The Directors have pleasure in presenting this Twenty First Annual
Report together with the Audited Accounts for the year ended June 30,
The highlights of the financial results of your Company prepared for
the financial year 2012-13 are tabulated below:
2012-13 2011-12 2012-13 2011-12
Total Income 25,932.17 21,037.05 12,896.66 9,208.08
Total Expenditure 20,662.28 17,827.25 8,445.46 6,847.34
Profit before tax 5,269.89 3,209.80 4,451.20 2,360.74
Provision for tax (1,225.31) (782.72) (840.02) (410.32)
Share of minority
interest (4.28) (4.31)
Share of loss of associates (0.21) (0.07)
Profit after tax 4,040.09 2,422.70 3,611.18 1,950.42
Impact of scheme of
to earlier period 93.54
Profit for the year 4,040.09 2,422.70 3,704.72 1,950.42
Balance in Profit and
Loss Account brought
forward 5,390.28 4,167.94 3,185.77 2,435.71
Transfer from debenture
redemption reserve due
to redemption of
debenture 330.00 170.00 330.00 170.00
under the scheme of
Amount available for
appropriation 9,760.37 6,760.64 8,052.30 4,556.13
Proposed final dividend
[including Rs.0.30 crores 418.42 277.60 418.42 277.60
(previous year Rs.0.29
crores) paid for
Interim dividend 416.94 552.98 416.94 552.98
tax [including Rs.0.05
crores 139.82 134.74 139.82 134.74
(previous year Rs.0.05
crores) paid for
Transfer to general
reserve 380.00 195.04 380.00 195.04
Transfer to debenture
redemption reserve 100.00 210.00 100.00 210.00
Balance carried forward
to the balance sheet 8,305.19 5,390.28 6,597.12 3,185.77
TRANSFER TO RESERVES
For the year ended June 30, 2013, on a standalone basis, your Company
has transferred Rs.380 crores to the General Reserve Account. An amount
of Rs.100 crores has been transferred to the Debenture Redemption Reserve
Account and Rs.330 crores has been transferred back to the Profit & Loss
Account from the Debenture Redemption Reserve Account on account of
redemption of debentures. As on June 30, 2013, the balance available
in the Debenture Redemption Reserve Account is Rs.400 crores. An amount
of Rs.6,597.12 crores is proposed to be carried forward in the Profit &
During the financial year 2012-13, on a consolidated basis, your
Company''s revenues stood at Rs.25,581.06 crores registering a growth of
22.80% over the previous year.
A detailed analysis on the Company''s performance is included in the
Management''s Discussion and Analysis Report titled as Management''s
Discussion and Analysis, which forms part of this Annual Report.
Your Directors are pleased to recommend a final dividend of Rs.6/-per
equity share of par value of Rs.2/- each for the financial year ended
June 30, 2013, subject to the approval of the shareholders at the
ensuing Annual General Meeting of the Company. During the year under
review, your directors had declared and paid three interim dividends as
per the details given hereunder:
The total amount of dividends (including interim dividends paid) for
the year ended June 30, 2013 shall be Rs.835.36 crores. Dividend
distribution tax paid / payable by the Company for the year would
amount to Rs.139.82 crores.
SCHEME OF AMALGAMATION
During the year under review, the Hon''ble High Court of Delhi vide its
order dated April 12, 2013 has approved the Scheme of Arrangement
between HCL Technologies Limited, HCL Comnet Systems & Services Limited
and their respective shareholders and creditors under section 391 to
394 of the Companies Act, 1956 for amalgamation of the demerged
undertaking of HCL Comnet Systems & Services Limited, a subsidiary of
the Company into the Company. The said Order became effective w.e.f.
May 17, 2013 being the date of filing of the said order with the Office
of Registrar of Companies, NCT of Delhi & Haryana.
HCL Technologies Chile SpA
In view of the new business prospects, the Company during the year has
incorporated a step down subsidiary in Chile viz. HCL Technologies
SUBSIDIARIES - FINANCIALS
The Company has 57 subsidiaries as on June 30, 2013. Pursuant to the
circular dated February 8, 2011 issued by the Ministry of Corporate
Affairs a general exemption has been granted to the companies from
annexing the individual accounts of all the subsidiaries along with the
audited financial statements of the Company while publishing the Annual
Report subject to certain conditions as mentioned in the said circular.
Your Company meets all the conditions stated in the aforesaid circular
and therefore the standalone financial statements of each subsidiary
are not annexed with the Annual Report for the year ended June 30,
The consolidated financial statements of the Company and its
subsidiaries are attached in the Annual Report. A statement containing
brief financial details of all the subsidiaries of the Company for the
year ended June 30, 2013 forms part of the Annual Report. The Company
would provide the annual accounts of the subsidiaries and the related
detailed information to the shareholders of the Company on specific
requests made to it in this regard by the shareholders.
CHANGES IN CAPITAL STRUCTURE
Issue of shares under Employees Stock Option Plans
During the year ended June 30, 2013, the Company allotted 35,76,256
equity shares of Rs.2/- each fully paid up under its Employees Stock
Option Plans. This constitutes 0.51% of the total paid up share capital
of the Company as on June 30, 2013.
Issue of shares under the Scheme of Arrangement
During the year ended June 30, 2013, the Company allotted 10,125 equity
shares of Rs.2/- each fully paid up under the Scheme of Arrangement
between HCL Technologies Limited, HCL Comnet Systems & Services Limited
and their respective shareholders and creditors under section 391 to
394 of the Companies Act, 1956. This constitutes 0.001% of the total
paid up share capital of the Company as on June 30, 2013.
Issued and Paid-up Share Capital
As on June 30, 2013, the issued and paid-up share capital of the
Company was Rs.139,37,39,714/- (previous year: Rs.138,65,66,952/-)
comprising 69,68,69,857 (previous year: 69,32,83,476) equity shares of
Rs.2/- each fully paid-up.
SHARES UNDER COMPULSORY DEMATERIALIZATION
The equity shares of your Company are included in the list of specified
scrips where delivery of shares in dematerialized (demat) form is
compulsorily effective from July 24, 2000, if the same are traded on a
stock exchange, which is linked to a depository. As of June 30, 2013,
99.93% shares were held in demat form.
During the financial year ended June 30, 2013, the Company has redeemed
the debentures worth Rs.330 crores which was issued in the year 2010. The
details of the debentures issued, redeemed and outstanding are given
A debenture trust deed in favour of IDBI Trusteeship Services Limited
for the aforesaid issues was executed. The debentures are secured by
way of mortgage(s) and/ or charges on the specific movable / immovable
properties of the Company whether existing / future. The said
debentures have been listed on Wholesale Debt Segment of the National
Stock Exchange of India Limited. The Company has paid the interest due
on the aforesaid debentures on time and nothing is payable as on date.
INTERNAL CONTROL SYSTEM
The Company has put in place an adequate system of internal control
commensurate with its size and nature of business. These systems
provide a reasonable assurance in respect of providing financial and
operational information, complying with applicable statutes,
safeguarding of assets of the Company and ensuring compliance with
The Company has a dedicated Internal Audit team which is commensurate
with the size, nature and complexity of operations of the Company.
Internal Audit reports functionally to the Audit Committee of the Board
which reviews and approves risk based annual internal audit plan. The
Audit Committee periodically reviews the performance of internal audit
The Company has a rigorous business planning system to set targets and
parameters for operations which are reviewed with actual performance to
ensure timely initiation of corrective action, if required.
The Audit Committee reviews adherence to internal control systems,
internal audit reports and legal compliances. This Committee reviews
all quarterly and yearly results of the Company and recommends the same
to Board for its approval.
The report of the Board of Directors of the Company on Corporate
Governance is given as a separate section titled ''Corporate Governance
Report 2012-13'', which forms part of this Annual Report.
Certificate of the Statutory Auditors of the Company regarding
compliance with the Corporate Governance requirements as stipulated in
clause 49 of the Listing Agreement with the stock exchanges is annexed
with the aforesaid Corporate Governance Report.
MANAGEMENT''S DISCUSSION & ANALYSIS
The Management''s Discussion and Analysis is given separately and forms
part of this Annual Report.
BUSINESS RESPONSIBILITY REPORT
The Securities and Exchange Board of India (SEBI) vide its circular
dated August 13, 2012 has mandated inclusion of Business Responsibility
Report (BRR) as part of the Annual Report for top 100 listed
companies. Pursuant to these provisions if a listed company publishes
its sustainability report under GRI framework along with a mapping of
the BRR as stated in the SEBI Circular, it would be treated as
sufficient compliance of the aforesaid Circular.
For the financial year 2012-13, as the Company has prepared its
sustainability report based on the GRI framework and the principals
stated under the aforesaid SEBI circular have been mapped with the
sustainability report, no separate report has been prepared by the
Company. The Sustainability Report as well as mapping as stated above
is available on our website at
INSIDER TRADING REGULATIONS
Based on the requirements under SEBI (Prohibition of Insider Trading)
Regulations, 1992, as amended from time to time, the code of conduct
for prevention of insider trading and the code for corporate
disclosures are in force.
In accordance with the provision of the Companies Act, 1956 and
Articles of Association of the Company, Mr. Vineet Nayar, Mr. Amal
Ganguli and Mr. Subroto Bhattacharya shall retire by rotation as
Directors of the Company at the ensuing Annual General Meeting and
being eligible, have offered themselves for the reappointment as the
Directors of the Company.
Mr. Subramanian Madhavan and Mr. Keki Mistry were appointed as
Additional Directors of the Company w.e.f. January 15, 2013 and April
15, 2013 respectively. Pursuant to the provisions of section 260 of the
Companies Act, 1956, Mr. Subramanian Madhavan and Mr. Keki Mistry hold
the office till the ensuing Annual General Meeting and are eligible for
appointment as the Directors of the Company.
The Statutory Auditors, M/s. S.R. Batliboi & Co. LLP, Chartered
Accountants, retire at the conclusion of the ensuing Annual General
Meeting and they have confirmed their eligibility and willingness to be
re-appointed. The Audit Committee and the Board of Directors recommend
the reappointment of M/s. S.R. Batliboi & Co. LLP, Chartered
Accountants as Statutory Auditors for the financial year 2013-14 for
TRANSFER OF UNPAID AND UNCLAIMED AMOUNTS TO IEPF
Pursuant to the provisions of section 205A(5) of the Companies Act,
1956, the dividend amounts which have remain 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
205C of the said Act. The details of the unpaid/unclaimed dividend
that will be transferred to IEPF A/c in subsequent years are given in
the corporate governance section of the annual report.
Your Company has not accepted any fixed deposits.
AWARDS AND RECOGNITIONS
As your Company pursues excellence relentlessly, your Company is
delighted to receive phenomenal share of recognitions and awards this
year, not just from the media, but also from analysts, governing
bodies, academic institutions, partners and even customers. Some of the
key accolades received during the year include:
- The Company has been conferred the prestigious ''ICSI National Award
2012'' for Excellence in Corporate Governance from Institute of Company
Secretaries of India. This award is an acclaimed recognition for
corporate practicing best corporate governance norms in both letter and
- The Company has wonBest in Show Award for online video (branding)
for its ''Employees First Effect'' video and ''Silver Award for Best
Website Features'' for its corporate website www.hcltech.com at the W3
award. The W3 Awards honor outstanding websites, web advertising, web
videos and mobile applications.
- The Company has won the ''NASSCOM HR Award in the
''Glocalisers''category for successfully driving an integrated global
employer brand while balancing the need for localization.
- The Company has been conferred with Asian HR Leadership Award 2012
for ''Innovative HR Practices''. The Company won this citation for its
Talent Management application ''Pulse - The Organization Health Index''.
Pulse is a one stop solution to gauge and track the health index of HCL
employees based on 27 behavioral traits and 5 broad parameters such as
Organization Disconnect, Compensation related, Personal Problems,
Career related and Disciplinary issue.
- The Company has won the ''2012 Optimas Award for Global Outlook'' in
recognition of its ''Working Across Borders'', program aimed at
incubating an inclusive work- culture.
- The Company has been named as a ''Market Leader'' in the report titled
Achieving Market Leadership in Engineering and R&D Services published
in Oct 2012 by Frost & Sullivan. The Company emerged as the strongest
India-centric Engineering Services Outsourcing Provider in this report
that was attributed to its noteworthy market performance.
- The Company has won the Prestigious ''Asia Pacific Enterprise
Leadership Award (APELA) 2013'' for Corporate Social Responsibility.
The APELA award recognizes and honors the achievements of companies in
the areas of sustainable development, corporate responsibility, and/or
corporate social responsibility.
- The Company has been conferred the ''United Nations- Women Empowerment
(UN-WEP) Leadership Award 2013'', for exceptional championship of gender
equality and support for Women''s Empowerment Principles. The Company is
the only India headquartered Company to make it to the Honor Roll for
implementing innovative gender equality initiatives within a Company
Responsible corporate citizenship has been a part of our core values
and sustainability has been the driving factor in many of our
initiatives.Today, the sustainability office runs a multi-layered
corporate program to drive our sustainability vision. We partner with
multiple stakeholders to form an inclusive working group to create
policies, processes and other organizational measures. We believe that
responsible investments in sustainability will generate long term value
for all our stakeholders by improving competitiveness and reducing
In our everyday practice as a ''Responsible Business'' we focus on
Value-Centricity and Trust through Transparency. The initiative taken
by the Company on sustainability are given in detail in the
sustainability report for the year 2012-13 which is being hosted on the
website of the Company.
The Company sees the changing landscape and market conditions as an
opportunity to build leadership in the information technology services
space, through creation of robust business and people models to enhance
its share of the customer wallet.
The Organization Effectiveness function is currently engaged in
creating mature people models to leverage human capabilities, thereby
generating higher value at the customer-employee interface, which would
propel the Company into the next phase of growth globally. It includes
Program First, Smart Survey and Talent Management:
The Company focuses constantly on reassessing, refreshing and
reinventing organizational and individual capabilities so that it
continues to offer a distinctive experience to its employees as well as
to its customers. The Company is on an accelerated journey to enhance
the employment experience of its people and create new benchmarks. The
commitment to this will bring new opportunities and meaning to all its
employees. The beliefs, behaviors and programs reinforce a culture with
an entrepreneurial history - and encourage and energize each of its
employees to be recognized as an ''ideapreneur'' - making the Company
world''s largest ''Ideapreneurship''!
In the same light Program FIRST (Future-ready Initiatives for Results
and Smart Transformation) has been initiated. Program First introduces
practices that enable, empower and engage the Company ideapreneurs to
drive organization to success in the future. It introduces enhancements
to the career, performance, reward, talent, and learning management
practices within the organization. The objective is to make employees
future-ready by enhancing the Company''s employment experience so as to
enable individual and organizational growth.
Smart Survey is a process of collating effective, constructive and
integrated feedback from the employees in an organization that is
crucial to the ongoing development and growth of individuals as well as
the organization. The tool is built around the 3 key pillars - self, my
managers and work environment. The outcome of each pillar will act as
decision support tool for different stakeholders involved in different
phases of employee''s lifecycle. It is a one stop solution to launch new
surveys, monitor existing surveys, analyze data for individual surveys,
and process data across multiple surveys that provides action oriented
approach to deliver on the outcomes of the survey.
Your Company has always believed its people to be the source of value
and have followed formal talent appreciation processes geared to ensure
that it has the capability, both capacity and ability, to do what it
has committed to do in the immediate and more medium term future. Build
/ Buy / Secure / Reward / Progress / Invest decisions were taken as a
result of this effort.
It has also used the occasion to move leaders from one service line to
The High Potential employees identified in Talent Reviews have been
invited to participate in a rigorous development program for 6-18
months internally called TOPGUN. The program consists of extensive
action learning, coaching, and self-reflection, as well as
opportunities to build networks with peers and executives from across
LEARNING AND DEVELOPMENT
The Company''s Learning & Development (L&D) Ecosystem supports
holistic employee development through a combination of Technical,
Behavioral and specialized Domain training. The Company''s learning
interventions are fully woven around job roles and competencies
required to perform these roles successfully. Further, the programs are
designed on blended delivery mode, i.e., classroom, webinars,
e-learning and action projects, to allow comprehensive learning
opportunity and the ability to reach a global workforce.
Behavioral learning is delivered through 3 key verticals, namely,
Professional Excellence, Leadership Excellence and Sales Excellence.
There are over 20 learning programs available across these verticals
catering to a wide range of employees- from fresher right up to senior
leadership. These are designed to impact key business outcomes and are
developed with content in partnership with several world class training
organizations. The Company''s learning approach is unique, as it
connects to the career road map of employees by allowing them to take
charge of their individual learning needs to sharpen the desired
competencies in their current and future roles. With reporting managers
it encourages mentoring and their development in learning plays a key
role in shaping the Company''s leadership pipeline.
L&D is also deeply engaged in a unique ''customer connect'' program which
attempts to bring together senior leadership of our key clients and the
Company delivery teams for greater cultural alignment, thereby
resulting in better working relationships and stronger bonding, which
has been highly applauded by many of our valued clients.
CONSERVATION OF ENERGY, RESEARCH AND DEVELOPMENT, TECHNOLOGY
ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO
Disclosures of particulars as required by the Companies (Disclosure of
Particulars in the Report of Board of Directors) Rules, 1988, are set
out in the Annexure 1 to this Report.
DIRECTORS'' RESPONSIBILITY STATEMENT
A statement of responsibility of the Directors relating to compliance
with the financial accounting and reporting requirements in respect of
the financial statements, as specified under section 217(2AA) of the
Companies Act, 1956 inserted by the Companies (Amendment) Act, 2000, is
annexed as Annexure 2 to this Report.
STOCK OPTIONS PLANS
1999 Stock Option Plan / 2000 Stock Option Plan / 2004 Stock Option
The details of these plans have been annexed as Annexure 3 to this
DISCLOSURES UNDER SECTION 217 OF THE COMPANIES ACT, 1956
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.
As required under section 217(2A) of the Companies Act, 1956, read with
the Companies (Particulars of Employees) Rules, 1975, as amended, the
names and other particulars of employees are set out in the Annexure 4
to this Report.
The Board wishes to place on record its appreciation to the
contribution 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, Financial Institutions and Shareholders for
their cooperation and assistance extended to the Company.
For and on behalf of the Board of Directors
Noida (U.P.), India
July 31, 2013 Chairman and Chief Strategy Officer