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HCL Technologies LtdIndustry : Computers - Software - Large
BSE Code:532281
ISIN Demat:INE860A01027
Book Value(Rs):197.94
NSE Symbol:HCLTECH
Div & Yield %:1.17
Market Cap (Rs Cr.):142573.33
P/E(TTM):18.79
EPS(TTM):54.48
Face Value(Rs):2
  Change Company 

Dear Shareholders,

Your Directors have immense pleasure in presenting the Twenty Sixth Annual Report together with the audited financial statements for the financial year ended March 31, 2018.

1. FINANCIAL RESULTS

Key highlights of the financial results of your Company prepared as per the Indian Accounting Standards ("Ind AS") for the financial year ended March 31, 2018 are as under:

(Rs in crores)

Particulars Consolidated year ended Standalone year ended
March 31, 2018 March 31, 2017 March 31, 2018 March 31, 2017
Total Income 51,786 48,641 22,775 20,274
Total Expenditure 40,775 38,101 13,650 11,998
Profit before tax 11,024 10,542 9,125 8,276
Provision for tax (2,302) (1,936) (1,763) (1,403)
Share of profit of associates 13 2 - -
Profit for the year 8,722 8,606 7,362 6,873
Other Comprehensive Income 260 (301) (226) 405
Total Comprehensive Income 8,982 8,305 7,136 7,278
Total Comprehensive Income attributable to Owners of the Company 8,981 8,343 N.A. N.A.

2. RESULTS OF OPERATIONS AND THE STATE OF COMPANY'S AFFAIRS

On a standalone basis, the Company achieved a revenue of Rs22,775 crores in the financial year 2017-18 and the profit for the financial year 2017-18 isRs7,362 crores .

On a consolidated basis, the Company achieved a revenue of Rs51,786 crores in the financial year 2017-18 and the profit for the financial year isRs8,722 crores.

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

3. DIVIDEND

During the financial year ended March 31, 2018, your Directors had declared and paid four interim dividends as per the details given below:

Interim dividend paid S. No. during the financial year ended March 31, 2018 Date of Declaration Rate of dividend per share (face value of Rs2 each) Amount of dividend paid Dividend Distribution tax paid by the Company (Rs in crores) Total Out ow
1 1st Interim Dividend May 11, 2017 Rs 6 856 174 1,030
2 2nd Interim Dividend July 27, 2017 Rs 2 278 56 334
3 3rd Interim Dividend October 25, 2017 Rs 2 278 53 331
4 4th Interim Dividend January 19, 2018 Rs 2 278 57 335
Total 1,690 340 2,030

The Board of Directors in its meeting held on April 30- May 2, 2018 declared an interim dividend of Rs2 per equity share of face value of Rs2 each fully paid up for the financial year 2018-19. The Directors did not recommend final dividend for the financial year ended March 31, 2018

4. TRANSFER TO RESERVES

No amount was transferred to the General Reserve

Account for the financial year ended March 31, 2018.

5. CHANGES IN CAPITAL STRUCTURE

The changes in the capital structure of the Company during the year under review, are as follows:

(i) During the year under review, the Company allotted 4,62,960 fully paid up equity shares of Rs2/- each under its Employees Stock Option Plan.

(ii) 3,50,00,000 fully paid up equity shares of Rs2/- each of the Company were bought Services, LLC became a step- back from the shareholders under the Buyback Offer made by the Company as on July 4, 2017. The said shares were extinguished / physically destroyed on July 6, 2017.

Issued and Paid-up share capital as on March 31, 2018

As on March 31, 2018, the issued, subscribed and paid-up share capital of the Company was Rs2,78,44,92,768/- divided into 1,39,22,46,384 equity shares of face value of

Rs2/- each.

6. DEBENTURES

Your Company has not issued any fresh debentures during the financial year under review. In addition, there are no debentures outstanding.

7. 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, is attached and forms a part of this Report.

8. SUBSIDIARIES / ACQUISITIONS

As on March 31, 2018, the Company has 94 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 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 on specific request made to it in this regard by the shareholders.

The following acquisitions have been made by the

Company through its step-down subsidiaries during the year under review:

HCL America, Inc. (a wholly owned step down subsidiary of the Company) acquired Urban Fulfillment

Services, LLC, a limited liability company formed under the laws of State of Delaware, pursuant to which Urban Fulfillment wholly owned subsidiary of HCL America, Inc.

For the purpose of the said acquisition, the Company incorporated HCL Mortgage holdings, LLC, a limited liability company formed under the laws of State of Delaware as a wholly owned subsidiary of HCL America, Inc.

HCL Technologies UK Limited (a wholly owned step down subsidiary of the Company) acquired ETL

Factory Limited, a company formed under the laws of U.K., pursuant to which ETL Factory Limited became the wholly owned subsidiary of HCL Technologies U.K Limited.

The Company acquired 8% equity shares of HCL Eagle

Limited from its JV partner viz. Great American Insurance Company, USA, thereby making HCL Eagle Limited a wholly-owned subsidiary of the Company.

Further, as a part of the internal restructuring, the following were undertaken during the year under review:

The Company has incorporated HCL Technologies

Corporate Services Limited, a private limited company, under the laws of United Kingdom.

The Company has transferred its entire shareholding in HCL Training & Staffing Services Private Limited

("HCL TSS"), a wholly owned subsidiary of the Company to HCL Comnet Limited, another wholly owned subsidiary of the Company. Post the transfer of shareholding, HCL TSS has become a direct wholly-owned subsidiary of HCL Comnet Limited and a step-down wholly-owned subsidiary of the Company.

Axon Solution Inc. a wholly owned subsidiary of HCL

America, Inc. got merged with and into HCL America, Inc., with effect from July 1, 2017.

HCL Expense Management Services, Inc. a step-down subsidiary of the Company was not in operation and was therefore voluntarily dissolved.

Acquisitions / Joint Ventures after the close of the financial year:

HCL America, Inc. (a wholly owned step down subsidiary of the Company) acquired Telerx Marketing, Inc. (doing business as C3i Solutions) a company formed under the laws of State of Delaware, pursuant to which Telerx Marketing, Inc. and all its subsidiaries have become the wholly owned subsidiary(ies) of HCL America Inc., with effect from the date of completion of acquisition, i. e. April 06, 2018.

HCL America, Inc. (a wholly owned step down subsidiary of the Company) has entered into a Joint Venture agreement with Sumeru Equity Partners, a newly incorporated technology and growth-focused private equity firm named as HCL Technologies SEP Holdings, Inc., for the purpose of acquisition of Actian Corporation, a provider of a hybrid data management company formed under the laws of State of Delaware.

Pursuant to the above agreement, Actian Corporation and all its subsidiaries will become the step down subsidiaries of HCL America Inc., with effect from the date of completion of acquisition which is expected in the current financialyear .

9. DIRECTORS AND KEy MANAGERIAL PERSONNEL

The Board of Directors of the Company consists of eleven members, of which three are Women Directors. The Board consists of one Whole-time Director and ten non-executive Directors of whom eight are independent Directors. The Whole-time Director is the promoter director who is designated as the Chairman and Chief Strategy Officer of the Company.

Mr. Deepak Kapoor (DIN -00162957) was appointed as an Additional Director by the Board of Directors of the Company w.e.f. July 26, 2017. Subsequently, at the Annual General

Meeting of the Company held on September 21, 2017, Mr. Deepak Kapoor was appointed as an Independent Director of the Company in terms of section 149 of

Companies Act, 2013, 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.

As per the provisions of Section 152 (6) of the Act, Ms. Roshni Nadar Malhotra shall retire by rotation at the ensuing Annual General Meeting and being eligible, has offered herself for re-appointment as the Director of the Company.

Changes in the composition of the Board after the close of the financialyear :

Mr. Keki Mistry resigned as an Independent Director of the Company w.e.f. April 30, 2018. The Board places on record its sincere appreciation and gratitude for Mr. Mistry's valuable services, guidance and contribution to the Company during his tenure as a member of the Board and its Committees.

10. NUMBER OF MEETINGS OF THE BOARD

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

11. FAMILIARIzATION PROGRAMME

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

12. BOARD EVALUATION

Pursuant to the provisions of the Companies Act, 2013 and

SEBI (Listing Obligations 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 as approved by the Nomination and Remuneration Committee of the Company (basis the Guidance note on Board evaluation that was 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 report.

13. AUDITORS

M/s. S.R. Batliboi and Co. LLP, Chartered Accountants, were appointed as the Statutory Auditors of your Company in the Annual General Meeting held on December 4, 2014 for a term of five years until the conclusion of the Twenty

Seventh Annual General Meeting of the Company to be held in the year 2019.

14. AUDITORS' REPORT

There are no qualifications,reservations, adverse remarks or disclaimer made by M/s. S.R. Batliboi and Co. LLP,

Statutory Auditors in their report for the financial year ended March 31, 2018. The Statutory Auditors have not reported any incident of fraud to the Audit Committee of the Company for the year under review.

15. 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, adverse remarks or disclaimer made by the

Secretarial Auditor in their report for the financial year ended March 31, 2018.

16. 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.

17. DIRECTORS' APPOINTMENT AND REMUNERATION

In accordance with the provisions of the Companies Act, 2013 ("Act"), 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 sufficienttime 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 Act 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.

18. AUDIT COMMITTEE

As on March 31, 2018, the Audit Committee comprises of five Independent Directors viz. Mr. Keki Mistry, Mr.

Subramanian Madhavan, Mr. Deepak Kapoor, Ms. Robin Ann Abrams and Ms. Nishi Vasudeva.

Mr. Deepak Kapoor was co-opted as a member of the Committee w.e.f. November 01, 2017.

Mr. Keki Mistry ceased to be the Chairman of the Committee due to his resignation from the board of the Company w.e.f. April 30, 2018. Mr. Subramanian Madhavan was appointed as the Chairman of the Committee in place of Mr. Keki Mistry.

All the recommendations made by the Audit Committee, during the financial year 2017-18, were accepted by the

Board.

19. RISK MANAGEMENT COMMITTEE

As on March 31, 2018, the Risk Management Committee comprises of five Independent Directors viz. Mr. Keki

Mistry, Mr. Subramanian Madhavan, Mr. Deepak Kapoor, Ms. Robin Ann Abrams and Ms. Nishi Vasudeva.

Mr. Deepak Kapoor was co-opted as a member of the Committee w.e.f. January 19, 2018.

Mr. Keki Mistry ceased to be the Chairman of the Committee due to his resignation from the board of the Company w.e.f. April 30, 2018. Mr. Subramanian Madhavan was appointed as the Chairman of the Committee in place of Mr. Keki Mistry.

All the recommendations made by the Committee, during the financial year 2017-18, were accepted by the Board.

20. 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.

21. 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.

22. SIGNIFICANT AND MATERIAL ORDERS

by There are no significant the regulators or courts or tribunals impacting the going concern status and Company's operations in future.

23. PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS

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

24. TRANSACTIONS WITH RELATED PARTIES

The particular of transactions entered with related parties referred to in section 188(1) and applicable rules of the Companies Act, 2013 has been 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.

25. 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 CSR Policy of the Company and the initiatives undertaken by the Company is attached and forms part on CSR activities of thisduring 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.

26. 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 the Dividend Distribution Policy forms part of the Corporate Governance Report annexed with this Report.

27. TRANSFER OF UNCLAIMED SHARES AND UNCLIAMED DIVIDEND AMOUNTS TO IEPF

Pursuant to the provisions of Section 124 of the Companies Act, 2013 ("Act"), the 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 section of 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 were also required to be transferred to the demat account created by the IEPF Authority. Accordingly, during the year, the Company transferred 78,973 equity shares of the Company 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.

28. DEPOSITS

The Company has not accepted any deposits from public.

29. CORPORATE 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 Report.

30. BUSINESS RESPONSIBILITy REPORT

The SEBI (Listing Obligations and Disclosure

Requirements) Regulations, 2015 mandates inclusion of Business Responsibility Report ("BRR") as part of the 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 2017-18 and forms part of this Annual Report.

31. 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 at https://www. hcltech.com/investors/governance-policies.

32. 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:

1. At the 2017 BMA B2 Marketing Awards, the Company was awarded for excellence in various categories such as ‘Existing Customer Retention and Growth'; ‘Corporate Brand / Identity Program'; ‘Digital Advertising'; ‘Social Media'; ‘Custom Publishing'; ‘Sports Marketing', and ‘Marketer of the Year'. Further, The Asian Customer Engagement Forum (ACEF) awarded the Company for ‘Best Publication Capability Category' and ‘Excellence in Brand management'.

2. The Company was bestowed with the Everest Group PEAK Matrix ‘Service Provider of the Year™ 2017' award for ‘Cloud and Infrastructure Services (CIS)'.

3. The Company positioned as a leader in the Gartner Magic Quadrant for Data Center Outsourcing and Infrastructure Utility Services in Europe, 2017.

4. At the ‘National CSR Leadership Congress & Awards 2017', presented by the World CSR Congress, HCL Foundation has been conferred with ‘Best Innovation in CSR' award for its role in promoting a more sustainable and equitable society.

5. In continued recognition of its innovative HR best practices, the Company was felicitated with gold awards at the 2017 Brandon Hall Group Excellence Awards under the categories of:

‘Best Advance in HR Data Analytics' category for ‘New Employee Turnover & Retention – Predictive Analytics'

‘Best Inclusion and Diversity Strategy' category for ‘Gender Diversity at HCL America, Inc., a step down wholly owned subsidiary of the Company'

‘Best Advance in Women's Leadership

Development' category for ‘Women's Leadership Development Program'

6. The Company's Business Services has been conferred with ‘Excellence in Automation' award at the ‘CMO Outsourcing Excellence Awards 2017' hosted by CMO Asia in Singapore. The Company showcased how its service capabilities in automation, management philosophy, employee engagement policies and innovation, are transforming the entire customer journey for excellence.

7. DRYiCETM COPA (Cognitive Orchestrated Process Autonomics) Platform that applies A.I. to drive enterprise–wide process automation & orchestration won the ‘Best Innovation in RPA' at the prestigious AIconics – the world's only independently judged AI awards, at the AI Summit San Francisco.

8. The Company's Red Ladder Initiative was recognized as the finalist at the 14th Annual Stevie Awards for

Women in Business in the category – ‘Women Helping Women'. The ‘Red Ladder' initiative helps women at the workplace, identifying high performing leaders and supporting them towards effective leadership roles.

9. The Company was conferred with ‘The key to the Heart of Gothenburg' award by Business Region Gteborg, Sweden, for being one of the most important international businesses established in

2016 / 2017 and undertaking significant including launch of new delivery centre and acquisition of Volvo's external IT business.

10. The IT Services Marketing Association (ITSMA) felicitated the Company among 2017 Marketing Excellence Awards Winners for:

‘Best-in-class' in ‘Transforming Marketing for

Digital Leadership' by creating an agile, data–driven marketing organization through frugal digital transformation.

Executing a 360 degree integrated campaign for

‘Driving business with Thought Leadership' by leveraging the Company's first global survey on

IoT Adopters and a thought paper with MIT Sloan Management Review.

11. At the Kapost Customer Awards 2017, which recognize ‘The Best of the Best in B2B Content Operations', the

Company was awarded the ‘Biggest Transformation of 2017' for automating the content and digital marketing operations across the business.

12. The Company's Business Services has been conferred with ‘NASSCOM Customer Excellence Awards 2017' in ‘Return on Investment' category for driving digital transformation for a leading UK–based banking organization. The Company showcased how it deployed the three lever BPM for digital transformation roadmap of the bank, enabling faster service delivery, greater visibility across teams and transparency of volumes and productivity.

13. The Company positioned in the Leadership zone for its Aerospace Engineering and Medical Devices services in the Zinnov Zones 2017 Product Engineering Services report.

14. The Company has been named a Top Employer in the United Kingdom by The Top Employers Institute for the twelfth consecutive year in recognition of its best–in–class employee engagement and people practices.

33. SUSTAINABILIT y

The 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.

34. ORGANIzATION EFFECTIVENESS

Employee Strength and Expansion

The Company has reached an employee strength of 1,20,000+ and has successfully delivered an industry leading revenue per employee. Company continued its focus on talent localization strategy in global locations, which we started in the last 10 years and it is working well for us. Under the banner of the New Vistas program, our operations in tier-2 cities in India like Madurai, Lucknow, Coimbatore, Vijayawada and Nagpur houses close to 6,900 employees.

In FY18, human resource function continued to build on its organization strategy of - Mode 1-2-3. Our various initiatives were focused to simplify HR function, impacting entire hire to retire cycle, enhancing employee experience by delivering distinctive people practices. HR function collaborated with business for enhanced business value addition by driving operational efficiencies and effective organization design.

Talent Acquisition, Talent Development & Career

Management

Talent acquisition & talent management practices are aligned to our Mode 1-2-3 strategy. We have leveraged

Digital technologies to enhance the quality and experience of our Talent Acquisition, Talent Development and Career management programs.

Talent Acquisition

With an impressive gross hiring of about 33,700 professionals across the globe, we leveraged artificial intelligence & data science to hire the right talent at the right time. We deployed "Intelligent Neural Network" engine that searches through the database of a million+ candidate records & supports our talent acquisition along with prescriptive insights.

Training / Talent Development

The Company believes in LEARN.. UNLEARN... RELEARN. This is a continuous process, and it will bring in new models of employment and force organizations to rethink Future of Work and Workplace.

We shifted focus on enhancing the business value through increasing passion, proficiency and value by enabling our employees to drive Performance, Productivity and Innovation. Our training approach at client and business line level has helped our employees to proactively identify training needs and deepen their skills in new technologies.

Last year, our employees invested 1.6 million hours in training to enhance and learn new skills resulting in training of over 70,000 unique employees

Over 15,000 employees were trained on digital skills

Talent Development's prime focus is to enhance the behavioral and leadership competencies of the Individual Contributors, Managers & Leaders.

In alignment to our Mode 1-2-3 strategy, Talent Development at the Company is committed to incorporate the next-gen skills and competencies to our employees. Our research with globally benchmarked vendors, L&D associations & research agencies led us to identify the new age competencies practiced industry wide and capability development initiatives that align to Individual and Managerial Development.

CareerManagement

CareerConnect2.0isaprescriptivecareerrecommendation platform, leveraging big data to provide a career concierge service to employees, suggesting career paths, learning, mentors & jobs at the Company relevant to the employee's profile:

The value is to provide intelligent career paths to over

100 thousand employees for internal opportunities which has resulted in designing and closing over 8,000 Career Development Plans for our employees.

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 pilot of the platform is progressing well as we have already witnessed over 66,000 hits and it will be ready for mass deployment over the next 2 quarters.

Diversity

As an organisation, the Company focuses on enhancing awareness and advocacy to understand and accept diversity and inclusion; be it gender, culture, ethnicity or ability. The Company truly believes in building Relationships Beyond the Contract, and therefore, our focus on women advancement is not just limited to internal employees but externally also in the communities we operate in.

The Company has taken a three-tiered approach to improve gender diversity and inclusion outcomes which has helped us sustain our overall gender diversity rate at 24%. The three key elements of the Company's gender diversity strategy involve:

1. Leadership commitment and extensive ongoing advocacy to address the unconscious bias in the workplace

2. On-boarding multiple stakeholders and driving the agenda based on diversity and inclusion goals of the respective unit, wherein the framework is global but the implementation is to suit varied business and location needs

3. Two enabling programs for women leadership development which are based on formal mentoring.

ASCEND is the key diversity initiative which 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 Creation of DAPs, Mentoring by senior leaders, Peer Mentoring, Action Learning Projects, and Leadership Webinar Series.

The second program is called ‘Stepping Stones', which is a focused career development program to enable mid-level Women employees to realise their career aspirations and potential to help them in their developmental journey.

The Company has also launched ‘iBelieve – Company's Second Career Program for Women' a platform for women to restart their tech careers after a break. The program was launched in Chennai recently, though the Company will be extending this program to other locations too. The program focuses on refreshing the candidates existing skills and provides training on new age technologies to make them future ready. To be eligible, applicants must have had a career break of 2 to 6 years after a minimum of 2 years of work experience. Women who meet the eligibility criteria will undergo a rigorous selection process where they are assessed on their current knowledge and are allocated a suitable job role & salary commensurate to their previous experience. The training period varies from 1 month to

3 months depending on the candidates skill proficiency assessed during the selection process. The program has received overwhelming response and candidates are currently undergoing assessments as part of the selection process.

These initiatives along with our Networking & Advocacy sessions – "iMotivate", "Feminspiration", "Women Connect", "BlogHer" wherein successful women leaders address the aspiring young leaders, help HCLites gain insight into successful leadership as well as understand perspectives on gender matters.

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.

HCL Continues to be Employer of Choice across the globe

In FY 18, the Company has been named as one of the most sought-after employers in India. Surpassing its peers and major contenders from other industries in LinkedIn ranking, the Company ranks at #6 amongst all industries put together & at no. 1 amongst IT Services company to feature in the Top 10 attractive employer for the second consecutive year by LinkedIn.

The Company was recognized as the Top Employer in UK for the Twelfth consecutive year by Top

Employers Institute, UK for its distinctive culture and employment practices among which Ideaprenuership plays a major role.

Leadership Development Programs & Gender Diversity Recognized Globally

The Company is committed to gender diversity which reflects in our practices and initiatives like " Ascend" – our women leadership development agship program where senior women leaders are given a platform to learn & exhibit transformational leadership which won Gold award in Best Advance in women leadership development by Brandon Hall Group.

One of the wholly owned subsidiaries of the

Company, HCL America, Inc., was also recognized for Best diversity & Inclusion strategy for Gender Diversity showcasing our programs for women career development programs by Brandon Hall.

Superior learning experience delivered through our asset Harvard learning program Certified HCL Career Program enables leaders to manage projects effectively through gamified learning has been recognized by Leap vault. This Practice is winning Awards globally from past 3 Quarters & making the Company Proud.

Brandon Hall Recognised Sharpen the Saw practice with Silver of the Company in Best Advance in leadership development.

Our Social Career Development & Advanced Talent Analytics has become industry benchmarks

The Company's flagship social career navigation platform

Career connect has been recognized as Excellence in Practice by ATD (Association of Talent Development) as it enables crowdsourced career management for its employees through peers, colleagues and its managers to design a disruptive career path. This is introduced to design the individual's Career Path in the organization in line with their aspirations.

The Company's New employee turnover & retention-predictive analytics practice have won Gold in Best Advance in HR Data analytics by Brandon Hall.

35. 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 Companies Act, 2013, read with the Companies (Accounts) Rules, 2014 to the extent applicable to the Company, are set out in Annexure 5 to this Report.

36. DIRECTORS' RESPONSIBILITy STATEMENT

A statement of responsibility of the Directors relating to compliance with the financial accounting and reporting requirements in respect of the financial statements, as specified under Section 134(3)(c) of the Act, is annexed as

Annexure 6 to this Annual Report.

37. 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.

38. 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:

Name of Director Ratio to median remuneration of employees
Executive Director
1. Mr. Shiv Nadar* 66.58
Non-Executive Directors
2. Mr. Keki Mistry 8.93
3. Mr. Ramanathan Srinivasan 14.58
4. Ms. Robin Ann Abrams 15.57
5. Ms. Roshni Nadar Malhotra 10.24
6. Mr. Subramanian Madhavan 10.67
7. Mr. Sudhindar Krishna Khanna 7.92
8. Dr. Sosale Shankara Sastry 12.10
9. Mr. Thomas Sieber 11.21
10. Ms. Nishi Vasudeva 8.59
11. Mr. Deepak Kapoor^ -

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. Deepak Kapoor was appointed as Director w.e.f. July 26, 2017. 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:

Sl. Name of Director / Key No. Managerial Personnel % increase in remuneration in the financial year
Directors
1. Mr. Shiv Nadar(1) (66.25)
2. Mr. Keki Mistry 4.04
3. Mr. Ramanathan Srinivasan 4.15
4. Ms. Robin Ann Abrams 1.71
5. Ms. Roshni Nadar Malhotra 18.89
6. Mr. Subramanian Madhavan 5.82
7. Mr. Sudhindar Krishna Khanna 0.34
8. Dr. Sosale Shankara Sastry 4.80
9. Mr. Thomas Sieber (2.96)
10. Ms. Nishi Vasudeva(2) -
11. Mr. Deepak Kapoor(3) -
Key Managerial Personnel
12. Mr. C. Vijayakumar (President and Chief Executive Officer) (4) -
13. Mr. Anil Kumar Chanana (Chief Financial Officer) 5.59
14. Mr. Manish Anand (Company Secretary) 8.73

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.

(2) Ms. Nishi Vasudeva was appointed as Director w.e.f. August 1, 2016. Hence, the said information is incomparable and not provided.

(3) Mr. Deepak Kapoor was appointed as Director w.e.f. July 26, 2017. Hence, the said information is incomparable and not provided.

(4) Mr. C. Vijayakumar was appointed as the President and Chief Executive Officer w.e.f October 20,

2016. Hence, the said information is incomparable and not provided.

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

3.20%

d. The number of permanent employees on the rolls of Company: There were 50,853 permanent employees on the rolls of the Company. In addition, the Company had 69,228 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 3.20%. There is 3.00% 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.

39. 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 2017-18 and a statement containing the names of the employees employed throughout the financial year and in receipt of remuneration of Rs1.02 crores or more and employees employed for part of the year and in receipt of Rs8.50 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.

40. VIGIL MECHANISM / WHISTLE BLOWER POLICy

The Company has formulated and published a Whistle Blower Policy to provide Vigil Mechanism for employees including Directors contributions made by the employees 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 Annual Report.

41. 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.

42. ACKNOWLEDGEMENTS

The Board wishes to place on record its appreciation of the the significant

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, 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 and Chief Strategy Officer
Place: Noida (U.P.), India
Date: May 02, 2018

   

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