The Board of Directors (“Board”) have immense pleasure in presenting the Thirty-Second Directors’ Report of HCL Technologies Limited (“HCLTech” or the “Company”) together with the Audited Financial Statements for the Financial Year (“FY”) ended March 31,2024.
1. FINANCIAL RESULTS
Key highlights of the financial results of the Company prepared as per the Indian Accounting Standards (“Ind AS”) for the FY ended March 31,2024, along with corresponding numbers of March 31,2023, are as under:
(? in crores)
| |
Consolidated
|
Standalone
|
|
Particulars
|
FY ended
|
FY ended
|
| |
March 31, 2024
|
March 31, 2023
|
March 31,2024
|
March 31, 2023
|
|
Revenue from operations
|
1,09,913
|
1,01,456
|
48,118
|
46,276
|
|
Other income
|
1,495
|
1,358
|
1,076
|
1,031
|
|
Total Income
|
1,11,408
|
1,02,814
|
49,194
|
47,307
|
| |
|
|
|
|
|
Total Expenses
|
90,441
|
83,326
|
33,738
|
32,591
|
| |
|
|
|
|
|
Profit before tax
|
20,967
|
19,488
|
15,456
|
14,716
|
| |
|
|
|
|
|
Tax Expense
|
5,257
|
4,643
|
3,782
|
3,257
|
| |
|
|
|
|
|
Profit for the year
|
15,710
|
14,845
|
11,674
|
11,459
|
| |
|
|
|
|
|
Other comprehensive income
|
855
|
1,301
|
439
|
(259)
|
|
Total comprehensive income for the year
|
16,565
|
16,146
|
12,113
|
11,200
|
|
Earnings per share of ?2 each
|
|
|
|
|
|
Basic (in ?)
|
57.99
|
54.85
|
43.11
|
42.32
|
|
Diluted (in ?)
|
57.86
|
54.79
|
43.02
|
42.27
|
2. BUSINESS OVERVIEW AND STATE OF AFFAIRS
HCLTech brings together the best of technology and its people to enable global enterprises to accelerate their digital transformation journeys.
The Company has a footprint across 60 countries and employs over 2,27,000 people. It's full stack technology services portfolio across the digital, engineering, cloud, AI and software makes it a preferred digital transformation partner to G2000 companies across industries.
The Company serves clients through a network of 200 delivery centers and 150 innovation labs. It has also established presence in 20 nearshore locations to deliver inproximity services to clients. This global reach, combined with a robust ecosystem of partners and hyperscalers, allows it to deploy best-in-class technology solutions at speed and scale.
The advent of new technologies like GenAI and continued
digital transformation needs of enterprises offer growth opportunities to the Company.
On a consolidated basis, the Company's revenue from operations for the financial year under review was ? 1,09,913 crores as against ? 1,01,456 crores for the previous financial year. The profit for the financial year under review was ? 15,710 crores, as against ? 14,845 crores for the previous financial year.
On a standalone basis, the Company's revenue from operations for the financial year under review was ? 48,118 crores as against ? 46,276 crores in the previous financial year. The profit for the financial year under review was ? 11,674 crores as against ? 11,459 crores for 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 the Annual Report for FY 2023-24.
3. DIVIDEND
The Board has paid the following interim dividends during the financial year under review:
|
S.
|
Dividend Paid during
|
Date of Declaration
|
Rate of Dividend per Share
|
Dividend amount*
|
|
No.
|
FY 2023-24
|
(face value of ?2 each)
|
(? in crores)
|
|
1
|
1st Interim Dividend
|
April 20, 2023
|
18/-
|
4,873
|
|
2
|
2nd Interim Dividend
|
July 12, 2023
|
10/-
|
2,707
|
|
3
|
3rd Interim Dividend
|
October 12, 2023
|
12/-
|
3,250
|
|
4
|
4th Interim Dividend
|
January 12, 2024
|
12/-
|
3,250
|
| |
|
|
Total
|
14,080
|
Note: The dividend amount is the gross amount before deduction of tax at source by the Company. Total tax deducted at source was approx. ? 1,375 crores.
The Board declared an interim dividend of ? 18/- per share for FY 2024-25 on April 26, 2024 after approval of the financial results for the quarter and financial year ended March 31,2024.
4. TRANSFER TO RESERVES
The closing balance of the retained earnings of the Company, on a standalone basis, as on March 31, 2024, after all appropriations and adjustments was ? 32,783 crores.
For complete details on movement in Reserves and Surplus during the financial year under review, please refer to the Statement of Changes in Equity included in the Standalone and Consolidated financial statements of the Company for FY 2023-24.
5. SHARE CAPITAL
During the financial year under review, the Company has not issued any equity shares. As on March 31,2024, the Authorised share capital of the Company was ?6,03,40,00,000/- divided into 3,01,70,00,000 equity shares of face value of ?2/- each.
The Issued, Subscribed and Paid-up equity share capital of the Company as on March 31, 2024, was ?5,42,73,30,192/-divided into 2,71,36,65,096 equity shares of face value of ?2/-each.
6. USD DENOMINATED UNSECURED NOTES ISSUED BY A WHOLLY OWNED SUBSIDIARY
During FY 2020-21, HCL America Inc., a step-down wholly owned subsidiary of the Company, incorporated under the laws of California, USA had issued USD 500 million fixed rate, senior unsecured notes (“Notes”) with a maturity date of March 2026 and bearing interest rate of 1.375% per annum. The Notes were unconditionally and irrevocably guaranteed by the Company. The Company's potential liability under the guarantee was capped at USD 525 million which was 105% of principal amount of the Notes.
During FY 2022-23, HCL America Inc. through cash tender offer had bought back its Notes of the principal amount of USD 247.793 million. Post this buy back, the principal amount of Notes that remain outstanding are USD 252.207 million. Accordingly, as on March 31,2024, the Company's aggregate potential liability for the Notes is USD 264.817 million which is 105% of the total aggregate principal amount of the Notes outstanding.
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, as amended from time to time, (“Listing Regulations”) shall form part of the Annual Report of the Company for FY 2023-24.
8. SUBSIDIARIES, ASSOCIATES AND JOINT VENTURES
As on March 31,2024, the Company has 130 subsidiaries and 6 associate companies within the meaning of Sections 2(87) and 2(6) of the Companies Act, 2013 (“Act”), as amended from time to time, respectively.
A. Incorporation of new subsidiary during the financial year under review
HCL Technologies Holding UK Limited was incorporated under the laws of United Kingdom as a wholly owned subsidiary of the Company.
B. Acquisitions done during the financial year under review ASAP Holding GmbH
HCL Technologies UK Limited a Company incorporated in UK and a step-down wholly owned subsidiary of the company had acquired 100% stake in ASAP Holding GmbH, a German automotive engineering technology provider in areas such as autonomous driving, e-mobility and connectivity. Pursuant to this acquisition, ASAP Holding GmbH and its 10 subsidiaries have become the step-down wholly owned subsidiaries of the Company with effect from August 31,2023, being the date of completion of the acquisition.
The names of the aforesaid 10 subsidiaries are provided under note 3.32 to the Consolidated Financial Statements which shall form part of the Annual Report FY 2023-24.
C. Subsidiaries merged / closed during the financial year under review
The Company's endeavour is to achieve organisational efficiency by optimising resources and managing costs for operating in various countries. Accordingly, after taking into consideration the business aspects, local laws and regulations, etc., the Company takes appropriate actions for internal restructuring by integrating businesses amongst subsidiaries so as to reduce the number of entities.
Considering the above, the following step-down wholly owned subsidiaries of the Company were merged / closed:
a) Manzina Tech GmbH (incorporated in Switzerland) was merged with and into Confinale AG (incorporated in Switzerland) on July 4, 2023.
b) Sankalp Semiconductor Sdn. Bhd. (incorporated in Malaysia) was liquidated on October 3, 2023.
c) Brillant Data LLC (incorporated in Virginia , USA) was voluntarily dissolved on February 8, 2024.
d) TeleRX Marketing Inc. (incorporated in Pennsylvania, USA), was merged with and into HCL America Inc. (incorporated in California, USA) on March 15, 2024.
D. Divestment of stake in the Joint Venture (JV) with State Street International Holdings
HCL Investments UK Limited, (“HCL UK”) a company incorporated in UK and a wholly owned step-down subsidiary of the Company had a Joint Venture with State Street International Holdings, a US corporation. Pursuant to the Share Purchase Agreement, HCL UK has divested its entire 49% equity stake in the JV, w.e.f. April 1,2024.
E. Financial Statement of the Subsidiaries
In terms of the requirements of 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 the Annual Report for FY 2023-24.
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 2023-24 shall be available on the website of the Company at https://www.hcltech.com/ investor-relations/financial-results. The financial statements in respect of the subsidiaries for FY 2023-24 shall be available at the Company's website at https://www.hcltech.com/investor-relations/subsidiaries-financials.
9. 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.
10. DIRECTORS AND KEY MANAGERIAL PERSONNEL
Details of the composition of the Board, appointments / reappointments during the financial year under review, director retiring by rotation and details of declaration by Independent Directors have been provided in the Corporate Governance Report.
During the year under review, there were no changes in the Key Managerial Personnel of the Company.
11. NUMBER OF MEETINGS OF THE BOARD
During the financial year under review, four meetings of the Board were held. The details of the meetings are provided in the Corporate Governance Report.
12. BOARD COMMITTEES
The Company has the following Board Committees:
A. Audit Committee
B. Corporate Social Responsibility Committee
C. Nomination and Remuneration Committee
D. Risk Management Committee
E. Stakeholders' Relationship Committee
F. ESG & Diversity Equity Inclusion Committee
G. Finance Committee
Details of the composition of the Committees, their terms of reference, attendance of Directors at meetings of the Committees and other requisite details are provided in the Corporate Governance Report.
13. 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 / 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.
14. STATUTORY AUDITORS AND STATUTORY AUDIT REPORT
M/s. B S R & Co. LLP, Chartered Accountants (Firm Registration No.101248W/W-100022) the Statutory Auditors of the Company, will hold office till the conclusion of the Thirty Second Annual General Meeting of the Company.
The appointment /re-appointment of Statutory Auditors will be placed for approval of the Shareholders in the ensuing Annual General Meeting, as may be recommended by the Audit Committee and the Board.
There are no qualifications, reservations, adverse remarks or disclaimers made by M/s. B S R & Co. LLP, Statutory Auditors in their Report for FY 2023-24. The Statutory Auditors have not reported any incident of fraud to the Audit Committee of the Company during the financial year under review. The observations made in the Report under Section 143(3) of the Companies Act, 2013 read with Clause (g) of Rule 11 of the Companies (Audit and Auditors) Rules, 2014 are selfexplanatory and do not call for any further comments.
15. 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 Auditors of the Company for FY 2023-24. The report of the Secretarial Auditor is enclosed as Annexure 1 to this Report. There are no qualifications, reservations, adverse remarks or disclaimer made by the Secretarial Auditor in their report. The Secretarial Auditor has not reported any incident of fraud during the financial year under review.
16. MAINTENANCE OF COST RECORDS
The maintenance of cost records and requirement of cost audit as prescribed by the Central Government under the provisions of Section 148 of the Act are not applicable to the business activities carried out by the Company. Accordingly, such cost accounts and records are not maintained by the Company.
17. ANNUAL RETURN
Pursuant to the provisions of the Sections 92(3) and 134(3) (a) of the Act, the Annual Return of the Company for FY 2023-24 is available on the website of the Company at https://www.hcltech.com/investor-relations/annual-reports
18. POLICY ON DIRECTORS’ APPOINTMENT AND REMUNERATION
The Nomination and Remuneration Committee (“NRC”) formulates the criteria for determining the qualifications, positive attributes and independence of directors in terms of its charter. While evaluating the suitability of individual Board members, the NRC considers factors such as educational and professional background, general understanding of the Company's business dynamics, professional standing, personal & professional ethics, integrity & values, willingness to devote sufficient time & energy in carrying out their duties and responsibilities effectively.
The NRC 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.
19. RISK MANAGEMENT POLICY
The Company has developed and implemented a Risk Management Policy that ensures appropriate management of risks in line with its internal systems and culture.
A detailed section on Risk Management is provided in the Management Discussion and Analysis Report.
20. 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.
21. 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.
22. PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS
The particulars of loans, guarantees and investments, as required under Section 186 of the Act and Schedule V of the Listing Regulations, have been disclosed in the financial statements for FY 2023-24.
23. TRANSACTIONS WITH RELATED PARTIES
The particulars of transactions entered into with the related parties referred to in Section 188(1) and applicable rules of the Act, have been given in Annexure 2 to this Report in Form AOC-2. The Company has in place a ‘Related Party Transaction Policy', which is available on the website of the Company at https://www.hcltech.com/corporate/related-party-transaction-policy.
24. 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, and, includes guiding principles for selection, implementation and monitoring of activities as well as formulation of the annual action plan.
The composition of the CSR Committee, and other details including a brief outline of the CSR Policy of the Company, the amount that the Company was required to spent in terms of the provisions of the Act, and the amount that was actually spent during the financial year under review are set out in Annexure -3 to this Report in the format as prescribed under the Companies (Corporate Social Responsibility Policy) Rules, 2014.
The CSR projects, as approved by the Board for FY 2024-25 are available on the website of the Company at https://www.hcltech.com/investor-relations/corporate-social-responsibilitv
25. DIVIDEND DISTRIBUTION POLICY
Your Company’s wealth distribution philosophy aims at sharing its prosperity with its shareholders, through a formal earmarking / disbursement of profits to its shareholders. In accordance with Regulation 43A of the Listing Regulations, the Company has formulated and adopted 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, etc. The Dividend Distribution Policy is available on the website of the Company at https://www.hcltech.com/corporate/dividend-distribution-policy
26. UNCLAIMED DIVIDEND 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 the IEPF in the subsequent years are given in the Corporate Governance Report. Further, according to the IEPF Authority (Accounting, Audit, Transfer and Refund) Rules, 2016, the shares in respect of which dividend 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 15,239 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/investor-relations/iepf
27. DEPOSITS
The Company neither has any outstanding deposits nor it has accepted any deposits from the public during the financial year under review.
28. PROCEEDINGS PENDING UNDER THE INSOLVENCY AND BANKRUPTCY CODE, 2016
There are no proceedings initiated/pending against the Company under the Insolvency and Bankruptcy Code, 2016.
29. VALUATION DONE AT THE TIME OF ONE TIME SETTLEMENT
There were no instances of one-time settlement with the Banks or Financial Institutions.
30. CORPORATE GOVERNANCE REPORT
The Corporate Governance Report in terms of Regulation 34(3) of the Listing Regulations, along with the Statutory Auditors' certificate shall form part of the Annual Report for FY 2023-24.
31. BUSINESS RESPONSIBILITY AND SUSTAINABILITY REPORT
The Business Responsibility and Sustainability Report in terms of Regulation 34(2) of the Listing Regulations shall form part of Annual Report for FY 2023-24.
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/corporate/fair-disclosure-code
33. AWARDS AND RECOGNITIONS
Your Company relentlessly pursues excellence and is delighted to receive phenomenal share of recognitions and awards from analysts, governing bodies, academic institutions, partners and even customers. The details of few Awards & Recognitions are provided below:
• HCLTech recognized by Ethisphere as one of the World's Most Ethical Companies 2024.
• Emerged as the fastest-growing IT services brand with a 15.9% YoY growth in brand value among the top 10 IT companies globally, as per the 2024 Brand Finance Global 500 and IT Services Top 25 Report.
• Rated A- by global environment non-profit Carbon Disclosure Project (“CDP”) for climate change initiatives.
• HCLTech certified as Top Employer in 26 countries, with No. 1 ranking in 15 countries. Also received regional Top Employer certification in three key geographies of its operations: Top Employer North America 2024 (ranked No. 1), Top Employer Asia Pacific 2024 (ranked No. 1) and Top Employer Europe 2024 (ranked No. 2).
• HCLTech won the National Water Award for significant efforts in holistic water conservation and management in India.
• Included in the S&P Global Sustainability Yearbook 2024 for the second year in a row.
• Highest ranked India-headquartered IT company in the Forbes Best Employers List 2023.
• Ranked seventh globally in the Professional Services category.
A detailed section on Awards & Recognitions received by the Company during the financial year is provided in the Corporate Overview which forms part of the Annual Report for FY 2023-24.
34. SUSTAINABILITY
“Supercharging progress, sustainably and responsibly” conveys the Company's commitment to driving rapid and meaningful long term sustainable growth, while adopting a responsible and mindful approach in an accountable and transparent way. As the Company pursued its commitment, efforts have been made towards ambitious goals, including reaching net-zero emissions by the end of 2040.
The Company's initiatives recognized for consistently demonstrating sustainability are as under:
• 25% reduction in scope 1 and 2 emissions compared to base year 2020.
• 19.02% of renewable energy across global operations.
• The Company has impacted over 6.5 million lives with 54% female beneficiaries through its CSR arm, the HCL Foundation, and helped over 13,500 Persons with Disability.
• Planted over 2.04 million saplings, developed 243 water structures, rejuvenated 150 water bodies and recharged 32 times more water than it uses.
• More than 15,704 hours of training completed by employees at Company's Sustainability School.
Following leading ESG rating agencies have recognized the Company as a leader in consideration of its commitments and progress.
• MSCI ESG assessment conferred “AA” rating to HCLTech for second consecutive year.
• Recognized as Leader (A category) by CDP
• Included in the S&P Global Sustainability Yearbook 2024.
• EcoVadis rated HCLTech 'Gold' for HCLTech's advanced sustainability performance.
35. ORGANIZATION EFFECTIVENESS
A. Human Resources
In the continuing mission of the Company to expand and enrich its employee-centric culture, HCLTech has long understood this fundamental truth: its people are the key to its progress. Through a culture of innovation and “Ideapreneurship”, the Company empower its people to lead value-driven ideas in an inclusive and flexible work environment.
The people strategy is focused on building the skills and capabilities that the industry needs, attracting and retaining the right talent across the globe, and creating a supportive culture for them to do their best work.
B. Employee Strength and Expansion
The global team of the Company is its biggest strength and enables the Company to deliver differentiated service experience to its clients. The Company has attained an impressive employee strength of 2,27,481 with net addition of 1,537 in FY 2023-24. IT services voluntary attrition rate fell from 19.5% in FY 2022-23 to 12.42% in FY 2023-24. The Company has a nearshore presence in 20 countries, where over 90% employees are locally hired. The Company plans to scale up in these areas in next few years.
With a presence in 60 countries and team members from 160 nationalities, the Company is rapidly growing in longstanding locations like India and, more recently, in Eastern Europe and Central America.
HCLTech has been a part of the United States' growth and technological advancement since the Company commenced operations with its first office in the heart of Silicon Valley. HCLTech localization in US stands at 74.4%.
C. Talent Acquisition
HCLTech takes a hands-on approach to recruiting, seeking to directly engage and hire employees rather than use placement agencies. About 84% of the hiring today is direct, which keeps the Company connected with the talent pool.
Hiring freshers is a big component of the Company's talent strategy. 12,141 freshers were during the FY 2023-24.
HCLTech has doubled entry-level hiring in the last three fiscal years. The Company's- TechBee program seeks to recruit highly talented Class 12 graduates and its career development framework ensures that entry-level hires are adequately trained, provided opportunities to work on new challenges and recognized for their contributions, while also enabling them to pursue higher education. The Company programs to attract and recruit Gen Z talent are a crucial part of Companies' strategy and have given a head start as a leading employer for this generation. Gen Z employees represent 27% the workforce today.
D. Talent Development
The employee value proposition, ‘Find your Spark,' is built on four tenets - 1) Providing flexible and diverse career opportunities, 2) Offering enriching job experiences, 3) Creating trusted employment and environment and 4) Embracing employee's whole self with an idea-driven and socially responsible culture.
HCLTech's innovative approaches to training, reskilling and upskilling ensures that its employees are future ready. 1,63,943 employees availed 7.5 million hours of training for enhancing their current skills and learning new skills. 80,780 employees were also trained in digital skills during this period.
Employees can upskill with Aspire, a first-ever digital learning platform at HCLTech. Aspire provides digital knowledge to all employees so that they become more aware of what future tech looks like. Employees can choose from Artificial Intelligence, Machine Learning, Cloud, Data Analytics/Automation each course is thoughtfully structured to help them navigate their learning journey.
E. Diversity, Equity and Inclusion (“DE&I”)
HCLTech is committed to building a diverse workforce across multiple dimensions in a verifiable and measurable manner. Gender diversity stands at 29.1% as of March 2024.
HCLTech's Chief Executive Officer & Managing Director ("CEO & Managing Director") has one of the primary functions of managing the Company's DE&I initiatives. To affirm, guide and support the commitment of the Company towards ESG and to drive gender diversity, the Company has in place a Committee of the Board named as ESG & Diversity Equity Inclusion Committee.
The Diversity, Equity and Inclusion Centre of Excellence has established an inspiring and transformational learning program for all employees, Inclusion at Scale, to educate people on various aspects of inclusion via short video modules. Inclusion at Scale training aims to foster an inclusive culture through ongoing education, awareness, and application. It aids in the development of a common language of inclusion across teams and organizations globally.
The Company provides the following learning and development programs for women:
a) Feminspiration - It is a platform where women leaders from the Company's- client company are invited to address HCLTechies.
b) iMotivate - It aims to motivate women HCLTechies by connecting them with the Company's women leader/s via a formal session and enable them to understand how to manage their priorities and develop necessary leadership and networking capabilities to stay successful in their careers.
c) Women Connect - A network of women employees advocating a gender-neutral work environment. This group coaches and counsels aspiring young women professionals, shares experiences on work / life priorities and includes life coach support, day-care in office premises, concierge services, and policies such as extended maternity leave, work from home, flexible careers, flexible work hours and other women related issues.
d) ASCEND - It is an initiative, which focuses on career progression of women leaders in functional roles and help them achieve their aspired roles. The key outline of the program includes Mentoring & Coaching by senior leaders of the Company to program participants.
e) STEPPING STONES - It is a global program which aims to pace up the growth of mid-level women managers in the leadership positions. The program is designed for midlevel managers to fuel their leadership capabilities.
f) Prelude - It is a focused program for E4 women leaders. The objective is to mentor them for their next level roles to create a ready pool of women leaders for the existing open positions.
g) Momtastic - An initiative launched to help all young mothers and to be mothers to have a smooth transition and ease the dilemmas and decision-making process, when they come back to work post their maternity leave that includes fully paid leaves as per the law of land and 5 days of fully paid leaves for the secondary caregiver. Support is extended to women in three different phases: Pre-natal, pre-conceptual support, support for returning mothers.
h) HCLTech's Second Career Return Program is an opportunity provided through returnship program -HCLTech's Career Program for Women. Through this program, women from diverse backgrounds are trained and hired for entry level jobs.
F. Employee Resource Groups (“ERG”)
a) Pride@HCLTech: It shares unique insights from gay, lesbian, bisexual, transgender, and allied communities, helping to contribute to an inclusive workplace environment that welcomes and values differences. Through increasing LGBTQIA awareness and education, Pride@HCLTech, members vision is to make the world a safer place. The goal of LGBTQIA Inclusion is to create an environment that is welcoming, safe, and supportive for all employees who identify as lesbian, gay, bisexual, transgender, or queer as well as their allies.
b) Ability Connect Network is a community for those who have a disability, support a colleague with a disability, and any employee who wants to help raise awareness and champion support for impacted individuals.
c) Women Connect Network: The ERG is committed to retain and increase the visibility and contributions of the Company's women and attracting top female talent.
d) Multicultural Employee Resource Group (MERG):
Cultural Inclusion at HCLTech is a belief that ensures all individuals are respected irrespective of their backgrounds, cultures, nationalities, their ways of working and their lifestyles. The network provides an employee forum for improvement and enhancement of the professional development of its membership and promotes cultural awareness both within and outside of the Company through education about Indigenous cultures. There are 3 chapters in MERG:
• Black Employee Resource Group (BERG)
and their allies would act as a strategic business partner, providing business solutions, promoting the enhancement of HCLTech's black employees. It will enable black employees to reach their full potential through advocacy of an inclusive work environment that would improve their knowledge, skills and capabilities.
• Latino Employees and Allies Resource Network (LEARN) ERG members would be committed to the representation, advancement, and inclusion of Latino employees and their
allies worldwide. LEARN would host events throughout the year to foster a sense of ‘familia' by educating HCLTechies about Latino culture and empower growth and volunteer opportunities in the Latino community.
• The Asian Network and their allies would promote professional development and community outreach for the Asian community at HCLTech. Asian Network would hold many events throughout the year to celebrate events like Lunar New Year, Asian American and Pacific Islander Heritage Month, and Autumn Moon Festival.
e) Single Parent Network: It is a voluntary, employee-led group of active single parent HCLTechies who contribute both by improving social and emotional wellbeing for other single parents and their families and being the catalysts to improve inclusion in the workplace.
G. Gender Inclusion As a Company we believe that gender diversity will increasingly be a driving force of competitive businesses, now and into the future. The significance of gender diversity for HCLTech business & growth is evident from the high focus it derives from the Company's stakeholders and the Board. Gender parity and inclusion at all levels of hierarchy is HCLTech's top priority, with a special focus given to increasing the representation of women leaders at key leadership positions.
H. Disability Inclusion It focuses on successful integration of people with disabilities into the workforce by providing them an inclusive and accessible work environment. The Company's inclusion is a business imperative for sustainable growth. The Company believes that every individual brings in unique value and skills to workplace. Thus, the organization's Person with Disability ("PwD") charter was drawn up to focus on successful integration of people with disabilities into the workforce by providing them an inclusive and accessible work environment. The charter emphasizes in fostering PwD inclusion through its 4 tenets of Employ, Enable, Engage and Empower.
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. EMPLOYEE STOCK OPTIONS PLANS
A. HCL Technologies Limited - Restricted Stock Unit Plan 2021 (“RSU Plan 2021”)
The Company has adopted and implemented the RSU Plan 2021 for granting Restricted Stock units (“RSUs”) as per the approvals obtained from the shareholders of the Company on November 28, 2021.
In terms of the RSU Plan 2021, a maximum of 1,11,00,000 (One crore eleven lakhs) RSUs in one or more tranches may be granted, which on exercise would entitle not more than 1,11,00,000 (One crore eleven lakhs) equity shares of ?2/- each (approximately 0.41% of the paid-up equity share capital as on March 31,2021), with each such RSU conferring a right to apply for one equity share of the Company against each RSU granted & vested. As on date of this Report, the Company has utilized approx. 94% of total RSUs that were available under the RSU Plan 2021.
The RSU Plan 2021 has been implemented through a trust mechanism by way of secondary acquisition of equity shares of the Company by the Trust for transferring the same on exercise of the vested RSUs. Accordingly, no fresh shares are issued or will be issued by the Company either to the Trust or the RSUs grantees.
The RSU Plan 2021 is in compliance with the SEBI (Share Based Employee Benefits and Sweat Equity) Regulations, 2021, as amended from time to time and there have been no changes in the said plan during the financial year under review.
The details of the RSU Plan 2021 including requirements specified under Regulation 14 of the SEBI (Share Based Employee Benefits and Sweat Equity) Regulations, 2021 are available on the Company's website at https://www.hcltech.com/investors/results-reports.
B. HCL Technologies Limited - Restricted Stock Unit Plan 2024 (RSU Plan 2024)
The Board at its meeting held on April 25-26, 2024, has approved the RSU Plan 2024 for grant of RSUs to the eligible Employees and Directors of the Company and its subsidiaries & associates. The said Plan is proposed to be implemented to continue with the Company's existing Long-Term Incentive (“LTI”) Plan wherein part of the LTI is given by way of the RSUs.
The RSU Plan 2024 is in accordance with the SEBI (Share Based Employee Benefits and Sweat Equity) Regulations, 2021. The adoption and the implementation of the RSU Plan 2024 will be subject to the approval of the shareholders of the Company that would be taken in due course.
39. VIGIL MECHANISM / WHISTLE BLOWER POLICY
The Company has formulated and published a Whistleblower Policy to provide vigil mechanism for employees, directors and other stakeholders of the Company 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 the said Policy is available on the website of the Company at https://www.hcltech.com/corporate/whistleblower-policy. The details of the Whistleblower Policy are provided in the Corporate Governance Report.
40. 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.
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 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 Complaints Committee for the redressal of all sexual harassment complaints. These matters are also being reported to the Audit Committee. The details of the Policy have been stated in the Corporate Governance Report and the complaints and the mechanism to prevent adverse consequences are provided in the Business Responsibility and Sustainability Report.
42. 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 2023-24:
|
S. No.
|
Name of the Director
|
Ratio to median remuneration of employees
|
|
Executive Director
|
|
|
1
|
Mr. C. Vijayakumar, CEO & Managing Director
|
707.46
|
|
Non-Executive Director
|
|
|
2
|
Ms. Bhavani Balasubramanian
|
-
|
|
3
|
Mr. Deepak Kapoor
|
7.51
|
|
4
|
Mr. S. Madhavan
|
9.29
|
|
5
|
Dr. Mohan Chellappa
|
9.85
|
|
6
|
Ms. Nishi Vasudeva
|
7.51
|
|
7
|
Ms. Robin Ann Abrams
|
12.16
|
|
8
|
Ms. Roshni Nadar Malhotra
|
7.98
|
|
9
|
Dr. Sosale Shankara Sastry
|
9.20
|
|
10
|
Mr. Shikhar Malhotra
|
6.93
|
|
11
|
Mr. R. Srinivasan
|
11.19
|
|
12
|
Mr. Simon John England
|
10.99
|
|
13
|
Mr. Thomas Sieber
|
11.91
|
|
14
|
Ms. Vanitha Narayanan
|
11.05
|
Notes:
i. The remuneration of Non-Executive Directors comprises of sitting fees and commission paid /payable for FY 2023-24.
ii. Ms. Bhavani Balasubramanian was appointed as a Non-Executive Independent director of the Company w.e.f. January 12, 2024. Hence, information of her remuneration is incomparable and has not been provided.
iii. Mr. C. Vijayakumar, CEO & Managing Director is based in USA and draws remuneration from HCL America Inc., a wholly owned step-down subsidiary of the Company in USA.
iv. While calculating the above ratio, the median remuneration of employees has been taken on global basis.
B. The percentage increase / decrease in remuneration of each Director, Chief Executive Officer, Chief Financial Officer, Company Secretary in the financial year 2023-24:
i. Percentage increase / (decrease) in Remuneration of Non-Executive Directors
|
S. No.
|
Name of the Director
|
% Increase / (Decrease) in
|
| |
|
Remuneration in the financial year
|
|
1
|
Ms. Roshni Nadar Malhotra
|
(9)
|
|
2
|
Ms. Bhavani Balasubramanian
|
*
|
|
3
|
Mr. Deepak Kapoor
|
-
|
|
4
|
Mr. S. Madhavan
|
-
|
|
5
|
Dr. Mohan Chellappa
|
(6)
|
|
6
|
Ms. Nishi Vasudeva
|
-
|
|
7
|
Ms. Robin Ann Abrams
|
1
|
|
8
|
Dr. Sosale Shankara Sastry
|
1
|
|
9
|
Mr. Shikhar Malhotra
|
-
|
|
10
|
Mr. R. Srinivasan
|
-
|
|
11
|
Mr. Simon John England
|
8
|
|
12
|
Mr. Thomas Sieber
|
28
|
|
13
|
Ms. Vanitha Narayanan
|
17
|
Note: *Ms. Bhavani Balasubramanian was appointed as a Non-Executive Independent Director during FY 2023-24. Hence, information of her remuneration is incomparable and has not been provided.
ii. Percentage increase / decrease in remuneration of Executive Director and Key Managerial Personnel
|
S. No.
|
Name of Key Managerial Personnel
|
Designation
|
% Increase /(Decrease) in Remuneration in the financial year after considering the Long Term Incentive ("LTI") payment & perquisite value of RSUs exercised
|
% Increase /(Decrease) in Remuneration in the financial year without considering the LTI payment & perquisite value of RSUs exercised
|
|
1.
2.
3.
|
Mr. C. Vijayakumar* Mr. Prateek Aggarwal Mr. Manish Anand
|
CEO & Managing Director Chief Financial Officer Company Secretary
|
190.74%
0.64%
4.86%
|
(9.20%)
(0.52%)
6.68%
|
Note: *
i. Mr. C. Vijayakumar was appointed as the Managing Director of the Company w.e.f. July 20, 2021, with the designation as ‘CEO & Managing Director’. There has been no change in the overall remuneration of Mr. C. Vijayakumar, as approved by the shareholders, since his appointment.
ii. During FY 2023-24, he did not receive any remuneration from the Company, however, he received remuneration including cash component of LTI from HCL America Inc., a step-down wholly owned subsidiary of the Company. He received USD 2.36 million as the cash component of the LTI. The perquisite value of the performance based RSUs exercised by him during FY 2023-24 was USD 4.56 million.
iii. The performance-linked bonus of USD 1.14 million paid in FY 2023-24 was related to performance for the previous financial year FY 2022-23.
C. The percentage increase in the median remuneration of employees in the financial year: 7.07%
D. The number of permanent employees on the rolls of Company: There were 1,19,035 permanent employees on the rolls of the Company. In addition, the Company had 1,08,446 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 percentage increase made in the salaries of employees other than the managerial personnel in the last financial year was
3.37%. The remuneration paid to the CEO & MD is within the limits approved by the shareholders, the percentage change in remuneration have been stated in Para 42 of this report and the details of the remuneration have been provided in the Para 19 of the Corporate Governance Report which shall form part of the Annual Report FY 2023-24.
F. The Company affirms that the remuneration is as per the Remuneration Policy of the Company.
G. Variable Pay Compensation: The variable compensation of executive officers, including the CEO and Managing Director, is based on clearly laid out performance criteria and measures. The variable compensation is paid in the form of Annual Performance linked Bonus, Long-Term Incentive (“LTI”) and Restricted Stock Units (based on Performance or Tenure). The parameters for variable compensation include achieving targets related to Revenues, EBIT, Net profit, Free cashflow, Total Shareholder Return, personal KPPs, strategic goals and other metrices such as client satisfaction, ESG, Diversity, etc.
43. STATEMENT OF EMPLOYEES PURSUANT TO RULE 5(2) AND 5(3) OF THE COMPANIES (APPOINTMENT AND REMUNERATION OF MANAGERIAL PERSONNEL) RULES,2014
In terms of Rule 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, a separate exhibit forming part of this report contains the following:
A. the list of top ten employees of the Company in terms of the remuneration drawn in FY 2023-24;
B. a statement containing the names of the employees employed throughout the financial year and in receipt of remuneration of ? 1.02 crores or more per annum; and
C. a statement containing the names of the employees employed for part of the year and in receipt of remuneration of ? 8.50 lacs or more per month.
This exhibit is available on the website of the Company at https://www.hcltech.com/investor-relations/annual-reports The Annual Report is being sent to the shareholders excluding the aforesaid exhibit. Shareholders interested in obtaining this information may access the same from the Company's website.
44. LARGE CORPORATES
As per Regulation 50B of the SEBI (Issue and Listing of NonConvertible Securities) Regulations, 2021, read with Chapter XII of the Master Circular number SEBI/HO/DDHS/PoD1/P/ CIR/2023/119 dated August 10, 2021 on ‘Fund raising by issuance of debt securities by large corporates', as amended (“LC Regulations”), the Company was a Large Corporate (“LC”) as on March 31, 2021, March 31, 2022 and March 31, 2023 as its outstanding long term borrowings were more than ? 100 crores on the said dates. Accordingly, in terms of the LC Regulations, for any incremental borrowings made by the Company during FY22, FY23 & FY24, a minimum of 25% of such incremental borrowings were required to be raised through issuance of debt securities, which were to be raised either in the same financial year and / or in the subsequent two financial years.
The details of incremental borrowings made by the Company during FY22, FY23 & FY24 and the obligations to borrow through issuance of debt securities are provided as below:
(? in crores)
|
Particulars
|
FY22
|
FY23
|
FY24
|
|
Incremental borrowings made during the financial year (a)
|
24.95
|
35.48
|
6
|
|
Mandatory borrowing that was required through issuance of debt securities {25% of (a)}
|
6.23
|
8.87
|
1.50
|
SEBI vide its circular number SEBI/HO/DDHS/DDHS-RACPOD1/P/CIR/2023/172 dated October 19, 2023 (“SEBI Circular”) has revised the criteria for considering a listed entity as a LC which now provides that the outstanding long-term borrowings of the companies as on March 31, 2024, should not be less than ?1,000 crores. As per the said revised criteria, the Company would not fall in the category of LC for FY25.
Further, the SEBI Circular requires that the companies that were identified as LC based on the erstwhile criteria, shall endeavor to comply with the requirement of raising 25% of their incremental borrowings done during FY22, FY23 & FY24, by way of issuance of debt securities till FY ended March 31,2024. In case the companies have not issued debt securities, a one-time explanation should be provided in the Annual Report.
In this regard, it is hereby clarified that that the borrowings done by the Company were mainly on account of the Company's car loan policy to facilitate its employees. From the above table, it will be observed that the amount required to be borrowed by issuance of debt securities is so miniscule that it would not have been feasible to issue debt securities for such small amount. Further, considering the funds & cash flow position of the Company, there was no requirement to borrow during these years except to meet the aforesaid regulatory requirements, for which the Company had approached the Stock Exchanges for a waiver / guidance due to the circumstances as stated above. As the said SEBI Circular requires to the companies to comply or explain, the Company has chosen to explain its position for not issuing the debt securities.
45. ACKNOWLEDGEMENTS
The Board wishes to place on record its appreciation of the significant contributions made by the employees of the Company, its subsidiaries and associate companies. The Company has achieved impressive growth through competence, hard work, solidarity, co-operation and support of employees at all levels. The Board wishes to thank the customers, vendors, other business associates and investors for their continued support in the Company's growth and also wishes to thank the government authorities, banks and other regulatory bodies for their co-operation and assistance extended to the Company.
For and on behalf of the Board of Directors of HCL Technologies Limited
Roshni Nadar Malhotra
Place: Noida (U.P.), India Chairperson
Date: April 26, 2024 DIN: 02346621
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