Assignment onHCL Technologies Ltd.

Group 7

Acknowledgement

I would like to acknowledge and extend my heartfelt gratitude to our prof…………. who provided us with the better understanding of the subject and without whose able guidance and help this assignment would not have been completed.

A special thanks to god and parents for providing the strength to work. Thanks to the dear friends for the constant help and support.

Profile of the CompanyHCL Technologies Limited is an Indian global IT services company headquartered in Noida, Uttar Pradesh. It offers services including software consulting, enterprise transformation, remote infrastructure management, engineering and R&D services, and business process outsourcing (BPO).

HCL has offices in 31 countries to provide services across industry verticals, including aerospace & defense, energy & utilities, independent software vendors, manufacturing, professional services, servers & storage, automotive, financial services, industrial manufacturing, media & entertainment, retail & consumer, telecom, consumer

electronics, government, life sciences & healthcare, medical devices, semiconductors, and travel, transportation & logistics.

HCL Technologies is on the Forbes Global 2000 list and is one of Asia’s Fab 50 Companies. HCL Technologies, along with its subsidiaries, had consolidated revenues of $5 billion in 2013 (Calendar Year).

HCL Technologies Limited (HCL) is a global technology company. The Company’s operations consist of providing Software services, infrastructure services, including sale of networking equipment and business processing outsourcing services, which are in the nature of customer contact centers and technical help desks. HCL is a provider of business transformation, enterprise and custom applications, infrastructure management, business process outsourcing (BPO), and engineering services. The Company delivers solutions across a range of verticals, such as financial services, manufacturing, consumer services, public services and healthcare. The principal geographical segments include America, Europe and others. During the fiscal year ended June 30, 2011 (fiscal 2011), the Company sold certain portion of its Telecom Expense Management Services business. In March 2013, it divested its entire (49%) stake in NEC HCL System Technologies (NHST).

History of the Company

1991 - HCL Technologies Limited was originally incorporated on 12th November, as "HCL Overseas Limited". The Company changed its name to "HCL Technologies Limited" on 6th October 1999 to better reflect the line of activities of the Company.

1998- The Company started addressing the markets in Europe and Asia Pacific.The company has a rich heritage in technologies like the Internet and e-Commerce, networking and internetworking, Internet telephony, telecom, embedded software, satellite communication, wireless communication etc.

2000 - The Company set up a dedicated offshore development centre in Chennai, a supplier of process control and yield management solutions for the semiconductor and related microelectronics industry.

HCL Technologies, the Shiv Nada controlled software major, has invested in five venture capital funds that specialise in high technology, particularly internet technology, related areas.

HCL Technologies also has entered into a tie-up with BroadVision Inc, a provider of personalised e-business applications, to act as a distributor for the latter's customised software, services, support, maintenance and other related activities.It has also acquired equity stake in an Indian networking product company as part of its incubation programme.Shiv Nadar-promoted HCL Technologies Ltd as its looking at the possibility of opening a software technology development centre in China.

2003- Partners with Alayance, a USA based company, to enhance Enterprise Application Integration expertise.It signed a multi- year, multi- million dollar collaborative IT co-sourcing contract with AMD, a leading supplier of integrated circuits for the personal and networked computer and communications markets.US firm acquires HCL's equity in Joint Venture.HCL Technologies Ltd has informed that Ambassador Richard Burt, Director of the company, has retired by rotation at the Annual General Meeting of the Company held on December 20, 2003 and it was furthur resolved at the meeting not to fill in the vacancy caused by his retirement.

2006 -HCL Tech joins hand with Wavesat.HCL Technologies Launches RoHS Compliance Management System For Medical Device Users.

It also signed Alliance to develop Private Wealth Management SolutionsHCL Technologies Ltd has inked pact with Canada based electronics manufacturing services company Celestica Inc to jointly design and manufacture electronic products for global original equipment manufacturers (OEMs).

2008 -HCL to acquired British BPO firm. HCL Technologies Launched First-of-its-Kind on-Demand Software Testing Lab 2009It entered into a five-year transformational IT infrastructure management engagement

with the Energy Future Holdings Corporation (EFHC), a Texas-based, privately-held energy company.HCL signed a Rs 393 crore, 7 year end-to-end IT Services engagement with National Insurance Company.HCL Signs a five year engagement with Energy Future Holdings for IT Infrastructure Management Services.

Income StatementIncome Statement

Quarter ended Growth Year ended Growth

30-Jun-13 31-Mar-14 30-Jun-14 YoY QoQ 30-Jun-13 30-Jun-14 YoYRevenue 6,980 8,349 8,424 20.7% 0.9% 25,758 32,917 27.8%

Direct Costs 4,426 5,103 5,215 16,505 20,215Gross Profits 2,554 3,246 3,208 25.6% -1.2% 9,253 12,702 37.3%SG & A 939 1,014 992 3,499 4,036

EBITDA 1,615 2,232 2,216 37.2% -0.7% 5,754 8,666 50.6%

Depreciation 158 159 165 627 676

Amortisation 12 13 12 47 57EBIT 1,446 2,060 2,038 41.0% -1.0% 5,080 7,933 56.2%Foreign Exchange Gain/(loss) 29 (142) (53) (21) (589)

Other Income, net 48 135 211 177 572

Provision for Tax 330 429 362 1,214 1,547Minority Interest (0.18) 0.08 0.05 (0.12) 0.33

Net Income 1,193 1,624 1,834 53.7% 12.9% 4,023 6,369 58.3%

Gross Margin 36.6% 38.9% 38.1% 35.9% 38.6%

EBITDA Margin 23.1% 26.7% 26.3% 22.4% 26.3%

EBIT Margin 20.7% 24.6% 24.2% 19.7% 24.1%

Net Income Margin 17.1% 19.4% 21.7% 15.6% 19.3%

Earnings Per ShareAnnualized in `

Basic 69 93 105 53.0% 58 91 57.5%

Diluted 68 92 104 53.6% 57 90 57.9%

Weighted average Numberof Shares

Basic 696,400,688 699,175,714 699,683,852 694,783,323 698,616,947

Diluted 705,820,597 706,473,958 706,569,869 704,840,341 706,799,245

Outstanding Options (in equivalent no of shares) 30-Jun-13 31-Mar-14 30-Jun-14

Options at market price 3,716,148 1,598,036 1, 382,108

Options at less than market price 8,867,364 7,243,484 6,877,544

FootnotesDirect Costs-It refers to direct materials, labour and expenses which directly relates to the production and manufacturing of the company such as raw material, fuel, power , wages etc.

Gross Profits-It is the difference between the income or revenues to the expenses of the company. It indicates how efficiently management uses labor and supplies in the production process. 

SG & AIt represents the Selling , General & Administrative expenses of the company. It includes the sum of all the direct and indirect selling , general & administrative expenses of the company. Direct selling expenses are expenses that can be directly linked to the sale of a specific unit such as credit, warranty and advertising expenses. Indirect selling expenses are expenses which cannot be directly linked to the sale of a specific unit, but which are proportionally allocated to all units, such as telephone, interest and postal charges. General and administrative expenses include salaries of non-sales personnel, rent, heat and lights.

EBITDA

Earnings before interests, taxes, depreciation & amortization. It is an indicator of a company's financial performance.

DepreciationIt is the decrease in the value of an asset by unfavourable market condtions, wear & tear, or has become obsolete. Company depreciate long-term assets for both tax and accounting purposes.

AmortizationIt is the paying off of a debt with a fixed repayment schedule in regular installments over a period of time. It is basically used in amortization of loans and amortization of tangible assets.

Provision of TaxIt is the amount which the company as a taxpayer will owe in income taxes for a particular year. A provision basically represents a liability of the company.

Minority InterestMinority Interest or the non controlling interest is the portion of a subsidiary company’s stock that is not owned by the parent company. It is generally the ownership of less than 50% of a company's voting shares by either an investor or another company. 

Balance SheetParticulars As on

30-Jun-13 30-Jun-14

Assets

Cash and Cash Equivalents 732.1

Accounts Receivables, net 4,464.0 5,684.3

Unbilled Receivables 1,712.7 2,024.3

Fixed Deposits 3,615.2 8,370.1

Investment Securities, held to maturity 44.3 212.0

Investment Securities, available for sale 589.6 397.1

Other Current Assets 1,907.0 2,124.5

Total Current Assets 13,064.9 19,833.0

Property and Equipments, net 2,728.3 3,146.5

Intangible Assets, net 4,958.1 5,149.2

Investment Securities, held to maturity 50.0 -

Investments in Equity Investee 4.1 15.6

Other Assets 2,238.9 2,346.2

Total Assets 23,044.2 30,490.4

Liabilities & Stockholders Equity

Current Liabilities 6,542.3 8,196.6

Borrowings 696.0 750.9

Other Liabilities 1,515.1 1,461.5

Total Liabilities 8,753.4 10,409.0

Total Stockholders Equity 14,290.8 20,081.4

Total Liabilities and Stockholders

Equity23,044.2 30,490.4

Footnotes –Cash and Cash equivalents- Cash is cash in hand or Cash at bank. Cash equivalents are the assets that are readily convertible into cash such as Marketable securities, Commercial paper etc. These are highly liquid financial instruments that are near their maturity. And as per the consolidated balance sheet there is no Cash balance available with the company.

Account Receivables-It includes the bills receivables and the debtors of the company. As pe balance sheet, the increase in account receivables means the company is in trouble generating or collecting money from the customers. The company might shutdown if it does not write off of some of its account receivables as bad debts.

Unbilled Receivables-Unbilled receivables arise when revenue, though appropriately recorded, cannot be billed yet under the terms of the contract. The increase during the reporting period of the amount of revenue for work performed for which billing has not occurred, net of uncollectible accounts.

Fixed Deposits-A fixed deposit is a financial instrument provided by banks which provides investors with a higher rate of interest than a regular savings account, until the given maturity date. According to the balance sheet , the company has increased its fixed deposits and which may increase its stability.

Investment Securities –Investment security held to maturity is a debt or equity security that is purchased with the intention of holding the investment to maturity. This type of security is reported at amortized cost on a company's financial statements and is usually in the form of a debt security with a specific maturity date.

Investment security available for sale is a debt or equity security that is not classified as a held-for-trading or held-to-maturity security. This type of security is reported at fair value; changes in value between accounting periods are included in comprehensive income until the securities are sold.

Other Current Assets-It is the firm's assets that do not include cash, securities, receivables, inventory and prepaid assets, and can be convertible into cash within one year.

Property , Equipments-

These are the Tangible assets of the company and as per the balance sheet , the company has increased its tangible net worth in the year 2014.

Tangible Assets-These are assets which are in physical form and includes both fixed assets such as machinery, furniture, land etc.and current assets such as inventory of the company.

Investments Securities –Investment Securities held to maturity are debt securities that management has the positive intent and ability to hold to maturity. Securities classified as held to maturity are reported at cost, adjusted for amortization of premiums and of discounts.

Investments in equity investee indicates the investments in joint ventures, affiliated companies and alliances in which we have the ability to exercise significant influence, generally represented by common stock ownership or partnership equity of at least 20 percent but not more than 50 percent.

Other Assets-The assets which are not included in the above fixed assets and current assets are other assets.It includes Prepaid expenses and accrued income.

Stockholders Equity-It is that portion of the balance sheet that represents the capital received from investors in exchange for stock (paid-in capital), donated capital and retained earnings. Stockholders' equity represents the equity stake currently held on the books by a firm's equity investors..

Current Liabillties-These are the obligations which are due within one year. It includes short term debt, accounts payables and other debts. As per the balance sheet the current liabilities of

the company has been increased which means the financial position of the company is not sound.

Borrowings-It is basically the amount of money which is a loan to the company. It includes Short term borrowings such as short term loans taken for less than 12months and long term borrowings such as debentures, bonds or loans which are taken for more than 12months.

Other Liabilities-It includes outstanding expenses of the company and other liabilities which ae not recorded in the current liabiltites.

Bibliography

http://en.wikipedia.org/wiki/HCL_Technologies

http://info.shine.com/company/hcl-technologies-ltd/ 1264.html.

http://www.hcl.com/downloadfinance/1529