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 OVERVIEW

HCL ventured into the software services business in 1991.HCL Technologies Ltd is a multinational IT services company, headquartered in Noida, Uttar Pradesh, India.

The company has offices in 34 countries including the United States,Northern Irelands in the United Kingdom and European countries like France and Germany.

          HISTORY

In the summer of 1976 ,all former employees of Delhi Cloth Mils, led by Shiv Nadar, a group of five engineers started a company that would make personal computers.

HCL Technologies is one of the four companies under HCL Corporation, the second company being HCL Infosystems. In February, 2014 HCL launched HCL Healthcare. HCL TalentCare is the fourth and latest venture of HCL Corporation.

Community initiatives

Power of One

Power of One is an employee-driven, management supported initiative that focuses on transforming social projects and activities. As a part of this initiative, the company has undertaken:

' Project Samudhay, which involves adopting 100 villages and driving transformation in five areas ' water, women's welfare, education, health and malnutrition, and sanitation.

' Association with Udayan Ghar and over 55 other NGOs, to promote all-round community development and growth.

Additionally, since 2006, the company conducts monthly and biennial concerts to provide a platform for upcoming young Indian classical artists to showcase their talent.

CORPORATE PROFILE

HCL Technologies Limited is engaged in providing a range of software development services, business process outsourcing services and information technology (IT) infrastructure services. The Company's segments include software services, infrastructure management services and business process outsourcing services. The software services segment provides application development and maintenance, enterprise application, software as a service (SAAS) application services and engineering, and research and development (R&D) services to global customers. The infrastructure management services segment involves managing customer's IT assets. The business process outsourcing services segment includes contact center and help desk services. The Company delivers its solutions across select verticals, including financial services, manufacturing, retail and consumer products, media, publishing and entertainment, public services, energy and utility, healthcare, and travel, transport and logistics

Honours

Awards

' 2015 - Aecus Innovation Award for implementing an operational control center for Uniliver

' 2014 - Best Governed Company by the Asian Centre for Corporate Governance & Sustainability

' 2014 - Outstanding Company of the Year at CNBC-TV18's India Business Leader Awards

Recognition

' 2015 - Among the Top 10 Indian Brands by Brand Finance

' 2015 - Among The World's Most Influential Companies by Bloomberg Businesswek

' 2009 - Top 10 Outsourcers by The wall street journal

' 2008 - 2012 - Among the Most Democratic Workplaces in the world by WorldBlu

Consolidated Balance Sheet of HCL Technologies ------------------- in Rs. Cr. -------------------

Jun 15 Jun 14 Jun 13 Jun 12 Jun 11

 

12 mths 12 mths 12 mths 12 mths 12 mths

 

EQUITIES AND LIABILITIES

SHAREHOLDER'S FUNDS

Equity Share Capital 281.20 140.00 139.37 138.66 137.74

Total Share Capital 281.20 140.00 139.37 138.66 137.74

Reserves and Surplus 23,943.19 19,402.18 13,019.61 9,696.43 7,514.25

Total Reserves and Surplus 23,943.19 19,402.18 13,019.61 9,696.43 7,514.25

Total Shareholders Funds 24,224.39 19,542.18 13,158.98 9,835.09 7,651.99

Equity Share Application Money 0.02 7.65 5.01 2.77 1.00

Minority Interest 82.11 57.33 44.68 1.07 3.71

NON-CURRENT LIABILITIES

Long Term Borrowings 167.89 200.64 796.73 1,077.20 1,655.78

Other Long Term Liabilities 614.57 735.75 720.21 661.64 373.93

Long Term Provisions 210.64 194.36 201.48 289.55 150.41

Total Non-Current Liabilities 993.10 1,130.75 1,718.42 2,028.39 2,180.12

CURRENT LIABILITIES

Short Term Borrowings 355.48 205.83 128.52 448.99 18.61

Trade Payables 625.41 468.48 401.38 469.44 277.04

Other Current Liabilities 7,230.62 7,105.30 5,220.73 4,168.18 2,945.19

Short Term Provisions 1,733.54 1,462.17 1,721.60 1,337.37 822.98

Total Current Liabilities 9,945.05 9,241.78 7,472.23 6,423.98 4,063.82

Total Capital And Liabilities 35,244.67 29,979.69 22,399.32 18,291.30 13,900.64

ASSETS

NON-CURRENT ASSETS

Tangible Assets 3,403.69 2,657.52 2,192.54 1,918.03 1,509.61

Intangible Assets 4,871.58 4,786.42 4,560.00 4,535.07 3,736.17

Capital Work-In-Progress 551.52 530.95 493.84 578.47 555.85

Fixed Assets 8,826.79 7,974.89 7,246.38 7,031.57 5,801.63

Non-Current Investments 106.81 55.40 85.87 127.00 94.93

Deferred Tax Assets [Net] 789.71 814.96 741.88 661.57 363.26

Long Term Loans And Advances 1,442.19 1,429.49 1,273.96 996.24 667.00

Other Non-Current Assets 1,032.37 375.32 417.71 426.09 317.19

Total Non-Current Assets 12,197.87 10,650.06 9,765.80 9,242.47 7,244.01

CURRENT ASSETS

Current Investments 762.58 606.29 627.17 546.20 642.57

Inventories 157.61 122.30 231.50 226.16 166.35

Trade Receivables 6,538.69 5,682.84 4,497.15 3,875.66 2,611.28

Cash And Cash Equivalents 9,786.23 8,807.30 3,577.11 1,947.69 1,612.36

Short Term Loans And Advances 2,188.84 1,589.93 1,571.81 674.69 473.04

OtherCurrentAssets 3,612.85 2,520.97 2,128.78 1,778.43 1,151.03

Total Current Assets 23,046.80 19,329.63 12,633.52 9,048.83 6,656.63

Total Assets 35,244.67 29,979.69 22,399.32 18,291.30 13,900.64

OTHER ADDITIONAL INFORMATION

CONTINGENT LIABILITIES, COMMITMENTS

Contingent Liabilities 583.33 2,421.77 1,250.61 665.14 480.10

BONUS DETAILS

Bonus Equity Share Capital 222.26 81.69 81.69 81.69 81.69

NON-CURRENT INVESTMENTS

Non-Current Investments Quoted Market Value 0.00 0.00 48.42 91.54 0.00

Non-Current Investments Unquoted Book Value 106.81 55.40 35.87 127.00 94.93

CURRENT INVESTMENTS

Current Investments Quoted Market Value 0.00 212.08 43.94 91.54 91.80

Current Investments Unquoted Book Value 762.58 394.25 582.83 546.20 642.57

Consolidated Profit & Loss account of HCL Technologies ------------------- in Rs. Cr. -------------------

Jun 15 Jun 14 Jun 13 Jun 12 Jun 11

 

12 mths 12 mths 12 mths 12 mths 12 mths

 

INCOME

Revenue From Operations [Gross] 36,701.22 32,143.66 25,581.06 20,830.55 15,730.43

Revenue From Operations [Net] 36,701.22 32,143.66 25,581.06 20,830.55 15,730.43

Total Operating Revenues 36,701.22 32,143.66 25,581.06 20,830.55 15,730.43

Other Income 1,139.46 677.40 351.11 206.50 299.65

Total Revenue 37,840.68 32,821.06 25,932.17 21,037.05 16,030.08

EXPENSES

Purchase Of Stock-In Trade 1,306.38 920.92 975.46 684.83 605.84

Changes In Inventories Of FG,WIP And Stock-In Trade -35.65 108.06 -16.12 -72.84 -83.71

Employee Benefit Expenses 17,726.43 14,906.36 12,574.17 11,104.55 8,589.60

Finance Costs 91.23 114.50 105.62 142.63 160.37

Depreciation And Amortisation Expenses 403.75 680.86 636.76 549.24 459.69

Other Expenses 9,231.48 8,173.03 6,386.39 5,418.84 4,163.18

Total Expenses 28,723.62 24,903.73 20,662.28 17,827.25 13,894.97

Profit/Loss Before Exceptional, ExtraOrdinary Items And Tax 9,117.06 7,917.33 5,269.89 3,209.80 2,135.11

Profit/Loss Before Tax 9,117.06 7,917.33 5,269.89 3,209.80 2,135.11

Tax Expenses-Continued Operations

Current Tax 2,128.42 1,692.25 1,258.89 934.42 492.52

Less: MAT Credit Entitlement 311.95 120.36 14.43 0.00 0.00

Deferred Tax -1.36 -162.32 -19.15 -151.70 -4.04

Total Tax Expenses 1,815.11 1,409.57 1,225.31 782.72 488.48

Profit/Loss After Tax And Before ExtraOrdinary Items 7,301.95 6,507.76 4,044.58 2,427.08 1,646.63

Profit/Loss From Continuing Operations 7,301.95 6,507.76 4,044.58 2,427.08 1,646.63

Profit/Loss For The Period 7,301.95 6,507.76 4,044.58 2,427.08 1,646.63

Minority Interest -24.78 -18.31 -4.28 -0.07 -0.12

Share Of Profit/Loss Of Associates 39.90 20.06 -0.21 -4.31 0.00

Consolidated Profit/Loss After MI And Associates 7,317.07 6,509.51 4,040.09 2,422.70 1,646.51

OTHER ADDITIONAL INFORMATION

EARNINGS PER SHARE

Basic EPS (Rs.) 52.00 93.00 58.00 35.00 24.00

Diluted EPS (Rs.) 52.00 92.00 57.00 34.00 24.00

DIVIDEND AND DIVIDEND PERCENTAGE

Equity Share Dividend 2,385.59 700.27 835.36 830.58 514.49

Tax On Dividend 439.27 113.39 139.82 134.74 84.39

Cash Flow of HCL Technologies ------------------- in Rs. Cr. -------------------

Jun 15 Jun 15 Jun 14 Jun 13 Jun 12

 

12 mths 12 mths 12 mths 12 mths 12 mths

 

Net Profit/Loss Before Extraordinary Items And Tax 7,698.54 7,698.54 7,397.66 4,451.20 2,360.74

Net CashFlow From Operating Activities 5,335.67 5,335.67 6,147.22 4,170.15 2,160.10

Net Cash Used In Investing Activities -1,763.04 -1,763.04 -4,655.54 -2,985.48 -1,342.76

Net Cash Used From Financing Activities -3,360.21 -3,360.21 -1,397.67 -1,175.37 -837.12

Foreign Exchange Gains / Losses -20.42 -20.42 -9.09 -9.78 -13.23

Adjustments on Amalgamation / Merger / Demerger / Others 0.00 0.00 0.00 21.60 0.00

Net Inc/Dec In Cash And Cash Equivalents 192.00 192.00 84.92 21.12 -33.01

Cash And Cash Equivalents Begin of Year 240.73 240.73 155.81 134.69 167.70

Cash And Cash Equivalents End Of Year 432.73 432.73 240.73 155.81 134.69

Introduction to Ratio Analysis

(Financial Statement Analysis)

Ratio Analysis is the method of finding the various inter-relationships between the financial data of the company on basis of the available data from Balance sheet, P&l A/c  and cash Flow Statement.

The relation is expressed in terms of percentage or quotient.

Ratio Analysis can be carried out by anyone interested in knowing the detailed insight of financial condition of the firm.

These people could mainly be categorized as:

' Owners of the company

' Creditors of the company

' Potential Investors

' Other people relating to the financial field

Investors usually refer to this tool of financial analysis to know the earning capacity of the firm.

On the other hand, the creditors keep a close check on these ratios of the company in order to check their credibility and loan repayment capacity.

Management of the company consider these ratio to find the true standing of various departments of the company's financial stem and make accurate decision on those basis.

Family of Ratios:

Ratios can be mainly categorized into 4 groups:

' Liquidity

' Structural

' Turnover

' Profitability

' Liquidity:

It consists of two Ratios- Acid test ratio (quick ratio) and Current Ratio:

' Quick ratio: This ratio is calculated  by dividing the quick assets by current liabilities

' Current Ratio: This ratio is calculated by dividing the Current assets by Current Liabilities

Liquidity ratios help to find the short term debt payoff capacity of the firm.

Higher the value of the ratio, higher is the safety for covering short term debts.

' Structural:

It consists of Debt to equity and Long term debt to net working capital:

' Debt to equity: it can be calculated as Long term debt to equity= long term debt/equity share capita + Reserves and surplus

(This ratio shows the amount of Debt a firm is been using to fund its assets)

#a low D/E ratio indicates low risk

' Long term debt to net working capital: This is calculated as Long term debt/net working capital.

(It shows the contribution of creditor to the liquid assets of the firm)

' Turnover:

It comprises of mainly 4 ratios:

' Asset Turnover ratio: It is the ratio between the total value of net sales of the company to the total asset holdings.

' Net working (capital turnover) ratio: it shows the efficiency at which the capital employed is used in an organization.

' Higher the ratio-better the situation

' Receivables Turnover Ratio: It shows the average time needed to convert the business receivables to liquid cash.

' Inventory Turnover Ratio: This is a ratio which shows how many times a firm's stock been sold and replaced over a period of time.

' Profitability:

It mainly consists of 3 ratios:

' Operating Ratio: this ratio depicts the efficiency of the company by comparing the operating expenses with revenue generated.

Smaller the ratio better it is for the organization.

' Net profit to sales: it is the ratio of net profit after tax to the net sales of the organization. it tells us about the net profit after deducting all the expenses of production , administration etc.

Limitations of ratio analysis

1. It is a very challenging work to find and set accurate standards for comparison.

2. Usually the companies are of different size and type hence comparison between them becomes more difficult.

3.  Change in price affects the validity of comparisons of ratios calculated at different point of time.

4. Comparisons also become complicated due to differences in the terminology like gross profit, operating profit etc.

5. Ratios do not provide a definite solution to various financial glitches. There is always a decision to be made regarding how much significance should be given to the figures.

Calculation of ratios of HCL TECHNOLOGY LTD:

For year 2013-14-15

' Quick/Acid test ratio = Quick assets/ current liabilities.

(Quick assets = assets which could be converted to cash easily)

Ratio 2015 2014 2013

Quick/Acid test ratio 3.22 2.62 1.86

' Current ratio= Current assets/Current Liabilities

Ratio 2015 2014 2013

Current ratio 3.23 2.62 1.88

Hence in the case of HCL TECHNOLOGY LTD the current ratio is fluctuating alot.

' Debt to equity ratio= long term debt/equity share capita + Reserves and surplus

Ratio 2015 2014 2013

Debt to equity ratio 0.00 0.00 0.06

Under this, ratio below 0.4 is considered healthy. Hence here also HCL TECHNOLOGY LTD have the leading edge. Lower debt ratio portrays good credibility.

' Asset turnover Ratio= net sales/ net fixed assets + current assets x 100

Ratio 2015 (%) 2014

(%) 2013

(%)

Asset turnover ratio 68.84 75.62 78.43

Ideally ratio around 2 is considered very good for a company as higher it is, it means a company can operate well with fewer assets.

' Inventory turnover = sales/ ending inventory

Ratio 2015 2014 2013

Inventory turnover ratio 205.06 1061.61 152.95

High level of inventory turn ratio means that the company has a well managed purchasing function.

So here also HCL TECHNOLOGY LTD is performing very well.

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