HCL

HCL Technologies Limited (Hindustan Computers

Limited) is an Indian multinational information
technology (IT) service and consulting company
headquartered in Noida, Uttar Pradesh. It is a
subsidiary of HCL Enterprise. Originally a research
and development division of HCL, it emerged as an
independent company in 1991 when HCL ventured
into the software services business
The company has offices in 44 countries including
the United States, France and Germany, and the
United Kingdom with a worldwide network of R&D, "innovation labs" and "delivery centers", and
137,000+ employees and its customers include 250 of the Fortune 500 and 650 of the Global 2000
companies. It operates across sectors including aerospace and defense, automotive, banking,
capital markets, chemical and process industries, consumer goods, energy and utilities, healthcare,
hi-tech, industrial manufacturing, insurance, life sciences, manufacturing, media and
entertainment, mining and natural resources, oil and gas, retail, telecom, and travel, transportation,
logistics & hospitality.
As of May 2018, the company, along with its subsidiaries, had a consolidated revenue of $7.8
billion.

Indian Accounting Standard (Ind AS) 102

A share-based payment is a transaction in which the entity receives goods or services either as
consideration for its equity instruments or by incurring liabilities for amounts based on the price
of the entity's shares or other equity instruments of the entity. The accounting requirements for the
share-based payment depend on how the transaction will be settled, that is, by the issuance of (a)
equity, (b) cash, or (c) equity or cash.
Indian Accounting Standard (Ind AS) 108
An entity shall disclose information to enable users of its financial statements to evaluate the nature
and financial effects of the business activities in which it engages and the economic environments
in which it operates.
Indian Accounting Standard (Ind AS) 102
1999 Stock Option Plan / 2000 Stock Option Plan / 2004 Stock Option Plan
Pursuant to the approval of the shareholders, the Company had instituted the 1999 Stock Option
Plan (“1999 Plan”), 2000 Stock Options Plan (“2000 Plan”) and 2004 Stock Option Plan (“2004
Plan”) for all eligible employees of the Company and its subsidiaries. The 1999 Plan, 2000 Plan
and 2004 Plan are administered by the Nomination & Remuneration Committee (erstwhile
Compensation Committee) of the Board and provide for the issuance of 20,000,000; 15,000,000
and 20,000,000 options, respectively.
The 1999 Plan and 2000 Plan were lapsed and 2004 Plan is active. The entitlement of the Stock
Option holders under 2004 Plan is 8 equity Shares of `2 each against each option exercised. The
Company has a ‘HCL Technologies Stock Options Trust’ for administering ESOP Plan as per
SEBI (Share Based Employee Benefits) Regulations, 2014. The trustees of the trust are Mr.Vineet
Vij, Mr. Mathew George and Mr. Subodh Jain. However, the Company has not undertaken any
transactions under trust mechanism.
The details of the options granted under the 1999, 2000 and 2004 Plans are given below:
The diluted earnings per share were `53 and `48 for the fiscal years ended March 31, 2018 and
March 31, 2017 respectively.
BONUS SHARE:
Bonus shares are additional shares given to the current shareholders without any additional cost,
based upon the number of shares that a shareholder owns. These are company's accumulated
earnings which are not given out in the form of dividends, but are converted into free shares.
ESOP:
An ESOP (Employee stock ownership plan) refers to an employee benefit plan which offers
employees an ownership interest in the organization. Employee stock ownership plans are issued
as direct stock, profit-sharing plans or bonuses, and the employer has the sole discretion in deciding
who could avail of these options.
GRANT DATE:
The date on which an employee is given a stock option. The grant date is usually later than the
date on which it is announced that stock options will be distributed.
FAIR VALUE:
Fair value refers to the actual value of an asset – a product, stock, or security – that is agreed upon
by both the seller and the buyer.

VESTING PERIOD:
The vesting period is the period of time before shares in an employee stock option plan or
benefits in a retirement plan are unconditionally owned by an employee.
Use of estimates
The preparation of financial statements in conformity with Ind AS requires the management to
make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue,
expenses and other comprehensive income (OCI) that are reported and disclosed in the financial
statements and accompanying notes. These estimates are based on the management’s best
knowledge of current events, historical experience, actions that the Company may undertake in the
future and on various other assumptions that are believed to be reasonable under the circumstances.
Significant estimates and assumptions are used for, but not limited to, accounting for costs
expected to be incurred to complete performance under fixed price projects, allowance for
uncollectible accounts receivables, accrual of warranty costs, income taxes, valuation of share-
based compensation, future obligations under employee benefit plans, the useful lives of property,
plant and equipment, intangible assets, impairment of goodwill, and other contingencies and
commitments.
Changes in estimates are reflected in the financial statements in the year in which the changes are
made. Actual results could differ from those estimates.

Equity settled stock-based compensation

Stock-based compensation represents the cost related to stock-based awards granted to
employees. The Company measures stock-based compensation cost at grant date, based on the
estimated fair value of the award and recognizes the cost (net of estimated forfeitures) on a
straight line basis over the requisite service period for each separately vesting portion of the
award, as if award was in substance, multiple awards. The Company estimates the fair value of
stock options using the Black-Scholes valuation model. The cost is recorded under the head
employee benefit expense in the statement of profit and loss with corresponding increase in
“Share Based Payment Reserve”.
Revenue from product sales are shown net of sales tax and applicable discounts and allowances.
Revenue related to product with installation services that are critical to the product is recognized
when installation of product at customer site is completed and accepted by the customer. If the
revenue for a delivered item is not recognized for non-receipt of acceptance from the customer,
the cost of the delivered item continues to be in inventory
Inventory
Stock-in-trade, stores and spares are valued at the lower of the cost or net realizable value. Net
realizable value is the estimated selling price in the ordinary course of business, less estimated
costs of completion and estimated costs necessary to make the sale.
Cost of stock-in-trade procured for specific projects is assigned by identifying individual costs of
each item. Cost of stock in trade, that are interchangeable and not specific to any project and cost
of stores and spare parts are determined using the weighted average cost formula.
Indian Accounting Standard (Ind AS) 108
Segment Reporting
As per Ind AS 108 ‘Operating Segments’, the Company has disclosed the segment information
only as part of the consolidated financial results.
HCL offers comprehensive engineering services and solutions in all aspects of product
development and platform engineering.
These services span hardware, embedded software, mechanical, VLSI design, PLM, and software
engineering. Our clientele are leaders across several engineering industry segments such as
telecommunications, aerospace and defense, automotive, consumer electronics, industrial
manufacturing, medical devices, office automation, semiconductor, and ISVs. We successfully
collaborate with innovation partners, universities, industry bodies, and manufacturing partners.
Revenues
The Group derives its revenue from three segments viz Software services, IT Infrastructure
services and Business Process
Outsourcing services.
Understand the Company and its business: The directors have an obligation to remain informed
about the Company and its business, including the principal operational and financial objectives,
strategies and plans of the Company, relative standing of the business segments within the
Company and vis-a-vis the competitors of the Company, factors that determine the Company’s
success, results of operations and financial condition of the Company and the significant
subsidiaries and business segments.

Presentations by management: The Board is given presentations covering finance, sales,

marketing, major business segments and operations of the Company, global business environment
including business opportunities, business strategy and the risk management practices before
taking on record the financial results of the Company.

The scope / boundary of the yearly GHG emission reporting cover the Pan India and Global
Operations of the organization. This includes three business segments: Software, Infrastructure
Management (Infra) and Business Process Outsourcing Services. (BSERV) and covers data in
actuals from April to March every year. In addition to the above initiatives the organization has
developed in-house an exhaustive online tool (Manage Carbon) to monitor & analyze the trend of
emissions and energy consumption.