HCL Technologies
BSE: 532281 | NSE: HCLTECH | ISIN: INE860A01027 | Computers - Software
- Directors Report
- Chairman's Speech
- Auditors Report
- Notes To Accounts
- Accounting Policy
- Finished Products
- Raw Materials
| Notes to Accounts | Year End : Jun '08 |
1. Segment reporting (i) Business Segments The operations of the Company predominately relate to providing IT services, delivered to customers located globally. Further, the Company is also engaged in the business of rendering business processing outsourcing services, which are in the nature of customer contact centers and technical help desks. The Chairman of the Company, who is the Chief Strategy Officer, evaluates the Companys performance and allocates resources based on an analysis of various performance indicators by types of service provided by the Company and geographic segmentation of customers. Accordingly, revenue from service segments comprises the primary basis of segmental information set out in these financial statements. Secondary segmental reporting is performed on the basis of the geographical location of customers. Revenue in relation to service segments is categorized based on items that are individually identifiable to that segment, while expenditure is categorized in relation to the associated turnover of the segment. Assets and liabilities are also identified to service segments. (ii) Geographic Segments Geographic segmentation is based on the location of the respective client. The principal geographical segments have been classified as America, Europe and others. Europe comprises business operations conducted by the Company in the United Kingdom, Sweden, Germany, Italy, Belgium, Netherlands, Finland, Switzerland and Poland. Since services provided by the Company within these European entities are subject to similar risks and returns, their operating results have been reported as one segment, namely Europe. All other customers, mainly in Japan, Australia, New Zealand, Singapore, Malaysia, Israel, South Korea, India, China and Hong Kong are included in others. (iii) Segment Accounting Policies The accounting principles consistently used in the preparation of the financial statements and consistently applied to record revenue and expenditure in individual segments are as set out in Note 1 to this schedule on significant accounting policies. The accounting policies in relation to segment accounting are as under: a) Segment assets and liabilities All segment assets and liabilities have been allocated to the various segments on the basis of specific identification. Segment assets consist principally of fixed assets, sundry debtors, loans and advances, cash and bank balances, and unbilled receivables. Segment assets do not include unallocated corporate and treasury assets and net deferred tax assets and advance taxes. Segment liabilities include sundry creditors, other liabilities, unsecured loan and secured loan. Segment liabilities do not include share capital, reserves and provision for taxes. 2. Related party transactions a) Related parties where control exists Subsidiaries HCL America Inc., United States of America HCL Great Britain Limited, United Kingdom HCL (Netherlands) BV, Netherlands HCL GmbH, Germany HCL Belgium NV, Belgium HCL Sweden AB, Sweden HCL Italy SLR, Italy HCL Australia Services Pty. Limited, Australia HCL (New Zealand) Limited, New Zealand HCL Hong Kong SAR Limited, Hong Kong HCL Japan Limited, Japan HCL Comnet Systems and Services Limited, India HCL Comnet Limited, India HCL Bermuda Limited, Bermuda HCL Holdings GmbH, Austria HCL Enterprise Solutions Limited, Mauritius Intelicent India Limited, India DSI Financial Solutions Pte. Limited, Singapore HCL BPO Services (Nl) Limited, Northern Ireland HCL Jones Technologies (Bermuda) Limited, Bermuda HCL Jones Technologies LLC, United States of America HCL Singapore Pte. Limited, Singapore HCL Poland Sp.z.o.o., Poland HCL (Malaysia) Sdn. Bhd., Malaysia HCL EAI Services Inc., United States of America Aalayance (UK) Limited, United Kingdom HCL EAI Services Limited, India HCL Technoparks Limited, India HCL Technologies (Shanghai) Limited, Shanghai Capital Stream Inc. , United States of America* * w.e.f. 15th Feb 2008 Others HCL Technologies Limited Employees Trust b) Related parties with whom transactions have taken place during the year Subsidiaries HCL America Inc., United States of America HCL Great Britain Limited, United Kingdom HCL (Netherlands) BV, Netherlands HCL GmbH, Germany HCL Belgium NV, Belgium HCL Sweden AB, Sweden HCL Australia Services Pty. Limited, Australia HCL (New Zealand) Limited, New Zealand HCL Hong Kong SAR Limited, Hong Kong HCL Comnet Systems and Services Limited, India HCL Comnet Limited, India HCL Bermuda Limited, Bermuda Intelicent India Limited, India HCL Jones Technologies (Bermuda) Limited, Bermuda HCL Singapore Pte. Limited, Singapore HCL (Malaysia) Sdn. Bhd., Malaysia HCL EAI Services Limited, India HCL Technoparks Limited, India HCL BPO Services (Nl) Limited, Northern Ireland HCL Technologies (Shanghai) Limited, Shanghai HCL Poland Sp.z.o.o., Poland HCL EAI Services Inc., United States of America Jointly controlled entities NEC HCL System Technologies Limited Others (Significant influence) HCL Corporation Limited* HCL Infosystems Limited** HCL Peripherals Limited** HCL Technologies Limited Employees Trust * Holding Company till 27 March 2007 ** Fellow subsidiary till 27 March 2007 c) Key Management Personnel Shiv Nadar, Chairman and Chief Strategy Officer ii) Contingent Liabilities a) Guarantees have been given by the Company on behalf of various subsidiaries against credit facilities, financial assistance and office premises taken on lease amounting to Rs. 138.52 crores (previous year Rs. 175.97 crores). These guarantees have been given in the normal course of the Companys operations and are not expected to result in any loss to the Company on the basis of the beneficiaries fulfilling their ordinary commercial obligations. b) Bank guarantees of Rs. 20.21 crores (previous year Rs. 7.29 crores). These guarantees have been given in the normal course of the Companys operations and are not expected to result in any loss to the Company, on the basis of the Company fulfilling its ordinary commercial obligations. c) Income Tax demands (excluding interest) of Rs. 31.04 crores (previous year Rs. 31.04 crores) The amounts shown in the item (c) above represent best possible estimates arrived at on the basis of available information. The uncertainties and possible reimbursements are dependent on the outcome of the different legal processes which have been invoked by the Company or the claimants as the case may be and therefore cannot be predicted accurately. The Company engages reputed professional advisors to protect its interest and has been advised that it has strong legal positions against such disputes. 3. Employee Benefit Plans The Company has calculated the various benefits provided to employees as under A. Defined Contribution Plans and State Plans Superannuation Fund Employers contribution to Employees State Insurance Employers contribution to Employees Pension Scheme. 4. The company has a comprehensive system of maintenance of information and documents as required by the transfer pricing legislation under sections 92-92F of the Income Tax Act, 1961. Since the law requires existence of such information and documentation to be contemporaneous in nature, the company appoints independent consultants for conducting a Transfer Pricing Study to determine whether the transactions with associate enterprises are undertaken, during the financial year, on an arms length basis. Adjustments, if any, arising from the transfer pricing study in the respective jurisdictions shall be accounted for as and when the study is completed for the current financial year. However the management is of the opinion that its international transactions are at arms length so that the aforesaid legislation will not have any impact on the financial statements. |
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| Source : Religare Technova | |
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