESS OVERVIEW AND STATE OF AFFAIRS
The Company is a leading global IT services company that helps global
enterprises re–imagine and transform their businesses through Digital technology
transformation. The Company 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 DRYiCETM 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 &
Analytics, IoT WoRKS™, Cloud Native Services and Cyber security & GRC services to
drive business outcomes and enable enterprise digitalization. Mode 3 strategy is
ecosystem–driven, creating innovative IP–partnerships to build products and
platforms business.
The Company 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 & CPG, Life Sciences & Healthcare, Oil
& Gas, Energy & Utilities, Travel, Transportation & Logistics and Government.
During the fi nancial year 2018-19, the Company achieved a revenue from
operations of र 26,012 crore on standalone basis and र 60,427 crore on
consolidated basis, as compared to र 22,073 crore on standalone basis and
र 50,569 crore on consolidated basis for the fi nancial year
2017-18.
During the fi nancial year 2018-19, profi t for the year was
र 8,185 crore on standalone basis and र 10,120 crore on
consolidated basis, as compared to र 7,362 crore on standalone basis and र 8,722
crore on consolidated basis for the fi nancial 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 fi nancial year ended March 31, 2019, your Directors had
declared and paid four interim dividends as per the details given below:
| Interim dividend paid during fi nancial
year ended March 31, 2019 |
Date of Declaration |
Rate of Dividend per
share (face value of र 2 each) |
Amount of Dividend paid |
Dividend
Distribution Tax paid by the Company (र in crore) |
Total Outfl ow |
| 1 1st Interim Dividend |
May 2, 2018 |
2.00 |
278.46 |
57.08 |
335.54 |
| 2 2nd Interim Dividend |
July 27, 2018 |
2.00 |
278.48 |
57.08 |
335.56 |
| 3 3rd Interim Dividend |
October 23, 2018 |
2.00 |
271.23 |
52.11 |
323.34 |
| 4 4th Interim Dividend |
January 29, 2019 |
2.00 |
271.25 |
55.55 |
326.80 |
|
|
Total |
1,099.42 |
221.82 |
1,321.24 |
The Board of Directors in its meeting held on May 9, 2019 declared an
interim dividend of र 2 per equity share of face value of र 2 each fully
paid-up, for the fi nancial year 2019-20. The Board of Directors did not recommend any fi
nal dividend for the fi nancial year ended March 31, 2019.
4. TRANSFER TO GENERAL RESERVES
No amount was transferred to the General Reserves for the fi nancial
year ended March 31, 2019.
5. SHARE CAPITAL
During the fi nancial year under review, the Company issued and
allotted 3,96,120 fully paid-up equity shares of
र 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 र 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 र 2,71,25,57,736/- divided into 1,35,62,78,868
equity shares of face value of र 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 fi nancial 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 step-down 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 fi rm. 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 solutions–powers
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.
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 defi nitive 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 fi nancial 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 step-down 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 fi nancial statements of the Company's
subsidiaries, associates and 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 fi nancial
statements of the Company along with relevant documents and the fi nancial statements in
respect of the subsidiaries, are available on the website of the Company. The Company
would provide the fi nancial statements of the subsidiaries and the related detailed
information to the shareholders on specifi c 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 Annima, 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 Fulfi llment Services LLC. Since the acquisition was successfully completed
during the previous fi nancial 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 Whole-time 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 Offi cer of the Company.
Appointment(s) / Re-appointment(s)
The Board of Directors of your Company appointed / re-appointed the
following Directors during the fi nancial 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 offi ce for a period of fi ve 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 fi ve consecutive
years and therefore, their fi rst 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 fi ve 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 certifi cate 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 fulfi ll the conditions as specifi ed 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 fi ve 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.
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 fi nancial year under review, Mr. Prateek Aggarwal was
appointed as the Chief Financial Offi cer of the Company on October 1, 2018, in place of
Mr. Anil Kumar Chanana, who stepped down from the position of Chief Financial Offi cer.
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:
| Name of the Committee |
Composition |
| 1 Audit Committee |
Mr. S. Madhavan (Chairman) |
|
Mr. Deepak Kapoor |
|
Ms. Nishi Vasudeva |
|
Ms. Robin Ann Abrams |
| 2 Corporate Social Responsibility Committee |
Ms. Roshni Nadar Malhotra (Chairperson) |
|
Mr. Shiv Nadar |
|
Mr. S. Madhavan |
| 3 Nomination & Remuneration Committee |
Mr. R. Srinivasan (Chairman) |
|
Mr. Shiv Nadar |
|
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 Options Allotment Committee |
Mr. Shiv Nadar |
|
Mr. S. Madhavan |
|
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.
14. STATUTORY AUDITORS AND STATUTORY AUDITORS' REPORT
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 fi ve 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 fi rst 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 fi ve 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 qualifi cations, reservations, adverse remarks or
disclaimer made by M/s. S.R. Batliboi & Co. LLP, Statutory Auditors in their report
for the fi nancial year ended March 31, 2019. The Statutory Auditors have not reported any
incident of fraud to the Audit Committee of the Company for the fi nancial 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 fi nancial 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 qualifi cations, reservations, adverse remarks or
disclaimer made by the Secretarial Auditor in its report for the fi nancial 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 fi nancial year ended March 31, 2019, is
enclosed as Annexure 2 to this Report.
18. POLICY ON DIRECTORS' APPOINTMENT AND REMUNERATION
The Nomination & Remuneration Committee of the Company formulates
the criteria for determining the qualifi cations, 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
suffi cient 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
identifi cation, 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 fi nancial control systems are commensurate
with its size and the nature of its operations. The controls are adequate for ensuring
orderly and effi cient 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 fi nancial 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 signifi cant and material orders passed by the regulators
or courts or tribunals impacting the going concern status and Company's operations in
future.
22. PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS
The particulars of loans, guarantees and investments have been
disclosed in the fi nancial 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 fi nancial 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
IEPF in the subsequent years are given in the Corporate Governance
Report, annexed with this the Annual Report.
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' certifi cate 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 fi nancial 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:
Awards –
1. The Company was awarded with Outstanding Achievement Award in
Automation Implementation at the Asia Outsourcing Leadership Awards 2019 for EXACTO™,
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 DRYiCE™ 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 Artifi cial Intelligence Game
Changer Award 2018 for Best 50 Innovative Applications of Artifi cial 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
& Benefi ts 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 fl exibility 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.
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 fi nancial
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 simplifi ed functionality
to provide an improved user experience. The tools have been simplifi ed and enhanced to
automate the talent acquisition, talent integration, talent assessment and employee travel
processes. Virtual assistance and "botifi cation" 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 artifi cial 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
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 fi nancial year, the Company used demand, fulfi lment 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 defi ned 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 Artifi cial Intelligence and Big Data achieved further traction during the fi
nancial year.
9,000 employees progressed to their destinations in their career
journeys during the fi nancial 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 unifi ed 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
specifi cally 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 fl exible 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 & Benefi ts 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.
35. DIRECTORS' RESPONSIBILITY STATEMENT
A statement of responsibility of the Directors relating to compliance
with the fi nancial accounting and reporting requirements in respect of the fi nancial
statements, as specifi ed 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 fi nancial year:
| Name of Director |
Ratio to median remuneration of employees
|
| Executive Director(s) |
|
| 1. Mr. Shiv Nadar(1) |
52.52 |
| Non-Executive Director(s) |
|
| 2. Mr. Deepak Kapoor |
7.00 |
| 3. Mr. James Philip Adamczyk(2) |
- |
| 4. Mr. Keki Mistry(3) |
- |
| 5. Mr. S. Madhavan |
9.01 |
| 6. Ms. Nishi Vasudeva |
6.94 |
| 7. Ms. Robin Ann Abrams |
13.12 |
| 8. Ms. Roshni Nadar Malhotra |
8.38 |
| 9. Dr. Sosale Shankara Sastry |
10.29 |
| 10. Mr. R. Srinivasan |
12.26 |
| 11. Mr. Sudhindar Krishan Khanna(4) |
6.44 |
| 12. Mr. Thomas Sieber |
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.
b. The percentage increase in remuneration of each Director, Chief
Executive Offi cer, Chief Financial Offi cer, Company Secretary in the fi nancial year:
| Name of Director / KMP |
% increase in
remuneration in the fi nancial 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 & Chief Executive Offi
cer) |
(15.67) |
| 14. Mr. Prateek Aggarwal (Chief Financial Offi cer) (6) |
- |
| 15. Mr. Anil Kumar Chanana (Chief Financial Offi cer) (6) |
- |
| 16. Mr. Manish Anand (Company Secretary) |
20.73 |
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 fi nancial 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 fi nancial year and its
comparison with the percentile increase in the managerial remuneration and justifi cation
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 fi nancial 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. Affi rmation that the remuneration is as per the remuneration policy
of the Company:
The Company affi rms 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 fi nancial year 2018-19 and a statement containing the names of the employees
employed throughout the fi nancial year and in receipt of remuneration of र 1.02
crore or more and employees employed for part of the year and in receipt of र 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
genuineconcernsandtoensurestrictcompliancewithethical 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 signifi
cant 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 |
| SHIV NADAR |
| Chairman & Chief Strategy Offi cer |
| Place: Noida (U.P.), India |
| Date: May 9, 2019 |
|