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Company Information

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HCL Technologies Ltd.

Sep 27, 04:00
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Market Cap. ( ₹ ) 351473.90 Cr. P/BV 5.87 Book Value ( ₹ ) 220.78
52 Week High/Low ( ₹ ) 1378/800 FV/ML 2/1 P/E(X) 31.54
Bookclosure 23/10/2021 TTM EPS ( ₹ ) 42.08 Div Yield (%) 0.77
DIRECTOR'S REPORT
You can view full text of the latest Director's Report for the company.
Year End :2021-03 

Your Directors have immense pleasure in presenting the Twenty-Ninth Annual Report of HCL Technologies Limited (“HCL” or the “Company”) together with the Audited Financial Statements for the Financial Year (FY) ended March 31,2021.

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, 2021 are as under:

(f in crores)

Particulars

Consolidated

Standalone

Year ended

Year ended

March 31, 2021

March 31,2020

March 31, 2021

March 31, 2020

Revenue from operations

75,379

70,676

35,673

32,666

Other income

927

589

965

613

Total Income

76,306

71,265

36,638

33,279

Total Expenses

60,453

57,285

24,228

22,101

Profit before tax

15,853

13,980

12,410

11,178

Tax Expense

4,684

2,923

3,667

2,209

Profit for the year

11,169

11,057

8,743

8,969

Other comprehensive income / (loss)

758

479

520

(486)

Total comprehensive income for the year

11,927

11,536

9,263

8,483

Earnings per share of ? 2 each

Basic (in ?)

41.07

40.75

32.22

33.06

Diluted (in ?)

41.07

40.75

32.22

33.05

Note: The comparative numbers of the standalone financial statements for the previous year have been restated to give effect of the Scheme of Amalgamation providing for the amalgamation of four direct / step-down wholly owned subsidiaries of the Company with and into the Company, with effect from April 1, 2019, the Appointed Date. The accounting treatment for the said amalgamation has been explained in the “Summary of Significant Accounting Policies” of the standalone financial statements, which forms part of this Annual Report.

2. BUSINESS OVERVIEW AND STATE OF AFFAIRS

The Company empowers global enterprises with technology for the next decade today. The Company's Mode 1-2-3 strategy, through its deep-domain industry expertise, customer-centricity and entrepreneurial culture of Ideapreneurship™ enables businesses to transform into next-gen enterprises.

The Company offers its services and products through three business units - IT and Business Services (ITBS), Engineering and R&D Services (ERS) and Products & Platforms (P&P). ITBS enables global enterprises to transform their businesses through offerings in the areas of Applications, Infrastructure, Digital Process Operations and next generation Digital Transformation Solutions. ERS offers engineering services and solutions in all aspects of product development and platform engineering. Under P&P, the Company provides modernized software products to global clients for their technology and industry-specific requirements.

Through its cutting-edge co-innovation labs, global delivery

98 HCL Annual Report 2021

capabilities and broad global network, the Company delivers holistic services in various industry verticals, categorized under Financial Services, Manufacturing, Technology & Services, Telecom & Media, Retail & Consumer Packaged Goods, Life Sciences & Healthcare and Public Services.

On a consolidated basis, the Company's revenue from operations was ?75,379 crores in the financial year under review, as against ?70,676 crores in the previous financial year. The profit for the financial year under review was ?11,169 crores, as against ?11,057 crores in the previous financial year.

On a standalone basis, the Company’s revenue from operations was ?35,673 crores in the financial year under review, as against ?32,666 crores in the previous financial year. The profit for the financial year under review was ?8,743 crores, as against ?8,969 crores in the previous financial year.

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

3. DIVIDEND

Your Directors have declared the following dividends during the financial year under review:

S. No.

Dividend Declared during FY 2020-21

Date of Declaration

Rate of Dividend per Equity Share (face value of ?2 each)

Gross Dividend (? in crores)

1

1st Interim Dividend

July 17, 2020

2.00

543

2

2nd Interim Dividend

October 16, 2020

4.00

1,085

3

3rd Interim Dividend

January 15, 2021

4.00

1,085

Total

2,713

Note: The amount shown under Gross Dividend is the amount before deduction of tax at source.

The Company had also paid Final Dividend for FY 2019-20 at ?2 per equity share of face value of ?2 each aggregating to ? 543 crores, after deduction of tax at source. The same was approved by the shareholders of the Company in the Twenty-Eighth AGM held on September 29, 2020.

The Board of Directors in its meeting held on April 21-23, 2021, declared an interim dividend of ?6 per equity share of face value of ?2 each, and a special interim dividend of ?10 per equity share of face value of ?2 each, for FY 2021-22. The special interim dividend was declared by the Board in recognition of the Company's recent milestone, crossing the USD 10 billion mark in revenue during FY 2020-21.

The Board of Directors did not recommend any final dividend during the financial year under review.

4. TRANSFER TO GENERAL RESERVES

No amount was transferred to the General Reserves during the financial year under review.

5. SHARE CAPITAL

During the financial year under review, pursuant to the Scheme of Amalgamation providing for the amalgamation of four direct / step-down wholly owned subsidiaries of the Company namely, HCL Eagle Limited, HCL Comnet Limited, HCL Technologies Solutions Limited and Concept2Silicon Systems Private Limited with and into the Company, effective on July 13, 2020, the Authorized share capital of the said subsidiaries aggregating to ?3,40,00,000/- was transferred to and added with the Authorized share capital of the Company.

As on March 31, 2021, the Authorized share capital of the Company was ?603,40,00,000/- divided into 301,70,00,000 equity shares of face value of ?2 each.

The Issued, Subscribed and Paid-up share capital of the Company as on March 31,2021 was ?542,73,30,192/- divided into 271,36,65,096 equity shares of face value of ?2 each.

6. ISSUANCE OF USD DENOMINATED UNSECURED NOTES BY WHOLLY OWNED SUBSIDIARY

HCL America Inc., a step-down wholly owned subsidiary of the Company incorporated under the laws of California, on March 10, 2021, issued and allotted USD 500 million fixed rate, senior unsecured notes, bearing interest at the rate of 1.375% per annum to be matured in 2026, in accordance with Rule 144a and Regulation S of the U.S. Securities Act, 1933. The Notes are rated “A-” by S&P and have been listed on the Singapore Exchange Securities Trading Limited (SGX-ST) w.e.f. March 11,2021. The net proceeds of the sale of the said Notes were to be used by HCL America Inc. for re-financing its existing debt and/or meeting its working capital requirements.

The Notes are guaranteed by the Company. The Guarantee is unconditional and irrevocable. The Company's aggregate potential liability under the Guarantee is capped at USD 525 million which is 105% of the total aggregate principal amount of the Notes outstanding from time to time. The Corporate Guarantee is being treated as "Contingent Liability" for the Company.

7. MANAGEMENT DISCUSSION AND ANALYSIS REPORT

The Management Discussion and Analysis Report in terms of Regulation 34(2) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (the “Listing Regulations”), is attached and forms a part of this Annual Report.

8. ACQUISITIONS

The acquisitions consummated by the Company (including by its step-down wholly owned subsidiary) during FY 2020-21 are summarized as below -

DWS Limited

The Company's step-down wholly owned subsidiary, HCL Australia Services Pty. Ltd., acquired DWS Limited (DWS), a public company listed on the ASX, the Australian Securities Exchange. DWS is a provider of IT, Business and Management consulting services in Australia and New Zealand. Pursuant to this acquisition, DWS and all its subsidiaries have become the step-down wholly owned subsidiaries of the Company with effect from January 5, 2021, being the date of completion of the acquisition. Post the acquisition DWS was delisted from the ASX.

Cisco’s SON Technology

The Company acquired asset carve-out of the product and services business that comprises of the Self-Optimizing Network (SON) from Cisco Systems Inc., a company incorporated in California. SON is a multi-vendor multi-technology solution that optimizes the Radio Access Networks for 2G-5G. The acquisition was completed on October 25, 2020.

9. SUBSIDIARIES, ASSOCIATES AND JOINT VENTURES

As on March 31,2021, the Company has 140 subsidiaries and 11 associate companies within the meaning of Sections 2(87) and 2(6) of the Companies Act, 2013 (“Act”) respectively. During the year under review, there has been no material change in the nature of business of the subsidiaries.

As per the first proviso to Section 129(3) of the Act, a statement containing salient features of the financial statements of the Company's subsidiaries, associates and joint ventures in Form AOC-1 shall form 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 financial statements of the Company along with relevant documents for FY 2020-21 would be available on the website of the Company at https://www.hcltech.com/investors/results-reports and the financial statements in respect of the subsidiaries for FY 2020-21 would be available at https://www.hcltech.com/investors/subsidiaries-financials.

Note: The word “subsidiaries” used in this Annual Report includes both direct and step-down subsidiaries.

Incorporation of Subsidiaries during the financial year under review:

1. HCL Technologies Angola (SU), LDA., a private limited liability company, was incorporated during the year under the laws of Angola as a step-down wholly owned subsidiary of the Company.

2. HCL Technologies S.A.C., a Corporation was incorporated during the year under the laws of Peru as a step-down wholly owned subsidiary of the Company.

Merger of Subsidiaries during the financial year under review:

Merger of Indian Subsidiaries -

In the previous financial year ended March 31, 2020, the Scheme of Amalgamation (“Scheme”) providing for the amalgamation of four direct / step-down wholly owned subsidiaries of the Company namely, HCL Eagle Limited, HCL Comnet Limited, HCL Technologies Solutions Limited and Concept2Silicon Systems Private Limited, with and into the Company, was sanctioned by the Hon'ble National Company Law Tribunal, New Delhi vide its Order dated December 12, 2019 along with its Modification Order dated January 23, 2020 and certified copy of the said Order was filed with the Registrar of Companies on March 13, 2020.

During the financial year under review, the Scheme was also sanctioned by the Hon'ble National Company Law Tribunal, Bengaluru vide its Order dated June 24, 2020 and certified copy of the said Order was filed with the Registrar of Companies on July 13, 2020.

Accordingly, the Scheme became effective from July 13, 2020

i.e. the date from which the certified copies of orders of both the jurisdictional Tribunals were filed with the Registrar of Companies. The Appointed Date of the Scheme was April 1, 2019.

Merger of Foreign Subsidiaries -

1. Honigsberg & Duvel Datentechnik Czech s.r.o. (incorporated in Czech Republic), a step-down wholly owned subsidiary of the Company was merged with and into HCL Technologies Czech Republic s.r.o. (incorporated in Czech Republic), another step-down wholly owned subsidiary of the Company.

2. Axon Solutions Singapore Pte. Ltd. (incorporated in Singapore), a step-down wholly owned subsidiary of the Company was merged with and into HCL Singapore Pte. Ltd. (incorporated in Singapore), another step-down wholly owned subsidiary of the Company.

3. HCL Belgium NV (incorporated in Belgium), a step-down wholly owned subsidiary of the Company was merged with and into HCL Technologies Belgium BVBA (incorporated in Belgium), another step-down wholly owned subsidiary of the Company.

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4. Honigsberg & Duvel Corporation (incorporated in Tennessee, USA), a step-down wholly owned subsidiary of the Company was merged with and into HCL America Inc. (incorporated in California, USA), another step-down wholly owned subsidiary of the Company.

5. HCL Sweden AB (incorporated in Sweden), a step-down wholly owned subsidiary of the Company was merged with and into HCL Technologies Sweden AB (incorporated in Sweden), another step-down wholly owned subsidiary of the Company.

6. HCL (Netherlands) BV (incorporated in Netherlands), a step-down wholly owned subsidiary of the Company was merged with and into HCL Technologies B.V. (incorporated in Netherlands), another step-down wholly owned subsidiary of the Company.

7. Geometric SAS (incorporated in France), a step-down wholly owned subsidiary of the Company was merged with and into HCL Technologies France SAS (incorporated in France), another step-down wholly owned subsidiary of the Company.

Merger of Subsidiaries after the close of the financial year

under review:

Merger of Foreign Subsidiaries -

1. 14 subsidiaries including step-down subsidiaries (all incorporated in Germany) of Honigsberg & Duvel Datentechnik GmbH (‘H&D'), all being step-down wholly owned subsidiaries (‘WOS') of the Company, merged with and into H&D (incorporated in Germany), another step-down WOS of the Company in the following manner.

• 4 step-down wholly owned subsidiaries of H & D merged with their immediate parent company viz. H&D IT Automotive Services GmbH, WOS of H & D.

• 1 step down wholly owned subsidiary of H & D merged with its immediate parent company viz. CATIS GmbH, WOS of H & D.

• Post merger of the aforesaid 5 subsidiaries with their immediate parents, both these parent companies along with other 7 subsidiaries of H & D merged with and into H & D.

The aforesaid mergers were approved by the appropriate authorities in Germany on April 1, 2021 and the mergers were effective from January 1, 2020.

2. Honigsberg & Duvel Datentechnik GmbH (incorporated in Germany), a step-down wholly owned subsidiary of the Company merged with and into HCL Technologies Germany GmbH (incorporated in Germany), another step-down wholly owned subsidiary of the Company. The said merger was approved by the appropriate authorities in Germany on April 6, 2021 and the merger was effective from January 1, 2020.

3. HCL GmbH (incorporated in Germany), a step-down wholly owned subsidiary of the Company merged with and into HCL Technologies Germany GmbH (incorporated in Germany), another step-down wholly owned subsidiary of the Company. The said merger was approved by the appropriate authorities in Germany on April 6, 2021 and the merger was effective from April 1, 2020.

4. The merger of PowerTeam, LLC, (a Delaware Limited Company), a step-down wholly owned subsidiary of the

Company with and into HCL America Inc. (incorporated in California, USA), another step-down wholly owned subsidiary of the Company with effect from January 1, 2021 was approved by the State of Delaware on December 3, 2020. The approval from the California Secretary of State is awaited.

10. MATERIAL CHANGES AND COMMITMENTS AFFECTING FINANCIAL POSITION BETWEEN THE END OF THE FINANCIAL YEAR AND DATE OF THE REPORT

There have been no material changes and commitments, which affect the financial position of the Company, that have occurred between the end of the financial year to which the financial statements relate and the date of this Report.

11. 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 Director, Non-Executive Non-Independent Directors and Independent Directors.

Details of the composition of the Board of Directors, appointments / re-appointments during the financial year under review, re-appointments after the close of the financial year, director(s) retiring by rotation and details of declaration by Independent Directors have been provided in the Corporate Governance Report, which forms part of this Annual Report.

12. NUMBER OF MEETINGS OF THE BOARD

During the financial year under review, 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.

13. BOARD COMMITTEES

As on March 31, 2021, the Company had the following 7 Board Committees:

1. Audit Committee

2. Corporate Social Responsibility Committee

3. Nomination and Remuneration Committee

4. Finance Committee

5. Stakeholders' Relationship Committee

6. Risk Management Committee

7. Diversity Committee

Details of the composition of the Committees and changes therein, terms of reference of the Committees and other requisite details are provided in the Corporate Governance Report, which forms part of this Annual Report.

14. FAMILIARIZATION PROGRAMME

The details of the familiarization programme have been provided under the Corporate Governance Report, which forms part of this Annual Report.

15. BOARD EVALUATION

The Annual Performance Evaluation of the Board, its Committees, the Chairperson of the Board and the individual Directors was undertaken by the Board of Directors / Independent Directors in terms of the provisions of the Act and the Listing Regulations. The evaluation was carried out in terms of the framework and criteria of evaluation as approved by the Nomination and 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.

16. STATUTORY AUDITORS AND STATUTORY AUDITORS’ REPORT

M/s. B S R & Co. LLP, Chartered Accountants (ICAI Firm Registration No. 101248W/W-100022) were appointed as the Statutory Auditors of your Company in the Twenty-Seventh Annual General Meeting (‘AGM’) of the Company held on August 6, 2019 for a term of five consecutive years from the conclusion of the said AGM till the conclusion of the Thirty-Second AGM to be held in the year 2024. The Statutory Auditors have confirmed that they are not disqualified to serve as the Statutory Auditors of the Company.

Statutory Auditors’ Report

There are no qualifications, reservations, adverse remarks or disclaimer made by M/s. B S R & Co. LLP, Statutory Auditors in their report for FY 2020-21. The Statutory Auditors have not reported any incident of fraud to the Audit Committee of the Company during the financial year under review.

17. SECRETARIAL AUDITORS 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 FY 2020-21. 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 its report for FY 2020-21.

18. MAINTENANCE OF COST RECORDS

The Central Government has not prescribed the maintenance of cost records under Section 148(1) of the Act, and accordingly, such cost accounts and records are not maintained by the Company.

19. ANNUAL RETURN

Pursuant to Sections 92(3) and 134(3)(a) of the Act and Rule 12(1) of the Companies (Management & Administration) Rules, 2014, the Annual Return of the Company for FY 2020-21 is available on the website of the Company at https://www.hcltech.com/investors/results-reports

20. POLICY ON DIRECTORS’ APPOINTMENT AND REMUNERATION

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, professional standing, personal and professional ethics, integrity and values, willingness to devote sufficient time and energy in carrying out their duties and responsibilities effectively.

The Committee also assesses the independence of directors at the time of their appointment / re-appointment as per the criteria prescribed under the provisions of the Act, 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 Annual Report.

21. 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 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 appropriate management of risks in line with its internal systems and culture.

22. INTERNAL FINANCIAL CONTROL SYSTEMS AND THEIR ADEQUACY

The Company's internal financial control systems are commensurate with its size and nature of its operations and such internal financial controls are adequate and are operating effectively. The Company has adopted policies and procedures for ensuring orderly and efficient conduct of the business. These controls have been designed to provide reasonable assurance regarding 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, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial disclosures.

23. SIGNIFICANT AND MATERIAL ORDERS

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

24. PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS

The particulars of loans, guarantees and investments have been disclosed in the financial statements which forms part of this Annual Report.

25. 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 2 to this Report in Form AOC-2. The Company also has in place a ‘Related Party Policy', which is available on the website of the Company at https://www.hcltech.com/investors/governance-policies.

26. CORPORATE SOCIAL RESPONSIBILITY

The Company contributes progressively to the socio-economic and environmental advancement of the planet with ‘Corporate Social Responsibility' (“CSR”) at the very core of its existence. To meet its goals, the Company drives its corporate social responsibility agenda through its CSR arm, HCL Foundation, a Public Charitable Trust.

The CSR Committee of the Company is inter-alia responsible for formulating, recommending and monitoring the CSR Policy of the Company which contains the approach and direction given by the Board of Directors, and includes guiding principles for selection, implementation and monitoring of activities as well as formulation of the annual action plan.

A brief outline of the CSR Policy of the Company and the initiatives undertaken by the Company on CSR activities during the financial year under review are set out in Annexure 3 to this Report in the format as prescribed under Companies (Corporate Social Responsibility Policy) Amendment Rules, 2021.

The composition of the CSR Committee, the CSR Policy and the CSR projects as approved by the Board of Directors for FY 2021-22 are available on the website of the Company at https://www.hcltech.com/investors/corporate-social-responsibilitv-hcl.

27. DIVIDEND DISTRIBUTION POLICY

The Company has formulated and published a Dividend Distribution Policy which provides for the circumstances under which the members may / may not expect dividend, the financial parameters, internal and external factors, utilization of retained earnings, parameters regarding 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.

28. UNCLAIMED DIVIDENDS AND TRANSFER TO INVESTOR EDUCATION AND PROTECTION FUND

Pursuant to the provisions of Section 124 of the Act, the dividend amounts which have remained unpaid or unclaimed for a period of seven years from the date of transfer to unpaid dividend account 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 amount which will be transferred to IEPF in the subsequent years are given in the Corporate Governance section of this 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 members for seven consecutive years or more are also required to be transferred to the demat account created by the IEPF Authority. Accordingly, during the financial year under review, the Company has transferred 4,111 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.

29. DEPOSITS

The Company has not accepted any deposits from the public during the financial year under review.

30. CORPORATE GOVERNANCE REPORT

The Corporate Governance Report in terms of Regulation 34(3) of the Listing Regulations, along with the Statutory Auditors’ certificate forms part of this Annual Report.

31. BUSINESS RESPONSIBILITY REPORT

The Listing Regulations mandates the inclusion of Business Responsibility Report (‘BRR’) as part of the Annual Report of the Company. In compliance with this regulation, the Company has prepared a BrR for FY 2020-21 which describes the initiatives taken by the Company from an environmental, social and governance perspective and the same forms part of this Annual Report.

32. INSIDER TRADING REGULATIONS

Pursuant to the provisions of the SEBI (Prohibition of Insider Trading) Regulations, 2015 (as amended from time to time), the Company has adopted 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'). The Fair Disclosure Code is available on the website of the Company at https://www.hcltech.com/investors/governance-policies.

33. AWARDS AND RECOGNITIONS

Your Company relentlessly pursues excellence and is delighted to receive phenomenal share of recognitions and awards this year, not only from the media, but also from analysts, governing bodies, academic institutions, partners and even customers. Some of the key honors received by the Company during the year include:

Awards -

1. The Company was awarded the “2020 Rising Star Award” from Pegasystems Inc., for the Company's thought leadership and trusted advisor role in driving large scale digital transformation and implementation services.

2. The Company was awarded the “Industrial IoT Product of the Year 2020” Award by IoT Evolution World for its RealTime Manufacturing Solution (RMI).

3. The Company was awarded the “Gold Stevie® Award” at the 2020 American Business Awards for EXACTO™, under the category ‘New Product and Service - Business Technology' for its Artificial Intelligence and Machine Learning Capabilities.

4. The Company was awarded the “Partner of the Year Award” from Skybox Security North America under the ‘Win of the Year 2020' category.

5. The Company was named the ‘Target Specialized Partner' by Adobe. The Company is a global service provider for Adobe Experience Cloud solutions and this accomplishment comes in addition to the existing Adobe Experience Manager, Analytics and Campaign specializations in the US.

6. PowerTeam, LLC, a step-down wholly owned subsidiary of the Company, has been named the “Microsoft Proactive Customer Service Partner of the Year”, which is a global award and is the highest recognition within Microsoft. PowerTeam, LLC was also named a “Finalist for Financial Services Partner of the Year”.

Recognitions -

1. The Company was positioned as a ‘Leader' in The Forrester Wave™ for Specialized Insights Service Providers, Q2 2020, and as a ‘Strong Performer' in The Forrester Wave TM for Commerce Services, Q1 2021.

2. The Company was positioned as a ‘Leader' in IDC Market Scape for:

- Worldwide Manufacturing Intelligence Transformation Strategic Consulting 2020 Vendor Assessment (IDC Doc #US46844920, September 2020)

- Worldwide Business Analytics Consulting and Systems Integration Services 2020 Vendor Assessment (IDC Doc #US45353220, June 2020)

- Worldwide Application Management Services on the Cloud 2020 Vendor Assessment (IDC Doc #US46924517, November 2020)

- Worldwide Retail Co-Innovation Services Providers

2020 Vendor Assessment (IDC Doc #US46160020, December 2020)

- Asia / Pacific (Excluding Japan) Workplace Services in the Era of Multiplied Innovation 2020 Vendor Assessment (IDC Doc #AP46571220, June 2020)

- Worldwide Cloud Professional Services 2020 Vendor Assessment (IDC Doc #US45439120, April 2020)

- Canadian Cloud Professional Services 2021 Vendor Assessment (IDC Doc #CA46215320, January 2021)

- Worldwide Supply Chain SAP Ecosystem Services

2021 Vendor Assessment (IDC Doc #US47537120, March 2021)

3. The Company was positioned as a ‘Leader' by Everest

Group for:

- Industry 4.0 Services PEAK Matrix® Assessment 2020 for The Transformational Leap in CyberPhysical Convergence.

- Next-generation Application Management Services PEAK Matrix® Assessment 2021.

- Open Banking IT Services PEAK Matrix® Assessment 2020.

- System Integrator (SI) Capabilities on Microsoft Azure Services PEAK Matrix® Assessment 2021.

- System Integrator (SI) Capabilities on Google Cloud Platform (GCP) Services PEAK Matrix® Assessment 2021.

- System Integrator (SI) Capabilities on Amazon Web Services (AWS) pEaK Matrix® Assessment 2021.

- Life Sciences Digital Services PEAK Matrix® Assessment 2021.

- IT Security Services PEAK Matrix® Assessment 2020.

- Artificial Intelligence (AI) Services PEAK Matrix® Assessment 2021.

- Insurance Business Model Innovation Enablement Services PEAK Matrix® Assessment 2021.

- Software Product Engineering Services PEAK Matrix® Assessment 2021.

- Semiconductor Engineering Services PEAK Matrix® Assessment 2021.

4. The Company was positioned as a ‘Leader':

- across 11 quadrants of ISG Provider Lens™ SAP HANA and Leonardo Ecosystem Partners.

- across 6 quadrants of ISG Provider Lens™ IoT -Services and Platforms for U.S and Germany, 2020 under ‘Managed Services' category.

- across 19 quadrants of ISG Provider Lens™ Digital Business - Solutions and Service Partners.

- across 5 quadrants of ISG Provider Lens™ Cyber Security - Solutions & Services.

- across 10 quadrants of ISG Provider Lens™ SIAM / ITSM.

- for ISG Provider Lens™ Salesforce Ecosystem Partners for U.S. and Germany 2020 under ‘Managed Application Services' category.

5. The Company was positioned as a Leader in Avasant's:

- Digital Masters, 2020 Radar View™ report.

- AI and Advanced Analytics, 2020 Radar View™ report.

- Retail & CPG Digital Services 2020-21 Radar View™ report.

- Manufacturing Digital Services 2020-21 Radar View™ report.

6. The Company was positioned at No. 2 in HFS Top 10 Agile Software Development, 2020 category.

34. SUSTAINABILITY

“Creating harmony between the Planet, People and Prosperity"

The Company builds sustainability principles and actions into its strategy, culture and day-to-day operations. The Company aims to improve the lives of people around the planet, engaging its employees, clients, stakeholders and the communities we live in, to a higher purpose.

The Company focuses on areas where it can make the most difference: health, education, technology, jobs and people who are denied benefits and access. Guided by the United Nations Sustainable Development Goals, the Company views sustainability in three ways - economic, social and environmental, known informally as Profit, People and the Planet.

35. ORGANIZATION EFFECTIVENESS Human Resource

2020, like never before, was the year that challenged the human spirit in each and every way. It has tested our resilience, and our Company has demonstrated its fortitude and has emerged much stronger, together. The Company salutes the strength and endurance of its employees in these challenging times.

The Company continues its journey with proactive efforts to safeguard the employees, minimize impact on clients, reduce financial risk, maintain supply chain resilience and provide support to the communities lived and served around the world. The Company is successfully navigating rising Covid-19 infections in India, secondary waves in certain geographies and coinciding crisis situations with minimal impact due to stable remote working arrangements.

In line with our ‘Duty of Care' responsibilities and commitment to employee health and safety, the Company has become the first IT company in India to achieve the ‘PROTEK' certification from Intertek, the world-renowned quality assurance leader, that tests and inspects the end-to-end health and safety of your people, places, and products.

Employee Strength and Expansion

As we close out another successful year, the Company and its subsidiaries have attained an impressive employee strength of 1,68,977 and continues to build and support the business strategy of “Mode 1-2-3”.

Our emphasis and commitment to talent localization continues. We believe this strategy confers us competitive advantages in a tightening regulatory environment with respect to workforce mobility. In the United States, our localization stands at 70.4%.

The Company prides itself in employing people from different geographies and nationalities, creating a unique fabric of values and traditions. As on March 31, 2021, the Company employed resources from 157 nationalities and women represented 27.2% of the global workforce.

Talent Acquisition

The talent acquisition 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 its talent acquisition programs. The Company's gross hiring was 44,695 globally.

Talent Development

The Company's Talent Development Centre of Excellence (CoE) continues to focus on creating a culture of continuous learning through its business focused learning solutions, contributing to the vision of building a truly global organization.

During the fiscal year, 1,20,652 employees availed 6.64 million hours of training for enhancing their current skills and learning new skills. 47,232 unique employees were also trained in digital skills during this period.

The vagaries posed by the Covid-19 pandemic pushed team members to work in a virtually connected mode, further prodding talent development to rearticulate competencies relevant to this unprecedented change. The ‘New Normal' competencies became an integral part of the key learning solutions being deployed globally. These were also translated into micro-learning nuggets to adequately engage the people and provide them the necessary perspective to lead ‘Self' and ‘Team' during the trying times.

Diversity and Inclusion

Having built and scaled a multinational enterprise over nearly four decades, the Company believes that diversity and inclusion in the workplace is an asset for both businesses and their employees to foster innovation, creativity and empathy in ways that homogeneous environments seldom do. Yet it takes careful nurturing and conscious orchestration to unleash the true potential of this invaluable asset. The Company has crafted multiple initiatives for its diverse employees to realize their potential, while striking a good work-life balance. The Company makes an intentional and continuous focus to create and sustain a culture of equality, self-awareness, authenticity and accountability in the realm of gender, cross-cultural diversity, persons with disabilities and LGBTQ inclusion.

The Company believes that the effort towards creating an inclusive environment should translate into people feeling valued, treated equally and with respect, feeling safe to express their opinions and empowered to take decisions and do their best. Keeping the same in mind, ‘Inclusion Lab' and ‘Inclusion at Scale' has been launched for all employees to foster the inclusive work environments. These targeted initiatives have helped the Company to make tremendous progress over the years in fostering gender diversity.

In order to affirm, guide and support the commitment of the Company to drive diversity and inclusion, the Board of Directors of the Company has constituted a Committee of the Board named as Diversity Committee to focus on these areas.

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. Our distinctive people practices continue to win accolades across the globe.

1. The Company has been recognized as the ‘Top Employer 2021', for its exemplary HR performance by the Top Employer's Institute in France, Germany, Netherlands, Australia, New Zealand, Philippines, Poland, Singapore, South Africa, Sweden and the United Kingdom. The Company is proud to have received this prestigious accolade in the United Kingdom for the fifteenth consecutive year.

2. The Company has been ranked No. 1 across multi-national companies headquartered in India and No. 30 in the World's Best Employers by Forbes.

3. In the ‘Diversity and Inclusion' space, the Company won the following accolades -

- Won the Brandon Hall Gold award for ‘Best Inclusion and Diversity Strategy'.

- Won a place in the ‘Top 100 Best Companies for Women in India’ the prestigious ‘Exemplar of Inclusion’ award in the 2020 Working Mother & Avtar Most Inclusive Companies Index (MICI).

- Won a place in the Gender-Equality Index by Bloomberg.

4. The Company won the Brandon Hall Gold award for ‘Best Unique or Innovative Learning and Development Program'.

5. The Company was felicitated with various Stevie® Awards including Gold Award for ‘Most Innovative Work From Home Plan - All Other Nations', Silver award for ‘Most Valuable Employer - Asia Pacific’ and Silver Award for ‘Most Valuable Hr Team - Asia Pacific’.

36. CONSERVATION OF ENERGY, RESEARCH AND DEVELOPMENT, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO

Disclosures of particulars as required under Section 134(3)(m) of the Act, read with the Companies (Accounts) Rules, 2014 to the extent applicable to the Company, are set out in Annexure 4 to this Report.

37. 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 5 to this Report.

38. STOCK OPTIONS PLANS

The stock option plans of the Company viz. the 1999 Stock Option Plan, the 2000 Stock Plan and the 2004 Stock Option Plan have been terminated.

39. 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 financial year:

Sl.

No.

Name of the Director

Ratio to median remuneration of employees

Executive Director

1

Mr. Shiv Nadar (1)

46.02

Non-Executive Directors (2)

2

Ms. Roshni Nadar Malhotra

7.84

3

Mr. Deepak Kapoor

6.60

4

Mr. S. Madhavan

8.49

5

Dr. Mohan Chellappa

7.26

6

Ms. Nishi Vasudeva

6.58

7

Ms. Robin Ann Abrams

9.93

8

Dr. Sosale Shankara Sastry

7.26

9

Mr. Shikhar Malhotra

6.75

10

Mr. R. Srinivasan

9.14

11

Mr. Simon John England

7.26

12

Mr. Thomas Sieber

8.09

Notes:

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

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

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

Sl.

No.

Name of the Director

% increase in Remuneration in the financial year

Executive Director

1

Mr. Shiv Nadar (1)

(3.96)

Non-Executive Directors (2)

2

Ms. Roshni Nadar Malhotra

1.57

3

Mr. Deepak Kapoor

1.56

4

Mr. S. Madhavan

1.21

5

Dr. Mohan Chellappa (3)

-

6

Ms. Nishi Vasudeva

0.62

7

Ms. Robin Ann Abrams

(23.78)

8

Dr. Sosale Shankara Sastry

(30.32)

9

Mr. Shikhar Malhotra (3)

-

10

Mr. R. Srinivasan

(25.31)

11

Mr. Simon John England (3)

-

12

Mr. Thomas Sieber

(19.87)

Key Managerial Personnel (4)

13

Mr. C. Vijayakumar (President & Chief Executive Officer) (5)

(73.91)

14

Mr. Prateek Aggarwal (Chief Financial Officer) (6)

57.91

15

Mr. Manish Anand (Company Secretary)

9.60

(1) The % has been calculated after taking into account the remuneration drawn from the Company as well as from HCL America Inc., a step-down wholly owned subsidiary of the Company and the above change includes any variation on account of exchange rate.

the list of top ten employees of the Company in terms of the remuneration drawn in FY 2020-21 and a statement containing the names of the employees employed throughout the financial year and in receipt of remuneration of ?1.02 crores per annum or more and employees employed for part of the year and in receipt of ?8.50 lacs or more per month is provided in a separate exhibit forming part of this report. The Annual Report and the Financial Statements are being sent to the shareholders excluding this exhibit. This exhibit is available to any shareholder for inspection on request and is also available on the website of the Company at https://www.hcltech.com/investors/results-reports

41. VIGIL MECHANISM / WHISTLE BLOWER POLICY

The Company has formulated and published a Whistleblower Policy to provide Vigil Mechanism to report genuine concerns (including reporting of instances of leakage of unpublished price sensitive information) 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 the Listing Regulations and are 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.

42. OBSERVANCE OF THE SECRETARIAL STANDARDS ISSUED BY THE INSTITUTE OF COMPANY SECRETARIES OF INDIA

The Company complies with all applicable Secretarial Standards issued by the Institute of Company Secretaries of India.

43. DISCLOSURE UNDER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013

The Company has in place a Prevention and Redressal of Sexual Harassment at Workplace 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, which form part of this Annual Report.

44. ACKNOWLEDGEMENTS

The Board wishes to place on record its appreciation of the significant contributions made by the employees of the Company and its subsidiaries during the year under review. The Company has achieved impressive growth through 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 members for their cooperation and assistance extended to the Company.

For and on behalf of the Board of Directors of HCL Technologies Limited

Place: New Delhi, India ROSHNI NADAR MALHOTRA

Date: April 23, 2021 Chairperson